Mr SNOWDON (Lingiari—Minister for Veterans' Affairs, Minister for Defence Science and Personnel and Minister for Indigenous Health) (09:01): I move:

That this bill be now read a second time.

I am pleased to present legislation that delivers on the government’s budget measures to help support our veteran community. These measures further improve the operation of Australia’s repatriation system and provide special recognition to those Australians who were prisoners of war. The 2011-12 budget reflects the government’s ongoing commitment to more than 360,000 veterans and their families.

The bill will introduce a new payment for surviving Australian prisoners of war (POWs) recognising the hardships these men and women endured. More than 30,000 Australians became prisoners during the Second World War and the Korean War.

We have all heard of the hardships these men and women endured during captivity.

Subject to extremely harsh conditions and deprivation, many have lived with physical and psychological scars for decades. All in the service of their country. It is expected that around 900 former POWs will benefit from the payment. This bill introduces a new payment of $500 per fortnight which will be known as the prisoner of war recognition supplement. The supplement will be payable from 20 September 2011 with the first payment being made on 6 October 2011. Payments will begin automatically for former POWs known to the department. The supplement will be payable in addition to any existing benefits the person receives from the Commonwealth. It will be exempt income for the purposes of income tax and for the purposes of the veterans entitlements and social security income tests.

Further amendments in the bill will affirm the longstanding arrangements under the Veterans’ Entitlements Act for compensation offsetting. Offsetting is intended to prevent double payments of compensation. This can happen when a veteran or member is eligible for compensation for the same incapacity under different schemes.

This bill will clarify the longstanding compensation offsetting arrangements that have been in place in the repatriation system since 1973. This follows a full Federal Court decision which highlighted the need to clarify the legislation. It does not vary the disability pension for any veteran.

Finally, the bill will rationalise and better target payments for veterans and members who are undergoing treatment for war or defence caused injuries or diseases. There is currently an overlap in the allowances paid to veterans and members who are unable to work due to episodes of medical treatment and recuperation for war or defence caused injuries or diseases. This bill will better target payments through the loss of earnings allowance. Abolishing the temporary incapacity allowance ensures individuals are recompensed where there is actual loss of income. It has no impact on a veteran or member’s existing disability payment. From 20 September 2011, all eligible veterans and members in this situation will be assessed consistently against the criteria for the loss of earnings allowance.

This government is committed to streamlining and enhancing the services and support that our veterans, members and their families so rightly deserve.

Debate adjourned.

Mr CRAIG THOMSON (Dobell) (09:05): On behalf of the Standing Committee on Economics I present the committee's report entitled Advisory report on the taxation of alternative fuels bills 2011, incorporating a dissenting report, together with the minutes of the proceedings.

In accordance with standing order 39(f), the report was made a parliamentary paper.

Mr CRAIG THOMSON: by leave—This is a report into four government bills that affect the tax treatment of alternative fuels. Three of the bills apply an excise on liquid petroleum gas, compressed natural gas and liquid natural gas. The fuels were not previously subject to excise, which will now be applied at 50 per cent of that applied to petrol. The fourth bill continues a grant scheme for the next 10 years where the amount of the grant offsets the amount of excise levied on biofuels such as ethanol and biodiesel. The majority on the committee support these bills, and it is worth looking at what some people have said about the proposal that goes with them. I go back to May 2003, when the then Treasurer—the former member for Higgins, Peter Costello—announced the then government's alternative fuels tax arrangements as an long-term important reform, saying, 'Australia must have a more consistent and sustainable fuel tax regime.' In December 2003, the then Prime Minister, John Howard, said, 'These reforms will result in a more consistent and neutral tax regime for fuels used in vehicles.' The then Deputy Prime Minister, John Anderson, at the same time emphasised the importance of investment certainty and that the measures then introduced would achieve that certainty in an identical manner to the way in which it will be achieved by the bills considered by the committee in the present report. Furthermore, Mr Costello stated in his press release:

… today I am announcing important long term reforms to the excise treatment of fuels. The reforms establish a broad sustainable taxation framework for fuels, by addressing a number of anomalies in the current fuel tax system and providing increased long term certainty for investors, while meeting Government commitments and providing time for industry to adjust.

You will not often see me get up here and say that the former Prime Minister was right, that the former Treasurer was right or that the former Deputy Prime Minister was right; but they were absolutely right about those reforms and the effect they would have. Today we have an absolute policy vacuum on the other side. The member for Moncrieff, the deputy chair, who is going to speak next, and particularly the current member for Higgins,-who was an adviser to the former Treasurer at the time those reforms were introduced, must really be severely conflicted about what they are going to say here today in opposing the bills that the committee considered.

These bills are in the national interest. They had bipartisan support. The former government thought they were necessary. But because we now have Mr No in charge of the opposition, good public policy on these issues does not matter anymore; those on the other side are just saying no to the sake of saying no and this is probably the worst example we have seen of the positions that the Leader of the Opposition forces them to take. It does not matter what the issue is now, whether the former Treasurer introduced identical reforms to the ones in these bills or whether the former Prime Minister was a strong advocate of the reforms in these bills; those on the other side say, 'We're not going to support them because we don't support anything that the government puts up.' It is an absolute disgrace that they are taking this position on Australia's long-term fuel interests and trying to score a cheap political point. What is more, it is hypocritical. We hear day after day about the government's not being able to make cuts to the budget, to the deficit and to the bottom line, but this budget measure saves over $500 million, and what are those on the other side saying? They are saying, 'No, you shouldn't do it.' Hang your heads in shame—the position that you are adopting on these bills is disgraceful.

How can the member for Higgins come into this place and, for the sake of political expediency and supporting an opposition leader who will say no to anything, oppose these bills, despite having worked for the former Treasurer and given him advice that his reforms were good policy? It is unbelievable that we are in this situation, and it is a great shame that hangs over the heads of the opposition. We even have the unusual situation of Senator Minchin, who is not known for great policy development—in fact, his position is probably best characterised as extremely pragmatic and political—saying that this legislation should be supported by those on the other side. So a long history of bipartisanship on the way in which the measures in these bills should be dealt with is being trashed completely because those on the other side are not interested in what is good for the Australian people, in what is good for this industry or in making sure that we set up a fair regime for alternative fuels. All they are interested in is saying no and opposing what this government wants to do to make sure that Australia is better placed on these alternative fuels and on our budget bottom line.

These are important pieces of legislation, and both we and those on the other side have known the implications of them since 2003; they have not suddenly been rushed on the parliament. The Prime Minister and the former Treasurer made their statements in 2003 and set in place the policies that these bills are trying to implement, and it is an absolute disgrace that some eight years later we are seeing a complete reversal and a complete absence of policy from those opposite. The only argument that they are going to put forward here today is that it is going to affect cost-of-living issues. They are now going to try to mount another scare campaign on what is essentially their own policy, undermining it by arguing that these measures are going to affect consumers in their adjustment to the cost of living. Where is that cost-of-living adjustment going to come about? They are going to say that taxis will be more expensive, but the increase on an average $20 taxi fare, if it is passed on by the various state governments who regulate the cost of taxis, will be about 80c. So, for the sake of the opposition's attacking and undermining Australia's sensible budget and fiscal stance and undermining policy on alternative fuels, we are having an argument about 80c in a taxi fare.

The opposition stand condemned for their persistent negativity about any bill that comes here, particularly these three bills. The majority of the committee—the government members on the committee—took the sensible approach, advocated by the former Prime Minister Mr Howard, the former Treasurer Mr Costello and the former Deputy Prime Minister Mr Anderson and supported by Senator Minchin. The government has taken the sensible approach. The government members on the committee recommend these bills to the House, and that recommendation is contained in this report.

Mr CIOBO (Moncrieff) (09:14): by leave—Mr Speaker, I would like to start on a positive note and say it is good to see you in the chair today after what occurred yesterday. I turn to the subject of the debate before the House, and that is the report that came from the House of Representatives Standing Committee on Economics. It was interesting to note the passion that the chairman of the committee had with respect to this particular report and the passion that he had about defending the integrity of the government's budget position. I must say that for members on this side of the House it was a little bemusing. The reason it was bemusing is that the lecture that we got for five minutes from the chairman of the committee was about the importance of budget integrity. The lecture from the chairman of the committee was about how this was coalition policy and how it ought not be changed.

The interesting thing about that for all members of the coalition is that this came from a member of the Labor Party whose Prime Minister sits at the table and, only eight days out from the election, swore black and blue that there would not be a carbon tax under the government that she would lead, and then, seven days later, changed her position. So I say to Labor Party members: if you want to lecture us about changes in position, why don't you address the fact that you had a change in eight days as opposed to our change, which was years and years later and reflects one very fundamental aspect—that is, this is not the time for this change. The reason it is not the time for this change is that there are families across this country facing some very difficult choices. They are facing hard choices because the government has presided over a massive increase in the cost of living.

I noticed as well that the chairman of the committee almost fobbed off the very genuine and real concerns of struggling working families. Members opposite, do you remember those struggling working families in Western Sydney who have to budget to the last dollar? The member opposite completely fobs off their concerns and says, 'This is about 80c on a $20 cab fare.' That is exceptionally disingenuous. For example, we know that there is a fleet of some 700,000 vehicles that have been converted to LPG or run on LPG. The taxi component of the 700,000 vehicles is 18,000, so there are about 682,000 vehicles out there that are not taxis and have been converted to run on LPG because families need to embrace the savings. The evidence that was put to the committee demonstrated that those people would be slugged with an extra $250 to $500 a year as a result of this policy change. That is the reason why the coalition will stand up for those families; that is the reason why the coalition will not support this change. But it is about more than that. It is also because the reforms that the government has laid out will see increases in CNG and LNG. The most vulnerable people in our society are going to be slugged with this new tax.

Government members stand up and say: 'But this is about protecting budget integrity. Why won't the coalition be with us? There are savings of $500 million, or thereabouts.' No, there are not. Do not use economic jargon in here and say that this is about savings of $500 million. Let's call it what it is: a direct tax slug of nearly half a billion dollars. The government say, 'Where is the coalition?' I will tell you where the coalition is: we stand against higher taxes. That is where we are. We stand against this kind of activity because it is about taking money straight out of the pockets of the most vulnerable in our society. That is why we turn our backs on this. We turn our backs on this because the government need to get their house in shape, the government need to make policy changes and the government need to make savings. We will then consider what we can do to have policy integrity, but it will not be through the sweat off the brow of working families in Western Sydney. It will not be off their sweat; it will be because the government start to tighten their belt. When the government do that, we will be serious about so-called policy integrity.

I must say that there is one aspect of this that we are comfortable with. We are very happy to support the fourth bill. That particular bill goes to ensuring that there is equitable treatment when it comes to ethanol and other alternative fuels like biodiesel. We are supportive of that. It is not all about 'No, no, no,' despite what the Labor Party say. We are happy for that bill to go through, but that requires the government to do something. It requires the government to stop being quite so tricky. It requires the government to recognise that the first three bills need to be put to one side and then the final bill will be passed by the House. At the moment, the government are into playing tricky games and are insisting that all four bills be passed or none be passed. As the coalition and the dissenting members of the committee said, we are happy to support the passage of the fourth bill, but we will oppose the first three.

I call upon the member opposite to take that message back. He and all Labor members need to concern themselves with the passage of the fourth bill, which is the one for which time is of the essence—that one can go through the House and up to the Senate—or they can stand in their tricky political way against all four bills and refuse to allow them to go through. We will not support that. We make no apology for the fact that we will stand up for those Western Sydney families, we will stand up for those 700,000 vehicles that have been converted to LPG and, most importantly, we will stand up for the environment. The reason we will stand up for the environment is that we know that this policy will make environmentally-friendly vehicles—those vehicles with a smaller carbon footprint—less attractive. This government policy will see the emphasis return to traditional fossil fuels. This government policy will see the hundreds of millions of dollars that has been invested in the conversion of vehicles from traditional fossil fuels to, for example, LPG effectively junked.

I reinforce the point to the chamber and, through the broadcast, to those listening. Remember that it is the coalition that stands for a smaller carbon footprint, it is the coalition that stands for being environmentally-friendly and it is the coalition, through its position on this bill, that will stand up for those who are trying to do the right thing by the planet. The coalition and all the members of the coalition on this committee stand by our dissenting report because we know that we will look after working families and we will look after the environment. We still allow passage of the bill for which time is of the essence, but we remain steadfastly opposed to the first three bills because they are wrong for Australia at the wrong time. In fact, tax reform needs to be part of a comprehensive energy platform.

Ms KATE ELLIS (Adelaide—Minister for Employment Participation and Childcare and Minister for the Status of Women) (09:22): I would like to take this opportunity to thank all members for their contributions on this debate. The government's Building Australia's Future Workforce reforms represent a long-term investment in Australia's economy through building the education, the skills and the employment prospects of the Australian workforce. An important part of these reforms is directed towards providing greater incentives for parents, particularly single parents, to engage in the workforce to reduce their reliance on welfare and to provide their family with a better future underpinned by secure and rewarding employment. The Social Security Amendment (Parenting Payment Transitional Arrangement) Bill 2011 represents the first stage of the income support payment reforms contained in the Building Australia's Future Workforce package. This bill is a positive step towards reducing the inequity which exists within the legislative structure of parenting payment.

Under current arrangements recipients of parenting payment are treated differently based upon when they first applied for the payment. This inequity dates back to the 2006 Welfare to Work reforms which allowed for recipients who had applied for the payment prior to July 2006 to stay on parenting payment for up to 10 years longer than those parents who applied for payment after 1 July 2006. From July 2006 persons who claimed parenting payment can only qualify until their youngest child turns eight if the parent is single, or six if the parent is a member of a couple. Prior to July 2006 a person could qualify for parenting payment until their youngest child turned 16.

This bill will amend the Social Security Act so that from 1 July 2011 new children who come into the care of an existing parenting payment recipient will no longer extend the duration of a recipient's preferential treatment. This will serve to minimise the lingering inequity within parenting payment as a result of the 2006 Welfare to Work reforms. Further changes for parents on income support will take effect from 1 January 2013 and will be included in a separate bill to be introduced later this year.

I take this opportunity to once again thank members for their contributions and commend this bill to the House.

Question agreed to.

Bill read a second time.

Ms KATE ELLIS: by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms LEY (Farrer) (09:27): I rise to speak on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011 before the House this morning. The bill reflects some of the recommendations contained in the Department of Education, Employment and Workplace Relations' 2008 report, Review of self-insurance arrangements under the Comcare scheme. Although not explicitly stated, the review was part of a broad program by Labor to eventually shift all existing Comcare self-insurers back to the relevant state based workers compensation systems.

In 2008 the government implemented a moratorium on non-government employers seeking access to the scheme. This was subsequently enshrined in legislation in 2009 and the coalition did not oppose the bill. While the coalition will not oppose this legislation, we note our very real concern about this bill which is simply that it is an element of Labor's program of changes to water down the Commonwealth government workers compensation scheme, Comcare. Provisions in this bill will bring the Commonwealth laws in line with existing state workers compensation laws thereby reducing the attraction for non-government Comcare participants. This review was part of Labor's plan to shift all existing self-insurers back to the relevant state based workers compensation systems. The 25 or so non-government self-insurers will be forced to return to state systems, sending us back to the dark ages.

Currently an employee who is injured during a break from work, for example leaving a worksite during a lunchbreak to purchase a meal at a nearby shop, would not be eligible to claim for such an injury. This would be reversed under the changes proposed in the bill thereby allowing a worker to claim an injury suffered when temporarily absent from their normal workplace during such a recess. Obviously this expands the extent to which an employer has liability. It also removes the ability of an employer to control the degree of safety compliance of a worker. For example, the worker might choose to cross a busy road rather than use a pedestrian crossing or may sprain their ankle whilst running during their lunchbreak. Anecdotal evidence suggests that many contested injuries occur in either recess or journey circumstances and an unscrupulous employee may exploit the lack of dedicated workplace supervision to sustain an injury for which compensation is sought. The Productivity Commission found that the employer's ability to exert control over workplace recess breaks and social activities is a relevant consideration. It recommended that coverage for recess breaks and work-related events be restricted on the basis of employer control to those undertaken at workplaces and at employer sanctioned events. In line with recommendation 13 of the department's review and the Productivity Commission's 2004 recommendation that claims arising from injuries sustained during off-site recess breaks should be excluded, the coalition will seek to amend the bill proposed by the government to remove the changes to recess claims.

We know from the Senate committee that if an employee goes scuba diving in their lunch break the employer is liable for anything that happens. We believe that people should take individual responsibility and that the liability to an employee should continue to be limited to circumstances where the employer has an element of control. It would be unreasonable to make employers liable for all types of injuries sustained by their employees independent of the employment relationship.

If this bill were to succeed, an employee working on a building site in Manly who goes scuba diving in the lunch break and injures themselves will be pleased to know that, despite being on their lunch break, the Commonwealth would be liable for them. It is unreasonable to make employers liable for all types of injury sustained by their employees independent of the employment relationship. This justifies the common-sense test, and the coalition will put forward a sensible amendment to insert some common sense in this bill.

Mr STEPHEN JONES (Throsby) (09:31): Our approach to these matters is quite simple: we do not start from the presumption that workers are on the shirk, that they are trying to rip off their employer or that they are trying to defraud the Commonwealth, their employer or anybody else. Secondly, we take the approach that, when an employee, bound by a contract of employment, is under the supervision and control of their employer, they lose none of their responsibility but they do lose some of their autonomy and control over their work situation. It is a principle that has been adopted and accepted in Australian common law for several decades. It is a principle that has been understood in Australian statute law since we adopted the approach of the Robens committee in the early 1970s. And for the member for Farrer to stand here and use some of the more ludicrous examples, suggesting that somehow the provisions in this bill, the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011, are going to lead to a flood of Commonwealth employees taking up the sport of scuba diving in their 15-minute tea break, does her side no credit and does nothing to advance the cause of credible debate in this place.

I am pleased to speak today about Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011, the government's bill to amend the Safety Rehabilitation and Compensation Act 1988. The SRC Act established a workers compensation and rehabilitation scheme for Commonwealth employees and employees of non-Commonwealth licensees, many of whom are former Commonwealth entities which have subsequently been corporatised and, in some instances, privatised. Comcare is the Australian government agency that has responsibility for the administration of the SRC Act, including managing claims for those Commonwealth agencies that pay premiums under the SRC system.

By way of brief background, there was an earlier bill, the Occupational Health and Safety and Other Legislation Amendment Bill 2009, that was introduced into this place on 26 November 2009 but which lapsed when parliament was prorogued on 19 July 2010. The bill before the House today is not identical to that original bill but there is certainly a lot of overlap in subject matter. The provisions of the original bill were referred to the Senate Education, Employment and Workplace Relations Committee for inquiry and report by 25 February 2010. Some of the comments reflected in that report of February 2010 are relevant to the bill before the House today. In 2008, the government established a review into the operation of Comcare, and the bill before the House today represents the government's response to that review as well as some consequential amendments.

The measures in this bill will: reinstate claims arising from injuries sustained during off-site recess breaks, allow compensation for medical expenses to continue to be paid in cases where payment of other compensation is suspended, and allow time limits for claim determination. In addition, and importantly, the measures in this bill will enable Comcare to access the Consolidated Revenue Fund to pay compensation claims in respect of diseases with a long latency period—for example, asbestos related diseases—where the employment period was pre 1 December 1988 but where the condition did not manifest itself until after that date. Finally, this bill will allow for continuous workers compensation coverage for employees while overseas and who are in a declared place or who belong to a declared class of employee, such as the Australian Civilian Corps.

I will now talk about the off-site recess breaks—something which seemed to excite and concern the member for Farrer in her earlier contribution. This is about the reinstatement of claims for injuries sustained during off-site recess breaks. There is no doubt that the removal of these claims in 2007 by the previous government—a removal which was aimed to remove a right and benefit of Commonwealth employees and others covered by the scheme—has led to some practical difficulties in the administration of the act and also some inequitable situations. It is probably the failure of the member for Farrer to grasp and understand the operation of these practical difficulties and inequitable situations that led her to stand here moments ago and make such ludicrous claims about the impact of this bill. Why were there inequitable situations and practical difficulties? Some employers do not provide on-site facilities for recess breaks, so one category of employees would be covered at work while another would not—often within the same employing agency. In many cases it has proved difficult to determine what would and what would not constitute an off-site recess. It is also difficult to determine what constitutes an off-site recess where employees are required to undertake their work predominantly off site. We know that many Commonwealth employees travel from location to location during the course of their employment on a day-to-day basis. Far from the typical notion of Commonwealth public servants as colourless old men clad in vests sitting behind desks pushing pens, there are literally thousands of employees who are engaged in inspectorial, audit and enforcement functions—and they probably do not own vests or work socks—who have to in the course of their day-to-day employment work outside what most people would consider to be normal on-site premises.

Many Commonwealth employees also travel off site to attend employer-sanctioned courses at educational institutions either within or outside normal working hours. These would include, for example, assessors from the Commonwealth Rehabilitation Service, interviewers from the Australian Bureau of Statistics and auditors from the Australian Valuation Office as well as many of the employees involved in the Department of Immigration and Citizenship in inspectorial and enforcement roles, to name but a few. Without this legislation, inconsistency arises as to whether these types of employees would be covered during lunch breaks and when attending these courses.

The bill will ensure that there is consistency between the Commonwealth and all state jurisdictions, with the exception of Tasmania and South Australia. It is unfair to expect Commonwealth employees to accept a lower level of workers compensation coverage than that which is enjoyed by the majority of their state counterparts.

At present, the SRC Act provides that workers compensation entitlements are suspended when an employee fails to participate in reasonable rehabilitation. Currently this suspension of entitlements includes the loss of medical benefits as well as weekly compensation benefits. The amendment in this bill recognises that the loss of these medical benefits might be counterproductive to a person's recovery and return to work by inadvertently affecting that person's recovery. Put simply, it is counterproductive and counterintuitive, if the objective of the workers compensation regime is to work towards not only compensating but also ensuring that a worker recovers from an injury, to remove from them—through the misplaced notion that a punitive sanction has some work to do in these instances—their capacity to be rehabilitated. That is why this bill contains an amendment that would provide that only the weekly compensation benefit is suspended, while the ongoing medical expenses would continue to be covered in these circumstances. I hope that it is a sanction that is never needed to be applied, because, after all, the basis of the act is to ensure not only compensation but rehabilitation and return to work. The majority report of the Senate committee inquiry into the bill in 2009 made the observation that the rehabilitation of an injured worker should be a clear priority of the Comcare scheme, and these amendmentsto the legislation give force to that recommendation.

On the issue of time limits, this bill also introduces a time limit for the determination of a claim for workers compensation. The 2008 Comcare review noted that claims determined quickly tended to be shorter in duration and less costly, as claimants can commence rehabilitation much sooner than they would otherwise. There is currently no requirement under the SRC Act for decision makers to act within time limits—that is, there is no statutory requirement, and I cast no aspersions on those who are employed by Comcare. I know that they work to the best of their ability to assess and determine claims as quickly as possible, but there is no harm or injury in ensuring that there is a statutory requirement that those claims be assessed in a timely fashion. We know that this is a beneficial provision, because state workers compensation schemes apply statutory time limits for the determination of claims in all state jurisdictions. It is therefore another important move to ensure there is consistency in Commonwealth and state approaches to these issues. This is particularly the case as data shows that the determination of new claims and diseases currently takes longer for Commonwealth employees than for their state counterparts. It is our contention that the inclusion of statutory time limits will ensure that these types of claims are determined in a timely fashion.

A further measure in this bill is a remedial provision that will allow Comcare access to the Consolidated Revenue Fund—the CRF—to pay compensation claims in respect of diseases with a long latency period, such as asbestos related diseases. This applies where the relevant employment period was prior to 1 December 1988 and the condition did not manifest itself until after that date. As members here would be aware, the Comcare premium scheme, which was introduced on 1 July 1989, provides a financial incentive for employers to improve their injury prevention and management systems by linking the size of their premiums to their performance in these areas. These are incentives which are known very well in the private sector. Allowing Comcare to access the CRF for liabilities that arose before the Comcare premium system was introduced in 1989 will maintain the rationale behind the establishment of the Comcare premium system. The reason that this particular measure is needed now is because, until the Federal Court decision in 2006, Comcare had that access to the CRF to pay for certain pre-Comcare scheme premium liabilities that are taken to be Comcare's liabilities.So this measure is remedial legislation to deal with a decision arising from the Federal Court in Comcare v Etheridge, which closed off Comcare's access to the CRF in respect of those long latency liabilities.

This bill also contains measures that will ensure that there will be continuous workers compensation coverage for employees while they are overseas and in a declared place, or who belong to a declared class of employee. The need for this measure has arisen in part as a result of the establishment of the Australian Civilian Corps, and I am sure it is an amendment that should enjoy the support of all members in this place.

To conclude where I commenced, our approach to these matters in the broad is not to assume that employers are beset with employees who are on the shirk, who are trying to defraud the Commonwealth or any other employer, but that the employer has an obligation and employees have responsibility to manage health and safety in the workplace and that they need to be continually reviewed from time to time. We believe that this legislation is both timely and of benefit to the Commonwealth.

Mr SIMPKINS (Cowan) (09:46): I welcome the opportunity to make some comments, though fairly brief ones, today on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011. Providing a safe workplace is an obligation on an employer, and no-one can deny that this responsibility is one of the paramount obligations of employers and their managers. Naturally it is also in the best interests of the employer to do so. Good, hard-working and committed employees are what every organisation wants. Apart from doing the morally right thing and making sure that accidents are avoided, the costs of replacing or retraining staff and the overall costs in so many ways make sure that there are a range of reasons beyond the legal obligations to make workplaces as safe as possible. It really is a common-sense matter, and everybody agrees on this.

This bill, the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011, offers a number of amendments. It is not my intention to speak on the Amendment of the Occupational Health and Safety (Maritime Industry) Act 1993 element, as these are purely technical amendments relating to new arrangements and terminology introduced some years ago. In the same way, given the technical nature of amendments to the Seafarers Rehabilitation and Compensation Act 1992, excessive comments on those will also not add any great value. Instead, I will speak of matters relating to the amendments to the Safety, Rehabilitation and Compensation Act 1988, where amendments are proposed for sections 6, 36, 37, 50, 61, 62, 90 and 92.

I began my contribution to this debate by speaking of the responsibilities of the employers, whilst also speaking of the clear benefits to those employers of offering a safe workplace. As I said, it really is common sense. Certainly much has been said in the last 30 years in this country about safety hazards. Whether it is providing safety equipment and ensuring that it is worn, or installing safety equipment and guards around machinery, or even fixing trip hazards, not doing these things can result in injuries that benefit neither the employer nor the employee, obviously. It is certainly the case that a negligent employer may be liable for very large penalties that could even result in the closure of the business itself; therefore, the losses may extend beyond the employer and the injured employee. I therefore make the point that it is certainly in the interests of the employer to examine the physical environment in their workplace. They should also look at the detailed processes of the workplace to again ensure that the risks are dealt with. The training and vocational knowledge of the employee, or the lack thereof, would also represent a possible weakness that the employer is obliged to assess and act upon.

Clearly, being an employer involves not only actually running a business or organisation but also meeting the full range of legal and moral safety responsibilities. It is not easy, and anyone who says it is obviously has never run an organisation. As I have said, from the time the employee enters the land that the business is established upon, the safety risks must be assessed and addressed. The complications are significant. Sometimes employees must be watched closely; sometimes their work must be prescribed in some detail. Yet in all cases what happens in that work environment must be risk-assessed and addressed. It is very complicated, yet also, obviously, very necessary.

The problem is that this bill has loaded the burden onto employers to an even greater extent, because of what is proposed for paragraph 6(1)(b). This paragraph currently reads, before this amendment:

(1) Without limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment, an injury shall, for the purposes of this Act, be treated as having so arisen if it was sustained:

…   …   …

(a) while the employee was at the employee's place of work, including during an ordinary recess, for the purposes of that employment …

So that is what this paragraph currently says. But what the government proposes for subparagraph (b) is this:

(b) while the employee was at the employee's place of work, for the purposes of that employment, or was temporarily absent from that place during an ordinary recess in that employment …

This change means that the employer will now be made responsible for the actions of the employee beyond the business or organisation. In the area that he or she does not control and cannot hope to control, he or she will become responsible for the employee. As has previously been said by the shadow minister, when employees have to cross a dangerous road, rather than at an intersection, that is a risk that will be placed upon the employer, even though the employee undertakes the action. I wonder whether employers in business organisations that are covered by Comcare around the country may want to supervise how their employees move to the lunch bars. Clearly the liability of the employers, the managers and the organisations is expanded under this proposed change, but the degree of safety compliance by the employee is, of course, completely up to the employee themselves.

The Productivity Commission undertook an inquiry back in 2004 that covered such matters. It found that the employer's ability to exert control over workplace recess breaks and social activities is actually a relevant consideration. The commission recom­mended that coverage for recess breaks and work related events be restricted, on the basis of employer control, to those undertaken at workplaces and at employer-sanctioned events.

The last speaker implied that this was in some way a unilateral action by the Howard government. While the Howard government did undertake this action, and stood by it, the decision was absolutely based on the view of the experts, the Productivity Commission. This is a very important issue. It is certainly the coalition's view that it is unreasonable for an employer to be responsible for employees when they leave the workplace, and that is why we propose an amendment to this section of the bill.

This really does go to one of the key principles that divides the coalition from those opposite. We on this side of the House believe in personal responsibility, that we have to accept the consequences of the decisions we make as individuals. But it appears that there is a belief on the other side of the House that, whatever happens and wherever it happens, someone else is always responsible. I would make the further point that, should we be unsuccessful in amending the government's changes under section 6(1)(b), it will be interesting to see by what figure the number of claims for injuries or incidents outside the work place rises. Given the amount of insurance frauds that already take place in Australia each year, I suspect that some—hopefully very few—will seek to take advantage of the changes that the government has brought before the House today.

In summary, it is the intention of the coalition to make an amendment to address what we consider to be a retrograde step. Beyond that, there are no great concerns with this bill. As a member of the coalition, I support good and effective workplace safety laws that provide for the fulfilment of responsibilities. I emphasise that, while there is employer responsibility, at no time should the personal responsibility of the employee ever be set aside. I worry that, while such a philosophy may be an article of faith with some in this place, it does not serve the best interests of any person in this country, particularly the employees of Australia.

Mr SYMON (Deakin) (09:55): I speak in support of the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011. A bill similar to this, the Occupational Health and Safety and Other Legislation Bill 2009, was introduced into the previous parliament on 26 November 2009 but lapsed due to the proroguing of parliament on 19 July last year. Consequently I have been waiting a long time to speak on this bill—and finally the day has arrived.

Occupational health and safety and workers compensation are greatly important to me. Before coming to this place, I spent many years as both an occupational health and safety representative and a professional in that area as well. My particular concern was the construction industry, which to this day still has one of the highest rates of injury, death and claims when it comes to workers compensation. A lot of that comes about as a result of the itinerant nature of the industry, and that is going to be an ongoing problem. Anything we can do at the Commonwealth level, especially for those companies that are covered by Comcare, is always a good improvement.

While this bill itself does not make major changes, it is part of a much bigger and broader package of reforms that the Labor government has undertaken in the area of workplace relations and occupational health and safety. The centrepiece of those reforms was the implementation of the Fair Work Act in the previous parliament. And we also saw in 2009 the establishment of Safe Work Australia, an Australian government statutory agency with primary responsibility for improving health and safety at work and workers' compensation arrangements across Australia. I am proud of the work that the Labor government has undertaken in working towards national standards in such important areas, and I look forward to the harmonisation process reaching completion. It has been a long road and it has required the coming together of many different elements. But it is actually going to happen, and that is a great thing.

The bill before the House introduces a number of amendments to the Safety, Rehabilitation and Compensation Act 1988 to make some changes to the Comcare scheme as well as some other associated changes. In 2009-10 the Comcare scheme covered 371, 300 employees and received 10,551 claims, of which 8,777 were accepted. A total of $203 million was paid to claimants and the return to work rate of 93 per cent was higher than the national average of 85 per cent for other schemes.

The bill follows the government's 2008 review into the Comcare scheme, which was a commitment made by the Labor Party in the lead-up to the 2007 election. That review focused especially on the self-insurance arrangements, which allowed for the entry of private sector corporations into the Comcare scheme, and whether the scheme was providing suitable arrangements for self-insurers and their employees. On 11 December 2007 the government placed a moratorium on private corporations seeking to join the scheme. This had the effect of freezing the number of private companies in the scheme. I have previously spoken in this place of my concerns about Comcare in the private sector—specifically, the number of on-site inspections conducted compared to state based compensation schemes. There are several changes that are proposed in this bill. Firstly, it reintroduces workers' compensation for claims arising from off-site recess injuries. I think this is a rather big area. Listening to the last speaker and the opposition's concerns about off-site injuries I would like to say that maybe they should try it themselves. For many, many years I worked off-site and for many, many years I did not have lunch facilities or rest break facilities. Being in a service industry, many times the only place you could buy food or go to the toilet was off-site. You had to leave your place of work, drive up the street to find a public toilet or a food outlet. I do not think that should be held against anyone whilst at work. They also deserve coverage. That may be just walking to the shop, as I said, it may be driving to the shop, it may be going elsewhere to a public convenience, but these things have to be done during the course of the working day. Bringing such claims back under Comcare brings the scheme into line with most other jurisdictions, other than South Australia and Tasmania. It is also important to note, as I have said, that not everyone has access to facilities that most of us take for granted, and those people should not be forgotten.

This amendment bill also places specified time limits within which compensation claims must be dealt with. There are two obvious benefits to this change. Firstly, it provides greater certainty for people lodging a claim. When workers lodge claims it is usually a very stressful situation. There are a lot of things going on, a lot of changes from the ordinary, and the impacts that has on the mental state of the worker is not always apparent. Depending on the seriousness of their injury, sometimes it can be particularly severe. For a worker to know that their claim will be handled within a specified time frame hopefully provides some minor relief for people who are, unfortunately, in such a situation. Secondly, it is logical to believe that claims that are dealt with quickly will be less costly. The introduction of statutory time limits is an improvement to the Comcare scheme.

The bill also amends the Safety, Rehabilitation and Compensation Act 1988 to allow for medical and related costs to be paid when payment of other compensation has been suspended. Weekly compensation benefits that are not for medical purposes, such as payment for loss of wages, can be suspended if a worker refuses to attend rehabilitation for their injury. While suspending payments provides an incentive for injured workers to fulfil their requirements under the scheme, the suspension of payments for medical expenses would seem to be taking this a step too far, and is probably quite counterproductive. If someone is injured on the job, they are entitled to the appropriate treatment and care that will allow them to return to work as soon as possible. Denying them the payment for such treatment will only impede this goal. This revised system strikes an appropriate balance between incentives and penalties—a 'carrot and stick' approach.

The bill also restores Comcare's ability to access the Consolidated Revenue Fund to pay for workers compensation claims and expenses arising from long latency injuries claims. This access to funding was shut off in 2006 as an indirect result of a decision of the Federal Court. Examples of long latency injury claims are asbestosis and mesothelioma, many cases of which may not become apparent for decades after the initial exposure. It is not only decades; sometimes people do not even know which employer may have been the source of that exposure, because it is so long between the time of contracting the disease and any signs of it showing.

This provision in the bill will allow Comcare to access consolidated revenue for payment of its liabilities relating to events which happened before 1 December 1988, but which did not result in an injury until after that date. That certainly covers the examples I have noted. Restoring Comcare's access to the Consolidated Revenue Fund for such injuries is a minor administrative change, but it is one that makes sense given the purposes of the Comcare scheme.

Finally, there is a provision in the bill that allows for continuous workers' compensation for employees who are working overseas and who are in a declared place. The Australian Civilian Corps and the employment of DFAT staff in high risk areas such as Afghanistan and Iraq are examples where this cover could apply. The effect of these provisions is that employees in declared places or a declared class of employee will have access to 24/7 workers compensation for the duration of the overseas employment with the usual exceptions that apply to workers compensation such as serious and wilful misconduct, intentional self-inflicted injury and a few other exceptions.

This bill makes some small but significant changes to the Safety, Rehabilitation and Compensation Act 1988 that will provide better outcomes for workers employed by the Commonwealth government and those private businesses that are covered by the Comcare scheme. I welcome the changes and I look forward to continued progress in this important area. I commend the bill to the House.

Ms BRODTMANN (Canberra) (10:05): I rise today to speak in favour of the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011, but before I go into any detail about that I just want to take issue with the overblown comments that were made by the member for Farrer with regard to her concerns about the off-site recess element of this bill. She suggests that people go scuba diving at lunch and so therefore she had an objection to elements of this bill. She maintained that that element of the bill defies common sense. Her comments defy common sense. I cannot believe that she said that. It shows a complete distrust and a misunderstanding of Australian workers and of Commonwealth employees and people who would be covered under this scheme.

How many times have you been out on a lunch break, when we do get a lunch break, driving around Lake Burley Griffin and the place is—what?—bobbing with people scuba diving? Commonwealth public servants just all bobbing round—it's absolutely chockers! Winter, spring, summer, autumn, there they are, down there scuba diving! It is a completely ridiculous statement and it should be highlighted as such. It also shows a complete misunderstanding and distrust for Australian workers. So, in a way, the comments of the member for Farrer really do not surprise me, particularly with regard to Commonwealth employees. She has a complete misunderstanding and a complete distrust of them.

This bill will have a positive impact on many of my constituents here in Canberra and I would like to congratulate the Gillard government for responding to the Comcare review. The Comcare scheme has grown since its introduction to now include 200 employers and over 400,000 employees nationally. The Prime Minister, in her then capacity as minister for workplace relations, agreed to make a number of amendments to the Safety, Rehabilitation and Compensation Act following the report of the Comcare review. In particular, the government made amendments to reinstate the coverage of workers injured during an off-site recess break; continue the payment of medical costs, even if the employee refuses to take part in the rehabilitation process; and introduce statutory time limits within which claims must be determined by Comcare.

Although the language and technicalities of this bill can seem dry, this bill ultimately is about the very real problems that can and do face Australian workers who are injured at work. There are few things that can be more worrying and disruptive than to be unable to work due to injury and to face the prospect of no longer being able to carry out your trade or profession. In considering this bill we should therefore bear in mind that we are addressing the realities of the workplace.

This bill will, through its amendments, redress a number of anomalies which can make the position of workers affected by injury even more difficult. To illustrate these amendments, and the need for them, just think of something we see every day. For many people today, workplaces provide a place where they can go for recess breaks but for many others taking a recess break means going to a venue off site, as the member for Deakin just pointed out. Normally, that is a pleasurable, relaxing experience but under the present act there is an inequity in coverage of workers injured during an off-site break, between those employees who have an on-site facility for recess breaks and those who are not provided with one.

It is difficult, furthermore, to determine what would and would not be considered an off-site recess break for those employees who undertake their work off site—for example, a Telstra technician. There is another real-life situation that is relevant here. Most of us will know of someone engaged in an apprenticeship, or otherwise undergoing work related study to improve themselves. This means attending a work sanctioned course of an education provider such as a CIT or TAFE. But under the present arrangements this person would not necessarily be covered while on a lunch break. For these very real and common-sense reasons, one of the amendments the government is putting forward will reinstate the coverage of workers injured during an off-site recess break.

Now turning to another reality of life, we can all agree that rehabilitation for an injured worker is important in restoring confidence and a return to the workforce. But we also know that this can be a difficult process and that not all can easily take part in what is often a demanding process. Showing the necessary commitment and discipline can take time. Under present arrangements if a worker does not, or is not ready to, take part in a rehabilitation and return-to-work plan then all benefits can be suspended. This provision has some merit in so far as it is an incentive for a worker to stick to a rehabilitation and return-to-work plan. The recommendation of the majority report of the Senate inquiry into this legislation was that the rehabilitation and return to work of the employee were a priority of the Comcare scheme. And this is a view shared I would think by most of us.

But, while the suspension of benefits can be a useful mechanism to compel employees to comply with their rehabilitation and return-to-work plan, we should analyse more carefully the way in which this is done. In particular, the suspension of medical benefits appears to me to be a bit ill-judged. If the worker is unable to continue to receive treatment it makes it highly unlikely that the medical condition will improve sufficiently to make a return to work possible. For this reason the bill proposes an amendment under which the payment of medical costs can be continued even if the employee refuses to take part in the rehabilitation process. The effect of this amendment then is that only weekly compensation benefits would be affected in the case of a worker not engaging in rehabilitation; the payment of medical benefits would not be affected.

We all know how dispiriting and annoying it can be to face what seem to be unnecessarily long delays in the settlement of a claim we have made. Imagine, then, the effect on injured workers of waiting for a decision on which, it is not too much to say, their futures and their families' futures depend. The Comcare review noted that if claims are determined quickly then claimants can gain access to rehabilitation and medical treatment sooner.

Claims that are determined quickly also tend to be of a shorter duration and less costly. As it currently stands, there is no requirement under the act for decision-makers to act within a certain period. This is contrasted by those schemes operated by the states, which do apply statutory limits. The government is therefore proposing an amendment to introduce statutory time limits within which claims must be determined by Comcare.

Currently, the average time taken by Comcare is in excess of the time taken by these schemes, and therefore these amendments will provide a clear standard to determine claims quickly. As to the introduction of time limits, it was noted by the Comcare review that Comcare does not have a particularly good record of accomplishment in resolution of claims. In their submission to the review, Maurice Blackburn Lawyers noted:

... in 2004/2005 every state system had resolved more than 80% of claims within nine months while Comcare lagged behind with just 45% of claims resolved. These are the figures in a year where Comcare handled just 2660 total claims (disputed and undisputed) - Victoria and Queensland managed 27,000 each and NSW 52,000.

The AWU noted similar issues, saying:

The scenarios allowed under Comcare can result in extended periods before an injured worker may receive treatment and rehabilitation, reducing the potential for a sustainable return to work.

There is a definite link between the time it takes to resolve a claim and the positive outcome and return to work of an employee. Those claims that are determined quickly tend to be of a shorter duration and less costly. It also means claimants can gain access to rehabilitation and medical treatment sooner. As it stands, there is no requirement under the act for decision makers to act within a certain period. This is contrasted by those schemes operated by the states, and this bill addresses those issues. This bill will also give Comcare access to the Consolidated Revenue Fund, which was closed off as an indirect result of a Federal Court decision. These moneys have been used to pay for liabilities accrued prior to the premium system being introduced in 1989. As a result of the Federal Court decision, premium moneys are being used to pay for liabilities they were not intended for, thus compromising the system. This amendment will fix this and ensure the government has made contingencies for the provision of long-latency illnesses, such as asbestosis.

This legislation will also allow for the continuous coverage of employees who have been deployed overseas or are members of a declared class of employee, such as those deployed as part of the Australian Civilian Corps. This is particularly welcome news to me because I know many people in my electorate who have been deployed overseas, often to dangerous and unstable positions and locations. They are often called upon at a moment's notice to serve their government and country and they do so willingly and proudly. It is good to know that while they are away the government has them covered, should they be injured.

I also note with pride the specific mention of the Australian Civilian Corps as a declared category of employee. I am a proud supporter of the corps and am pleased to see its inclusion. For those unaware, the Australian Civilian Corps is a select group of civilian specialists who deploy to countries experiencing or emerging from natural disaster or conflict. Members of the corps are drawn from a register of screened and trained civilian specialists. They are selected for their technical skills and ability to work in some challenging environments overseas.

Members of this corps come from all levels of government and the broader community to provide advice, assistance and capability building in public administration, finance, law and justice, agriculture, engineering and health administration, and many of them are from Canberra. The Australian Civilian Corps is not part of the emergency relief effort but is designed to support stabilisation, recovery and development planning with a view towards the long-term viability of countries in need. It builds on the initial humanitarian efforts to set the foundation for sustainable development and self-reliance. For a range of reasons, this is a welcome bill and I commend it to the House.

Ms HALL (Shortland—Government Whip) (10:17): I rise to speak on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011, which establishes a workers compensation and rehabilitation scheme applying to Commonwealth employees and those employers of non-Commonwealth licensees.

The Commonwealth is the Australian government agency that has primary operational responsibility for the Safety, Rehabilitation and Compensation Act, including claims management for premium-paying Commonwealth agencies. This legislation implements some of the recommendations that came from the Comcare review. In late 2007, the government announced a review of the Comcare scheme to ensure that it is a suitable OH&S and workers compensation scheme for licensees and employees. This was necessary because under the previous government, the Howard government, the conditions and effectiveness of the Comcare scheme had been eroded. There was a move by the previous government to undermine the Comcare scheme. I spoke on that legislation on many occasions in this House as condition after condition was eroded from the scheme. That was of great concern to me, particularly as I had worked with injured workers prior to coming into this parliament. They were people covered by the Comcare scheme. I knew how important it was to have in place an effective scheme that looked after people and ensured that when they were injured they were cared for and offered good quality rehabilitation, certainty and assistance to re-enter the workforce. Prior to the Howard government coming to power, that is how the Comcare scheme operated. The Howard government eroded the scheme over the time that they were in power.

Since being elected, we have worked very hard to restore the scheme to its previous position and the changes in this legislation look at some of those issues. One issue is the workers compensation coverage for injuries sustained during off-site breaks, which was removed by the coalition in 2007 and which this legislation reinstates. I heard the member for Farrer say that people can go out and scuba dive during their recess break. That is absolutely ludicrous. A example of injury would be when somebody working at Telstra or a contractor has their break, walks across the road to the shop—because there is nothing on site for them to purchase during that break—and is hit by a car. It is a farce to think that the opposition could compare scuba diving with going across the road to buy sustenance in a break. It just shows the level that those on the other side will stoop to when it comes to attacking workers. They do not like workers. They do not believe that workers should have any conditions and they do not believe that they should have proper coverage when they are injured at work. If workers do have coverage, they believe that it should be minimal. It is all about reducing the liability to the employer, not ensuring that an injured worker has the proper coverage so that they can retrain or receive the medical treatment they need and then retrain and return to the workforce.

A Senate committee looked at this legislation and it was no surprise whatsoever to find out that the coalition senators took the view that an employer's liability to an employee should not be sustained if they are injured during their recess break. We on this side of the House know that the opposition has no commitment to workers. We have only to look back at the previous Work Choices legislation to see what they think of workers and their commitment to workers. I think the reinstatement of off-site recess breaks and coverage during off-site recess breaks is an important aspect of this legislation. It should not be trivialised in the way that I have heard from opposition speakers this morning.

The next point I would like to deal with relates to medical costs and whether they should continue to be paid where a worker's weekly compensation benefits are suspended for refusing to participate in the rehabilitation process. As I mentioned earlier, I come from a background where I worked with injured employees and I know that one of the most important aspects of a person's rehabilitation program and return to work is certainty. Quite often the person who has been injured feels that they are incapable of undertaking a return-to-work program because they feel that the status of their injury still has not been clarified and they feel that if they do participate in the rehabilitation program they will further injure themselves. Discontinuing the payment of medical costs creates greater uncertainty and can inhibit the rehabilitation process, and it can actually inhibit the person's ability to return to work. Everybody knows that it is quite often the person who has the injury listening to their body and knowing that things are not right and knowing that if they undertake certain activities they will injure themselves further. The last thing we want in this parliament is a situation where workers are forced to return to work and further injure themselves.

That is a very important aspect of this legislation and I think it is important for us to look at what the coalition senators on the committee said when the committee looked at this legislation. It was no surprise to find out that the coalition senators strongly disagreed with the amendment, expressing their concerns that the amendment to the suspension of payment provision under the SRC Act may facilitate a culture of noncompliance by rewarding employees who do not comply with their obligations. I think nothing could contrast more the approach by the opposition and the approach by the government than that statement by coalition senators.

We on this side of the House know that it is important to address the medical status of somebody who is injured, even if they have declined to be involved in a rehabilitation process and return to work. We know that by resolving the medical problems that a person has we have the best chance of their returning to work, while those senators in the coalition are only interested in noncompliance. One side of this House cares about workers and cares about returning them to the workforce and enabling them to be productive members of our society while the other side of this House is more concerned with punishing workers and making it harder for them. Anyone who has been involved in that process knows that if medical expenses are not being paid, it is very difficult in some cases for an injured worker to be involved in the process; it makes it very hard for them to pay for the treatment they need to receive. The opposition stands condemned for the position it has taken on that aspect of this legislation.

Another part of the legislation I would like to concentrate a little on is the introduction of the statutory time limits within which claims must be determined by Comcare as a means to encourage timely determination of workers compensation claims. It is very important and I am pleased to report to the House that when the opposition looked at the issue in the Senate they agreed with that aspect of the legislation. It is very surprising to us when we hear in this House that the opposition agreed with any aspect of any piece of legislation. The one thing they are very good at doing is saying no, but they agreed with the statutory time limits and that is vitally important. Most of the state workers compensation systems have incorporated statutory time limits and, as such, it is vitally important to the effective operation of the system. This piece of legislation also gives Comcare access to the Consolidated Revenue Fund. The Comcare scheme's premium system was introduced in July 1989. The system provides a financial incentive to employers to improve their injury prevention and management systems by linking the size of their premium to their performance in these areas. That is vitally important. It encourages employers to take responsibility for their workers. It encourages a better outcome for Comcare, for the government and for injured workers.

In 2006 a decision of the full Federal Court, in Comcare v Etheridge, on matters unrelated to the funding of Comcare's liabilities closed off Comcare's access to the CRF in respect of liabilities for long latency diseases. As a result, Comcare was forced to use premium funds to pay for these liabilities. The rationale behind the premium system will be undermined if Comcare is to pay for liabilities that predate the premium system's introduction.

The amendments contained in this bill will realign the operation of the SRC Act with the original policy intention by restoring Comcare's access to the CRF to pay for workers compensation liabilities arising pre 1 December 1988. That covers things such as asbestosis and other diseases that do not become apparent until further down the track.

This is good legislation. It is about ensuring that workers have the protection that they need at the appropriate time. It is about restoring some of the elements that the Howard government took away in their savaging of workers, in their anti-worker campaign, and recognising that to have an effective system you need effective coverage. That is what this legislation will ensure. I commend the legislation to the House.

Mr MELHAM (Banks) (10:32): I rise to give my support to the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011. This is a worthwhile bill and is importantly part of the Labor tradition in looking after the rights of workers. The bill provides protection for workers—protection which was, in part, removed by the previous government. The bill is a second attempt by the government to redress the inequities introduced by the changes in April 2007 to the Safety, Rehabilitation and Compensation Act 1988.

In 2007 the government announced a review of the Comcare scheme. The review was to ensure that the Comcare scheme had suitable occupational health and safety and workers compensation arrangements for self-insurers and their employees. On 26 November 2009 the Occupational Health and Safety and Other Legislation Amendment Bill was introduced into the House to implement the improvements recommended by the review. The bill lapsed when parliament was prorogued. This bill now will implement those improvements arising from the review of the Comcare scheme through amendments to the Safety, Rehabilitation and Compensation Act 1988.

The primary purposes of the bill are as follows. It will amend the SRC Act to enable Comcare to access the Consolidated Revenue Fund to pay compensation claims in respect of diseases with a long latency period such as asbestos and mesothelioma. It will allow for continuous workers compensation coverage for employees who are overseas and who are in a declared place, or who belong to a declared class of employees—for example, those DFAT officials who are required to work in Afghanistan or Iraq. It will reinstate claims arising from off-site recess injuries—for example, if an employee is injured at lunchtime. It will allow compensation for medical expenses to be paid, where payment of other compensation is suspended. For example, in a case where an employee has sustained a workplace injury but is reluctant to undertake rehabilitation, medical bills will continue to be paid even if compensation is discontinued. And the bill will allow for time limits for claim debate termination so that employees are not kept waiting unnecessarily for a decision to be made in relation to their claim for compensation.

When the original bill was introduced in 2009, it was referred to the Senate Education, Employment and Workplace Relations Legislation Committee for inquiry. Not surprisingly, the coalition senators produced a minority report stating that there was insufficient reason to merit the changes proposed by the bill in relation to off-site recess breaks. A number of difficulties have resulted from the 2007 removal of coverage of off-site recess break claims. Firstly, there is a basic equity issue in the case of employees who are not provided with on-site facilities; secondly, it is difficult to determine what would and what would not constitute an off-site recess break where employees such as Telstra workers are required to undertake their work off site and their usual place of work is their vehicle; thirdly, there is also inconsistency in the fact that an employee would be covered if attending an employer-sanctioned off-site training program but would not necessarily be covered during lunchbreaks; and, fourthly, reinstating coverage for off-site recess breaks will realign the Comcare scheme with the majority of jurisdictions.

In my own electorate office, we were faced with the inequity of the April 2007 amendments to the act when an employee fell in the street outside the office during a lunchbreak and was unable to claim workers compensation. In my office we have a lunchbreak between 1 and 2 pm, although it should be noted that the employees and I still answer the phone. It is ridiculous that someone who had to go and get their lunch from a place across the station, and who fell in the street during that lunchbreak, is not entitled to claim workers compensation. This amendment bill will fix that, as it should.

It was a mean-spirited approach by those opposite to have taken this away in the first place. Indeed, it was the mean-spirited approach by the former government that saw their demise at the 2007 election, in relation to the Work Choices policies that they introduced. They went too far in this area. It was an ideological pursuit of workplace conditions by the former Prime Minister—an ideology, in fairness to him, that he had held in all his public life—but he was repudiated at the 2007 election. I think it was a good thing that he was the Prime Minister at that election and was repudiated by the electorate particularly in relation to his view of the world when it comes to workplace legislation. During the Senate committee's hearings, DEEWR provided an explanation of the practical difficulties in its submission No. 1, on page 3:

One concern was the difficulty in determining what would and what would not constitute an off-site recess break where, for example, employees worked off-site or where no facilities were provided for lunch breaks. Another concern was the inconsistency between the fact that an employee would be covered when attending employer-sanctioned courses at educational institutions either within or outside normal working hours but not necessarily during lunch breaks.

The majority of state and territory jurisdictions already provide coverage for off-site recess breaks. At the same time, DEEWR made it clear that there are other provisions in the SRC Act whereby compensation would still not be payable in respect of self-inflicted injuries and that would also carry over to recess breaks or as a result of serious or wilful misconduct on behalf of the employee. The committee majority report viewed this particular amendment as an important reinstatement of workers' rights which had been removed under the 2007 changes—that is the reason, no doubt, that the coalition senators did not support the amendment.

The access to consolidated revenue for long latency claims is an important aspect of the bill before the House today. As part of its claims management role, Comcare collects premiums from Commonwealth agencies to finance its administration and pay for the cost of claims. This system did not commence until 1 July 1989. Therefore claims that accrued before that date were paid for from consolidated revenue as no premium-paying employer could be held accountable for those earlier injuries. As an indirect result of the Full Federal Court decision in Comcare v Etheridge, Comcare's access to the Consolidated Revenue Fund to discharge its liabilities for one particular category of these earlier claims was closed off. In particular this impacts on long latency diseases such as asbestosis and mesothelioma. Obviously this is not acceptable. We all know how long and how hard unions fought on behalf of workers affected by these terrible diseases. While its omission is inadvertent, it is vital that the provisions be reinstated. It is simply not acceptable for workers diagnosed as having asbestosis, for example, to be excluded from potential workers compensation payment because of an unexpected consequence of a court decision.

Another amendment concerns the continued payment of medical bills when incapacity payments are suspended. The SRC Act provides that workers compensation payments will be suspended when an employee fails to participate in reasonable rehabilitation. This suspension currently includes the suspension of payment of medical benefits. Obviously this suspension could well be counterproductive to the employee's recovery and eventual return to work. To that end this bill, as did the OHSOLA Bill, seeks to amend the SRC Act to protect the payment of medical and related benefits to claimants notwithstanding the suspension of their weekly benefits. Similar arrangements are contained in workers compensation legislation in several other jurisdictions; for example, in Victoria, Tasmania and the ACT. An example of the real world implication of this could be the case where an employee is on stress leave and perhaps dealing with a mental illness. That employee may, in the course of his or her illness, refuse rehabilitation. If this amendment is not enacted, that person, because of the nature of their illness, would not have their medical bills paid. That is not a reasonable or equitable outcome given that the person's eventual recovery and return to work could be directly impacted by the nonpayment of medical bills.

Another aspect of the bill which should be noted is the mechanism whereby certain employees of the Commonwealth will have the benefit of continuous 24/7 workers compensation coverage while overseas. The usual proviso applies, of course, that the injury must have arisen out of, or in the course of, his or her employment. That is, the provisions will not apply if the employee sustained an injury because he or she voluntarily and unreasonably submitted to an abnormal risk of injury. This provision arises from the introduction of the Australian Civilian Corps Bill 2010. The Civilian Corps will comprise civilian experts who can be rapidly deployed to assist in international disaster relief, stabilisation and postconflict reconstruction efforts. When that bill is enacted, according to Bills Digest No. 35 prepared by the Parliamentary Library at pages 3 and 4:

The Australian Civilian Corps will comprise a register of up to 500 civilian specialists in areas such as public administration and finance, law and justice, engineering, health administration and community development. Specialists will be chosen for inclusion on the deployment register based on their expertise and demonstrated experience in relevant areas. It is intended that personnel will be sought from both government and the broader Australian community and will remain in their regular employment until accepting a deployment.

Given the role of the Australian Civilian Corps, it is, of course, important that workers compensation provisions apply while they are serving overseas. At the same time the changes also address the need to ensure that other Commonwealth employees deployed in such high-risk areas as Afghanistan and Iraq have workers compensation coverage during the time of that deployment. For instance, there are a number of officers from the Department of Foreign Affairs and Trade currently working in Afghanistan. The amendments will also provide for the minister to declare high-risk places to be places where the 24/7 coverage will apply.

This bill is a direct response to the Government's Comcare review. The measures it contains are designed to improve the Comcare scheme by reducing injuries, strengthening the focus on rehabilitation and return to work and increasing benefits for injured workers. I commend the bill to the House.

Mr LAURIE FERGUSON (Werriwa) (10:43): I rise to speak on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011. There was a time in Australian politics when John Howard was able to persuade a significant number of workers, particularly in the outer suburban seats of this country, that his party represented the working class and had an interest in working class conditions. People who had been concerned about the deterioration of industry in this country and who were mystified by the reduction in tariffs were, in a sense, liable to the appeals of social conservatism that Howard represented. It is in bills such as this that we see some of the realities of where the current opposition stand in regard to workers conditions. That appeal to social conservatism was accompanied by rhetoric about the unnecessary—as they saw it—hope for working-class students to go to university. I heard constant references to the fact that people should lower their expectations; they should perhaps be content to go into the workforce, into TAFE et cetera. Of course, that was not accompanied by any significant expenditure by the previous government on TAFE. One of the major initiatives of this last budget was in regard to the apprenticeship system: (a) the expedition of outcomes; (b) the mentoring; and (c) the delivering of more money et cetera. There has been a doubling in the course of this government.

As I say, it is when we come to bills like this that we have some recognition of where the opposition really stand in regard to the average worker in the western suburbs of Sydney and their conditions, because, as I see it, we are today rectifying a major attack on their conditions in relation to, for instance, off-site injuries. It is interesting to note the estimate of the minimal cost of this for Australian taxpayers. It is about $2 million. When we look at the size of the budget of this country, that is infinitesimally small, and yet the coalition were prepared to go out of their way to legislate so that workers injured whilst on their lunch breaks could not have coverage.

The previous speaker, the member for Banks, has given an example of exactly what occurred in the real world to one of his employees. The member for Farrer typified the kind of rhetoric and conservative reaction on this matter with fanciful suggestions that what we are trying to do here is cover somebody who goes scuba diving. I have been privileged, like most members of this parliament, not to have been in workforce situations where I had to travel to get my lunch. Perhaps the only times in my life were a few university jobs on the Water Board. I recall that people had to go to shopping centres from distant areas in suburbs that were having Water Board sewerage laid. Most of us here have not experienced that reality, but Australian workers do. The opposition suggest that basically we should not give them coverage for something that is in their working day—when they would rather be sitting on the couch at home doing nothing. But, if workers are part of the workforce and they need to get their lunch away from the work site, I think the majority of people in this country would believe that they should be covered if they are hit by a car or, as the member indicated, injured as the result of a faulty footpath. The opposition are trying to save $2 million on this measure but, in a real sense, that just represents their lack of attention to and interest in working-class conditions.

As another member indicated earlier, the backdrop to this is the move towards harmonisation of workers compensation measures around the country, an attempt to make sure that we have a degree of regularity across state and territory borders. The measures in this bill, besides the question of coverage of people on lunch breaks, are also practical, necessary and in the interests of public servants. I should note, when we talk about the attitude of the opposition, that I recall in 1996 the elevation of the Howard government and the massive swathe of redundancies and sackings that occurred in the Public Service in this country and particularly in this city as a result of their policies.

In this bill we see a number of other measures that are commendable. If, for a variety of reasons, people are not fully cooperative about rehabilitation, they do at least receive their medical costs during that period. I listened to the New Zealand High Commissioner this morning talking to the foreign affairs committee about the trauma after the events in Christchurch and the very deep concerns in the New Zealand psyche about what is going to happen to the people who have endured that. We cannot predict the reaction of every person in this country if they are injured or how they will react afterwards. There can be a variety of reasons why they do not wish to participate in or do not participate in rehabilitation. It should not be accompanied by measures that restrict their ability to get medical assistance, because in the long term all that can mean is that their rehabilitation is delayed or it does not happen, and there are even more long-term costs to the Australian taxpayer in the rectification of their problems. So it is right and proper that in this legislation there are measures to make sure that those medical expenses are covered.

Another measure here is to get some more expeditious reaction by the fund in its clearing up of cases. It was mentioned earlier that, when this was investigated, the degree of finalising claims in this sector was quite low by any comparison with state and territory jurisdictions. I find that a bit surprising because of what I would expect about the nature of the workforce and the jobs they do in the Australian Public Service compared to other sectors. One would expect perhaps the reverse. But, as I say, there are measures here to try and make sure that there is a more expeditious reaction in how these matters are finalised.

I commend the legislation. It is an indictment of the opposition that their senatorial representatives found ways to quibble about it and to try and throw fanciful possibilities as reasons that we should not legislate to protect workers in this fashion. This bill comes as a result of investigation into the system. It is not separate from what was found at that inquiry. I commend the legislation.

Dr LEIGH (Fraser) (10:50): In 2006, a Commonwealth public servant in Queensland told the story of having sprained an ankle just two metres from the front door of his building while going out for a lunch break. Would any of us reasonably think that that was not a workplace accident? Would any of us reasonably seek to deny someone who suffered such an injury fair compensation? The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011 may look technical, but in its essence it is about fairness and it is about equity. If you have ever been injured at work, you know that it can be a time of incredible stress and uncertainty. This bill provides greater assurance to employees covered by the Safety, Rehabilitation and Compensation Act about their rights and entitlements. This bill also expands the application of the SRC Act to ensure that people deployed on dangerous missions, whether here or overseas, have greater certainty about their workers compensation coverage.

The recess breaks amendment reinstates a previously held entitlement to workers compensation insurance coverage for workers on unpaid recess breaks. Leaving work for a coffee, for lunch or for an appointment during your own time currently leaves public servants without workers compensation coverage. This means that public servants participating in a lunchtime stroll around Lake Burley Griffin are left without workers compensation coverage, even when the walk is part of a charity activity supported by their department. People who slip on the frosty Canberra grass on a winter's morning on their way to warm up with a coffee or a hot chocolate are denied coverage for any injury they sustain.

Under current arrangements, workers on a recess break may only claim some compensation through their motor vehicle insurance. So the workers who are punished by these Howard government reforms removing coverage for recess breaks are those workers who are being more socially and environmentally responsible. Restoring this coverage to workers covered by the Comcare scheme is important to me as the member for Fraser, not just because of the significant number of Australian Public Service employees living in my electorate but also because the Comcare scheme covers employees of the Australian Capital Territory government. Additionally, employees of non-Commonwealth licensees that self-insure under the Comcare scheme will see those rights restored to their working conditions. The rights restored by this bill apply to ACT government employees as well as Australian government employees. Unusually for public sector workers, ACT government employees are not able to lobby or negotiate with their direct employer over their workers compensation arrangements. In that respect, as their representative here in the big house in Canberra, I feel an additional duty to ensure that the rights of these workers are improved.

Workers compensation coverage is a basic right in Australia. Most voters would reasonably expect that if an employee is injured by their work or while carrying out their work then they should be compensated for their injury. I need to be clear here and stress again to the House that workers compensation coverage for employees on recess breaks is not a new entitlement. It restores a right previously held by Commonwealth and ACT government employees from the introduction of workers compensation insurance in 1988 right up until 2006 when, as a part of then Prime Minister John Howard's broader attacks on the rights of workers, the Liberal and National parties saw fit to deny their own public servants rights enjoyed by workers across other jurisdictions in Australia. In fact, South Australia and Tasmania are the only two jurisdictions aside from those in the Comcare scheme that do not provide workers compensation coverage for their employees during recess breaks. It is a right enjoyed by most Australian workers that must be restored to workers covered by the Comcare scheme.

As well as restoring rights, extension of workers compensation coverage to recess breaks removes a substantial number of grey areas. Think about the following situations: an employee leaves work for a coffee with their supervisor to discuss a range of work related issues; an employee takes a work related telephone call on their lunch break; an employee runs into a contact or a colleague on their lunch break and proceeds to have a long conversation about a work related matter; and a group of employees attend a work lunch. Restoration of workers compensation coverage for recess breaks means that workers at workplaces that do not provide on-site lunch facilities are not offered different treatment to workers lucky enough to have on-site lunch facilities. Similarly, work sponsored health and fitness activities that occur off-site during breaks currently leave employees exposed to situations where they are not covered by workers compensation, and have left employers reluctant to encourage off-site health initiatives. I am proud that my local public sector workplaces encourage their employees to get out of the workplace during their unpaid lunch break to undertake community activities, healthy activities and fitness activities. But I am disappointed that the current law acts as a disincentive for people to participate in these healthy activities.

There are plenty of examples around Canberra of healthy lunchtime activities. There are walking clubs, there is netball, Tai Chi, Pilates and Zumba. Department of Defence employees use onsite gyms, badminton courts and pool facilities, participate in lunchtime competitions including volleyball, touch football, basketball and softball, and participate in lunchtime classes including aerobics, weights, resistance training and ballroom dancing. The way the laws currently stand, it is unclear whether the employees would be covered for workers compensation purposes in these situations. Breaks during the working day cannot always be divided neatly into 'working' and 'not working'. We need laws that recognise the diversity and flexibility of working arrangements.

As to time limits, this bill adds further benefits and protections to workers by introducing statutory time limits for the determination of claims. Procedural rights can be just as important as substantive rights to allow people to access their entitlements. Without time limits an application for compensation could technically be allowed to sit with a decision maker for days, weeks, months or years on end before a decision is finally made. Administrative law has long recognised the need for decisions by government to be made in a timely manner. Introducing time limits provides assurance to workers in the Comcare scheme that their claim will be dealt with by a particular date. Making these limits a statutory right rather than an administrative process means that these rights are given greater prominence and certainty. Claimants can rely on the laws to remain constant and reliable.

For those that have suffered an injury at work, uncertainty about their workers compensation claim can cause considerable distress. People who suffer an injury at work, and are unable to attend work as a result, are forced to sit at home and wonder about when they will be able to return to full health and return to work. It can be an incredibly distressing time and it allows plenty of time for the injured worker to worry about their claim and their entitlements. Providing as much assurance and certainty as we can about when and how a worker will know their precise entitlements is a key step forward in ensuring that our workers compensation system is as effective as possible at getting people back into work. Evidence in the Comcare review showed that Comcare had a much lower rate than the national average for assessing and determining claims. Providing statutory time limits should encourage Comcare to provide the same level of service to workers covered under that scheme as workers from other jurisdictions.

I have long supported the principle of policy based on considered evidence. The changes to time limits proposed in the bill arose from the review of Comcare conducted by the Department of Education, Employment and Workplace Relations. Statistics about these time limits leave me convinced that without an adequate statutory requirement workers will continue to be denied important rights with respect to their workers compensation.

One new aspect of this bill, which was not a part of the Comcare review, is the extension of workers compensation coverage to particular areas or particular classes of employees. The bill amends the SRC Act to provide workers compensation coverage for injuries sustained while an employee is working in a 'declared place' outside Australia. This is above and beyond any existing extraterritoriality provisions and will provide additional certainty for employees on overseas postings about their workers compensation entitlements. This means that the relevant minister can declare high-risk places, such as Afghanistan and Iraq, to be places where workers compensation coverage will be continuous for all Commonwealth employees. The very act of being in a dangerous situation, as determined by the minister, means that a worker is deemed to continuously be at work and any injuries sustained while in that dangerous place as a result of work will be compensable.

The changed coverage also applies where a person is a member of a 'declared category' of employees whose work requires deployment to places outside Australia. The need for this flexibility arises specifically in relation to the establishment of the Australian Civilian Corps, who will assist in disaster relief, stabilisation and postconflict resolution in developing countries and failed states. The effect of these changes will be to provide 24/7 coverage under the SRC Act for employees exposed to unusually high risks while working outside Australia.

I spoke recently at the Lowy Institute about the need for targeted, effective foreign aid. The Australian Civilian Corps is very much in this mould. It will provide expertise where it is most needed: after natural disasters or in times of acute stress. We have a duty to help our neighbours and an obligation to provide our expertise on a global scale. But in providing this aid we should recognise that the Australian government still has a role in protecting its people who are sent into these dangerous situations and should ensure that their workers compensation is assured and not left open to interpretation or confusion. Providing continuous workers compensation coverage for such groups will also assure them, both before and during their deployment, that there is a safety net in case anything goes wrong during their deployment.

I am proud to be part of a political party that always seeks to look after the rights of workers. I am proud to be part of a political party that looks after the substantive and procedural rights of people who are unfortunate enough to be injured at work. This bill goes some way to undoing the damage of the Howard years on public servants in Canberra and throughout Australia—those working for the Australian government or the ACT government, as well as non-Commonwealth licensees. I am also proud to be a part of a political party that recognises its obligations when new and challenging situations arise for people carrying out work in our name in places of high risk or danger. I commend this bill to the House.

Ms KATE ELLIS (Adelaide—Minister for Employment Participation and Childcare and Minister for the Status of Women) (11:03): I thank all members for their contributions to this debate on the second reading of the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2011. This bill implements the government's response to the review of the Comcare scheme. It also introduces certain associated amendments. In late 2007 we undertook to review the Comcare scheme—in particular, its self-insurance arrangements, which provide for the entry of private sector corporations into the scheme. This review was designed to ensure that the Comcare scheme has suitable occupational health and safety and workers compensation arrangements for self-insurers and their employees.

The bill implements improvements arising from the review through amendments to the Safety, Rehabilitation and Compensation Act 1988—the SRC Act. It also makes amendments that respond to policy issues unrelated to the review that address Comcare's access to the Consolidated Revenue Fund as well as workers compensation coverage for employees working in high-risk environments overseas. To encourage the timely determination of workers compensation claims, the bill amends the SRC Act to enable the setting of statutory time limits within which claims must be determined. This is because claims determined quickly tend to be shorter in duration and less costly. In addition, the bill amends the SRC Act so that medical and related costs will continue to be paid when a worker has their compensation benefits suspended for refusing to participate in the rehabilitation process.

The bill also reinstates workers compensation coverage for off-site recess breaks. This will realign the Comcare scheme with the schemes of most jurisdictions and remove the inequity in coverage for employees whose employers do not provide on-site facilities for meal breaks.

In the coalition senators' minority report on the Occupational Health and Safety and Other Legislation Amendment Bill 2009, senators recommended that the bill be amended to continue to exclude workers compensation claims arising from injuries sustained during off-site recess breaks. The government does not support this recommendation. A number of practical difficulties have resulted from the April 2007 removal of coverage of off-site recess breaks. These problems include the inequity of coverage for employees whose employers do not provide on-site facilities for recess breaks.

There is also the difficulty of determining what would or would not constitute an off-site recess break. One example is when employees are required to work off-site, such as Telstra technicians whose usual place of work is their vehicle. A further inconsistency arises in that an employee would be covered when attending employer sanctioned courses at educational institutions both during and outside normal work hours but might not be covered during lunch breaks. Reinstating workers compensation coverage during recess breaks does not mean that workers will be automatically covered for all injuries sustained during their breaks. Workers compensation is not payable in relation to self-inflicted injuries, injuries sustained as a result of serious or wilful misconduct on the part of the employee or injuries sustained because an employee voluntarily and unreasonably submitted to an abnormal risk of injury. Reinstatement of coverage of recess breaks will cost Comcare $1.7 million in 2010-11, indexed for future years.

The measures proposed in the bill are designed to improve the Comcare scheme by reducing injuries, strengthening the focus on rehabilitation and return to work and increasing benefits for injured workers. The bill also seeks to make a number of additional reforms to address issues that have arisen separately to the Comcare review. In particular, the bill amends the SRC Act to provide workers compensation coverage for injuries sustained while an employee is working in a declared place outside Australia or where the person is a member of a declared category of employees whose work requires deployment to places outside Australia.

The bill will allow the minister to declare certain high-risk places—for example, Afghanistan or Iraq—to be places where the SRC Act will be deemed to provide continuous coverage for all Commonwealth employees. The bill will also allow the minister to declare certain classes of employees to be covered while outside Australia. The need for this flexibility arises specifically in relation to the establishment of the Australian Civilian Corps, who will assist in disaster relief, stabilisation and post-conflict resolution in developing countries and failed states. The effect of these changes will be to provide 24/7 coverage under the SRC Act for employees exposed to unusually high risk while working outside Australia. The fiscal impact of these amendments will be in the order of $2 million per annum.

Other amendments to the SRC Act contained in this bill restore Comcare's access to the Consolidated Revenue Fund to pay for its workers compensation liabilities and associated expenses arising from long-latency injury claims, such as those related to asbestos exposure. Comcare's access to the Consolidated Revenue Fund was closed off as an indirect result of a Federal Court decision in 2006. However, the intention of the SRC Act has been and still is that the Consolidated Revenue Fund should fund these claims because they relate to employment related injuries not covered by Comcare's premium system. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ms LEY (Farrer) (11:10): I move:

(1) Schedule 2, item 1, page 4 (lines 5 to 10), omit the item.

It is important to note that there is much in this bill that the coalition agrees to, but we do propose a straightforward, common-sense amendment. The remarks by members opposite have all focused around the issue of an employee being eligible to claim for an injury during a recess break from work and reasons why that might seem perfectly logical. Exception was taken to the example that I previously mentioned about an employee who might be going scuba diving in their break. There may have been an element of rhetorical flourish in that example, but I really make the point that it does illustrate the problem that we have with this bill. In fact, a very similar example was presented to coalition senators.

An employee injured during a break from work, who leaves a work site during a lunch break to purchase a meal at a nearby shop, would not be eligible to claim for such an injury. This would be reversed under changes proposed in this bill, thereby allowing a worker to claim for an injury suffered when temporarily absent from their normal workplace during such a recess. Obviously this expands the extent to which an employer has liability. It also removes the ability of an employer to control the degree of safety compliance of a worker. For example, the worker might choose to cross a busy road rather than use a pedestrian crossing. It comes down to personal responsibility, and employees do need to take that personal responsibility for themselves.

The Productivity Commission inquiry found that the employer's ability to exert control over workplace recess breaks and social activities is actually a relevant consideration. It is not reasonable that an employer should be liable for circumstances that are completely outside the employer's ability to control or to monitor or where they do not have any exercise over what their employee does. The Productivity Commission did recognise that and it recommended that coverage for recess breaks and work related events be restricted, on the basis of employer control, to those undertaken at workplaces and employer sanctioned events. So, in line with recommendation 13 of the government's own review and the Productivity Commission's 2004 recommendation that claims arising from injuries sustained during off-site recess breaks should be excluded, the coalition will amend the bill proposed by the government to remove the changes to recess claims.

Mention has been made by members opposite of the coalition report. Our minority report is instructive in this. During the inquiry, various pieces of evidence were taken by coalition senators, leading them to explain their concerns relating particularly to the reinstatement of claims arising from off-site recess break injuries, the introduction of time limits for claim determination and amending the suspension provisions set out in section 36(4) of the SRC Act. Coverage for off-site recess break claims was removed from the SRC Act in April 2007 through the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act. The department in its report set out the reasons for the removal. The removal of this coverage from the SRC Act in April 2007 was through adoption of a recommendation made by the Productivity Commission in its 2004 report. The principle underlying that recommendation is that employers should be liable only for injuries and illnesses resulting from activities which they are in a position to control. Employers cannot control circumstances associated with journeys to and from work or with recess breaks away from employers' premises. It was therefore decided by the previous government that it is not appropriate for injuries sustained at these times to be covered by workers compensation.

In response to questioning by Senator Back during the inquiry, the department gave evidence confirming that if, during their lunch break, an employee went snorkelling and dived into the water and hit their head they would be covered under the proposed amendment. Senator Back said:

So what if the person in their lunch break decided they were close enough to the beach, went snorkelling, dived into the water and hit their head? Under this proposed amendment would they actually be covered for that activity?

The response was:

Yes, they would.

Coalition senators considered that this evidence from the department reinforces the principle underlying the Productivity Commission's recommendation that employers should be liable only for injuries and illnesses resulting from activities which they are in a position to control.

In further questioning during the inquiry the department was unable to provide any compelling information as to what had changed since both the Productivity Commission and the department made their recommendations that off-site recess breaks not be covered by the scheme. I commend my amendment to the House. (Time expired)

Ms KATE ELLIS (Adelaide—Minister for Employment Participation and Childcare and Minister for the Status of Women) (11:15): The government will not be supporting the amendment put forward by the coalition, for the reasons that I outlined in my speech in reply to the second reading debate. To reiterate, a number of practical difficulties have resulted from the removal of coverage of off-site recess breaks. These problems include the inequity to some employees whose employers do not provide on-site facilities for these recess breaks. This is clearly an issue that needs to be addressed, but there is also the difficulty in determining what would or would not constitute an off-site recess break. The example I gave previously was a Telstra technician who is on the road and whose work site really is their vehicle. The opposition's suggestion for how to determine what would or what would not constitute an off-site recess break in these examples is puzzling to us.

A further inconsistency arises in that an employee would be covered when attending employer sanctioned courses at educational institutions both during and outside normal work hours but might not be covered during lunch breaks.

These are sensible and important changes which the government is putting forward. The opposition's amendment seeks to remove a major part of the bill before the House and we will be opposing it.

Ms LEY (Farrer) (11:17): I want to reiterate that coalition senators and the coalition generally consider that an employer's liability to an employee should continue to be limited to the circumstances where the employer has that element of control and that it is unreasonable to make employers liable for all types of injuries, and note that the continued exclusion of off-site recess breaks will not preclude an employee pursuing a remedy in the event that they are injured. There are other options available to an employee.

The government commissioned and received a report. The report recommended that claims arising from injuries sustained during off-site recess breaks continue to be excluded. In evidence to the committee, there was no evidence from the department or information from the Productivity Commission that demonstrated a reason for the government not to accept recommendation 13 of the report that it commissioned. I commend my amendment to the House.

Question put:

That the amendment (Ms Ley's) be agreed to.

The House divided. [11:22]

(The Speaker—Mr Harry Jenkins)

Question negatived.

Bill agreed to.

Ms KATE ELLIS: by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms LEY (Farrer) (11:32): I rise today to speak on the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. The coalition will be moving a second reading amendment during the second reading debate. We will also be moving an amendment during the consideration in detail phase. This bill reiterates the government's love affair with red tape. The coalition does not oppose sensible regulations. However, when those regulations do not clearly define their mandate and seek to do little more than impose more and more onerous requirements on business, we do need to raise our voices.

The childcare sector is already more than overwhelmed with administrative requirements. At every childcare centre I visit I hear the common message that it is the administrative requirements which are so extensive that take away from the primary purpose of a childcare centre, which is caring for children. I have painted the picture before of the toddler on one hip and the clipboard on the other and the boxes being ticked. I know that is not what this bill is about. I understand that this bill is about something quite separate and I will come to that. However, I do want to make the point that we are dealing with a sector that is completely overwhelmed with red tape, whether it be in the community services area or the small business area. We know that because we have heard the message from small businesses that talk to us on this side of the House anyway about the amount of time they have to spend doing book work to satisfy external stakeholders, including government. Remember that all of the time spent on this sort of carry-on is time away from your principal activity, and in the case of a childcare centre that is the care of children.

I have heard from one centre recently that does not care for nought to two year olds but is still required to have cot death information within their sleeping policy. That is one example. Childcare workers are overwhelmed, and that is not because of ratios between them and the number of children, it is not because of busy little toddlers, it is not because bottoms need wiping and faces need cleaning and food needs preparing—it is not because of any of those things; it is because of the paperwork.

The amendment that we are moving highlights this government's lack of understanding of business, constantly trying to make life harder for business and imposing more and more red tape. It is ultimately another broken promise. The Rudd Labor government made an election commitment to ease the red tape burden on business by a one in, one out requirement for regulations. Unfortunately, this promise has been shelved and now the government marches forward madly intent on imposing regulations left, right and centre.

Ultimately, the six or so businesses that will be affected by this legislation have their own measures in place to ensure their financial viability. On that point I will come to the substance of the bill. It seeks to amend the A New Tax System (Family Assistance) (Administration) Act to provide for the assessment and ongoing monitoring of the financial viability of large long day care centre operators of approved childcare centres. By way of background, in late 2008 the largest provider of childcare services in Australia, ABC Learning, went into voluntary administration. At that time they had approximately 1,000 childcare centres nationally. It is well known that the rapid collapse of this provider saw the childcare sector thrown into turmoil. A government bailout of $58 million took a while coming. It was needed to keep these centres open and provide certainty for Australian families and the childcare workers.

During the period of receivership a decision was made to close 55 of the unviable centres. A further 262 unviable centres were transferred into the ABC2 group and sold through a process managed by a court appointed receiver at the request of the Commonwealth. Up to an additional $34 million was allocated in total to keep these centres operating until the final completion of that process in August 2009. A further 26 of these centres closed before being sold. The remaining 720 centres continued to operate until sold by the receiver in 2009 and 2010 with GoodStart being the preferred purchaser for the majority of these centres. That is all a matter of history and a matter of fact. I do not wish to reflect on the reasons why ABC Learning went the way it did, except to note that it was during the global financial crisis. There may have been factors related to the strategic direction of the company; there may not have been. But I do resist the implication in this bill that there is, because of that instance, something wrong with the private provider model of child care in this country, because we know that the community sector and the private sector each have a role to play in the provision of child care and that there is no one type of centre that is better than the others. I certainly know that they are all struggling with increasing costs, red tape and the requirements of the national quality framework that are being imposed on them, whether they be community or private providers. From that point of view, they have been put under the pump by this government. There is no one model to be preferred and I do resist that implication in this bill. There is a subtext running through it that, if you are a large private provider, maybe something could happen to you and you could go broke as a result.

I want to reflect on the regulation impact statement that was produced as part of the explanatory memorandum for this bill and the approach that was taken by the department and the government in looking at a framework for assessing the viability of large long day care providers. As I said, this was part of the national quality framework. In May 2010 the government announced that it would invest $273 million to support the introduction of that National Quality Framework for Early Childhood Education and Care. I have had much to say about that in other forums and will continue to do so, but for the purposes of this bill $1.9 million of the announced funding was to support new regulatory measures to help achieve ongoing stability in the childcare industry following the ABC Learning crisis. So this bill has its particular genesis in the ABC Learning crisis, and that is the slight problem that I have: this implication that there was a problem in the private provision of child care by large operators. It is large operators that are targeted by this bill. You would need, according to the explanatory memorandum, to have 25 sites across Australia in order to come under the ambit of this bill. Currently I understand there are about six large providers who would do so.

According to the explanatory memo­randum:

This Regulation Impact Statement (RIS) provides an assessment and information from the consultation process conducted with the child care sector on the two regulatory measures below:

Developing enhanced measures that required large child care providers to provide financial information in order to assess and monitor their financial viability on an ongoing basis; and

Creating a new legislative power to enable an independent audit (audit power) of a child care provider to be commissioned where there are concerns about its financial viability and the failure of the provider could have a material impact on the market or a section of the market.

It sounds quite reasonable. There is the possibility of something happening in the sector and of course parents need to be reassured. I agree with that. I agree that when a childcare centre closes it is enormously disruptive to any family. So the principle is sort of okay, but when we look a little bit deeper into the substance of the bill and how it would actually play out in practice, we in the coalition see problems. I alluded to the problem relating to the amendments that I will move at this stage, which is simply the size of the regulatory burden that would be imposed. In providing this information to the Department of Education, Employment and Workplace Relations, centres might have to take even more time out from running their small business or, in the case of a voluntary board, take more time out of their lives in a voluntary capacity to come up with information that might be available on the public record anyway, in which case it is not so much of a problem, might not be necessary and might not be any of the department's business. In other words, I do not agree with the department, because a centre or operator receives childcare benefit, going on a fishing expedition and scooping up information through a provision in this bill that says, 'Any other information required by the secretary can be sought.' We know that could mean a multitude of things. It could mean that centres are required to appoint outside consultants or financial analysts or wheel their accountant in for another whole round of paperwork during the year just to satisfy the bureaucrats of something. That is essentially where the problem lies.

Coming back to the rationale, which is that large childcare providers might go belly up and we need to know about it in advance, I introduce the suggestion that the centres that are most likely to encounter problems are small ones. The going broke, for want of a better word, of a small centre in a small town with very few alternative options for parents is just as dramatic for families. If the department and the government are satisfied that measures are in place for small centres, and I am satisfied that they are, that would be something that could not be controlled by government. After all, we cannot control everything that happens, but what we can do we have done. If that is okay for small centres in rural areas, if that is okay for operators with less than 25 sites across Australia, why is there the suggestion that it is not okay for operators with 25 sites or more. Would you not expect that the requirements of the Corporations Act, the requirements for centres that are owned by large operators, would demand that they provide this information, that they provide it regularly, that they have it on hand and that they have in fact climbed over those regulatory and business hurdles in the first place?

The financial viability framework costs $1.9 million. Some in the government may say that it is only $1.9 million, but it is going to employ more bureaucrats in the department. It is going to employ more teams of assessors and the problem is that, if those assessors decide that there is a problem with some of the information they receive, or more likely that there might be a problem, the first issue is whether they have the expertise to determine that themselves. I noticed in a report that was commissioned as part of the homework for this particular piece of legislation there was a suggestion that the department actually calculate the financial ratios. I do not think the department should be calculating financial ratios. I suspect they would hive that activity off to consultants. But even more alarmingly, they could send that back to the childcare provider and say: 'You do it. We need this information. We need this set of ratios. We need to know all these things and you pay for it because it is user pays.' So what looks like quite an innocent provision is, I am certain, going to add to the regulatory burden on small business.

The existing regulation of childcare centres is sound. When centres apply for childcare benefit, in other words for the right to receive government assistance, they do have to demonstrate that they are financially sound, they do have to demonstrate that they have got it together and they do have to demonstrate that their operation, not just financially but in every other sense, is a good and proper one. We in the coalition are happy with that. We are quite suspicious of a bill that imposes a greater regulatory burden on the sector. Large providers are accountable to shareholders and boards. There is little point in reinventing the wheel and giving departmental staff access to financial records that they may or may not be able to interpret.

This legislation also fails to clearly restrict the types of evidence that may be called for by the department. That is what I would allude to as a fishing expedition, where something else that the secretary may want the secretary is entitled to ask for. I understand that in drafting laws we cannot be too prescriptive. We do not know what we may encounter down the track so we have to be careful. But I also think that if we leave it wide open we could have overzealous bureaucrats, newly appointed to the financial viability framework for large childcare providers section in the department, deciding that everything is not all right out there and that more information needs to be sought and more statistics provided.

When looking through the types of information to be provided I was alarmed that you need to make the government department aware of such things as other investments the childcare operator might be involved in. I do not know that it is any of the government department's business. It is a government department's business that you are operating a sound organisation and, as I said, you are required to provide that information anyway. But it is not the government's business to know what else you might be investing in or the concurrent activities of other investors in your organisation who may have a 15 per cent—that was the figure quoted—shareholding or investment. Why is all that relevant? There are some transactions that take place in the private sector, within small businesses, that this government has no right to know about. Why should the sector itself be charged with the cost of providing that information? It looks like that is what this bill is going to do.

The coalition is tired of the government's obsession with increasing the burden on business. A prime example of this is its decision to have employers play the role of pay clerk for the Paid Parental Leave Scheme, which I am sure will apply to small businesses in the childcare sector, instead of leaving that role with the Family Assistance Office. That is where it started out, so presumably the software and infrastructure are already there in the Family Assistance Office to enable it to continue to be the pay clerk for the Paid Parental Leave Scheme. After a mere six months of the scheme, the government is insisting that the responsibility go back to small businesses, which just underscores its approach. We want a commonsense approach to ensure that business is not required to hand over all manner of information—frivolous, commercial, repetitive—to the department when there no legitimate need. With this in mind, I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) the bill proposes that information will be obtained to determine whether the operators of child care services are financially viable, and likely to remain so;

(b) the bill also proposes that financial information will be obtained relating to large long day care centre operators;

(c) the growing burden of red tape and regulation imposed on small businesses, not-for-profit organisations and industry by the Gillard Government; and

(d) that the increasing regulatory burden represents a broken election promise whereby the Labor Government said that it would only introduce a new regulation after repealing an earlier regulation: a "one in, one out" rule; and

(2) calls on the Gillard Government to immediately adopt the Coalition's red-tape reduction policy which will seek to reduce the cost of the Commonwealth's regulatory burden by at least $1 billion per year."

The DEPUTY SPEAKER ( Ms AE Burke ): Is the motion seconded?

Mr BALDWIN: I second the motion and reserve my right to speak.

Mr NEUMANN (Blair) (11:48): I speak in support of the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. I had a look at what the coalition want to do in moving their amendment. I had a look at point 2 of the amendment, which calls on us immediately to adopt their alleged red-tape reduction policy that seeks to reduce the Commonwealth's regulatory burden by at least $1 billion per year. I saw '$1 billion' and thought: 'That rings a bell, the coalition wanting to take $1 billion out of something. Let's have a look back to when those opposite had Mr Howard and Mr Costello at the dispatch box. What was one of the first things they did to the childcare sector? They ripped $1 billion out of the sector.'

So the billion dollars those opposite are talking about here has some resonance for me. I want to remind everyone who listens to this that just about the first thing the then coalition government did after 1996 was to rip $1 billion out of the childcare sector. Those in the childcare sector know very well that that is what they did. When the opposition talk about taking $1 billion of federal government money off the sector, it is a bit rich for them to say they are going to reduce the regulatory burden. You always have to listen to what the coalition do, not what they say. There is an old saying in the Bible that it is not the hearers of the word but the doers of the word who are righteous. Those opposite are not very righteous when it comes to child support or child care. They are not particularly good at all, because they say one thing in this place and when they get into government they do exactly the opposite.

The member for Farrer talked about the Paid Parental Leave Scheme. When the coalition were in government did they show heartfelt sympathy for small business operators who collected the goods and services tax, acting as conduits for the tax office? Did they show any sympathy, love or affection for them, or any empathy? No, they did not. The coalition have never supported families with things like the Paid Parental Leave Scheme, except for the ridiculous and fanciful notion they came up with at the last election. They mentioned the ABC Learning Centres collapse. This happened on their watch. The empire was created on their watch, and we had to deal with the problems created through the lack of a regulatory burden, financial capacity and capability in the sector.

This bill we are supporting today introduces new requirements for large long day care entities to provide financial information. We want to make sure that nothing like the ABC Learning collapse, which affected electorates across the country and communities across the nation, never happens again. Why? Because we had to put in $58 million of taxpayers' money to prop up the sector so that 90 per cent of the kids who went to those centres were able to go to continuing centres—for example, in my electorate where Bush Kidz took over the ABC Learning Centre at the back of the Brassall Shopping Centre, where my electorate office is, we had to provide a $15 million loan to the not-for-profit consortium GoodStart Childcare to purchase 678 ABC Learning Centres. That is taxpayers' money. That is taking decisive steps to support child care to ensure that the mums and dads in small businesses and large businesses across the country who rely on childcare centres are available to work. Their kids can be looked after, educated and socialised and the mums and dads can work, use their labour to support small business to make a profit and help about 2.4 million small businesses across the country.

The opposition say they are supporting small business but they never supported child care properly. They will not even support the regulatory measures which are necessary to make sure the viability of the system continues. If the opposition were in, it would be a Milton Friedman type of response: complete laissez-faire, let it go, let the market rip and let ABC and all those problems occur again. If they were in power again they would do it. If you do not believe me, listen to the member for Farrer. That is what they want. They feign support for small business but they will not support the childcare centres that allow the mums and dads to work in the small businesses. They feign support for small business by saying, 'We want to take regulatory burdens off you.' But, when they were in power, they never ceased to tax higher than any other government previously, and certainly the burden of taxation on small business is much lower now compared with when they were in power.

This bill will allow the department to get financial information more expeditiously and more frequently to make sure that if a childcare provider is in trouble we can be aware of it. We can take steps to protect taxpayers' dollars and to step in if necessary to give a helping hand, and that is good for business. It is good for both large and small businesses, and mums and dads everywhere across the country are in need of it.

It is the case that many Australians need to use child care. The last record I could find showed that there were about 870,000 children in child care. That is 628,000 families with parents working and building our economy. There are nearly 14,000 childcare services creating jobs. Once again, those opposite are negative, not supporting the sector. But then, they have form. The member for Farrer talked about the GFC and somehow blamed the GFC. They never like to talk about the GFC. It is almost something they do not want to talk about because they have a record on the GFC. Just as we had to support the childcare sector, the retail sector and the construction sector during the GFC, those opposite would have let 200,000 Australians lose their jobs, including in the childcare sector. I really do wonder if they had been in power in 2008 what they would have done about the ABC Learning Centre collapses. Would they have propped them up? Would they have provided child care? Their record would indicate that they probably would not have done so.

We are undertaking further reform and this legislation that we are debating today is important. It proposes amendments to allow for civil penalties and sanctions if the provider does not provide the financial requirements and comply with the burden. When you read what it is all about, I think it is not difficult for them to provide information because they do that anyway. Business provides information and childcare centres do as well. The legislation defines which providers are large long day care providers and specifies certain related persons who have to provide that information. It makes amendments to allow for the commissioning of an independent audit of large long day care providers where there are concerns about a particular provider's financial viability. There are amendments which enable an audit team accompanied by an authorised officer to enter premises to carry out an audit. This is really important to protect taxpayers' dollars.

As alarming and potentially dangerous as the collapse of the ABC Learning Centres could have been, our quick action prevented it and so there were no locked doors. Those opposite are in favour of locked doors. That is the case because they have taken every step they possibly can to prevent reform in the childcare sector. We have introduced a range of measures since 2008 to strengthen the approval processes and establish a penalty regime. We have assisted families across the sector with that. In fact, with respect to child care, we have provided $20 billion over four years for early childhood education and child care.

Those opposite say they are supporters of child care. But I want anyone who is listening to note that the $20 billion we are providing for early childhood education and child care is almost $12.8 billion more than that provided by the previous Howard coalition government over the four years. That is an enormous increase in funding for the sector. A billion dollars was ripped out by those opposite. First act, what did we do? We massively increased financial support for the sector, and we are providing $16.4 billion to help Australian families annually with their costs.

One of the big burdens for families who engage with the childcare sector is the actual cost of child care. What did we do? Those opposite said, 'Thank you very much, we'll provide a childcare rebate.' They wanted to pay it annually and, when they left office, it was $4,354. We increased that by 72 per cent, to $7,500, and so we have helped nearly 740,000 Australian families since 1 July 2008 with additional assistance, including about 5,600 families in Ipswich and the Somerset region in my electorate of Blair. We have provided additional assistance for 640,000 low- and middle-income families through the childcare benefit. We have also, as I said before, stepped in to help GoodStart to purchase those nearly 678 ABC Learning Centres. We have established 38 priority early learning and care centres across the country, including one in my electorate at Yamanto, at Amberley District State School, and I was very pleased to be there with the minister to open it.

With the states' help, we have integrated the kind of assistance we provide and focused these centres in areas of high disadvantage. So we are helping with child care, playgroups, the childcare rebate, the childcare benefit, the Paid Parental Leave scheme, tax cuts three years in a row and the national quality standards that we are bringing in to make sure there are new training requirements and a ratings system to help families make decisions about the best service for their children. And there is the Healthy Start for School program. So a broad range of funding programs have been rolled out across the country since the election of this federal Labor government in November 2007. It is a record unparalleled by those opposite.

When I went to the last election as a candidate, I looked at the policies of those opposite. It was a bit like a football team looking at video clips or DVDs of matches; I had a look at their policies and checked them out to see which ones were all right and which ones I thought might be a bit of a problem. In politics, you punch, you defend, you feint and you have a look around. I had a look at what the coalition were saying with respect to child care, child support and family support, and I worked out something about the way the coalition operate. I always knew this in the past, but I became even more convinced of it.

The coalition always claim they support business, but they do not act like they support business. They claim they support families and put families first, but they do not—because family values are about education, accommodation, child care, good health care and all the things that really count every day in a person's life. They claim they are supporters of family values, but they are not. Family values are the values that Australians really believe in, and I emphatically believe that they are the values that the Labor government and the Labor Party support: decent child care, help for families, good jobs. Those opposite always, when given the opportunity, put the burden on business. They want to make good employers into bad employers by changing industrial relations and they want to rip money out of child care. They do not support families and they do not want a watch on money. They are the party of waste with respect to money. They are the party of burden on business. They are the party that will not support families.

This legislation is good. The opposition should support it. They should not be coming in with the nonsense they have moved as a second reading amendment to this bill. That amendment is simply a political document without any policies. That is the point I want to make finally. They went into an election without a policy. All they are is mindless and negative. Any policy they have is null and void. I think at the next federal election the people in this country will vitiate them and declare that they are simply not suitable and competent to be, or capable of being, on this side of the House once again. They do not deserve it because they just do not care about Australian families and Australian business. Do not listen to what they say; look at what they do.

Mr FLETCHER (Bradfield) (12:03): The question before the parliament as we consider the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011 is not whether the collapse of ABC Learning in 2008 and early 2009 was a bad thing and caused great inconvenient and uncertainty to parents. Of course the collapse of ABC Learning was a bad thing and caused such inconvenience and uncertainty to parents. Speaking as the parent of a 2½-year-old who presently attends long day care, I can absolutely empathise with parents about the disruptive consequences of the collapse of a childcare centre when they had made their arrangements in reliance on the ongoing operation of that centre and were suddenly required to rapidly make alternative arrangements.

That is not the question before this House. We are all in agreement that the collapse of ABC, or indeed of any childcare centre, is a bad thing. Nor is the question before this House whether it would be a good thing, if it were possible to do, to prevent the risk of such a collapse—to ensure against the possibility of any childcare centre ever collapsing. Clearly, if that could be done, that would be worth doing. The question is this: will the measure which is before this House be of any material benefit in actually reducing the risk of the collapse of a childcare centre, and how is such benefit as may fairly be attributed to this measure to be weighed up against the costs of imposing this measure?

I want to put three arguments to the House in the brief time that I have available to me. Firstly, I think there are grounds to doubt whether this measure makes any real difference at all. Secondly, I do believe there is a risk that this measure could impose significant costs and burdens on childcare operators, particularly in view of the breadth of the drafting of the provisions in this legislation. Thirdly, there is, I submit, real doubt as to whether this measure actually achieves anything or is simply a piece of window dressing.

Let me turn to the first issue. On a fair and reasonable assessment, what practical difference will this measure make? There are two key elements in the bill. The first is a requirement for large childcare centre providers to report certain information to the Department of Education, Employment and Workplace Relations on an annual basis. The second is the power for the secretary of that department to call, should he choose to do so, for an audit of individual large childcare centre operators. The premise underlying these measures appears to be that officials of the Department of Education, Employment and Workplace Relations will have some superior capacity to assess the risks of the financial collapse of a childcare centre operator, a superior capacity beyond that presently available to and exercised by the other bodies which have regulatory responsibility for the ongoing financial viability of companies of all kinds.

I think it is worthwhile testing the viability of this assumption by having a look at what actually happened in relation to the collapse of ABC Learning. I reiterate that it is not contested that the collapse of ABC Learning was a bad thing and caused deep inconvenience and anxiety to many thousands of parents. ABC Learning was a publicly listed entity subject to continuous disclosure obligations. That meant it was required to provide all kinds of detailed financial reporting to the stock exchange and there is an obligation on the directors and senior management of a publicly listed company to provide, effectively immediately, any information which materially changes the assessment that an investor would make of the value of the securities in that entity. Having myself been a member of the senior management team of a listed company responsible for complying with those continuous disclosure obligations, I can testify that they are onerous and that they exercise, quite properly, the continuing attention of the senior management team and directors of any listed company.

The second point to make is that such information as was disclosed under this regime by ABC Learning was subject to continuous scrutiny and examination by a whole class of expert financial analysts: equity analysts employed by the major investment banks, investors in ABC Learning who had a clear financial incentive to be watching like a hawk for any indication that something was wrong. As the historical record shows, ABC Learning collapsed in 2008-09 but concerns about the financial viability of ABC Learning had been raised significantly earlier. In fact, according to one press report that I have reviewed this morning, concerns were raised with the corporate regulator, the Australian Securities and Investment Commission, in 2006.

I do not argue that the continuous disclosure obligations immediately and instantly picked up signs of trouble as the historical record clearly shows it took some time for the consequences of ABC Learning's financial management to be realised. But the question I simply ask is this: if the specialist corporate regulator, with all of its resources in relation to financial management, or if all of the organisations and individuals who had an incentive to monitor and scrutinise the information disclosed by ABC Learning under the continuous disclosure obligations, were unable to identify until very late in the day that there was a serious problem with the financial viability of ABC Learning, then on what possible basis can we believe that officials of the Department of Education, Employment and Workplace Relations will in some way have such superior financial acumen and such an enhanced capacity to see into the financial future that they are going to identify risks which are not identified by the regulator—which is specifically responsible for corporate and financial activities—and which are not identified by all of the players that have a clear incentive to be looking out for such signs of trouble?

It is instructive, I believe, that the regulatory impact statement prepared as part of the explanatory memorandum for this bill says the following:

The options assessed in this RIS are:

Option 1: No change

Option 2: Legislate for the ongoing annual assessment of financial viability ...

Self-regulatory and quasi-regulatory options are not explored for several reasons.

I will tell you the main reason that they were not explored. It is the philosophy of this government that whenever there is any doubt you simply hand more power to a bureaucrat and that in some miraculous way is going to solve the problem. But we have not seen any explanation of the rationale for giving these powers of financial scrutiny to a department which has no competence or experience or specialisation in this role. I do not say that to be in any sense critical of that particular department. It does important work. I am simply making the point that this is not their core mission and this is not their area of expertise. Nor have we seen adequate demonstration in the materials provided to this House in respect of the existing regulatory mechanisms to scrutinise and monitor the financial performance of companies of all kinds and all organisations of all kinds including the obligations on directors not to trade while insolvent, including the obligations to provide annual accounts and including, in the case of listed companies, the continuous disclosure obligations. We have seen no evidence that this additional measure is going to provide some extra level of support. I do not say, lest my arguments be mischaracterised, that the present arrangements are perfect and automatically and instantly pick up signs of trouble. Of course, they do not. We live in a complex and difficult world and no human institution has yet been devised which can achieve that. But I will say this to the House: I am very confident that the particular institutional measures proposed in this bill will not advance the cause. They do not in any material way add significant useful, reliable tools to achieve the purported objective.

The second point that I want to make in the brief time available to me is that there is one thing that these measures certainly do, and that is to impose additional regulatory costs and obligations. There is an annual reporting requirement and there is also a questionnaire about which the explanatory memorandum is troublingly opaque. But let me make this confident prediction: the length of that questionnaire will increase each year. Every year somebody will have new ideas about what should go into that questionnaire. There will be people whose career assessments, whose performance assessments within the department, depend upon how long and voluminous that questionnaire is. The reporting obligations will grow and grow and grow—and, of course, the reporting obligations under this measure have the force of law.

There is a long list of people upon whom obligations can be imposed by virtue of a notice being issued by the secretary of the department to provide financial information, not just the operator of a childcare centre but a person who at any time owns 15 per cent or more of the operator; 'a person who, at any time during the financial year, is owed a debt by the operator'; or a person who acts, or is accustomed to act, 'in accordance with the directions, instructions or wishes of, or in concert with' the operator or 'if the operator consists of more than one person—any of those persons'. The draftspeople have gone to town. This is a textbook example of bureaucrats—I do not say this critically but I say it analytically—filling out the pages to make this measure look as substantial as possible because they know in their hearts that it materially does very little indeed.

But of course there is a press release on this matter, issued by the Gillard government, and the unfortunate public officials have been charged with coming up with some piece of window-dressing that can be alleged to substantiate the wafty, broad claims made in the press release dated 11 May 2010. We are told that there will be, amongst other things:

… $1.9 million to support new regulatory measures to help achieve ongoing stability in the child care market in the wake of the ABC Learning crisis. This includes developing measures that require large child care providers entering the market to prove their financial viability.

I pause parenthetically to make the point that the measures which are before the House today do nothing towards this stated objective of requiring large childcare providers entering the market to prove their financial viability. In fact, they are a set of measures which require existing participants in the market to file annual accounts. Indeed, the explanatory memorandum is somewhat conflicted, because on the one hand we are told that this is a sweeping measure which will deliver new security, new confidence, new assurance, to parents all around Australia but on the other hand we are told, 'Oh, well, in fact all that you'll need to do to comply with this is to provide the financial accounts which you are already required to provide under other reporting requirements.'

This again raises the very obvious question that I have already asked: if these organisations are already required to provide these accounts under other reporting obligations, what is the possible purpose of imposing this additional piece of bureaucratic artifice? It allegedly provides additional safety and security to parents but in reality provides a piece of convenient window-dressing to substantiate a couple of lines that were whacked into a press release in a desire to demonstrate to parents around Australia, who are naturally and properly concerned about the risk of a childcare centre collapsing, that this government has a measure to deal with it.

This measure does nothing seriously or materially to address the risks which it purports to address. Indeed, if you look at the expert commentary, one of the real issues that arose with the collapse of ABC Learning was that it had such a large share of the market, a very high degree of concentration. This measure does absolutely nothing to deal with that issue, but it does one thing with certainty. It imposes additional regulatory requirements and obligations on businesses, and for that reason I think the case for it has not been made. (Time expired)

Mr PERRETT (Moreton) (12:18): I am pleased to speak in support of the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. It has been great to hear from the previous speakers, particularly the member for Bradfield and the member for Farrer, the old free marketeers when it comes to kids in child care. But strangely, when it comes to our kids' future in a carbon constrained environment, they are not free marketeers. They do not believe in the market when it comes to pricing carbon. They have a completely different approach. They are free marketeers when it comes to sending our kids off to child care, but when we talk about our kids' future, the future of the planet, which every reasonable person understands is what we are talking about in terms of carbon pollution, there would not be a person in this House—oh, I beg your pardon; there would not be a reasonable person—who takes a scientific approach to it who would not understand that we were going to have—

Mr Morrison: Madam Deputy Speaker, I raise a point of order of relevance.

The DEPUTY SPEAKER ( Ms AE Burke ): Thank you. The member for Cook has made his point of order. The member for Moreton could return to the bill. Mind you, some latitude has been given to other speakers, but the member for Moreton will refer to the bill before the chair.

Mr PERRETT: As I said, Madam Deputy Speaker, I was just comparing the different approaches to the market in terms of child care versus carbon pricing. I would have thought that was very relevant, but nevertheless I will defer to your fine judgment, Madam Deputy Speaker.

The DEPUTY SPEAKER: Yes, I get to decide what is relevant, actually, so the member for Moreton will proceed.

Mr PERRETT: Obviously. This bill builds on the Labor government's strong commitment to child care and supporting Australian families. In fact, this week marks the three-year anniversary of the Australian government's increase to the childcare rebate. I am sure the opposition party room had a little cake to celebrate that. We did not have one in our caucus room, but we did acknowledge the three-year anniversary of the increase to the childcare rebate.

Madam Deputy Speaker, you would remember that we increased the rebate from 30 per cent all the way up to 50 per cent to help take the pressure off Australian families by making child care more affordable. It enables parents to claim up to $7,500 per child per year. We know about cost-of-living pressures. We understand that. We are a Labor government. We actually get it. We have had three years of tax cuts; three years of making sure that people are in jobs. We have created nearly 700,000 jobs. We have had an increase for the pensioners. This is a government that continues to drive changes to support families and the childcare sector.

From July this year families will be able to choose to have their childcare rebate payments made fortnightly or weekly, a much more effective approach to the family budget, as well as the current options for annual or quarterly payments. Parents can also choose to receive a reduction on their bills or continue to receive the rebate as a direct payment. This is a government that understands flexibility. I take this opportunity to remind parents to contact Centrelink and choose a payment option before 17 June.

All these reforms have transformed the childcare landscape in Australia. While families are still not without their cost pressures—we acknowledge that—the Gillard Labor government can be very proud of the difference we have made in the area of child care. All good economists know that money invested now in child care and children's lives saves us money later down the track.

These innovations have not been without their challenges. All of us would remember hearing the news in November 2008 that ABC Learning Centres was in voluntary administration. It was not just a company in limbo but almost 100,000 families around the country were uncertain about their childcare arrangements and 16,000 childcare workers faced the prospect of losing their jobs, with very little notice. It was a very tough time and, as we heard from the member for Bradfield, the Howard government was aware of this back in 2006, I think he said. So, with that many people being affected and particularly when they included society's most vulnerable, our children, obviously that was not a good state of affairs.

The Labor government sprang into action to support the childcare centres, ensuring that 90 per cent of the centres were able to continue operating. The government also worked to find new places for families when their centres closed. As a person with a two-year-old I know how hard it can be to find places for your children and, with the juggling act of careers, bills and mortgages, how crucial it can be to ensure that your children go into a childcare centre. This event showed just how vulnerable the childcare sector was and how much upheaval could be caused by one operator failing, especially when that operator was the biggest in the country.

The ABC Learning child care collapse also put a spotlight on the effectiveness of the regulatory framework for childcare centres. If we look back at the history of ABC Learning and Eddy Groves, we are talking about a milkman who was lucky enough to have a milk run where they plonked down a shopping centre, which meant he and his wife, who was a childcare operator, I think, were from there able to build a centre, and ABC Learning grew like topsy. It was under the Howard government's watch, but these things happen. I remember it being the darling of the stock exchange. Once I think they were deemed to be an ethical investment, because it was child care rather than a coal mine or something like that, and the shares took off. That is why in May last year the Labor government announced $273.7 million to introduce a new national quality framework for early childhood education in child care. This funding includes $1.9 million over four years to cover the costs involved in monitoring the financial viability of large long day care centre operators. We are not talking about the single, standalone, community run, not-for-profit or smaller centres. We are talking about those that have more than 25 sites. As has been suggested by the member for Farrer, we are probably talking about only six operators in Australia.

This bill will help ensure that we have a more stable childcare industry by creating a critical early-warning system. This will help prevent collapses such as occurred with ABC Learning from ever happening again. The bill gives the government the power to request financial information about large long day care providers. This 'no surprises' policy will enable the government to assess the financial viability of a childcare provider. Where there is concern about a provider's ongoing financial viability, the government will have new powers to commission an independent confidential audit of a particular provider. It also authorises an audit team to enter premises and seek documents to carry out the audit. This will enable the government to take timely action to help address the risk of wholesale closures of large long day care centres.

As a condition of the childcare benefit, long day care providers will be required to demonstrate that they are financially viable, and they must continue to demonstrate that every year. This will also give families greater confidence in the reliability of their childcare service. The Labor government, having averted disaster following the ABC Learning collapse, could have sat on its hands and let the childcare market rip—if we had had the same approach to markets that those opposite seem to have—and let it be the status quo. But we cannot let a major collapse like that happen all over again. It is not the Labor government's style. We moved quickly to put in place measures to ensure a more viable childcare industry in the future. We believe in the market but on occasions you need the guiding and watching hand of government, especially when it comes to our children's future.

The Gillard Labor government will proudly ensure that childcare workers, families and governments do not again face that kind of unexpected upheaval. I commend the bill to the House.

Mr TUDGE (Aston) (12:27): I rise also to speak on the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. This bill seeks to amend the A New Tax System (Family Assistance) Act 1999 to provide for the assessment and ongoing monitoring of the financial viability of large long day care centre operators of approved childcare services. This is a case where the intent of the bill is fine but I have some serious reservations about the practical implementation of the bill.

With this government it is not enough just to look at the intent of what their actions are. You need to go into the details of what they are proposing in order to implement their intent. We know that they have had fine intent in other matters that have ended in disaster. They had the intent of helping households out with home insulation, and we know the result of that. They had the intent of supposedly being more compassionate to illegal entrants to this country, and we know the result of the practical implementation of that, also. So it is very important to look at what is actually going to be delivered rather than just the fine rhetoric about trying to save private providers from collapsing.

The intent of this bill is that it seeks to prevent the collapse of large childcare operators, such as occurred with ABC Learning in 2008, and that is an admirable intent. No-one wants to see the collapse of a single childcare centre in Australia let alone many childcare centres as occurred in 2008 when ABC Learning went into voluntary administration. At that particular time, 55 of its 1,000 premises were closed down immediately and a further 26 were subsequently closed down before it was sold. That had a large repercussion for thousands of families across Australia. I understand that. I have young children myself. My children have been in childcare centres in the past. I personally know the importance of childcare centres and what they do and how they facilitate parents being able to work. So the intention to put measures in place to prevent a childcare centre from ever going into voluntary or involuntary liquidation is a particularly good one. But, as with a lot of things, how the intent is enacted is the problem with this particular bill. My concern is that this bill will contribute little towards implementing the fine intent of preventing any childcare centre from collapsing in the future but will have some considerable downsides.

What does the bill actually impose? It requires the largest childcare operators to submit a financial viability assessment each year when they reapply for childcare benefit approval. The explanatory memorandum provides a list of the types of financial proof that will have to be submitted. It is quite a lengthy list. It includes a statement of comprehensive income, a statement of financial position—that is, the balance sheet—a statement of cash flows, notes to the accounts, material changes to the financial situation over the reporting period, breaches of debt covenants, ownership structures et cetera.

The childcare operators—and six will be affected by this piece of legislation—have to provide this information to the government. What will then happen to that information? That we do not know. We do know that $1.9 million is set aside to facilitate this—$1.9 million over four years. That equates to just a little under half a million dollars per year for the government to assess the financial viability of six childcare providers. Half a million dollars can buy you quite a few public servants—maybe five or six in this particular instance. So this bill will actually deliver six additional public servants in Canberra to assess the financial viability of six childcare providers. Each childcare provider will have one public servant all of its own to assess the financial viability of its operations. That public servant will have the whole year to assess that. At the end of that year the childcare provider will get a new set of accounts, and the public servant will have a whole further year to assess the financial viability of that one particular childcare operator. It sounds a bit like the Sydney Harbour Bridge. You just finish painting the Harbour Bridge and then you have to start all over again. Is this what is going to occur with this particular bill?

What are the public servants going to be doing when they get this financial information from the childcare operators? Presumably they will look at some financial ratios, at debt to equity, at some of the forecasts, at whether the balance sheet is sufficiently strong to enable the operator to grow according to its forecasts, and at some of its revenue projections. I was a financial analyst myself in a previous career. I went to one of the top business schools in the world. I know the type of financial analysis that would have to be done to make any reasonable assessments of the financial viability of an organisation. It does not take a year, I can tell you that, but it does take a certain amount of skill. I mean no disrespect to anybody working in Canberra, but I question whether a public servant in DEEWR is going to be able to do a better financial viability assessment than what financial analysts are already able to do or indeed what internal financial analysts in these companies are already doing.

So I seriously question whether this is going to have an impact. These companies already have to abide by the corporations law. They already have certain obligations: they cannot trade when insolvent, and the directors have certain duties to act in the best interests of the shareholders, as you know. There is a governance framework already in place. I seriously question whether this will actually deliver on the good intent of this bill. My further concern is that we are not only expending more money for arguably little intent but are adding a further layer of regulation upon private businesses.

This government have talked a lot about deregulation. They changed the name of their minister. It is the minister for 'deregulation' now rather than 'regulation'. They have very good rhetoric in relation to deregulation across the economy. Indeed, one of the government's election promises was that whenever they introduced a new regulation they would remove a regulation. It was their one-in one-out policy. It sounded like a pretty good idea. But what do the government do in practice? They regulate and they regulate and they provide more regulations and they provide more regulations. Since 2007 there have been an extra 20,000 members of the Commonwealth Public Service to develop and administer those regulations. Let me tell the Labor government something: you cannot regulate a business to succeed. Yes, you can put in place a good governance structure—absolutely. And by and large we have good corporate governance structures in place. You can put other laws in place which require directors to act in the best interests of their companies, and they are already in place. You can put insolvency laws in place, and they are already in place. You can put other good corporate governance laws in place, which can make a difference. But you cannot regulate a business to succeed. It is something that this government does not quite understand, possibly because so few of its members have ever worked in either a managerial position or owned their own business. If they did, they would understand that it is not regulation that actually causes business to succeed. Good corporate governance can assist that, but it has to be the good operation of the particular business in place.

If this government were fair dinkum about their rhetoric on regulation then they would support the amendment which we have put forward. There are several parts to the amendment, and let me highlight a couple:

(c) the growing burden of red tape and regulation imposed on small businesses, not-for-profit organisations and industry by the Gillard Government; and

(d) that the increasing regulatory burden represents a broken election promise whereby the Labor Government said that it would only introduce a new regulation after repealing an earlier regulation: a “one in, one out” rule; and

(2) calls on the Gillard Government to immediately adopt the Coalition’s red-tape reduction policy which will seek to reduce the cost of the Commonwealth’s regulatory burden by at least $1 billion per year.

It is a good and worthwhile amendment that is indeed in keeping with the rhetoric of the government in relation to deregulation, so I would hope that the government would indeed support the amendment put forward by the shadow minister.

We do not need a further six bureaucrats in Canberra for this particular measure. The six companies in question do not need their own dedicated public servant looking over their shoulder year in, year out. The taxpayers do not need to spend a further $1.9 million for very little impact. We know that this government has already spent billions of dollars for very little impact on all number of things. It does not need to spend a further $1.9 million for very little impact. I reiterate that the intent is right. Of course we never want to see any private business collapse. We particularly do not want to see private businesses, private organisations and non-profit organisations—which provide such important services in our community, such as childcare—collapse. Of course we do not. But I am not convinced this particular bill will actually make any difference in relation to that fine intent.

The government should accept our amendments. It should deliver on its own promises and on its own rhetoric and it should let the childcare centres get on with doing their job.

Ms O'NEILL (Robertson) (12:40): I rise to speak in support of the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. I do strongly support this bill because I believe it is essential that our childcare sector is stable and that it provides quality, affordable childcare. As a mother of three children, and having the pleasure of also having a career and wanting to work, I do not know how my family would have functioned if my children had been of the age that they required early childhood care if, at the time of the collapse of ABC Learning, my family had been caught up in that. There are a lot of pressures on families these days, and excellent childcare is a critical part of how a healthy family functions. The instability that was caused by the collapse of ABC is something that cannot be allowed to happen again, and it is for this reason that this bill is before the House today.

The collapse of the ABC childcare provider in 2008 absolutely had a detrimental impact on parents, children, childcare workers and indeed the Commonwealth. The collapse of the ABC Learning business was completely unanticipated, and that is a vital part of why this bill is being put before the House today. The fact was that it put at risk the provision of child care for over 120,000 children in more than 1,000 centres right across the nation. The word 'insolvency' is one that people do not want to ever hear. They certainly do not want to hear it with regard to the care of their children in a childcare setting, for which parents have some reasonable expectation that there will be longevity of service and that there will be stability in addition to high-quality delivery.

As the minister said in her second reading speech, over 100,000 families were affected by the collapse of ABC Learning. Let us not underestimate what that means in terms of the flow-on effect into local communities. This is 100,000 families who, overnight, were completely left with a total lack of certainty about whether or not they might be able to access the child care or long day services that they needed in the next 24, 48 or 72 hours. That uncertainty undoubtedly had an impact on unsettling families and parents. But families and kids are very tight units, and I daresay that the flow-on would certainly have been felt by all of those little preschoolers as well as they soaked up the concerns that their parents would have had at that time. Thankfully, this government responded very quickly and decisively and ensured that 90 per cent of these centres continued to operate for Australian families today.

These issues were certainly pertinent in my electorate of Robertson due to the importance of child care for families where parents commute to work daily or move around the coast for local work daily. For these families and families right across the nation, child care is a necessity, and uncertainty about its provision can have incredibly detrimental short-term and long-term impacts. This legislation is designed to ensure that we actually learn from that experience. My father-in-law had a great saying, 'Had the experience, keep the receipt', and this legislation is a response to that practical wisdom. It is designed to provide for the assessment and monitoring of the financial viability of large long day care centre operators of approved childcare services. As stated in the explanatory memorandum to this bill, this is in the context of the approval and continued approval of such services for the purposes of the family assistance law. This bill also enables the secretary of the department to carry out an independent audit of operators where there are concerns about their financial viability. This is about shining light into a place that obviously was quite dark at the time that the ABC centres collapsed. The provisions of this bill will prevent history from repeating itself and provide for much-needed stability and certainty in the childcare sector. Child care and long day care should not be a means of profiteering from families nor should it be a sector subject to abject speculation and unsustainable risk taking, and that is what we have seen in the past. We need to construct a regulatory framework that dissuades people who would employ such dangerous business practices from entering into this field ever again. And we need to make sure that Australian families are certain about the continuity and quality of care that they will receive in their local communities.

These are indeed the circumstances that resulted in the collapse of ABC Learning, a large public company that controlled what proved to be an unsustainable share of the childcare market. It was those opposite who allowed this situation to occur and allowed the childcare market to be dominated by a company that engaged in these unsavoury practices. The additional powers given to the secretary of the department through this bill will provide for a critical early warning system, which will ensure that childcare and long day care providers are accountable for their financial decisions. The Australian government had very little warning when this happened last time. It had very little warning about the financial circumstances when ABC Learning collapsed. For this reason, the department and its secretary clearly needed greater powers to ensure that governments are better warned of issues confronting the childcare and long day care sector.

I understand that long day care and child care are predominantly privately run in Australia, and I understand the desire to ensure that childcare operators are not burdened unnecessarily with red tape. Despite this, and I think with the assent of those operators who have an ethic of care for the great work that they do in our community, the government need to ensure that the people who do the right thing are supported by good practices. We need to do our best to prevent a situation like the ABC Learning demise happening again. It caused far too much stress for families, far too much stress for children and far too much stress for those great childcare workers who are so important in helping our young children grow, socialise and get used to participating in a great democracy—and the sandpit is where we start to practice that.

The first means through which this legislation will provide for greater accountability is the additional powers granted to the secretary of the department to request detailed information about large long day care providers. This information is to be used to assess their financial viability on an ongoing basis and the information will only need to be provided by these large long day care providers. That means that smaller, family-run childcare centres and long day care providers will not be required to comply. I think that that really does counteract some of the points made by the member opposite who spoke just before me regarding onerous compliance. We need to be clear about the capacity for small operators to continue to do what they do without incredible oversight.

The large long day care providers who are defined under the bill as:

... a person who operates, or proposes to operate, 25 or more approved centre based long day care services at any time during the financial year; or

... 2 or more persons who, between them, operate, or propose to operate, 25 or more approved centre based long day care services during the financial year—

subject to certain ownership criteria. Parents and families often rely on these large long day care providers because of their ability to provide a quality and stable childcare service. This quality and stability, however, is contingent upon these providers actually being financially stable and viable.

The collapse of a long day care provider with 24 or more centres is not something small or insignificant. Twenty-five centres reach out into communities right across the nation. Any sort of future collapse of some such structure is likely to have an incredible impact on the availability of care for children and families. The flow-on effects of that for workplace participation, security, family budgeting and mortgage payments should not be underestimated either. This is a critical part of the social and economic infrastructure of our country upon which we have come to depend. It needs to be carefully organised. It needs to be carefully audited. It needs to be carefully managed. This is what this bill will achieve.

Representing a suburban electorate with a large commuter population, I am committed to ensuring that everything is done to enable all the people in my area to access every opportunity to participate in our society and to provide the opportunity for those who have children to participate, confident in the knowledge that their children will be in a centre that will be open when they show up the next morning.

This bill will also allow the commissioning of an independent audit of large long day care providers where there are concerns about the provider's financial viability. It will enable an audit team, accompanied by an authorised officer, to enter premises and to carry out an audit on the financial viability of a long day care centre. This is an important audit that can be triggered in response to concerns raised.

It is imperative that this government ensures that child care and long day care is accessible, affordable and of sufficient quality. It is also absolutely important that the government act to ensure that these centres remain open. This action is absolutely needed because the ABC Learning insolvency shows that there are potentially significant risks to the continuity of care and we need to address those risks by changing the practices that allowed such an awful situation to arise. We need to have the capacity to identify risks of insolvency. This legislation allows for that.

We need to provide women in particular with greater capacity. Women are so often charged with the responsibility for organising and managing child care. I have to confess that, despite the wonderful participation of my own husband and very many men in the children's upbringing these days, I did meet many more mothers dropping children off before we went to school than I did fathers. I think this is an issue for women: the decision to participate in our economy. It is wonderful that we have unemployment down to 4.9 per cent. It is an opportunity for women who might never have thought that they would participate to come back after having their children, decide that they want to give their talents and capacities to the workplace, and participate with confidence that the child care that they establish will still be there when they show up ready to drop their child off before work. For all these reasons I commend this bill to the House.

Mr MITCHELL (McEwen) (12:52): I rise in support of the government's Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. This bill will amend the A New Tax System (Family Assistance)(Administration) Act 1999 and set up new requirements for large long day care bodies to continuously administer their financial viability. The passage of this bill is critical to ensure we can sustain and monitor the financial foundations of our childcare centres so that these centres do not collapse, like when ABC Learning centres went into voluntary administration in 2008.

The bill will also allow for the secretary to request financial information more frequently if there are concerns about a provider's financial viability and make amendments to allow for civil penalties and sanctions if the provider does not comply with the requirements to provide financial information. The bill will also make clear what constitutes a `large' long day care provider, who in turn will be required to provide financial information. So we are creating a more transparent and accountable childcare system. This bill will protect and strengthen our childcare system, with new powers to commission an independent, confidential audit of providers where there are concerns about a provider's ongoing financial viability.

The Gillard Labor government recognises the importance of a stable childcare market to Australian families. The unprecedented collapse of ABC Learning affected families across the country because it impacted on the availability of childcare places, jobs and operations around Australia. However, because of the government's swift and decisive action 90 per cent of these centres continue to operate for families today, including ones in my electorate, and we have provided certainty and options for our working families. We will continue to strengthen the financial foundations of our childcare system so that we do not see those sorts of events again.

If we had not provided support for almost 100,000 Australian families, they may have been faced with the prospect of finding alternative care arrangements with little or no notice, and some 16,000 employees would have found themselves with no work and no future. Again, it underlines the strength of this government's commitment to jobs and ensuring that our families have every opportunity.

The Senate Education, Employment and Workplace Relations References Committee report into child care found that by 2008 ABC Learning was the largest provider of childcare, holding around 20 per cent of the long day care market and providing care to about 100,000 children. The purpose of that inquiry was to look at the condition of childcare provisions with the intention of informing the current debate over the most desirable practices to pursue as part of a national policy.

As I said, ABC Learning employed around 16,000 staff. The company sold 45 of its childcare centres in July 2007, which contributed to a reduction in the number of centres in 2008. In researching the growth of the company between 2001 and 2006, the Australia Institute noted that ABC Learning achieved close to 100 per cent growth between the financial years of 2004-05 and 2005-06. The collapse of ABC Learning raised serious questions about the regulatory framework for childcare centres. The Commonwealth government and state governments moved swiftly to understand the impacts that the collapse might have on families through the reduced availability of childcare places, jobs and operations around the nation.

In May 2010 the Australian government announced that it would invest $273.7 million to support the introduction of a new national quality framework for early childhood education and child care. Of the announced funding, $1.9 million was to support new regulatory measures to help achieve ongoing stability in the childcare industry following the ABC Learning crisis. This included developing measures that require large childcare providers entering the market to prove their financial viability. The bill will create an early warning system to help prevent such collapses. For parents to receive the child care benefit, large day care providers will have to demonstrate each year that they are financially viable.

When ABC Learning collapsed in 2008 we immediately stepped in with $58 million to ensure continuity of care for 68,000 families and, as I said, around 90 per cent of the centres are still operating today. The government are increasing diversity through a $15 million loan to the not-for-profit consortium GoodStart Childcare to purchase 678 ABC Learning centres. This will allow for greater diversity in the childcare market through a balanced mix of not-for-profit and for-profit providers. This will also give Australian families more choice when it comes to childcare providers.

The establishment of the MyChild website helps parents easily identify child care that suits the needs of their families and provides updates on childcare centres like the ABC Learning centres. The Gillard government are also funding an unlimited number of childcare places. The number of childcare centres in Australia has increased from 11,342 in 2007 to 13,417 in 2010—an 18 per cent increase. We believe in supporting families and giving every child the best possible start in life. This is why we are implementing measures like those in this bill to ensure that childcare providers are sustainable not only today but also in the future.

Research undertaken in a study titled Growing up in Australia has shown the positive effects of child care and its importance to Australian families and children. The study found that the childcare sector assisted parents of those children, particularly those who worked or wanted to further their studies or other activities outside the home. It also pointed to the vast damage to family budgets, as well as to the national economy, that could occur if a significant number of parents gave up work due to a lack of child care. The long-term social benefits that child care brings are vital. The report states that the benefits extend beyond the personal or family domain to the nation's future health, educational achievement, workforce participation and social connectedness. The New South Wales Commission for Children and Young People submitted:

The quality of children's early experiences, including of early childhood education and care, has a significant impact on children's lives. The quality of early childhood settings impacts on children's daily experiences, their healthy brain development, as well as their response to experiences at school and throughout their lives.

There are so many benefits child care brings to families, children, our economy and society, which is why the Gillard Labor government is taking many other measures in addition to this bill to support families and child care. We are helping families access more affordable child care by putting $14.9 billion over four years into assistance for families through the Child Care Benefit and the Child Care Rebate. That is a total spend of $20 billion over four years that we are investing into families and children.

The Child Care Rebate has been increased from 30 per cent to 50 per cent of parents' out-of-pocket expenses. The annual limit for each child also increased from $4,354 to $7,500—an increase of 72 per cent. This has been helping more than 735,000 Australian families since 1 July 2008. The rebate is now paid quarterly rather than annually so that parents do not have to wait until the end of the year to get the childcare assistance they need.

In addition we are providing assistance for 640,000 low- and middle-income families each year through the Child Care Benefit. A low-income family using full-time child care now has around 80 per cent of their childcare fees covered. This bill shows the government's commitment to young families across Australia as we continue to ease the cost-of-living pressures through tax cuts, improvements to family payments, childcare assistance, the education tax refund and, of course, Australia's first ever Paid Parental Leave scheme.

Unfortunately, not all members in this place support young families. The Liberal Party opposed the Paid Parental Leave scheme and, as the workplace relations minister, the Leader of the Opposition said that paid parental leave would be introduced over his government's dead body. Guess what? That happened: they are a dead body of a government. A good government came in and actually contributed to helping families across the nation. The Leader of the Opposition displays mindless negativity, opposes everything and has no real plan to support families when a child is born or to deliver affordable and sustainable child care when they need it.

The government is serious about our childcare sector and is ensuring that it is financially viable today and into the future so that we do not see any collapses of providers like we did in 2008. We, unlike those opposite, are continuing to support young families and children to ensure that they get the best possible start in life, and this bill plays a big role in doing that. As I said, the Gillard government is committed to doing everything in our power to ensure continuity and reliability of child care across Australia, and that is why I strongly commend this bill to the House.

Ms LIVERMORE (Capricornia) (13:03): I give my strong support to the Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011. The name of this bill says it all: child care financial viability. We know what this bill wants to achieve very clearly and we know what it seeks to avoid. Members have already talked about the spectacular collapse in 2008 of the ABC Learning company.

We all want to know, and the government wants to know, that companies running large numbers of our nation's childcare centres are well run and financially stable. To do that, this bill gives the government much-needed powers to monitor and assess the financial viability of companies that operate a large number of long day care centres. The bill introduces new requirements for large long day care entities to provide financial information to the government. This will enable the government to assess on an ongoing basis the financial viability of those companies. Under this legislation, the secretary of the department will be able to request financial information more frequently if there are concerns about a provider's financial viability. Also, following the passage of this legislation there will be power to commission an independent audit of large long day care providers where there are concerns about that provider's financial viability.

I am supporting this legislation because I never want families in my electorate to go through what they went through when ABC Learning collapsed almost overnight in 2008. I never want the dedicated and hardworking childcare workers in my electorate to go through what they went through, wondering whether their jobs were safe as the fallout from the ABC corporate meltdown became apparent in suburbs and towns across Australia.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.

The DEPUTY SPEAKER (Mr S Sidebottom): The question is that the words proposed to be omitted stand part of the question.

Mr SHORTEN (Maribyrnong—Assistant Treasurer and Minister for Financial Services and Superannuation) (13:06): I am pleased to bring the second reading debate on Appropriation Bill (No. 1) 2011-2012 to a close and I thank those members who have made a contribution. Despite the devastating impacts of the natural disasters at home and abroad, Australia’s economic prospects remain strong and the budget remains on track to return to surplus in 2012-13. The need to return the budget to surplus has not been diminished by the impacts of natural disasters nor a weaker near-term outlook for tax receipts.

Constructing this budget meant taking some tough decisions on government expenditure in the long-term national interest. Led by the Treasurer, and of course the Prime Minister, we have done that. While the terms of trade have been good for both this government and our coalition predecessors, Labor in office remain determined to be fiscally prudent. Because of our fiscal prudence, spending growth is increasing under this government by just one per cent. By comparison it is now a matter of public record that under the coalition’s last seven budgets it was 3.3 per cent. In the coalition's final term of office it was actually 3.6 per cent.

I believe it is also very important to note in this place that, under this government, the tax-to-GDP ratio has dropped from 23.5 per cent in 2007-08, when we came to office, to 21.8 per cent in 2011-12. We are determined to keep Australia’s tax-to-GDP ratio at or below the level we inherited, on average, as part of an economy where taxes are fair, simple, sustainable and pro-growth.

While the natural disasters have dampened growth in 2010-11, the strong economic outlook highlights the importance of returning to surplus to avoid compounding capacity pressures that are expected to re-emerge. That is why we have made $22 billion in difficult savings, around two-thirds of which are from reductions in spending, to keep the budget on track to return to surplus. These savings have also provided scope for the government to invest in Australia’s workforce and to deliver reforms in a number of key areas.

This budget has focused on measures aimed at expanding the productive capacity of the economy and ensuring that all Australians have access to the opportunities and prosperity of mining boom mark 2. The core of this budget is jobs. We do not just believe, we understand fundamentally, that the best way to ease the cost-of-living pressures for Australian families and households is to make sure they have jobs with decent pay and fair conditions.

This budget also contains a blueprint to build Australia’s strengths—a plan to build a more productive workforce for our economy; a plan for better schools, hospitals and health care; investments in a sustainable and internationally engaged Australia; and new assistance for small businesses, manufacturers and of course families themselves. This budget includes funding to build Australia’s future workforce. This funding will help get skilled workers into industries, modernise apprenticeships and ensure more Australians are employed. Under our conservative predecessors, Australian apprenticeships were largely forgotten about—ironic, given the Leader of the Opposition’s rhetoric of late about forgotten Australians. Under the Gillard government and this budget, apprenticeships are shown to be what they really are—an engine room of our productivity and skills base.

The government will implement a new approach to training, including the $558 million National Workforce Development Fund, which will deliver 130,000 new training places over four years; supporting apprentices by providing $101 million for a national mentoring program and $100 million for more flexible training models; providing funding for 30,000 additional places in the Language, Literacy and Numeracy Program, which provides job seekers with basic skills essential for employment, and allocating 16,000 skilled migration places to the regions. The government will also invest $233 million in new support programs and targeted wage subsidies to get the very long-term unemployed into work.

In addition to building productive capacity through the investments in training and participation, the government is also investing in infrastructure. We are providing $36 billion for vital roads, railways and ports, including the Moreton Bay Rail Link in Queensland, the Gateway WA Project, the Western Ring Road upgrade in Victoria and additional funds to duplicate the Pacific Highway. Infrastructure Australia will also receive extra funding and greater independence to produce the national construction schedule which will give superannuation funds and other investors the certainty they need to invest with confidence. I note that the new governance arrangements for Infrastructure Australia have been warmly welcomed by the private sector, including with some strong words of endorsement from the Australian Industry Group. So, again, where for over a decade under the conservatives infrastructure investment in our country was neglected and undermined by political interference, under this government we are prioritising the productivity agenda and administering infrastructure investment as it should be.

The Gillard government is committed to investing in better health care and education for all Australians wherever they live. The government will provide $1.5 billion for new initiatives to address mental illness as part of a $2.2 billion package which will deliver better care. The package will focus on support for the severely ill and includes funding for organisations coordinating clinical and social support for the severely ill and their families. A further $419 million is being provided to headspace and to early psychosis prevention and intervention centres to assist with the prevention and early detection of mental illness in young people. In addition to the funding being provided to address mental illness, a total of $1.8 billion will be invested from the latest round of the Health and Hospitals Fund for regional hospitals and health care, an investment of $717 million over five years will expand access to diagnostic imaging services and make new medicines and immunisations more affordable and access to public dental services will improve as a result of the $53 million provided by the government.

This budget also includes over $800 million of new investment in schools, including $425 million to reward top-performing teachers, $18 million for the Teach Next Initiative, which provides new pathways into a teaching career, and $200 million to support school students with a disability. On this side of the House we are pleased and proud to be providing some $200 million to students with disabilities to improve their educational chances in life. The new funding in this budget is about giving children with a disability the best possible education outcomes.

This budget also helps families under financial pressure, regions under pressure and businesses under pressure to modernise, to grow and to prosper. It also helps industries under pressure from the rising dollar. The government is helping families through a range of tax relief initiatives, including increasing family tax benefit part A for older teenagers. The government’s commitment to developing regional Australia will be met with a $4.3 billion dollar investment in essential services and infrastructure. This will include initiatives to improve hospitals, health care, universities and roads. The government will also provide $232 million dollars to partner with state governments in projects that address the particular needs of individual regions. The government will provide small business and manufacturing with support through improved taxation arrangements. We will replace the narrow entrepreneurs tax offset with wider reforms for small business. These reforms include an immediate deduction after $5,000 for small businesses to purchase vehicles. We will also help business to free up cash flow by reducing tax instalment payments by $700 million in the 2011-12 financial year. The government will provide further tax relief to small businesses by implementing the cut to the company tax rate early for small businesses, funded by the minerals resource rent tax.

This budget also recognises prisoners of war from World War II and the Korean War with an additional fortnightly payment of $500 from 20 September 2011.

While the amendments to the Commonwealth Inscribed Stock Act 1911 are part of Appropriation Bill (No.2) 2011-2012, given the number of comments on this which members made as part of the debate I will spend a little bit of time explaining, particularly to those opposite, the rationale behind this sensible move. The need to increase the government's borrowing limit at this time is an inevitable consequence of the impacts of recent natural disasters and weaker-than-expected revenues. It has always been the case that the government's borrowing limit would need to be increased. This has been clear from previous budgets. In the 2009-10 budget, the impacts of the global financial crisis on the budget position meant that gross debt was expected to reach at least $300 billion by 2012-13. Our sustained fiscal discipline has meant that gross debt will now peak significantly below this level. The increase in the legislative limit on debt from a total of $200 billion to $250 billion is a modest increase that will provide for the government's financing requirement over the forward estimates. It will also provide the flexibility to maintain a liquid and efficient government bond market in the years to come, a policy that has bipartisan support.

Historically, the bills to borrow funds in deficit years were typically introduced as part of the budget on budget night. The new borrowing arrangements introduced in 2008 mean the actual loan acts are no longer required. It is therefore appropriate that the CIS Act amendments are included in the appropriation bills as they relate directly to the government's financing requirements over the forward estimates. The amendments to the CIS Act will also repeal the special circumstances provision and establish two special appropriations for the expenses associated with borrowing and debt management activities.

The appropriation bills have been prepared to accord with the government's existing interpretation of the Senate executive compact. In response to concerns raised by the Australian Greens and several Independents in the Senate more generally, the government is considering a number of alternative arrangements and in this regard has commenced discussions with relevant parties. At this stage it is too early to assess the timing for implementation of changes.

This is a budget that gets the balance right. It maintains our drive to surplus, it carefully addresses the circumstances of an economy in transition and it looks after all parts and people in our community—all at the same time. If you have children in child care, we are giving you the choice of claiming childcare payments more regularly, getting the money in their pocket or off their bills. If you have children in school, you can now use the education tax refund to claim for school uniforms. If you have teenagers between 16 and 19, we are increasing the family tax benefit payment by up to $160 a fortnight. If you want some training to earn a higher wage, we are creating 130,000 training spots. If you want to be an apprentice, or have a teenage son or daughter who does, we will provide more support for them to complete—through mentoring, guidance and allowing good apprentices to get their qualifications faster.

If you are a tradesperson or a small business and are buying a new ute or vehicle, you can claim $5,000 back in tax. If you are a low-income earner, you will get more in your pay packet each week through the low income tax offset, which will mean another $300 in your pocket during the year rather than at the end of it. If you are finding it tough to get a job, there will be 35,000 wage subsidies for very-long-term unemployed job seekers to help them get a job and 30,000 training places for single and teenage parents to get the skills they need to be in the workforce. If you are worried about your local hospital, there will be $3.4 billion for emergency departments and elective surgery, and there is $613 million to make new medicines and immunisations more affordable. If there is a teacher in your family or you are a family that places a high value on the quality of your child's teacher, there is $425 million to reward our top-performing teachers across the nation.

This is a government building on its record of successfully steering Australia through the global financial crisis, of managing the evident forces of an economy in transition and of setting our sights on securing the next wave of national prosperity. This budget is a bridge to that future. I commend Appropriation Bill (No.1) 2011-2012 to the House.

Question agreed to.

Original question agreed to.

Bill read a second time.

Mr SHORTEN: by leave—I move:

That the order of the day be referred to the Main Committee for further consideration.

Question agreed to.

Mr CRAIG THOMSON (Dobell) (13:21): It appears that the opposition does not have a lot of interest in aged care and could not make it down to the chamber. I welcome the opportunity to speak to the Aged Care Amendment Bill 2011—a very important bill in a very important area of government policy. It is a shame that when the opposition was in government it did not have the same attention to detail on this bill as this government has taken. This bill is part of the reforms to aged care that this government is looking to put in place. The purpose of the bill is to amend the Aged Care Act 1997 to strengthen protections for accommodation bonds paid by care recipients to providers of residential and flexible aged-care services. In particular, the proposed amendments will limit the permitted uses for accommodation bonds taken after 1 October 2011 such that providers of aged care may still use bonds for capital improvements to aged-care services and prudent financial investments but may not use bonds for operational purposes. However, it will provide a two-year transition period to allow time for the sector to adjust to the new arrangements.

The amendments to this bill will: introduce new criminal offences where significant misuse of bonds has been identified; introduce new information-gathering powers to enable the Secretary of the Department of Health and Ageing to better monitor approved providers that may be experiencing financial difficulties or using bonds for non-permitted uses; and remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. This gives aged-care providers an unrestricted source of income, offsetting the proposed restrictions on the use of accommodation bonds.

The bill will also introduce complaints principles, replacing the existing investigation principles, which will improve the process of handling aged-care complaints. The legislation will also make other minor amendments to remove redundant provisions.

Since the introduction of the Aged Care Act 1997, there has been strong growth in the value of accommodation bonds. During the four years since 30 June 2006, the total value of bonds held has doubled. As at 30 June 2010, approved providers held more than $10.6 billion in bonds on behalf of more than 63,000 aged-care residents. The average total bond holding held by an individual approved provider was $11.2 million and the average accommodation bond held was $167,000. The total value of bonds held by providers has increased by around 20 per cent per annum. This constitutes significant amounts held by approved providers.

Currently, a care recipient may be asked to pay an accommodation bond when entering a low-care or extra service high-care aged-care facility, and approved providers have a responsibility to refund the bond when a care recipient exits the facility. The original policy intent was that accommodation bonds be used for capital funding for investment in building stock and retirement of associated debt. However, this is not clearly articulated in the legislation with respect to the principal amount of the accommodation bond.

Bonds are, in effect, an interest-free loan to the provider and care recipients are unsecured creditors, with the Accommodation Bond Guarantee Scheme as the only protection currently available to ensure they receive their bond refund. Given the significant and increasing amount of funds that approved providers are holding, it is appropriate that residents have some reassurance that their funds are being used for the intended purpose, that there is transparency about the use and that there is sound regulation in place to monitor and protect their savings.

On 12 April 2010, the government announced it would increase protection for aged-care residents' savings. The announcement was made as part of More Support for Older Australians in the National Health and Hospitals Network. Since then, the Department of Health and Ageing has undertaken extensive consultation with industry, community and government stakeholders on the options for enhancing prudential regulation of accommodation bonds to: identify the best means by which to ensure, as far as possible, that the financial interests of residents are protected; maintain effective regulatory safeguards for accommodation bonds; provide a regulated source of capital funding for investment in aged-care infrastructure; provide a regulatory framework that is commensurate to the risk associated with the exponential growth of accommodation bond holdings, which is currently over $10 billion; and promote public confidence in the aged-care system.

As a result of the consultation process, it is proposed that the following changes be made to the act to strengthen consumer protection for accommodation bonds. The bill proposes to make amendments to address the lack of clarity in the act to ensure investment in aged-care infrastructure by clearly articulating that accommodation bonds should be used only for capital works, investment in financial products, loans associated with capital works, investment in financial products and refunding bonds. The bill proposes to make amendments to also introduce new criminal offences where a misuse of bonds has been identified. The bill proposes that an approved provider would commit an offence when there has been a misuse of bond funds and, within two years of that misuse, the provider becomes insolvent and fails to refund bonds. In the very worst cases, offences will also apply to individuals within the organisation, such as when the individual knew bonds were being used for a non-permitted use and was in a position to take reasonable steps to prevent the misuse but had not done so.

The bill proposes to introduce new information-gathering powers for government in circumstances where concerns exist regarding the capacity of an approved provider to repay accommodation bonds and, finally, to remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. This will focus the regulation more on the associated risks of the bond principle rather than on the income derived from the bond, retention amounts and accommodation charges. It is proposed that the changes take effect from 1 October 2011, with provision for a two-year transitional period to allow the sector time to become more familiar with the new requirements. Initially in the transition period, approved providers would continue to be able to use bonds in line with the current regulatory requirements and prepare for the start of the new requirements. Later in the transition period, approved providers not ready to meet the new requirements could continue to use bonds for existing purposes but would report to the department on this use and on actions being taken to become compliant.

In relation to the impact of the proposed reforms on the Productivity Commission's current inquiry into aged-care there is movement here as well. The proposed prudential reforms are consistent with the direction of the Productivity Commission's draft report. The proposed prudential reforms reinforce the requirements that accommodation bonds should primarily be directed to investment in aged-care infrastructure. The Productivity Commission acknowledged the ongoing need for prudential regulation and that these prudential reforms were currently under consideration.

A second part of the legislation relates to the complaints scheme. The bill proposes amendments to the act which would enable the investigation principles, which currently describe the investigation process in relation to complaints, to be replaced with complaints principles. The Aged Care Complaints Investigation Scheme provides a means through which concerns relating to the delivery of residential, community and flexible aged-care services, subsidised by the government, can be investigated. In July 2009, in response to industry and community concerns about the scheme's operation, the then Minister for Ageing commissioned an independent review to identify areas of improvement to ensure the scheme achieves best practice aged-care complaints management arrangements. The review recommended a number of changes to improve the operation of the scheme in terms of timeliness, transparency and consumer focus.

Following consideration of the review and further consultation regarding proposed amendments to the act, proposed new complaints principles will describe the improved new complaints scheme and will have a stronger focus on resolution rather than investigation of complaints. The bill proposes to shift the focus of the system from investigation, whereby the department investigates complaints and determines whether there has been a breach or not, to a more flexible scheme, whereby the department can employ a range of mechanisms for assisting to resolve a complaint—including early resolution, conciliation and mediation—that encourage the parties to resolve the issues themselves.

Other amendments contained within the bill will make some minor operational changes to remove redundant provisions relating to aged care. Amendments to the Aged Care Act 1997 will strengthen consumer protection around accommodation bonds and the arrangements for managing complaints. The purpose of the bill is to amend the Aged Care Act 1997 to address current legislative inadequacies regarding the permitted use of accommodation bonds. In particular the proposed amendments will clearly articulate the permitted use of accommodation bonds, introduce new criminal offences where misuse has been identified, introduce new information-gathering powers and remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. The bill will also enable the making of the complaints principle in place of the existing investigation principles, which will improve the process of handling aged-care complaints and make other minor amendments to remove redundant provisions.

Subject to the passage of the bill through parliament and the development of associated changes to delegated legislation, it is proposed that the reforms regarding accommodation bonds will take effect in relation to new accommodation bonds taken by approved providers from 1 October 2011. A two-year transition period until the end of September 2013 will allow the sector time to become more familiar with the new requirements. It is proposed that the introduction of the new aged-care complaints scheme will take effect from 1 September 2011 with a limited transition period for existing complaints to be transferred to the new arrangements. To ensure smooth implementation, the government will continue to work collaboratively with providers and key stakeholders and listen closely to all their views. It is proposed that the effectiveness of any changes to the legislation be monitored by the department and that a post-implementation review be conducted. Given the two-year transition periods for reforms to accommodation bonds, it is anticipated that the review is likely to be conducted in 2014-15.

These are important changes to aged care that aim to ensure there is better regulation around the operation of accommodation bonds to give greater confidence to the public and also to set in place a new complaints regime so that the public can have greater confidence in the operation of our aged-care sector. This is an important bill and I commend it to the House.

Mr DUTTON (Dickson) (13:33): The Aged Care Amendment Bill 2011 introduces a number of changes to the Aged Care Act 1997. The act describes a regulatory framework within which Commonwealth government subsidised aged-care providers, known as approved providers, must operate in order to obtain funding. Amongst other things, the act describes the rules relating to the charging and use of accommodation bonds, which is the money given to approved providers by residents of aged-care services. In effect, the accommodation bonds are interest-free, unsecured loans to the provider from the resident due for repayment when the resident leaves the home.

The amendments in this bill seek to limit the permitted uses for accommodation bonds, specifying that the bonds may be used for capital works, investment in financial products, loans for those purposes and refunding accommodation bonds. At the same time, the amendments are claimed to provide greater flexibility for aged-care providers in managing their cash flows by removing restrictions on the use of income derived from the accommodation bonds, retention amounts and accommodation charges. The bill will introduce new criminal offences where misuse of accommodation bonds has been identified and the approved provider has failed financially, owing accommodation bond refunds. It also introduces new information-gathering powers to enable the Secretary of the Department of Health and Ageing to better monitor approved providers that may be experiencing financial difficulties or using accommodation bonds for non-permitted uses.

Additionally, the bill will make amendments in relation to complaints against providers about Commonwealth funded aged-care services. It will enable the making of complaints principles in place of the existing investigation principles. The bill's explanatory memorandum states that this will improve the process of handling aged-care complaints with increased focus on achieving outcomes for care recipients, their families and other representatives by allowing DoHA to adopt a range of approaches such as conciliation, mediation and investigation to resolve complaints cooperatively with care recipients and providers of care. In short, the Minister for Ageing says the bill will increase protection for accommodation bonds and strengthen complaints management. The amendments relating to the accommodation bonds will take effect for bonds taken after 1 October 2011, with a two-year transition period to allow the aged-care sector to become familiar with the new requirements. The new complaints principle will take effect from 1 September 2011.

The aged-care sector is at crisis point. In its 2011-12 budget submission, the Aged Care Industry Council stated:

A snapshot of the industry at the start of 2011 does not depict a sustainable system: only 40% of residential aged care services are operating in the black; hours of service are decreasing; hours of care provided under community aged care packages have fallen; and many providers are not building new residential care beds. The situation is worse in rural and regional areas where providers face generally higher costs with less ability to manage their income streams.

There are approximately 1,400 approved providers of aged care in Australia and over 970 of these providers hold accommodation bonds. Sixty-three thousand residents of aged-care facilities have paid accommodation bonds amounting to, on average over the last financial year, $232,000, according to the minister. Those moneys no doubt represent a significant part of each resident's life savings. Since the introduction of the Aged Care Act 1997 the value of accommodation bonds has risen from $500 million to more than $10.6 billion. During the four years since 30 June 2006 the total value of bonds has increased by around 20 per cent per annum, effectively doubling in that time from $5.2 billion. Prudential requirements for aged-care providers were introduced in 2006, as was the Accommodation Bond Guarantee Scheme, to cover residents when operators failed and bonds were not repaid. Since then 652 approved providers have been found to be non-compliant with the prudential standards. This amounted to noncompliance with the prudential standards by over 15 per cent of the aged-care industry. When I first read that figure I was struck by it because it is a significant number of providers who have been captured by this alleged breach.

Part of the problem that this government have is that they have an industry which is in a complete state of flux. They are concerned about whether there is going to be stability in the marketplace going forward, they are concerned about increasing burdens of regulation imposed by this government at every turn and they are concerned about withdrawal of capital investment by this government into the sector. They are certainly of the view that the Labor Party, this government in particular, simply do not understand small business or business and the way in which business operates or indeed not-for-profit operates in this sector. In the same timeframe, the risks of underwriting provider failures through the guarantee scheme has cost the Commonwealth $24.5 million.

A Grant Thornton aged-care survey of November 2007 found that 40 per cent of all providers were operating in the red. Given that aged care is in crisis and in need of reform, the financial viability of the sector is very much an issue. Any measures that can help make the sector more viable and able to meet the growing needs of an ageing population are essential. The minister tells us these measures are structured to ensure that crucial investment in aged-care infrastructure is maintained. We will wait to see. In 2007 the then Prime Minister Rudd promised Labor would deliver 'new directions for frail and older Australians', to quote him directly. What was delivered of course has been a period of sheer neglect. Rather than strengthen the sector, the then minister established an atmosphere of fear and worked against providers. In an admission of the failures in aged care the minister was later dumped. It was an unusual event in a number of areas, if you look back on the history, but there was of course a litany of reports and reviews right through that period. Again, as usual, the outcomes were ignored or were responded to with still more inquiries. The National Health and Hospitals Reform Commission outlined a framework for reform which pointed to a need for greater competition in the sector, less regulation and more consumer involvement. The Rudd and now Gillard government response was underwhelming, to state the obvious.

The aged-care sector is in meltdown. Under this government 2,000 beds were cut in the 2008-09 aged-care approvals round and the industry is rejecting government funded beds with a shortfall in residential bed licences. In recent Aged Care Approval Rounds, ACAR, providers are handing back licences, beds are left empty and senior Australians are having to wait longer and travel further to find a bed, all the while placing extra pressure on our public hospitals. Providers have gone to the wall or have been forced to sell to larger entities in the sector.

Since this government has come to power there have been budget cuts and little new spending in the area of aged care. Aged care has been overlooked at a time when the government has thrown billions of dollars out the door in failed stimulus packages, the list of which is long and getting longer. The Prime Minister oversaw the biggest of them all. Building the Education Revolution cost more than $16 billion, blown out by $1.7 billion and possibly $8 billion of the spending has been wasted. Think what just a small part of those billions of dollars could have done for aged-care services. Then of course there was the pink batts scandal, otherwise known as the Home Insulation Scheme. It was closed after it caused workers' deaths and at least 100 home fires, all at a cost of $2.5 billion. There is also the myriad of so-called green schemes instituted by this government and subsequently closed down because of their inefficiency. Who knows how much was wasted there? Into the future we have the $350 million being handed out for set-top boxes and the billions after billions that will be spent into the forward estimates and well beyond to the National Broadband Network.

Ageing and therefore aged care could be the biggest social issue facing Australia with our rapidly ageing population, yet under this government it has virtually been overlooked. The government tells us the measures contained in this bill are part of its so-called health reform. That does not inspire a great deal of confidence, though. Just this week in Senate estimates hearings the litany of failure in the Gillard version of health reform has again been exposed. We have a bill to establish a National Health Performance Authority before this House, a so-called key element of Labor's reforms according to the Minister for Health and Ageing. It will never proceed in its current form. It has been introduced but it has since disappeared. Why has that occurred? It has occurred because many of the states say the bill as presented is unacceptable to them because it does not reflect what was agreed to during the COAG process.

The National Health Performance Authority is supposed to be in operation on 1 July. That is just one month away. Yet the legislation to establish it has not even passed the parliament. From Senate estimates we learn that it is the subject of ongoing dispute between the Commonwealth and the states. It is a dispute so serious that Minister Roxon had to convene a teleconference of health ministers last week to try and avert yet another Roxon-made crisis. No resolution came from that conference and now she is seeking a face-to-face ministerial meeting sometime in the next week.

The performance authority is not the only debacle in this government's attempt at so-called reform. With the 1 July start date looming for many elements of Labor's health reform, the department of health revealed in Senate estimates that it still does not know how many local hospital networks there would be across Australia. It did not know how many would be ready to start on 1 July. Of course local hospital networks are at the core of Labor's reforms. Remember that line so often repeated: 'federally funded and locally controlled'? Well, there will not be very much local control from 1 July when the government does not know how many local hospital networks there will be.

Then there are the Medicare Locals, 15 of which are also supposed to start operating on 1 July. The House might be interested to know that not one exists at the moment. None have been formed. Indeed, none have even been contracted. At Senate estimates the department could not tell us how or when clinician groups would be established. What it could reveal was that the centrepiece of reform, the so-called Independent Hospital Pricing Authority, the organ that will decide how the nation's public hospitals will receive their funding under Labor's reforms—

The DEPUTY SPEAKER ( Hon. Peter Slipper ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. At that time the honourable member will have the opportunity to continue speaking when the debate is resumed.

Mr ALBANESE: by leave—I move:

That the order of the day in relation to the deaths of Lance Corporal Andrew Gordon Jones and Lieutenant Marcus Sean Case be referred to the Main Committee for debate.

Question agreed to.

Mr DUTTON (Dickson) (16:45): I conclude my remarks on the Aged Care Amendment Bill 2011. It is true that all we have gotten from Labor's so-called reforms in health has been overblown promises, overblown spending and new layers of bureaucracy, one after the next. Let us hope the legislation before us to make changes in the aged-care sector is more successful. There is provision for a review to be conducted in 2014-15. Aged care needs supportive policy. Currently it is overregulated, underfunded and facing huge challenges. I note that the explanatory memorandum for this bill states that it is difficult to quantify the regulatory impact of these amendments. This remains an ongoing concern for the coalition. This is a government that imposes additional regulatory burden on industry at every turn. The aged-care sector has almost been regulated to death. For those reasons I move:

That all words after "That" be omitted with a view to substituting the following words: "whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) objection to the growing burden of regulation being placed on the aged care sector by this Government and its impact on the ability of providers to make available affordable aged care places; and

(b) that the Government has broken its election promise to repeal one regulation for every new regulation; and

(2) calls on the Government to immediately adopt the Coalition’s commitment to reduce Commonwealth regulation by at least $1 billion per year."

The DEPUTY SPEAKER ( Hon. BC Scott ): Is the amendment seconded?

Mr Turnbull: I second the amendment.

Mr NEUMANN (Blair) (16:47): I speak in support of the Aged Care Amendment Bill 2011. I take issue with what the member for Dickson was saying about what we are doing on aged care because we are strengthening protections for accommodation bonds paid by care recipients to providers of residential and flexible aged-care services. We are taking steps in a massive way to support the aged-care sector. The aged-care sector has never received such a large sum of money in any budget than it has in this budget. We are providing assistance to the aged-care sector in a big way. We are supporting a review on aged-care services in this country. The Productivity Commission handed down its draft report on 21 January this year and we are seeing significant interest in that and from the aged-care sector.

We are making sure that we have a sustainable sector. We are making sure that we have opportunity for people in their senior years to get the best quality care, that people have choice and that people have decency and support from good qualified nurses, nurse aides, doctors and care workers in that sector. We are also very committed to making sure that the workers in that sector have decent and affordable wages and conditions.

The member for Dickson was very critical of our performance on aged care. He quoted the Grant Thornton analysis of aged care. It is interesting because back in 2006-07 Grant Thornton examined what went on under the Howard coalition government. The member for Dickson pointed this out, failing to tell those who might be listening that the coalition government was in power at that time. Grant Thornton prepared a financial analysis based on data obtained from financial information from the Department of Health and Ageing. Grant Thornton found that 40 per cent of all providers of aged care reported a loss in residential aged care. Net profit per bed fell by 30 per cent from 2005 to 2006—those opposite were in government at that time—and the annual average net profit per bed was around $1,700, a return of less than 2.5 per cent.

So let us not come up with this furphy that somehow there was some sort of aged-care nirvana during the time they were in government. In fact, the aged-care portfolio was a bit like the Northern Ireland of politics in the UK because Prime Minister Howard took the view that he would put people like the current member for Sturt in the portfolio—people he did not really like. We saw plenty of people over there who are not really too au fait with the portfolio. We saw a revolving door of about seven different ministers across about 11 years. The aged-care sector was up in arms about this.

I can recall meeting with the Aged Care Alliance in Queensland before the 2007 election when they were just absolutely livid with the performance of the coalition government. A number of backbenchers opposite were clearly of the view—they knocked on the door of the then member for Bennelong, the then Prime Minister John Howard—that more support should be provided. This was a constant refrain in the Courier Mail and the media back home in Queensland. So let us not perpetuate and perpetrate a myth about the commitment to aged care from the coalition. I look forward to what the Productivity Commission has to say when it releases its report at the end of June this year because the draft report was creative and innovative. I see the member for Ryan across the chamber. She and I both spoke at an aged-care breakfast in Brisbane about this topic some months ago where, as she would know, people from the aged-care sector were looking forward to the liberty and to a more sustainable, flexible and financially viable sector. We welcome the Productivity Commission's draft report. I have to confess I actually have read that report, all 507 pages. The Productivity Commission has made it clear that we need to make reforms in this area. The Prime Minister and the Minister for Mental Health and Ageing have made it clear that this item is very high on the second term agenda of the government.

The legislation that is before the House today will make a number of important reforms that I think go towards transitioning aged care to the point where we look at, act upon and take seriously the suggestions of the Productivity Commission and its recommendations. The bill will make amendments which limit the permitted uses for accommodation bonds taken after 1 October 2011, such that providers of aged care may still use bonds for capital improvements to aged-care services and prudent financial investments but may not use bonds for operational purposes. The bill provides a two-year transition period to allow time for the sector to adjust to the new arrangements. Bonds are of course paid in low care and not in high care, which is a more hospital-like environment for people who are suffering from severe illness and disability.

The average person who goes into a high-care facility is about 84 years of age. We have about 170,000 people in residential aged-care facilities across the country, but a million Australians interact with the aged-care sector and we are putting about $50 billion into that sector across the forward estimates. A million people often get home and community care. On the Extended Aged Care at Home Dementia packages: I have been arguing for some time, in my electorate for a start, that there should be more aged-care packages. I am pleased to see that recently my representation has been successful with further packages for Blue Care in the upper part of the Brisbane Valley around Lowood. I warmly welcome the representation from Peter Conaghan in relation to that. Peter has been a terrific advocate as the Service Manager, Community, at Blue Care in Lowood.

These amendments will also remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. This will give an unrestricted source of income to aged-care providers. I spent 14 years on the board of Queensland Baptist Care and acted as a lawyer for many aged-care providers. In fact, when I spoke at the event that the member for Ryan also attended, I saw in the audience quite a number of the clients I represented when I was in private practice as a lawyer.

The aged-care sector is crying out for reform. The amendments in this legislation are transitional, but they make clear the sources of income. It is always difficult to invest in capital infrastructure to build the best kind of facility and to have that ready source of income. So I welcome the ACFI funding that we have put in during the last few years, which has given further assistance to those in aged care and made a ready source of money available to assist people.

The challenges in this sector are so great. By 2050 we will have 2.7 Australians working for every person over the age of 65. That is what the third intergenerational report says. The increase in costs in aged care will be three times what the increase will be in health funding. That is the challenge we face. About five Australians now work for every person over the age of 65 years. The intergenerational report indicates the rate of growth is enormous. About seven in 10 women and about five in 10 men reach 65 years of age and they are going to need some form of help for their domestic needs, some form of help with showering, shopping, mowing, ironing and those kinds of routine household chores.

The legislation we are debating today is about caring for the disadvantaged and the vulnerable. It is about honouring the contributions that they have made to our welfare and our wellbeing in this country. We believe that every Australian deserves the right to access good quality care. We believe it is appropriate and the measure of a decent society is how we treat our senior citizens. In my electorate of Blair we have made a significant contribution to our senior citizens. Of the $9 million used to redevelop the Cabanda aged-care facility in Rosewood, a community run aged-care facility, $1.5 million was federal government money. We have put in $5 million as an interest-free loan for the Milford Grange project in Ipswich run by RSL Care. Our transitional funding through low-interest loans has made a big difference. Older people will benefit from another 113 new aged-care places in Blair costing more than $6 million a year. This includes an allocation of 30 new residential aged-care beds. We are making a huge contribution. On 8 December, the Minister for Mental Health and Ageing announced that 12,272 new aged-care places worth more than $450 million a year will be allocated across the country. That is a huge number of people who will interact with the aged-care sector. The aged-care sector has been crying out for reform for a long, long time. It is not as if those opposite did not know about the need to reform the aged-care system, which the Productivity Commission has described as complex and difficult for people who interact with it to negotiate and navigate. They knew very well about the challenges in aged care because former Prime Minister John Howard instructed Professor Warren Hogan to undertake the Hogan review back in 2004. Professor Hogan urged radical change in the aged-care sector, but for three years the government sat on his report and did virtually nothing.

In 1997 the government made some significant change, which we acknowledge, but subsequently they refused to take up the mantle of change. They refused to be reformers. Their idea of aged care was to manage it as best they could, in a political way. They did not really commit themselves to the change they needed to make.

The Productivity Commission's draft report Caring for older Australians has really made it clear that the Howard coalition government utterly failed with respect to aged care. It has made clear that there is great disparity in wages and conditions for aged-care sector staff; that the system is difficult for people to work out; that we need a different model, a different method, for funding the aged-care sector; and that we need a gateway agency to allow people to navigate the system, with different methods of assessment, different methods of sanction and different methods of accreditation. There is a lot to be done—the legislation here is really transitional—before that happens.

We think that making changes to the aged-care sector will improve the lot and lifestyle of our senior citizens. We think a more flexible range of care and support services will make a difference. We want to make sure there are safety and quality standards across the sector. We want to make sure that the regulatory commissions and bodies involved in it are transparent, accountable and open. We want to make sure that there is a simplified gateway that is easily understood so that assessments of care and information can be given to consumers and customers. We want to make sure that where there are gaps in service delivery we can fix them.

The legislation here is part of that process as we transition to major reform. This is a priority of a reformist Labor government. The fact that we have to do it is testimony to the failure of those opposite who, for 11½ years, fudged and fumbled aged care because they did not have the wisdom or wit to do the reform that needed to be undertaken.

Mrs PRENTICE (Ryan) (17:02): Aged care in Australia is a topic that confronts and challenges us all. I spoke in my maiden speech about the importance of social connectedness and active ageing. To put the potential impact of an ageing population into perspective, it is worth noting the statistics. By 2050, one in two voters will be aged over 50 and by 2055, 78,000 Australians will be aged over 100. We need to acknowledge not only the cost but also the potential benefits of age. Australians aged over 55 contribute an estimated $74.5 billion per annum through voluntary, unpaid and caring work. We must not dismiss their enormous contribution and potential. That is our challenge.

The government is not meeting this challenge. We are here today debating yet another amendment—another stop-gap measure; a bandaid solution—that still does not resolve the bigger issue. The government came to the 2007 election claiming 'new directions for frail and older Australians' and claimed that it would make the transition from hospital to aged care a priority. Yet the reality is: another Labor priority policy area; another Labor government failure.

After delivering so little for this sector during its first term, this Labor government refused to commit to any substantial reform during last year's election campaign, leaving aged care to be swept under the rug once again. This government has failed to make the tough decisions needed in the aged-care sector, yet again dodging the key issues and then passing the buck to the Productivity Commission inquiry. The findings of this inquiry will not be released until after the 2011-12 budget, providing the government with yet another excuse to delay any real action in this vital area.

This amendment bill aims to strengthen consumer protection for accommodation bonds paid to aged-care facilities as well as to improve the arrangements for the handling of complaints about Commonwealth funded aged-care services. Given the recent experience of one of my constituents, I agree with the government that at the very least there are major issues within this area that need to be addressed. Ms Linda Fitzgibbon recently contacted my office to share her experience when dealing with an aged-care facility. Ms Fitzgibbon placed her two elderly parents into care last year, paying an upfront accommodation bond of $300,000 for each parent—$600,000 in total up-front just for the bond—in addition to the fees she would be paying for their care.

As Ms Fitzgibbon points out, she was lucky to have been able to afford this outlay up-front, as the interest charged on paying this bond off over time was, at that point, over seven per cent per annum. Sadly, she has lost both her parents over the course of the past year, her mother in September and her father in March. During this grieving and stressful time she also faced, due to circumstances beyond her control, a delay in her parents' wills going to probate.

As you would appreciate, this was a very distressing time for Ms Fitzgibbon. That stress was compounded by the fact that, due to the delay in the will going to probate, the aged-care facility would not release her parents' accommodation bond. Unfairly, neither was that bond earning interest at the same rate that the constituent would have been charged had she not paid that bond up-front. That rate has now increased to 8.94 per cent. With this in mind, I do find the proposals to strengthen consumer protection for accommodation bonds and improve arrangements for the handling of complaints to be warranted, and we on this side will continue to support sensible policy measures. It will help to curb aged-care facilities investing these accommodation bonds—substantial amounts of money—in high risk investments, reducing the possibility of the bond being lost. The proposals will also, hopefully, encourage aged-care providers to upgrade their facilities for residents, which I am sure residents and their families would appreciate.

But the question we must ask is: why is this happening within the aged-care industry? It is happening because the sector does not receive enough support from the government. As the Productivity Commission report stated, the aged-care industry is close to crisis, with 40 per cent of aged-care providers operating in the red as at June 2010. Yet the population of over 85-year-olds, the main users of aged care in Australia, is set to swell from 400,000 in 2007 to 1.6 million by 2047. Increasingly, seniors are struggling to access the care that they want, they need and they deserve, with 2,000 aged-care beds and 786 bed licences lost since 2007 alone. The government clearly have not faced the reality of our ageing population and they do not appreciate the dedicated and committed individuals working in aged-care facilities. Aged-care nurses on average earn 20 to 30 per cent less than their acute-care colleagues.

Whilst the amendments we discuss today are both needed, they are not enough. This government's entire treatment of the sector is simply inadequate. Those in the industry have already raised the alarm that the system is difficult to navigate, confusing and underfunded. The whole industry is already overregulated, yet here we are today discussing stopgap regulation but not real reform. Back in 2007 the government promised to cut one regulation for every one it introduced—one in, one out. So the obvious question is: what is being cut today? The answer to that is: nothing. It is yet another broken promise of this Labor government. In fact it has introduced 220 new regulations for each one it has repealed. Indeed, rather than reducing regulation, the only cut this government has made is a cut to funding for the sector. The assistive technology in community care initiative was cut and, as a result, there is restricted access to vital technology which could assist older Australians in their homes. We have also seen cuts to hearing services through the introduction of a threshold, and funding cuts to preventative measures that assisted our older Australians to keep fit and healthy, increasing the financial burden on the government purse and, sadly, reducing support for our senior citizens. On top of that the Labor government applied one of their most simplistic and lazy 'saving' measures: freezing indexation payable to aged-care providers in the 2009-10 budget, thereby cutting approximately $910 million over four years. The government continues to fail our aged-care sector and therefore fails our seniors, in turn fails their families and then fails our young Australians—for it is our young Australians who will bear the responsibility and the cost in the future for rectifying this neglect.

The amendments today are a bandaid step, but we need genuine reform if we are to support aged care in Australia. It must be done responsibly and it must be done soon. Aged care is in crisis, and the financial viability and associated issues are of vital importance. As Mike Woods of the Productivity Commission said:

… the system is expected to provide care to over 3.6 million older Australians by 2050. It is inevitable that government expenditure will rise. The challenge is to reform the system, while keeping that expenditure within sustainable limits.

The more we fail now, the greater the problems for future generations. The more costs and pressures we place now on the aged-care industry, and by extension the health system, the greater the burden we place on future generations. Failing in aged care affects so many facets of our economy and has far-reaching consequences which this government refuses to face. To quote Abraham J. Heschel:

A test of a people is how it behaves towards the old. It is easy to love children. Even tyrants and dictators make a point of being fond of children. But the affection and care for the old, the incurable, the helpless are the true gold mines of a culture.

Mr Deputy Speaker, let us begin to apply this philosophy to our aged-care sector.

Mr HAYES (Fowler—Government Whip) (17:12): I rise to support the Aged Care Amendment Bill 2011 and I commend the minister on bringing this matter to the parliament. A compassionate and responsible aged-care sector is, quite frankly, the hallmark of a modern society. When we look at the costs associated with maintaining that sector I know they sometimes appear horrendous, but one of the things that strikes me these days is that we have seen huge changes, particularly with respect to the standards of accommodation and lifestyle which are associated with aged-care facilities. One of the reasons for that is not just that it is what society expects for its aged community; it is what we expect for our parents. If you personalise that point, it is what we are looking forward to for the care of our mums and dads—and I suppose we might possibly inherit that degree of care from our kids as well—and it shows that there is a reason why we constantly review, upgrade and look forward to progress being made in this sector. We pride ourselves on advancing our own standards of living and lifestyle, and clearly in taking care of our aged these things are no less important. That is the hallmark of a modern society and a modern community, which we are all very happy to support. That is the reality of the position. In my electorate I have—as, no doubt, every member has—a number of aged-care facilities. I take the opportunity to visit them regularly. I would like to mention two that I have been to very recently. One is the Cardinal Stepinac Village and the other is the Indo-Chinese Elderly Hostel. They are fantastic organisations. These organisations cater for a significant ethnic population in my electorate. I have mentioned many times that my electorate is the most multicultural electorate in the country. The work that those two organisations do—Cardinal Stepinac Village with respect to the Croatian community and the Indo-Chinese Elderly Hostel with respect to the Indochinese population—is extraordinary. A lot of the residents have limited English. That has not always been the case. Regrettably, as people grow old and with the onset of dementia, a lot of people return to their original tongue. Hence, these two facilities cater very significantly to the ethnic aspects of the elderly in my electorate.

I would like to refer to Harry Tang and his team. Harry is the President of the Indo-Chinese Elderly Hostel and Veronica Hon is the CEO. They do a wonderful job. As a consequence, the government rewarded them only recently with approval for another 32 aged-care beds as part of the second round approval process. That is significant in my area, particularly around Bonnyrigg where they are located. When I was at Cardinal Stepinac Village the chief executive officer, Matt Smolcic, presented me with a cheque for $40,000 to top up the Premier's Disaster Relief Appeal in Queensland. I thought that what the Croatian community did was pretty good—that they still thought about others.

Getting back to the bill—I know I have digressed—these amendments will strengthen consumer protection around accommodation bonds and will make the processing of complaints easier and probably more flexible as that applies in this sector. In particular, it will amend the Aged Care Act to address the current legislative inadequacies around accommodation bonds in aged-care facilities. It will go a long way to clearing up the confusion and uncertainty—certainly in the minds of some of the industry operators but, more particularly, in the minds of residents and families of residents—about what these bonds can and cannot be used for.

Bear in mind that these bonds are a form of interest-free loans to operators. They are certainly worth a significant amount of money and it is only right that we protect the consumer—often that is the family of the aged-care recipient—make sure that their investment is protected and that the money is used for proper processes. As I understand it, when the bonds were introduced in 1997, they were designed to apply to infrastructure—the bricks and mortar associated with accommodation. However, since then, without prescription provided by the legislation, there has been the opportunity for some operators to use the money, which has effectively been held in trust for recipients, to do other things. This bill is designed to bring it back to what these bonds were originally intended to do. The bill gives greater clarity in that respect. It will ensure that what the bonds in the aged-care sector are for—the money is held in trust—and what the bonds can be used for by the operator is clearly understood. The amendment, which will take effect on 1 October 2011, will make it clear to all operators, residents and, in particular, the families of residents that the bonds are to be used strictly for capital improvement and not, under any circumstances, used for other operational purposes.

The two-year transition period will give the aged-care providers the opportunity to prepare for the changes. In addition, the compliance and enforcement regime will change under these provisions. That will be enhanced around these bonds. It will introduce new offences where misuse of funds has been identified. It will also provide for new and better information-gathering powers for the department to follow up on when there are complaints or allegations of misuse of accommodation bonds.

The second aspect of the bill removes restrictions on the use of income derived from accommodation bonds, which technically gives aged-care providers an unrestricted source of income. The amendments to the Aged Care Act will strengthen and improve the compliance scheme in the aged-care area. It will replace the investigation principles with a new complaints based principle. That will broaden the department's scope for dealing with and following up on concerns.

At present the department is limited to only being able to investigate complaints and establishing whether a breach of the act has occurred. If that is proven to be the case, it would go down the prosecution route and adversarial aspects in terms of compliance with the act. This amendment will make the scheme more flexible. It will introduce the aspect where the department can employ a wide range of mechanisms to assist in resolving complaints, not waiting until there has been an established breach of an act. Those mechanisms include early resolution, conciliation and mediation to work in collaboration with residents, families of residents—the complainants in this case—and the operators of an aged-care facility. At the end of the day, it is not in our interests or the department's interests to establish a prosecutorial regime. We want to show leadership in the standards and the services that are being administered by aged-care providers, and we want their obligations to be understood not only by the providers but also by the residents and the families of the aged. This will lend greater flexibility in trying to resolve issues so that people can undertake their work—that is, to look after the aged.

These recommendations came out of an independent report commissioned by the then Minister for Ageing, Justine Elliot, into how the industry responded to concerns. I acknowledge the former minister's good work and I wish her well in her new portfolio. For what it is worth, I think she applied herself diligently in the ageing portfolio with a view to making a difference for the people in aged care.

The last element of the bill will make some minor operational changes to remove the redundant provisions of the Aged Care Act. These amendments were developed through extensive consultation with a wide range of stakeholders, including aged-care providers, residents and their families, and aged-care advocacy groups. These amendments will get the balance right. That is not to say that once we pass this bill everything will come to a stop, because this is an ongoing reform of aged care. Changes will obviously occur from time to time, but we are trying to make sure that the administration of our aged-care residents reflects the contemporary standards that one would expect in a society such as ours.

We intend to protect residents and their families from unscrupulous operators. There are profits to be made in this area, there is no question about that. It is not simply an altruistic industry. We want to make sure that people do not cut corners that prejudice the lifestyle of residents. As a consequence, continued monitoring of this industry will be needed and that is why a further review will take place two years after these changes are implemented.

As I said, we are setting about to protect the community from unscrupulous operators, but that is not meant to cast aspersions on all of the good operators out there who are the vast majority. However, where operators and their senior staff abuse the rights of others we need to be able to give a level of assurance to the aged and those who effectively fund the accommodation bonds. This government will do all we can to support Australians who are being cared for in aged-care facilities and to support the industry so that they can provide the highest possible standard of care to our aged. As such, the government will continuously monitor the effectiveness of these changes. As I have said, once they have been implemented there will be a subsequent review that will take place in 2014 or 2015.

The elderly certainly have the potential to continue playing a very significant role within our community and that is why we need greater flexibility in aged care. One of the things that drives the development of the aged-care industry is what we expect for our own parents. I support these amendments because they will introduce changes that are needed, but they do need to be continually reviewed. The best thing we could do to provide a greater degree of assurance for those in aged care is establish mechanisms that can quickly and appropriately address complaints instead of simply looking for breaches to prosecute in the courts. I think these amendments will take us a long way down that track. I think it shows that we are committed to making sure that the processes work not only on paper but also in ways that fundamentally deliver good results for the aged-care sector and, more importantly, for those who are cared for in the aged-care sector. I commend the bill to the House.

Mr RANDALL (Canning) (17:27): I am very pleased to speak on the Aged Care Amendment Bill 2011. As previous speakers have mentioned, this bill introduces a number of amendments to the Aged Care Act 1997 which are part of the reform agenda to strengthen consumer protection for accommodation bonds paid to aged-care services and to improve the arrangements for handling complaints about Commonwealth funded aged-care facilities. If this bill is passed it is proposed that the reforms regarding accommodation bonds for approved providers will take effect after 1 October 2011 and the new complaints mechanisms will take effect on 1 September 2011. I am sure that my colleagues have already mentioned that there will be a transition period, so I will not just repeat what everyone else has said about these matters.

There was a need for reform because things have happened with accommodation bonds. The original policy was that they were to be used for capital funding for investment in the building of stock; however, the principal amount of the accommodation bond was not clearly articulated in the legislation. In other words, the act needed clarification and that is what this bill does. It makes it clear that bonds must not be used for purposes other than those related to providing aged care to recipients. The bill also provides that, where a bond is charged, the approved provider is entitled to income derived from that bond and the principal can be deducted from it for specific purposes. The bonds were generally invested in deposit-taking institutions, such as banks et cetera, but they did venture into other areas, such as credit unions, syndicates and other sorts of trusts. There has been a very wide use of bonds and there has been a lack of consistent interpretation regarding permitted uses of bonds. There have been a number of anomalies which have been identified by the Department of Health and Ageing. These included using accommodation bonds to make loans to related parties, related entities and individuals, and failing to meet existing prudential standards relating to bonds.

Grant Thornton, in his Aged care performance survey in November 2007, found that 40 per cent of all providers were operating in the red. Without going through all the issues, that is why we are here today. Let us get on to some of the real issues in relation to why there is a crisis in aged-care funding. I suspect that you, Mr Deputy Speaker Scott, would be the only one who has been in this House long enough to know that in 1997 there was a massive argument in this House about the charging of bonds and it essentially brought down the minister of the day, the member for Pearce. She was attacked roundly by the member for Jagajaga for trying to charge accommodation bonds where it related to the family home.

I will not revisit that whole experience, other than to say that we supported sensible arrangements to charge bonds because no government can afford the growing aged-care industry capital spending that is required. There needs to be a blend of funds from government, the investment sector and individuals. As we know, at that time, many people entering aged-care facilities had a home and they could have used the value of that home to help provide capital for accommodation by providing a bond to the aged-care facility. But that proposal was not supported, and people like Francis Sullivan from the Catholic association helped the Labor Party opposition at that time savage us over this issue.

There are still massive underspends in what is required for aged-care accommodation. I see on the opposite side of the House the former minister for aged care. I am sure as she travels around this country she would hear—as all members hear in their electorates—that they are desperate for funds in this area. At the moment, there is not only a crisis but also a massive underspend because these facilities cannot create a business case. I have met with my aged-care providers, and earlier this year the member for Hasluck and I met a delegation of aged-care providers at Amaroo Village in Perth. We met with David Fenwick—who is very vocal on these issues—Trudi Hodges, from Dale Cottages, and a number of other providers. They said that we had to do something about supporting their parlous situation and they wanted us raise this issue in the parliament—and this debate gives me the opportunity today.

What is happening in Western Australia—and it is happening right across Australia—is that they are handing back the allocation of funds for beds and they are handing back licences because they cannot make a business case. Charitable organisations, churches, community based aged care et cetera cannot make a business case at the moment. As a result, they are experiencing real problems trying to expand or even do with what they have now.

I feel very, very chastened because during the election campaign I visited one of my aged-care facilities, the Graceford Hostel, an independent living facility in Byford in my electorate, and they pleaded with me: 'Mr Randall, can you do something about helping us?' While showing us through the home, they said, 'We are in a desperate situation here for a whole number of reasons: we are swamped by regulation, we are swamped by the massive amount of compliance and we can't get aged-care nurses.' They are not very well paid. I think they are 30 per cent under the average nursing payment ratio, particularly agency nurses. They cannot get qualified nurses or even nurses who want to work in the sector. As you know, Western Australia has a shortage of labour in a whole range of areas, and this is exacerbated in the aged-care area. This home had no ability to get capital funding to expand the services even though they had a massive waiting list.

All of these aged-care facilities are asking me, 'Can you help us?' One of the things that they came up with at the forum that I attended with the member for Hasluck was: 'If there is all of this money being offered for beds—and 2,000 in Western Australia alone have been handed back—obviously there is a massive underspend in that area because they are not taking them up.' They said—and I am sure that the member for Hasluck will corroborate this—'If there is this massive underspend and the money is not getting out the door, why can't you cobble it together and put out more per bed to make a business case out of it, because at the moment the amount per bed just will not make a business case for any organisation that wants to invest in age care?'

What is the end result to this? In 2007, Kevin Rudd said that he would end this logjam in hospitals, where aged people were being parked up in hospitals. He was going to do something about it, but it never happened. It did not happen through the Rudd years and it certainly has not happened through Prime Minister Gillard's years. There is a logjam and people, particularly in rural and regional areas, are getting parked in hospitals rather than going into aged-care facilities. The residents at Quambie Park in my electorate are so frustrated that Ken Landwehr, the CEO, sent me a petition from them. It said:

Let Canberra know about the needs of older Australians—their right to quality care and support now and in the future.

This is how desperate they are.

Pam Corker and Quambie Park have actually opened a further expansion of their dementia facilities. But they did this largely through legacies left to them by former residents and the community. The strange thing about it is that the legacy left to them by one of their former residents made it more difficult for them to get ongoing and recurrent funding. They were told, 'You have too much money.' The system is just not flexible enough. Since the Labor Party has taken over, compliance has, if anything, increased and made it harder for people to get on and do the actual job of nursing. In addition to compliance, as I said, you cannot make a business case out of the funding available.

The tsunami is coming and this government is not prepared for it. In 2007, there were 400,000 people over 85—1.7 per cent of the population. There will be 1.6 million people in this age group by 2047—that is the size of the aged-care exercise that is heading our way. In addition to that, the growing incidence of dementia means that specialist facilities have to be built—in other words, more capital funding. In 2009, 245,000 people were deemed to have dementia. By 2030, it is predicted that there will be 591,000 and the prediction for 2050 is a staggering 1.13 million. And yet this is an underfunded area. It is not a priority of the Gillard government; aged care is not a priority area for the Labor Party at all. In fact their failure to act is indictable.

We have an ageing population. In 2007, there were six working people to support every person aged 67 and over; by 2047, there will be only 3.2 people for each aged person. So where is the plan for the future? Where is the investment for the future in this sector? That is what aged-care providers in my electorate are asking me to raise here. At their meeting with the member for Hasluck and me, they even asked: 'Can you get someone to have the courage to look at the housing situation again? Obviously any way of freeing up capital for aged-care facilities, nursing homes et cetera would be a blessing for us, because we cannot make a go of it.' As I said, rather than expanding their services, many of them now are reducing their services or even selling them. Who is buying them? It is the large aged-care providers in Australia. There are economies of size, but you do not get the same level of care from these large providers as is provided by the hands-on community aged-care facilities found in many suburbs and rural and regional areas. Ageing in place? That is ideal and it should happen. Without economies of scale, however, it is harder.

I say in the House today to the government: investment in this area has not so far been a priority of yours. While we were in government under John Howard, we made it a priority and we certainly made sure that there was accreditation and that standards were lifted. We are asking you, on behalf of the aged and frail of Australia, to finally get off your hands and do something about getting funding into this sector. (Time expired)

Ms O'NEILL (Robertson) (17:42): I am delighted to speak on the Aged Care Amendment Bill 2011. This bill once again demonstrates the government's commitment to ensuring that older Australians receive the best possible care available. This bill again demonstrates that protections are in place to ensure that money paid by those entering assisted living is being returned in capital investment. These amendments will also strengthen the arrangements for managing complaints concerning facilities providing subsidised care by creating more flexibility in the resolution process.

This is not new. The Gillard government has taken a number of steps to improve aged care for older Australians and to ensure the aged-care system is both sustainable and responsive to care needs. The Gillard government will give $55.4 billion for aged care over the next four years. This year's budget will support continued investment in the aged-care industry to meet the increasing demand for services.

(Quorum formed) When entering a care facility, residents are often required to pay a bond, much like any other individual entering into an accommodation arrangement. The value of these bonds has increased to more than $10.6 billion. Currently we can see an increase in value of more than 20 per cent every year. These bonds are, in essence, an unsecured loan paid by care recipients to the approved provider. Given the significant and increasing amount of bonds, it is appropriate that care recipients can be assured that their funds are being used for the intended purposes and that there is transparency of, and accountability for, that use.

While the intent of the legislation was always that the bond would be used for capital funding, a lack of clarity in the language—being that bond money should be used for expenses related to 'providing' aged care to care recipients—has allowed some service providers to fund a wide variety of other purposes. The danger is that certain expenditure of bonds, especially those which fund day-to-day operational costs, makes having bond money on hand for repaying recipients on leaving the care facility extremely difficult. This does introduce unnecessary concern and it is resulting in a higher chance of default on these important payments.

This legislation ensures that we clearly articulate what these bonds can and cannot be used for. The legislation is not about making life more difficult for providers by taking away a potential source of income; rather, this legislation is about ensuring that what is a significant part of each resident's life savings—and we are talking about a sum of about $167,000 per individual on average—is used to provide the necessary capital improvements that are just a part of maintaining a home.

Similarly, the amendments in this bill will enshrine that these bonds can be invested in term deposit accounts and act as interest-bearing investments. While some providers have done this in the past, it was never expressly known as a possibility, as previously it did not meet the requirement that it was spent on providing care to recipients. My electorate of Robertson, and the Central Coast as a whole community, is an aged and ageing community. We do have a large cluster of young people at the other end but aged care is definitely part of the landscape of the Central Coast.

In our care facilities we have a high population of retirees who downsize from the long-held family homes in the region and use a proportion of the profit from the sale of their home to fund their accommodation bond. Often making this move into a new facility—a change at the later stages of life—can be very daunting. Whatever we can do as a government to give more certainty to those individuals will ensure that people have confidence in the sector. It is important that people have confidence. It is important they know that the facility and the management are doing the right thing and that when it is time for their bonds to be returned, the money will be available.

These amendments are for the care of recipients. These amendments are aimed at improving the quality of aged care for the care recipient through increased investment in capital works. These amendments will increase the reliability of refunding of bonds and add more transparency and more certainty to ensure that bonds are not squandered but reinvested. This certainty will, in turn, provide longer term benefits to the providers themselves. The removal of restrictions on the use of income derived from bonds will provide aged-care providers with a legitimate cash flow and will reduce the current regulatory burden.

The introduction of criminal offences, which this amendment bill provides, is a reflection of the moral importance that we as a government put on ensuring that money which is essentially 'loaned' to providers is spent properly. It is our intention to protect the rights and the interests of care recipients, who are often in a vulnerable situation. There was considerable support for the introduction of criminal penalties, and we are very aware of this from the submissions to the inquiry. Submissions urged the department to carefully structure any penalties to ensure that key personnel could not unintentionally be caught up under any new offences. The legislation was also structured to ensure that the new offences did not dissuade people from taking up roles within aged care and that offences would only apply to those individuals in the worst cases where an individual has deliberately acted in a way that has caused a provider to misuse bonds.

These changes in the legislation have received wide consultation. The government has spoken to consumer groups, peak bodies, providers of aged care and the financial services sector. A total of 33 submissions were received: six from peak industry bodies, 23 from approved providers, one from a consumer group and three from other interested organisations. It is important to note that the aged-care sector supports these changes. It is also important to note that we are not responding in panic; rather, it is a much-needed and carefully considered response to the reality that exists in our communities.

The bill provides much more clarity in the language, This will ensure that providers know precisely what they can and cannot do, and that has to be a massive improvement for aged-care recipients who are participating in transactions. The consultation period yielded a great sense of a need for this change. Providers and consumer groups all recognised the issues that currently existed within the unclear language and they all agreed that action had to be taken to review what options were available. The government was open and responsive to these needs and, with wide contribution from all those participants in the formation of the legislation, we know that we have brought the best legislation before the House.

We also do not propose to blind side the industry with these changes. We understand that there will be some immediate compliance costs with the changes, as providers make the necessary changes to their financial affairs. The government is proposing that the changes take effect from 1 October 2011 for all bonds received on or after that date. Bonds received before that date can continue to be used in accordance with the existing rules or may be used in accordance with the new rules. This ensures that the changes do not have any retrospective impact but also gives approved providers the flexibility to choose to treat all bonds in the same way.

A two-year transition period is also proposed, whereby approved providers may use bonds for existing purposes associated with aged care. This will provide the department with the data necessary to determine if further adjustments to this proposal should be made to assist the cashflow management of approved providers and will provide industry with a reasonable transition period to become familiar with these important new arrangements.

This legislation is effective in clarifying our aged-care bond system. It is absolutely effective in providing a more positive outlook for service providers and care recipients. It is a practical reform that is not based on some ideological rhetoric; rather, it is based on a genuine consideration of the needs of the system and those who use it and on the way in which accommodation bonds could and should be used. I commend the bill to the House.

WYATT ROY (Longman) (17:55): I rise to speak to the Aged Care Amendment Bill 2011. The bill introduces a number of amendments that aim to strengthen consumer protection for accommodation bonds paid to aged-care service providers and aims to provide an increased focus on consumer complaint resolution and on the achievement of outcomes for complaints rather than just investigation.

The coalition will not be opposing this bill, which takes steps to protect some of the most vulnerable members of our community. However, there is so much more that needs to be done, encompassed within a framework of reform of the aged-care sector—reform that should see a vibrant aged-care sector that provides for the holistic needs of older Australians and a sector that is valued for the work that it does.

The ageing of Australia's population is undoubtedly one of the nation's biggest social challenges. Over the last two decades, the median age of the population has increased by 4.8 years, whilst over the same period the number of children aged between 0 and 14 decreased by three per cent. The first cohort of baby boomers will leave the workforce this year, but the number of young people joining it will decline. In 2007 there were seven people working to support every person over the age of 67. By 2047, this figure is expected to almost halve to 3.2 people supporting every Australian over the age of 67. Australians are expected to live longer, further increasing the pressure on the aged-care sector. More and more people are expected to live well into their 80s. By 2047, there is expected to be an increase from 1.7 per cent to 5.6 per cent of over-85-year-olds requiring the services of our aged-care sector.

There is evidence that the aged-care sector is already struggling to provide the excellent levels of care that we want for our older Australians, who have contributed so much to our community. This Labor government has delayed any meaningful reform of the sector by commissioning report after report, whose conclusions only point in one direction: a crisis in the sector. Forty per cent of aged-care facilities are operating in the red. There are a record number of provider liquidations and undersubscription to aged-care places.

In the context of the current legislation at issue, accommodation bonds payable were originally intended for capital funding. The legislation as it stands provides for the use of accommodation bonds paid for by someone going into care for the purpose of providing aged care for recipients. However, there are ambiguities around what this actually means, so accommodation bonds have been used for a wide variety of purposes, including meeting operational costs. There is no clarity around the ability of service providers to invest the money in, for example, long-term bank accounts or, alternatively, to use the money to provide loans. There is currently no data that reveals the true extent of the problem. However, anecdotal evidence from discussions with service providers indicates that bonds are being utilised for operational purposes.

At the moment there are restrictions on how an approved aged-care provider can use income derived from an accommodation bond. However, the restrictions that currently apply do not reflect the comparative risk and create a situation whereby the administrative burden of the regulations may impact on cashflow, thereby increasing the possibility that bonds may be used for operational expenses. The financial viability of the aged-care sector is a major issue, an issue that will only gain greater prominence in Australia. In its 2011-12 budget submission, the Aged Care Industry Council stated that a snapshot of the industry at the start of 2011 indicates a sector that is unsustainable. Hours of service are decreasing, hours of care provided under Community Aged Care Packages are decreasing, new residential care beds are not being built, many services are not operating at a profit and liquidations have increased.

At a time when Australia is likely to see increasing demand for aged care, the sector is struggling. In 2008-09, 2,000 beds were cut in the aged-care approvals round, and industry is rejecting government funded beds. The last two aged-care rounds were undersubscribed, as opposed to the situation under the coalition government, where aged-care places were prized. Providers are handing back licences, and beds are being left empty, with older Australians having to wait longer for a bed and travel greater distances. This is particularly the case in rural Australia.

In my electorate, this is an issue for the community. I have had to deal with several cases of older constituents waiting for months in hospital beds because there is no other place for them to go. This is not representative of a system that recognises the holistic needs of individuals. If people from Bribie Island in my electorate are in hospital in Brisbane, their partners have to commute for up to three hours a day to visit them. This has the obvious effect of causing social dislocation and isolation. It also has the effect of placing extra pressure on an already overcrowded public hospital system. This situation is causing distress and anxiety in my community.

This legislation is designed to increase regulations on the amount of accommodation bond principal; however, it will reduce the regulations on income derived from the bond, retention amounts and accommodation charges. The regulation would then better reflect the risk associated with the principal. This would permit improved oversight of the bond, which is effectively an interest-free loan made by a resident, and other sources of income derived from the approved provider. Permitted uses for the accommodation bond would be limited to the original policy intent of providing funding for increased investment in capital works, in certain products and to pay debt related to the provision of aged care. From talking to local aged-care providers, it would seem that it is the provision of capital-intensive mortar and bricks that provides the greatest financial hurdle for the sector. The Department of Health and Ageing will have increased information-gathering powers to ensure that service providers that might be at risk are able to repay accommodation bonds.

Because the sector is struggling and aged-care providers have had to go into liquidation, the Accommodation Bond Guarantee Scheme has been utilised to the tune of $24.5 million, meaning around 150 accommodation bonds. This legislation proposes that there be new penalties introduced for approved providers that use bonds for non-permitted purposes that might trigger the guarantee scheme. While this is a step forward in safeguarding the contributions of older Australians and making the sector more financially viable, there is more that needs to be done.

Unfortunately, as in many other areas of government policy, the Labor government's record is littered with broken promises. For example, the attraction and retention of nurses in the aged-care sector is becoming increasingly difficult. However, despite promises of a fix, Labor recruitment policies have failed. The Bringing Nurses Back into the Workforce Program was abolished, with the program delivering only 139 nurses out of a promised 1,000 by February 2010. In 2009-10, only 8,200 out of 13,100 training places for aged-care workers had been delivered. Of the 2,000 transition places promised, only 698 had become operational by April 2010.

The bill is also designed to improve complaints handling by changing the focus to resolution of complaints rather than just their investigation. It is intended that the handling of aged-care complaints will be improved, with an increased focus on the achievement of outcomes for care recipients, their families and other representatives. A range of approaches such as mediation, conciliation and investigation will be employed by the Department of Health and Ageing to resolve complaints cooperatively with care recipients and providers of care. This should go some way to reassuring care recipients and their families that issues relating to their care will be dealt with rather than just investigated, and as such the coalition welcomes the change.

The coalition is committed to providing the highest possible standards of aged care. We believe that this is one way of giving back to those who have contributed so much to this country in the past and continue to contribute in a number of ways. My electorate is full of senior people who continue to make a full and meaningful contribution to the community. Some of them have the time and are able to volunteer in various ways that provide invaluable support for the community. However, there are those that are more vulnerable and require different levels of care. These people and their families should expect and receive the very highest possible standards of care. Whilst this bill is a step in the right direction, the whole aged-care sector is in need of serious attention, not just tinkering around the edges.

The Labor government has failed the aged-care sector and with it many of our most vulnerable senior Australians. The coalition, on the other hand, remains committed to the provision of $935 million over a four-year period in order to provide for the increasing challenges the aged-care sector will face as there is increasing demand for its services from an ageing population. Central to the coalition policy is the development of an aged-care provider agreement with the aged-care sector that will be designed to reduce red tape and paperwork so that medical professionals can actually get on with the job of providing care rather than jumping through bureaucratic hoops. The agreement would provide more certainty for older Australians and those involved in their care.

For a start within this coalition policy the agreement would see the provision of $50 million over four years for professional aged-care programs and services. There would be payments of $30,000 for 3,000 aged-care places as part of the implementation of the aged-care bed incentive program. Importantly, the coalition would work cooperatively with the aged-care sector in order to identify areas of greatest need in order to establish a framework for the allocation of the places. As with many other areas in health, the coalition believes that it is the people on the ground and in the communities, not bureaucrats in Canberra, who are best placed to know and make decisions about what is needed. Importantly for my community, the coalition has promised to establish a convalescent care program, with funding of $300 million over four years to assist up to 20,000 Australians waiting in hospital to return home. As I mentioned before, this is an issue that has been raised with me on many occasions by the senior members of my community who are waiting for months to return home and are impeded from doing so because there is no-one able to care for them. The convalescent care program would provide up to 21 days in a residential aged-care facility, relieving pressure on our hospitals and adding to aged-care providers' funds. Uncertainty is plaguing the aged-care sector and the coalition's plans for an aged-care provider agreement would provide much-needed certainty for aged-care providers with the added benefit of increasing security of employment in the aged care workforce.

Labor has neglected the needs of older Australians and the aged-care sector is in urgent need of reform to meet the coming challenges of Australia's ageing population. Older Australians have every right to feel they are going to be well cared for in their twilight years and the coalition is committed to meeting care needs now and into the future. This legislation is a step forward; however, broader reform of the aged-care sector is needed. The coalition's sustainable plan would see the needs of our seniors met and would provide a framework for the real reform the sector so urgently needs in constructive partnership with them.

Ms HALL (Shortland—Government Whip) (18:07): I took great interest in listening to the member for Longman read his speech to this parliament. There were a number of items in his speech that I think really need to be dealt with. His speech demonstrated to me that he was unaware of what happened in the Howard government era. He was unaware of the lack of spot checks, the people in aged-care facilities being given kerosene baths and the total lack of receptiveness of the Howard government to the needs of older Australians. He talked about the aged-care sector struggling. It was struggling as it was under enormous pressure at the time of the Howard government. As for reviews, we had the Hogan review. What happened following the Hogan review, a review which the Deputy Leader of the Opposition was so proud of at the time?

And what of operating in the red, as he suggested? Well, I know that in the Howard government era aged-care facilities were really struggling. Time and time again the facilities people came and talked to me about the need for compensation, workers compensation, electricity, water and wages—all the issues that the Howard government ignored. As for 'unsustainable', he talked about people waiting for aged-care beds. In the Howard government era one out of every 10 beds in the Shortland electorate only existed on paper—phantom beds! I think it is beholden upon me to remind the House of the Standing Committee on Health and Ageing report about the blame game that was brought down in the parliament in, I think, 2007. As a member of the committee, I spoke to a number of people who were involved in aged care and the one thing that was pointed out to me by those people was the number of people waiting for aged-care beds who were languishing in hospital because the Howard government refused to act.

Here we have before us today legislation, in the form of the Aged Care Amendment Bill 2011, that is bringing about real change, legislation that strengthens protection for accommodation bonds paid by care recipients to providers of residential and flexible aged-care services—something that is good for the aged-care facilities and good for those people that make those facilities their home. I am really pleased to say that the minister at the table was previously the Minister for Ageing who was responsible for the reviews that have been bringing about the changes that we are seeing now. If it were not for her efforts, we would not have this really proactive good legislation before us today. Legislation limits the permitted use for accommodation bonds taken after 1 October 2011, so that providers of aged care can still use these bonds for capital improvements to aged-care services. That is really important for those facilities. I talk to the aged-care facilities people in my electorate on a regular basis, just as I talk to the people that live in those aged-care facilities and those people that may need those facilities in the future.

Shortland is one of the oldest electorates in the country—it is the 11th oldest electorate—and this is an issue that is very dear to my heart and I need to know that the aged-care facilities we have, and also the care that those people who choose to live in them will receive, will be outstanding. This change to the use of the bonds is really important. The fact that bonds cannot be used for operational purposes is a very important change. The introduction of the new criminal offences where there has been a significant misuse of bonds is about the government facing up to and dealing with the problem, not burying its head in the sand and hoping it will go away and not acting and so ignoring the needs of older people and the needs of the aged-care industry. This is a government that actually deals with the problem and does not mouth platitudes or make statements that just sound good. We act, we do and we address the problem. The legislation is introducing new information-gathering powers to enable the Secretary of the Department of Health and Ageing to better monitor approved providers that may be experiencing financial difficulties or using bonds for non-permitted uses. This will allow the department to help these aged-care providers. It is about making sure that there is continuity of aged care and making sure that older Australians have security about where they live. There is also a move to remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. This gives aged-care providers an unrestricted source of income, offsetting the proposed restrictions on the bonds. That is a really good news story. It is about making the aged-care providers more viable and, by doing that, making aged care safer and more secure for those older Australians who will require aged care over a period of time.

I referred earlier to the Parliamentary Secretary for Trade, who is at the table. On 12 April 2010, when she was the Minister for Ageing, she announced that the government would increase protection for aged-care residents' savings. She made that announcement as part of the announcement entitled 'More support for older Australians in the National Health and Hospitals Network'. She has always been committed to the needs of older Australians, and I know she also represents an electorate in this House that has an older population.

This legislation has been subjected to extensive consultation with the industry, community, government and stakeholders on the options for enhancing prudential regulation of accommodation bonds to identify the best means by which to ensure as far as possible that the financial interests of the residents are protected; to maintain effective regulatory safeguards for accommodation bonds; to provide a regulated source of capital funding for investment in aged-care infrastructure; to provide a regulatory framework that is commensurate to the risk associated with the exponential growth of accommodation bond holding; and to promote public confidence in the aged-care system. I emphasise that that last point, promoting public confidence, is very important.

Unlike the previous government, this government believes in consultation. We believe in talking to the people who will be operating the aged-care facilities. We believe in talking to those people who will be using the aged-care facilities. We also believe in talking to those people who will be regulating the facilities. This is a far cry from the type of consultation that took place in the last parliament, where there was cover-up after cover-up after cover-up, no spot checks—and now spot checks are regular occurrences—in aged-care facilities and a culture that enabled elderly people to be given kerosene baths.

As a result of this consultation process it is proposed that there will be changes to the act to strengthen the accommodation bond. This will address the lack of clarity in the act, which I think is really important, and introduce new criminal offences where misuses of bonds are identified. Once again, that is a really important change to the legislation. It is dealing with a problem that exists. It is proposed that the changes will take place from 1 October this year. There will be a two-year transition period to allow the sector to become more familiar with the new requirements, and I think that that is very important.

The other major change in this legislation involves the proposed amendments to the complaints scheme. It is proposed to amend the act to enable investigation principles which currently describe the investigation process in relation to complaints to be replaced with a complaints principle. This means that concerns relating to the delivery of residential, community and flexible aged care subsidised by the government can be investigated. They will be investigated. There is going to be a strong focus on resolution of complaints rather than investigations of complaints.

Investigating a complaint is all very well. Like me, all members of this parliament would have been visited by a constituent who had a problem with an aged-care facility. You would ring the aged-care complaints line. They would investigate it. And still that person who came to see you, more times than not, would be unsatisfied with the result. It was about investigation; it was about looking at it. It was not about dealing with the issue. It was not about resolving the issue.

These changes will allow those issues to be resolved rather than an investigation taking place that will deliver no outcome whatsoever to the person who has lodged a complaint. I think the fact that this legislation brings about a change that focuses on resolution rather than investigation is a very proactive and good change. The bill shifts the focus of the system from investigation to a more flexible scheme where the department can employ a range of mechanisms to assist to resolve a complaint, including early resolution, conciliation, mediation and encouraging the departments to resolve the issue themselves.

The changes that are outlined in this bill are essential. They come out of the government reviewing the system, looking at it and then, after consulting widely with the community and the sector, putting in place changes to the 1997 act that was introduced by the Howard government. Changes have caused quite a few problems within the community. We only have to look back to the time when the member for Mackellar was the Minister for Aged Care to see the kinds of problems that can be caused if governments do not consult widely with the community. The community and the aged-care sector need to have input into the direction of legislation, because good legislation is not imposed on a sector or on the community; good legislation is developed in consultation with all parties. I congratulate the minister for developing legislation that builds on the work of the previous minister and brings about legislation that is workable, that takes account of the interests of all parties and that will benefit those vulnerable frail aged people in the electorates of each and every member of this parliament. I commend the legislation to the House.

Mr TEHAN (Wannon) (18:23): I rise tonight to raise various points concerning the Aged Care Amendment Bill 2011. The first point I would like to address is that of regulation, which we are once again seeing. The merits of that regulation are yet to be tested and it is yet to be seen whether they will be worthwhile. But we are seeing regulation occurring without the government honouring its commitment of 'one regulation in-one regulation out'. This is a sector that is continually suffering from the stifling impacts of regulation, so we need to address that.

We also need to look at where the aged-care sector stands at the moment. The Rudd government came into power promising all sorts of things for this sector, but it delivered next to nothing. We then need to compare that with how the coalition would go about addressing the problems and issues confronting the aged-care sector. We have a proven track record on this. Ever since we introduced the Intergenerational Report and forecast what was going to occur with the ageing of our population we have had a policy that has fitted neatly with that budget summation as to where spending on aged care is going to go as Australia's population continues to age. I would then like to look at some of the impacts the aged-care sector is facing in my seat of Wannon and make some reference to Sea View House and a way forward on that issue at the moment.

This bill introduces a number of amendments as part of the governments health and hospital reform agenda. It plans to, and hopefully will, strengthen consumer protection for accommodation bonds paid to aged-care services. It also plans to improve arrangements for the handling of complaints about Commonwealth funded aged-care services. The government released an issues paper in October 2010 and, following submissions, undertook a series of industry and consumer stakeholder meetings. A consultation paper was released in February 2011 followed by industry, consumer and regulatory stakeholders in February and March 2011.

As part of the government's health and hospital reform agenda, it is committed to strengthening consumer protection for accommodation bonds and this is what this legislation seeks to do. If the bill is passed the reforms regarding accommodation bonds will take effect on and after 1 October 2011 and the new complaints principles will take effect on 1 September 2011. However, there will be a two-year transition period, until the end of September 2013, for the changes to the permitted use of accommodation bonds, which will allow the sector to become familiar with the new requirements. A post-implementation review will be conducted in 2014-15.

In its 2011-12 budget submission, the Aged Care Industry Council stated:

A snapshot of the industry at the start of 2011 does not depict a sustainable system: only 40% of residential aged care services are operating in the black; hours of service are decreasing; hours of care provided under community aged care packages have fallen; and many providers are not building new residential care beds. The situation is worse in rural and regional areas where providers face generally higher costs with less ability to manage their income streams.

This does not portray a sector that is heading in the right direction. This does not portray a sector that is ready to meet the ageing of Australia's population. This does not portray a sector that is going to deliver, especially for older Australians in regional and rural areas. What it does portray is a sector that is in urgent need of reform. It also portrays a sector that needs a government that will listen to it and address its problems, and this does not seem to be occurring. As a matter of fact, if there is a constant theme that I am hearing in my community and I am witnessing when I come into this place every day the parliament sits, it is that this government does not seem to want to listen to the Australian people. It has its own agenda and it seems hell-bent on forcing that agenda on the Australian people.

The difficult part about this bill is that we do not really have a clear understanding of the regulatory impact. Also, given that we are introducing more regulation, what regulation are we taking out of the aged-care sector to help it meet the incredible demands it is going to be facing in the coming years?

The coalition understands that the very best care, whether in the community or residential, should be balanced. We need a clearly articulated policy that balances the community care and the residential care. We put forward at the last election a clear policy that first admitted the reality that the ageing of the population is an enormous social challenge facing Australia. We have a rapidly ageing population, and we are seeing that played out more in regional and rural areas. Australians are living longer and, as a result, are facing more complex health conditions. Disease patterns are changing as a result of Australians living longer. We are also seeing a shift in the size and composition of households, which means that there is not the family support there once was to help Australians as they age.

What does this mean? It means that our budget cannot sustain Australia's demographic changes. The declining workforce will generate insufficient tax revenue to meet the health and aged-care demands of our ageing population. On this point, we have to look at where the Australian budget is at the moment. The budget just handed down has a deficit of $47 billion—a budget deficit the size of the whole of the Victorian budget. We do not have a government that is getting our budgetary position in place to deal with the ageing of our population. We have a government that has forgotten about the Intergenerational report and how it set out clearly what we need to do as a country to make sure we are ready to meet the ageing of our population.

We have a budget deficit forecast for next year of $21 billion. All this has led already to a net debt position of $106 billion, with repayments of $135 million per day. Imagine what that money could do if it were put into productive use in our aged-care sector. Sadly, though, we will see this money being used to repay debt and not to deal with these enormous challenges we are facing today in the aged-care sector.

In 2007 Kevin Rudd and the Labor government promised the world for this sector. They pointed out that there were issues about providing enough aged-care beds and people becoming 'blockers' of acute care hospital beds. Kevin Rudd announced that we were going to get a new direction. He promised the world. What has he delivered? As I quoted before from that damning indictment in the prebudget submission, we did not get that at all. The Aged Care Industry Council has stated that the snapshot of the industry at the start of 2011 does not depict a sustainable system—and we must work towards a sustainable system.

A key to producing a sustainable system will be making sure there is appropriate funding and also making sure we do not stifle this sector with regulation. Sadly, it is a habit of this government to try to fix every problem with regulation. Maybe it should step back and listen to some very wise advice, which is that trying to fix every problem with regulation often just creates more problems.

In visiting aged-care facilities across Wannon—in Ararat, Stawell, Casterton, Hamilton, Portland, Warrnambool and Mortlake, just to name a few—I see communities dealing with constant issues, especially workforce issues. This is not made easier by governments promising to deliver—for instance, promising to deliver new nurses, especially in regional and rural areas—and not delivering on those promises. These centres are dealing more and more with constraints on accessing the labour they need. Not only that but they then have to deal with extra regulation that requires them to have professionals with certain qualifications and does not allow them flexibility as to where they get those professionals and how often they can use them.

One of the key things for regional and rural communities is to ensure that as people age in their communities they can stay in those communities. One of the key components of the coalition's policy approach before the last election was to ensure that there was flexibility in the system to enable people to age gracefully in the communities in which they grew up. Sadly, we are not seeing that from this government. What we are seeing from this government are regulations that continually make this more and more difficult—regulations that seem to support large facilities in urban areas and do not have the flexibility to enable the smaller aged-care facilities to operate.

Finally, I will point to a very simple example. Sea View House in Portland is a 56-bed supported residential service that has had the rug pulled from underneath it by Portland District Health. At the moment it is trying to deal with the question of what will become of it. The community has rallied and is keen to buy Sea View House so that it can continue to provide services. I would like to take this opportunity to say how much I support what the community is trying to do to save Sea View House. Glenda Carswell, the spokeswoman from the community group which has been set up, the Sea View House Support Group, has been doing an excellent job to make sure that the facility can continue to provide its services to the people in residence there. They have provided bonds to make sure that they are in a situation where they can live the last parts of their lives in a very comfortable way and in an environment which they have freely chosen. The support group are doing a terrific job and I hope that they will be able to get a purchaser for that facility so that it can continue to provide its services. I thank the House for the opportunity to speak on this bill.

Mr WYATT (Hasluck) (18:38): The Aged Care Amendment Bill 2011 introduces a number of amendments, which form part of the government's health and hospitals reform agenda. This bill plans to improve arrangements for complaints handling of Commonwealth funded aged-care services and to strengthen consumer protection for accommodation bonds paid to aged-care services. The history of this bill is an interesting one and for once demonstrates that those on the other side sometimes consult and listen to key stakeholders. Especially on an issue as important as aged care, we would expect the government to undertake consultations. The issues paper on enhanced prudential regulation of accommodation bonds, released in October 2010, resulted in a consultation paper released in February this year, which was followed by a number of industry, consumer and regulatory stakeholders meetings with the government to work through the issues raised.

In Aboriginal and Torres Strait Islander society elders are consulted because of their knowledge, wisdom and life experiences. Their guidance helps to shape our future and teaches us humility, compassion and understanding. Ageism is not a factor; nor is age. Members of this House need to fully appreciate that if we apply the same approach in our wider society then we are more likely to provide the level of aged-care services and facilities that reflect aged people's needs, including staying in their own home. It is that generation that built and continued to build this great country of ours and the lifestyle we enjoy; therefore, we should take care of them.

The current regulation around the use of accommodation bonds is not consistent throughout the industry. The Department of Health and Ageing has identified, through monitoring and compliance activity and financial reports from a range of providers, that the lack of consistency of interpretation as to the permitted uses of bonds has led to many providers misusing them. The Aged Care Act provides that if an accommodation bond is charged to the care recipient by the aged-care provider then the provider must not use the bond for a purpose that is not related to 'providing aged care to care recipients.' It also stipulates that where a bond is charged then the provider is entitled to the income derived from the bond and may also deduct retention amounts from the bond principal. However, there are restrictions on how these amounts can be used. As mentioned before, the Department of Health and Ageing has found that a number of providers are using bonds to make loans to related parties and meet operational costs, making loans to related entities and to individuals with variable practice in documenting the loans, repayment arrangements and interest charges, and failing to meet the existing prudential standards relating to bonds. Since the prudential requirements were introduced in 2006, over 15 per cent of the aged-care industry has been found to be noncompliant.

Our aged-care system is a mess under this government. According to a Grant Thornton aged-care performance survey in 2007, over 40 per cent of all providers were operating in the red. I find that fascinating in this day and age. The Aged Care Industry Council stated in its 2011-2012 budget submission:

… only 40% of residential aged care services are operating in the black; hours of service are decreasing; hours of care provided under community aged care packages have fallen; and many providers are not building new residential care beds.

This is important, because in my own electorate I have a large demographic, but part of that demographic are retirees and ageing Australians who will remain in their homes for a period until such time as they are unable to continue in independent residential living and move into a facility that will provide the levels of support that they require. In some instances those who need more intensive care move from my electorate into two other regions of the metropolitan area because the aged-care facilities that are established in our electorate do not have the capacity to meet the numbers.

This industry needs urgent help. No-one knows this better than Mr David Fenwick, in my electorate of Hasluck, who I work extremely closely with on the issues that impact on the industry. Mr Fenwick is the Chief Executive Officer of Amaroo Village in Gosnells. Amaroo provides independent living units, 92 high-level care places and 81 low-care places. Amaroo is an outstanding example of how the industry is making it work. They struggle to meet operating costs but recognise that there is a need in the area and continue to work towards the best outcomes possible for the residents.

Back in January, my colleague the member for Canning and I were presented with petitions from aged-care providers in our electorates of Canning and Hasluck. The aim of the petitions was to 'let Canberra know about the needs of Older Australians—their right to quality care and support they deserve now and in the future'. Their voices deserve to be heard. The pity is that the petitions did not meet the rigour of the requirements for petitions to be tabled in the House. Nevertheless the message was quite strong.

The management and care team at Amaroo are passionate about their work and they deserve to be supported by governments. This is consistent in all of the aged-care facilities that I have visited in Hasluck. Instead, the government has broken its election promise to repeal one regulation for every new regulation. Red tape and bureaucracy is holding the industry back. The burden of growing regulation is a disgrace. The coalition is committed to reducing Commonwealth regulation by at least $1 billion per year. Unlike those on the other side, we want to see industry encouraged to innovate, grow and provide the best possible services to those who need them the most.

We need to be supporting the aged-care industry now because we remember that, one day, we will all most likely need to access the services provided by the aged-care industry. When we grow old and need support, the aged-care industry, and the carers and providers, who are extremely passionate, will be looking after us. Unfortunately, only when that day comes for those opposite will they realise that they should have been much more supporting of the aged-care industry than they are now. The aged-care industry is becoming financially unviable and the number of providers going into liquidation has increased. However, many are being absorbed by larger facilities, thus not giving an accurate representation of the state of the industry.

The changes proposed by this bill strike a balance between explicit regulatory requirements and a risk based approach. It is difficult to accurately quantify the regulatory impact of these proposed changes due to the lack of available data. The changes include the provision of a regulatory framework that is equal to the risk associated with the strong growth of accommodation bond holdings and the increasing of incentives for bonds to be used in a prudent and sustainable way to meet the policy objective of allowing providers to charge bonds. Further, any costs to providers due to changes to ensure that bonds are only used for permitted purposes will be minimised by removing current restrictions on the use of income derived from bonds, retention amounts and accommodation charges and giving providers complete flexibility over how such income is used. There will be a transition period of two years, which will allow approved providers time to comply with the new arrangements. The changes also ensure that the financial interests of care recipients are protected.

These proposed changes will take effect in relation to accommodation bonds taken by approved providers on or after 1 October 2011 and the new complaints principles will take effect on 1 September 2011. A two-year transition period will conclude at the end of September 2013 to allow the changes to permitted uses of accommodation bonds to take effect and to allow the sector to become familiar with the new requirements. A post-implementation review will take place in 2014 or 2015. This review will be extremely important to the industry and I certainly look forward to seeing the outcome and what the challenges are.

Another key element of this bill is the management and resolution of complaints about aged-care services. The bill proposes that the investigation principles be replaced with new complaints principles. This will provide greater flexibility for complainants and will result in a range of options being available to assist in resolving a complaint, including early resolution, conciliation and mediation. I support this measure as people accessing the industry deserve to be looked after.

In my electorate of Hasluck, there are 22 approved aged-care providers providing a total of 321 community care places, 313 residential high-care places and 610 residential low-care places. I have been privileged to visit a number of these providers and they provide outstanding service to those in Hasluck who need it. I will always fight for the needs of the aged-care sector because it is an important part of the Hasluck community. We all know someone who is accessing aged-care services and, as such, we all have a duty to stand up and argue to improve the quality of the industry. This is a passion of mine. As I stated in my first speech to the House:

Elders within Aboriginal and Torres Strait Islander societies are revered and respected, and hold a special place—they do not go away but remain as wisdom-givers and guides in our future. The same concept has to be applied to all seniors and retirees, and the support they require should be accorded to them.

In the short time I have represented the electorate of Hasluck I have enjoyed the privilege of meeting people within residential care and, equally, those who have made the decision to remain living at home. The level of support provided in the home has been welcomed; what is disappointing, though, is that where there are increasing numbers there is not the financial capital to build the infrastructure required to provide the number of beds that are needed. I hope that in the future the Productivity Commission report and the work that we do on this side will help contribute to solutions that will make a difference across this nation for our elders, who will need the services and opportunities that are provided, both socially and from the point of view of accommodation at secure facilities that provide them with a bed and the comfort of support.

I revere our seniors. I believe that they provide opportunities for us to learn of the past, to take their knowledge and use it for the future and to understand our history in this nation. When I was teaching, the school had a relationship with an aged-care home and I saw many children enjoy the relationship with older people. Those who did not have grandparents enjoyed the relationship with seniors in those villages. They liked the fact that they were talking to people who had lived through a history, where they had seen the transition from horse-and-cart days to the types of vehicles and technology that we have in this day and age. I just hope that this government gives due attention to the needs of our elderly and to aged-care services.

Ms MARINO (Forrest—Opposition Whip) (18:51): The aged-care system in Australia is rapidly approaching crisis point. The number of people over 65 is set to double over the next 20 years and the industry is desperate for additional funding particularly for capital works. There are a number of indicators that should alarm all policy-makers in this House in the provision of residential care in particular, and I would like to talk about some of these.

Last year the federal government allocated 1,564 additional residential aged-care places to Western Australia. However, only 314 of the beds were taken up—just 20 per cent. In the preceding year, of the 1,208 beds on offer, only 507 or 42 per cent were taken up in WA. What is worse, over the last three years 786 aged-care bed licences, the licence that provides the funding for aged-care beds, were handed back to the government and 283 of them were from Western Australia. We are now some 2,400 beds short of our aged-care requirements in WA. The situation is going to get worse.

This is happening at a time when the group referred to as the 'baby boomers', those born between 1946 and 1964, start to enter retirement. They are looking at retirement and at aged-care solutions. I would suggest that several members in this House right at this moment may be part of that group and may feel as though they are being made responsible for a lot of the world's problems. Some of us do, however, represent a significant increase in the ageing population, which makes the debate on how we care for our ageing community perhaps even more urgent for some members here.

In my electorate of Forrest there are around 19,000 residents over the age of 65 and that number will increase rapidly. We have 30 aged-care facilities; however, the number of facilities and their capacity has to expand as the age demographic within my electorate increases. I note that in its 2011-12 budget submission the Aged Care Industry Council stated:

A snapshot of the industry at the start of 2011 does not depict a sustainable system: only 40% of residential aged care services are operating in the black; hours of service are decreasing; hours of care provided under community aged care packages have fallen; and many providers are not building new residential care beds. The situation is worse in rural and regional areas where providers face generally higher costs with less ability to manage their income streams.

This is exactly the case in my electorate, and I would expect it is also the case in other rural and regional electorates. It is extremely difficult for aged-care providers to invest in new facilities. The financial viability of the sector is critical to the ongoing provision of appropriate aged care in this nation.

As well as the viability issue, as we engage in the debate about aged care, there are several other questions. One of them is: what is the most appropriate form of care? Historically senior members of our community were cared for by their families in the homes. While in some circumstances this may have resulted in some forms of neglect, in most cases it did not. In many countries in the world it is still the primary form of aged care. Some constituents of mine with a strong history in the aged-care sector visited Italy in recent years and did some research on the aged-care industry there. It was extremely limited, of course, because most of the aged care in Italy centred on care in the home, by the family, with the support as needed. We have some similarities. They have a baby boomer population entering retirement, as does most of the developed world. There are increasing numbers of families who can no longer care for their ageing relatives at home although Italy, as you would imagine, starts from a much lower base on this.

Most Australians want to live in their own homes as long as they possibly can. When people cannot do so, they will most certainly enter residential care but, because it will be later in life, they will be in a much more frail state with far more serious health issues, as the member for Mackellar frequently advises us. They will potentially need high care, which brings me to the bill before the House. Accommodation bonds are an acknowledgement that the individual does have some responsibility to contribute to their own aged care. The bill tightens the rules for the use of bond money. Greater certainty in the area is required, but it is another tinkering around the edges of aged-care provision. This is an industry that is overwhelmed with compliance already, yet the government is adding to that burden, and more and more resources within these facilities are being directed to compliance and less into patient care where it is so badly needed. Again, the government has broken its promise to repeal one piece of legislation and regulation for every other piece that it passes. As I said, the industry is swamped with complex, overlapping and costly regulations.

The government must also consider the specific and individual needs of smaller, community based aged-care providers such as Tuia Lodge in Donnybrook in my electorate, which is a 26-bed facility employing 30 very caring staff members. Lui Tuia has been the driving force, as the member for Mackellar knows. It has been Lui's leadership and endless volunteering, the commitment from the local community and constant community fundraising that has provided the people of Donnybrook with a great quality, caring aged-care facility. In this small community not only does Tuia Lodge provide aged care but it is one of the major employers in the town. I am told that, in general, aged care employs more people than retail. Facilities like Tuia Lodge need to be able to expand to meet the growing demands of Donnybrook. There will be an explosion in the need for high-care provision within three years in this area, but they need the capital funding to expand and, of course, it has to be a profitable outcome to proceed and be sustainable. Tuia Lodge needs all the help and consideration of its specific needs from this government not only to continue to provide quality services but to continue to expand to meet the needs of the community.

Another issue confronting rural and regional communities is the fact that parents with disabled children of a mature age have no aged-care accommodation facilities that provide for their specific needs. The task ahead, the future of aged care will take bold vision and strength of resolve that not only is not in this legislation but is also lacking from this government.

An aged-care provider in the town of Collie in my electorate, Southern Cross Care, has a 64-bed residence which currently has a waiting list of 22 people. One poor lady has recently had to leave the town she has lived in for 66 years and move 50 kilometres to Bunbury. There was no other option for the lady and, of course, it is particularly difficult for her family.

I did want to briefly touch on palliative care, Mr Deputy Speaker, but I see that my time has run out. I believe there are other matters in this House that are about to be dealt with, so I will conclude my remarks.