Mr PYNE (Sturt—Manager of Opposition Business) (09:07): Mr Speaker, I note your statement to the House and I take it from your statement that your ruling is that the Abolition of Age Limit on Payment of the Superannuation Guarantee Charge Bill 2011, introduced by the member for Mackellar, cannot be proceeded with. I have ascertained from the Leader of the House that he does not intend to move a motion to that effect, as occurred on two previous occasions—on the regional students bill and on the bill to do with increasing the pension. Having ascertained that, I reluctantly, but I feel necessarily on behalf of the opposition, move:

That the Speaker's ruling be dissented from.

The SPEAKER: On this occasion—and you know I do not do this often—perhaps you would permit me to liaise with the Clerk. I have characterised that this may be described as an advisory ruling, which is something I have tried to avoid. The member for Mackellar can shake her head all she likes. I am trying to get through this with no trickery or hokery pokery. I have been asked whether I consider this to be a ruling or a statement, and I am going to seek advice from the Clerk.

I thought I was making a statement, but I am happy for it to be looked upon as a ruling. I had expected it to become a ruling when there was something before us or there were other attempts to do something. If it assists the House, I am happy to put on the record that it is a ruling, and with its becoming a ruling the Manager of Opposition Business is open to do whatever he wishes to do.

Mr PYNE: Thank you very much, Mr Speaker. I appreciate that. May I say at the beginning of my remarks on this dissent motion that usually dissent motions against a Speaker's ruling are moved in the heat of battle, in question time or at other times during the day, because emotions are running high and the opposition disagrees fundamentally with the Speaker's call on a particular matter. On this occasion I move dissent from your ruling not with any sense of anger or outrage but because it is the only mechanism available to the opposition to put on record its disagreement with the stance you, Mr Speaker, have taken on this occasion on an important bill before the House.

As you alluded to in your statement, Mr Speaker, this is not the first time we have debated the issue of appropriation bills—or bills that are not appropriation bills, in the opposition's mind—being before the House and whether the House of Representatives can deal with those bills or is incapable of dealing with those bills. We had this debate over the youth allowance bill that I moved in this House and we had this debate over the bill on the increase in pension, which was moved when Brendan Nelson was the Leader of the Opposition.

This is the first, most comprehensive treatment of this fundamental issue that we have had the opportunity to debate in a calm, considered way. I appreciate the note the clerks have produced. It is an excellent note. It is well researched and well written. I appreciate the spirit in which you have made your statement to the House. I also appreciate the fact that the statement was made in an entirely non-partisan way in an attempt to inform the House of what you, Mr Speaker, believe is in our power and within our capacity to deal with in the House of Representatives. However, we fundamentally disagree with the proposition that the Abolition of the Age Limit on Payment of the Superannuation Guarantee Charge Bill 2011 cannot be proceeded with in this House. We in the opposition believe that, while it is certainly the case that under the Constitution and the standing orders only the executive can present bills to the Governor-General for assent, that does not mean that the House of Representatives cannot deal with any matter it chooses to deal with that it seeks to put before itself. Our view is that the members of the House of Representatives are sovereign in their capacity to address and deal with any matter.

This is a very important debate, because it deals with the relationship between the executive and the Crown, it deals with the relationship between the parliament and the executive and it deals with the relationship between the people and the parliament. It is the opposition's view that the people elect a parliament of 150 members of the House of Representatives and from amongst those members of the parliament an executive is appointed by the Governor-General to advise them on how to govern the nation. The executive has a relationship with the Crown that is quite separate and apart from the parliament. That is in our Constitution and is how our nation has been governed since 1901 and before that in the colonies. The Crown has a particular relationship with the executive which it does not have with the parliament. The opposition has never claimed, and does not claim today, that we as a parliament have the power to direct the Governor-General on how to act or to direct a member of the executive on how to advise the Governor-General. However, we as a parliament do have a right to address and deal with any matter we seek to put before ourselves: we have the capacity to pass it, to amend it, to defeat it or to decide to lay it on the table. But we in the opposition do not believe that the Speaker has the capacity to direct the parliament on whether it can or cannot proceed with a bill.

I particularly appeal to the members of the crossbenches, who over the last nine months have made the capacity of private members in this House their cause celebre. The member for Lyne particularly has spoken on many occasions in this place about the sovereignty of private members and their capacity to represent their constituents. I am sure the member for New England would share those views, as would the member for Denison, the member for O'Connor, the member for Kennedy and the member for Melbourne. Our argument is very simple and our argument is this: that while the executive decides what to advise the Governor-General and which bills should be presented to the Governor-General for assent, it is the parliament which can decide any matter before it and dispose of it.

So we do dissent from your ruling, Mr Speaker. We dissent from your ruling because it is the only mechanism we have before us to get a vote in this House on whether the Abolition of Age Limit on Payment of the Superannuation Guarantee Charge Bill 2011 can proceed. This is a very important debate for our parliament because it goes very much to the whole basis of the Westminster system over many hundreds of years. Our forebears, who established the traditions upon which our parliament is based, would have fought very strongly, very powerfully, for the right of the parliament to consider any matter we choose to put before us.

This is not a light matter. An English civil war was fought over the relationship between the parliament and the people and the Crown and the executive. The English Civil War in the 17th century was not a light matter about a particular king who had a disagreement with a particular group of people led by Oliver Cromwell and many others. It was actually a war over whether the parliament had the capacity to act and its relationship with the Crown. The parliament won that civil war and the relationship between the Crown and the parliament and the executive was established at that time and reaffirmed—

Mr Perrett: They cut his head off.

The SPEAKER: The member for Moreton will come to order.

Mr PYNE: Do not be so pathetic. That relationship was reaffirmed in 1688 in the Glorious Revolution, as it was called, when James II was removed by the parliament and replaced with a different sovereign, because again the relationship—

Mr Perrett interjecting—

Mr PYNE: If you do not understand the basis of the traditions of the Westminster system, it is not my job to tell you.

The SPEAKER: Order! The member for Moreton will cease interjecting and the member for Sturt will ignore him.

Mr PYNE: In 1688, the parliament reaffirmed its power and the relationship between itself, the executive and the Crown. That relationship, set in Westminster in the 17th century, is the same relationship we have today in 2011. It has stood for hundreds of years and it is not a light matter for the parliament to decide that it cannot deal with a matter that we would like to put before it. For that reason, while some members of the Labor Party think these are trivial issues—

Mr Perrett: That is not what I am saying at all.

The SPEAKER: Order! The member for Moreton is warned and the warning lasts all day.

Mr PYNE: While some members of the Labor Party believe that the 24-hour news cycle, or even the 12-hour news cycle, should determine how we operate in this parliament and think that it is simply a game of sport—that it is about who is winning at any particular time—the truth is that these matters are of great import to the relationship this parliament has with the executive and to the relationship between the executive and the Crown. So these matters should be taken very seriously.

The Speaker has taken these matters seriously. The Speaker has spent the last week deliberating on this matter. He did not rule last Thursday that the bill could not proceed. I think that the Leader of the House has also taken these matters seriously, because he has not pushed the Speaker on this matter. He has allowed the Speaker to come to a view. The Speaker has quite properly sought the input of the clerks, a paper has been produced and the Speaker has made a decision. We disagree with the Speaker's ruling and so this motion before the chair is that the Speaker's ruling be dissented from. We put that dissent motion so that the power of the parliament, the prerogative of the parliament and the sovereignty of the people can be upheld.

We do not seek to direct the executive. We do not seek to direct the Crown. Some characterise the bill we are putting up as an appropriation bill, but I note that others do not. The President of the Senate, Senator Hogg, does not characterise this bill as an appropriation bill. The Senate does not characterise this bill as an appropriation bill. The Senate takes the view that, because an appropriation is already in the parliament—because there have already been appropriations placed in the parliament for these matters—this is not a new appropriation and therefore the Senate can deal with such a bill. So why would the Senate have greater powers than the House of Representatives? It is simply absurd to suggest that the Senate would give itself more powers than the House of Representatives, which is of course the people's house. While the people vote for the Senate, the different voting system means that the House of Representatives can most properly be characterised as the people's house. I urge people to support the dissent motion. (Time expired)

Mrs BRONWYN BISHOP (Mackellar) (09:20): Mr Speaker, I second the motion and in doing so I would like to echo the comments made by the Manager of Opposition Business. This is in no way a reflection on you, but it is in fact a very important constitutional issue, an important question about whether or not this House is in charge of its own agenda. As the Leader of the House has refused to put forward any motion on this matter, the only mechanism we have for debating this issue is to move dissent from your ruling.

I want to make two points. Your ruling is saying that you are upholding standing orders which say that a bill may only be introduced by the government. The problem is, Mr Speaker, that the bill has already been introduced. The bill is alive and before this parliament. Indeed the Selection Committee which you chair and which was set up under the new paradigm—where all the crossbenchers said there must be a voice for private members' business; this was an important tenet that they agreed to support the government on—has recommended that the bill be listed for a vote on its second reading. The government acted in defiance of your recommendation last week by failing to list the bill. Instead, the bill was brought on by suspending standing orders, which we agreed to, and we had the debate on the motion to suspend standing orders rather than on the second reading. The bill was read a first time and the second reading commenced, so the bill is already here. The government had two speakers in the second reading debate on the bill, but not one of them raised the constitutional issue that this was an appropriation bill—not one. At no stage was this issue raised in this House. It was not raised from the chair, it was not raised by the government and the debate went on; we argued the merits of the bill. It was only when it came to the suspension vote that we were able to voice the fact that the government was now raising this question and wanted to somehow knock out the bill. It sent around a little cheat sheet for the Independents to use, and those Independents who spoke did not at all comment on the proposition that I made—which I believe is the only sensible way out of this dilemma—that the bill could proceed to a vote on the second reading and then the government during consideration in detail could move an amendment to say that the bill would not come into force until the government undertook to move an appropriation bill. That is a way around this dilemma, because the bill is already in this place. It has been debated, and it is awaiting a vote.

I turn now to section 56 of the Constitution. Mr McClelland in his advice to you dated February, when we were dealing with the Social Security Amendment (Income Support for Regional Students) Bill 2010 [2011], pointed out that section 56 states that appropriation bills:

... shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House in which the proposal originated.

That is quite right, but that message does not come until after the second reading vote has been held, and I am putting to you, Mr Speaker, that by ruling on the two standing orders it is too late—it is post factum. The fact is that the bill is already in this place and it must proceed to a second reading. What happens after that is another matter. We would then move to consideration in detail. The question of section 56 of the Constitution could be raised. The government could accept my proposition.

I was very disappointed when those members of the crossbenches who did speak last week on the suspension motion did not address that point that I raised at all; they simply addressed the matters that the government had put in the little sheet that they sent around. I was most disappointed, because I like to think that the Independents do consider things in all seriousness, and it is not too late.

Mr Windsor: Shame the opposition didn't do it.

Mrs BRONWYN BISHOP: You did not speak, Mr Windsor, Member for New England. I deliberately only mentioned those who did, and you cannot hide behind that pile of papers. (Time expired)

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (09:26): Mr Speaker, I rise to support your ruling and to express the ongoing confidence of the government in your speakership. I think it is very good that today we have some clarification of both the short-term issue that was before the House last Thursday and the longer term rulings that are required. This is a very simple issue. It goes to the operation of the Constitution, the standing orders and the House of Representatives Practice; it goes to the way that our form of government operates, which is that only the executive can appropriate money; and it goes to good governance. If it is the case that each issue can be considered one by one without having the context of the overall fiscal position, then you will certainly not have a return of the budget to surplus in 2012-13.

Mr Tehan: That's the greatest joke of all time.

The SPEAKER: Order! The Leader of the House has the call.

Mr ALBANESE: Thank you, Mr Speaker. The Constitution and the House of Representatives Practice are very clear. The Constitution enshrines very clearly under sections 53 and 56 the way that money bills come before the House. Section 53 says:

Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate.

That is a section of the Constitution that from time to time people in the Senate have expressed a different view on. It is understandable that from time to time people will try to increase the importance of the chamber in which they reside, but that is not a principle that has ever been supported by the House of Representatives and neither should it be. Section 56 of the Constitution reinforces section 53. It says:

A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House in which the proposal originated.

It is very clear that there is no message from the Governor-General with this legislation. It is quite clear from the speeches of the member for Mackellar and others that this bill, were it to be passed, would indeed require additional moneys to be expended. The financial initiative of the executive is enshrined not only in the Constitution but also in the House of Representatives Practice and standing orders. House of Representatives Practice has been used in this chamber since this chamber was formed. Page 408 very clearly outlines the financial initiative of the executive:

The Executive Government is charged with the management of revenue and with payments for the public service.

It is a long established and strictly observed rule which expresses a principle of the highest constitutional importance that no public charge can be incurred except on the initiative of the Executive Government.

The Executive Government demands money, the House grants it, but the House does not vote money unless required by the Government …

It is there in the House of Representatives Practice in black and white for all to see, and the Manager of Opposition Business knows this to be the case. Page 431 of Practice goes on to deal with section 53 of the Constitution and the limitations on the Senate powers of amendment. Further, page 567 of House of Representatives Practice says:

A private Member may not initiate a bill imposing or varying a tax or requiring the appropriation of revenue or moneys. This would be contrary to the constitutional and parliamentary principle of the financial initiative of the Executive—that is, that no public charge can be incurred except on the initiative of the Government.

So it makes it very clear. Page 568 of Practice says this:

It would not be possible for a private Member to obtain the Governor-General’s recommendation for an appropriation. Furthermore, of those bills requiring a Governor-General’s message, only those brought in by a Minister may be introduced and proceeded with before the message is announced.

It goes on to say:

Therefore, only a Minister may bring in a bill which appropriates public moneys.

It could not be clearer. Standing order 179(a) is also very clear:

Only a Minister may initiate a proposal to impose, increase, or decrease a tax or duty, or change the scope of any charge.

There is no possibility that those who have moved opportunistically to dissent from your ruling, Mr Speaker, can argue that this does not change the scope of the charge. There is no possibility that they can argue that. They know that that is the case, and they know that their position is contradictory to the standing orders and to House of Representatives Practice. Standing orders 179(b) and (c) say:

(b) Only a Minister may move an amendment to the proposal which increases or extends the scope of the charge proposed beyond the total already existing under any Act of Parliament.

(c) A Member who is not a Minister may move an amendment to the proposal which does not increase or extend the scope of the charge proposed beyond the total already existing under any Act of Parliament.

So we have a very clear position here which is backed up by the Constitution, the House of Representatives Practice and the standing orders. Indeed, when this issue raised its head at the end of last year in this new parliament, the Member for Opposition Business made it clear in public interviews that he understood that only a minister can introduce a money bill. On a number of occasions, the Manager of Opposition Business and other senior members of the opposition have stated that their intention in raising these issues is to get the government to adopt them. They say that in recognition that only a government minister can introduce money bills into this House and only with a message from the Governor-General.

I say to you, Mr Speaker, that your ruling is absolutely correct today. This House has continually reaffirmed this principle, without exception. The House has done so because the founding fathers—and they were all men—were very wise when they wrote the Constitution and put in place provisions that have served this nation well for 111 years. These provisions ensure that when expenditures are approved people know where the money is actually coming from. You cannot have one-off bills not considered as part of the executive government because if you had that there would a range of expenditures which, by themselves, every member of this House would support. Who would not support, in isolation, the concept of giving more money to the homeless or the disadvantaged? Unless it is viewed in the context of a budget, which is the role of the executive government, you simply cannot have a responsible government that puts in place appropriate economic management in the interests of this nation.

We are determined to return the budget to surplus in 2012-13. That is why we have put forward a responsible budget. Those opposite are determined to wreck the budget surplus. They are determined to put forward opportunistic propositions for expenditure and they are determined to opportunistically block savings measures even when they are their own propositions, which is what you see in the alternative fuel debate. Mr Speaker, I ask the House to express its confidence in you, as it has earlier this week, and support your ruling.

Mr BANDT (Melbourne) (09:36): First of all, Mr Speaker, I want to thank you and the clerks for the attention you have paid to this matter and for the note. I have not yet had a chance to read and digest that note, so I make these comments without having read it. I must say that it is only because the motion is moved in the form of dissent to your ruling that I will not be supporting the motion, but I do it through gritted teeth because this should not be about whether or not there is confidence in you. This is an important matter that goes to the role of private members in a minority parliament. I agree with the member for Mackellar and the Manager of Opposition Business that this is not an appropriation bill and I think that should be something that is resolved by the House through a motion on the merits of the bill and not by way of a proxy debate through dissenting your ruling.

I can indicate to you, Mr Speaker—especially not having had the chance to read the advice that has come—that I could not guarantee that I would vote the same way next time. I also indicate to you and to other members of the House that, if this were a motion that were to come in some way other than in the form of a dissent from your ruling and would allow the House to be master of its own business and would allow these kinds of bills to be debated, my inclination would be to support it. The question of past practice and precedent is of limited relevance because every past ruling and every procedure that has been referred to—again, without having read the Clerk's advice—has been developed on the context of majority government, and of course it would make sense in those instances to deal with amendments from the opposition in that way.

But that is not the case we have here. Private members, whether on the crossbenches or from the opposition, ought to have their full rights to move amendments or move bills, even though the government might consider they are appropriation matters. If the House considers they are not appropriation matters, they should be able to be debated. I indicate that I will not be dissenting from your ruling, but I cannot guarantee that that would occur in the future. I hope that there is some way in which a motion may come back before the House to allow this to be debated in a form that is not dissent from your ruling.

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (09:39): I ask that leave be given to permit the Attorney-General, the member for New England and the member for Lyne to address this question for a time no longer than five minutes each.

Leave granted.

Mr ALBANESE: I move:

That so much of standing orders be suspended as would permit the Attorney-General, the member for New England and the member for Lyne to address this question for no longer than five minutes each.

Question agreed to.

Mr McCLELLAND (Barton—Attorney-General) (09:40): Mr Speaker, you have, with respect, correctly identified the two issues that arise from this bill, namely, in the first case, the need for an appropriation for the bill and, also, the extension of a charge that results from the bill. You have identified that both issues, as a consequence of the bill, are enlarging the class of persons to whom an appropriation on the one hand and a charge on the other could apply.

In dealing with the second issue first—that is, in respect to a charge—the Leader of the House correctly identified that it is quite plain on its face that standing order 179(a) necessarily applies because it increases the scope of a charge, and it is noted in the memorandum from the Clerk that the incentive for employers to pay their superannuation contribution is that if they fail to do so or fail to do so in full they are liable for a superannuation guarantee charge. That is necessarily the case.

Dealing with the second issue with respect to appropriation, could I refer the House—and I have previously touched upon these issues, but perhaps not in great detail—to an advice of Sir Garfield Barwick, when he was the Attorney-General, on 20 February 1962. In the advice he in turn referred to the passage from the book, The British Budgetary System, by Sir Herbert Brittain, published in 1959. I quote from that:

Underlying the parliamentary procedure on supply is a rule of the House of Commons which is of fundamental importance. It is enshrined in a standing order, which, in its earliest form, was passed in 1706 and is which now, according to the relevant standing order that existed in the House of Commons, this House will receive no petition for any sum relating to public service or proposed upon any motion for a grant or charge upon the public revenue whether payable out of consolidated fund or out of money to be provided by parliament unless recommended from the Crown.

The significance of that is that it notes a principle going back to 1706. The Leader of the House has referred to the debates of our founding fathers—our constitutional fathers—who were well aware of that heritage and adopted the same principles in our Constitution. Indeed, the author, Sir Herbert Brittain, summarised:

Only the Crown therefore can initiate proposals for expenditure in the House. The Crown's right and responsibility in this respect are exercised by ministers in the government of the day.

That is reflected in standing order 180, which requires a message from the Governor-General, which message is given on the advice of the day.

The Clerk's advice appropriately refers to Pape's case by way of footnote. That was a recent decision of the High Court of Australia and that also confirmed the principle. I also refer to the fundamental principle described by the High Court in Combet's case, where the majority judgment of justices Gummow, Hayne, Callinan and Heydon noted that it is the executive government which begins the process of appropriation. This the executive government does by specifying the purpose of the appropriation by message to the House of Representatives.

Again, that message comes from the Governor-General. Similarly, in that case Justice Kirby referred to the discussion in the issue in Lane's Commentary on the Australian Constitution of 1997 and concluded that:

… the initiative for proposed appropriations belongs to the Executive Government, in accordance with s 56 of the Constitution.

Again, the will of the executive being referred to in the message of the Governor-General, with the Governor-General acting on the advice of the executive of the day. So, with respect, Mr Speaker, your ruling is entirely consistent with the standing orders but, more than that, it is entirely consistent with our Constitutional heritage.

Mr OAKESHOTT (Lyne) (09:44): I appreciate the House allowing an extension of this debate, and it is entirely appropriate that a motion has been put and, as is the right of all members, for some members to want to dissent from that ruling. The matters of the last fortnight do weigh heavily. I would hope other members are like me and wake up in the middle of the night worrying about the standing orders and trying to work through the issues of the last two weeks. I would hope this is not going to mean sleepless nights for the next two years. I would hope that this is a moment when we clarify and, from that, stabilise the processes of government not only for this parliament but also for future parliaments when these questions may arise. This is therefore an opportunity, not a threat, for this parliament to resolve some of these issues.

I want to clarify the issue of the last week because it is going to be important to the views on this motion. I believe in the independence of a Speaker, I believe in the authority of a Speaker, and I have confidence in a Speaker. There may be some confusion about the position taken on a naming motion. I do not believe that anyone should vote in this place based on the implications of a future vote. When a member is named, in no way is that reflecting on the chair. It is weighing up the issue before me as a member of parliament and, if I do not see or hear the incident in question, that is not dissenting from or seeking a wont for disorder in the House. It is basically making a ruling at my end on the question that is being put before me as to whether there was or was not disorder. For whatever reason, whether it is the location that we sit in this House or any other reason, I did not see or hear what happened.

For that reason, without that being confused with any sort of challenge to the confidence or independence of the chair, I will be referring the matter to the House of Representatives Standing Committee on Procedure to clarify because, if we are serious about an independent Speaker, the question then is why the Speaker has to put a vote to seek order in the chamber. Now we have put in place in this parliament a system of an independent Speaker, potentially we could align that with giving the Speaker the authority to not only dismiss someone for an hour but also potentially for 24 hours. That is, hopefully, a question that would resolve the issue at my end and resolve the issue for this parliament.

Consistently, that leads into the thinking behind the question before us. If we are to believe in the independence of a Speaker and to have confidence in the authority of a Speaker, then this process is entirely appropriate. The bill that was put before the House had some questions around its status of whether it is a money bill or not. There were several of us who asked the question—and expressed frustration—about whether these bills were leaving open that question. We had advice from the Clerk, for example, and advice from the Parliamentary Library that was completely contradictory. For that reason, the Speaker quite rightly took on the issue of trying to resolve it.

If the clerks are the clerks of the parliament and not the executive, then they have duly done their job of providing advice to the Speaker of the parliament, not the executive, and the Speaker has provided advice to the parliament that is now—having gone through a due and proper process—entirely worthy of support, if we are to accept that we have an independent Speaker that we have confidence in. I do. I think we do have an independent Speaker whom we have confidence in. The process that we have gone through to get the advice that we have got has been appropriate. Therefore, I will not be supporting the motion before the House.

Mr WINDSOR (New England) (09:49): Mr Speaker, this pile of documents does not relate to your ruling; it relates to the Murray-Darling report that will be coming up soon. This debate on the motion of dissent from your ruling, Mr Speaker, has been interesting and I hope it does go some way towards putting in place a bit of a glide path for this parliament. That is not to deny the member's right in this case to bring a bill before the parliament, but we do really need some clarification.

Mr Speaker, your ruling today and the contribution from the member for Lyne have both given some clarification to this issue. If this issue is not determined today, I would suggest that there would need to be maybe a meeting between the two houses or some formal process set in place to try to resolve this issue. It is one that is going to continually plague this parliament, where Independent members in a minority in the parliament have made a determination of the government. The government of the day has a right—and it would have been the same if the determination of the government had been the other way—which we have supported, to access supply and to make its budgetary arrangements.

This bringing on of bills which are essentially, in my view and in the determination of the clerks and you through a number of rulings, appropriation bills does need to be clarified; otherwise, we will just get an avalanche of these bills which will destabilise the budgetary process. That might be all very well politically—I do not think anybody doubts the intent of a lot of these bills that are being introduced—but we saw a successful outcome with the youth allowance bill. That bill did not get through the parliament because of the same issues that have been raised here, but the issues that were raised were of such importance that the government has initiated a review of the process. So I would suggest that maybe that is a way through this. But, if it is not a way through this, maybe at some stage the House has to pass some sort of appropriation bill, for $1, so that it can be tested in the courts for future reference. By that time, the hung parliament will probably be well over and done with. But I would suggest that if we cannot find a formal process that resolves this and we have this continual round of debates over this issue then maybe that is a way forward. I went through exactly the same experience with a different form of government in the hung parliament that I was in in New South Wales. I supported the Liberal Party on that occasion. The country Independent was subjected to a whole avalanche of country bills, as we used to call them, to put that member of parliament in a difficult position in terms of the determination and the politics that could be played in relation to that. But on all of those occasions I supported the government of the day in its responsibility for supply. So I will not be dissenting from your ruling.

Whilst I have a few seconds, I recognise that there is a Chinese wall between the Speaker and the executive. It has been spoken about on a number of occasions. The member for Braddon has been very vocal on that issue of having a Chinese wall between the executive and the Speaker. I think the Speaker knows what I am referring to. I apologise for not being in the House on the occasion the other day when the vote was taken in relation to the Speaker's ruling. In all the parliaments that I have been in, on all occasions I have always supported the Speaker of the parliament, irrespective of their political tone. I will continue to do that because I think the independence of the Speaker is something very special in our parliamentary system.

Mrs BRONWYN BISHOP (Mackellar) (09:54): on indulgence—Mr Speaker, this morning your ruling was made on the basis that you had had advice from the clerks, and we have had debate on the procedural motion I moved because there was nothing else I could do to have the debate. My question is this: I have read the advice that the clerks have given to you and at no point have they advised you on the question that this is in fact a live bill. None of the debate from the government or the crossbenchers has addressed that question. This is totally different from any other circumstance. This is a bill that was in fact introduced, whereas the standing orders would preclude it if you ruled. The matter is that it has in fact been introduced and no advice has been given to you on that point.

The SPEAKER: Order! The member will resume her place. A more sensitive and 'precious petal' soul could suggest that that was reflecting on the way that we have come to this decision. I assure you, for the last week we have not just been looking at the tea leaves and the written word. The member would be aware that this is something that has been under discussion for even longer than the past week. I assure her that I am cognisant of the fact that a process commenced and I have made my ruling.

Question put:

That the Speaker's ruling be dissented from.

The House divided. [10:01]

(The Speaker—Mr Harry Jenkins)

Question negatived.

Mr ANDREWS (Menzies) (10:20): I seek leave of the House to amend the motion circulated in my name.

Leave granted.

Mr ANDREWS: Very briefly, without detaining the House for too long, this is simply to add the Intergovernmental Working Group for the Centenary of Canberra to the parliament and the National Capital Authority as organisations which are being urged to celebrate the centenary of Canberra. I move:

Paragraph 2:

After 'Authority' insert 'and the Intergovernmental Working Group for the Centenary of Canberra'.

The SPEAKER: Is the motion seconded?

Mr Pyne: I second the motion.

Question agreed to.

Original question, as amended, agreed to.

Mr BANDT (Melbourne) (10:22): I move:

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

(1) a Joint Select Committee on Australia's Immigration Detention Network be appointed to inquire into and report on:

(a) any reforms needed to the current Immigration Detention Network in Australia;

(b) the impact of length of detention and the appropriateness of facilities and services for asylum seekers;

(c) the resources, support and training for employees of Commonwealth agencies and/or their agents or contractors in performing their duties;

(d) the health, safety and wellbeing of asylum seekers, including specifically children, detained within the detention network;

(e) impact of detention on children and families, and viable alternatives;

(f) the effectiveness and long-term viability of outsourcing immigration detention centre contracts to private providers;

(g) the impact, effectiveness and cost of mandatory detention and any alternatives, including community release; and

(h) any other matters relevant to the above terms of reference;

(2) the committee consist of 11 members, 2 Members to be nominated by the Government Whip or Whips, 2 Senators to be nominated by the Leader of the Government in the Senate, 2 Members to be nominated by the Opposition Whip or Whips, 2 Senators nominated by the Leader of the Opposition in the Senate, 1 Member and 1 Senator nominated by the Australian Greens Whip, and 1 non-aligned member;

(3) participating members may be appointed to the committee. Participating members may participate in hearings of evidence and deliberations of the committee, and have all the rights of a member of the committee, but may not vote on any questions before the committee;

(4) every nomination of a member of the committee be notified in writing to the President of the Senate and the Speaker of the House of Representatives;

(5) the members of the committee hold office as a joint select committee until the House of Representatives is dissolved or expires by effluxion of time, whichever is the earlier;

(6) the committee shall elect a chair and deputy chair;

(7) the deputy chair shall act as chair of the committee at any time when the chair is not present at a meeting of the committee, and at any time when the chair and deputy chair are not present at a meeting of the committee the members present shall elect another member to act as chair at that meeting;

(8) in the event of an equally divided vote, the chair, or the deputy chair when acting as chair, have a casting vote;

(9) 3 members of the committee constitute a quorum of the committee provided that in a deliberative meeting the quorum shall include 1 Government member of either House and 1 non-Government member of either House;

(10) the committee have power to appoint subcommittees consisting of 3 or more of its members and to refer to any subcommittee any matter which the committee is empowered to examine;

(11) the committee appoint the chair of each subcommittee who shall have a casting vote only;

(12) at any time when the chair of a subcommittee is not present at a meeting of the subcommittee the members of the subcommittee present shall elect another member of that subcommittee to act as chair at that meeting;

(13) 2 members of a subcommittee constitute the quorum of that subcommittee;

(14) members of the committee who are not members of a subcommittee may participate in the proceedings of that subcommittee but shall not vote, move any motion or be counted for the purpose of a quorum;

(15) the committee or any subcommittee have power to call for witnesses to attend and for documents to be produced;

(16) the committee or any subcommittee may conduct proceedings at any place it sees fit;

(17) the committee or any subcommittee have power to adjourn from time to time and to sit during any adjournment of the House of Representatives and the Senate;

(18) the committee may report to both Houses of Parliament from time to time and that it present its final report no later than 7 October 2011;

(19) the provisions of this resolution, so far as they are inconsistent with the standing orders, have effect notwithstanding anything contained in the standing orders;

(20) a message be sent to the Senate acquainting it of this resolution and requesting that it concur and take action accordingly

There are two reasons for my amendment. The first is that we need a broad inquiry into the state of detention in Australia, and that needs to be an inquiry that focuses on the causes, not just the symptoms. To focus only on the riots would be to focus on the symptoms, where people who have been locked up indefinitely for a long period of time are expressing their frustration. What we need to examine is why it is that mandatory detention has failed. Secondly, it ought to be a joint committee. The terms of the amendment I have moved allow for participation of senators as well. It is my strong hope that a real inquiry into mandatory detention in Australia, participated in by members of both houses of parliament, might start to put Australia on the path to a more humane immigration future.

The SPEAKER: Is the amendment seconded?

Mr Oakeshott: I second the amendment.

The SPEAKER: The question is that the amendment moved by the member for Melbourne be agreed to.

Mr BOWEN (McMahon—Minister for Immigration and Citizenship) (10:24): We support this amendment. This is a government which is more than happy to have transparency when it comes to our immigration policy. That is why we have answered 800 questions on notice from the Senate estimates process—more than any other portfolio. That is why we have instigated inquiries into disturbances in our detention centres.

Opposition members interjecting—

The SPEAKER: Order! Those on my left!

Mr BOWEN: We are happy to have a proper inquiry into the detention network, not the sort of witch-hunt and political point-scoring exercise the opposition has not been able to get up through this process. We will support this amendment and support the amended motion.

Mr MORRISON (Cook) (10:25): The opposition will also be supporting this amendment, and I flag that a further amendment will be made to the amended motion. This is an important inquiry and we look forward to the support of the House and the support of the other place.

Question agreed to.

The SPEAKER: The question now is that the motion as amended be agreed to.

Mr MORRISON: I move an amendment to the motion:

That the following words be inserted after point (g) after the word 'and':

(h) the reasons for and nature of riots and disturbances in detention facilities;

(i) the performance and management of Commonwealth agencies and/or their agents or contractors in discharging their responsibilities associated with the detention and processing of irregular maritime arrivals or other persons;

(j) the health, safety and wellbeing of employees of Commonwealth agencies and/or their agents or contractors in performing their duties relating to irregular maritime arrivals or other persons detained in the network;

(k) the level, adequacy and effectiveness of reporting incidents and the response to incidents within the immigration detention network, including relevant policies, procedures, authorities and protocols;

(l) compliance with the Government's immigration detention values within the detention network;

(m) any issues relating to interaction with States and Territories regarding the detention and processing of irregular maritime arrivals or other persons;

(n) the management of good order and public order with respect to the immigration detention network;

(o) the total costs of managing and maintaining the immigration detention network and processing irregular maritime arrivals or other detainees;

(p) the expansion of the immigration detention network, including the cost and process adopted to establish new facilities;

(q) the length of time detainees have been held in the detention network, the reasons for their length of stay and the impact on the detention network;

(r) processes for assessment of protection claims made by irregular maritime arrivals and other persons and the impact on the detention network; and,

And insert the words at point 6 after the word 'elect', the words 'a Government chair'.

We seek this further amendment to the motion to ensure that it includes the full breadth of all the matters that need to be addressed as part of this very important inquiry, an inquiry that just a week or so ago the minister liked to call a stunt but I understand today will now support. I appreciate the support of the crossbenchers and I appreciate the support of the Greens in the productive discussions we have had, because this is a detention system in which there is an average of more than three critical incidents occurring in a detention network every single day. I think it is important that this House has not sought to muzzle those who want to ask questions about this matter. I know the crossbenchers want to ask questions, I know the Greens want to ask serious questions and the opposition certainly wants to ask serious questions. I look forward to this motion also being supported in the other place, which will enable these matters to be addressed by both houses of this parliament in what has become a rolling crisis in our detention network under this government.

The SPEAKER: Is the amendment seconded?

Mr Pyne: I second the amendment.

The SPEAKER: The question before us is that the motion as amended be agreed to. To this the honourable member for Cook has moved an amendment. The question now is that the amendment moved by the member for Cook be agreed to.

Question agreed to.

The SPEAKER: The question now is that the amended motion, as amended, be agreed to.

Question agreed to.

Original question, as amended, agreed to.

Mr WINDSOR (New England) (10:37): On behalf of the Standing Committee on Regional Australia I present the committee's report entitled Of drought and flooding rains: inquiry into the impact of the Guide to the Murray-Darling Basin Plan, together with the minutes of proceedings and evidence received by the committee. I ask leave of the House to make a short statement in connection with the report.

Leave granted.

Mr WINDSOR: This inquiry was established following the release of the Murray-Darling Basin Authority's Guide to the proposed Basin Plan in October last year. All members of the committee, and they are all here today, representing all political persuasions within the parliament, have worked cooperatively in pursuit of a common purpose: to find a different way to achieve a sustainable and prosperous future for basin communities and the environment. The findings of this report show that there are win-win solutions to a lot of the problems in the basin and that there is a better way through. It will still mean some change, but not great pain as indicated in the guide.

The Murray-Darling Basin is one of the most productive regions of Australia, with a rich diversity of communities, landscapes and environment. However, growth in the diversion of water in the second half of last century means we need to find a better balance between the productive use of water resources and the environment, but this must be done in a way that includes the Basin communities and helps them have certainty and confidence about their future.

This report presents a way to achieve these objectives with a win-win outcome for communities and the environment. This pathway includes improvement in the way the Basin Plan is developed, better ways to recover water for the environment and offset the proposed reductions, support to build strong and prosperous communities in the basin as they adjust to a future with less water, more transparency and accountability around the government's water reform processes, and improvement in monitoring, compliance and enforcement of basin water resource use.

The guide was intended to merely give an insight into the authority's thinking as it developed the proposed Basin Plan. It included proposed sustainable levels of diversion that would require significant reductions to current diversions to ensure the basin's environmental health. Unfortunately, the way it chose to develop and communicate this document was appalling. The authority shut the door on the basin communities, the state and territory governments and scientists. But without their involvement it is unreasonable to go out into the community only days after releasing such complex proposals.

In both the guide and the following information sessions, the Murray-Darling Basin Authority failed to communicate how the Basin Plan would be implemented, the role of the states or the ability for the reductions to be offset by the government's water purchase and irrigation efficiency savings. Understandably, basin communities reacted with anger and disbelief at the scale of the reductions and how they were to be treated. They were left with the impression that someone was going to turn up at their door and actually take away the water that they were legitimately given as entitlements from various governments. Understandably, basin communities saw it as an attack on their livelihoods and their communities.

Through this inquiry the committee has had the privilege of visiting regions throughout the basin and speaking with many of its residents. We heard the frustration, uncertainty and anxiety caused by the guide. In contrast to the animosity towards the authority, the people we met throughout the basin made the committee feel very welcome. The committee heard a general agreement wherever it went that more water needs to return to the environment and an acknowledgement that, without healthy rivers, we cannot have long-term and healthy communities.

The key recommendations arising from this inquiry are intended to provide a pathway towards the changes most agree are needed—a pathway that we hope will have the support of basin communities. The report recommendations cover (1) improving the way the authority proceeds in the next stages of the basin planning process, (2) stopping all non-strategic water buyback immediately, (3) establishing a national water fund to invest in water-saving projects, environmental works and measures, strategic purchase of water entitlements and research to improve irrigation efficiency, (4) creating a government owned corporation, a joint venture with state and territory governments, to manage the national water fund similar to the way the successful Water for Rivers company operates and (5) creating a stand-alone Commonwealth environmental water holder.

From the very south to the top of the basin, the committee heard of water savings that could be found through environmental works and measures and on-farm efficiency works. The report identifies some of these measures and recommends that they be explored prior to consideration of any reduction in productive water allocation.

While much of the responsibility for the fear and anxiety caused by the guide rests with the Murray-Darling Basin Authority, the failure to communicate the need for a basin plan is also the responsibility of the six governments responsible for water sharing within the basin. Past government agreements on water reform have all been motivated by a mutual desire to provide for the long-term health and prosperity of the basin. A more cooperative approach is needed if we are to achieve these outcomes. This will require all governments involved to set aside their differences and parochial tendencies and work together to help these communities adapt and thrive in the face of change. The committee found that, even after decades of continual change, communities across the basin are still willing to cooperate in this next round of reforms. However, trust in the Murray-Darling Basin Authority has been seriously eroded. We owe it to these people, to their willingness to put right the ramifications of decisions made by state and Commonwealth governments in the past, to find a way forward that helps build a more productive and sustainable future for the basin.

Finally, I thank my committee colleagues, who are here today: the member for Braddon; the member for Capricornia; the member for Riverina, who attended every meeting—and this committee had a lot of meetings, so I thank him for his diligence—the member for McMillan; the member for Murray; the member for Wannon; and the member for Dobell. I thank them personally for the way they have approached the inquiry's task. In January, when most people were taking their break, we had something like a fortnight on the road, yet most of the committee were able to attend and get stuck into meeting people.

I also thank the four supplementary members who joined the committee for the purpose of this inquiry—the members for Barker, Bendigo, Farrer and Makin—for their valuable input. I take this opportunity to express my gratitude for the thorough and professional support of the committee secretariat, namely—and they are in the chamber today—Glen Worthington, Siobhan Leyne, Raymond Knight, Daniel Miletic and Chris Golding. I recognise them all, and I am sure the committee does as well, but I would like to thank Chris in particular for his technical work. His input based on his understanding of the very complex arrangements within various states and of past water legislation has been invaluable. But I thank all of the committee for the work they have done. I would also like to thank the many people and organisations who welcomed us into their communities, appeared as witnesses and took the time to prepare submissions.

I note that, due to the importance of the issues addressed in this inquiry and the need to deliver the findings in a timely manner, printed copies of this report are not immediately available to members and the general public. These are likely to be available sometime next week.

In conclusion, I once again thank all the members personally for their input. This is not an easy situation to deal with for anybody in any of the six parliaments or for a lot of the communities that we have spent time in. But I think the way members of the committee, despite their political differences, addressed the community meetings and the report itself demonstrates to me that this parliament actually does want to do something about what was, in some cases, previous mismanagement and, in particular, about the way in which some of the issues raised in the guide really did shock people in communities in the basin. There is a way through this which can achieve similar outcomes without the pain and anguish that many people in these communities feared. I am pleased that both the Minister for Regional Australia, Regional Development and Local Government and the Minister for Sustainability, Environment, Water, Population and Communities are here today and I thank them. I would urge them to look very seriously at the process that this committee has developed before going straight to entitlement cuts as a way through this issue. I commend the report to the House.

Mr SIDEBOTTOM (Braddon) (10:48): by leave—I will be quite brief because we have an opportunity to speak on this in another place. I want to congratulate the chair and my colleagues on this committee for the work they have done and the secretariat for the excellent work it has done. I believe the report reflects the evidence that we took, that the challenges and issues raised in the report need to be taken forward and that the report contains some very constructive and positive suggestions about how to do that.

There are three things that I believe the evidence in the report emphasises. First, foremost and most importantly is that wherever we went the communities we spoke to recognised that without a healthy river you cannot have healthy communities. That was right across the board. There is a recognition of the need to ensure a sustainable environment, but in order to do that you also need sustainable communities. That fact, which has often been forgotten, was truly recognised.

The second thing that came out of the evidence is set out in point 7.7 from the report. It says:

The presentation of the Guide—

as the chair just pointed out—

contained many failures and yet the Committee still found communities willing to engage, be consulted with and contribute to a Basin Plan. Communities want a Basin Plan, but they want a Plan that acknowledges them as a critical part of the Basin.

The final issue is the importance of institutional reform and that is set out in point 7.9. It says:

In order to ensure that this reform is effective and community-focussed, there is a need to significantly overhaul how environmental water is sourced, managed and accounted for, then monitored.

We believe that the institutional reforms we recommend in the report will allow this to happen. I thank all the committee members and the secretariat for their fantastic work and to the chair I say that I believe you did an excellent job.

Dr STONE (Murray) (10:51): by leave—I too join with my fellow committee members in saying that this was a report perhaps different to many others that come before this House in that it actually affects the livelihoods and futures of the people living on 14 per cent of Australia's land mass. We received consistent evidence throughout the basin that in fact there is a win-win solution to this—there is a triple bottom line approach that can be taken. In my electorate of Murray, and for me in particular, this was no academic exercise; what comes through in this final plan for the Murray-Darling Basin will determine if the irrigation communities of northern Victoria survive and thrive or—and this would have been the case if the original guide to the plan had been followed through—be decimated. The report we have tabled is very much a reflection of how we can go into the future, preserving the food production and fibre capacity of the most fertile part of Australia and at the same time ensuring that we preserve for all time our iconic sites and our biodiversity; and we must do that. But—as the previous speaker said, and indeed the chair of the also committee alluded to it—you cannot manage the ecosystem appropriately if you do not have productive, viable, strong human communities. Those human communities in the basin manage day to day the natural resources that are in turn part of their productive base and the biodiversity protection.

I commend to the government the recommendations of this report. I know that the government has good intentions here. They have already made substantial changes to the Murray-Darling Basin Authority personnel, and I commend them for doing that; it was very timely and important that they did. I know that the government understands the importance at this time; as the basin recovers from years of drought and in some places flood; as the people need to have their trust restored in what governments can do and will do in a timely way. We need a win-win scenario—the environment must be protected, the productive capacity of the basin must be supported and further enhanced and our nation must march together, understanding the rights of all farms to survive and thrive and the interdependence and necessity of sustainable natural resources.

Ms MACKLIN (Jagajaga—Minister for Families, Housing, Community Services and Indigenous Affairs) (10:54): I move:

That this bill be now read a second time.

The Family Assistance and Other Legislation Amendment Bill 2011 delivers on five measures from the recently announced 2011-2012 budget, and a minor non-budget measure.

Reform of family payments

The bill introduces three measures that make important changes to the family payments system to make it fairer and simpler and to ensure its long-term sustainability.

The first measure lowers the maximum child age of eligibility for Family Tax Benefit Part A from 24 to 21, and that will start on 1 January 2012.

Family payments are designed to support families with the costs of raising children while they are dependent. This change recognises that young people aged 22 and over are considered independent, and will bring Family Tax Benefit Part A into line with the reduction in the youth allowance age of independence from 1 January 2012.

Young people aged 22 and over in full-time study may be able to access youth allowance independent of their parents' income, subject to means testing and academic progress rules.

Transitional arrangements will mean that families with a young person who is already enrolled in a course which started before 1 January 2012 will continue to receive Family Tax Benefit Part A until that course finishes.

The second measure builds on reforms introduced in the 2009-10 Budget that better targeted the family payments system to focus on low- and middle-income families.

The government is a strong supporter of the family payments system. Family payments are a fundamental part of the Australian social fabric.

Next year, we will spend around $30 billion combined on Family Tax Benefit, the baby bonus, Paid Parental Leave and child care assistance.

We have added to the system since coming to government by increasing the child care rebate to 50 per cent, introducing Australia's first national paid parental leave scheme and the education tax refund, and also, in the recent budget, increasing family payments for older teenagers by up to $4,200 a year.

But we also believe in a targeted system that is sustainable for the long term.

That is why the government is extending indexation pauses on higher income limits for a further two years, until 30 June 2014, for Family Tax Benefit Part A and B, the baby bonus and Paid Parental Leave.

This bill will extend indexation pauses on higher income limits for a further two years, until 30 June 2014, in the following areas:

the Family Tax Benefit Part B primary earner income limit will remain at $150,000;

the baby bonus eligibility limit will remain at $75,000 family income in the six months following the birth or adoption of a child (equivalent to $150,000 a year);

the Paid Parental Leave income limit will stay at $150,000 for the primary carer in the previous financial year before the birth or adoption of a child; and

the higher income-free area, and the per child add on, of Family Tax Benefit Part A will remain constant. This threshold is the income level at which the base rate of Family Tax Benefit Part A begins to reduce, until the benefit ends completely. The income level at which a family's benefit is completely withdrawn varies by family circumstance, depending on the number and age of the children. The family tax benefit part A lower income free threshold and the family tax benefit part B secondary earner income threshold will continue to be indexed, providing support to low and middle income households.

Fortnightly payment rates for family tax benefit and the baby bonus will also continue to be indexed every year to meet increases in the cost of living. The rate of parental leave pay is linked to the national minimum wage and is also not affected by this change.

Pauses to the upper income limits mean that some families will no longer be eligible for payments, and some families will get fewer family payments—but only if their income rises.

No family will lose any family payments unless their income rises.

Families whose income does not increase will also have more money in their pockets as the fortnightly rates of family tax benefit continue to rise, due to normal indexation.

In the first year, fewer than two per cent of families will no longer be eligible for family payments as the result of these changes.

Indexation on the upper income limits for family tax benefit part A and B, and the baby bonus, was paused in the 2009-2010 budget.

The opposition supported this very same measure in 2009. In the parliament two years ago, on 13 May 2009, the Leader of the Opposition, who was the relevant shadow minister at the time, said these changes were too 'soft'.

The extension of these pauses will save $1.2 billion over the forward estimates. These are the decisions an economically responsible government must make if we are to bring the budget back to surplus, and make sure our family payments system is sustainable now and into the future.

Under the third measure, indexation of family tax benefit end of year supplements will also be paused for three years. End of year supplements were first introduced to address overpayments of family payments because of underestimation of income.

The number of families with overpayments has decreased since supplements were first introduced, and pausing indexation of these supplements will help make family payments more sustainable.

The end of year supplements are generally paid as a lump sum after the end of an entitlement year, when a family has completed their tax return and reconciled their actual family tax benefit entitlement.

This amendment will keep the end of year supplements at their current level of $726.35 per child for family tax benefit part A, and $354.05 per family for family tax benefit part B, for the next three entitlement years.

Building Australia's Future Workforce— implementing more efficient and accurate assessments for disability support pension

This bill also introduces changes to the assessment arrangements for disability support pension to help Australians with a disability into work wherever possible, while continuing to provide an essential safety net for Australians unable to work.

To qualify for disability support pension, a person must have a physical, intellectual or psychiatric impairment of 20 points or more under the impairment tables, and have a continuing inability to work for at least 15 hours per week.

Currently a person's inability to work can be assessed before the person has investigated alternative employment options or assistance from employment services, or had any retraining or rehabilitation.

This means that assessments of a person's inability to work, for the purposes of the disability support pension, can occur without the person having tested whether the help available could find them suitable work.

This bill refines the test for determining whether a person has a continuing inability to work.

Under the new rules, most people applying for disability support pension will be required to have actively participated in a program of support to find employment through an open employment service or vocational rehabilitation.

People with a severe impairment, such as those who are clearly unable to work, will receive financial support more quickly, and will not need to have actively participated in a program of support.

These changes were first announced in the 2010-2011 budget and, in the most recent budget, were fast-tracked so that they will now apply from 3 September 2011, rather than from 1 January 2012.

These reforms will provide faster, more sustainable support for people with severe disabilities, while referring others with the potential to work to employment services including Job Services Australia and Disability Employment Services.

The new assessment procedure for disability support pension will help people with disabilities return to the workforce wherever possible by focusing on their ability, rather than their disability.

Enabling the extension of the Cape York Welfare Reform Trial

In the 2011-2012 budget, the government provided $16.1 million for a proposed extension of the Cape York Welfare Reform trial for an additional year.

The trial is a partnership between the communities of Aurukun, Coen, Hope Vale and Mossman Gorge, the Australian government, the Queensland government and the Cape York Institute for Policy and Leadership. It aims to restore positive social norms, re-establish local Indigenous authority and support community and individual engagement in the real economy.

To date, the trial has made a real and lasting difference in the lives of Indigenous people in the cape. Since it began in July 2008, the Cape York Welfare Reform communities have seen improved school attendance, care and protection of children and community safety.

The Queensland government is currently leading a process of consultation with Cape York communities about extension of the trial. Queensland government legislation would also need to be changed in order for the trial to be extended.

While these discussions occur, the Commonwealth government is seeking to put in place the amendments required to enable the extension of the income management element of the trial.

It is important these enabling legislative changes are put in place to ensure they do not delay any extension of the trial and to ensure the four communities are not adversely affected. The extension of the trial will not go ahead until the communities of Aurukun, Coen, Hope Vale and Mossman Gorge have been consulted and the Queensland government legislates to extend the operation of the Family Responsibilities Commission.

The Family Responsibilities Commission, which is established under Queensland government legislation, is a key plank of Cape York Welfare Reform. Local Family Responsibility Commissioners hold conferences with community members, refer people to support services and, when necessary, arrange income management.

Currently, a person can only be subject to income management under the trial after a decision by the Family Responsibilities Commission, made before 1 January 2012.

The bill before the Parliament extends this date to 1 January 2013, to enable income management to continue in Cape York for a further 12 months.

Minor measure

The bill also includes a minor non-Budget measure, which clarifies that the Public Works Committee Act 1969 does not apply to Aboriginal Land Trusts established in the Northern Territory under the Aboriginal Land Rights (Northern Territory) Act 1976.

The concept of an authority of the Commonwealth was first introduced into the Public Works Committee Act by way of amendment in 1981. Aboriginal land trusts are a mechanism to give effect to what is private ownership of land for the benefit of Aboriginal traditional owners. Land trusts were never intended to be Commonwealth authorities to which that act applies. This amendment puts that position beyond doubt.

This amendment will not affect the application of the Public Works Committee Act to any proposed arrangement that involves the carrying out of a work by or for the Commonwealth, or by or for an authority of the Commonwealth to which the Public Works Committee Act applies.

Where the Parliamentary appropriation requirements of section 5AA of the Public Works Committee Act are otherwise satisfied, the work will be a 'public work' for the purposes of that Act, even if the work is proposed to be carried out on land owned by a Land Rights Act Aboriginal Land Trust.

Debate adjourned.

Mr SHORTEN (Maribyrnong—Assistant Treasurer and Minister for Financial Services and Superannuation) (11:10): I move:

That this bill be now read a second time.

This bill amends various taxation laws to implement a range of improvements to Australia's tax laws.

Schedule 1 amends the income tax law to allow trust beneficiaries to continue to use the primary production averaging and farm management deposits provisions in a year where the trust has a loss for trust law purposes.

After the High Court decision in Commissioner of Taxation v Bamford, the commissioner withdrew a public ruling under which he had accepted that in certain circumstances a beneficiary could be eligible for the primary production averaging and farm management deposits rules, despite the trust incurring a loss for trust law purposes.

Schedule 1 will restore the ability of beneficiaries to access both sets of rules in an income year where the trust has incurred a loss and certain conditions are met. The amendments will secure continuity for taxpayers because they apply from the 2010-11 income year and the commissioner's ruling applies up to and including the 2009-10 income year.

If the amendments in schedule 1 are not enacted by 30 June 2011, the beneficiaries of up to approximately 23,000 trusts will be uncertain as to their eligibility for the primary production averaging and farm management deposits rules in the 2010-11 income year by the time they start to lodge their income tax returns.

Schedule 2 amends subdivision 115-C and subdivision 207-B of the Income Tax Assessment Act 1997 to ensure that, where permitted by the trust deed, the capital gains and franked distributions (including any attached franking credits) of a trust can be effectively streamed to beneficiaries for tax purposes, by making them 'specifically entitled' to those amounts.

This schedule also amends division 6 of part III of the Income Tax Assessment Act 1936 to include specific anti-avoidance rules to address the inappropriate use of exempt entities to 'shelter' the taxable income of a trust.

The government announced on 16 December 2010, that it would update and re-write the trust income tax law to deal with the ongoing discrepancies between the treatment of trust income by trust laws, on the one hand, and the tax system on the other. These issues were highlighted by the High Court's decision in Commissioner of Taxation v Bamford.

In the interim, the Board of Taxation recommended (following consultation with industry) that changes were urgently needed to provide certainty about the streaming of capital gains and franked distributions (including any attached franking credits).

These amendments provide this certainty and ensure that the streaming of capital gains and franked distributions (including any attached franking credits) is effective for tax purposes.

The government is aware that due to the short timeframe involved in developing these amendments, there may be scope for unintended consequences. The operation of these amendments will therefore be closely monitored and if unintended consequences are identified, the government will act to remedy these consequences retrospectively where appropriate.

The broader review of the trust income tax provisions remains the primary focus for the government. This will simplify the system, rewrite the rules and give more certainty to the many thousands of small businesses and farmers who use trusts. If the amendments in schedule 2 are not enacted by 30 June 2011, trustees of approximately 660,000 trusts in Australia that are required to make their resolutions by 30 June 2011 will face significant uncertainty.

Schedule 3 relates to the National Rental Affordability Scheme tax offset provisions.

The National Rental Affordability Scheme, which commenced on 1 July 2008, is a government initiative to stimulate the supply of new affordable rental dwellings.

The NRAS incentive was $9,140 per dwelling in 2010-11, comprising $6,855 from the Australian government and $2,285 from the states. These amounts are indexed annually in line with the rents component of the consumer price index.

These amendments simplify the operation of the National Rental Affordability Scheme for participants and provide some additional flexibility to NRAS participants in how the incentive is shared between members of the NRAS consortium participating in this National Rental Affordability Scheme.

Importantly, these amendments introduce the concept of an NRAS consortium, which is less restrictive than the existing non-entity joint venture provisions.

The Australian Taxation Office interpretive decision in 2009 highlighted that certain head-lease and sublease arrangements used in NRAS might not allow the NRAS tax offset entitlement to flow through from the 'approved participant' to the ultimate investor.

These amendments address this situation by allowing NRAS approved participants deriving NRAS rent to make an election to relinquish their entitlement to an NRAS tax offset in favour of other members of their NRAS consortium.

These amendments also recognise that certificates issued by the Housing Secretary under National Rental Affordability Scheme are issued to the approved participants (rather than the consortium) and ensure that certain payments provided under NRAS indirectly, such as through an NRAS consortium, are treated as 'non-assessable non-exempt income'.

Although the amendments do provide additional flexibility for those participating in NRAS, it is prudent for taxpayers to seek advice from the Australian Taxation Office about the detailed structure of their particular NRAS models and their ability to access the NRAS tax offset before investing in the National Rental Affordability Scheme.

Schedule 4 implements the 2011-12 budget measure to phase out the dependent spouse tax offset.

The dependent spouse tax offset originated around three-quarters of a century ago—at a time when the single-income family was the norm and the welfare system was in its infancy. This was a time when a breadwinner was expected to 'maintain' a spouse even without children, and there were limited employment opportunities for women.

In today's modern economy, where unemployment is forecast to fall to 4.5 per cent, an expanding workforce is vital for the strength of our economy and the living standards of our community.

This is why the government is phasing out the tax offset for dependent spouses currently aged less than 40 to help encourage more Australians into paid employment.

From 1 July 2011, taxpayers with a dependent spouse born on or after 1 July 1971 will no longer be eligible for the dependent spouse tax offset.

Dependent spouses with children are not affected by this measure, nor are taxpayers whose dependent spouse is a carer, an invalid or permanently unable to work. Taxpayers eligible for the zone, overseas forces or overseas civilian tax offsets are also not affected by this measure.

If the amendments in schedule 4 are not enacted by 30 June 2011, some taxpayers may not be able to use the pay-as-you-go withholding system to claim their benefit during the 2011-12 income year.

The final schedule, schedule 5, implements the 2011-12 budget measure to introduce a single statutory rate of 20 per cent, regardless of distance travelled, for car fringe benefits valued under the statutory formula method.

Under the current statutory formula method, the calculated fringe benefit from a salary sacrificed or employer provided car decreases as the distance travelled by the vehicle increases. People can therefore increase their tax concession by driving their vehicle further. This schedule removes the current incentive for people to drive vehicles further than they otherwise would, just merely to increase their tax concession.

The log book method will still be available for cars with genuine work related use. This means that users will be able to ensure that actual work related kilometres of travel continue to be tax exempt.

This reform applies to commitments made after the budget announcement on 10 May 2011 and will be phased in over four years. Existing contracts will not be affected.

Both schedule 4 and schedule 5 implement further recommendations of the Australia's Future Tax System Review, and continue the process of tax reform started in May last year with the release of the government's Stronger, Fairer, Simpler package of reforms.

Full details of the measures in this bill are contained in the explanatory memorandum.

Debate adjourned.

Mr GRAY (Brand—Special Minister of State for the Public Service and Integrity and Special Minister of State) (11:21): I move:

That this bill be now read a second time.

The Financial Framework Legislation Amendment Bill (No. 1) 2011 would, if enacted, amend eight acts across five portfolios to help further clarify aspects of the Commonwealth's financial framework.

This bill is the eighth financial framework legislation amendment bill since 2004 and forms part of an ongoing program to address financial framework issues as they are identified, taking a collaborative and whole-of-government approach.

The work behind this bill has already been partially presented to parliament through the Statute Stocktake Bill (No. 1) 2011, which I tabled on 23 March 2011, to repeal 39 redundant special appropriations relating to the Commonwealth's financial framework.

The breadth of appropriation, governance and financial management issues across the government compel continued attention. For this reason, the Department of Finance and Deregulation works with all parts of government, in a culture of strong collaboration, to address statutory financial framework issues promptly.

Accordingly, this bill seeks to amend two acts in the Finance and Deregulation portfolio, but also six acts in four other portfolios. These are: the Attorney-General's portfolio; the Agriculture, Fisheries and Forestry portfolio; the Climate Change and Energy Efficiency portfolio; and the Innovation, Industry, Science and Research portfolio. Specifically, schedule 1 of the bill contains minor amendments to the Commonwealth Authorities and Companies Act 1997 to enable the content requirements for the corporate plans of government business enterprises to be specified under regulations, rather than in the act. This allows that content to be updated more readily.

Schedule 2 of the bill contains minor amendments to the Financial Management and Accountability Act 1997 (FMA Act) primarily to clarify the legal status of various legislative instruments, such as determinations, instructions, and guidelines issued under the act or under its regulations. There is also an amendment to clarify that the Auditor-General is the external auditor of FMA Act agencies.

Schedule 3 of the bill then makes consequential amendments to the Legislative Instruments Act 2003 and removes reference to an instrument under the FMA Act that is now redundant. As a result, the matters dealing with the Legislative Instruments Act 2003 will be covered in the FMA Act alone.

Schedules 4 to 8 of the bill contain minor amendments to five acts of parliament.

These amendments seek to:

update the Wheat Export Marketing Act 2008 to clarify the scope of credits to the Wheat Exports Australia Special Account;

amend the Wine Australia Corporation Act 1980 to update the circumstances in which the Wine Australia Corporation must provide their annual operational plan to the responsible minister, and clarify the term in office of a member of the Geographical Indications Committee;

update a reference in the Renewable Energy (Electricity) Act 2000 to the 'Australian Bureau of Agricultural and Resource Economics and Sciences';

remove a redundant reference to the former name of the 'Australian Bureau of Agricultural and Resource Economics and Sciences' in the Primary Industries (Excise) Levies Act 1999; and

repeal a redundant paragraph and make technical amendments to the Science and Industry Research Act 1949.

This short bill is, accordingly, another step to help ensure that specific provisions within our financial legislation remain clear and up-to-date. I commend the bill to the House.

Debate adjourned.

Mr GRAY (Brand—Special Minister of State for the Public Service and Integrity and Special Minister of State) (11:25): I move:

That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Integrated fit-out of new leased premises for the Australian Taxation Office at 55 Elizabeth Street, Brisbane, Queensland.

The Australian Taxation Office, the ATO, proposes to undertake an integrated fit-out of new leased premises at 55 Elizabeth Street, Brisbane, Queensland. The new premises will replace two existing ATO locations in the Brisbane CBD. The leases for the existing properties will expire in June 2013 and February 2014. It is expected that the relocation into a new building will provide the ATO with considerable advantages in terms of building design, operational performance, operating cost efficiencies and long-term viability through improvements in site infrastructure.

The estimated out-turn cost of the proposal is $33.1 million plus GST. Subject to parliamentary approval, the proposed integrated fit-out works are scheduled to start in May 2012 and be completed by 1 May 2013. The developer commenced base building works on site in May 2011, with demolition and excavation for the basement areas being the first task. The ATO is expected to take up occupancy of the building in May 2013. I commend the motion to the House.

Question agreed to.

Mr HAYES (Fowler—Government Whip) (11:27): I present the report of the House Standing Committee on Publications. Copies of the report have been placed on the table.

Report—by leave—agreed to.

Mr FORREST (Mallee) (11:29): I am pleased to have an opportunity to offer some comments in regard to a very important subject, aged care, in the context of this bill, the Aged Care Amendment Bill 2011. In all my time as a member of the federal parliament representing the good people of Mallee, aged care has been the issue that has kept the office busiest in ongoing representation both directly to the operators of aged-care facilities and to governments in all places. It is certainly a top-of-mind issue across the north-west of Victoria. In fact, in my own case, going back many years before my time in parliament, I had to find accommodation for my late father, way back as far as 1990, through the terrible nineties. I remember my mother saying to me, 'Son, someone must go to Canberra and get this fixed up,' as we waited, like so many families wait, for the place and acceptable care that we as a family wanted for someone we loved dearly. Sadly, my mum has now passed on as well.

It is somewhat refreshing to be able to say that the nature of the workload has changed over the years, although some very deep concerns remain. That is especially the case for the baby boomer generation that is coming on, which probably includes me, which has very high expectations for the standard of accommodation it will receive. Another, very serious issue is that of finding suitable accommodation for dementia patients across north-west Victoria.

I am in general support of the legislation—it is necessary—but I support the coalition parties' amendment, which highlights and gives us an opportunity to talk about the restrictions that apply with regard to regulation and to express our disappointment at the government's broken promise to the sector, made at the last election, that it would relieve some of the intense paperwork. I recall the government's commitment that for every new regulation it would find one it could repeal. When I spend time with the excellent nursing staff and professional people who look after our aged-care residents, I find their constant complaint to me is about the amount of time they spend attending to the paperwork, relating to the particular plan of care for a patient, that is needed for accreditation. It is fairly rigorous and it is time consuming. It takes them away from the ward and from the beds where they are needed most to ensure that the clients of aged-care facilities are well looked after.

Mallee would probably have the largest number of aged-care facilities of all the electorates in Australia—there are 47 in total. I have not had time to check every other constituency, but that is a huge number and reflects the fact that every small community across the north-west of Victoria has a small aged-care facility. Some of them are very small, their bed numbers can be as low as 10 or 15, which makes sustainability a challenging issue for them. In fact, as a result of the recent redistribution in Victoria, Mallee has grown yet again. The member for Mallee now represents the fine rural city of Stawell, which means two more aged-care facilities there—the Macpherson Smith nursing home and Eventide—will become part of his responsibility.

The 47 aged-care facilities in Mallee are of a mixed nature. They are predominantly community owned organisations. A lot of them come out of the old post-war bush nursing hospital model—they are basically owned by communities. There are only two professional, for-profit aged-care facilities run by private operators in my entire electorate, which are in the strong provincial city of Mildura. The rest are operated either by government agencies or by not-for-profit church groups and community owned organisations.

The compliance issues, as I have mentioned, are a chore. I have been very alarmed at the willingness of health departments, particularly in Victoria, to launch into punitive action for what I consider to be minor breaches of the paperwork trail. I have been disappointed with that and have expressed that disappointment to the department. Over the last two or three years, three of my organisations have been put into one level of sanction, not because they did something wrong, not because someone's rights were abused or they suffered some terrible incident in the nursing home, but because of the potential for that to occur. I think that is a bit harsh and sends very strong signals to my organisations. As a result, they have been spending an inordinate amount of time, I believe, on the regulation and the paperwork, when their attention really ought to be at the coalface. They should be making sure that those people who are in nursing homes and hostels are enjoying their twilight years and that their families are content that their loved ones are receiving the best possible care and attention.

Last week, I had representations from a family from Mildura. Their loved one has a very severe case of dementia and is so disoriented he becomes violent. They were very concerned because three accommodation options have been tried for this man and it looks like he may have to move as far away as Bendigo, which will require a 5½-hour car drive when the family visits him. He needs really particular care because his dementia is so disorienting that he becomes violent with anybody who tries to manage and offer care to him. It is a very sad situation. I am advised by Alzheimer's Australia that dementia is going to be a massive challenge for the nation in the next 30 years. In fact, last year they said to me that the likelihood is that Mallee will have a dramatic increase in the number of dementia sufferers, which reflects what they predict will happen for the rest of the nation. They predict that dementia will tip 246,000 people in Victoria by 2050. Unless there are some medical breakthroughs that can meet the challenge of understanding why this disease occurs, the impacts on my constituency will mean a 443 per cent increase in dementia sufferers in north-western Victoria. That is a frightening concept. On top of the challenges that my aged-care facilities currently endure, meeting a demand like that is going to be a huge challenge. It will mean a huge amount of capital. It will be the responsibility of this place to ensure that the parliament can assist them in a task like that.

I remember from my own family's experience that it is a terrible and traumatic time for families as they go through finding suitable and acceptable accommodation for their loved one. It is a terrible time and loved ones do not necessarily think or express themselves clearly. I have noticed in the last few months, particularly with the events that have occurred in north-western Victoria with the floods and now the loss of two aged-care facilities—one in Donald was flooded and basically has to be rebuilt and the other was in Charlton; that is about 80-odd residents that are now scattered across north-western Victoria trying to find alternative accommodation as the community and governments decide what the future of Charlton and Donald really is—the number of representations coming through to my office increasing as a result of that as families are faced with the prospect of a two- or three-hour drive to see their loved one. That is just not acceptable.

I am calling on particularly the Victorian government to find a quicker resolution to the challenges in Charlton. It needs a new hospital, it needs a new medical surgery and it needs a new aged-care facility. They were all in one complex that was completely wiped out in the January floods. And that was their third flood in less than six months. That has put pressure on the issue of aged care in Mallee, and I am looking forward to working with both governments to find a much readier solution to that issue there.

I would like to put on the record my appreciation for the tremendous staff who support and provide the care in these facilities. I often say that there are two professions that have my enduring affection. One is school teachers, who spend more time with our children than we as parents do, and the other is nurses. That is not because I am married to one; it is because of the wonderful work they do. Sometimes it is tireless, sometimes it is in the middle of the night and sometimes, with the nature of the illnesses of aged people, it is the same old thing over and over again. Yet, there they are, tending in a caring way. It gives enormous comfort to families when they see their loved ones being treated well.

This legislation makes it a little easier for a complaint to be made. Often the complaints are minor but the residents are reluctant to make them. I remember at one institution—I will not say where it was—where all the resident wanted was to have bananas in her diet on a regular basis and was frightened to ask, reflecting the nature of country people, who do not like to be considered troublemakers. All she wanted was banana in her diet on a regular basis. I was able to put that question and have it fixed. But if patients and people who are in these facilities have a reluctance to put their case then I do not think that is fair. Often unhappiness could be avoided if the process for making a complaint was much easier and the person making the complaint was confident that there would not be repercussions.

I support this legislation. I am appreciative of the fact that it has come forward. It is confirming and making much clearer the responsibilities for the huge number of deposits that are now in place for aged-care homes. I think it is in the order of $12 billion. It is accumulating all the time. I think access to that level of capital is helping to alleviate some of the problems of limitation of capital to improve the conditions in some of the facilities across my constituency. I am generally in support of the bill and I thank the government for putting it forward.

Mr BALDWIN (Paterson) (11:42): I rise today to address the Aged Care Amendment Bill 2011, which proposes changes to the Aged Care Act of 1997. This bill is designed to strengthen protection for those who pay accommodation bonds to aged-care providers. It is also designed to improve complaints handling processes when it comes to aged-care providers that are funded by the Commonwealth. If passed, the amendments will take effect later this year.

One of the functions of this bill is to ensure that accommodation bonds paid to our aged-care providers can be used to support the sector itself. It is right that this government should do something to help support our nursing homes because it is a sad reality that our aged-care providers are struggling to survive, despite their vital role in our community. In fact, a Grant Thornton aged-care performance survey in November 2007 found that almost half of our nursing homes were operating in the red. Almost half were in debt.

That rings giant alarm bells for my electorate of Paterson, where we have a large number of older residents. According to the 2008 census, there are almost 25,000 people aged 65 or over in my electorate of Paterson. That is one-fifth of the entire population of Paterson. Now, of course, not all of these people will rely on aged care. However, many of them well. And many more will choose to retire to our area because of all the wonderful things we have to offer. I have met hundreds of people who have moved to the Paterson electorate from Sydney and other areas after their retirement. It is vital that we get this right now so that the problem does not continue to grow.

The aged-care system is struggling to meet the demand as it is. As we know, Australia's population is rapidly ageing and the demand on aged-care services will continue to expand with it. This crisis was highlighted in the Sydney Morning Herald on 25 February this year. Mark Wetherell wrote:

Baby boomers taking a seachange in their dotage face the prospect of widespread shortages in aged care, revised projections of the impact of dementia show.

Australia will be 279,000 aged care places short by 2050 without significant policy changes, and hardest hit will be coastal areas popular with retirees, a study by Access Economics has found.

Paterson is one of those areas that Mark writes about—on the coast and popular for retirement. As a consequence, it promises to be one of the hardest hit by a shortage in aged-care places. As the article goes on to explain:

The expected growth points in elderly populations show that sea-change locations such as Port Macquarie, Tweed Heads and the NSW south coast would experience shortages of 2000 or more aged-care places by 2050 without a change in policy. In the Paterson electorate in the Hunter region, the shortfall would be just under 3000 places.

When I was first elected to this parliament in 1996 there was already a crisis in aged-care accommodation. If my memory serves me correctly, there were not much more than 500 aged-care beds in the electorate of Paterson. Since then, through government support and the allocation of bed licences to my electorate, that list has massively grown. We now have Great Lakes Nursing Home in Bulahdelah which expanded its operations under the coalition; Regis The Gardens, formerly known as Port Stephens Gardens, based at Corlette, a new facility opened by the now Deputy Leader of the Liberal Party, Julie Bishop; Lara Aged Care at Dungog, a great community facility which has grown but is addressing all of the challenges that are faced by a community aged-care facility; the Bill King Aged Care Facility at Fingal Bay, a great facility which combines retirement living and aged-care provision and which has grown and developed since the coalition government came to power; the BCS Kularoo Centre at Forster, locally known as Kularoo, which has also grown an expanded; Barclay Gardens in Forster; the Myall Lodge, which started off as a community facility but had to be transferred to much larger management because of critical mass considerations and the cost of providing care—it does a tremendous job at Hawks Nest; Largs Lodge at Largs; Raymond Terrace Gardens Nursing Centre at Raymond Terrace, a nursing home that was pulled down, totally redeveloped and expanded; Salamander Bay Aged Care Facility at Salamander; Harbourside Haven Nursing Home and Hostel at Shoal Bay; Stroud Community Lodge, which was built by the community with community support and is still run by the community of Stroud; Tanilba Bay Hostel, formerly started by the local government at Port Stephens but sold and passed on to Catholic aged care; Beaumont Terrace, another site at Tuncurry, which has been completely redeveloped an expanded; and Glaica House at Tuncurry, another project which has expanded its operations.

With all these expansions there are still not enough beds to cope with the demands that will be coming in the future. One of the sad things for nursing homes is that immediately after they expand their operations they spend an awful lot of time with empty beds until the demand grows in that local area. But, as the article I quoted says, Paterson's shortfall will be just under 3,000 places. The article also says:

In Victoria, similar shortages would be experienced in the Mornington Peninsula-Flinders area, the Gippsland coast and districts along the Great Ocean Road. In the Flinders electorate, the shortfall would be 2870.

As the shadow minister for regional development, these things concern me just as much as their local member. These are shortages of both nursing home care and community care packages. The most important question is: what can we do about the shortages? Decreasing the amount of regulation in the aged-care industry would be a start—it is the common complaint that I get from the operators of nursing homes. Only through deregulation can we start the ball rolling to make the industry viable. That is why the coalition has pledged to reduce Commonwealth regulation by $1 billion a year. Our Prime Minister, on the other hand, promised to repeal one regulation for every new regulation; but, as this bill shows, that was another election promise the Prime Minister never intended to keep, just like her promise, 'There will be no carbon tax under the government I lead.' It seems our Prime Minister will say and do anything to stay in government.

I am pleased to say, however, that there has been some positive movement on this issue in my electorate recently. As the Port Stephens Examiner reported on 25 May this year:

The Port's largest aged care provider is set to embark on a $21 million project that, when complete, will offer hospice, high care and villa-style accommodation.

The news comes after Port Stephens Veterans and Citizens Aged Care was recently granted licences for 60 new beds to create a state-of-the-art nursing home.

CEO Louise Watters said with each bed costing around $200,000 to adequately set up, the not-for-profit group will need to build extra villas to fund the project.

"The cost of the nursing home is going to be around $12 million because it is a unique style of care with the units above," Ms Watters said. "

So in order to do this we're looking to build 30 to 35 villas at Fingal Bay on land in front of the retirement village and 16 villas at Salamander Bay."

Conditions on the new bed licences require the nursing home to be operating by 2013, but Ms Watters said that it was likely the group would seek an extension to complete the project. The nursing home will provide high-level and hospice care as well as having units above in which partners can live.

She said the aim was to have development applications for the villas to Port Stephens Council by late July or early August with the villas built, complete and sold by the end of this year.

I am proud to report this investment in the House today. I only wish I could say that the government helped to make it happen. Unfortunately, not nearly enough has been done by the Gillard Labor government to help the aged-care sector grow in what we know is a market where demand will only continue to skyrocket. Under the previous coalition government we saw a record $2.2 billion funding packed for aged care. We opened new facilities such as Port Stephens Garden Nursing Centre, and helped regain control of the sector after Labor, having been in power for 13 years, had left Australia with a 10,000-bed shortfall. I urge the Gillard Labor government to do more to ensure that we are not left with a massive shortfall in aged-care beds and services this time around. That is why Labor must honour its promise to repeal one regulation for every new regulation and help make this aged-care sector viable.

Aged-care services do wonderful things in our community. I have visited the nursing homes in my electorates many, many times—more than I can count. I see the wonderful and dedicated staff at each and every facility. In fact, a dear friend of mine, Doreen Bradley OAM, recently lost her husband, Jack Bradley, who spent his final years in a nursing home in my electorate. Despite struggling with dementia, Jack was treated with the utmost respect and those at the home were always there to support Doreen. They tried to make it as much as possible like a real home and many of the staff provided immeasurable comfort to both Jack and Doreen, and for that I cannot thank them enough.

It is this amazing work that we need to foster and grow so that our elderly community gets the support it deserves now and into the future. They would not get such support if it were not for the dedication of those in our community, the staff that work in these facilities and in particular the volunteers who give of their time to make these people's lives just that little bit more comfortable. You see, the hardest part for those going into aged care is moving from their home, from their family, from their support networks and from their friends. That is the hardest thing to replicate. That is where I want to pay tribute to the volunteers who regularly go to the nursing homes and try to replicate that environment for them. What we must do is treat the elderly in our community with the utmost respect. In fact, society is measured not just by how we treat and bring up the children in our community but, in particular, how we treat those at the other end of the spectrum that are towards the end of their lives' journeys.

I want to commend each and every one of the facilities in my electorate. Since the time I came to this parliament in 1996—besides the break from 1998 to 2001—through to today, I can count on one hand the total number of complaints I have had in relation to all the nursing homes in my electorate. That shows the quality, the calibre and the dedication of those people to providing a quality service to those in our community, and I commend them for that.

This bill will have some flaws in some of the regulations. I was here in 1997 when a bill was put forward to raise accommodation bonds. I remember the hue and cry from members now occupying the government bench that this was immoral, that this was taking away the kids' futures. There were some epic speeches by people who now occupy the front bench as well as the back bench. And here they are now promoting this program. More needs to be done. The funds need to be managed better and there need to be greater incentives to increase the investment in aged care. As pointed out in all of the reports, there is a massive need to increase the amount of aged care in our community. Only if we make it viable can we maintain the quality of that aged care in our community.

Mr BUTLER (Port Adelaide—Minister for Mental Health and Ageing) (11:56): I thank the member for Paterson for his contribution to this debate on the Aged Care Amendment Bill and for his interest in aged care. I thank members on both sides for their contributions to this debate, specifically about this bill but generally about the aged-care sector, which is such an important part of all of our electorates. I am very pleased to have the opportunity to sum up the debate on Aged Care Amendment Bill 2011. This bill seeks to amend the Aged Care Act 1997 to increase protection for accommodation bonds and to strengthen complaints management in aged care as part of the government's commitment to providing better health and better care for older Australians through the National Health Reform Agenda.

Since the introduction of the Aged Care Act in 1997 there has been very strong growth in the value of accommodation bonds held by the sector. 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 about $11.2 million and the average new accommodation bond charged during the financial year was around $232,000. This is a significant amount of funds held by aged-care providers on behalf of their residents and, as the Australian population continues to age and the demand for aged care increases, the funds loaned to approved providers through accommodation bonds will continue to grow.

This bill provides greater clarity about the uses of accommodation bonds and strengthens the link to investment in aged care. Specifically, the bill reinforces that bonds taken after 1 October this year should be used for capital expenditure at aged-care services, repaying debt associated with capital works and refunding existing bonds. The bill also makes it clear that accommodation bonds can be used for investment in a broad range of financial products, consistent with current practice. 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 has at least one outstanding bond balance. In the very worst of cases, offences would 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, but had not taken, reasonable steps to prevent the misuse. These changes will reinforce the significance of approved providers' obligations to their residents in dealing appropriately with residents' funds and ensuring that refund obligations are met. Accompanying these changes all restrictions on the use of income derived from bonds, retention amounts and accommodation charges will be removed. This will free up these funds for use by approved providers, reduce regulatory burden and focus the regulation on the risks of the bond principle.

The bill also proposes to enable the investigation principles to be replaced with new complaints principles. The proposed new complaints principles will describe and improve the complaints scheme for aged care, with a stronger focus on resolution of complaints. This will provide consumers with a more flexible scheme where a range of options are available for assisting to resolve a complaint, including early resolution, conciliation and mediation.

I would like again to thank members for their contributions to the debate on the bill. It has underscored the importance of the role played by the aged-care sector now and into the future across the country. It has also highlighted the importance of achieving a balance between effective regulation to protect vulnerable and elderly people and reducing the regulatory burden on the aged-care sector. These changes will promote public confidence in the aged-care industry, provide regulation that is commensurate with the risks associated with bond holding in the aged-care sector and improve the way in which complaints are managed in aged care.

The government does not agree to the second reading amendment proposed by the shadow minister. Beyond saying the amendment clearly strays beyond the scope of the bill, and indeed beyond the scope of the principal act, it simply misconceives the effect of this bill. To recap, the effect of this bill is simply to clarify the original intent of the accommodation bond system, which was to provide a capital funding stream for the aged-care sector, and it actually removes regulation about how providers will be able to use literally hundreds and hundreds of millions of dollars of income every year.

I repeat: this bill removes regulation on the way in which aged-care providers can use the income that they derive from the bond principal, it removes regulation on the way in which aged-care providers can use the retention amounts extracted from the bond principal, and it removes regulation over the way in which aged-care providers can use accommodation charges paid by residents in high-care facilities—literally hundreds of millions of dollars of income are freed of any regulation by this bill. It also removes a range of redundant provisions, including two pieces of redundant legislation. For those reasons we oppose the second reading amendment proposed by the shadow minister and commend the bill to the House.

Question put:

That the words proposed to be omitted (Mr Dutton's amendment) stand part of the question.

The House divided. [12:06]

The Speaker (Mr Harry Jenkins)

Question agreed to.

The SPEAKER: As has just been decided, a cognate debate will be allowed, which will include this bill, the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011.

Debate resumed on the motion:

That this bill be now read a second time.

Mr IAN MACFARLANE (Groom) (12:21): I rise today to speak on the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011. What we are seeing from the Gillard government with this set of bills is another attack on the cost of living of all Australian families. The first three bills deal with the taxation of gaseous fuels for motor vehicles. They will apply a tax to LNG, CNG and LPG. They will apply a tax to mum's taxi. They will apply a tax to the taxi fleet. They will apply a tax to the public transport systems, particularly those of cities such as Sydney, Perth and Brisbane, whose buses use compressed natural gas not only to lower emissions but also to lower pollution. These buses burn cleaner and provide Australia with an opportunity to use some of the overwhelmingly ample resources that we have in natural gas.

Australia is a very lucky country. We are self-sufficient in energy. We are, in fact, one of the few OECD countries that export energy. That energy comes from a number of sources. It comes from coal, and we are the biggest exporter in the world both of coking coal for the manufacture of steel and of steaming coal for the production of electricity. That energy comes also from LNG, liquefied natural gas, of which similarly we are a very significant exporter. We have a supply of gas in Australia that will probably last a couple of hundred years, at a bare minimum, based on current reserves, and it makes sense to use that resource here in Australia in transportation fuels, which is the one area in which we are deficient. We import almost 50 per cent of the petrol, diesel and crude oil that we use in our transport fleet. Finally, the energy comes from liquid petroleum gas, LPG, of which we are also net exporters, and while many of us in this place know LPG as the thing that runs our barbecues and, in some cases, our hot water systems and stoves, LPG's main use is in transportation fuels. It makes no sense to apply a tax on those fuels.

On top of the increases to electricity prices and the cost-of-living expenses that will occur as a result of the carbon tax, families and businesses now face further pressure on the cost of fuel because of the Gillard government's policies. Unfortunately it is no surprise, bearing in mind that this government is so out of touch, that the most critical component of the family budget—that is, fuel for the motor vehicle—is now in the sights of the Gillard government. As we see from these bills, the intention of the government is to raise the cost of those fuels to those families using LPG in their vehicles by 20 per cent. This is not a small increase; this is a major hit on the family budget, an attack by the Gillard government on the purse strings of everyday Australian families already struggling under massive increases in electricity prices, gas prices, water charges and other living costs. These increases are soon to be made even more massive by an ill-conceived carbon tax, which will add a further cost, including in the area of transport, to all Australians.

Applying an excise of 12½c per litre on LPG makes no sense at all. This government runs a program to encourage families through a financial incentive to convert their vehicles to LPG by offsetting some of the cost of conversion, yet with all that encouragement the government is really just setting a honey trap: 'We'll get these vehicles onto LPG and then we'll increase the cost of LPG by 20 per cent. We'll increase the tax to make sure that these families can no longer cope with the pressures of the cost of living.'

Currently 283,000 vehicles have been converted to LPG under this government scheme. Every single one of those vehicles is owned by a family. This scheme is not open to commercial vehicles, not open to fleet vehicles and not open to business vehicles; it is only open to family owned vehicles. There are 283,000 vehicles that are owned by 283,000 families who will wake up, if these first three bills pass, to higher fuel costs. There is absolutely no justification for this. Why is the government doing it? It needs the money. Why does it need the money? It wastes money. This is an old-style spend, waste and tax government of the kind that we see from the Labor Party every time they sit on that side of the Speaker. Every time a Labor government holds the Treasury benches, it spends and wastes money until it has no option but to increase the taxes on the people of Australia. This tax on Australian families is intolerable, and the opposition, hopefully with the support of the Independents, will do everything we can to defeat these first three bills. Along with those 283,000 vehicles, there are another 400,000-plus vehicles that have already been converted and a majority of those vehicles would be owned by families. Some of these families would have bought them second-hand from a car yard in the expectation that they would be able to continue to use these vehicles to lower the cost of living, to lower the cost of taking their kids to school every morning—mum's taxi—and to lower the cost of running a family in Australia under a government that is so out of touch. Costs rise every day and soon with a carbon tax those costs will rise even more steeply.

What we see in these first three bills is a government desperate for money to fill the enormous black holes that it created by wasting money under the home insulation scheme—that was $2 billion up in smoke. Four times what it is going to get from this scheme has already been wasted and you wonder how the families of Australia feel about that. Of course, the wastage in that area was small compared to the wastage under the Building the Education Revolution scheme, where billions and billions of dollars were overspent. Again, that was many times the money that is going to be raised from this scheme.

When the people who sit on the opposite benches go back to their electorates what do they say when families ask them, 'Why are you putting up my fuel costs by 20 per cent?' I would be interested to hear the answer. Is it because they simply do not care? Is it because they are simply desperate? Is it because we know that they have gone from a cash surplus of $70 billion to a net debt of $107 billion? Is it because they have gone from a budget surplus of $20 billion to a budget deficit of $50 billion? Probably. I would like to give them the benefit of the doubt that they are not deliberately trying to destroy the family budget with this tax, but that it is actually because they are incompetent money managers and wasteful with spending. I would like to think that was the reason, but sometimes it is hard to accept that it is the only reason. It appears to me that it is more about this government being completely out of touch and completely lacking in compassion and understanding for the way in which families in Australia are currently struggling.

I note that the fourth of these bills, the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, is a bill which the coalition will support. It is a bill to extend the grants scheme to biodiesel and renewable diesel. As I said, in Australia we face a challenge in providing enough transport fuel. Logically, you would say that if you have an alternative fuel you would support it and not tax it. If you were awash with it you would not tax it. In the case of LPG we are awash with it, and I have covered that issue extensively. We are trying to build a biofuels industry in Australia. Along with the government, the coalition support the measures that have been taken, previously by the Howard government and continued by the Rudd and Gillard governments, to provide grants to the ethanol, biodiesel and renewable diesel industries to offset the excise which is applied to those fuels at the full rate of 38.143.

The Energy Grants (Cleaner Fuels) Scheme Amendment Bill is a worthy bill that the minister has brought to this House and it is one which the coalition will support because it maintains the grants for the biodiesel and renewable diesel industry. That is an industry that is doing it tough. That industry has faced unfair dumping competition from overseas supplies. I commend the minister for continuing what we started. He has not done anything more, but at least we should be grateful that he has not done anything less. With that certainty, at least through until 2020, I hope that the biodiesel industry, truly supported and protected from dumping actions by the anti-dumping legislation, will be able to resume some economic growth and help us supply the burgeoning demand for diesel fuel in Australia. We live in a region where diesel fuel is very much in demand. I am often asked by my constituents, particularly those constituents who drive diesel vehicles, why they have to pay more for diesel than they do for not only ULP but also higher octane petrol. The answer is quite simple: it is a case of demand. We live in the South-East Asian supply region where diesel is very much in demand not only for heavy equipment but also for transport fuels.

We can look at the trend in the motor industry in Australia. Much of the romance goes to the hybrid vehicles, and we are producing a hybrid vehicle here in Australia, the Camry, which is based on Toyota's Prius technology. There are a number of other vehicles around now that run on hybrid technology. If you want to buy a Porsche you can buy one that uses hybrid technology. But if you want to drive the most efficient vehicle in the world, as measured by litres per 100 kilometres—or, as my dad used to say, miles per gallon—you will drive a diesel vehicle. I think the turbocharged Volkswagen Golf holds the record at the moment. It is more efficient than a Prius and it runs on diesel. So if the opportunity is there for Australia to increase its self-sufficiency in that most efficient of fuels—diesel—through the production of renewable diesel or biodiesel then we need to ensure that those incentives continue. That is what this fourth bill does—it provides the incentive for diesel production.

We then move to compressed natural gas. It is a cumbersome fuel but one which has a place in the Australian urban environment, particularly for delivery vehicles or buses that return to a depot that can carry this bulky fuel. It is not liquefied; it is compressed. It takes up a lot of room and the tanks weigh a lot, but it has a very significant role to play in public transport. This is a fuel that we are trying to get into our bus fleets. Perth has about 300, Sydney has around the same number and growing, and Brisbane has also made an investment in these sorts of buses. These are buses which do not leave the particulates in the air, they burn cleaner, they provide an opportunity to reduce emissions and they will increase the efficient transport of people through the public transport system. So, what does this government do to those buses? It taxes them. And what is the result of that tax? Those buses will no longer be bought because the economics of running a compressed-natural-gas bus simply will not be there. So we will stop using a fuel that we are abundant in, so abundant that we export tens of millions of tonnes, and perhaps soon 50 million tonnes, of natural gas per year, in the form of LNG. So, instead of using a fuel that we are abundant in, this government taxes it to the point where it is not economical to use those buses, so the buses will go back to being diesel. Then there are all the issues associated with that, in terms of the balance of payments.

But those 900 buses already in use would face a fuel price increase of at least 20 per cent, in the case of CNG. That means that bus fares go up. Here we have a government that claims it is all about reducing emissions and introducing efficiencies and all about trying to get people to use public transport, but they are so desperate for money that they have these bills in the House.

So the mums and dads, and the kids going to school, who are already struggling with a household budget that is tight, with cost-of-living pressures growing every day for families, now have to find extra money for bus fares as well. When that family has to then use the other form of public transport, taxis, to perhaps take their elderly parents to the doctor or to attend an occasion somewhere without the family car, they are going to get hit again. This government reaches out to every part of sensible living and taxes it. We have a tax on family cars, a tax on compressed-natural-gas buses and we have also got a tax on taxis. The 19,000 taxis in Australia are going to see a 20 per cent increase in their fuel cost. And guess what? That means higher taxi fares in Australia, because the Gillard government cannot manage money. They are so desperate to get money into their coffers that they will literally tax anything that moves.

It does not end there. In Tasmania we have recently seen a very responsible decision taken there to put in place an LNG plant, not to export liquefied natural gas to our northern neighbours, but to run trucks. Trucks are big users of diesel. Diesel is expensive and in Tasmania it all has to be shipped there, so it made sense to power the logging fleet with LNG. LNG is already used on the mainland in trucks. People like Goulburn dairy co-op are using it in their milk trucks, Wesfarmers have been using it in their transport fleet out of Perth and a number of other installations have been mooted. This tax will kill that dead. Another opportunity to use our abundant natural gas to lower emissions, lower running costs and lower particulates is shot dead by this government, which is desperate for money. So the transport LNG industry will fold overnight, as well.

If it stopped there I guess we would say 'Whew, how much damage can you do in a day,' but there is more, because this tax will be administered in a way that means small businesses selling LPG—it might be for my barbecue, or the member for Bass's hot water system or it might be to a large commercial business user—have to acquit that in a whole new set of regulations and red tape, because LPG will now have a tax on it. So it will mean more work and more red tape for small business. It was small business people to whom the previous leader of Labor in opposition, Kim Beazley, was referring when he said: 'They are not the natural friend of small business.' But they do not have to show small business every day that when they wake up in the morning they will have a tax applied to them—to their motor vehicles if they are running an LPG vehicle—and also give them a heap of red tape to deal with.

This is bad legislation. It is not about improving inefficiencies in Australia. It is not about ensuring Australia is a better pace to live. It is legislation about taxing a fuel source in which we are abundant. It is legislation about taxing a fuel source that is efficient. It is legislation about taxing a fuel source that is a lower emitter. It is legislation about taxing the livelihoods of Australians. And it is legislation about increasing the cost-of-living pressures on families.

The opposition will oppose these first three bills. I flagged that we will move an amendment to the fourth bill. When I watched the minister presenting these bills a few weeks ago I could tell by the sly smile on his face that there was something in these bills that I had to go and look for. I looked hard and sought the advice of the library and they looked hard. And then we found it: the suicide clause. If each of these bills is not passed, none of them will receive royal assent. Here is a minister who is prepared to say to the biodiesel industry: 'If the opposition knocks over these bad bills on LPG, we are going to tax you at 38.143 cents.' This is not a minister who cares about the energy industry. This is a minister who is desperate for money.

Our amendment will break the nexus between these bills. It will ensure that if the first three bills are defeated, which they should be, and the fourth bill is passed, which it should be, then we do not have to rely on all four bills being passed to get royal assent. Our amendment will make the fourth bill, the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, effective from 1 July 2011. There should be no other way. You cannot leave the biodiesel and renewable diesel industries swinging in the breeze while the minister who sits opposite plays games with their livelihood. As I said, the biodiesel industry has been through enough already. We need to give that industry certainty, and it is the coalition, as usual, that has to do that.

I will be interested to listen to the contributions from the other side. I will be interested to hear how they justify increasing the cost of living for families. I will be interested to see how they can be so oblivious to the circumstances we currently find ourselves in, which is the reason the Howard government never proceeded with this.

Mr Champion: It's their plan.

Mr IAN MACFARLANE: He says, 'It's their plan.' We never presented legislation in this House when families were in financial crisis, because we knew, we were in touch and we understood. We believed in making sure that there was no pressure put on families by a tax. This government is mindless and careless to that fact. It knows families, or it should know families—

Mr Champion interjecting—

Mr Lyons interjecting—

Mr IAN MACFARLANE: Perhaps the interjecting members opposite do not care or perhaps they do not know—perhaps both—but we know that families are under pressure now, just as we knew when we were in government, which is why we never proceeded with these bills. Those members are now saying to their electorates, 'We don't care that we're going to put your price of LPG up by 20 per cent.' I say to them: you had better hope we save you by defeating these bills.

Mr LYONS (Bass) (12:46): This is the first time I have spoken with you in the chair, Mr Deputy Speaker Adams. The electorate of Lyons is a great electorate. I rise in the House today to speak on the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Ethanol Production Grants Bill 2011, the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011.

The current taxation arrangements for fuel impose excise on certain domestic manufactured fuels and excise-equivalent customs duty on relevant imported fuels. Fuels subject to fuel tax include petrol, diesel, fuel oil, kerosene, benzene, toluene, xylene, biodiesel and fuel ethanol. The bills before us today reflect policy first announced in 2003 in the Howard days, implementing longstanding plans to bring alternative automotive fuels into the fuel taxation regime on the basis of their energy content, with a discount of 50 per cent to reflect the benefits of alternative fuel use. The Truck Industry Council, in its submission to the Implementation Of Alternative Fuels Taxation Policy inquiry, stated:

The principle of applying excise according to the fuel's energy content is considered fair and equitable.

It is worthy to note that the financial impact of the alternative fuels taxation measure has been included in the forward estimates since the 2003-04 budget. Taxation of LPG contributes to the largest part of this revenue. Essentially, these bills bring certain alternative fuels used for transport purposes into the fuel taxation regime and make them subject to the excise duty or excise-equivalent customs duty. The fuels affected include liquefied petroleum gas, LPG, and compressed natural gas, CNG.

It is important to note that only fuels used in vehicles will be taxed. Fuel for domestic use, such as for barbecues and heating, will be exempt from the tax. The rates for these fuels are based on the energy content of the specific fuel and are discounted by 50 per cent to reflect the potential benefits of these alternative fuels. The changes are phased in over a transition period to allow affected parties time to adjust to the changes. This is very important. Three tax bands are now used to reflect the energy content of the fuels: high, medium and low. Methanol, LPG and compressed natural gas are currently outside the fuel tax system and are thus excise free. We recognise that there has been considerable debate about this. We took steps to consult with industry about this bill and, as a result of those discussions, the introduction of the excise was pushed back from July 2011 until December 2011. It is important to note that there is a five-year transition period to phase in taxation on alternative fuels such as CNG, LPG, methanol and biodiesel. The bills allow for a longer lead-in period for ethanol, which will be subject to a 10-year phase-in period.

Taxing alternative fuels improves the operation of the fuel market by enhancing competition between the different types of fuel, improving market efficiency, economic choice and the consequent allocation of resources. Ethanol is a renewable, environmentally friendly source. It is sourced from natural products, like annual sugarcane crops. Blending ethanol and petrol in various proportions has been put forward as a means of reducing greenhouse gas emissions and alleviating adverse economic conditions in the sugar industry. Ethanol blended fuels represent 3.5 per cent of the world gasoline market. Ethanol blended fuels are widely used in countries such as the US and Brazil. In Brazil they represents 41 per cent of the local fuel market. I am pleased this bill has a 10-year phase-in period for the excise to allow this industry to grow. Presently, fuel tax on biodiesel is imposed on the full rate, as it is for petrol and diesel. Under these bills, biodiesel will be subject to fuel tax at a high-energy content rate of 100 per cent of the petrol and diesel rate but discounted by 50 per cent. Australia enjoys the lowest LPG prices in the OECD. By introducing taxation on these fuels, we bring Australia into line with the taxation treatment of LPG in most other OECD countries. Methanol has not previously been subject to excise or excise-equivalent customs duty. There is evidence to suggest that methanol is not widely used as a transport fuel, either directly in blends or as a fuel substitute. Under Australian fuel quality standards, methanol cannot be used as an extender or additive to petrol or diesel for commercial sale. This is due in part to the significant damage that methanol can cause to some engines designed to run on petrol or diesel. Methanol is mostly used as an industrial chemical and as racing fuel.

There has been some criticism that taxing LPG would have an impact on taxis. The impact of including LPG in the excise system on taxis depends on decisions by the state and territory regulators. If the excise is passed on in full, it could add approximately 3.5c to the average metro taxi fare trip upon the introduction of a 2.5c per litre excise on 1 December 2011. This will increase to approximately 19c for the average metro taxi trip when the final excise of 12.5c per litre is introduced in 2015. While the government is aware that the LPG industry does not want to be taxed until their market share hits 10 per cent—they are currently just under six per cent—this would blow a $600 million hole in the bottom line, and petrol and diesel, which are their main competitors, are all taxed. The majority of OECD countries, in particular France, Germany and the UK, as well as New Zealand, Canada and the US, all tax LPG to various degrees. In addition, the EU is looking to substantially increase the tax on LPG over the next five years to take into account climate change.

A sustainable alternative fuel industry will provide rural and regional economic development, create new jobs and revenue streams, help reduce our reliance on imported, finite fossil fuels, improve fuel security and improve air quality and the environment. Many of the alternative fuels subject to this excise are embryonic industries and we recognise this fact. Future Australian transport fuel energy security embraces two major changes: climate change and the transition from oil. Both these events will occur roughly at the same time. Climate change is the great challenge of our generation. Australia is very vulnerable to the effects of climate change. We are already the driest inhabited continent on earth, heavily exposed to the dangers of extreme heat and drought. We are home to many globally important and vulnerable ecological systems. Australians are overwhelmingly coastal dwellers. Our industries and urban centres face ongoing water limitations. Our economy, including food production and agriculture, is under threat. The longer we wait to act on climate change, the more it will cost and the worse its effects will be.

The government is currently developing an energy white paper that will look at alternative fuels policy more broadly. While the government has not made any final decisions about the treatment of fuel in the carbon price arrangements, a principle of carbon pricing is to apply a price that reflects the emissions of different activities. The government is committed to addressing the relative emissions generated by those fuels as part of its consideration of arrangements for fuel under the carbon price.

Australia has a lot of cars and trucks on its roads. Of the nearly 500,000 trucks on the Australian register, over 90 per cent use diesel. The alternative fuel debate is one well worth having. The government recognises that alternative fuels have the potential to reduce environmental harm as they have the capability to reduce Australia's carbon footprint. They provide an alternative to conventional fuels, which ensures that there is a wider and more diverse range of energy sources, and the alternative fuel industries create jobs, particularly in rural and regional Australia.

As the Assistant Treasurer, the Hon. Bill Shorten, stated in his first reading speech on these bills:

The support of the parliament for this legislation is crucial.

Under the former government's legislation that will apply unless new legislative arrangements are made, the taxation arrangements for both imported and domestically produced ethanol will both jump to 7.6c per litre from 1 July 2011. This will mean that on this date the net excise on domestic ethanol will rise by 7.6c per litre and the duty on imported ethanol will fall by more than 30c per litre. In addition, the tax on imported and domestic ethanol will continue to rise each year by more than 7.6c per litre until they are both taxed at the petrol rate of 38.143c per litre. Biodiesel will also be overtaxed from 1 July 2011 if the bills are not passed. The consequences of these arrangements would be devastating for industry. The Gillard government is committed to completing the unfinished business of the Howard government and to acting in the national interest. It is imperative to have these bills passed to avoid the unintended tax consequences on the ethanol and biodiesel industries.

Once enacted, the legislation will provide certainty for alternative fuels taxation so that industry will be able to make decisions, confident in the knowledge of the tax arrangements that apply.

…   …   …

It is critical that the bills are considered promptly in the parliament. Royal assent is necessary before 1 July 2011 to prevent the changes legislated for ethanol, biodiesel and renewable diesel by the Howard government coming into operation on 1 July 2011. These changes would seriously undermine Australia's renewable fuels manufacturing industry.

These bills have been developed following an extensive consultation process with industry that included the release for comment of a discussion paper and release of exposure draft legislation.

The alternative fuel industry should be aware that there will be a review after 1 July 2015, once the tax has been fully implemented. It is likely to consider the impact of the tax, its interaction with the carbon price and the market demand for these fuels. The government remains committed to ensuring that alternative fuels make an important contribution to transport fuel use in Australia both today and into the future. I commend these bills to the House.

Mr TRUSS (Wide Bay—Leader of The Nationals) (13:00): It is almost 10 years since I launched Australia's first national biofuels policy in Townsville during the 2001 election campaign. That policy set an objective that renewable fuel—namely ethanol and biodiesel—produced in Australia would contribute at least 350 million litres to the total fuel supply by 2010. To implement that objective the coalition committed to provide excise-free treatment of biofuels and a grant process, a capital subsidy for new or expanded domestic production infrastructure of 16c per litre of biofuel.

When the coalition moved in government to implement this policy in 2002, we witnessed one of the most dishonest campaigns ever launched by the Labor Party. Labor sought to discredit and denigrate the use of ethanol at every opportunity, with claims that it was damaging car engines—which was later proved to be false—and other similar claims which it systematically fed to its friends in the media. The ethanol industry still suffers today in the aftermath of that disgraceful Labor scare campaign. Nevertheless, the coalition's commitment was met. It certainly started slowly in the wake of the vilification campaign, but I am very proud that the vision that I outlined in 2001 has come to fruition. We now need to move to the next step, increasing the level of biofuels and renewables in our liquid fuel supply.

There have been many champions of ethanol over the years but none has been greater than Dick Honan. The Manildra group of companies have been real champions of the industry. They have a very innovative process, making ethanol as a by-product of their Nowra starch plant. They had a problem with effluent that needed to be disposed of and they developed a really clever solution. They had a lot of resistance from the fuel companies and they suffered very badly in the aftermath of the ethanol smear campaign, but they have won through and their product is now widely used across the country. Dick Honan, above anyone else, is the father of the Australian ethanol industry. He can be proud of his achievements but he knows that there is still a lot more to be done as well. There are other important contributors—particularly CSR and other players in the sugar industry, and I note the new grain based plant at Dalby—and a number of other innovative ideas, because ethanol can be sourced from a wide range of feedstocks.

Not much has changed since that time in 2001 as far as the Labor Party is concerned. The Taxation of Alternative Fuels Legislation Amendment Bill 2011 and the other bills before us show that, once again the government is incapable of producing a coherent policy response to an energy related issue. In June 2004, the then coalition government released its energy white paper, which proposed to adjust the excise rate applicable to all fuels based on their energy content relative to petrol. The rate was to be halved for alternative fuels as an industry development and environmental measure. The new rates were to be phased in from 2011 to 2015. This policy received bipartisan support at the time from the then Labor opposition. But the policy was not enacted in legislation before the coalition lost office, although significant good-faith investment was made in ethanol facilities by companies like CSR based on the white paper. The new income from the coalition policy was incorporated in the forward estimates in the 2010-11 budget papers, apparently without the Labor government even realising it had done it. On budget night, both the Treasurer's office and the office of the Minister for Resources and Energy denied that an excise on LPG was being introduced. But by 7 am the next morning the Assistant Treasurer and the Minister for Resources and Energy had issued a media release confirming that a new excise regime on alternative fuels would in fact be introduced after all and announced a consultation process.

After the 2010 election, as part of a deal with the member for New England, the government announced that ethanol excise would be phased in over 10 years, rather than five. This would have been an acceptable position had it applied to all alternative fuels but, inexplicably, the phase-in period for other alternative fuels was to remain at five years. This was stage 1 of the government's descent into policy confusion on this matter. Following the consultation process, on 24 January 2011 the Assistant Treasurer released an exposure draft of legislation. At the same time the government deferred the introduction of the new excise rates by five months, to 1 December 2011. This legislation would have allowed the excise-free import of unlimited amounts of subsidised ethanol from the United States. The US ethanol industry receives subsidies of $6 billion per year, or about 15c per litre, and also receives tariff protection, as does Brazilian ethanol. Under the government's proposed legislation, the Australian ethanol industry would cease to exist on 1 July this year. The United States also subsidises biodiesel, including exported biodiesel. It took the Minister for Home Affairs four months to act on Australian Customs recommendations that countervailing duties be imposed on subsidised US biodiesel, despite this being one of the most straightforward cases ever brought. The US government had legislated for the subsidies. They were clearly breaching the rules, but it took the government such a long time to act to protect the Australian industry, as it had an obligation to do—stage 2 of the government's policy confusion. Next, the member for New England indicated that, rather than just an extension of the phase-in period, he would prefer no excise on ethanol at all. It must be said that the member for New England is also not always particularly noted for his policy consistency. Remember his bill proposing that Australia reduce its greenhouse gas emissions by 30 per cent by 2020 and by 80 per cent by 2050? That is a position from which the member now distances himself.

Astonishingly, the minister did not bother to discuss the legislation with the opposition. He pulled the bills on the day they were scheduled to be introduced into the House—policy confusion stage 3. So now, with only seven sitting days left before excise is automatically imposed on ethanol, we finally get to the debate about the government's proposals, and what a mess it is. Ethanol, biodiesel and methanol are now to remain excise free for at least 10 years but LPG, LNG and CNG are to have excise phased in over five years at half the energy-equivalent rate. The minister even had the hide to criticise me for allegedly opposing bipartisan fuel tax arrangements while he himself was throwing the whole package out the window.

Indicative of the quality of this legislation is the regulation impact statement attached to it, which is actually based on the earlier legislation that the minister withdrew before it was even tabled. The regulation impact statement extols the virtues of imposing an excise on biofuels. 'Significant deviations from the announced policy may unsettle investment decision making,' it says. What a laughing stock the government has become. It is hard to justify treating some alternative fuels differently from others. In the case of LNG and CNG, use is restricted almost entirely to heavy vehicles. There is little financial gain to the government in taxing those fuels, the cost of which will fall disproportionately on bus users, particularly metropolitan bus users.

When we were in government, we implemented programs to help people with LPG conversion grants for new and used vehicles. It was the sound, environmentally responsible thing to do—$550 million was spent on grants to support 283,000 vehicle conversions or new LPG vehicles. Labor has halved and capped that program and will now tax people who have made the conscious decision to do the right thing for the environment. Adding insult to injury, Labor is singling out LPG, having shelved plans to tax ethanol and biofuels. Again, at the very least the government should treat all alternative fuels equally. Trying to pick winners puts the LPG sector at a distinct disadvantage.

This tax leap from zero to 12.5c per litre over five years will trap around 700,000 motorists, including families who can ill afford it—yet another Gillard government tax slug. It will also affect the fleet of small business operators and, notably, 70,000-plus taxis. The tax will be the death knell for the $300 million LPG conversion industry and its 2,500 employees, who have been hung out to dry by this government.

Labor's craving for new taxes is akin to that of a junkie looking for their next hit. What will Labor tax next? All this is on top of the all-pervasive carbon tax and the hikes it will impose on the cost of everything. At a time when Holden and Ford are releasing new Australian-built LPG vehicles, Labor has taxed the fuel. What of their green car plan? The logic and policy inconsistency shown by this government is simply beyond belief. The bill is a bizarre, counterintuitive twist from a government that claims the moral high ground on environmental matters. LPG is a cleaner alternative fuel. The Gillard government is now penalising the very drivers it should be rewarding. It likes to parade its environmental credentials but it is actually damaging the industries that could help reduce our CO2 emissions.

Finally, I would like to say something about the further development of the biofuels industry. The lack of consumer information on biofuels and the residual effects of the ALP campaign against biofuels use continues to lead to uncertainty amongst consumers about the benefits and safety of biofuels. Research on second-generation biofuels, such as ethanol from cellulose and biodiesel from algae, is lacking. Similarly, research is needed on optimisation of agricultural feedstocks and car-manufacturing innovation. What is needed is a support package comprising measures such as a consumer information campaign, guaranteed warranty cover for all Australian manufacturers of cars using E10 and research and support for the development of second-generation biofuels, including agricultural research.

There are many exciting opportunities available. Industry is now making important investment decisions which will underpin the further development of Australian biofuels. I commend Holden, on the launch last year of their E85 Commodore, and Caltex, for rolling out E85 outlets in capital cities and regions. Holden and Caltex, with other partners, are looking to establish a plant in Victoria to generate 200 million litres of ethanol a year from waste. Ford has focused on the LPG market and developed a new generation LPG engine which markedly improves engine efficiency. Toyota, of course, has gone down the hybrid route.

Only last week the CSIRO reported that Australia could cut jet fuel imports by $2 billion a year and reduce aviation carbon emissions by 17 per cent. But Australian research has only been laboratory scale to date, according to the CSIRO. These companies and research bodies deserve support within the framework designed to secure Australia's energy future. The government promised us an energy paper by 2009. Two years after this deadline, we are yet to see even a draft. The opposition will support the 10-year moratorium on excise on biofuels and methanol, even though the biofuels industry itself accepts that it will need to accommodate some excise in the future. The industry is entitled to 10 years of certainty to secure its future, and the opposition will provide that certainty.

But the opposition will not support the different treatment of different alternative fuels, as the government proposes. The opposition will not support the government's new excise on LPG, LCG and LNG, which will unfairly discriminate against public transport users, taxi users and motorists, who have invested in good faith in a clean fuel.

For a government that likes to pride itself on, and argue in the media about, its environmental credentials and that wants to impose new taxes to reduce CO2 emissions and to be a world leader in addressing climate change, this bill is incredible—a bill that will impose a tax on some of fuels that could in fact make a real difference.

Mr WILKIE (Denison) (13:15): I have mixed feelings about the government's package of bills regarding alternative and cleaner fuels: the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011. While I do regard the government's proposal regarding ethanol as wholly desirable, the move to put a 12½c per litre tax on auto LPG is deeply troubling.

Tasmania is the best place in Australia to live—as I am sure, Mr Deputy Speaker Adams, you are well aware—in part due to its isolation and small population. But this isolation and small population means we regularly pay more for basic everyday items such as groceries, electricity and fuel, even though the state's population earns less on average than people elsewhere in Australia. While shipping costs are often given as the reason for price discrepancies on our side of Bass Strait, the price hike at the Tasmanian cash register often reflects much more than the cost of transport, as is the case with LPG, where the industry is much less mature and thinner on the ground than on the mainland.

That is why I simply cannot support the proposed excise on LPG in the government's alternative and cleaner fuels package. Quite simply, this tax will have a patently disproportional effect on Tasmania, to the extent that I am very concerned that the market in Tasmania for LPG could collapse altogether.

The effect on the taxi industry in my electorate, in particular, would be catastrophic. Many of the vehicles use LPG—as they do on the mainland in the taxi industry—and the excise will surely mean that the state government, already guilty of flogging off too many taxi licences every time it needs more cash, will be pressured to approve fare increases. Moreover, taxi drivers in my electorate already work ridiculously long hours and take home a pittance—often just $5 or $6 an hour—so this excise can only make things worse for them. I simply cannot, in all conscience, come into this place and support a tax that will reduce their meagre income even more. Then of course there are the customers who are already struggling with the rising cost of living. Remember that many people who rely on taxis are elderly, disabled or infirm, and they are the last people who can afford 12½c a litre being added to their taxi's fuel bill.

Nor am I convinced that the proposed LPG excise makes sense nationally. Remember that successive federal governments have offered subsidies to encourage people to convert their vehicles to gas because LPG is an environmentally friendly, reliable and cost-effective alternative to petrol. I well understand why people who thought they were doing the right thing by the environment and their household budgets and who took advantage of the subsidies feel duped at the prospect of this tax on LPG. It is a pity that the government does not understand. Nor does the government seem to recognise that vehicles powered by LPG emit up to 13 per cent less carbon than petrol-powered vehicles. The proposed excise will add 12½c a litre to LPG and will push its price so close to petrol that it will scarcely be a viable alternative fuel.

In other words, LPG is a cleaner fuel and, for the life of me, I cannot see why we would slap a tax on it at a time when the country is on the verge of introducing a price on carbon. I trust that the government's muddled thinking on LPG does not forewarn of problems with its commendable move to put a price on carbon.

The government's proposal to put a tax on LPG makes no sense to me at all. For that reason I will not support the three separate bills to do with taxing LPG. In other words, I will not support the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011.

I will, however, support the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, because ethanol is of great value as an alternative fuel and Australia should move quickly to produce and use as much of it as possible. As long as fuel crops are not produced at the expense of food production—and in Australia they do not need to be—we should better embrace ethanol, because it is so obviously cleaner and more sustainable than petrol or diesel.

I applaud my colleagues the members for Kennedy and New England for their passionate advocacy for ethanol, and I look forward to working with my colleagues, as well as the government and/or the opposition, to ensure much greater production and take-up of ethanol over the coming years.

Mr TONY SMITH (Casey) (13:21): In following the member for Denison and his remarks on LPG, let me highlight that what government members in this House will do when these bills—the Taxation of Alternative Fuels Legislation Amendment Bill 2011 and cognate bills—come to a vote is knowingly vote to damage the LPG industry in Australia. Members opposite need to understand that. It is pure and simple. What we will have from senior ministers opposite is attempts to talk about what they say is their consistent policy. But what they will not talk about is the abject uncertainty they have created over so many months and the incompetent way in which they have come to the position they are in now. The previous speaker, the Leader of the National Party and the shadow minister on behalf of the coalition, just an hour or so earlier outlined very capably and in great detail the approach of the opposition to these four bills and our fundamental difference on three of those bills. In relation to those three, as I indicated, I wish to focus on LPG in particular.

When you look at the history of this issue, which they say they are interested in, you discover—

Mr Craig Thomson interjecting—

Mr TONY SMITH: And I would urge the member opposite, who talks so often before he thinks, to listen and learn the history. You discover that those opposite, despite what they have said in the past, have at every step—for reasons which I am oblivious to—taken action to damage the LPG industry in Australia.

To illustrate that point, let me depart from these bills for just a second, which I know you will allow me to do, Mr Deputy Speaker. I look back to 2006–07. My friend the member for Gippsland will know this, being a fellow Victorian, because the LPG industry is very important in outer suburban and rural electorates in Victoria. In 2006 the Howard government introduced the LPG Autogas tank rebate—and I concede it would have had a more eloquent name that would have formed itself into a nice acronym. The Labor Party at the time did not say anything, but in the 2009 budget they took action to cut back that rebate. They did not promise before the 2007 election that they would cut the rebate back.

Mr Craig Thomson: It is like Work Choices.

Mr TONY SMITH: The member opposite did not say to his electors that, if he were elected, he would support a cutback in that rebate, but the Labor Party did that, without notice, in the 2009 budget. Then just at the start of this year, when they were searching for savings, one of the first things they chose was this same scheme, and they chose to cap it. At every point since their election, when given an opportunity they have quickly taken action to damage the LPG industry in Australia.

The other important point that is lost on those opposite is the policy context today. Those opposite are introducing a carbon tax, a carbon tax which—as has been made clear in many forums in this House—they pledged they would not introduce. But they are introducing one, against their word to the electorate. There is talk of how petrol will be treated in that carbon tax. The government has hinted—and Professor Garnaut in recent days has suggested—that in introducing a carbon tax the government would simultaneously cut the excise on petrol. Those opposite will not disagree with that. That has been what Professor Garnaut has said. I imagine that, in introducing their damaging carbon tax, that is what those opposite will argue.

But there is no mention at all of LPG. There is no mention because it is not on their minds, unless they have an opportunity to damage the industry. In this whole context of rising cost of living, of families facing a difficult time paying their bills—as so many previous speakers on this side of the House have indicated—it is important to acknowledge that many of those who have taken up LPG, who have taken up that grant to get their car converted, are low- and middle-income families. Before the grant was cut, many took it up to have their car fitted with an LPG system or to buy, as you can these days, a car with a factory-fitted LPG system.

Those opposite will knowingly in this House vote to put up the price of LPG. They will do so in a way that they know will make life tougher for LPG users. But what about the industry? This is an industry that has dealt with the unexpected cut in the tank rebate that those opposite never mentioned before the 2007 election. Remember the good old days? The member for Griffith was the Leader of the Labor Party in 2007 and they were going to reduce the pressure on cost of living. They were going to have GROCERYchoice and Fuelwatch. Their third promise was not to cut the rebate for the installation of LP gas tanks in cars, but they went ahead and did it anyway and, in doing so, showed their true colours. The combination of these actions by the government and the fact that they have now rushed ahead with this legislation solely as a revenue grab, and off the back of increasing the cost-of-living pressures on the families that use LPG in their vehicles, has been to spread incredible uncertainty within the industry itself.

The Leader of the Nationals talked about the 2½ thousand people who work in the industry, and there is no doubt that those workers in the industry will face a tougher time. Some of those workers will lose their jobs if this government gets its way. The member for Corio, sitting opposite, has workers in his electorate. In the outer eastern suburbs of Melbourne there are significant LPG auto industries. It would be very hard to drive through any electorate if you cross Springvale Road, along those golden miles where the auto industry is so long, and not come across many industries.

The members for Deakin and La Trobe—Labor members who adjoin my electorate of Casey—need to know that in voting for this bill they will be voting directly against the interests of the workers in that industry in their electorates. The consequences that flow from this legislation will be their responsibility. This is a chance for some of those members opposite to show if they care about the working families they spoke about so often before the 2007 election and the last election and if they care about those working in industries like this. This is the chance to show they mean it.

But what we know over here is that, when given a choice between standing up for what is right and toeing the line for what they know in their heart is wrong, they will always choose the latter. The consequences of this legislation at this time, on the back of what the government is doing, for the reasons outlined by the Leader of the Nationals and the shadow minister, will be to put up the price of LPG, to make it harder for families, to put up taxi fares, as we said, but more than that—and I want to focus on this—to put in jeopardy some of those in the industry who are facing uncertain times through a combination of reasons. Some of those, as I have outlined, are the government's incompetence and the government's actions on LPG.

Those opposite will have a lot to say, but if they have any integrity they will stand up and say, 'Yes, we did break our word before the 2007 election, and we did cut back the rebate which we said we wouldn't do, and we fully understand what we are doing today.' But they will not. They can say what they want in this House, but I would ask them to do one thing in their electorates, and that is to visit some of the LP auto gas installers, talk to some of the workers and think about what it is they are doing—think about whether what they are doing on this bill is what they really came here to do.

Mr CRAIG THOMSON (Dobell) (13:35): In speaking to the Taxation of Alternative Fuels Legislation Amendment Bill 2011 and cognate bills I start with a quote. It says:

The reforms will establish a fairer and more transparent fuel excise system with improved competitive neutrality between fuels. They will provide the opportunity for currently untaxed fuels to establish their commercial credentials in the market place.

Who would have said that?

Mr Buchholz: Someone from outside parliament.

Mr CRAIG THOMSON: Yes, it was. It was in fact the former Treasurer, the former member for Higgins, who said that in 2003, supporting these pieces of legislation in pretty much their current form, except at that stage the then government was not prepared to give the tax breaks that these bills do to ethanol. We had from the previous government a position that is identical, except for us being more generous in our treatment of ethanol, to what is now proposed. What has changed since then is the Leader of the Opposition. We now have a Leader of the Opposition who has no interest in what is good for this country, has no interest in what is good public policy and whose automatic reaction to any legislation that we put up is no. What we have here is the ridiculous situation that he is opposing the coalition's own policies on these bills. It is not some Labor developed policy that we have suddenly decided that we need to put in place. This is something that your side announced in 2003, something that your side said it was going to do. We have the ridiculous position that the Leader of the Opposition is opposed to his own policies. The House must find that absolutely extraordinary. The Leader of the Opposition is opposed to the opposition's own policy positions. The only reason he is opposed to them is that we have introduced them. How can he ever come into this place and say that he has the interests of Australia at heart when he takes a position like that? How can he ever, on any issue, come in here and say, 'I'm in here to try and better the lot of Australians,' when he takes a position of opposing his own policies? It is an absolutely farcical situation that we find ourselves in. We on this side are absolutely stunned that these are the tactics that those on the other side have employed. We have got used to the negativity that we see from the Leader of the Opposition, but this is in another realm entirely. To oppose your own policy position because the Labor Party brought it into parliament I think must be a first in any Western democracy.

These are important bits of legislation for the reasons that the former Treasurer, Mr Costello, gave when he was the member for Higgins. Of course, it was not just the member for Higgins who had that view, either. The former member for Bennelong said that the reforms 'will result in a more consistent and neutral tax regime for fuels used in vehicles'. So the former Prime Minister and former member for Bennelong in December 2003 also supported these bills. The Deputy Prime Minister at the time, Mr Anderson, said that these bills 'emphasise the importance of investment certainty'. Can I say it is a very rare day that you find anyone on this side quoting the former Prime Minister, the former Treasurer and the former Deputy Prime Minister and saying they were right, but this is one of those days. The reason they were right was that those policies were in the national interest, and that is why we are prosecuting these bills. They are in the national interest. We have an incredible situation of those on the other side opposing their own policy position, which is just unbelievable.

Mr Stephen Jones interjecting—

Mr CRAIG THOMSON: As my good friend and colleague the member for Throsby points out, it is because, in the absence of any policy position on the other side, rather than be consistent with their own position in the past they would rather say no. They say, 'Look, we actually don't have any policies other than opposing everything the government puts forward.' That is where we are today. We have a very sorry opposition who have no position other than 'no'. They expect that they can lead this country on a negative position without a policy. It is an unbelievable situation that we are in.

These three bills, which are the ones that those on the other side have decided to oppose even though it is their own policy to support them, do not apply to liquid petroleum gas, compressed natural gas or liquid natural gas. These fuels were not previously subject to excise. These bills will now apply a 50 per cent excise, which is 50 per cent lower than that which applies to petrol. We have seen some incredible claims coming from those on the other side in relation to this, and one of them was that the opposition are opposing these bills because they are environmentally more sound in what they want to do. They say this will encourage people to use petrol. There is a 50 per cent discount on what applies to petrol, and the emissions that come from LPG are only 13 per cent less than those of petrol. So they are getting a 50 per cent discount for emissions that are 13 per cent less.

Mr Lyons: Not a bad deal.

Mr CRAIG THOMSON: That is not a bad deal. That is not a bad situation to be in. You only make 13 per cent less in emissions but you get a 50 per cent discount. Those opposite say that their opposition to this in some way means their green credentials are better, when we know that they do not believe in climate change. They do not have any rational position in relation to making sure that carbon is dealt with properly. They instead want to tax ordinary Australians, costing billions of dollars, and pay the polluters.

The Garnaut report the other day really did bell the cat in terms of the difference between the government's position on climate change and the opposition's. It was clear from the Garnaut report that the proposal from this side of the House is for a low-cost, sensible way of dealing with climate change—one that compensates households, as opposed to the one from the other side that attacks households and compensates big business and polluters. If anyone on that side says that their negativity in relation to these bills is about their green credentials, it just does not stack up against anything else that comes from the opposition. Instead, what we are faced with from those on the other side is a policy vacuum. They have taken the position they have on this bill because it is their standard line. Their standard line is: 'We oppose anything that the government puts up, even if it's our own. We're going to oppose it anyway.' We have this absolutely unbelievable position.

I had the pleasure of chairing the House of Representatives Standing Committee on Economics inquiry that looked into, investigated and reported on these bills. We received a large degree of evidence on the effects that the bills would have and the way they should be dealt with. In some senses, I am in an ideal position to make some comments about this. I know I will have to save those comments for another time.

Debate interrupted.

The SPEAKER: The question is that the motion be agreed to. I ask all honourable members to signify their approval by rising in their places.

Question agreed to, honourable members standing in their places.

The SPEAKER (16:09): I present Selection Committee report No. 23 relating to private members business and the referral of a bill to a committee. The report will be printed in today's Hansard. Copies of the report have been placed on the table.

The report read as follows—

Report relating to private Members’ business and the consideration of bills introduced 1 and 2 June 2011

1. The committee met in private session on 1 and 2 June 2011.

2. The committee recommends that the following items of private Members’ business listed on the notice paper be voted on:

Orders of the Day

House of Representatives Chamber

Malaysia asylum seeker proposal (Mr Bandt)

Select Committee on Australia’s Immigration Detention Network (Mr Morrison)

Criteria for independent youth allowance (Mr Pyne)

Main Committee

Defence houses at Eaton, NT (Mrs Griggs)

Greater Western Sydney Conservation Corridor (Mrs Markus)

Pharmaceutical Benefits Scheme (Mrs Moylan)

One-hundredth anniversary of the sinking of SS Yongala (Mr Christensen)

Fortieth anniversary of the Ramsar Convention (Mr Chester)

Death of Mr Greg McNicol (Mr Hunt).

3. The committee determined that the Family Assistance and Other Legislation Amendment Bill 2011 be referred to the Standing Committee on Social Policy and Legal Affairs for inquiry and report.