Mr FITZGIBBON (Hunter—Chief Government Whip) (12:01): by leave—I move:

That the bills be referred to the Federation Chamber for further consideration.

Question agreed to.

Ms LEY (Farrer) (12:02): I rise today to speak on the Equal Opportunity for Women in the Workplace Amendment Bill 2012. I say at the outset that the coalition is committed to gender equality both in and outside the workplace. As a nation we must continue to strive to ensure that all Australians irrespective of gender are afforded the same opportunities. Our side of politics has led the way on a number of key initiatives that benefit women. For example, in 2003 we enacted the Equal Opportunity for Women in the Workplace Act. We also introduced amendments to the Sex Discrimination Act to specifically identify breastfeeding as a potential ground of unlawful discrimination in the workplace. The funding of the Gardasil vaccine was another coalition initiative, and there were measures to address perinatal depression, funding for cervical cancer screening and numerous other initiatives. Our dedication to policy that specifically looks after women where required has not waned since we were last in government.

Of course, the coalition has proposed a paid parental leave scheme that is absolutely focused on equal opportunity for women. Our scheme would ensure that women are not being paid at less than their normal rate of pay when they take time off after the birth of their child. Our paid parental scheme has at its core a commitment to maintaining the financial security of women. Our scheme includes superannuation and pays real replacement wages, reducing the strain for many who would struggle to meet their financial commitments on Labor's scheme. By including superannuation we are ensuring that women will not be disadvantaged when the time comes for them to retire. These are not tokenistic measures but practical ones that assist in true equality.

We are also committed to flexible, affordable and accessible child care, recognising that paid parental leave and affordable child care are both key to encouraging women to return to the workforce. Yet this is something that Labor really struggle with. They have decreased the childcare rebate from $8,179, where it should be today, to $7,500, and their onerous red tape requirements for child care coupled with the increased staff-to-child ratios are seeing the cost of child care skyrocket. In my travels around the country I am constantly hearing from centre owners who do not necessarily disagree with increased staff-to-child ratios but wish that the government had listened to them when they asked for the changes to be rolled out gradually.

The government has also sought to burden them with a mass of paperwork, ironically reducing the amount of time a carer can spend focused on the children in their care as they are frantically filling out form after form instead of sitting on the floor and playing with the children. This Labor government is yet to learn that the way to go about gender equality is not through the imposition of draconian measures on business. Once again this bill sees Labor's cure-all as a plethora of red tape with a mass of reporting requirements for business.

Lest you think that I am putting my own interpretation on the bill, I refer to the Minister for the Status of Women and her second reading speech on introduction of the bill on 1 March 2012. By way of an aside, I suspect that it was designed to come into this place on International Women's Day, 8 March, and to be talked about when topics of gender equality around the world were a subject of discussion. But I cannot remember how many times this bill has been shunted to the back of the legislative agenda. Ten times I have been ready to stand up and speak on it and 10 times it has been moved away, so just how important was it really for the government to talk about these issues? We think there is another agenda at play.

But to come back to the minister's second reading speech: she told the House what this is really about. The minister made the point in that second reading speech that it is about closing the gap between men's and women's workforce participation, that it will improve gender equality outcomes and simplify reporting for businesses and that it is an important component of the government's workforce participation and human rights agenda, which is certainly giving it a grand scope. I have just made the point that workforce participation comes down to child care and paid parental leave that work for you and your family. But the objects of the bill are described by the minister as 'promoting and improving gender equality, supporting employers to remove barriers, promoting among employers the elimination of discrimination, fostering workplace consultation between employers and employees and improving the productivity and competitiveness of Australian business through the advancement of gender equality in the workplace'. Listening to those objects, you would think: 'My goodness, this is really serious stuff. I wonder what the actual operative provisions of the bill are that could produce these outcomes?'

I should say also that there are name changes. With Labor we always have name changes. When things look as though they need airbrushing, touching up and rolling out yet again, we have changes of name. This bill changes the name of the act to the Workplace Gender Equality Act, it changes the name of the Equal Opportunity for Women in the Workplace Agency to the Workplace Gender Equality Agency and it changes the director's title to Director of Workplace Gender Equality. I cannot think of a woman who would want that job. 'Director of Workplace Gender Equality'—what does it all really mean? Well, the operative provisions are that employers must prepare and lodge a public report containing information relating to gender equality indicators. This bill is all about gender equality indicators. The jargon is proliferating—and we have not really even got into the detail.

If you are a business with 100 employees or more you come under this bill. If you are a business with fewer than 100 employees you will not be required to report but you will be able to access the agency's advice, education and incentive activities. I am sure they will keep the data on small businesses with fewer than 100 employees and perhaps in another iteration of this type of legislation those small businesses really will be crippled by these onerous reporting requirements—as if small business does not have enough to do.

The minister says, 'We will know exactly what is happening, and where, in Australian workplaces regarding gender equality, practices and outcomes.' That is a monstrous Big Brother statement to make. The gender equality indicators are set out in the act and include reporting on equal remuneration for men and women—they talk about what you are paying, how you are paying it and who is getting it. 'Over time,' the minister says, 'the legislation will enable the agency to develop benchmarks which will allow employers to consider their performance compared to others in the industry.'

But the key and most alarming statement coming from the government about this bill is this: 'The legislation will enable the minister to set industry-specific minimum standards in consultation with industry and experts. These minimum standards will have to be determined before April 2014.' I think there has been about a three-year lead up to this bill. But what this is actually saying is that this House should pass it, the Senate should pass it and then, before 2014, the minister will work out the industry-specific minimum standards against which employers will have to report. I know that the government will come back after my remarks and say none of this actually requires a certain rate of pay, none of this requires businesses to do anything about what they report. But I make two points: one is that just having to report on this sort of nonsense is a serious burden for business; the second is that, maybe, somewhere down the track, businesses will have to demonstrate that they have done the things that the government has set as minimum standards in terms of gender pay equality ideas, indicators et cetera that we really know so little about.

I am sure I read in here a veiled threat that a person would have to meet these standards in terms of government contracts, tender processes and other things or perhaps they will be named and shamed. In fact, in the second reading speech we come to three things: the inevitable checks, naming and consequences. It is like the government is an old school ma'am with glasses and with her hair scraped back in a bun, waving a pen at small business saying, 'You'll be checked, you'll be named and you'll have consequences.' In the current operating environment for businesses, families and the Australian economy why are we even debating this sort of stuff? I am confused.

Getting back to checks, naming and consequences: the minister says, 'Checks on a relevant employer may be undertaken and may, by written notice, require a relevant employer to provide information that is relevant to the employer's compliance with the act.' On naming: 'The consequences of a non-compliance without reasonable excuse, include naming the employer in a report to the minister or naming the employer by other means.' As for consequences, there are also possible consequences in relation to Commonwealth procurement, grants and financial assistance. So, following consequences, there are also threats.

The government wraps all this up with their determination to improve women's economic security. I come back to paid parental leave. The system that is proposed by this side of the House sees women's economic security absolutely take front and centre stage. We do not like this bill, Madam Deputy Speaker, as you may have gathered. We did not like the fact that businesses would be required to adhere to this new reporting framework, which they do not really have too many details against. They will have to report against the gender equality indicators in a publicly available report outlining the composition of their workplace and other aspects of their workplace profile.

The Labor Party has been a longstanding advocate of quotas. The coalition, on the other hand, believes in selection based on merit—not on gender, not to fill a mathematical quota, but strictly on ability. The setting of quotas will lead to tokenism and may impart the idea that some women's achievements are strictly based on gender, not ability. We would resist anything that would lead to the conclusion—anywhere, anyhow—that women's achievements are based on gender, not ability. I know that women have so much ability that they would never need to hide behind the gender card.

My first career was in air traffic control. I was often the only female air traffic controller in a room full of men. I cannot imagine if my employer, which I guess was a government department, to sign up to this completely would have been required to employ a certain number of female air traffic controllers. I had a career in the shearing sheds. I do not think a shearing contractor with many more than 100 employees would ever be able to meet requirements that might be determined on gender equality indicators, because I only met one female shearer in the entire time I worked in the sheds. By the way, she was very good. And so it goes.

There are protests from those opposite, but we do not know what the gender equality indicators are. We do not know how they might roll out in practice. I am not convinced that this legislation will achieve what the government intends it to. Indeed, I have concerns as to the chronic lack of information evident within this bill. Ultimately, this legislation relies on regulations that are yet to be drafted and ministerial directives that are yet to be made, in spite of the fact that there has been three years in which to do this work.. How important is equal opportunity in the workplace to the government?

The current act has been renamed and updated. It was amended in 1999, replacing the Affirmative Action (Equal Employment Opportunity for Women) Act 1986. It has as its key focus the promotion of merit in the workplace, promoting equal employment opportunity, eliminating discrimination and encouraging consultation between employers and employees on these issues. Businesses are required to develop a workplace program—more time, more effort, more compliance, more pieces of paper to produce and show to someone who turns up at your business to look at your program and asks, 'What are you doing about the gender equality indicators that we have set?' All not-for-profit and non-government organisations with 100 or more employees are required to comply with the public reporting requirements of the act.

The Minister for the Status of Women proclaims the amending of this bill as an 'example of the significant inroads' that the Labor Party is making through its 'progressive reforms'. I beg to disagree. These so-called reforms are anything but progressive. Rebranding the Equal Opportunity for Women in the Workplace Agency to the Workplace Gender Equality Agency is nothing more than window-dressing, another opportunity to waste taxpayer dollars on advertising and glossy logos, changing names on doors, changing the stationery—it all costs money.

Other 'reforms' are enhancing the agency's advice and education functions, and simplifying and streamlining reporting. How can there be simplifying and streamlining of reporting when there is so much additional compliance with reporting indicators that have not been set? Then there is strengthening the compliance framework. The government always has to strengthen the compliance framework. We so strongly disagree with the overemphasis on compliance. I am alarmed that we are expected to pass judgment on legislation that so poorly clarifies its scope. The financial and administrative cost to business will be harshly felt. Employers may well wonder what the real intention of the government is with this legislation.

The regulation impact statement states that the Workplace Gender Equality Agency will be vested with the authority to undertake organisational reviews, with the time burden for selected businesses estimated to be $1,300 where the business has up-to-date records. These compliance costs just further exacerbate the strain on businesses, many of which will be burdened by the imposition of Labor's carbon tax. I am further concerned by the prospect of the bill applying the general principles of the act to all employers. The effect of this would be to provide the Workplace Gender Equality Agency with a mandate to consider these businesses in their development of strategies and resources. I seek clarification from the minister as to what this really means for the small businesses of Australia. I look forward to advice on what 'a mandate to consider these businesses in their development of strategies and resources' really means.

The coalition does not support legislation which provides for such broad-ranging ministerial discretion in allowing the minister to effectively do what they like, further strangling business in red tape. This bill permits the minister to change the goal posts whenever the whim dictates, with no real parameters defined. Whilst the government may refer to this as 'flexibility', the reality is it proves that the government really has no idea what it wants to assess, so is leaving its options open. Three years on from the review undertaken by KPMG into the Equal Opportunity for Women in the Workplace Act and Agency, it is quite frankly alarming that the government has not been able to commit to matters for one single gender equality indicator. Where will the government get its advice from? Who is the government trying to please? What is the hidden agenda?

The then Minister for the Status of Women, the member for Adelaide, announced in 2011 spot checks on business. That was truly alarming. This is a government that clearly does not understand or respect business. Given the university, union or otherwise backgrounds of the members opposite, it is no real wonder. Whilst I am pleased that this crazy idea was little more than a chance to embellish a media opportunity, I remain concerned about the ramifications. Having announced the possibility of spot checks of businesses, that really silly idea sank like a stone. But it demonstrates the minister's thinking. I am also concerned about the requirement for the minister to consult only with those stakeholders that the minister considers appropriate. It sounds like a union love-in will tick all the boxes for this government, with no requirement for consideration of the views of the business community.

Regrettably, with this bill, the government is brashly waving around a big stick, and there is not a single carrot in sight. Whilst this could present an ideal opportunity for the government to promote and reward businesses that meet all the government benchmarks, it has failed to embrace this.

The coalition has established a deregulation task force to identify unnecessary red-tape measures that are diminishing the productivity of Australian workplaces. As I said, as I travel around the country as the coalition spokesperson for child care, I see firsthand how centre operators are being overwhelmed with the administrative burdens imposed by this government. Instead of demanding that businesses devote hours to filling out reports just so another government agency can justify its existence, this government could focus on proactive measures to provide for improved gender equality—measures such as the superannuation component that the coalition has included into its paid parental leave scheme. If this government is honestly seeking equal remuneration for women then this would be an ideal step in the right direction.

When I think of women a generation older than me who live quiet and difficult lives in small country towns in the electorate I represent in western New South Wales, I realise there was nothing when they took time off work to look after their homes and children. They did not have the opportunities I have been so lucky to have. As I said, I look at the lives of poverty they are experiencing and I am determined that we on this side of the House will make sure that superannuation will continue to be an important factor for women as they go through the different stages of working and having children. If you step away from the workforce and from your superannuation contributions to take maternity leave or to stay at home and look after children, it does not take very long for that gap to really tell on your future retirement. So I think the government has a bit of a nerve talking about the rights of women at work when they are not thinking about the superannuation contributions that they miss out on through the government's very poor, second-rate Paid Parental Leave scheme.

I will be moving an amendment to this bill calling on the government to achieve equal opportunity for women by supporting the coalition's paid parental leave scheme. In addition, we will propose removing the discretion proposed to be granted to the minister specifically in relation to the determination of industry-specific standards in conjunction with the stakeholders of the minister's own choosing. We are not going to let this government frolic away on their own with standards that they have not yet determined but are going to determine after they—hopefully, in their minds—pass the legislation. We are going to stand in the way of that. I have a terrible vision of the unions placing their stamp all over these standards and manipulating this legislation to their own ends to collect the data they want, and feel they are missing out on, about workplaces.

I shall also move to reintroduce provisions allowing the agency to waive public reporting requirements for relevant employers. Why should employers have to publicly report against these standards, whatever they may be? Further amendments will be moved to give public acknowledgement to relevant employers who regularly meet compliance standards. Also, in our amendments, we will require the government to remove one regulation for relevant employers for each new regulation imposed by the act, because we are absolutely serious about red tape and deregulation. So, for every new regulation that is imposed, we will require the government to remove one, so as to not add to the regulatory burden for employers.

I expect that government members, in responding on this bill, will talk about it being streamlined, transparent, flexible and easy—those sorts of words—for employers. In that case, even if they do not support any of our other amendments, I look forward to them supporting that one. If they do not, they will be acknowledging that this will add considerably to the red-tape burden on Australia's small businesses.

Passing the amendments I will move would prevent businesses facing draconian levels of government interference and ensure that the bill is a more reasonable, palatable framework for business in the quest for gender equality. This is a government that has no understanding of or compassion for business. I encourage members opposite to adopt the measures and restore some semblance of common sense to this bill.

We are not rejecting the bill outright, in spite of the problems that we see with it. That would leave us open to the charge that we do not care about gender equality in the workplace, that we are not a party that supports equality and fairness for women, and that would be untrue. Our significant amendments would still leave in place the reality, which is that we are proud of our record when it comes to women in the workplace. We will not allow this government to tell a different story. Labor governments tax, spend and interfere, and this legislation is an absolutely perfect example of interfering.

I move:

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

"whilst not declining to give the bill a second reading, the House notes that if the Government was genuinely committed to achieving equality for working women, it would adopt the Coalition's better, fairer Paid Parental Leave scheme."

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

Mr Hartsuyker: I second the amendment.

Mr NEUMANN (Blair) (12:26): I speak in support of the Equal Opportunity for Women in the Workplace Amendment Bill 2012. I listened to the member for Farrer and saw the list of who was speaking on this bill today and found that the coalition were so concerned about equal opportunity for women that they did not even have a bloke on the list to speak—not a man on the list—on this bill! We have men and women speaking in relation to this bill.

Ms Ley: We don't have quotas.

The DEPUTY SPEAKER ( Ms AE Burke ): Order! The member for Farrer was heard in silence.

Mr NEUMANN: So it is interesting that they are so concerned about that. Perhaps that is indicative of the attitude of their LNP colleagues in Queensland, where only about 18 per cent of their caucus are women. The member for Farrer was quite critical of quotas and quite critical of the steps taken by the Australian Labor Party, but I note that the party in Queensland is led by a woman; that the Premier, when Labor were in government in Queensland, was a woman; and that the Prime Minister is a woman. We have actually taken steps in our conferences and our party units, as well as in this government, to advance the role of women, because we know that gender inequality is a huge disincentive to participation of women in the workforce.

The member for Farrer was critical of us, and particularly of the minister, in relation to this legislation. But what she did not say at all was that the development of this legislation was underpinned by extensive consultation. She was critical of the trade union movement. It is always in the DNA of those opposite to criticise the trade union movement. They can never get over this. Demonising someone is always what the Tories do in this country. But let's have a look at the consultation. There was a consultation process undertaken in relation to this. Members of the advisory group included, amongst others, the following: ACCI, the Chamber of Commerce and Industry, who are not affiliated with the Australian Labor Party; the ACTU; the Australian Industry Group; ASX Ltd; the University of Sydney; and the Fair Work Ombudsman. If they want to know the full membership of the advisory committee, I am sure we can provide it to them. But it was not just the ACTU that we consulted on this.

I think what we are hearing today is actually part of a strategy, because I noticed that the LNP Premier of Queensland, Campbell Newman, said similar things to what the member for Farrer said in a letter to Tim Watling, the Committee Secretary of the Senate Standing Committee on Education, Employment and Workplace Relations, who recommended that we pass this legislation. In a letter dated 23 April 2012, Campbell Newman said:

The Bill's proposed amendments to the current reporting framework give rise to concerns regarding the likely impact on employers. My Government is also committed to changing the culture in government, from one that promotes red tape to one that reduces red tape. I am concerned the Bill may impose an additional regulatory burden on Queensland businesses.

These are similar to the words we heard from the member for Farrer in relation to this. It is interesting because last parliament I was a member of the House of Representatives Committee on Education, Employment and Workplace Relations, then chaired by the former member for Hasluck, and I seem to recall overwhelming amounts of evidence that it did not matter whether women were cleaners or shop assistants or nurses or even barristers. I remember that the Law Institute of Victoria gave us evidence that women who came from law school in their first year were earning on average $8,000 less than men in their first year, even though they had the same qualifications. That particular committee recommended reporting provisions similar to what is in this legislation. I recall sitting in that committee and I recall looking around and saying, 'Hello, there are members of the Liberal Party on the committee.' In a bipartisan way they recommended what we are doing here in this legislation. They were supporting us, but all of a sudden, somehow and not in a benevolent way, those opposite have changed their minds. They have had a false or bad epiphany in relation to this legislation. Perhaps they are taking instructions from their LNP colleagues in Queensland.

I hope as she goes around the countryside as the shadow minister for child care the member for Farrer makes the point—she waxed on about superannuation—that she and her caucus colleagues voted against superannuation increases for women from nine to 12 per cent over the next decade. I hope she tells them that. It means that a 30-year-old woman will get over $100,000 more because of this government and would have got $100,000 less if they had been in government. The coalition continues to vote against superannuation. Because she talked a lot about child care, I hope she also tells the people as she goes around that one of the first acts of the coalition government after 1996 was to rip a billion dollars out of the childcare sector.

I hope she also tells them that she left women in a position where they were getting by way of childcare rebate up to $4,354 per child and that we increased it by 73 per cent to $7,500 per child. I hope she also says that we have assisted over 900,000 Australian families with the increased costs of child care. I hope she also tells them that we have put a record amount of money into child care—$22.4 billion over four years, including $19.9 billion for the CCR and CCB. I hope she also says that a woman in a family earning $75,000 a year with one child in long-day care is only paying 7.5 per cent of their disposable income in childcare costs. It was 13 per cent in 2004, when her side of politics was in power.

Let us not hear platitudes from those opposite that they are supportive of equality in the workplace and that they are supportive of the sort of assistance that women need, because we are the ones who brought in the Paid Parental Leave scheme. Those opposite, in power for nearly 12 years, failed to do it. When they come up with a scheme, they come up with one that favours millionaires. That is what they do. The legislation here is important, because women are in a position where they are not participating in the workforce as much as men. In fact Australia ranks 45th in the World Economic Forum's 2011 Global Gender Gap Report when it comes to labour force participation. About 43 per cent of women participating in the workforce are working part time. We concede that casual and part-time work suits many women, but it also means that they earn far less, have lower superannuation and their employment arrangements are far less secure.

The gender pay gap starts early, as I have already pointed out. Men and women have different experiences of the workplace. I will show why this is important. One of my constituents, Dr Terrance Fitzsimmons, a post-doctoral research fellow from the University of Queensland, did his thesis on this point. He said that despite the fact that women represented 55 per cent of degree qualified work entrants in the past 20 years, only three per cent of Australia's ASX-listed companies have female CEOs. If we look at the market capitalisation, however, women control less than one per cent, if you take Gail Kelly out of the mix. This situation has remained static over the past decade. Dr Fitzsimmons makes the point that this is a major social issue. It is a massive economic problem. We simply have far too few women at senior levels in most organisations and there needs to be momentum to drive the cultural change and norms in society which act strongly against women being able to rise to the top of the corporate sector.

It does not matter whether they are part-time cleaners or they are in fact CEOs, women find themselves disadvantaged in the workplace for a variety of different reasons. Dr Fitzsimmons puts forward in his thesis a number of things that we can do. This legislation focuses on gender equality. It is about making sure that we establish the agency—and changing its title—and making sure that the agency's advice and assistance functions extend to all employers, but only relevant employers with a hundred or more employees are subject to the reporting requirements in the legislation, a new reporting framework, and they report against gender equality indicators. That is going to commence from 1 April 2013. We are going to make sure that reporting is simple; we are going to make sure it is useful; we are going to make sure there are industry based benchmarks; and we are going to consult industry. We are going to check compliance by requiring a relevant employer to give the agency the necessary information about the employer's compliance with the act. This is important also because we think that industry needs to understand that this is a serious issue as far as society is concerned. Contemporaneously, we believe that women can do anything and we think they should be able to do everything they want to do—that their skills, talents and abilities should be fostered and there should be no obstacles in the workplace, in politics and in the community to stop them. There should be no barriers; there should be no glass ceiling.

I mentioned before the extensive consultation which the coalition has railed against. In 2011 the government convened an implementation advisory group to assist. I know that the Minister for the Status of Women, Julie Collins, has addressed that group recently. She addressed a number of conferences around the country in relation to that, directly engaging with those people who are stakeholders in business and organisations around Australia. This is part of a commitment that we made when we went to the 2010 election. We made a commitment that we would retain and improve the quality of opportunity for women in the workplace.

It is important to note that there has been a long legislative history in relation to these issues going back to the Affirmative Action (Equal Employment Opportunity for Women) Act 1986, another great initiative of a Labor government under Bob Hawke. That has been part of our legislative framework to remove obstacles for women since that time. The Equal Opportunity for Women in the Workplace Act 1999 has served us well but now it is simply not good enough. We need to make significant reforms to bring into a contemporary setting our approach to gender equality.

I have two daughters and they are both at university. I want to make sure that they grow up in an environment and a world where they have no barriers to whatever they want to do. Sadly, we know that across all professions, even today—and not just the legal profession I mentioned before—the median full-time salary for a male graduate from university is $52,000 compared to $50,000 for female graduates. It gets worse as you go higher in different professions. Sadly, the average superannuation balance for Australian women is 40 per cent below that of men and the average payout is about half of that of men. We that know women make up about 70 per cent of single age pensioners. That is why our reforms in relation to superannuation and our reforms in relation to the pension—the historic rises in 2009-10—have made such a difference.

But there is more to be done. We are addressing inequalities that stop women achieving all they want. We are increasing workforce participation. That is crystal clear in our legislative framework and what we are doing. We are not just helping individual women; we are helping whole communities. We are helping them to achieve their potential to rejoin the workforce with extra funding, whether they are suffering from a physical disability or the disability from not having the education that they wished in the earlier parts of their lives.

Closing the gap between workforce participation for men and women would boost our gross domestic product by about 13 per cent. Those opposite talk about being friends of business, friends of small business, friends of economics. Even if you adopted a really economically rational approach, if you said you were going to end the inequality between men's and women's participation in the workforce, to increase our gross domestic product by 13 per cent is an extraordinary way to boost our $1.5 trillion economy. That is why it is important. It is important not just for decency, compassion and humanity, and giving 50 per cent of our population a fairer go; it is also about making sure the economy is stronger.

This legislation should be seen as part of a whole package. I commend the minister for the great work she has done. It seems to me to be pitiful that those opposite would pose as the friend of women when you look at their record. The fact that they have opposed this legislation says volumes about what would happen if they got on this side of the Treasury benches.

Ms GAMBARO (Brisbane) (12:41): It is always interesting to follow the member for Blair. Nevertheless, I want to speak to this government bill, the Equal Opportunity for Women in the Workplace Amendment Bill 2012, which amends the Equal Opportunity for Women in the Workplace Act 1999. It gives effect to a 2010 election campaign commitment.

The coalition supports gender equality in the workplace. From listening to the member for Blair you would think that those of us on this side of the House oppose all of the gender equality measures, many of which we instigated in the past when we have been in government. The coalition opposes this bill as it is currently drafted on the basis that it imposes some really draconian measures. All they are designed to do is increase the level of government interference in the workplace and they would have the absolute opposite effect, possibly, to what is stated in the bill's aim.

The coalition is committed to supporting gender equality and we are committed to workplace participation and improving workplace flexibility through retraining and improving the Equal Opportunity for Women in the Workplace Act 1999. The coalition values women and men as co-contributors to the economic and social wellbeing of Australia, and we recognise and value the many varied roles that women play across all sectors of Australian society. We are committed to achieving real and decisive progress to make sure that we remedy the gender inequality that exists in Australia today.

The fact is that in 2010 Australian females made up 50.2 per cent of the population and 45.3 per cent of the workforce. Increasingly, women are more educated than their male counterparts. More females are completing year 12 and many more are going on to university than males. In fact, in 2008 females made up some 55 per cent of students who were currently enrolled in Australian universities.

Australia is very fortunate to have so many high-achieving women who have made significant contributions in numerous fields and enterprises. We are also very fortunate to have so many quiet achievers. They are the Australian women who are the backbone of this country's economy. They are the ones that hold the key to greater productivity in Australia. Sadly, estimates suggest that closing the gap between men's and women's workforce participation could result, and has resulted, in gender pay gaps of 16.9 per cent. If we closed the gap between men's and women's workforce participation we would see an increase of 13 per cent in gross domestic product. We had a great improvement in closing that persistent gender wage gap during the Howard years. But sadly, as I said, it has gone up again and, at 16.9 per cent, it is the widest it has been for over a quarter of a century.

The coalition is very proud of having a record of creating economic opportunity for Australian women. Our plans for the future will continue the very important work we have done and will benefit every member of our community. Improving gender equality in Australian workplaces is essential and critical and, in particular, is a very important ingredient in lifting female employment and creating greater opportunities for Australian women.

Under the bill small business will maintain its exemption from reporting for now. However, the general principles of the bill are expressed to apply to all employers. The effect of this is that the agency will have a mandate to consider small businesses in the development of strategies and resources, which raises the question: what does the government intend to do for small businesses? Will they too eventually be roped into reporting? It is essential that changes such as the substituted reporting responsibilities do not create more red tape and more operational imposts on an already overburdened small business sector or, for that matter, on all businesses in this country.

The coalition believes in smaller government and in not interfering with businesses getting on with the job of employing people. That is why we established the deregulation task force, chaired by Senator Arthur Sinodinos. The more regulation that the government puts on businesses, the more time and money and effort that businesspeople have to divert from real work, family and friends to fill in forms. As a small business operator until a few years before I entered politics, I understood that only too well when I was running a family business. One of my family member's sole responsibility was to fill in the forms and take care of all the red tape. There was a form a day, I can assure those sitting opposite. It was a full-time job in our particular business.

We in the coalition support the right of employers to run their businesses efficiently and to employ people on merit. We do not support the placement of draconian measures which are designed to increase the level of government interference in the workplace. The bill proposes to expand those organisations which can comment on the public report. And it includes an employee organisation, which is not present in the current legislation and which has the same definition as that found in the Fair Work Act. There is a proposed new section, 16B, which gives employee organisations the opportunity to comment on the public report, and employee organisations may well target certain industries. We do not support legislation which provides a broad-ranging ministerial discretion to allow the minister to effectively do what he or she likes and potentially tie up businesses in red tape.

In 2007 the federal Sex Discrimination Commissioner, Elizabeth Broderick, visited every state and territory in Australia, and a report was published in 2008. Four years later, many of the equality issues remain unchanged today from what they were then. In her report Ms Broderick identified that many older women with limited retirement savings due to movement in and out of the workforce—and you have to bear in mind that many of these older women were in the workforce when there was no superannuation for women—had a considerable level of anxiety relating to poverty in their later years.

Pay inequality is a contributing factor to the gender gap in women's retirement savings. The movement of women in and out of the paid workforce due to caring responsibilities is another factor contributing to the gender gap in retirement savings. Of course, there are always structural and cultural barriers in the workplace which prevent women from balancing their paid work and their caring responsibilities, reducing their workforce participation and their economic independence. Pay inequality is also influencing decisions within families on the sharing of paid work and caring responsibilities. Those same barriers prevent men from taking on a greater share of caring responsibilities, with men sometimes finding it even harder to access flexible work due to cultural stereotypes about roles between parents.

The availability and cost of child care also remains a significant impediment and a negative factor for many women wishing to return to the workforce. The rising cost of child care is becoming a major barrier to people returning to work—in some instances it can cost more for a parent to go to work than to stay at home. There is also a limited amount of child care available for before- and after-school hours, and recent changes to legislation have resulted in even fewer places being available.

If the coalition gains government at the next election we will introduce a comprehensive paid parental leave scheme. The coalition's scheme provides real time and real money to working women, offering eligible women 26 weeks at their replacement wage, up to $75,000 per annum for six months. Unlike Labor's paltry scheme, the coalition's PPL scheme includes superannuation—which, as I mentioned earlier, is a real concern, particularly for older women. So this is a really important step in addressing the chronic disparity between male and female retirement incomes. It also has the ability to directly address three key challenges identified in the second Intergenerational report: productivity, participation and population

The amendment bill is drafted to provide the minister with an inordinate amount of discretion. For example, the bill gives the minister the power by legislative instrument to specify matters in relation to each gender equality indicator, as set out in proposed subsection 3(1). The public report must contain details of the matters specified in the instrument made by the minister. The explanatory memorandum also confirms the minister's broad discretion. As stated, this gives the minister the flexibility to consider all issues relevant to gender equality and to add new matters. Is it necessary to consider the scope and extent of these new matters? What are those new matters? Absolutely no indication whatsoever has been given about what these new matters might be.

The minister is also directed, prior to 1 April 2014, by legislative instrument to set minimum standards in relation to specified gender equality indicators, specified relevant employers and specified reporting periods. The newly named Workplace Gender Equality Agency is given the ability to check compliance by requiring a relevant employer to give the agency information that relates to that employer's compliance with the act or to the employer's performance against the minimum standards. Surely, this is a watering down of spot checks on businesses that were proposed by former Minister Kate Ellis in 2011. The only prescribed consultation is with the agency and other stakeholders 'as the Minister sees appropriate'. The minister should be required to consult with employers as they are the ones paying the bill for all these changes.

We are really concerned that the legislation also allows the minister to set 'industry specific standards'. There is no clear definition of an 'industry specific' standard. The minister in her second reading speech also gave no indication as to what these industries might be. As reported in the Australian Financial Review on 9 March 2012 under the banner headline 'Gender equity bill to spur pay claims':

… employers remained concerned that unions will use this information on wage levels at a particular company to ask for industry wide wage rises.

The Australian Chamber of Commerce and Industry chief executive Peter Anderson recently said that employers were concerned that the information they supplied could be 'misused for extraneous purposes'. His spokesman, David Turnbull, said 'employers remained concerned that unions will use this information on wage levels at a particular company to ask for industry-wide wage rises'.

The initial review of this act was announced in June 2009. KPMG provided an extensive report on the review but, three years on, the government has still not been able to come up with the 'matters in relation to each gender equality indicator'. Given their failure to address these issues, it seems really premature to be introducing this legislation.

The coalition opposes this bill on the basis that it imposes draconian measures which are designed to increase the level of government interference in the workplace and which may well have the opposite effect to what is stated as the bill's aim. If the government were really serious about improving the productivity and particularly the rates of participation of women in the workforce, it would look at adopting the childcare policies of the coalition, which include re-instating the occasional-care funding which allows parents to work part time and not have to commit to full-time child care, and gives them the flexibility at different stages of their careers to move in and out of the workforce at different times and also to work part time to full time. That is what women really need. They need that great flexibility as their families increase and to then, as their families start work, be able to phase back into paid full-time work.

The coalition seeks to amend the bill to: remove the discretion proposed to be provided to the minister; re-introduce provisions allowing the agency to waive public reporting requirements for relevant employers; insert a provision for the agency to give public acknowledgement to relevant employers who regularly meet compliance standards; and require the government to remove one regulation for relevant employers for each new regulation imposed by the act.

I want to conclude by saying that all this bill does is add to the burden of red tape for businesses while doing absolutely nothing to improve the opportunities for women in the workplace. All Australians must continue to work together to ensure that the contribution of women in this country's workforce is properly valued, appreciated and rewarded.

Ms O'NEILL (Robertson) (12:56): I am very pleased today to have the opportunity to speak on this important bill before the House, the Equal Opportunity for Women in the Workplace Amendment Bill 2012. The bill reflects the Gillard government's commitment to supporting gender equality and the improvement of workforce participation and flexibility. It substantially retains the act but improves on it.

Before I commence my formal comments, I reflect briefly on the contribution of the member for Brisbane. There is a somewhat revealing pattern in what we have heard from the member. In her description of a problem many of the points which she made were points of fact and I think that we would be in agreement on the disadvantage that it is out there in the workplace for women. But in contrast with this government's initiative, what we get from those opposite is a do-nothing response. That is the argument we constantly get. It is an articulation of a climate of fear—be afraid of the legislation; be afraid of everything; be afraid of any possible cost; be afraid of any change; we cannot afford it.

We heard exactly the same sort of mode of operation from those opposite in terms of the floods in Brisbane. When there was a need for us to respond to a real and pressing problem in and around Brisbane, what did we hear from the opposition? Absolute opposition and no response to the real and pressing need. In contrast, this government enacted the changes that made $5.8 billion possible as support to that particular state at a time of need. I think this sums up the great differences between what the people on our side—the government side—have to say on the legislation and what those opposite continue to do, which is to negate everything and to act in ways which would give people no hope for the future, but tell us simply to leave things as a status quo.

I can report to the House that earlier this year on International Women's Day I participated in a recognition of that day with a number of girls from local schools in the Central Coast, including Narara Valley High School, Gosford High School, St Joseph's high school, and a number of great female agencies and wonderful female and male leaders in our community as well. We talked about the need to recognise and celebrate women's achievements, but also to continue to articulate striving for equality in all aspects of life. Indeed, the theme for this year's International Women's Day was the 'economic empowerment of women'. That theme is relevant to women everywhere. That is why this piece of legislation, very carefully constructed by this government, is a vital piece of our legislative program, and I am delighted to be able to reflect on that in some detail now. I commence my formal remarks by noting the very important change to the name of the act, which reflects changing community attitudes to notions of equality and equity in the workplace. When this bill is passed, the name of the act will be the Workplace Gender Equality Act 2012. It follows then that the agency responsible for bringing this new legislation to life in the community and the director of that agency also receive new titles. When this legislation passes through this chamber and the other place, people will find a great deal of very helpful practical advice about gender equality at the Workplace Gender Equality Agency, which will be overseen by the newly named Director of Workplace Gender Equality. This name change is a marker in our legislative history, a marker of the success of those women and men who were such passionate advocates for women's rights in general and those who saw those saw those rights brought to life in workplaces across this nation to a degree.

Before I proceed with more a detailed consideration of the actual legislation, let us acknowledge what the original legislation achieved because it points to the power of legislation in supporting community articulation for needs to change and improve current practices. The original legislation was a vital historic step in raising awareness of unquestioned inequities that existed in workplaces, bringing changing community understanding alongside a developing understanding that, to make real our express belief that we are an egalitarian society, we need education but we also need structural change. The legislation was a critical tool in ensuring that businesses across the nation in all workplaces—from the backroom at a local distribution centre to the boardroom at the top of the MLC—had to take some time to understand and begin to alter longstanding and often unquestioned practices that put women at a disadvantage in the workplace.

Some businesses and organisations operating out of ethical values based models noted the opportunities to embrace the change in the context of that conversation. Without some compulsion and without raising the standards, some workplaces just knew that the right thing to do straight off was to actively change things to make their workplace a fairer place for women, striving towards making equality in the workplace common. But other businesses, whether by design or by a lack of interest, did not even see inequality. Others sought to maintain inequality for a range of reasons one hates to imagine.

In this mixed set of circumstances, the role of parliament in bringing forward and passing legislation is very important. This legislation before the House today reveals a commitment to putting in place the conditions that support equality in the workplace as part of our law. The type of legislation before the House in this matter very clearly expresses our beliefs about the equality of citizens, about the equality of male and female citizens in the workplace as well as outside of that workplace in the common place.

We believe that gender equality should be assured and that proof of this basic democratic belief should be evident in equitable outcomes. We commenced that with this legislation. There will be great businesses and organisations, both small and large, who understand that equity in the workplace creates an environment where people work better, where people are happier and where people are more productive. Successful, adaptive and ethical organisations know that their success depends on the quality of the people they engage and on the quality of the relationships within their working community. But, sadly, there will be businesses or individuals who fear change, cling to models of the past and no matter how unjust or inequitable they might be, can find an argument to stay just as they are, to do nothing.

There are people who think inequity is acceptable, but we in the Labor Party are not of that view. Interestingly, last week, on 23 May, a report in the Advertiser, that South Australian luminary publication, quoted the South Australian Liberal opposition leader as saying:

I think it is easier a lot of the time to just try to ignore the discrimination and get on with being the best councillor you can be, or the best whatever it is, and ask intelligent questions and … I think you'll find the discrimination will just disappear.

That is the policy of the opposition on this issue in a nutshell: 'If we do nothing, the problem will go away'. If only that was true. But it is not the truth, and it is not an appropriate response to inherit gender prejudice and exclusion from opportunity that sadly is still commonplace in our workplaces.

Let us just get some facts on the record here. In February 2010 the gender pay gap was 18 per cent. That is not acceptable to those girls who were at that International Women's Day with me. It is not acceptable to their brothers or their fathers or their future employers either. In 2009 a new male graduate had a median starting salary of $50,000; the girls who had started at the same time ended up with only $47,000. That is inexcusable. The average superannuation balances for Australians aged 15 years and over with superannuation coverage were $87,589 for men and $52,272 for women. In the ASX 200 only 10.7 per cent of executive managers are women. Women chair two per cent of ASX 200 companies and hold only 8.3 per cent of board director positions. This just simply does not match up with the reality of the success we are having with female graduates coming out of universities, and it certainly does not reflect the similarities between the genders in success that I saw amongst my own students.

Sadly, it is still the fact today that young women are up to fives times more likely than men to have average weekly incomes of less than $150 a week and twice as likely to have average weekly incomes of less than $600. In the prime working age, between the brackets of 35 and 64, the number of women earning above $1,300 a week is less than half of their male colleagues and women who earn about $2,000 a week make up less than 25 per cent of that group.

We have put the facts on the record, but what does this mean? Why does it matter? I want to make a few comments about productivity. We have increasing evidence that the benefits of gender diversity are absolutely seen in increased productive capacity for organisations and, through them, our economy. A recent report from Catalyst found that for four out of five industries in the United States, the companies with the highest female representation on their top management teams experienced a higher total return to shareholders than companies with the lowest representation of women. There is something about equity that creates fantastic productive outcomes. Growth in productivity is the main source of improvement in living standards and gross domestic product, and faster labour productivity growth enables higher growth for real GDP. The World Economic Forum clearly identifies the link between productivity and the better use of women in the workplace. There is a very strong correlation between the gender gap and national competitiveness, and a nation's competitiveness depends significantly on whether and how it educates and utilises its female talent. The reality is that we are currently in a place where we are not utilising that talent in the way we should.

It is very clear that this legislation significantly builds on advances that have already been made. Those on this side of the chamber are ready to take the necessary action that refocuses national attention on gender equity. This legislation moves us deliberately and responsibly towards the worthy goal of gender equity and the productivity and improved life outcomes that such a change offers.

One of the important points of the act's name change is to reflect community attitudes, which have changed very much to a desire to balance our work and our lives—for men and women to have the joy, the challenge and the growth opportunity of parenting or caring for older relatives or extended family or even members of their own communities who need our support, and to balance that important work in the community and their families with their work. This is another very important issue that is addressed by this legislation.

I would like to look quickly at some of the key elements of this bill. I know there has been a lot of noise in opposing them, but it is important that we have reporting on things that matter. People want to know the football scores at the end of the weekend; we do measure success in certain areas by numbers. The reality is that often it is what is measured that is seen to matter. That is why we need to have some reporting requirements to assist in this process. The requirement for organisations to develop workplace programs has been removed from this legislation. Employers will now have a much more streamlined set of gender equality indicators to help them focus on delivering outcomes rather than simply compliance. This is about changing the way that we work to improve our productivity, equity and equality to create the possibility of people getting the best out of their work-life balance. In terms of business assistance, it is also important to put on the record that smaller organisations and businesses with fewer than 100 employees are not required to report, but they can access this information—and they should access this information considering we know how much it will improve the productivity of all workplaces and that it is, in a way, simply an ethical practice. We know that that improves business productivity and the general tenor of a workplace.

Regarding compliance, the agency's improved resourcing will certainly make it easier for them to be able to check on how businesses are going with implementing these changes. It is important to highlight the employee engagement that has been a part of the minister's work leading to this day, where the legislation is now up for consideration to pass through the House of Representatives. Engagement with our employees and other business organisations has been a hallmark of the way in which this legislation has been advanced. It has also very much stood the test of whether we are an ethical international citizen that complies with its proclaimed support for international conventions on human rights.

In conclusion, the Equal Opportunity for Women in the Workplace Amendment Bill 2012 adds to the real and practical improvements to people's lives that this government is prepared to make through legislation. Once again, those opposite stand ready to say no to women, girls, men, boys, families, business and all who stand to benefit from this legislation. I commend the bill to the House. (Time expired)

Dr STONE (Murray) (13:11): This bill amends the Equal Opportunity for Women in the Workplace Act 1999 and amends the name of the act to the Workplace Gender Equality Act 2012. It will provide for both men and women. Anthropologists have quite a simple test for gender equity in a population. They simply ask the women whether, in the next life, they would like to return as a male or a female. In Australia, almost overwhelmingly women tend to respond that they are very happy with their gender and would like to return as female, which is unusual when you consider the realities of the inequity of women's experience in the workplace. Violence is much more likely to occur on women in a domestic situation and women in Australia have more financial difficulties, during what is usually a longer life than men, living in poverty.

This bill's equality focus is specifically on remuneration, but it takes on board the fact that accommodating family and caring responsibilities is central to the achievement of gender equality in the workplace. One of our key difficulties in Australia is that we continue to have inflexible workplace arrangements. Under Labor, sadly, workplace arrangements have become even more likely to be ruled by regulation and a lack of flexibility that does not reflect the seasonal work situation, for example, or women or younger people's need for part-time work and work on days other than the traditional working week of Monday to Friday. Our country is getting more straitjacketed rather than less when it comes to opportunities for women to participate.

Our culture continues to expect women to be the main carers for children, the elderly and the disabled. At the same time, of course, most women have an economic imperative to support their families by earning outside the home and bringing home a salary. So we have a serious problem in Australia. We expect women to do it all—to have the babies and to care for the elderly parent or the disabled. We expect women to do volunteer work relating to their family's education experience, but we also expect those same women to earn an income outside the home in an inflexible workplace.

This bill introduces new functions for the Workplace Gender Equality Agency, including to develop, in consultation with relevant employer and employee organisations, new benchmarks in relation to gender equality indicators. I hope we look at best practice internationally, because Australia has a great deal to learn, particularly from the experiences of some of our counterparts in developed northern European countries. The bill introduces a new reporting framework in which relevant employers are required to report against new gender equality indicators. The problem with this bill is that we do not have those equality indicators yet determined. It is not clear when and how the indicators will be presented to us, but we do hope that it will be in a very consultative mode. Employers who do not meet the minimum standards of these yet-to-be-identified benchmarks will be provided with assistance and advice from the agency. All employers will have access to education advice from the agency.

There is no doubt that Australia continues to fail women in the workplace and, even with these name, act and age changes and new benchmarks, we have a very great deal of territory to cover before we can stand tall in comparison to other developed nations and say that our women in the workplace have a fair go. For example, in the quarter ended February 2012 the gender pay gap between men and women doing the same or similar work stood at 17.4 per cent. This is one of the highest wage gaps in the developed world. The average weekly ordinary time income of females—this is full-time work—was $1,186 per week. Compared to men, it was $250.50 less per week.

The figures show that the gap has not changed from 12 months ago. Over the last 18 years the pay gap has, in fact, increased by 1.5 per cent. So, we are going backwards in the equality of pay for men and women doing similar or the same work. That is quite extraordinary especially when you realise that Australian women have access to, and are accessing and excelling in, formal education qualifications. Australia's women are the most likely to have finished secondary school and have tertiary education qualifications compared to most other developed nations. We are out there getting the education but we are not then achieving the extra productivity that can come from that education in the workplace. This is a serious loss for the women and it is an even greater loss for the nation as a whole.

Figures from the September 2011 ABS Survey of Income and Housing showed the average account balance in 2009-10 was $71,600 for men but only $40,400-odd for women—almost half. Sixty per cent of women retire with no superannuation at all to support themselves financially. They are destined to be dependent on welfare. If they do not own their own home—and given most women in older age are alone and not partnered—this is a recipe for a long life in poverty. For those at retirement age who do have superannuation—and, as I said, 60 per cent of women do not—the retirement payouts in 2009-10 were about $198,000 for men but only $112,000 for women.

This is why I am so angry about Labor's new Paid Parental Leave policy. It is such a cheapskate, mean and tricky offer when for years they had promised that a paid parental leave scheme would be something that women could use to help guarantee their futures in lifelong earnings and lifelong opportunities. The fact is, Labor's Paid Parental Leave policy does not pay superannuation. Women will continue to experience the gap in superannuation payments while they are bearing their babies and taking leave. Of course, the coalition's paid parental leave scheme does include superannuation and it also pays women up to a threshold the equivalent of their earnings prior to taking their paid parental leave.

Because the superannuation system is linked, obviously, to paid work, it overwhelmingly disadvantages women who have to move in and out of the paid workforce to have their babies and have their families. Some women also have to take part-time work during some of their most concentrated child-bearing and child-caring stages. The enormous superannuation gap between men and women reflects that broken work-lifetime experience of women in Australia, and that simply should not be the case. Women are more likely to be in casual and part-time work, and they are often more likely to be in work that is paid in cash—again, without superannuation. All of this means that we continue to have a horrific gender pay gap and a gap in retirement savings between men and women.

Besides the gender pay gap women are also significantly under-represented in Australia in senior management and on boards. We have tried to address that by naming and shaming the top boards of companies listed on the Australian Stock Exchange. It was interesting that, when that was first introduced, we immediately had a scurry and flurry of women being placed on boards. The realities are that in very recent times the numbers of women on boards has shrunk even though it can be shown again and again in very comprehensive research that, when a company does employ women in senior management, they are more likely to be more profitable. Having said that, in fact, women are most likely to be on boards of not-for-profit organisations. It is, again, a very different experience for men and women in the workplace.

I would be remiss if I did not refer to the fact that workplace violence is more likely to be experienced by women with very serious consequences. Women also experience sexual harassment and workplace bullying. There is a report from 2011 by the Victorian work cover authority which estimated that workplace violence costs some $57 million per annum in lost productivity and associated support costs. The research indicated that we have a very serious problem in our workplaces which affects the safety of many women. It costs millions of dollars, but we do not know how many millions exactly. All we understand is that many women are driven from the workplace by abuse. They suffer consequences if they report violence, bullying or harassment, and they often carry scars of those experiences for a very long time. While there are serious consequences from workplace violence for both men and women, of course, we know much less about the experience of workplace violence on women and its effects. The seriousness of workplace violence is further exacerbated, as the problem does not stay in the workplace after the worker has left for the day but spills into the life of the individual in their homes and in their communities. It can undermine family and community life. Then, of course, many women are subjected to domestic violence, even those women who are not employed outside the home. So it can be a very tough world for women, particularly for young mothers who do not have a partner, young women who have left school early who seek to gain some employment at a time when their children are old enough and who then find great difficulties with childcare costs and with access to childcare places. I think the behaviour of this government in relation to access to child care and the introduction of regulation and national frameworks which have made child care beyond the financial reach of many working families is just unconscionable.

We know that there are alternatives to family day care and long-day care—that is, children being minded in someone else's home or in a specially established workplace. We know that many would prefer to have in-home care, especially for their young children or where they have to do shift work or work on weekends. Those women, though, are branded by Labor as elitist, rich complainers when we come to discuss in-home care for children of working parents. I think we have to very seriously consider that if a woman or a family needs in-home care for their children then they should be allowed to pursue that with appropriate regulation but also with appropriate supports and protection of that worker in that home based workplace. But to simply brand that as elitist is absolutely ridiculous and also hypocritical, when you look at the number of women in this place in the government who themselves used or use home based carers for their children but deny it to women who know that it is actually a cheaper option than having their child placed in a childcare agency or a childcare centre for more than $100 a day.

I have to say that this bill is clearly about a very significant problem in Australian society, the problem of equal opportunity for men and women. But it also highlights a problem we have in Australian society, where we educate our women, our girls to a standard that is in many instances higher than their male counterparts. For example, we now have more women completing tertiary education than men, and in some faculties like law and, indeed, medicine, women have drawn up to the numbers of men and surpassed them in course entry and course completion. Having said that, women's participation is a lost opportunity for Australian society, when the economy does not have the advantage of their full-time work for long enough or does not allow these women to dip in and out of the workplace as they choose to have their children or when they have to take up the responsibility of caring for the elderly or disabled in their family network. I think it is very important that men in Australia understand that caring should not only be the prerogative or the expectation for women. Men also have to step up to the plate and understand that job-sharing caring and sharing responsibilities in the family is not only important for the woman's own self-fulfilment but can also enhance the life experience of fathers and men in the broader Australian community.

This is an important bill. We have some amendments being proposed, but I strongly support the underpinning values that this bill represents. However, in Australia I do not think we can yet stand tall or proud when it comes to the situation of women in the workplace. The statistics are bald and stark, when we compare our experience with those of women, in particular in northern European countries. I am also concerned that this bill leaves a lot unsaid and it will have to be improved when we gain government. (Time expired)

Ms LIVERMORE (Capricornia) (13:26): I am pleased to participate in this debate on the Equal Opportunity for Women in the Workplace Amendment Bill 2012, and I am pleased to be doing it at a time when the Minister for the Status of Women is at the table, because I know that this is an area that she is personally very committed to and that she has played an active role in consultations with important stakeholders. This bill makes a number of amendments to the Equal Opportunity for Women in the Workplace Act 1999. The amendments deliver on a commitment made at the 2010 election to retain and improve the Equal Opportunity for Women in the Workplace Act. In doing so, they draw on the results of a review of the act and the administering agency, the Equal Opportunity for Women in the Workplace Agency, which was initiated in June 2009 by Tanya Plibersek, the former Minister for the Status of Women.

Among other things, these amendments go to things like changing the name of the act and its objects. They improve the coverage of the act and they will result in streamlining and simplifying the reporting regime for those employers who are subject to the act and in improving the compliance framework that currently applies. These are all positive and worthwhile changes. In this debate, however, just as important as what we are doing with this bill is why we are doing it. One reason is that the existing legislation and the Equal Opportunity for Women in the Workplace Agency date back to 1999. Since that time there have been many changes in Australia—economic, legal and social changes—so, of course, we need to make sure that our legislative framework stays up to date so that we continue to make progress towards our goal of advancing and achieving equal opportunity for women in Australian workplaces.

The fact that we have not yet achieved that goal of equal opportunity and, on some measures, have actually gone backwards is the other reason that the government believes that this issue deserves renewed focus and attention, including the new measures contained in this bill. I think that there is a perception out in the community that Australia does a lot better on measures like equal opportunity for women than we actually do. Part of that is probably attributable to our treasured view of ourselves as the country of the fair go for everyone. Discrimination and the idea that someone would not achieve their due according to their merit do not really fit with our popular image of ourselves. There is also a strong sense that the battle for equal opportunity for women is one that has been fought and won. When the Prime Minister and the Governor-General are women, together with a record number of cabinet ministers and a number of former and serving female state premiers, it is easy to assume that such a view is correct. Those women seem to symbolise a country where the last barriers to the women's equal opportunity in the workplace have not just been removed but smashed. But I am sure a lot of women who might be listening in to this debate could point to their own experiences that demonstrate it is not that simple and we cannot assume that equal opportunity exists in all or even most of our workplaces. If women feel that way, they are not alone and they are not imagining it.

Many gaps between men's and women's employment and pay are well documented and are actually quite large relative to international comparisons. I said there is a perception that Australia performs better on equal opportunity than we actually do, and I admit to being surprised at some of the figures and where we sit on international rankings for these measures. The issues paper prepared by the Office for Women for the review of the Equal Opportunity for Women in the Workplace Act provides an excellent summary of the current situation for Australian women.

The labour force participation rate of women in Australia has increased significantly over the last 30 years, from just 43.4 per cent in 1978 to 58.7 per cent in 2009. Obviously that represents a big step forward in women's financial security and independence as well as an increase in women's ability to participate in our society in areas beyond the workplace. That participation rate is, however, lower than the rate of participation for men, which sits at 72.1 per cent. Women's participation in the workforce has some key characteristics. For one thing, only 54.9 per cent of women work full time compared to 84.1 per cent of men. There is a dip in female workforce participation during the child-bearing years from 25 to 44 which is not evident in male working patterns. On the one hand that is not surprising, but on the other hand it cannot be dismissed that easily when OECD comparisons show that Australia has a lower participation rate for mothers with young children than countries like Canada, Sweden, the UK and the United States. That suggests we have to look closer at why rather than just assume it is all down to the personal choice of those women and their families.

Despite gains in participation rates over time, women's earnings remain persistently lower than men's. Occupational segregation between men and women continues to exist and male dominated occupations tend to earn more than female dominated occupations. The gender pay gap based on the average weekly ordinary time earnings of full-time employees barely narrowed in 25 years. From 1984 to 2009, it shifted from an 18.5 per cent deficit to a 17.4 per cent deficit. That is just 1.1 per cent in 25 years, although most people would have the perception that we have done much better than that. No wonder employees in the social and community services sector fought so hard to have their case heard before Fair Work Australia. The recent equal pay decision is a landmark shift and welcome recognition that women's work has to be properly and fairly valued if that gap between men's and women's pay is to be closed.

Women are less likely to be in leadership positions within organisations. Looking at the ASX 200 as a guide, there are more than 10 male directors to every female director and the gap for CEOs is even bigger. These individual statistics can be encapsulated by looking at where Australia sits on international rankings. When compared to other OECD countries with similar tertiary education levels, Australia has the fifth largest pay gap. The global gender gap index compiled by the World Economic Forum incorporates measures of workforce participation, remuneration and opportunity. That index placed Australia in 20th place in 2009, down from 15th in 2006, so there is a lot of work to be done. For 2009 that compares to New Zealand in fifth place, Ireland in eighth place and the UK in 13th place.

Any government concerned about both equity and productivity cannot afford to be complacent about our current performance in achieving equal opportunity for women in the Australian workplace. Those figures and international comparisons have a useful purpose to the extent that they remind us that challenges remain and that our responses to those challenges must be as relevant and effective as we can make them. But measures to improve gender equity and equality of opportunity in the workplace are not things we should do just for their own sake. There are real and tangible benefits to individual employees, businesses and our national economy that come from greater equality in our workplace. For example, research in the US has looked at the benefits of gender diversity to productivity. A 2004 report found that in four out of five industries in the United States, the companies with the highest women's representation on their top management teams experienced a higher total return to shareholders than the companies with the lowest representation of women.

When I read those results I do not assume that means women are better employees per se. My interpretation is that the presence of women in top management is a sign of a business that values all of its employees on their merits and has practices in place to support and mentor everyone. Obviously, the results of that good management show. It is a sign of a well managed business with strategies in place to get the best out of all employees, so it is no wonder that higher productivity and things like lower absenteeism and lower turnover et cetera flow from that. Encouraging or, in the case of this legislation, requiring companies to think along those lines and meet certain expectations in gender equality does have benefits for employees, benefits for business and, by logical extension, benefits to our economy as a whole.

Other research referred to by the minister in her second reading speech estimates that closing the gap between men's and women's workforce participation could boost gross domestic product by 13 per cent. In the context of some of the debates we have been having in this place in recent days about the pressure to find people to fill jobs in Australia, that is a figure that is very important to consider. So clearly there are good reasons for us to support improved gender equality outcomes in Australian workplaces. This bill seeks to do that by putting the focus of our efforts more on outcomes and indicators of business progress towards equality rather than simply requiring them to report for the sake of reporting. It also strives for balance between the need to meaningfully assess performance and compliance by businesses and simplifying their reporting process. I turn to some of the specific points about the bill. I said at the start that one of the things it does is to change the name of the act and also to change the objects of the act. The name of the act and the agency will be changed to focus more on gender equality rather than exclusively the equality of women. That is in recognition that gender equality has to be at the heart of what we are trying to achieve, whether that is gender equality of remuneration or, importantly, recognising the caring roles of both men and women when they seek to balance their family responsibilities with their working life. That is now expressly included in the new legislation.

One of the things that has obviously caught the attention of opposition members, and I believe forms the basis of some of their amendments, goes to the reporting requirements. One of the important points to make is that this legislation has been the subject of extensive consultation. It is the product of consultation with industry, with employee groups and with organisations with interests in women's situations in this country. This is not something that is being rushed through or dropped on anyone out of the blue; this is a result of consultation with those people with the biggest stake in it. The new reporting requirements on companies are to be phased in over time. In fact, one of the things that companies would have cause to complain about in the previous system was that the reporting guidelines were a bit vague and woolly; companies had an obligation to report but it was not entirely clear what they were reporting about or what the purpose of the reporting was other than simply meeting that legislative requirement.

The reporting requirements now go much more to indicators, so they are outcomes-focused rather than simply describing program or policies that might be in place within the business. Businesses will now be required, over time, to report against indicators such as the gender breakdown of their employees and the kind of consultation that goes on within the workplace around gender equality. Importantly, it is only applicable to companies with over 100 employees, so we are not requiring this obligation of smaller businesses. We are talking about medium to large companies who are caught in the legislation.

Very importantly, that new reporting is much more straightforward. There is a set of indicators that we require companies to report against, and that will now be able to be done online. This specifically addresses a point raised by representatives of industry, and makes it much simpler to do. The other point to make is that by reporting against those indicators it is actually giving the government and industry meaningful data—useful data. We are not just asking, 'Tell us what you do so everyone can feel good about it,' we are asking, 'Tell us what the actual results are; what does your company look like in terms of having a genuine commitment to gender equality?'

With that data the government is then in a position to look at what is happening industry by industry and to see where support needs to be targeted the most to assist companies to meet their obligations under this legislation; again, all working towards those objectives of greater equality in the workplace. That will flow through to greater participation in the workplace for women and, of course, all those productivity and GDP results that I talked about earlier. Ultimately, the data that is collected will lead to the establishment of minimum standards. That will be done by the minister in preparation for the 2014 reporting deadline. That, again, is a logical extension of making this data useful in actually addressing some of the problems.

In closing, I might just mention that the compliance measures are no different to those in the legislation under the Howard government. (Time expired)

Mrs MARKUS (Macquarie) (13:42): I rise today to speak on the Equal Opportunity for Women in the Workplace Amendment Bill 2012. This bill would require medium and large businesses that employ more than 100 staff to report on their progress in gender equality.

Let me begin by emphasising that Tony Abbott and the coalition have a long history of supporting gender equality in the workplace, and I will draw on some of the examples that I have been proud to support during my time as an elected member of parliament. These examples more than demonstrate that the coalition's opposition to this amendment is not because we do not support gender equality in the workplace but rather that we do not support the Gillard government attempting to amend a bill to provide the minister with increased power of judgment and to impose greater red tape on everyday Australian businesses. Furthermore, we do not support legislation that provides broad-ranging statements allowing broad ministerial discretion.

Firstly, allow me to highlight some of the coalition policy positions and achievements that confirm our position with regard to gender equality and our interest in preserving the rights of women across the nation. While I cannot report on all, I would like to mention a couple here today.

If the coalition gains government at the next election it will introduce a comprehensive paid parental leave scheme. This scheme provides real time and real money to working women. We would offer eligible women 26 weeks at their replacement wage up to $75,000. Unlike Labor's scheme the coalition's paid parental leave scheme includes superannuation, which is an important step in addressing the chronic disparity between male and female retirement incomes. It will also address the three key challenges identified in the second Intergenerational report: productivity, participation and population.

The coalition will move an amendment calling on the government to commit to achieving equal opportunity for women by supporting this scheme. The coalition recognises that one of the most effective ways to increase female workforce participation is a solid parental leave scheme and affordable child care. As the Minister for Health and Ageing, Tony Abbott, along with the coalition, secured increased funding for successful screening programs for cervical cancer, resulting in a steady decline in Australia's cervical cancer rate. The then Howard government and Tony Abbott, as the then Minister for Employment Services, enacted the Equal Opportunity for Women in the Workplace Act 1999. These are just a few of a long list of examples that demonstrate the coalition's interest in preserving the rights of women and securing gender equality in the workforce.

I and the coalition do not think that it is in the best interest of Australian businesses to interfere with business getting on with the job of employing people, a concept that the Gillard government cannot seem to comprehend as it continues to introduce legislation that adds further barriers and additional red tape to Australian businesses. It should go without saying—but this government seems to need reminding—that the more regulation government places on businesses the more time, money and effort businesspeople have to divert from real work, family and friends to fill in forms. This is exactly what this amendment seeks to do. It seeks to add additional paperwork to Australian business owners who are already being choked by this government's red tape.

The current Gillard government and the former Rudd Labor government have been obsessed with increasing the red-tape burden on business. Labor has introduced 18,000 new regulations in just over 4½ years, which equates to 11 new regulations every day. In today's Sydney Morning Herald the Chief Executive of the Business Council of Australia, Jennifer Westacott, in an open letter to the government regarding the enterprise migration agreements, has urged Labor MPs to 'avoid the knee-jerk temptation to tie it up in even more red tape and processes'. Jennifer is clearly concerned by the Labor government's red tape and quick-fix solutions, which are having a considerable impact on Australian businesses.

The amendment bill is drafted to provide the minister with an excessive amount of judgment and discretion. The initial review of this act was announced in June 2009 by KPMG. One aspect of this report recommended that the government detail the 'matters in relation to each gender equality indicator'. Essentially, the government has not detailed gender equality indicators as the report recommended, and as a result the minister will be able to create these indicators at their own discretion. Given the minister's failure to address these issues, it seems premature to be introducing this legislation. This is just one example of where the minister would be able to use discretion to apply the legislation.

Another example is detailed in the explanatory memorandum, which states that the minister will have 'the flexibility to consider all issues relevant to gender equality and to add new matters'. It is necessary to consider the scope and extent of these new matters. However, these new matters are not identified within the amendment. Will these also be left up to the minister's discretion? Understandably, the coalition is sceptical and does not support legislation which provides broad-ranging ministerial discretion to allow the minister to effectively do what he or she wants and potentially tie Australian businesses up in more and more red tape. This red tape will do nothing for the equality of women in the workforce but rather will detract from productivity and potentially cost Australian businesses time and jobs.

Furthermore, as reinforced by Peter Anderson, the Chief Executive of the Australian Chamber of Commerce and Industry, in March this year, businesses are concerned that the information that they provide to employers and shareholders could be 'misused for extraneous purposes'. The key concern is that unions will use information regarding wage levels at any particular company to ask for industry-wide wage rises. This will put further pressure on Australian businesses and Australian jobs.

While the department 'estimates' that the resourcing cost to business will decrease on average from approximately $1,200 per annum to $450 per annum, the regulatory impact statement specifically states that the reforms will result in increased compliance costs for businesses that have not previously been compelled to report. Prior to recommending a change to the way a business conducts itself, the government and the Equal Opportunity for Women in the Workplace Agency need to ensure that the change will not result in additional compliance costs being borne by businesses. The agency has admitted that it does not do this, which is of concern to the coalition, particularly given that the Productivity Commission has estimated that the rewards for Australia to cut red tape could be worth up to $12 billion a year. This amendment creates more questions than answers and more challenges than solutions. It is just another attempt by the Gillard government to micromanage and adds additional red tape to the businesses of Australia without making any real impact on equal opportunity for women.

My coalition colleague the member for Farrer will move amendments to ensure that Australian women achieve equality in the workforce. The coalition's amendments will seek to remove discretion proposed to be provided to the minister and reintroduce provisions allowing the agency to waive public reporting requirements for relevant employers. We will also seek to insert a provision for the agency to give public acknowledgement to relevant employers who regularly meet compliance standards, and we will also seek to require the government to remove one regulation for relevant employers for each new regulation imposed by the act. This is a promise that the government made prior to the last election.

The coalition has a real plan to ensure that Australian women achieve gender equality in the workplace—one that does not infringe on the everyday operations of Australian businesses. The burden that the Gillard government is placing on Australian businesses through increased regulation and red tape is causing businesses to divert their time, money, efforts and resources to complying with government red tape rather than creating jobs and opportunities for all Australians. In February this year I had the pleasure of hosting Senator Cash, the shadow parliamentary secretary for the status of women, in the Blue Mountains. We had a roundtable with a number of businesswomen from Biznet. One of the women raised with us the challenges that she was facing as a small business owner under the Labor government, particularly with the government's Paid Parental Leave scheme. She had spent several hours—indeed, some weeks—arranging paperwork, making phone calls and negotiating with government departments in an attempt to facilitate and actually manage the scheme for one of her employees. This is a burden which small business cannot and should not bear. Again this government says it is for creating jobs, but its draconian business regulation and spending cuts say otherwise, as more and more Australian businesses are forced into voluntary administration. The coalition does not support the introduction of drastic measures which are designed to increase the level of government interference in the workplace. A coalition government would support the right of employers to run their businesses efficiently and to employ people the way they should be employed, based on merit.

This bill does little to improve the status of, and equal opportunity for, women. It does place unnecessary burdens on everyday Australians who are endeavouring to provide opportunities for themselves, for their families and for their communities, including the women in their communities, and to improve the status of the workforce overall. I call on the government to look closely at the coalition's amendments and to seriously consider supporting them.

Ms BRODTMANN (Canberra) (13:54): It gives me great pleasure to speak on the Equal Opportunity for Women in the Workplace Amendment Bill 2012 today, on an issue that touches so many women throughout their working lives. Gender equality is simple; it is fundamental—particularly when it comes to the workplace. There are undeniable benefits to promoting gender equality at work. Not only is it an important social step forward that improves workforce participation; it is also good for our economy. In fact, closing the gap between women's and men's workforce participation could boost Australia's GDP by up to 13 per cent. Closing the gap also enables women to join, rejoin or stay in the workforce, helping to solve the skills shortage problem that many Australian businesses are facing. I know that this is very much the case here in Canberra.

Unfortunately, in 2012 women are still struggling to realise their right to workplace equality. Women continue to obtain fewer senior leadership positions, to earn less pay, to have less superannuation and to do more than their fair share of unpaid work. That is why the Gillard government is committed to advancing gender equality by supporting women's economic empowerment. That is why we are debating this very important bill today.

By amending the Equal Opportunity for Women in the Workplace Act 1999, we are making a change to reflect current community expectations, and we are making a change that will reduce the regulatory burden on business. Overall, this amendment will ensure a much greater focus on outcomes to affect genuine and sustainable change over time. The introduction of this bill delivers on a 2010 election commitment by the Gillard government to retain and improve the Equal Opportunity for Women in the Workplace Act. This commitment was to support gender equality and to improve workforce participation and workplace flexibility through retaining and improving the act. The bill amends the name of the act to the Workplace Gender Equality Act 2012. This emphasises the focus of the act on gender equality, thereby improving outcomes for both women and men in the workplace. The name of the Equal Opportunity for Women in the Workplace Agency will also change to the Workplace Gender Equality Agency. The title of the director of the agency will change to the Director of Workplace Gender Equality—again to reflect the new focus of the act. The principal objects of the act are amended to reflect this new focus and to promote and improve gender equality in the workplace, with specific recognition of equal pay and family and caring responsibilities as central issues to achieving gender equality. The objects also focus on the fact that improving gender equality in the workplace will improve competitiveness and productivity and remove barriers to women's full and equal workforce participation.

It is well over a decade since this act was last reviewed. In that time, our economic, social and legislative landscape has changed significantly. We now have Australia's first Paid Parental Leave scheme, thanks to Labor. More than 150,000 new parents have applied for paid parental leave since the scheme began. This is a huge win for working Australian women and their families. It is a huge win for Canberra women, giving them support to take time off with their new babies in those critical early months. We have also increased the rebate for out-of-pocket childcare expenses from 30 to 50 per cent, which is now benefiting 800,000 families.

This reform is having a significant impact on the take-home wages of women returning to work. In 2004, the out-of-pocket costs for a family with one child in long day care and earning $55,000 a year were 13.2 per cent of their disposable income. By last year, this proportion had fallen to 7.5 per cent. We have also made a commitment to achieve pay equity. The historic decision of Fair Work Australia to award equal pay to social and community sector workers is a significant advance for women. Other achievements include amendments to the Sex Discrimination Act to make it unlawful to discriminate on the grounds of family responsibilities, and also the introduction of a new superannuation roundtable to improve retirement incomes and superannuation. This bill is another step towards equality for women, and we are working to achieve this by updating that act, by modernising it so that it is more effective in supporting and driving change in Australian workplaces. The Gillard government recognises that the act and the agency are important components that support and improve the workforce participation of women. But we also recognise the need to broaden the focus of the act to highlight equal pay between men and women, and caring responsibilities as central to improving gender equality.

The DEPUTY SPEAKER ( Ms AE Burke ): It being 2 pm, the time for government business is interrupted.

Mr JOHN COBB (Calare) (16:41): As I was saying yesterday evening, when I was abruptly terminated, the committee has the ability to publish options on improving the consistency of research in the area and information on developing leading standards in the protection of water resources from the impacts of coal seam gas and large coalmining developments. This is probably the big issue in being able to protect the aquifers, and at the same time allowing agriculture to continue doing what it does very well and the gas to be extracted. The committee provides the environment minister and relevant state or territory ministers with expert scientific advice on coal seam gas and large coalmining development proposals that may have a significant impact on water resources, and it provides other advice in whatever circumstances.

The background of it all is that while the technology to extract gas from coal seams has been long in existence, it has only been in the last decade and a half or so that development has actually occurred in our country of Australia. Currently, around 90 per cent of Queensland gas is supplied from CSG operations, and it represents approximately 10 per cent of Australia's total gas production. The industry is in the process of growing; in Queensland alone it is expected to deliver 18,000 jobs and around $850 million in royalties per year.

The federal government will also benefit from a substantial increase in income and in company taxes. There has been considerable public debate, as there would be, around CSG operations and the environmental impact, with groundwater resources being a key concern. But issues relating to water table preservation and the protection and integrity of aquifers need to be addressed. That is the prime issue. The establishment of the committee would add independent expert input into the debate. The coalition believes the committee is a positive step towards improving public confidence in the environmental integrity of the industry.

There is one proposed amendment to the bill. The bill states that each member of the committee except the chair is to be appointed on the basis that they possess scientific qualifications that the minister considers relevant to the performance of the committee's functions, including but not limited to ecology, geology, hydrology, hydrogeology, natural resource management and health. The coalition proposes that, as the committee's fundamental reason for being is to advise on scientific issues relating to water associated with CSM and coalmining, the bill should require a majority of the members to have advanced qualifications and expertise in the key fields of geology, hydrology or hydrogeology. That is a very important issue.

While this bill is about the establishment of a committee to provide scientific advice to governments on relevant coal seam gas and large coalmining projects, access to land by CSG operators is a very significant issue to the farmers on that land. In addition, there is a significant concern that farmers are not receiving fair compensation for access to their land and a share of any profits. Obviously farmers must get compensation for surface interference and everything that goes with it, but this is very different to ordinary mining, where the company tends to buy at a very good price the land the mine is actually on and buys a buffer zone around it. Ordinary mining tends to resolve itself, but coal seam is different because they do not buy the land. They are probably there for 15 years, or maybe 20, so they are not going to buy it. So the interference is permanent. It is there for 15 years or so. It is very real.

There are three priorities which we need to balance. One is the water. We have to get it right. We have to make sure that coal seam gas is not going to have a major impact on our water resources and destroy the environmental and practical values of our productive capacity. We know there is still much about our underground water that we do not know, so we have to not make hasty decisions that we will regret. We need to look at the impact on farmers and farming land. On the water, I have spoken to the drillers—not the exploration companies. I mean the people whose livelihood revolves around their ability to drill and pass that information back to their employer. The drillers believe they actually can preserve the aquifers by their knowledge and their actions, and we certainly need that to be the case. Many of the farmers who are outspoken in the media just want the coal industry to stop; they just do not want it to happen. Yet in widespread consultation with farmers it is apparent that many are happy to accommodate the coal seam gas industry as long as their interests are not compromised and they are compensated. I believe they need to get a share in the profits.

The third and final issue is that Australia has ongoing energy needs which must be met and that coal seam gas, if handled properly, can help reduce our emissions, amongst other things, but at the same time we are talking about agricultural land that cannot be replaced. They are not making any more of it. They are making a lot more people, and agricultural land needs to be here forever.

None of these issues is easy, and good policy to address them will take time and continue to be refined, but we are abrogating our responsibilities if we just say no or yes because it is too hard to actually solve the issues. Hopefully this committee is a step in the right direction and can lead to a robust policy outcome, but it will not actually solve the issue. At the end Australia needs both farmers and exploration, but farmers must have their water protected and they must have a say in how that happens.

Mr McCORMACK (Riverina) (16:49): I listened with interest as the shadow minister for climate action, environment and heritage delivered a compelling and thoughtful speech on the Environment Protection and Biodiversity Conservation Amendment (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development) Bill 2012 last Wednesday. With even greater interest I watched the reaction to the address by the Minister for Sustainability, Environment, Water, Population and Communities, who was at the table. The minister nodded with seriousness. He appeared as if he cared about and agreed with what the shadow minister said. It is a serious matter. There is bipartisan acceptance of the establishment of this coal seam gas committee. There is an amendment to this bill calling for members of the committee, except the chair, to be appointed on the basis that they have scientific qualifications that the minister deems appropriate to the performance of the committee's functions. This is a sound proposal.

I have previously seen Minister Tony Burke give a performance similar to last Wednesday's. I saw him listen and nod in the machinery shed of Benerembah farmer John Bonetti on 22 October 2010, just eight days after as many as 7,000 worried Murrumbidgee Irrigation Area residents—men, women and schoolchildren too—turned out at the first big Murray-Darling Basin Authority meeting at the Yoogali Club, Griffith. I saw him do the same, as well as taking copious notes, at the MDBA community meeting at the same venue on 15 December 2011 after the unacceptable draft plan had been announced on 28 November. This time, 12,000 people turned up, including the MDBA chairman, Craig Knowles, and the opposition leader. The reception the minister and the MDBA received was vastly different to that afforded Tony Abbott.

The MDBA obviously did not take heed of what was said that day, as only yesterday the states learned that the authority is pressing ahead with its intention to strip 2,750 gigalitres of productive surface water from our farmers. That is a big number. It is an especially high figure for farmers affected by both the basin plan and the contentious coal seam gas issue. But we probably already could and should have guessed that the revised draft basin plan number would be 2,750 gigalitres, equivalent to five Sydney Harbours. We should have figured it out when the Treasurer, who does not know the first thing about either farming or agribusiness and, worse, does not care, announced in his 8 May budget that $941 million of Murray-Darling Basin infrastructure money had been deferred to 2015-16. We should have realised it when money for buybacks was still very much left on the table.

The unacceptable 8 October 2010 basin guide, which became the unacceptable draft, has now morphed into the unacceptable revised draft which has been put to the states. I hope New South Wales and Victoria reject it out of hand for the disgrace that it is and for the contempt it has shown regional people who have put down tools, closed the doors of their businesses and stopped their tractors to attend community information meetings. New South Wales Minister for Primary Industries Katrina Hodgkinson has already rightly labelled the revised draft an insult to all.

The Independent member for New England yesterday queried the 12,000 attendance at that 15 December water rally at Griffith; he could not believe so many turned up. But that was the figure quoted by the local newspaper, the Area News, as well as the Daily Telegraphand the Land and the Mayor of Griffith, Councillor Mike Neville. Given that Griffith's population is 22,000, excluding the villages around the city, that is a remarkable turnout. That so many shut their shops, left their farms and went to show their support says a lot for the passion of this community and their need to have water security into the future.

The minister, who sat in this chamber last Wednesday nodding in agreement with our shadow minister about this legislation, will have the final say on the basin plan. Let us hope that, for the farmers' sake, for the nation's sake and for his sake, he makes the correct decision in the interests of our ability to feed ourselves and others into the future.

There are many in rural areas of northern New South Wales and Queensland who are just as committed to a balanced outcome in the coal seam gas issue. They, too, have turned up in large numbers at various meetings, including one in front of the New South Wales parliament on 1 May this year. Concerns about coal seam gas led members of the Country Women's Association to join thousands of protesters at the rally. NSW CWA President Elaine Armstrong from Oura near Wagga Wagga in my Riverina electorate, said the issues surrounding coal seam gas mining were so important that they had inspired the group to march on Sydney for the first time in its 90-year history.

This bill also has an important water component, one which must be put as the highest priority in any consideration about any coal development for the long-term sustainability of prime agricultural land and the environment. The independent expert scientific committee's role will be to provide scientific advice to governments on relevant coal seam gas and large coalmining projects and to commission and fund water resource assessments for priority regions.

In recent years there has been much public debate around coal seam gas operations and the effect they have on the environment, with groundwater resources being a chief concern. The federal coalition's position is a balanced approach for a coal seam gas industry, which has taken off with support by state authorities, whilst acknowledging that it is imperative to ensure Australian food security and fair rights for landholders. Issues pertaining to watertable preservation and the protection and integrity of aquifers must be addressed.

The environment and water minister has appointed an interim committee to give advice on coal seam gas and large coalmining awaiting its formal establishment by this bill. One sincerely hopes the committee does a far better job than the highly paid members of the independent authority who failed to achieve a Murray-Darling Basin Plan with a triple bottom line. Ask anyone in Griffith, Coleambally, Leeton, Deniliquin or Shepparton today what they think of the MDBA and I am sure you will get an angry response.

The government has allocated $150 million to resource the activities of this coal seam gas committee. An additional $50 million has been reserved for allocation to states by the committee as inducements to implement its recommendations. The committee has wide-reaching powers, as you would expect. These include: advising on research goals; advising on bioregional assessments in areas of high potential risk from coal seam gas and/or large coalmining projects and giving advice to the federal environment minister on priority assessment areas; advising on research and bioregional assessments commissioned by the minister subsequent to the committee's advice; publishing options on bettering the researching in this issue; and information on developing the very best protection of water resources from the effects of coal seam gas and large coalmining developments; providing the minister and the relevant state or territory counterpart with expert scientific advice on coal seam gas and large coalmining project proposals which may have a high and lasting impact on water resources; and providing other advice deemed appropriate and necessary.

The Land's Canberra correspondent Colin Bettles recently wrote an excellent series of articles detailing how Australia could learn from the coal seam gas experience in the United States of America. In the past 15 years thousands of coal seam gas wells have been drilled in the Powder River Basin, home to the US's biggest coal deposits, in southeast Montana and northeast Wyoming. As Bettles reported, for local ranchers it meant a share in rich royalties—if some interruptions to their agricultural operations. But now gas prices have tanked, mining companies are backing off and landowners are left with the legacy.

One of the telling quotes in Bettles' series came from Wyoming farmer Ed Schwartz, whose message for Australian farmers was:

… to get a tight water surface use agreement in place, before any mining activity starts.

“Make sure they reclaim the land, make sure they put up a sufficient bond to protect the water wells and don’t let them dump this water on the ground because if it’s salty like the water is here, it will kill the soil rather than improve it,” he said.

His son Troy said:

… the time it would take to repair the damage to critical land and water assets on his family ranch, caused by coalbed methane mining over the past decade, could take several lifetimes of his children and their grandkids—even with no more salt water running over it.

For many in Australia's coal seam gas regions, the horse has already well and truly bolted. However, this committee, if it undertakes the desired role, will certainly have an important part to play in ensuring environmental concerns are satisfactorily met on future developments. Given the amount of exploration and investment, the committee will—should—indeed be busy.

The economic benefits of the coal seam gas industry are now being realised across Queensland. The industry just gets bigger and bigger, and there is genuine and understandable concern about groundwater systems and surface water systems. We just heard from the shadow minister for agriculture, food security, fisheries and forestry, who made some pertinent points about the growth and value of coal seam gas in Queensland, and about our limited understanding of underground water systems.

Coal seam gas development requires a comprehensive policy approach which addresses the environmental, community and economic impacts of the industry. A measured, rational and balanced approach to the industry and its management is needed and is vital. Managed correctly, with proper safeguards in place, coal seam gas has the potential to revitalise parts of regional Australia. I know my colleague here, the member for Maranoa, is well aware of that, because it has brought great benefits and investment to his region and it delivered a new economic boom. Poorly managed it could become an environmental and social nightmare for the Commonwealth—certainly for the people who live in affected areas—and for the nation's future and that of our Great Artesian Basin. No coal seam gas development should proceed where it poses a real and lasting threat to the quality of groundwater or surface water systems. It must be crystal clear that no coal seam gas development should take place unless it is proven safe for the environment. Prime agricultural land is an increasingly important natural asset. It must be preserved and protected from activities which destroy its capacity to deliver food security not only for Australia but for a hungrier world, particularly in this Asia-Pacific region, for generations to come. Australia can play a key part in feeding the world as Asia booms.

Global food security is sure to be among the top issues most likely to lead to serious international conflicts over the next decade. There is a widening gulf between world food supply and demand. Worldwide demand for food will escalate dramatically in the coming years as the world population hurtles towards and beyond nine billion while limited resources of arable land and fresh water will become even more meagre.

The Prime Minister said in a groundbreaking speech to the Global Foundation Summit in Melbourne on 3 May that 'Australia must be ready to act as the food bowl of Asia' into the future and that we need to 'strengthen irrigation'. To do what the Prime Minister rightly says we need to do as a nation and supporter of Asia and the Pacific Rim, we must not enforce a man-made drought on our farmers through poor water policy decisions and we must get the issue of coal seam gas right.

Coal seam gas development must not be allowed to occur close to existing residential areas. People who have bought a home—their biggest lifetime investment—with a reasonable expectation of being away from mining operations must not have their lives turned upside down by coal seam gas operations springing up on their doorstep. Landowners are entitled to satisfactory pecuniary returns sourced by reason of access to their land. Remuneration for landowners should not be restricted to compensation. The regions which deliver much of the wealth from coal seam gas developments deserve to see a fair share of generated revenues reinvested in their communities.

There is an opportunity to grow our nation and encourage a lasting legacy from finite coal seam gas developments. The environment must be protected, as must the economic development imperatives of regional Australia and the legitimate rights of landowners. Unless regional communities are engaged as partners and have something meaningful to gain from the development of the coal seam gas industry, they will not support it, let alone on their land. Why would they? Without winning widespread support from regional communities, coal seam gas development will not proceed.

The need to earn a social licence is a reality with which the coal seam gas industry and governments must come to terms. State governments have primary responsibility for the approval and supervision of the coal seam gas industry, and the role and efforts of state governments in dealing with this issue are recognised. However, the stakes are so high for regional Australia that federal leadership is mandatory—something the Gillard government has lacked in so many areas, not just coal seam gas.

For regional Australians, it is acknowledged that coal seam gas presents both opportunities and threats. We must ensure the benefits of this emerging boom take into consideration the environment. That means finding a fair and necessary balance between the needs of mining companies, landowners and communities. Meeting those needs and spreading the benefits will smooth the way to underwrite support for the industry and guarantee it delivers regional Australia and, through it, the nation a lasting legacy far beyond the 35-year life of a coal seam gas well.

Mr KATTER (Kennedy) (17:03): I respect the previous speaker, but doesn't he realise that his party stands for the exact opposite position of all of the moral issues that he raised in his speech? I feel as though I am in a lunatic asylum insofar as the cutbacks in the Murray-Darling are going to reduce a lot of his towns to ghost towns. They were little tiny towns of 300 or 400 people before the irrigation came through. You are going to take eight million megalitres of irrigation and reduce it to five million megalitres. I fear for what is going to happen in inland New South Wales. I went there, and it is very relevant to the coal seam gas issue because the contamination of the underground aquifers is very real.

I think that I am the only person in this place who has ever worked down mines. I worked my own mines. I put my own gelignite at the coalface, blew it up, and mucked out with a shovel. The thing was in the development phase, and you can afford to do that sort of thing in the development phase. I was floating my own mining company before I went sideways into other things. But I worked at the Mount Isa Mines as a labourer at the coalface. I would also like to think that my scientific knowledge is reasonably adequate.

If you release hydrogen sulfide or methane gases, when they mix with water, they become poisonous. I spent half my life looking for copper sulfate. When you are looking for a copper ore body, you look for the ore that is below the watertable. That is invariably sulfides, and copper sulfate is a poison. Every copper ore body in the world is a copper sulfate ore body. There are one or two exceptions, but I think it is a fair call. The watertables that they sit in by definition are contaminants. They are mild acids.

I love to promote my book! People do not know about their own country. Inside the Great Dividing Range there were no kangaroos—there were no Skippys—there were no goannas and there were no people, because there was no surface water. In my homeland in the mid-west of North Queensland, west of Boulia, which is almost on the Northern Territory border, there was a stream that ran for 80 kilometres: Spring Creek. The Great Artesian Basin surfaced there. We dug holes in the ground and took the water out east of Boulia, between Boulia and the Great Dividing Range. So we now have maybe 10,000 or 20,000 kilometres of waterways in that area between the Great Dividing Range and the Northern Territory border. We now do not have an 80-kilometre river out there. It was not much use because it did not rain much and there was nothing much living out there. But when we put that water back this way, where there was rainfall and beautiful soils, we had this highly prolific grazing area which grazed a lot of Australia's sheep and was the biggest grazing area for cattle in the country. But what happens if that aquifer is contaminated? And they are drilling through it as we speak. Let me explain this to you, Mr Deputy Speaker, because I am probably the only person here who understands this. When you drill down and hit hydrogen sulfate, methane or any of these gases they come up the pipe. There is sheathing when you drill. There might be a bit of contamination. You put bore casing down—whether it be plastic or metal—and it prevents that contamination from getting into the aquifers. They are drilling through the Great Artesian Basin now. It costs a lot of money to drill. These holes cost $2,000 a foot. They would not be doing it without knowing that the methane and other gases are there to access. Righto, it is protected when the sheath is there. But anyone in mining knows that the ground moves—and I am not talking about tectonic plate shifts. When the ground moves, it will wear out or buckle those plastic or metal sheaths. If you have got hydrogen sulfate coming up, then you have got acids coming up. If you have got any sorts of sulfates, you will have acids. No matter what metal the sheath is made of, it will be worn away. If it is made of plastic it will buckle and eventually wear out. So at some stage you are going to contaminate the aquifer.

You might say, 'What's a couple of holes?' Well, in Queensland there are 55,000 applications so far. God gave a wonderful resource to our country. This was a land that no-one wanted. The Portuguese knew about it in 1504 when they were in Timor, and, in 1624, Carstensz wrote a full report about it to the government of Batavia. But it was such a dry, hungry country that no-one wanted to come here. Even when they did come here, all they sent for the first seven years were convicts. The only reason anyone came here was that they found some gold here. Up until 1900, that was the only reason anyone came here.

But when we were drilling for gold and other things, we discovered this underground water supply called the Great Artesian Basin. Without that supply, there would be no cattle or sheep inland from the Great Dividing Range. We would lose it all. Our inland rivers are so inconsistent that we cannot rely upon them to supply water for our stock. So what is now a great resource that feeds maybe 15 million or 20 million people—from the cattle and sheep that come of that area—will be feeding nobody. We will have destroyed that great resource the good Lord has given us. God will say: 'I gave you this resource. What did you do with it?'

The previous speaker spoke about the Prime Minister saying we want to be the food bowl of Asia. I mean, I wish someone would get their feet on the ground here! We will be importing tomatoes from China. Do not talk to me about it. Go and talk to Frank Costa, the biggest seller of fruit and vegetables in Australia. He owns the Essendon Football Club, amongst other things. Go and talk to him. We will be importing tomatoes from China. We import prawns from China. We import seafood from China. We are importing apples from China. We are not going to be the food bowl of Asia; we will be a net importer of food from Asia. But do not listen to me. Go down to the library and get the statistics out.

But how are we husbanding those resources? We had six million hectares of the most beautiful land on earth. You can farm it for seven years and not use any fertilisers. We had a research place at Richmond for about 15 years. For seven years they farmed it. In the final year they had no results whatsoever from putting fertiliser on it. That is how rich this soil is. So what are we doing? Six million hectares has been taken over by the dirty, filthy prickly tree, which was introduced by us. Human beings introduced the prickly tree and it has destroyed everything. The little dunnart—a cute little fella that is like a mini-kangaroo—is doomed because it cannot survive the prickly tree.

Instead of going forward and irrigating on the banks of our rivers to protect them and build them up and stop these terrible seeds from getting away every time there is a flood and being carried out and out and out, we have done absolutely nothing. Our banks are eroding away into the Gulf of Carpentaria—and now we are drilling holes through the greatest asset this nation has! The greatest asset this nation has is not coal. Coal will run out in 30 or 40 years and there will be replacements for it. The greatest asset this nation has is not iron ore. Iron ore will run out in 30 or 40 years and other countries will be producing it anyway so it will not be worth a great deal. The greatest asset this nation has is the artesian aquifer. But nobody is saying, 'Stop, you're not to drill a hole through the artesian aquifer.'

I am the only one here with the experience to know that, if you drill a hole through there, you will pick up poisonous gases all the time. Methane, hydrogen sulfate and all these poisonous gases come up. As long as the plastic sheath, the bore casing, is there it is all right. But the bore casing is not there forever. I mean, nothing is forever anywhere. All the great buildings of the world are ruins today—the Parthenon, the Colosseum and the pyramids. All great buildings wear out eventually. We are dooming and condemning this area and putting it in question. What for? Where is the benefit to this nation?

The previous speaker said that there had been a benefit in the member for Maranoa's area. It is like a sugar fix: you get a lot of energy at the start of the game. But I would not want to be the coach. If your State of Origin team have a sugar hit, they will play terrifically in the first 10 minutes but there will not be much left in the tank for the next 30 or 40 minutes—that is for certain. And that is what is happening here. I have lived with four generations of my family—and, if you include my kids and grandkids, seven generations—in the mining fields of Australia. The Katter side of my family went to these towns before there were towns there. And on the other side of my family they perished chasing gold in the deserts.

Is mining a huge boon to a town? As I get older I wonder about the benefit of that. We have a huge shift, we leap forward and then we have terrible withdrawal symptoms afterwards. What happens afterwards is absolutely critical. Charters Towers was a bigger town than Brisbane. It did not just come down to a normal sized town; it was vanishing completely. A few things happened and we were able to arrest that decline, but the things that we did to arrest the decline vanished because we found gold. Everyone left the meatworks, to quote but one example, or left the railway to go and work in the goldmines. The gold has now run out and I have a town where 10,000 people have lost their jobs and we are in a very critical state. If we had not had the gold we would have been determined to keep open the meatworks and the hospital, and all of the other things we had. But we did not care much about that because we had this quick fix—a quick hit. As the previous speaker, the member for Riverina, referred to, it will not be there in the longer term, but the aquifers have to be there.

I am all for drilling before you mine coal. The Americans did this. I speak with great authority. As the Minister for Mines and Energy—and, more importantly, as the minister for northern development—in the Queensland government, I heavily researched coal seam gas back in the eighties. Then it was not profitable, although there will be those that argue about that.

The Americans extracted coal seam gas to make their mining safe—they heavily subsidised it—ahead of the mining, so that the dangers of mining were removed. And most of the coal seam gas in America really comes from that phenomenon of mining. I am all for doing that. If there are no aquifers I find it hard to say that we should not be extracting coal seam gas, but the minute there are aquifers, as the member for Riverina pointed out, the water that comes up is contaminated. Then you have to spread it out somewhere to get rid of it. It is all flat country; you cannot put it in a big hole somewhere, so it is a huge area that becomes contaminated.

Heather Brown, a wonderful Australian and one of our great fighters on this issue, pointed out that in her area there is going to be a huge bowl of dirty, filthy, contaminating, poisonous soup. She went there because this was a beautiful place to live and she was suddenly confronted. The neighbours—his father is one of my three best friends; we went around a lot of the country and the never-never—are in a situation where there is an authority over their land to prospect for coal and for coal seam gas. They cannot go forward. They cannot do anything with it because the banks will not lend any money because they do not know when a mine will open up there. And the miners will not tell them; they said it would be seven years before they make a decision. So the neighbours' lives are destroyed. They cannot sell the land; no-one is going to buy it with authorities to prospect or exploration permits over it.

I do not want to condemn people or speak badly about people but you cannot get up in this place and speak on behalf of the opposition when you know they have done absolutely nothing and when the incoming Premier in Queensland is in love with coal seam gas. There are 55,000 holes; he is going to put 200,000 holes down. He is in love with it. So do not come in here and say these things, because your party represents the exact opposite view— (Time expired)

Mr BRUCE SCOTT (Maranoa—Second Deputy Speaker) (17:18): I certainly welcome the opportunity to speak on the Environment Protection and Biodiversity Conservation Amendment (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development) Bill 2012 and to follow the member for Kennedy, who gave a bit of history of his own family and his background in western and central western Queensland. I welcome the opportunity to follow the member for Riverina, as well.

I can say that I too come to this debate with a great deal of experience, because my family lived in western Queensland long before many of the towns were even gazetted as towns. In fact, in the case of my own home town of Roma, my family went there prior to its being gazetted as a town. They settled there and I certainly grew up with an appreciation of the importance of water. My home town of Roma was where the first oil was discovered in Australia. In fact, it is still a very big hub for the natural gas that was discovered in our region.

So I come to this debate with an enduring interest, not only in the resource sector and what it can do for our regional economies but also in making sure that we get the balance right and get right the legislation and regulations governing the mining operations of the companies that extract this coal seam methane gas.

This Environment Protection and Biodiversity Conservation Amendment (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development) Bill is certainly timely. I also acknowledge that it has the bipartisan support of both sides of the House. I acknowledge the member for New England who is here. He was raising these sorts of concerns in his area and, along with other people, I was one of those voicing protests in our own areas.

I acknowledged, all the time, that it is the state governments that have the overriding constitutional responsibility for the regulation and operation of our resources. The Commonwealth has very limited powers, and one of the powers it has is in the approval process. Our interests are limited really to environment and biodiversity issues associated with mining approvals.

So I do welcome this bill. It is important that this bill provides the support that we need to give communities confidence that these new developments—such as the open cut coalmining industry and the coal seam methane gas—are safe and that, as it moves into more closely settled areas, as opposed to the vast areas of the Cooper Basin in my electorate, it is sustainable, and that there is a much happier coexistence than we have seen as these industries have become established in the Surat Basin in my electorate. This bill will establish an independent expert scientific committee on coal seam gas and large coal developments. What I want to ensure is that when the panel is established it is not just loaded with scientists, because I can assure this House that if it is just scientists that make up this panel the communities will not have confidence in the committee. As well-meaning, well-resourced and well-credentialed as scientists may be, it is important to get a balance of people on this committee—as I believe it always is. It is important to include people who have an understanding of communities, of the environment, of the way the aquifers work and how they recharge, and, of course, of the importance of them to the people of the outback of Queensland and many parts of Australia. The Great Artesian Basin is not just in Queensland; it crosses into South Australia, the Northern Territory and New South Wales. So, when this panel is established, it is important that it has a balance of people, not just scientists, providing advice to the minister. It is important that we get the confidence of the communities, who have been a very strong voice of protest, and that we get the regulations right for the coal seam methane gas operations, particularly, and for the open coalmining operations as they move into more closely settled areas and prime agricultural land.

The coal seam industry in my region has been growing from the very early trials that they did in about 1995-96. It was Tri-Star, from America, that started to develop the method for identifying whether these coal seams would provide coal seam methane gas and how it would be extracted. Once they had established that it was possible they, Sunshine Star and a lot of other companies onsold a lot of their tenements to larger companies.

The other part of the problem in the establishment of this industry is that companies who had been granted tenements to explore for coal seam methane gas were taking for granted access to landholders' properties. They were cowboys. They were probably $2 shelf companies, with a computer in an office somewhere. They subcontracted to drillers. They believed they had a divine right to go onto landholders' land to look for coal seam methane gas, prove up a particular volume of gas in their tenement and then onsell it for a lot of money to a major company, who would then amalgamate the work that had been done by the subcontractors and cowboys—as we like to describe them in our area.

We had instances where these cowboys would just cut through people's fences and put old cockies' gates behind them, leave gates open and come in night and day, bringing vehicles onto properties that might have had Parthenium weed and other noxious plants that people spent hundreds of thousands of dollars controlling. The Commonwealth spent millions of dollars on control of these invasive weeds, and these cowboys did not have the respect that landholders had for this land.

Largely, I am happy to say, I think we have weeded out the cowboys and the regulations through the voice of protest. But we have seen what the previous government in Queensland and New South Wales have done—more particularly in Queensland, because I believe in Queensland we are much further advanced in the development of the coal seam methane gas industry than the southern states are. We are so much further advanced that quite a lot of the gas now that is used in cooking and power generation in Queensland comes from coal seam methane gas. In fact, 30 per cent of Queensland's gas consumption is from coal seam methane gas. I have two or three coal seam methane gas power stations in my area. One is a 125-megawatt plant at Miles, and another is a 750-megawatt plant in Braemar—combined-cycle, baseload coal power as well as peak-load coal seam methane gas power. It is very clean energy. When I see a coal-fired power station and a gas-fired power station, when it comes to the visual pollution, I would rather have a gas-fired power station than a coal-fired one any day. It is cleaner energy and there is less visual pollution in the landscape. Of course, when it comes to open cut coalmines, with the scar they leave on the landscape, as opposed to gas wells, there is no comparison.

I am certainly a great supporter, providing we get this right. We have to make sure landholders' rights are protected. I have family involved in this who are going to have gas wells on their property. I know their right to negotiate is absolute, but it has not been easy—notwithstanding the new regulations that are in place. So I come to this with family involvement in dealing with gas companies. I come to the debate having to deal with constituents with very real issues with the legacy left behind by the cowboys that were out there earlier, including pumping stations within 100 metres of family homes—things that are no longer allowed.

I will talk a little bit about the Great Artesian Basin because I have had a lot of practical experience in the Great Artesian Basin. On our own property we have had a free-flowing bore. When I was only a small kid we used to ride past this free-flowing bore in the winter on our ponies on our way to school. We would pull up and put our hands under the lovely warm water to warm our hands and then get back on our ponies and ride on to school. It sounds like it was a long time ago, and it was. But, after 56 years of free-flowing bores—the member for Kennedy, to his credit, did mention these free-flowing bores—that one stopped. Why? Because of the 4,500 free-flowing bores that went into the Hutton Sandstone and the Precipice Sandstone. When they were formed, 250 million years ago, the water just flowed down bore drains—98 per cent of the water was lost and two per cent was utilised. But the basin did open up the pastoral industry. It was seen as a way of developing the land out there, and it has done so. I am very pleased to see that since the mid-1990s we have had a program—funded by state and federal governments—to cap many of these bores. I would like to see that accelerated. I would like to think that we have a goal in the next five years of having every free-flowing artesian bore, from the artesian basin, capped. We can then continue to repressurise those bores. It will not run out in the near future but we have seen a third of them stop flowing since the first one went in, in the 1890s, at Bourke in western New South Wales.

The industry is important—if we get it right. This committee will have a huge responsibility in giving confidence to landholders, communities and members of parliament. This committee, this panel of experts and people with practical experience, are going to be a check in the state government's regulatory process for providing extraction permits.

In my electorate, coal seam methane gas extraction throughout the basin is going to produce something like 18,000 jobs. There is going to be something like $800 million worth of royalty money coming in every year to the state government, not the federal government. We need to make sure that this money goes back to development in those regions—for roads, social and health infrastructure or affordable housing. We need to make sure it is not just a transfer of wealth from the Surat Basin to our capital cities east of the dividing range. Those communities out there—local councils and small businesses—are under enormous pressure because of the goldmine mentality out at the moment. It is a boom.

I will describe the boom in another way. My home town of Roma is the epicentre of the Surat Basin at its western end. We have gone from one flight a day, from Brisbane to Roma, to six flights a day. In the last 12 months we have had up to 60,000 people flying through the Roma Airport. In the next 12 months 100,000 people are estimated to fly through that airport. It gives you some idea of the massive growth, the new wealth, that has come in. The subcontractors are getting a start in life. They are coming from many parts of Australia.

But it has put enormous pressure on existing businesses in affording staff. That is why the 457 visa process for workers sponsored in by companies is an important element. It makes sure that we can keep those small businesses—the traditional businesses—in business and able to afford labour. They should not have to compete with what the resource companies are paying to source labour—so they can drive the coal seam methane gas industry—to get the developments online, on target, delivering LNG out of Gladstone by 2015 and 2016. That has been their imperative, but it has put enormous pressure on our existing industries. Part of the reason we had such a voice of protest from landholders was this imperative; part was the way that landholders were being treated. They wanted to get the job done. It caused a huge division across my communities.

The Longreach Leader today said that out of Blackall we have a mining company opening up the possibility of open-cut coalmines. Blackall and those western Queensland towns are old wool towns and many of them have halved in population since the decline of the wool industry. It is the resource sector that gives those country towns an opportunity and a hope that they can once again be wonderful towns and grow to their former glory of the wool days and get a new growth in population. It will be the resource sector in the Galilee Basin that will give those communities an opportunity to grow. (Time expired)

Mr OAKESHOTT (Lyne) (17:34): I support this Environment Protection and Biodiversity Conservation Amendment (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development) Bill 2012. I do no support it for plain-English reasons. I support it for making a substantial contribution to better outcomes in natural resource management—productive land protection and establishing science at the centre of planning processes for land use.

I acknowledge Minister Burke in the chair and the work that he has done, along with the member for New England, in getting this bill before the House. This is one of the key agreements to come out of a pretty brutal debate around mineral resource rent taxes and their worth or otherwise. Three agreements between me, the member for New England and government came out of those negotiations. This was one of them, alongside the establishment of a cabinet food, soil and water committee. It considers, through the GST distribution review, mining royalties and how they relate to and talk to tax reform generally and looks at the relationship between the Commonwealth and the state. We are still waiting for the supplementary papers from the GST distribution committee to see progress on that one.

Of the three agreements, this one is the first. This one is very important and talks to the heart of many communities. They are very vocal at the moment and are deeply concerned. They have fears, real or perceived, about the energy gold rush and its impact, both short and long term, on communities as a consequence of that. In my local electorate I have one particular community, the Gloucester Basin, which is being challenged by both coal seam gas and large-scale mining. Mining has been in Gloucester for some time on a relatively small scale. Gloucester has mainly been a farming community. It is a community that is at the head of the Manning River. It has about 300 tributaries in and around the beautiful Gloucester Basin that is at the bottom of the Barrington Range and the Barrington Tops. For environmental, lifestyle and food production reasons many people choose Gloucester as their home. They are deeply challenged, therefore, by proposals with regard to coal seam gas in the area. In the last couple of years, 110 wells have been proposed, with more to come. Of greater concern is a large-scale coalmine, 1½ kilometres from the centre of town. For local council planning purposes, the location of this particular mine is, on local council papers, for local environmental planning purposes. So there is a clash between state government land use planning of extracting a resource if it is there as the basic principle of state based land use planning and a council planning document that says, 'We're going to have a bit of development here, but here is an environmentally protected area.' The situation with completely opposite outcomes proposed by the council and the state is unsatisfactory and has the community deeply concerned.

The Gloucester community probably has about 2½ thousand people in it and nearly half the community turned out on a very cold evening to express their concerns about the New South Wales 'strategic' land use planning changes. A very strong view was expressed that even the new changes under the new government are completely missing the point and are really just embedding the problems that were experienced under the old regime in New South Wales, where, at the heart of planning was the view, as I said before, that if there is a resource it is the obligation of the Crown to extract it. For many communities, that is not what is at the heart of community and, for the long-term economic interests of Australia, that is not sensible nor strategic policy. Many are now seeing that with an expected nine billion people by 2050 there are threats around the world with regard to food security but for Australia enormous opportunities in food production. Whilst there is a recognition of this energy gold rush of the moment, the long-term story for Australia will, quite rightly, see a very strong rebirth of agriculture as an important contribution to the region around us and an important contribution to our standard of living through national economic outcomes. So we cannot 'cook' those productive lands to achieve a short-term benefit and do ourselves damage in the long term—that is the broad principle and starting point.

That is not to deny that there may be locations where mining expansion, coal seam gas, may have a place, but that is where the Commonwealth kicks in, that is where this particular bill kicks in, in making sure that those decisions are not made by vested interests, not made by political interests and not made by a state government of any political persuasion that has the mentality of, 'If there's a resource, we must extract it.' It is all about science, the best possible science we can find, and making decisions with regard to impacts on some pretty sensitive regions, not only the water but also the landscape and also—I am pleased about what we will see over time—issues of public health. All these things need to be taken into real and material consideration in making decisions about how we deal with this very sensitive clash between productive lands and the rush for energy.

I am very pleased that we are now seeing an independent scientific expert panel being put at the heart of decision making. I am also pleased to see the very sensible engagement with the states, and a key part of this is the development of national partnership agreements with the state. As we all know, from a Commonwealth perspective, land use and land use planning has predominantly been state based. They are effectively the owners of the land but the underlying principle of extracted oil costs, regardless of the long-term benefits of potentially not extracting in particular locations, is one that was not being heard. I think, therefore, the role of the Commonwealth in coordinating and enticing state governments to consider food security, water security and the protection of productive lands alongside considerations around energy and the extractive industries is an important step forward.

I am not sure whether we are there yet with all the states but we are pretty close. I am pleased that New South Wales have signed up. I do not see their logic at all, and I suspect they would not be seeing their logic in hindsight, in signing up to what is a pretty simple but effective approach to putting science at the heart of this process yet, within 24 hours, trying to release some other strategic land use planning process that they themselves have tried to establish and control, which, if you have seen any of the protests out the front of the New South Wales parliament, you will know has caused enormous community uproar.

My message to New South Wales once this bill is passed is to keep it simple: just use this. Make this the heart of your policy and the way out of the position you have put yourself in in trying to be, in my view, too clever by half. The protests that I and others have attended outside the New South Wales parliament were extraordinary. To see a coming together of farmers and environmentalists—a whole range of representatives of community interests—expressing deep concern at the loss of community as a consequence of getting this wrong should be a very loud and instructive message for us all. There is a way through and it is this bill. It is making sure that not only New South Wales but all states work very closely in cooperation and in collaboration with what is being attempted at a Commonwealth level. To have the Country Women's Association standing outside the New South Wales parliament for the first time ever in its 90-odd year history should say it all—that New South Wales has got it wrong. This bill has got it right. It is a difficult issue. It is one that has to navigate a path of cooperation through conflict and I congratulate the drafters in pretty well striking the balance.

I would also like to thank the many local organisations in my area who have been involved—the likes of the Manning Alliance, the Manning Clean Water Action Group, the Barrington-Gloucester-Stroud Preservation Alliance, the Gloucester Residents in Partnership and the Camden Haven Anti-fracking Group. It is arguably even more important to acknowledge the many individuals who are not aligned with any particular organisation, who have had signs up on their fences, who have been emailing—the very ordinary ones who do not want to protest and who do not normally want to engage in politics. These very ordinary people have done an extraordinary job in making sure this message is heard loud and clear around the country and have made it a priority issue on the agenda of all parliaments.

This bill reflects the concerns of farmers, homeowners, environmentalists, landholders and many others and, hopefully, now starts to get some sensible public policy. It should not act in isolation. I think public policy has a lot of things to consider deeply. For example, food security and the sort of strategy Australia takes—whether we should chase the idea of trying to feed all or start to shake the top end market of the Asia-Pacific and become a specialist in food security. There are opportunities in our strategy, but we need to think about it a lot.

Likewise, I do not think we have nailed water security and the issues around water yet. The Murray-Darling Basin issue is still up in the air. There are still issues being put up by the National Water Commission which are falling on deaf ears in government. There is more work to be done. The issue of soil protection is one that has not had its place on the public policy landscape as much as it could—probably because soil is a pretty, pardon the pun, dirty topic—but it needs its place. Our loss of topsoils globally is an issue of our time. It is an issue that this parliament needs to start taking seriously and needs to start contributing to not only domestically, but also internationally as we grapple with the loss of topsoil around the world. If science is to be believed and is to be trusted, this is an issue for the next hundred years if we do not deal with it. It is right before us; it is a complementary issue to water and food security.

I am pleased we have got to this point. Now it is about locking all the states into the national partnership agreement and getting these bioregional assessments up and running. Now it is about securing the place of the independent science at the heart of any development processes from here. And now it is about really trying to get the states—in my case New South Wales—to see the worth of this, to use it for their own benefit and to make this the heart of public policy on this difficult but important issue for the states, including New South Wales, moving forward. I congratulate the minister at the table, Minister Burke, and hopefully now we can get some sensible direction on some challenging policy.

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (17:49): I want to thank everybody who has contributed to what has been an extremely good and a very constructive debate here in the chamber. I have not been able to hear all of it, but I have probably heard close to half of the contributions, either here within the chamber or from my office. There has been a really strong message from this chamber to industry generally and to the public—and this will not be lost on anyone—that the bill before us does not say that nothing should go ahead, but it does say that all decisions should be made on the best possible scientific information and that information should be available independently.

When I was dealing with some of the environmental decisions on projects in the Darling Downs—the Surat Basin—I felt there was a need for ongoing adaptive management of some of these mechanisms and I established an independent scientific committee that would overlook them. When the mining tax was being discussed, the member for New England and the member for Lyne both argued the case strongly, asking, 'Why can't we provide the best possible information in advance of decisions? Why do we have to wait for the process of decisions having been made and get into adaptive management?' They came up with the suggestion to government that we have an independent scientific committee on an ongoing basis and we provide serious dollars to fund the best possible information. It is one of the best ways of dealing with the obligations that we find we have in our interactions with the states. In this bill we are not telling the states to change their standards. We are not telling them to change their timelines or their laws, but we are saying: 'If we're putting together a framework with the best possible scientific information, then please use it. Use it to inform your decisions, because no-one should be afraid of applying the best quality scientific information to environmental decisions.'

We also need to face the fact that we are dealing with an area that is unbelievably complex and where a lot is not fully known. I have had a number of discussions where I have been told that individual aquifers have no connection to other areas of underground water and then I get told by another set of scientists that they think they might be connected and others who say they definitely are. There is a high degree of uncertainty and a lot of information only becomes available as further research is done. By putting the serious dollars that are on the table attached to this bill and having—

Mr Katter: Minister, if I could just say—

The DEPUTY SPEAKER ( Mr Mitchell ): Order! The member for Kennedy!

Mr Katter: from Boulia—indicated that those aquifers are connected. There is no way you can get that water to run—

The DEPUTY SPEAKER: The member for Kennedy!

Mr BURKE: I am very glad we allowed the pause. While the interjection might have been long, the point is really well taken. Because if something is not connected then you do not have a risk to underground water. But we do not want to undo all the conversations that are happening about water reform by finding that there is more water in rivers and we are just sucking the water back out through the system by depleting aquifers that are in fact connected. No-one wants that. The best possible scientific information is the best guard against that.

We have had good responses from a number of the state governments. I am disappointed that at this point the WA government is still saying, 'Absolutely no way'. But I am pleased to hear a number of members of the same party in the same state as the WA government—a number of members from the other side—who have spoken strongly in support of this. I hope they take that message to the WA government. No-one should be afraid of getting the best quality information—no-one.

I am also advised there was a contribution by the member for Groom, where he got stuck into decisions that I had made in a project in Queensland.

Mr Ian Macfarlane interjecting—

Mr BURKE: I did not hear a word of it, but I have been advised to feel very hurt by what he said. So I would simply refer him to a letter to the editor that was published in the Financial Review yesterday where I dealt with similar allegations which had a similar level of accuracy to the ones that were made by the member for Groom. But I am sure the mistakes were entirely well meaning.

Can I commend the bill to the House. Effectively, as a result of what is in front of us today, there will be a much better quality of base level information, a much better quality of information dealing with underground water and the right set of experts across the full range that we would want to see of expertise. It will be well funded. It means future decisions will be well informed as a result of the decisions taken in the parliament this day.

Question agreed to.

Bill read a second time.

Mr IAN MACFARLANE (Groom) (17:55): I move the amendment circulated in my name:

(1) Schedule 1, item 4, page 5 (after line 2), after subsection 505C(5), insert:

(6) The Minister must also ensure that a majority of the members possess scientific qualifications and expertise in one or more of the following areas:

   (a) geology;

   (b) hydrology;

   (c) hydrogeology;

   (d) ecology.

As I said in my comments when I spoke on the bill, the coalition supports the establishment of this expert panel, and the amendment here is being supported by the minister. There is certainly no doubt that, as the member for Lyne just said, science needs to be at the heart of the process. Too much of the debate has been dragged backwards and forwards by statements that are less than accurate, to say the least.

The most important thing in this process as we exploit those resources—which, as the member for Maranoa said, have the potential not only to provide jobs and income for the economy but just as importantly to provide jobs in communities which have seen an economic decline in the past—is that the community, the custodians of the land, in particular the farmers in Queensland and New South Wales and wherever else this industry expands to, have confidence in the process. There must be confidence in the process. We need to depoliticise the process. We need to take out of the process those things where those who for their own political gain are attempting to confuse the topic.

So establishing an expert panel, establishing the wherewithal behind that panel in the money that the Commonwealth is making available, is all part of ensuring that the community has confidence in this process. We do need to collate an absolute myriad information that is out there. Some of it is peer reviewed, some of it is not. Some of it is, therefore, accurate and some of it may not be accurate. We need to collate that information and where the deficiencies are identified in that information then do the research.

The coalition have moved this amendment, which, as I understand it, will be supported by the government. Our only aim in this is to ensure that that scientific panel has the very best expertise to ensure that it does the very best job for the responsibility that it is charged with. If it does that, everyone will benefit from it. The ability of the two industries to coexist is important—that is, primary industry or agriculture and also the resource or gas industry; the protection, most importantly, of the aquifers to preserve that most precious resource, which is of course water; and at the same time ensure that the land is able to, as much is physically possible at the time, but at the end of the extraction, be returned to its original productivity. It is very important in terms of us not only feeding our nation but our ongoing responsibility we will have to feed the world that we retain the productivity of our land. As an ex-farmer—and, once you are a farmer, you are always going to be a farmer; I still sniff the air when I go out in the bush—I want to see that happen and the coalition want to see that happen.

I commend the amendment to the House. We, as I say, will support the legislation when it comes forward.

Mr WINDSOR (New England) (17:59): I rise to thank members for the support for this legislation. I recognise the member for Groom and the amendment that the opposition is introducing. Essentially, I think the bill incorporates pretty much what you are suggesting, but you are spelling it out a little bit more than maybe the bill does. I hope the minister is supportive because I think it would be a very good thing if this particular piece of legislation got through the parliament with a united approach. It is critical, and the member for Groom made the point that we have appropriate assessment. I take on board what the member for Maranoa said when he suggested that we want to make sure that this is not just a talkfest of scientists, that there is some degree of community input. I thought his contribution was very good as well. This is in stark contrast to the situation some years ago when there was division on this very issue, on the need for independent scientific assessment in terms of risk and knowledge and cumulative impact on landscape. So in a number of years we have come quite a long way.

I remember a similar debate in the Senate, which the member for Groom would also remember, where there was a change of heart overnight and the coalition members, particularly the National Party at the time, recanted their vote the very next day after making glorious speeches about how they had been able to deliver a scientific process to look at these very issues in some of the lands that we are still talking about today. So progress has been made.

The Minerals Council back in 2008—the member for Groom would remember this as well—made the point through their environmental officer, Melanie Stutsel, who is still there, that there should be some form of bioregional assessment process engaged in before exploration licences are granted, so that we have some idea of what the landscape can accept. I think that has been taken up through the national partnerships agreement that the minister and the Prime Minister have been involved with and that is reflected very much in the independent scientific analysis. The money for that analysis, the $200 million that allows this to go forward, is in fact money that has come out of the minerals resource rent tax. In the very kindest of ways, I remind the member for Kennedy that he did not support that funding base. I believe he is going to try to amend it today and I will be interested to listen to his contribution.

The $150 million of funding will go towards the risk assessment process, the cumulative process. I think all of us want to know about that, irrespective of which catchment we live in. I take the point, which I think was made by the member for Groom, that none of us are against development. We just want to make sure that it is risk free or, if there are risks, that we prioritise our better agricultural lands, particularly where water is involved, and that we get it right prior to taking risks.

In relation to gas in New South Wales, the gas companies themselves ran an advertising campaign some months back where they made the point that within New South Wales there was enough gas to power Sydney for 5,000 years. The point I made in relation to that was: well, what's the hurry? Why don't we get this right—get the science right and make the assessment process one where there is a degree of objectivity rather than political platitudes and decision making based on the income of the state or the politics of the day? Five thousand years is a long time. If we lose a few at the start in getting the process right, I think the people in 5,000 years may well thank us.

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (18:04): I will not hold up the House. The intention of the opposition's amendment is a pretty close match to how we had envisaged the committee operating. The concept of putting that in and formalising it in the bill is, I think, a good suggestion and I thank the opposition for the consultative way in which the drafting has taken place.

Question agreed to.

Mr KATTER (Kennedy) (18:05): I move the amendment circulated in my name:

(1) Schedule 1, page 8 (after line 9), at the end of the Schedule, add:

12 Aquifer drilling—12 month moratorium

(1) A person commits an offence if:

(a) the person takes an action; and

(b) the person takes the action for the purposes of, or in connection with, coal seam gas extraction; and

(c) the action is, or results in, drilling through or into an aquifer; and

(d) the drilling occurs within 12 months after the commencement of this item.

Penalty:

(a) for an individual—$200,000; and

(b) for a body corporate—$2,000,000.

(2) Subitem (1) applies only if:

(a) the person is a corporation to which paragraph 51(xx) of the Constitution applies; or

(b) the action is taken for the purposes of trade or commerce:

(i) between Australia and another country; or

(ii) between 2 States; or

(iii) between a State and a Territory; or

(iv) between 2 Territories; or

(c) the action is taken in a Territory.

(3) Subitem (1) does not apply if the action is taken to facilitate safer coal mining.

(4) This item has effect despite any provision of the Environment Protection and Biodiversity Conservation Act 1999 or any other Act.

The amendment is pretty simple, really. It says that we should have a year's moratorium. The honourable member for New England has criticised me for opposing the $150 million. I do not mean to be disrespectful but $150 million to do this study is, in my opinion, a waste of taxpayers' money of indecent proportions, to be quite frank with you. If you want to know the science of it, I will explain it to you outside. You laugh, but if you had taken the time to find out a little bit about the gases that are inherent and their effect in an aquifer then you would know that it is inherently dangerous, my friend. And, if you had listened, what I said earlier on is that if you have casing it is only as good as how long it is going to last. You would know, as I do—both of us coming from the country—that bore casing, whether it is plastic or something else, is not going to last all that long because there are movements in the ground all the time.

I think I should have moved for two years rather than one year, and I agree with the criticism from the honourable member behind me on this issue. If you are saying that we need money to do some scientific research, I would agree with the member for New England. I applaud him and thank him, as I have done publicly and privately on the issue. As to whether it should be money of that dimension: no, I am sorry, I have always been a person that is very tight-fisted with government money. My many years in the ministries would attest to my frugality and I will not be apologising to anyone for that. Actually, I am quite proud of it.

As for the amendment being moved here, firstly, it is no use doing the scientific research whilst they are out there drilling holes through the aquifer. You stop the drilling. And until you do stop it for scientific research, whether you consider it necessary to the extent of $150 million or whether you consider it necessary to the extent of a few million dollars, which would be my position, we will argue that. But the thing that should not be argued is that they are out there drilling the holes without the scientific knowledge belonging to the member for New England or the minister or the government. I think that is grossly irresponsible. I fully agree with the honourable member behind me here in saying that there should be a moratorium until that scientific work is done and assessed.

The second issue is that, quite frankly, I just do not think the risks taken by drilling through the aquifers are justified—and we are talking about the artesian aquifers. I take the minister's point that there is great argument about whether the aquifers, which we call the Great Artesian Basin, are interconnected or whether they are not. I put on the table my scientific evidence that Spring Creek runs for 82 kilometres west of Boulia in arguably the hottest, driest place on earth—though San Fernando in California would argue otherwise, and there is another place in South America and one part of Africa. It is as hot and dry as any climate on earth. To be able to get a creek to run for 82 kilometres an awful lot of water has to be coming out. I just do not think that that amount of water would come unless the aquifers were interconnected, and I can present an awful lot of other evidence to that effect. So I just do not believe that we should be drilling through the aquifers.

Quite frankly, the aquifers in my area, the Great Artesian Basin, are at 1,500 feet. Surely you can find a lot of gas without having to go down below 1,500 feet. Also, because it is an aquifer, it has to have an impervious layer above it and an impervious layer below it, otherwise it is not an aquifer. The impervious layer below it is generally accepted as bedrock. I do not know—it is going to cost a lot to go through bedrock, and I would not have thought the chance of finding stuff beneath would be particularly good. We have people out there drilling holes. It looks good on a prospectus, and they will have a lot of gobbledegook scientific jargon in the prospectus. Quite frankly, we have a name for it in the bush but I cannot use that name here. (Time expired)

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (18:10): The government will not be supporting the amendment that has been moved by the member for Kennedy. In our view this bill is about improving the base level of scientific knowledge. In all the public statements and in all the decisions of government, our view is that the approval standards should not change; they should simply be better informed. That is what the bill does. That is what the money funds, and that is what we believe should be the consideration before the parliament.

The DEPUTY SPEAKER ( Mr Mitchell ): The question is that the member for Kennedy's amendment be agreed to.

A division having been called and the bells having been rung—

The DEPUTY SPEAKER: As there are fewer than five members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Katter, Mr Bandt and Mr Wilkie voting aye.

Mr BANDT (Melbourne) (18:17): I move:

(1) Schedule 1, page 8 (after line 9), at the end of the Schedule, add:

12 Aquifer drilling—moratorium

(1) A person commits an offence if:

(a) the person takes an action; and

(b) the person takes the action for the purposes of, or in connection with, coal seam gas mining; and

(c) the action is, or results in, drilling through or into an aquifer; and

(d) the drilling occurs before the earliest of the following:

(i) 5 years from the commencement of this item;

(ii) the conclusion of the full 5-year research program of the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development.

Penalty: 2,000 penalty units.

(2) Subitem (1) applies only if:

(a) the person is a corporation to which paragraph 51(xx) of the Constitution applies; or

(b) the action is taken for the purposes of trade or commerce:

(i) between Australia and another country; or

(ii) between 2 States; or

(iii) between a State and a Territory; or

(iv) between 2 Territories; or

(c) the action is taken in a Territory.

(3) Subitem (1) does not apply if the action is taken to facilitate scientific research to better understand the interaction of groundwater systems and the impact on those systems of coal seam gas mining.

(4) This item has effect despite any provision of the Environment Protection and Biodiversity Conservation Act 1999 or any other Act.

I will speak only briefly to this. When the bill passes to the other place, Senator Larissa Waters, who has been so actively involved in the campaign in Queensland, and Senator Rhiannon from New South Wales are going to speak more fulsomely. I first of all acknowledge the efforts of the member for New England in bringing this legislation to this place. A lot is said about minority parliaments, but one of the reasons that minority parliaments get outcomes is that issues that might otherwise go into the too-hard basket or might not find their way onto the agenda because of the role that certain vested interests have—such as in development, in agriculture and mining—can be brought out and debated.

Although there are a number of ways the Greens could suggest this bill would be improved—I will go through some of the things we would do, and what we have put before the parliament that we think would be better solution—I just want to acknowledge the debate and the hubbub about this current parliament. People are going to look back on this parliament at the time of the next election and acknowledge it has been a time of great reform and some significant gains. It is good that we are now having a national debate about coal seam gas.

The amendment that I am proposing is to impose a moratorium of sufficient length to allow the scientific research that we have heard about to take its course and to give us the proper base of scientific knowledge that we need to make informed decisions. It is our understanding, based on advice from the department, that the work program of this bill's independent expert scientific committee really needs a full five years to get to a proper level of scientific knowledge. So this amendment proposes a moratorium for that five-year period, with the option of lifting the moratorium should that work program be completed earlier.

As the Greens, we say that this is exactly the time that the precautionary principle should apply. The industry is expanding rapidly across the east coast, despite a serious lack of knowledge about the risk that CSG drilling, fracking and gas extraction poses, particularly to our groundwater systems. It is simply not acceptable—and we believe that our communities and our environment deserve better—to proceed in the absence of this knowledge.

The Australian Greens have suggested that there are a number of ways that this industry could be better regulated. Senator Waters has a bill before the Senate proposing that a water trigger be inserted into the EPBC Act—into our federal environmental laws—so that we can ensure that the full impacts on water systems from coal seam gas mining can be considered by the federal environment minister. Senator Waters has also proposed a landholder rights bill to allow people to say no to CSG mining on their land where the risks are still unknown, something that for a brief, fleeting period was supported by others in this place until they changed their position. The Greens have also proposed two motions in the Senate calling for a moratorium on coal seam gas mining.

We will be supporting the bill and debating these issues further when it comes to the Senate, but it would seem to be eminently sensible to use this opportunity, where it is on the national agenda and where we have the opportunity to progress with legislative reform, to say—as we have said before—that if there is 5,000 years worth of gas there, then waiting an extra five years while we work out the state of that e scientific knowledge will not hurt anyone. In fact, it might avoid a great deal of harm. So I commend the amendment to the House.

Mr WINDSOR (New England) (18:21): I will speak briefly to the amendment and the previous amendment, moved by the member for Kennedy, which did not get through the House. Whilst I have great sympathy for the sentiment being expressed by the Greens—and I thank the member for Melbourne for his complimentary remarks—I am not sure that this is the vehicle to drive a moratorium process. There may well be other vehicles within the parliament that could do that. This legislation is essentially about objectivity. It is not picking one side of the debate or the other; it is establishing an independent scientific process that is locked into a national partnerships agreement, which broadens the area.

The suggestion that we have some sort of absolute moratorium until we get the science right does, I think, apply in some areas. If the independent scientific committee and the national partnerships agreement are actually working successfully, that will in fact happen. It will go to risk, particularly in relation to water resources. It will go to the cumulative impact of large coal developments plus others in some catchments—the catchment of the Namoi, for instance. Large developments are being proposed there; there are large developments there now; there are large coal-seam gas companies interested in another layer of extractive activities, all around quite massive areas. It is not in the Great Artesian Basin, as the member for Kennedy kept referring to. The artesian basin does not exist there, but there are quite large groundwater supplies that we do not fully comprehend either for the Murray-Darling plan that is in the parliament at the moment or for the extraction of coal-seam gas. In those cases, if the scientific committee is working effectively, it will delay some of these large developments until effective and fully objective knowledge exists about those catchments.

There are other catchments where we do have a relatively full scientific knowledge and where the water resources are not of the magnitude of either the artesian basin or areas on the Liverpool Plains, for instance. The member for Groom would be well aware of some of the irrigation areas on the Darling Downs. There are other electorates in Queensland where there is a degree of knowledge about the scientific impact on water resources.

For that reason I will not support the amendment. There may well be other vehicles in the parliament by which these issues can be driven, but I do not think this is the right bill for it. Bear in mind that a lot of work has gone into plugging together the national partnerships agreement with the states. If this amendment were passed, we would run the risk of the whole process fracturing and undoing a lot of good work that has been done by a lot of people over a number of years.

Mr OAKESHOTT (Lyne) (18:25): I seek some clarification from the minister. Wherever a project, either coal-seam gas or large-scale coalmining, is on the spectrum of planning—even at the exploration stage through to the development application stage—my understanding is that every step along the way as of now the science decides whether we progress in a planning sense to the next stage. That is my understanding. I seek some clarification from the minister. If I am correct and the science now is at the heart of every gateway in the planning process, a one-year or five-year moratorium, in my view, is unnecessary. The science is here; the science is now. It is the law as of today. For those reasons, I think a moratorium is not necessary and, if anything, we should be celebrating the success of this bill in finally injecting much needed science into the planning process at all steps along the spectrum of that process.

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (18:27): I have to respond to that in a way that does not prejudge any decisions. The best way I can respond to the points raised by the member for Lyne is to say that environmental decisions are based on what are covered as matters of national environmental significance within our national environmental legislation, known as the EPBC Act. There are some parts of that decision-making process which do not necessarily have science at their core—for example, heritage decisions which are covered under those sections. Where the decisions call for a foundation of scientific information, the best available scientific information is used. As a result of the amendments here today, there will be a continued and rapid improvement in the quality of that scientific information that forms the foundations of those parts of the decision making within the act.

Question negatived.

Bill, as amended, agreed to.

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (18:28): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (18:30): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr ANDREWS (Menzies) (18:31): I rise to speak on the Social Security and Other Legislation Amendment (2012 Budget and Other Measures) Bill 2012. This bill seeks to amend legislation following government announcements.

Firstly, it seeks to permanently extend the current income test exemption for the Western Australian government's country age pension fuel card and the cost of living rebate scheme. The bill seeks to reduce the length of time people on income support payments and family payments can spend overseas, while continuing their payments, from 13 to six weeks. It also seeks to reduce the age of eligibility for family tax benefit part A from 21 years to 18 years. In addition, the bill will make changes to the percentage of care for child support and family tax benefit purposes based on the actual care of the child. The bill will amend the clean energy low income supplement provisions to clarify the eligibility of a group of low-income families who may otherwise not be fully assisted for their expected average cost impacts under the carbon tax. Finally, the bill will make minor amendments, including clarifying in the child support legislation the authority for the practice of automated decision making using computer programs. I will address each of these measures in turn.

Excluded income—the bill will extend permanently the current income test exemption for the Western Australian Liberal government's country age pension fuel card and the cost of living rebate scheme. The Western Australian country age pension fuel card scheme provides an annual amount for eligible singles and couples combined living in country areas of Western Australia to purchase fuel and taxi fares. The Western Australian cost of living rebate scheme provides an annual payment for Western Australian seniors card holders. This amendment will make sure that people continue to benefit from the full value of the assistance provided by the Western Australian government under these arrangements, without incurring a reduction in their pension. The income test exemption is currently due to end on 30 June 2012. This measure will make these income exemptions operate indefinitely from 1 July 2012.

Adjustments to portability and other periods—this measure will tighten the rules for people who travel overseas while receiving certain income support payments and family payments. Under the proposed amendments, the length of time people can spend overseas while continuing to receive these payments will generally be reduced from 13 weeks to six weeks. It is important to note that the change will not apply to age pension and disability support pension recipients assessed as having a severe and permanent disability and no future work capacity, or to students studying overseas as part of an approved Australian course. The pension supplement will also be changed to allow a temporary absence for a continuous period not exceeding six weeks. Family tax benefit part A will still be paid for up to three years for a temporary absence from Australia, but it will be reduced to the base rate of payment after six weeks. These changes will take effect from 1 January 2013.

Change to the age of eligibility for recipients of family assistance payments—this bill will limit the age of eligibility for family tax benefit part A to young people aged under 18, or until the end of the calendar year for 18- and 19-year-olds who are completing secondary education or equivalent vocational education. Effectively, this change will see families with children aged between 19 and 24 years lose their family assistance payments—news which could not have come at a worse time for Australian families who are already struggling with increasing cost-of-living pressures and who are about to be hit by the world's greatest carbon tax, an issue which I will talk more about in a moment.

Non-budget measures—this bill also introduces the following non-budget amendments. Firstly, the bill corrects an inequity in the family tax benefit part A rate provisions in relation to child support. From 1 July 2012, if an individual is privately collecting child support and it is reasonable to collect the full amount, the maintenance income test for the family tax benefit part A will be based on the individual's child support entitlement, instead of restricting the rate of family tax benefit part A for a child to the base child rate when the individual privately collects less than the full child support entitlement. Secondly, this bill makes amendments that will allow a person's percentage of care for child support and family tax benefit purposes to be based on the actual care of the child immediately in special circumstances such as where there is evidence of violence or unusual behaviour.

Thirdly, the bill amends the clean energy low income supplement provisions to clarify the eligibility of a group of low-income families who may otherwise not be fully assisted for their expected average cost impacts under the carbon price. Finally, the bill also makes a number of minor amendments, including clarifying in the child support legislation the authority for the practice of automated decision making using computer programs.

Family tax benefit changes to age of eligibility—I will now return to this issue to which the bill makes some changes. The revelation earlier this morning in Senate estimates that approximately 53,000 families will be affected by this budget measure is timely, as is the revelation that 43,000 of teenagers whose families will lose their entitlement to family tax benefit part A will not be eligible for any other form of assistance. So, 43,000 teenagers will not be eligible for any other form of assistance as a result of the passage of this legislation. That is 53,000 families who are losing payments at a time when many are already struggling with increasing cost-of-living pressures and are about to be hit with the world's biggest carbon tax. It is bad news for families and it keeps getting worse.

On the government's own figures, there will be an immediate 10 per cent increase in electricity prices and a nine per cent increase in gas bills under the carbon tax, and this comes on top of the fact that, over the last four years, across Australia electricity prices have increased by 61 per cent and gas prices by 37 per cent. In addition to this, health costs have gone up by 20 per cent, education costs by 24 per cent and rent costs in excess of 20 per cent. All of this is a direct hit on Australian families. It is therefore disappointing that, at a time like this, the government has again chosen to cut family payments to try to balance the books rather than cut government spending. The families of Australia continue to bear the burden of this government's reckless spending at a time when many of them can ill afford it. Australian families deserve better than waste and mismanagement, and they deserve better than the world's biggest carbon tax.

This is a divided and dysfunctional government, a government which is at war with itself. And it is a government at war with the people that it should be representing. The Labor Party's 'just chuck it on the credit card' thinking, coupled with its desire to rip money out of family household budgets is hurting many of those already under pressure. The government's wasteful and reckless spending is hurting many families, and of course those cost increases that they have suffered over the last four years—and those which are projected over the coming years—are going to continue to have an adverse impact on many Australians. There is a better way. We on this side believe that we should be promoting hope, reward and opportunity for all Australians. We believe that government should help families, not hinder them. And we believe that integrity is paramount. Unlike Labor, we do not make promises that we cannot keep. Accordingly, I move:

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

"whilst not declining to give the bill a second reading, the House condemns the Government for cutting assistance for families with children over the age of 18 at a time when Australian families are struggling with cost of living pressures and are about to face the world's biggest carbon tax."

The DEPUTY SPEAKER ( Ms K Livermore ): Is the amendment seconded?

Mrs Prentice: I second the amendment.

The DEPUTY SPEAKER: The original question was that this bill be now read a second time. To this the honourable member for Menzies has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Mr NEUMANN (Blair) (18:40): It is a bit rich being lectured by those opposite, who opposed the schoolkids bonus in the last week or so and who would actually claw back the family tax benefit assistance that families are getting, the pension assistance they are currently getting and also the assistance that they are getting in supplementary allowances. Those opposite would do all of those things if they were in the Treasury benches.

With respect to this legislation, the Social Security and Other Legislation Amendment (2012 Budget and Other Measures) Bill 2012, unlike those opposite, we believe in supporting families. We trust families with their budgets. Those opposite think that families will spend whatever government assistance they are provided on the pokies, booze and those kinds of things. That is what they think of families. This particular legislation deals with a number of important reforms, some of which are savings measures such as the age/study rules for children, family assistance payments, portability of income support, family payments, the cost to the budget in relation to the income test exemption for WA fuel card holders and minor amendments to social security and family assistance legislation.

First, in relation to the Western Australian situation, the exemption is a form of assistance that is received by people in regional and rural areas. The exemption currently benefits about 13,000 recipients of the WA country fuel card and about 60,000 recipients of the cost-of-living rebate scheme who are in receipt of social security or Veterans' Affairs income support payments. The fuel card scheme is worth about $500 a year for singles or couples, and in 2012 the cost-of-living rebate scheme payment was $155.25 for singles and $232.90 for couples. The scheme would expire on 30 June. We are making sure it continues and is permanent. We are making sure that those people who are eligible will continue to receive it and that their eligibility will not be reduced as a result of payments which we are providing in the budget to help their household budgets. That is what we are doing in relation to this particular assistance.

The second measure deals with the portability of income support and family payments. We are tightening the rules for people who travel overseas while receiving income support and family payments. We are cutting that back from 1 January 2013, reducing the amount of time a person on income support or family assistance payments will be able to be overseas and continue to receive those payments to between six and 13 weeks. There are people who are exempt from this. It will not affect the age pension, which will continue to be paid indefinitely while overseas. However, the pension supplement will be reduced to the basic rate after six weeks rather than after 13 weeks, and some disability support pension recipients will not be affected if they are severely disabled and have no future work capacity. We think that is a reasonable measure. We understand that people have relatives and friends overseas but we believe that six weeks is an appropriate time.

The third measure I want to talk about relates to the change to age of eligibility for family tax benefit part A in relation to young people over the age of 18 years. This government has provided a tremendous amount of assistance to those types of people. For example, in my electorate alone there will be about 5,700 local teenagers in the next five years who will benefit from our additional $4,200 a year to family tax benefit families with teenagers of 16 to 19 years who are currently in full-time secondary school or equivalent vocational education. The family tax benefit scheme in this country is to assist low- and middle-income families with the cost of raising children when they are at school or at a school equivalent. When a child turns 18 years of age, we think it is reasonable that the family assistance stops when they leave school. If they leave school or the school equivalent, young people seeking financial support if they are studying or looking for work can always apply for youth allowance. There are stricter conditions, we acknowledge that, but we believe that learning or earning is the way to go for young people. We want to make sure they look for jobs or are engaged in study. This particular reform will save about $361 million across the forward estimates over four years.

There is a lot this government is doing. The member for Menzies was talking about how we are not helping families. Regrettably, he does not understand constituents in his electorate get equivalent payments, which I am going to outline, to my constituents in Blair. For example, there are 11,256 local part FTB A recipients eligible for an advance payment of $1,000 to meet unexpected family expenses. There are 6,864 local families benefiting from a 73 per cent increase to the childcare rebate. Blair has 14,000 local families getting extra money through family assistance payments from this government, which those opposite would tear away from those families. Typically a family in my electorate gets $529 through tax cuts and family assistance measures through our clean energy legislation and budget measures. There are 13,500 FTB A recipients who are getting an extra $110 per year per child and 11,600 FTB recipients receiving $69 extra a year from May this year.

I could keep going and going, but I will not bore the House. I gave those figures entirely to show just what sort of assistance we are providing for local families in my electorate. I dare say, for the 150 members of this place that is the kind of assistance being rolled out in their electorates. I wonder what those opposite are going to say to their constituents about those tax cuts, about the family tax benefits, about the assistance to the 20,000 pensioners in their electorates when they meet them at mobile offices, street stalls or in their electorate offices. Their electorates would be similar to mine. I cannot believe they would not have between 20,000 and 40,000 pensioners in their respective electorates getting assistance. I am amazed those opposite would come in here and have the hide to lecture us about what we are doing when they themselves are hell bent on ripping away and clawing back the assistance for families. We have made it clear that we have taken some tough measures in this budget, but they are measures which we believe are necessary.

The final thing I will say in relation to this particular legislation is from my experience when I was practising as a lawyer. Particularly in family law, a change in actual care of a child results in a change to child support. The changes we are making here would allow a person's percentage of child care support and for family tax benefit purposes to be based on actual care of the child immediately in special circumstances where there is evidence of violence or other unusual behaviour. That is always a vexed question. I can recall many occasions being at the Family Court or the Federal Magistrates Court and discussing the issues and implications of what we used to call custody or access arrangements and the implications for social security payments for child support and what impact the consequences of a consent order might have for the mother or father of the children. So acknowledging the actual care immediately in special circumstances is a good measure, it is a sensible measure and it is something that reflects reality. Regrettably, in too many cases involving family law there is violence. I commend the legislation to the House.

Ms MACKLIN (Jagajaga—Minister for Families, Community Services and Indigenous Affairs and Minister for Disability Reform) (18:49): This bill introduces three measures from the 2012 budget, along with some minor amendments, to clarify existing government policies. One of the budget measures will provide a permanent exemption from the social security and veterans' entitlements income test for the Western Australian government's country age pension fuel card and cost-of-living rebate scheme. The Australian government previously exempted the value of the WA country fuel card and cost-of-living rebate scheme from the social security and veterans' income test for three years up to June 2012. This bill now makes that exemption permanent, so eligible people can have confidence in the long term that their income support payments will not be reduced because of benefits received through the Western Australian schemes.

The second budget measure will tighten the rules for people who travel overseas while receiving income support payments and family payments. This means that from 1 January 2013 the length of time that people on most income support payments will be able to be overseas and continue to receive payments will be reduced from 13 weeks to six weeks. Under this change, family tax benefit part A will continue to be paid for up to three years but will reduce to the base rate at six weeks rather than the 13 weeks of the current rules. Similarly, those payments such as special benefit and Newstart allowance that can be paid outside Australia only in limited and defined circumstances such as attending an acute family crisis will now only be payable for up to six weeks of the absence rather than for up to the 13 weeks under current rules.

The age pension will not be affected by this change, and nor will disability support pension recipients who have been assessed under new rules from 1 July 2012 as having a severe and permanent disability and no future work capacity. Portability periods may be extended in genuine exceptional circumstances such as when a person falls ill overseas and cannot return. Six weeks is a reasonable period of time for people to manage family or personal matters that take them overseas from time to time while having their absence funded by the Australian taxpayer.

As also announced in the budget, this bill limits family tax benefit part A to children aged under 18. Families with children aged 18 and 19 who are studying full time may continue to get the payments until the end of the calendar year in which they complete secondary education or equivalent vocational education. Youth allowance will be the primary form of assistance for eligible young adults aged 18 and over if they need financial support while they are studying or looking for work. This change builds on reforms over a number of years by this government to ensure that the family payment system is targeted to low- and middle-income families while their children are young, to help them finish school.

In 2011 this government delivered Australia's first Paid Parental Leave scheme, and on 1 January this year we delivered increases to family payments of up to $4,200 a year for families with teenagers in school. In this budget there is our new schoolkids bonus to help out with education costs and a boost to family tax benefit part A from 2013.

The bill also make some minor amendments to the social security law, the family assistance law and the child support legislation to clarify some existing government policies.

The DEPUTY SPEAKER ( Ms K Livermore ): The question is that the amendment be agreed to.

Question negatived.

The DEPUTY SPEAKER: The question now is that this bill be read a second time.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ms MACKLIN (Jagajaga—Minister for Families, Community Services and Indigenous Affairs and Minister for Disability Reform) (18:54): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr HUNT (Flinders) (18:55): In addressing the Clean Energy Finance Corporation Bill 2012 and related bills, let me begin with some history about the successes and failures of support for and management of renewable energy in Australia.

It was the coalition which created, developed and implemented the mandatory renewable energy target—successfully. It was the coalition which created, developed and implemented the then equivalent of the solar PV rebate—successfully. It was the coalition which created, developed and implemented the solar hot water rebate—successfully. By comparison, what we have had from this government is the Home Insulation Program, which on any account is arguably Australia's most dramatic policy failure on the domestic front since the Second World War. Two billion dollars were largely wasted, including $500 million simply to fix the roofs—over 70,000 repairs, removals or variations to the work done, and that is still knowing that there are hundreds of thousands of other jobs out there which will never be inspected by this government. There were, of course, 200 house fires, and the link to four of the most terrible tragedies.

But this government also created the Green Start program and the Green Loans program. Green Loans cost over $100 million for barely more than 1,000 loans: $100,000 per loan on average for loans which were literally a few thousand dollars. It was a monumental failure which in any other period of government would be classified as the standout failure of that administration, but it is dwarfed by the failures of the Home Insulation Program.

The Green Start program, which never actually started in any meaningful way, was terminated very shortly after it was announced. The cash-for-clunkers program was announced by this government as their centrepiece of the last election's climate change policy, only to be brought to its knees not that long after the new government was created because it was a policy that was so bad it should never have seen the light of day. The citizens assembly was created to randomly select 150 Australians from the phone book to determine the policy which the government dared not take to the last election.

And now we have potentially the largest waste of money of all, and that is the $10 billion Clean Energy Finance Corporation, the $10 billion clean energy fund which, even if it is successful, creates no net new renewable energy. It beggars belief that this government is proposing to spend $10 billion and there is not one megawatt, not one kilowatt and not one watt more of renewable energy which will be generated by 2020 as a consequence of this $10 billion. Let me look at the deep fundamental and structural flaws at the heart of this bill and explain why, whilst the opposition fully supports the 20 per cent renewable energy target, we believe that this bill is ill conceived, ill constructed and doomed to failure. I will do so in two phases: first by looking at the prospects even if there were the implausible case that all of the investments proposed were successful, and then by looking at the overwhelmingly more likely case of what happens if there are failures. Because, when you look around the world and at the history of investment by this government, this policy is doomed to failure and doomed to waste literally billions of dollars of taxpayers' money. This is money that comes from the work of shop assistants, plumbers, nurses and people who are working each and every day to pay their taxes, and their money will be wasted.

Let us begin with the concept, which is so fundamentally flawed. It would seem that spending $10 billion on renewable energy would get you something. What is proposed here is that the government will spend $10 billion and that therefore that will generate some form of new renewable energy. The problem, however, is that before this bill there was a 20 per cent renewable energy target. After the $10 billion included in this bill is spent, there will still be a 20 per cent renewable energy target. What does this mean? It means that any renewable energy generated as a consequence of the Clean Energy Finance Corporation investments will simply displace other renewable energy which would otherwise have come online between now and 2020. It is unarguable, it is without doubt and it is simply, palpably, absolutely the case that the government will spend $10 billion and, in a best-case, no-failure, no-problem, perfect-delivery scenario, will still produce not one gigawatt, not one megawatt, not one kilowatt and not one watt more actual renewable energy between now and 2020. That is an extraordinary example of conceptual failure.

I wonder if the minister at the table, Minister Shorten, or anybody else around the cabinet table considered the fact that for $10 billion there will not be an additional unit of energy generated at all between now and 2020. It is almost extraordinary that this policy could have been created, delivered and funded. But the answer is very simple. It was, of course, funded as part of the trade-off with the Greens to win their support for the carbon tax. The carbon tax, of course, is an entirely different story. We know that it was conceived in the breach. The Prime Minister famously said the very day before the election, 'I rule out a carbon tax.' On the Monday before the election, the Prime Minister said, now infamously, 'There will be no carbon tax under a government I lead.' So the price of that betrayal and of winning support for it included this $10 billion fund. But, as I have set out, in the best-case scenario, on the basis of perfect delivery, no new renewable energy will result. Our alternative is very simple. We have a renewable energy target. It is set to achieve 20 per cent by 2020. We support that, we helped negotiate it and it will achieve that. That will be the same result with or without this bill. It is unarguable, and anything else from the government would simply be misleading.

However—and this brings me to the second part of what I wish to say this evening—this bill will not be executed perfectly. The Clean Energy Finance Corporation and the clean energy fund will not be delivered as the government intends, and history shows us that on three fronts. Firstly, on the government's own performance in this country, as I mentioned at the outset, we have had pink batts, Green Loans, Green Start, cash-for-clunkers, the citizens assembly, the solar bubble and collapse and the solar hot water deception, where $44.7 million was ripped from the budgets of 2011-12 and 2012-13. This was only revealed in its full deception on budget night, and as a consequence we are seeing job losses at Rheem and Dux now. That is a list of seven failures from this government in this space.

Then we go to the broader question of comparable systems around the world. In the United States, we have seen the $700 million failure of Solyndra under the comparable US system. Beacon Power has collapsed. Ener1 has collapsed. Solar Trust of America was given a $2.1 billion line of credit from the US Department of Energy and has collapsed. It makes you think that perhaps there may be some systemic problems. The comparable program in the United States is the source of enormous division, enormous conflict and an ongoing scandal in relation to its administration, according to the Republicans in the way that they have presented. So, far from being a unifying program in the United States, it is a program which has had significant failures and is a source of deep, clear and ongoing division within the US congress.

What about Australia? Are there any comparable programs? There are. Let me point to two similar examples. The first is the ZeroGen project, which had over $100 million of co-financing from the Queensland government, delivered by Peter Beattie and, from the Australian federal government, by the then Prime Minister, Kevin Rudd. At the time that the ZeroGen project was proposed, Ian Macfarlane, who was the relevant spokesperson for the coalition, said that it would fail. He was clear on this front. The then Queensland Premier, Peter Beattie, famously said that Ian Macfarlane was on drugs—that, of course, was false. It also turned out that Ian Macfarlane was absolutely right: the ZeroGen project collapsed. It is gone; it is finished. The public money was done. Nothing was built. There is no low-carbon, let alone zero-carbon, ZeroGen project in Queensland. The money is gone. The project is gone. The idea was flawed from the beginning. It was not well executed. Therefore, we were not surprised when that which we had warned of came to pass.

But let me explain that that $100 million was money which came from everyday Australians. It was the taxes of everyday Australians, from all walks of life. It could be from members of the Health Services Union who are cleaning hospital wards and emptying bedpans. Their taxes go directly towards a project such as ZeroGen. It collapsed and failed. So all of that work and the payment of those taxes were wasted. So let us never forget that this is nothing hypothetical. When the government wastes somebody's money, it is real, because there is a shop assistant, an orderly or a small business person who has worked to pay that money. We hold their money in trust and we have a sacred responsibility to guard it carefully.

Let us also look at the Solar Flagships program: $700 million was announced over three years ago and yet no project has been successful. We have seen the Central Queensland project effectively collapse. We saw the Moree project collapse. I hope some success comes out of them. But many days, many months and three years have passed since the world's biggest solar array was proudly announced by the once and future Prime Minister. So that is another example.

We see the litany of failures of general environmental programs: pink batts, green loans, Green Star, cash for clunkers, citizens assembly, the solar bubble and the solar hot water bubble. We see the US examples of Solyndra, Beacon Power, Ener1 and Solar Trust of America, and we see the Australian examples of ZeroGen and also Solar Flagships where nothing has come to pass. The lessons must be fairly strong.

Let us, then, come to the costs of this bill. What we have seen is that, even on the government's own modelling, even in the explanatory memorandum, there is an expected loss, out of the first $6 billion, of $1.346 billion, or $1,346.4 million. That extrapolates out, over a five-year period, to more than a $2 billion loss—that is a combination of operating costs, write-downs for commercial failures and interest forgone for the government.

Let us understand that that is a best-case scenario—$2 billion being wasted over five years. That is a profound amount of money. And that is from a government which has not been highly successful in its other predictions in relation to comparable programs or allied environmental programs. Huge amounts of money have been wasted, to no effect. So, on its own best-case scenario, over five years we are looking at $2 billion of public money gone—written off; wasted.

Finally, we come to the fact that there is an impact on existing projects. It changes the financing regimes. It changes the competitive regimes. It changes the merit order. So it has a sovereign risk impact on existing investments in the space because, if they are displaced by subsidised projects, it has an impact on their ability to compete on level terms in the renewable energy space. That is another example of ill-thought-through consequences. I have a respect for the individuals involved who have sought to assist in this. But it is the fundamental design at the heart of government from people who have repeatedly shown an inability to apply government programs to the commercial environment with disastrous consequences.

Against all that background, what we saw yesterday was quite extraordinary: a two-hour hearing for $10 billion—$5 billion an hour—for a parliamentary inquiry. That inquiry was called on Friday. It was delivered on Monday. There was no ability for the public to have input. It was carried out over two days, and my understanding is that it will report tomorrow. What we had was not a parliamentary inquiry but a show trial. So that was an abuse of parliament and an abuse of the confidence of the public, and it is likely to be a fatal abuse of taxpayers' money.

In opposing this bill and the three related bills which extend the scope of the carbon tax to cover LPG, LNG and CNG, let me be clear on behalf of the opposition: the Clean Energy Finance Corporation $10 billion slush fund is destined to fail. Even in the unlikely event that it succeeds, what we will see is not one watt of additional renewable energy between now and 2020. In its design and its concept, this structure, this system will, on a best-case scenario, spend $10 billion and Australia will not have an additional watt of renewable energy between now and 2020. For those reasons, we oppose this bill and these allied bills, and we do so with every ounce of vigour.

Mr PERRETT (Moreton) (19:13): I rise to voice my strong support for the clean energy bills before the House with a little bit more vigour than those opposite and than was evident in the member for Flinders's speech. The Clean Energy Finance Corporation Bill 2012, Clean Energy Legislation Amendment Bill 2012, Clean Energy (Customs Tariff Amendment) Bill 2012 and Clean Energy (Excise Tariff Legislation Amendment) Bill 2012 are all part of the Gillard Labor government's commitment to move Australia towards a clean energy future.

Obviously, we have seen bipartisan support for these endeavours at the 2007 and 2010 elections—the same targets in terms of combating dangerous climate change gases, and the same clean energy targets of 20 per cent, on both sides of the chamber. It is good to see this bipartisan support in acting to ensure that our grandchildren and great-grandchildren have a world to inherit. I welcome the creation of the Clean Energy Finance Corporation as part of a raft of government initiatives designed to support the way we combat the impacts of dangerous and costly climate change. Investment in the Clean Energy Finance Corporation will go a long way towards delivering major new private investment in clean energy projects and the supply chains that feed into these projects.

The bills outline numerous measures that serve to improve the Carbon Farming Initiative, enhance the security of the Australian National Registry of Emissions Units—which I think might have flowed from some Howard government initiatives from 2007—and develop working relationships with the Clean Energy Finance Corporation. Clean energy is a concept that has been much debated in this chamber, despite that bipartisan support for the same targets. Time and time again, the Labor government has taken action to set Australia on a course to a clean energy future, a gentle change in direction, but an important economic change of direction in terms of the glide path of where we will end up. As everybody knows, there are lower costs if we act now rather than later, but unfortunately time and time again the coalition has tried to sabotage these efforts in an attempt to score cheap political points rather than considering the nation's interests.

Today I went on the web to have a look at the coalition's direct action plan on environment and climate change—I presume the policy came out before the 2010 election—to get an idea of the details embraced by those opposite. I will be generous and say that the direct action plan is probably a little bit outdated, but it does seem to be very costly—over $3.2 billion forecast over four years. I am not quite sure whether that has moved on or whether it is going to be compressed, but it is the current policy as seen on the Liberal Party webpage. It is a little bit unrealistic, outdated and perhaps even counter-productive. I would be gravely concerned for our nation's environmental legacy and our economic preparedness under an Abbott-led coalition government.

A nation's environmental legacy is what these clean energy bills before the chamber are all about—that is, what we leave behind for our children. The decisions we make in this chamber and the decisions voters make at the ballot box shape this nation for our descendants to inherit. I want my sons and their children and grandchildren to live in an Australia that did what was needed and when it was needed, even if it meant losing a bit of political skin. We need to do this to preserve the environment and work with the rest of the world in addressing climate change. Australia, while a young nation, has always had a proud record of being a good global citizen, whether it be Billy Hughes' actions after World War I—there was a lot of skin in that game after 60,000 Australians died in that conflict—or Doc Evatt in the first days of the United Nations. More recently, we can look to the former Prime Minister Bob Hawke and his actions in Antarctica or to the former Minister for Foreign Affairs, the member for Griffith, with his endeavours in Libya. As a nation we do our bit and a little bit more, I would suggest. That is why this nation is putting a price on carbon in 30 or so days. It is about cutting pollution, creating clean energy jobs and making sure our economy is ready for this transformation that the world is undertaking. We proudly play our role in reducing global greenhouse emissions, and we will be well positioned to compete in a world moving to lower carbon technologies.

As a Queenslander, Madam Deputy Speaker Livermore, you know that we as a state, the worst per capita polluter in the world, are taking some action to prepare our economy. We will not be alone. We are joining many countries around the world that are already taking action. In fact, 89 countries have already committed, and many are acting right now to take steps to address climate change. We saw the courage of the Koreans, one of our major trading partners—I have certainly heard the member for North Sydney talk a lot about Korea—which overnight committed to putting a price on greenhouse gases by 2015. Globally, more money is now invested in renewable power than in conventional high-pollution energy generation. The rest of the world is acting, and we must act with them and, more importantly, not be left behind.

We are doing the right things for the right reasons, but it has not been easy. As anyone would know, there is a big scare campaign that is confusing and frightening many Australians with exaggerated cost estimates and exaggerated claims and hyperbole about what is going to happen. It suggests that the sky will fall in at midnight on 30 June and the world as we know it will end. That is not the reality. We are talking about a gentle change in direction, a glide path that will gently shape the Australian economy. This fear mongering, I would suggest, will be proved a foolish fallacy, come 1 July. In 20 years or in 50 years we will see just how stupid it was, just as if we look back 20 years ago to how people reacted to the High Court's decision on 3 June about Mabo. At the time there was hysteria—backyards were going to be taken—but, 20 years on, we look back and see that it was the appropriate thing to do at the time. It was a tough thing for Prime Minister Keating to do at the time, and perhaps he did not reach the decision as easily as he might have, but he then had the courage to lead the nation into doing the right thing.

The honourable member for Warringah has neglected to mention that many vulnerable Australians, including many pensioners, will end up coming out ahead after the carbon price starts in little over a month from now. In Moreton alone, 16,000 pensioners—I note Minister Macklin at the table—will receive a cash payment over the coming weeks ahead of the introduction of the carbon price. All full and part pensioners in Moreton will receive a lump-sum payment of $250 if they are single and $380 for couples. Local pensioners will get another boost with an ongoing increase to their fortnightly payments from March 2013. In total, local pensioners will get around $338 extra a year for singles and $510 extra for couples. About 93 per cent of all pensioner households will be at least 20 per cent better off because of these new payments. We are talking about a gentle tax to change behaviour. If they are like many seniors that I know—people who do know where to find their jumpers, do know where to turn the lights switches off—they will find that it will not be the fear and doom and gloom, the jeremiad that those opposite would suggest. And, obviously, the money that the member for Jagajaga is putting in their pockets will be a reward for their years of service to the Australian community.

The member for Warringah does not want to hear about that and he certainly does not want to admit this to the Australian public. He more than any other member of parliament at the moment can hear the clocks in this House ticking loudly, because he knows that, as the days tick down towards 1 July, his campaign, his house of cards, the flimflam attack, the flimflam man, will find out that the world is different. His continued negativity on tackling climate change unfortunately has created a little bit of uncertainty in some markets, particularly the electricity market, which has hurt our economy and damaged the efficient functioning of the NEM and our energy markets. He has come a long way from his 2009 Lateline statement, where he supported an emissions trading scheme. He said:

We don't want to play games with the planet. So we are taking this issue seriously and we would like to see an ETS.

I agree with him. It would have been great to have an ETS. Obviously, that was before the member for Warringah knocked off the member for Wentworth in the leadership change early in December 2009 on that climate change sceptic ticket. I think the votes were 42 to 41, from memory. One person was absent, so did not actually vote, and one person could not bring themselves to vote for either of them, so I am not sure what their intentions were, even with two people on the ticket. Unfortunately we have not seen that sort of commitment from the opposition leader. As I said, the direct action plan that I have had a look through is quite different.

Like many other MPs I do have serious questions about Mr Abbott's direct action plan, particularly in the context of our shared Renewable Energy Targets. I have a lot of concerns about how this will impact on investment in solar, because I do believe as a Queenslander that we have great opportunities in solar. I was a bit disappointed to see one of the solar programs of the Queensland government scrapped the other day. I also think we have great potential in geothermal. I look forward to the Queensland government and the federal government working together to develop some of those geothermal resources. I would like to snatch some of those projects away from South Australia, hopefully.

We are only 30 or so days out from the start of our price on greenhouse gases. It is at this moment that I would like to have a look at some of the direct action plan policy. They are talking about creating a band within the Renewable Energy Target which would be reserved for emerging technologies such as big solar. I have a bit of a concern about that. If there were an addition to the 20 per cent target I could see the logic in that. If the coalition were to introduce a banded RET it would see solar built at the expense of other projects that are already in the pipeline—perhaps some of those geothermals, perhaps some of those other renewables like wave. That would create instability for renewable energy investors, and that is not a mature investment sector at the moment, even though, as I said, there is a lot of global money being pumped into this area.

The other policy in the direct action plan is to invest $100 million each year for an additional one million solar energy homes by 2020. As I said, this is the 2010 election policy, so it is slightly out of date. We are already on track for one million rooves by the end of 2014, so this plan as printed today is out of date and behind the times. As at April 2012, we are already in excess of 677,000 solar power systems, whereas the direct action plan estimates 275,000 by the end of 2012. I think they might need to update this document.

In their solar cities program, which I think was touched on by the member for Flinders, projects were announced for Adelaide, Townsville, Blacktown, Alice Springs and Central Victoria, 'providing practical benefits for the community, including PV, solar hot water and smart meters on public and private buildings'. The reality is that these are already solar cities, so I am not sure why we would need to go back and have a policy where we are going to try and take lessons from these. I think we should just let the industry get on with what it is already delivering.

The other surprising commitment is to fund 125 mid-scale solar projects in schools and communities. But we had 784 schools provided with solar power systems in the last funding round of the National Solar Schools Program, and already over 4,000 have been installed. I know this, because it is something I have been trying to push in my electorate. The schools are already ahead of the politicians. When complete next year, 70 per cent of schools will have a solar power system.

I would suggest there are some serious funding questions as well in this direct action plan. That cost of $1,300 per household is too high. It is time for the coalition, obviously, to reconsider this policy. I would ask for it to reconsider the scare campaign, although I would suggest it is going to be ramped up on the shrill factor to 11 in the lead-up to 30 June.

As a parliament everyone agrees—both sides of the chamber—that we need to take climate change seriously. There are really not too many sceptics that have got a voice on that side of the chamber. We need to do more so that we take action. The bills before the House are part of this plan. The Clean Energy Finance Corporation Bill 2012, Clean Energy Legislation Amendment Bill 2012, Clean Energy (Customs Tariff Amendment) Bill 2012 and the Clean Energy (Excise Tariff Legislation Amendment) Bill 2012 are another step in the right direction and I commend them to the House.

Mr ROBB (Goldstein) (19:28): I rise to speak on the Clean Energy Finance Corporation Bill 2012 and related bills. Well, I had to go and look at the running order a few minutes ago because I was confused. The member for Moreton did not seem to talk to the bills in any sense. It surprised me because, as the lead speaker for the government on supposedly one of their most significant initiatives, all we heard was 15 minutes of negativity and an avoidance of the big issues in this. There was no attempt to justify this carbon tax and all the related regulations and difficulties and costs that are going to be incurred by businesses and households, by the whole community. All we heard was a whole lot of platitudes intermingled with endless negative abuse of this side of politics.

This Clean Energy Finance Corporation is the product, unfortunately, of grubby politics. It is the product of a desperate last-minute deal, a $10 billion political bribe to win the support of the Greens for a carbon tax—pure and simple. That is what it is. Once again the Prime Minister caved in to the demands of the Greens and once again Australians will pay very heavily for this weakness and this lack of principle in dealing with major policy issues.

Setting up a government bank with borrowed billions, underwritten by taxpayers, to invest in high-risk ventures should be a thing of the past in this country. Hasn't this government learnt anything from past debacles such as Tricontinental, Western Australia Inc. and the State Bank of South Australia? These were the investments and the types of organisations which helped create the brand image of those on the other side of politics of being unable to manage money—and it was a well-earned reputation. You would think people would learn from their mistakes, but here we go again, just because the Prime Minister sought to save her political skin at any cost to the taxpayer. Has this government not learnt from the US government's costly attempts to pick winners in renewable energy? Names like solar panel manufacturer Solyndra come to mind: it went bankrupt after receiving $500 million in loan guarantees and it cost 1,100 jobs. Others to go under in the US include Evergreen Solar, SpectraWatt and Beacon Power.

This Clean Energy Finance Corporation is the price Labor is happy to pay for Greens backing. It is the Bob Brown bank—the Bob Brown who has dictated so many of the stupid, irresponsible and dangerous decisions that this government has subsequently sought to introduce since the first weeks of this government when it caved in on so many things, and has since proceeded to cave in, in order to placate the Greens. The nation will pay heavily in all sorts of ways, and this Clean Energy Finance Corporation is another one.

Tricontinental was a merchant bank arm of the State of Bank of Victoria, and the State Bank collapsed under the weight of the $3.5 billion in bad loans made to the corporate cowboys of the 1980s by Tricon. The Review Panel of the Clean Energy Finance Corporation says of the CEFC initially that 'it is anticipated that the majority of its investment will be loans'. That reminds us very much of the State Bank and Tricontinental. For the CEFC, the $10 billion of borrowed money will be over five years starting in 2013-14, with the first $2 billion instalment to be paid into a special account in July 2013—in all likelihood, just prior to the election. It is to be invested in projects the banks would not touch with a barge pole. This is the stupidity of this proposal. It is money that will be mostly hidden from the budget bottom line, covering up their mistakes. If you did include this money you would see it eating into the forecast surplus. Over the forward estimates, $6 billion will be pumped into the CEFC. Just $320 million shows up in the underlying cash balance. This supposedly includes a 'prudent recognition that some investments will not be recovered'. Taxpayers will carry both the hidden debt exposure and the interest rate exposure. In Senate estimates, Treasury conceded it had factored in that 7.5 per cent of invested capital would not be recovered. On $10 billion, that is $750 million that is expected to be lost—just a lazy $750 million of borrowed money. This is a government with no sense of the value of money. It sees its value only in what it can deliver in a political sense to the government. It would be the most Pollyanna assumption that it will only lose $750 million. The way this government manages money, it will be billions.

The CEFC along with the National Broadband Network white elephant are reasons debt continues to rise despite Labor claiming to be returning to surplus. They have a $300 billion debt ceiling included in the budget legislation, an increase of $50 billion, and yet they claim they are going to surplus. It is an absolute joke. It is a deliberate deception. It is tens of billions of dollars that should be on the budget bottom line. It should be, but it is not. This is a government which is into deception and spin and irresponsible investment of taxpayers' money. Now they are borrowing billions and billions more, and the taxpayer will have to pay this back at some stage.

There are precedents in the budget papers as to why the CEFC should be on budget. There is an existing program which was announced as a budget measure only 12 months before the last one, in the 2011-12 in budget. At page 304 of Budget Paper No. 2 it is there in black and white:

The Government will provide $108.7 million over 14 years to support the development and commercialisation of renewable energy technologies by making early-stage equity investments that leveraged private funds.

Doesn't it sound very familiar? It sounds exactly like the description of the Clean Energy Finance Corporation. I would like the next speaker to explain to the parliament what the difference is. There is no difference, we all know that. This is a cheap political stunt to get money off the bottom line and to try to save the skin of this Prime Minister. The only difference is the scale of the investment. It is an identical fund—one is on the budget; one is off.

The government says that this corporation will be independent. The Leader of the Greens, Christine Milne, states:

It is an independent authority, it isn't something that's going to have political interference.

These bills make it clear that this will not be independent. The board members—the chair and up to six others—will be appointed and removed by the government. Of course, there is no political interference or political direction! The government's board will appoint the CEO after consulting key ministers, but there is no political interference! There is independence, of course, but they must consult key ministers before they make a decision. The government will inevitably also consult the Greens. These bills also give the responsible ministers 'powers of direction over the broad mandate of the Corporation'. It puts a lie to what Senator Milne had to say. They will say anything in order to justify the unjustifiable.

The most absurd thing is that the renewable energy target was 20 per cent before this was announced and it is 20 per cent after it was announced. This is the reason this finance corporation should never exist. There is no justification. $10 billion will not increase the level of renewable energy in the grid because the target remains the same. What an absurdity! They bring in a carbon tax which morphs into an emissions trading scheme and they set a target of 20 per cent, and the credits that are issued each year will relate to how well the economy is achieving against that target. All we are seeing with this corporation is that the sale of carbon permits will be adjusted to meet the target and all the CEFC will do is see what would otherwise be cheaper emission reductions replaced by more expensive emission reductions. That is a fact confirmed by so many and yet this government has gone ahead with the scheme. All it will do is increase the cost of achieving an emissions reduction. And this is the government that talks about implementing a market based scheme!

The expert advisory panel, in its report, highlights these inherent risks. It says that a commercial investment filter will be applied to potential projects. The panel says:

The filter will not be as stringent as the private sector equivalent, as the CEFC has a public policy purpose.

Consequently, it has different risk/return requirements. For a given return, the CEFC may take on higher risk and, for a given level of risk, due to positive externalities, may accept a lower financial return.

What all that gobbledegook is saying is that this is a recipe to waste money we do not have. It is a recipe to waste borrowed money which taxpayers will have to repay. It is another symbol of Labor not been able to manage money.

The bill's explanatory material states:

The investment mandate will be in the form of a written legislative instrument. Because the investment mandate represents the policy direction of the Government and has the potential to impact on the Commonwealth Budget, it will be a non-disallowable instrument.

It has just smashed through this parliament and it is indefensible. It will increase dramatically the cost of achieving emissions and it will do nothing to increase the emissions in the country because of the cap.

There is an inexplicable omission. The fund is barred from supporting carbon capture and storage initiatives. The review panel observed:

With the abundance of coal in Australia, our cost of electricity is one of the lowest in the world.

Under a section titled 'Exclusions' it states: The government has announced the CEFC will not invest in Carbon Capture and Storage projects or technology.

Again, this is the Greens lording it over the government and lording it over the community. It is blind ideology. To the Greens, fossil fuels are the devil incarnate. They cannot be used. Irrespective of whether we could make the coal cleaner in order to maintain comparative advantage and our cheap electricity that we have enjoyed for 100-plus years, the CEFC deliberately sets out to erode this. It just shows the extent to which this government and this Prime Minister have so tugged their forelocks to the Greens party, which has been at the centre of so many of the cost increases that have been incurred over the last 18 months to two years, and it is demonstrably and rapidly making many areas of Australian business uncompetitive. When this carbon tax comes in we will see a real manifestation of how our competitive position can be eroded so dramatically on so many fronts.

So who will benefit from this slush fund? We will see the white shoe salesman and the dodgy operators that give the many reputable renewable energy businesses a bad name. This is exactly what happened with the pink batts. We have union funds, of course. It is no coincidence that the super funds are heavily invested in renewable energy projects. It will be a great temptation for the CEFC to give support to many of the investments on a non-commercial basis.

This piece of legislation is extremely dangerous and unnecessary and it should be stopped in its tracks. We should return to managing government money in a sensible and proper fashion.

Mr KELVIN THOMSON (Wills) (19:43): After that performance I think the House could profit from some information about the bills that we are debating. The Clean Energy Finance Corporation Bill 2012 establishes the Clean Energy Finance Corporation. It empowers the corporation to invest directly and indirectly in financial assets for the development of Australian based renewable energy technologies, low-emission technologies and energy efficiency projects. The significant thing about this is that it is a measure designed to support, promote and develop Australian industry and to enable us to take advantage of renewable energy technologies, something we have really failed to do, unfortunately, in the years gone by. We have to a considerable degree missed out on what has been an emerging, growing area of technological development and manufacturing jobs.

The accompanying bills to be passed with the Clean Energy Finance Corporation Bill 2012 by 1 July will provide market certainty around the changes. In April the government released the expert review panel's report on the design of the $10 billion Clean Energy Finance Corporation. The government accepted the recommendations of that report and is implementing them through this bill. Clean energy technologies face a range of obstacles in attracting financing: current global financial conditions, the complex nature of Australia's electricity markets, the cost of renewable energy and preference of investing institutions for listed assets inhibit the financing of the clean energy sector. The corporation will invest in financial assets for the development of Australian based renewable energy technologies, low-emission technologies and businesses that supply the required inputs which are critical areas to the transformation of the Australian economy. It will leverage private sector financing.

The bill requires the corporation to have at least half of its investments in renewable energy technology by 30 June 2018 and thereafter. It is expected that the corporation will apply a commercial filter when making its investment decisions, focusing on projects and technologies at the later stages of development. The filter will not be as stringent as the private sector equivalent, as the corporation has a public policy purpose and values any positive externalities that are generated. By using a commercial filter, it is expected the corporation will invest responsibly and manage risk so it is financially self-sufficient and achieves a target rate of return. The government will provide $2 billion of funding to the corporation per annum for five years, starting in 2013-14, with profits—including any capital and interest earned—available for reinvestment. The corporation will make individual investment decisions independently of the government.

The Clean Energy Finance Corporation is part of a suite of government initiatives designed to transform the Australian economy for a cleaner energy future. The government's $10 billion investment in the Clean Energy Finance Corporation will play a vital role in unlocking significant new private investment in clean energy projects and the supply chain that feeds into these projects. Australia's clean energy market is an early stage market, categorised by incomplete knowledge and limited experience of risk. This means that there are barriers inhibiting the effective allocation of capital.

The expert review chaired by Jillian Broadbent identified a number of common barriers inhibiting financing of the clean energy sector, such as availability and cost of finance. The Clean Energy Finance Corporation will make investments and encourage private sector investment in clean energy technologies, but there may still be market barriers that prevent these projects going ahead—for example, if investors are not familiar with emerging technologies. The Clean Energy Finance Corporation will have tools at its disposal to tailor investments to address market barriers. These tools include a capacity to provide funds, change the allocation of risk amongst participants and offer a concessional cost of funds. The Clean Energy Finance Corporation will act as a catalyst to private investment which is currently not available, and thereby contribute to carbon reduction and cleaner energy. It is not the intention of the Clean Energy Finance Corporation to directly compete with the private sector. Rather, it will seek to leverage more private sector investment.

The introduction of a carbon price is the key to changing the underlying economics of clean energy projects and making them more competitive. A carbon price in conjunction with the Clean Energy Finance Corporation will build on the government's investments in new renewable technologies and better and more efficient ways of using our energy resources. These efforts will create an incentive to reduce emissions, drive investment in renewable and low-emission technologies, create certainty for business investment and begin the adjustment of our economy to a cleaner energy future.

The member for Goldstein queried the purpose of the legislation and of the Clean Energy Finance Corporation. We need to say that this is a measure to boost Australian manufacturing. The carbon pricing mechanism and, in the particular, the Clean Energy Finance Corporation, will generate additional manufacturing opportunities for Australian firms. Australia could become a world leader in creating green industries, generating up to a million green collar jobs by 2030 and multibillion dollar export opportunities in green technology. Australia is well placed to lead an economic renewal based around clean industries and green jobs, but we will need to act quickly to compete with countries such as Germany and Denmark, which are already greening their workforces and dominating the international green market in solar and wind technology.

The good news is that there has been a great deal of work done to kick-start the structural change geared towards renewable energy development. For example, the company Beyond Zero Emissions has produced a report titled Zero carbon Australia stationary energy plan, which is a 10-year road map for 100 per cent renewable energy generation, with baseload energy supplied by renewable sources at a cost of $8 per household per week, a similar electricity price rise to what may be expected in Australia's business-as-usual electricity market. The plan includes concentrating solar thermal power with molten salt storage supplying 60 per cent of electricity demand, wind supplying 40 per cent, and biomass and hydroelectricity being used as contingency backup for up to two per cent of annual demand.

This comes at a time when the world is currently experiencing a boom in clean energy investment that I think is the beginning of a new industrial revolution. Last year, a record-breaking $260 billion was invested in new renewable energy projects across the globe. In fact, clean energy investment has hit new records in seven of the last eight years, and even the oil giant BP predicts that renewables will be the fastest growing energy sector every year until at least 2030. More staggeringly, the global clean energy and environment sector is now valued at $4.7 trillion, which is three times Australia's annual gross domestic product. Last year was also the first year when clean energy investment exceeded investment in fossil fuels, led by skyrocketing investments in countries like America, China, India and Brazil. These investments now underpin between 2.3 to three million jobs in clean energy industries worldwide. Globally, more renewable energy was built last year than fossil fuel energy. The Chinese solar industry is leading the way, and it is claimed that solar will be cheaper than coal within a decade.

Australia has what it takes to be leading this race: world-class renewable energy resources, a skilled workforce and a proud history of innovation. However, of that $260 billion which I mentioned was being invested last year, only $4.7 billion of it was in Australia. So we have been missing out and I think it is an excellent time for us to be investing in clean energy. Australians overwhelmingly support a renewable energy future for Australia. Close to 90 per cent support greater investment in clean energy and 80 per cent of Australians believe that clean energy investment is good for jobs.

A recently released report by 100% Renewable Energy shows the results of a poll conducted through the first half of this year of 12,000 Australians on their attitudes to solar energy. Ninety-four per cent of the respondents said they wanted to see big solar projects built in Australia and 95 per cent wanted to see governments investing in big solar projects. While respondents understand that the private sector will do the heavy lifting, they do expect governments to lead. Governments in many of the major economies of the world are moving strongly to create jobs in solar industries of the future and to safeguard their environments and energy grids with safe, clean solar power. A number of themes emerged through the comments that were made in this poll, which included the risk of Australia getting left behind, falling costs of solar, the need to move away from coal and gas, the opportunities in jobs and regional development, and the desire for political leadership. The results of this poll show that Australia is ready for its leaders, of all political parties, to embrace the huge opportunities that are out there in renewable energy such as solar power. The community is calling for it, business is ready to invest and we have the resources.

Australia is one of the sunniest countries on earth and yet our largest solar power station is a mere 1.2 megawatts. With the sun drenched landscape so much a part of Australia's identity, it makes sense for us to be using this valuable resource to supply energy for our nation. We are embracing solar panels on our rooftops—and I think that is terrific—but we have so far not grasped the opportunity of large-scale solar power to generate electricity, employment and energy stability into the future. Solar thermal power plants that store the sun's energy after the sun goes down can provide baseload power for our industries, while solar PV at utility scale is expected to be cheaper than coal or gas by the middle of this decade. In combination with other renewable technologies such as wind, solar power can make our power supply cheaper and cleaner and just as reliable as that which we enjoy now. Investment in large-scale solar will also set Australia up to benefit from stable electricity prices for decades to come in a way that coal and gas, with their exposure to volatile international energy markets, can no longer guarantee.

The high level of community support for investment in new solar technology demonstrates the importance of bodies like the Clean Energy Finance Corporation. Communities are seeking bipartisan support for this kind of investment. The Clean Energy Finance Corporation could deliver five gigawatts of solar PV and two gigawatts of solar thermal by 2020, which is the equivalent of seven large coal fired power stations. I think it comes at exactly the right time to give Australia the leg-up that we need to enter the global renewable energy race. It will overcome the barriers which have stymied our clean energy sector for too long, and unlock significant new investment and jobs in Australia. Despite the uncertain global economy, this sector is set to become one of the biggest industries of tomorrow. In conjunction with our 20 per cent renewable energy target, it will deliver diversity in our mix of energy as 'insurance to Australia securing the lowest cost of energy in a carbon constrained world', and it will create tens of thousands of jobs to underpin a strong future economy. It equips Australia with a suite of policies that can pull emerging clean energy technologies right through the innovation chain, helping turn great Australian innovation into real clean energy projects.

Australians are great innovators. We live in a country endowed with some of the best renewable energy resources of any country in the world: sun, wind, oceans and hot rocks. However, as a nation we have been stumbling along in the global race to take advantage of the global boom in renewable energy. As I mentioned before, it was a $243 billion industry in 2010, and it is expected to attract $5.7 trillion of investment globally over the next 25 years. Countries like China, South Korea, Germany and the US, frankly, have been leaving us for dead, often using technologies that were developed here. We should be winning this race. We have what it takes to lead the world into a renewable energy future. Instead we have allowed other nations with less technological innovation and fewer natural resources to get ahead. Our universities have consistently delivered world-leading innovation in renewable energy, but, when it comes time for commercialising these technologies, a pattern has emerged that sees the innovations going offshore. We can and should put a stop to this. These have been missed opportunities for our manufacturing industries and a failure to capitalise on and maximise our job creation.

The Clean Energy Finance Corporation is designed to take our best renewable energy innovation to full-scale commercial operation. In conjunction with putting a price on pollution and building on the 20 per cent renewable energy target, the corporation is a critical policy that will deliver Australians clean energy cheaper and sooner. I commend the bills to the House.

Ms O'DWYER (Higgins) (19:58): Tonight, I rise to speak on the Clean Energy Finance Corporation Bill 2012 and other associated legislation: the Clean Energy Legislation Amendment Bill 2012, the Clean Energy (Customs Tariff Amendment) Bill 2012 and the Clean Energy (Excise Tariff Legislation Amendment) Bill 2012. For the most part, though, my focus tonight will be on the Clean Energy Finance Corporation Bill 2012. I think it is important to understand the genesis of this bill. This bill is very separate to the announcement made by the government to introduce the carbon tax and all of the associated legislation that goes with it. The genesis of this bill was cooked up between the Labor government and the Greens at the direction of the Greens because they wanted to invest $10 billion of taxpayer money into renewable energy projects of their own choosing. At the time Senator Milne commented on the Clean Energy Finance Corporation, or as it has colloquially become known 'the Bob Brown bank', and said:

With a legislatively guaranteed stream of funding outside the budget, no future government will be able to undermine it without changing legislation.

That is the point of the legislation that has been brought before this House. This legislation is designed to make it very difficult for any other government to undo. What does it seek to do? According to the government, it seeks to invest in financial assets for the development of Australian based renewable energy technologies, low-emission technologies and energy efficient projects. It has the power to enter into investment agreements and make investments through subsidiaries. It has a duty to ensure that, as of 1 July 2018, half the funds invested at that time for the purposes of its investment function are invested in renewable energy technology.

The legislation also sets out a special account through which it will operate. Into this account $2 billion of taxpayer money per annum will be paid for the next five years, with the first instalment due to be paid on 1 July 2013 and each subsequent year after that, totalling $10 billion. It has the purpose of making payments to the CEFC and to the Australian Renewable Energy Agency, ARENA. The CEFC, according to the government, is intended to be self-sustaining once it is mature. The funds are meant to be returned to the CEFC for its investments and will be available for re-investment. That is what the government says the objectives of the bill are, and that is what it says the bill will do. However, we know that there is a huge difference between what the government says and what the government actually does.

It is important to note that the consultation on this bill has been negligible. The consultation process has been virtually zip. When you consider that the House of Representatives Standing Committee on Economics is currently still looking at this bill—the report has not even been tabled—yet the government is debating this bill in the House. Let me just outline to you the amount of time that the House of Representatives Standing Committee on Economics has had to look at this bill. The committee was notified on Thursday evening that a meeting was to be called because a referral had been given by the government. The committee met the following Friday morning at around 11 o'clock and it was determined by the government that the bills be referred to the committee. A media release went out that Friday afternoon calling for submissions. Submissions, of course, were closed on the Monday. So, following the weekend, submissions were closed and the only people invited to present for 2½ hours to the House of Representatives Standing Committee on Economics were the Department of Climate Change and Energy Efficiency and the Treasury. There was no public consultation, nothing was heard by any market participants and no-one else was invited. It was effectively an in-camera job.

So, we have had one session of 2½ hours for a $10 billion bill. That is about $4 billion an hour. There has been no public consultation with industry or market participants and, as I said, the bill is still being considered by the House of Representatives Standing Committee on Economics, and the report will not be tabled until tomorrow. But we know, really, that this is all a sham consultation process. Who could deduce otherwise from that timetable? The only conclusion that one could draw is that the government is seeking to avoid scrutiny of this bill because it knows it will be damned by that scrutiny.

Let us take the opportunity to have a look at what little evidence the committee could glean in that 2½ hours. Of course, the committee was shut down from any further scrutiny of the bills despite the fact that there were a number of members who sought to extend the timetable. The mandatory renewable energy target is something that is a bipartisan target of 20 per cent of mandatory renewable energy in Australia. Questions were asked. With this additional funding of $10 billion, will we see additional energy targets increase? Will we actually see more renewable energy as a result of a $10 billion 'investment' of taxpayer dollars into this renewable energy? I am sad to say that, in fact, there will be no change to the mandatory renewable energy target as a result of an additional $10 billion. I would like to quote from the evidence that was provided to the committee. My colleague Steve Ciobo asked this direct question of Treasury:

So, the purpose of the Clean Energy Finance Corporation is to drive investment into renewable energy, but it is going to make zero difference to the renewable energy target. Is that correct?

Mr Waslin, who I must say had a very difficult task as a member of the Treasury in having to defend the government's policy, said:

The purpose is to overcome the financial barriers. The renewable energy target affects the pricing of renewable energy and what can be achieved, but the individual projects themselves may still have barriers which inhibit investment. The purpose of the CEFC is to address those barriers and not the target itself.

Unfortunately, the evidence was very clear that there will be no increase in the target despite the enormous expense to taxpayers of $10 billion.

Let us look at the investment mandate of the Clean Energy Finance Corporation. Who can forget the comments made by Paul Howes last week at the Press Club when he spoke about the need for the government to get back into the business of 'picking winners'? He need not have been too concerned because, of course, the Greens are well ahead of him, except they sort of mixed up the whole picking winners aspect. They want a very different investment mandate. They in fact want the mandate to be about the riskiest types of investment—not the cheapest, not the most efficient, but the riskiest. Again, unfortunately, we heard quite a bit of evidence—and we look to the explanatory memorandum itself—that the CEFC is charged with finding technologies in the market that are effectively unproven, speculative and too risky for commercial financing.

This of course means that not all of those investments will produce a commercial return. The explanatory memorandum states:

The fiscal and underlying cash balance impacts include a prudent recognition that some investments will not be recovered, and interest revenue. The fiscal balance impact also includes the concessional component of loans.

It is very clear from this that the government expects to lose money and a lot of it. When questions were asked of the Treasury about the fact that clearly there needed to be a rate of return for an investment, the Treasury were not able to define what that rate of return was. They speculated it could be the government bond rate, but they could not be certain because this is to be determined by the board. They said that no modelling had in fact been done but they had factored in that they thought that there would be 7.5 per cent a year of investments not recovered. When we consider that there is $2 billion of investment each year, we are talking about $150 million each and every year.

The Treasury said that this was a conservative estimate. When they were pressed on exactly how this was conservative—how 7½ per cent a year of the investment not being recovered, leaving aside the rate of return, was conservative—they had to take on notice how they had actually devised this figure. This is very concerning for everybody on this side of the chamber and it should be concerning to people on the other side of the chamber as well. It is something that we are exercised about, and I want to quote from some of the evidence. My colleague Mr Ciobo asked about the success rate. He said, 'You are predicting a 92.5 per cent success rate, which assumes that 7.5 per cent of the investments are not recovered.' Mr Nicol replied:

At the moment that is our best guess.

I think that is the key word there; it is a 'guess'—nothing more, nothing less. In fact, the government simply does not know.

More than this, the government says that the point of this bill is to have Australian investments in renewable energy. When you actually look at the bill, at clause 61, when they talk about Australian based investments it is very clear that the Australian based investments that are spoken about are investments that are to be determined by guidelines set out by the board itself. I asked a number of questions of the Treasury on this:

What about overseas investment? What about companies that are predominantly owned by foreign or overseas investors?

Mr Waslin from the Treasury replied:

We are talking about where the assets would be located and not the ownership.

I said:

So, so long as the assets are here, for the purpose of this section of the bill, you would say that that makes it an Australian-based investment?

He replied:

Yes.

I said:

Irrespective of the fact that the guidelines have not yet been drafted?

He replied:

That is what is behind the solely or mainly based. It is a similar approach to what the UK Green Investment Bank is also taking.

I said:

But it would be up to the board to take a different view?

And the Treasury had to conclude that in fact it is entirely up to the board.

In the time remaining I would like to point out that there are a number of regulations that would go with this bill, yet these regulations have not been sighted. They are regulations that go to the heart of this bill. It causes us great concern that we have not been able to sight these regulations. We are also very concerned about the appropriation that has been provided to the CEFC for their ongoing costs: around $57.3 million over the forward estimates. This is drastically differently to the operating costs of the Inspector-General of Taxation, at around $1.5 million. When you look closely at the legislation there is nothing to prohibit the board setting very high salaries, for instance, for the CEO. There is no limitation on that amount. Again, it is entirely at the discretion of the board.

We are told by the Treasury, by the government, that the CEFC is going to be totally self-sufficient by 2015-16, yet there is no evidence to support this. It is merely a hope. It is merely something that the government wishes to be. Again, there is no evidence to support the statements that have been made. So what do we know? We know that this is $10 billion of taxpayers' money, $10 billion that has to be borrowed, $10 billion that will have to be paid for by not only this generation of Australians but future generations. What will we get for this? It is totally unclear.

The government has avoided scrutiny at every opportunity because it knows that the bill does not stand up to scrutiny. If those on the other side thought that these investments were so wonderful, they themselves would invest their own money in these investments. The ministers on the other side would put their superannuation funds in the hands of the CEFC. But I bet you they will not, and the reason they will not is that they know what we know: that this is bad legislation. The returns will be negligible, if anything, and it is an indictment on this government that this legislation has been brought forward.

Dr MIKE KELLY (Eden-Monaro—Parliamentary Secretary for Defence) (20:14): How exciting it is to be able to speak on this visionary bill, and how disappointing it is to hear what should be the bright young future of the Liberal Party lining herself up with the dinosaurs on the front bench. What a giveaway it was to hear the member for Goldstein talk about this bill and lump it in with the NBN. Nothing could explain or illustrate to you better the lack of vision, the lack of imagination, that this coalition demonstrates. It is the sort of issue we face with a party and a coalition that is unable to meet the challenges that confront this country not only in relation to climate change but in relation to the economic needs of this country in being able to diversify our economy into the future. We heard reference to the consultation and development of this project. It makes me laugh when we think back to the Howard government's $10 billion water plan on the beer coaster that did not even go through cabinet compared to the extensive development that went into this project. We also heard the member for Flinders talk about the Howard government's record in introducing a mandatory renewable energy target. The shame of the Howard years was that through that 12-year period we saw our renewable energy generation capacity decline from 10 per cent to nine per cent. That was an incredibly shameful record of lost opportunities.

This bill is not just about climate change. In fact, you do not even have to believe in climate change to support this bill, because this bill is all about tackling those economic challenges we face, the challenges that are generated by the mining boom and the need to have an economy where we are investing in infrastructure, skills and innovation. This bill really addresses the innovation aspect of that trifecta. It also addresses the needs we will have in energy security and the needs we will have to improve the health of our population. We have the health minister here with us tonight. There are significant benefits to be had from cleaning up the air in our major cities and from getting to renewable energy. Remember, this is the move from non-renewable energy—in other words energy that will expire—to renewable energy.

In every development, every technological advancement and market improvement in human history there is always a period where price competitiveness is an issue in the introduction of new technologies. The first time you went out and bought a plasma TV they cost $12,000. They are now pushed out the door for less than $1,000. What we intend to do with measures like these is get that impetus, the strategic weight behind the shift to renewable energy. And then, as the market share increases, the volume increases and the technology improves so the price comes down. In effect, what we are doing for Australians through measures like these is delivering them a future of cheaper energy in the long-term, as renewable energy sources will inevitably be. It is the coalition that would deny them that future security and cheaper power.

It is important we get involved in innovation, as I mentioned. That is the challenge we face. We can see the impacts on our economy of the mining boom. I look to the example of Israel. I have been to visit Israel and looked at the way it has addressed innovation with similar constraints to Australia of not being able to compete with cheap labour from sources such as Asia. Innovation was the way it drove an economy that is leading the world in technological advance. This is a country that, I might point out, is 7,000 square kilometres smaller than my own electorate of Eden-Monaro yet has a venture capital pool of $16 billion. Certainly this has been driven by government policy creating a program very similar to this that stimulated co-investment from the private sector into innovation.

We heard the member for Higgins talk about the risk component of this project. It is precisely the fact that the culture of venture capital and risk-taking in Israel has delivered the economic benefits achieved. There is a need in this country to generate a culture of taking risk in innovation and in start-ups. This Clean Energy Finance Corporation Bill will help deliver that. What am I talking about? I have an example in my own backyard of Spark Solar, the company of the wonderful young scientist Michelle McCann, who had done lots of research into more efficient solar cells. Spark Solar had proposals to develop a company in Queanbeyan which would have eventually been looking to export into our region. For the want of $2 million as a final piece of investment in that company, the whole project fell over. We cannot afford to see those sorts of projects fall over. We are seeing over a billion dollars worth of investment in my region in renewable energy projects but it is into these value added, high-tech companies that we also need to diversify. This is critical. We must get behind those entrepreneurs who we have seen bleed overseas in the past.

I am also concerned that this is an aspect of our energy security. When I was in Defence and had the Middle East desk I tracked the sources of funding coming into our region to fund radical madrassas and terrorist movements as coming from some unhealthy sources of petrodollars. We know that our country is currently 80 per cent self-sufficient in fuel supplies but within 15 to 20 years that figure will flop over. We will become 80 per cent dependent on foreign supplies, which means we will be at the mercy of OPEC and conglomerates and cartels such as that, which will add to our balance of payments deficit and fuel the sources of income to some of those unhealthy influences in our region. So it is important for us to get behind transitions as quickly as possible from fossil fuels.

There is a wonderful company near my region in the Shoalhaven called Algae Tec, which is developing brilliant technology for biodiesel fuels, and this very exciting. Projects like that will have a significant boost from these sorts of finance corporation measures. We know that these measures are intended to overcome the financial barriers to commercialising and deploying cleaner energy technologies. To move us through this process we know will take us to a 40 per cent generation figure by 2050. We are on track to achieve our 20 per cent target by 2020. These measures will get us over some of those hurdles we have experienced in investment and the timidity we have seen in investment in these sorts of industries and technologies in the past in this country.

But there are lots of measures in this bill that are to be admired for their elegance. For example, what we see with the requirement to apply a commercial filter is the combination of private sector skills and disciplines married to public policy guidance. With the funds that will be generated and that will be deployed through the appropriations, we will eventually see a self-sustaining finance mechanism. A special account will be created to manage surplus funds and to limit the corporations' need to undertake a cash management function. There will also be a mechanism whereby the board will be governed by an investment mandate from government. This will be where the public policy guidance will emerge even though there will be a high degree of independence. The sorts of directions that will appear in that mandate will deal with the issues of risk and return, eligibility criteria, investments in renewable energy technologies, low-emission technologies and energy efficiency projects, the allocation of investment, limits on concessional investments and types of financial instruments in which the corporation may invest in broad operational matters. And, very importantly, we intend to apply the Australian Industry Participation Plan framework to the corporation through this investment mandate with the objective of ensuring that Australian industry is afforded full opportunity to participate in these projects. And so this investment mandate will be in the form of a legislative instrument.

How is this being received by the business world? We know that a Deloitte study of over 40 senior executives from Australian banks, super funds, venture capital firms and major investors found that they overwhelmingly support this mechanism. Certainly, we have seen comments from the Clean Energy Council, which stated through the chief executive, Kane Thornton, that this will help bridge that gap between early research and development and the commercial rollout of clean energy technologies. The Australian Solar Energy Society said that the CEFC is set to help unlock substantial investment in community-scale, commercial-scale and large-scale solar energy. In fact, they called on the federal opposition to back the CEFC. They said that the CEFC is effectively helping to meet some of the goals that would normally be part of the philosophy of the Liberal Party—a coalition alignment—in relation to tackling climate change through commercial mechanisms and commercial filters. But, of course, we have seen the abandonment of those principles by the coalition and we have seen them so reluctant to adopt measures which actually promote business and investment through all of the propositions that we have put.

But certainly the corporation, through loans, loan guarantees and equity investment support, will begin operation, based in Sydney, in the period from about 2013-14. Of course, there is the potential through the $10 billion that this fund will have at its disposal to leverage something upwards of perhaps $100 billion in private investment through the co-investment strategies and requirements of the scheme.

I would draw the attention of members to an excellent article in the Sydney Morning Herald by the economist Simon O'Connor, who pointed to other mechanisms like these: the UK Green Investment Bank, the German development agency and the China Development Bank's $30 billion clean energy investments. We have been falling behind in this space, and the analysis that he put together is very instructive. Whereas the rest of the world is embracing this method of accelerating renewable energy investment at a time of intense global spending pressures we have been falling behind. He said:

Renewables are one of the few global industries that registered continued growth throughout the GFC. Clean energy investment is up 500 per cent since 2004.

Couple this with longer term energy forecasts and the necessity becomes very apparent. He continued:

Investing now in diverse sources is critical for the holy trinity of power: energy security, insurance against price shocks and lower energy prices.

He also stated:

Most energy analysts believe it is only a matter of time before our cheap fossil fuels inflate to international prices, all because of that very successful LNG and coal export program we've got going.

He points out:

Solar costs dropped by 50 per cent in 2011 alone.

So we are seeing that clean energy can indeed be cheaper, as I highlighted earlier with how we transition from one form of technology to the other. He also pointed out that another reason is the investment case. He stated:

Australians have more than $1 trillion invested in super funds, the majority of which is being battered by overexposure to global and domestic equity markets.

So:

… part of the solution relies on a more diverse asset allocation in pension fund portfolios.

He stated:

Indeed, when the global asset consultant Mercer investigated the overexposure of pension funds to climate risk, it came to the conclusion that 40 per cent of portfolios should be reallocated to climate-sensitive assets—such as clean energy.

The Clean Energy Finance Corporation, like its global cousins, responds to these challenges by broadening the energy infrastructure assets accessible to institutional investors. The corporation will help package these clean energy assets into something that a super fund, or other large investors, can finally take a stake in.

Super funds in Australia have shown some desire already to go down this road:

Industry Funds Management owns Pacific Hydro on behalf of the industry super funds, VicSuper seeded the Cleantech Australia Fund and REST super is a cornerstone investor in a major wind farm development in Western Australia.

This, as Simon points out, is a far better mechanism than a so-called direct action policy that would require bureaucrats to pick winners. He states:

… the CEFC is a commercially driven co-investment vehicle, run by independent, financially experienced staff, chaired at this point by the impeccably credentialled Jillian Broadbent—

as he describes her. He describes this as:

… the winning strategy for mums and dads with their money in super and the investors who oversee it.

I would also like to point out, while we are at it, that in relation to the health benefits motor vehicle emissions, for example, are the main cause of outdoor pollution in Australia, accounting for about 75 per cent of that. We know that all of these particulates and pollution from the current source of non-renewable energy cause upper respiratory irritation, chronic respiratory and heart disease, lung cancer, acute respiratory infections in children and chronic bronchitis in adults, aggravating pre-existing heart and lung diseases or asthmatic attacks. In addition, short- and long-term exposures have been linked with premature mortality and reduced life expectancy.

What we can benefit from in this measure is an energy-secure and healthy future, and something that will meet the energy needs of future generations of Australians well into the future. It is this sort of creative solution to stimulate innovation and the diversified economy that this nation must have and which is long overdue. It will provide us with a potent sword to complement the shield of other measures we have introduced to slay our carbon emissions dragon. It will help us to provide the energy security, prosperity and rewarding jobs that our children have the right to expect. And it is within the gift of this generation of Australians to deliver. I commend the bill to the House.

Mr FLETCHER (Bradfield) (20:28): I am pleased to rise to speak on the Clean Energy Legislation Amendment Bill 2012, the Clean Energy Finance Corporation Bill 2012 and the related bills. The Rudd-Gillard government has had a lot of bad ideas. It has had a lot of ill-thought-through ideas. It has had a lot of politically motivated ideas. It has had a lot of ideas which have been very hastily put together to meet short-term political objectives without thinking through carefully whether they make good long-term economic or policy sense. The Clean Energy Finance Corporation ranks right up there with some of the very worst ideas the Rudd-Gillard government has brought forward in its deeply undistinguished nearly five-year tenure. The essence of the policy package that this House is considering this evening is that the Commonwealth government should take $10 billion of taxpayers' money, together with some running costs, and put that money into projects that the private sector would not touch. Supposedly this is going to be a commercially successful venture, yet this investment fund is constrained to invest in projects that the private sector would not touch. It is extraordinarily difficult to understand how anybody could imagine that this is going to be anything other than a spectacular financial disaster.

In the brief time available to me, I want to make three points. The first is that the rationale for this measure—the reason the House is considering it—has nothing to do with policy; it is pure politics. It is because of a promise that a desperate Prime Minister Gillard made to the Greens. The second point I want to make is that, to fund this promise, the Gillard government is spending $10 billion that it does not have. All of this is borrowed money, and they have resorted to dodgy accounting to try to hide that fact. The third point I want to make is that this is going to be a dud investment for the Australian taxpayer. Any taxpayer who thinks that we are likely to get back all or even some of the $10 billion is, I fear, going to be facing a very disappointing outcome indeed.

Let me turn to the first proposition. The reason that the House is debating the Clean Energy Finance Corporation proposal this evening is that the Gillard government was desperate to secure the political support of the Greens to cling onto government and, in turn, committed to introduce a carbon tax despite having gone to the 2010 election promising there would be 'no carbon tax under the government I lead'—the famous words of Prime Minister Gillard. In addition, the Gillard government was forced to do something that the Greens insisted on as a political price for supporting the package: the Gillard government was forced to agree to tip $10 billion of taxpayers' money into this ill-considered Clean Energy Finance Corporation. We first heard of it in July 2011 after the package negotiated between the government, the Greens and the Independents was finally announced.

Let me remind the House of the euphoric, giddy words of Greens Senator Milne, who was the co-deputy chair of the Multi-Party Climate Change Committee. Charged with the euphoria of victory, she said on 10 July 2011:

The Greens welcome the leap forward towards powering Australia with 100% renewable energy secured as part of the agreement to put a price on pollution announced today with the government and the independent MPs.

The Australian community is crying out for renewable energy and I am delighted that we have been able to deliver Australia's biggest ever public investment in renewable energy …

Those were the words of Greens Senator Christine Milne in July 2011 as she ecstatically claimed victory in securing this $10 billion commitment of borrowed taxpayers' money to go into this ill-conceived venture. It is noteworthy that key policy elements of what is coming before the House this evening are elements that were specifically insisted upon by the Greens. Again I go to the statement issued by Senator Milne:

Securing a guarantee of 50% of the Clean Energy Finance Corporation fund for renewable energy … is the biggest single investment in renewable energy Australia has ever made.

In other words, a key design feature of the Clean Energy Finance Corporation—an insistence that 50 per cent of the money go into renewable energy as opposed to other forms of green energy—is something that was specifically required by the Greens party, and the Labor Party and Prime Minister Gillard had no choice but to accede to that. That is the sorry history of the grubby political deal which underpins the $10 billion taxpayers' cheque that this people's House is being asked to write this evening—because that is what we are being asked to do. We are being asked to write a cheque for $10 billion of taxpayers' money with very little comfort and very little reason to believe that we are ever going to see that money again.

I need hardly remind the House that no part of this policy was taken to the last election. The Australian people were never given the opportunity to decide whether they wanted to put $10 billion of their money at risk investing in ventures which the private sector had declined to invest in. That option was never given to them, but the Labor government, in cahoots with the Greens, has decided on their behalf that apparently that is a good idea.

That brings me to the second point I wanted to make this evening. It is curious that on the one hand the government thinks this is a good idea but on the other hand it is desperate to find a way to disguise the true accounting and financial impact of this measure. To achieve the disguising of the true financial impact of this measure, the Treasurer and the Minister for Finance and Deregulation have resorted to an accounting trick which they have resorted to several times already in the life of the Rudd-Gillard government. That accounting trick is to pretend that the money which is being spent is an equity investment in a vehicle which is going to generate a commercial return. That is the accounting trick which has been used for the National Broadband Network company, which is going to see some $20 billion, $30 billion or $40 billion—it could be $50 billion or more—of taxpayers' money squandered on an ill-conceived venture. That is the same accounting trick which this government is now using in relation to the Clean Energy Finance Corporation, which is again going to squander billions of dollars of taxpayers' money.

The consequence of the accounting trick—as I am sure you would be aware, Mr Deputy Speaker Symon—is that, by treating the money as an equity investment, it is not included in what is called the underlying cash balance. The underlying cash balance is the number which is colloquially referred to as the budget bottom line. The Treasurer proudly produced a budget bottom line this year that was, for the year 2012-13, a promised surplus of a bare $1.5 billion—a derisory amount, it might be pointed out, in the context of total Commonwealth expenditure of $364 billion. But he proudly claimed that he was delivering a surplus. The point I make to you, Mr Deputy Speaker—and I am sure that, to you, being the aficionado of government accounting standards that you are, it is not a point I need to underline—is that that number is the underlying cash balance, and the $2 billion a year which is appropriated by the bill before the House this evening into the Clean Energy Finance Corporation does not appear in the underlying cash balance. If those moneys were included then it would make the forward estimates look $10 billion worse than they actually look in the numbers the Treasurer presented to this House just a few weeks ago.

Let me turn to the third point I want to make. I predict that this investment of $10 billion of taxpayers' money is going to turn out very, very badly. I predict that taxpayers are not going to see a good return on the $10 billion which this government has presumed to invest on their behalf in a range of speculative and unproven technologies—technologies so speculative and unproven that they are ones that the private sector has declined to invest in.

Let us be clear here, because there were some points made earlier by the member for Eden-Monaro which seemed designed to give a misleading impression. The coalition has no objection to a venture capital industry. The coalition has no objection to people putting money at risk in innovation, green energy or any other area of new technology. We say good luck to people who do that, and, if you make money out of it, we congratulate you. But what we also say is: that is not a proper function of governments, to put taxpayers' money at risk doing it. That is something which private business people are free to do if they want to put at risk their capital or their shareholders' capital. But the idea that taxpayers' money, collected painstakingly from millions of Australians, many of them of modest means, should be put at risk in speculative ventures where there is very little confidence that the money will ever come back is the height of irresponsibility. And for this government to be doing that in pursuit of a political objective is disgraceful.

Mr Deputy Speaker, you would have noticed, when you read the expert report prepared by Jillian Broadbent and her two eminent colleagues, that there was some very careful wording. I am looking at page 9. After describing the objective that the expert panel recommends for the CEFC, the experts go on to say:

The CEFC will be challenged in achieving this objective as there is a tension between funding the clean energy sector, applying a commercial filter, and maintaining the financial self-sufficiency of the corporation.

That is the understatement of the century. That is code for saying, 'It is extremely unlikely this organisation is ever going to make a buck.'

When officials of the Treasury department appeared before the House Standing Committee on Economics yesterday, I had the opportunity to ask them if they thought this was going to turn out to be a good investment for taxpayers. I took that opportunity to ask the question, but they declined to answer. They said it was a policy decision. And I can understand why an official facing that question would duck it, because anybody who has had any experience in this area and who has seen the sorry track record of governments marching in to invest money in areas where private sector investors have trodden more warily would know that it almost invariably ends in tears.

When we asked some further detailed questions yesterday of Treasury officials about why it was that the government is expected to be able to make money out of these kinds of investments when the private sector has not been able to, the answer that I got from Mr Waslin of the Treasury was as follows:

As I said, the government is prepared to provide funds at a target rate of return which is less than the private sector's but it does also recognise the positive externalities.

Let us put aside 'positive externalities', which is a nice bureaucratic way of saying, 'The fairies at the bottom of the garden—if we hope very, very hard, and close our eyes and hum a bit, then maybe we'll get a nice positive financial return.' Let us focus on what this particular official was really saying to the committee. What he was really saying was, 'The only reason that the government might be able to do this is because the government can live with a lower rate of return than the private sector.'

Let us just understand that point because, if you look through the expert committee report, it refers to a financial target of achieving a return equal to the government bond rate. In other words, the grand financial scheme here is: the government can borrow money at the government bond rate and therefore it can accept a commercial return which is only equal to the government bond rate and no higher. Given that the government bond rate is, by definition, lower than the cost of finance which the private sector has to pay, then, if you took that logic to its extreme, government would carry out every activity in our economy because it has a lower cost of financing. That is essentially what is being proposed in the economic logic of the Clean Energy Finance Corporation: because the government does not need such a high rate of return then it is okay for it to take a risk on investing in risky and speculative technologies in green energy where the private sector has chosen not to take that risk.

There are examples around the world of governments losing a huge amount of taxpayers' money in doing this kind of thing. If I had more time I could speak about Solyndra, a US company which received a US$535 million loan guarantee from the Obama administration in 2009; the money was all lost. I do not have time.

I will conclude by saying this. This is a really bad idea. It is going to lose a bucket of taxpayers' money. And we should reject it.

Ms SMYTH (La Trobe) (20:43): I would like to thank the member for Bradfield for his very positive and optimistic contribution to this evening's debate. That is the kind of positivity and optimism you might expect from Thomas Hardy or from Dickens—something of that nature—though not really unexpected from those opposite. It is interesting to me that in summary the member for Bradfield's contribution to this evening's debate is all about the inelegance and the inappropriateness of government intervention into a marketplace. It is curious therefore that his side of politics is in fact opposing one of the most significant market mechanisms that this country has seen, through the introduction of a carbon price mechanism. It is extraordinary that his side of politics is this evening so vehemently objecting to intervention in the market through the Clean Energy Finance Corporation by government and yet seeks to impose a $1,300 impost on each household to fund what their side of politics has called a Direct Action Plan, which has been described as a tree in every lounge room. It is a most extraordinary proposition to put forward and then come into this place this evening and oppose the proposition to support the development of renewables in this country through the establishment of an appropriately thought-through mechanism, developed in consultation with experts and as part of an overall clean energy package. It is extraordinary that the opposition come in here this evening, having opposed household assistance, having opposed things like the Carbon Farming Initiative—which indeed will help some to the National Party's constituents, some of their farmers. They oppose that and they manage to oppose household measures and tax cuts. They have presented us with a crude so-called Direct Action Plan to address one of the most significant problems facing not only our country but our globe. It is amateurish that they come in here and present us with these thoroughly inadequate responses to significant policy problems across the globe.

I mentioned optimism earlier on, and it is disappointing once again to come into this place and have the opposition merely say 'no' to a well thought-through, well crafted policy proposal by this government. It is not simply a policy proposal of this government. I was reminded of that this week when I met some of the young people who came in to see me from the 100% Renewable Campaign, which is a community campaign working with over 100 local groups right around Australia, some of which are in my own electorate of La Trobe. They are groups that have been out polling community members right around the country; they have polled around 8,000 people face-to-face and around 4,000 people online, they tell me, about their views on the solar industry and for government investment in the renewables sector as a whole. They tell me that those results show that 94 per cent of people they surveyed support building large scale solar, for instance, in Australia and that 95 per cent support the government's new proposal for the Clean Energy Finance Corporation. It is compelling to me that there are people who have by their own resources and by their own means—some of them very limited means, I would expect—come to Canberra to speak to members of parliament about their vision for clean energy in this country. The member for Bradfield and I am sure many other opposition members throughout the course of this debate and the broader debate within our community have asked: 'Well, what we do we get back for this investment that is being made in the Clean Energy Finance Corporation, which in turn will support renewables?' What we get back is the opportunity to establish new industries, the opportunity to establish new jobs for Australians in a country and a globe which is going through economic transition. We get the opportunity to support new industries for Australians. It is not surprising that this is the next step in the government's clean energy package of measures, because our commitment to a clean energy future is absolutely apparent and has been apparent for some time. Whether it is through the carbon price, the Carbon Farming Initiative—that I mentioned as being so disappointingly opposed by people who purport to support farmers in this country and who purport to support people who could well derive an income stream by means of the Carbon Farming Initiative—or whether it is through the establishment of renewables targets or whether it is through the establishment of the Clean Energy Finance Corporation this evening, it is simply part of the sequence of events that this government is going through to build a new future for our country, one which is not reliant on old energy and which is not reliant on carbon polluting technologies.

This evening's bill, which contemplates the establishment of a Clean Energy Finance Corporation, is important because it ensures that new renewables technologies get the financial support that they need to become larger operations and to ensure that we have increasing numbers of employees engaged in those new industries. We know that clean energy technologies face a range of obstacles in attracting financing: current global financial conditions, the cost of renewable energy, the complex nature of Australia's electricity markets and the preference of some investing institutions for listed assets all contribute to the inhibiting of the financing of the clean energy sector at present. It is appropriate that we establish a mechanism to counteract that.

The Clean Energy Finance Corporation will make individual decisions about investment which are independent of government. They will be referential-backed to an investment mandate which provides a mechanism for the government to articulate its broad expectations of how that corporation might invest and how it might go about its work. In April this year we released the expert review panel's report on the design of the Clean Energy Finance Corporation. The government accepted the recommendations of that report and so it is implementing them through this bill. It has taken appropriate advice in a timely way in accordance with the range of measures which we have implemented to respond to the clean energy needs of our country and is implementing this measure through this bill.

The Clean Energy Finance Corporation will make investments for the development of Australian-based renewable energy technologies—low emission technologies, energy efficiency projects and businesses that supply the required inputs. I might say as someone who not so long ago was in commercial practice and acting in relation to clean energy opportunities that other countries' businesses had taken on, it was disappointing for me to see that the same opportunities were not being taken up by Australian companies. It is a great source of pride to me this evening to be participating in a debate that will try to support Australian-based renewables businesses. The bill before us requires the Clean Energy Finance Corporation to have at least half of the corporation's investments in renewable energy technologies by June 2018. The government will provide around $2 billion of funding to the corporation per annum for five years, starting in 2013-14, with profits being available for reinvestment. But why have a Clean Energy Finance Corporation? The investment of $10 billion in the corporation will mean that we can unlock new and very substantial private investment in clean energy projects and the supply chain that feeds into those projects. The Clean Energy Finance Corporation will enable the leveraging of private sector financing for renewable energy, low-emissions and energy efficiency technologies—investments which are critical to the transformation of the Australian economy. It will mean that the Clean Energy Finance Corporation can make investments and encourage private sector investment in clean energy technologies. It is ultimately the key to changing the economics of clean energy projects and making them more competitive in our country. It is necessary so that we can overcome potential market barriers that currently prevent those projects from going ahead—for instance, where investors are not appropriately informed about or familiar with emerging technologies.

The Clean Energy Finance Corporation will have a number of means available to it to tailor investments to address current and potential market barriers, including the capacity to provide funds, change the allocation of risk amongst participants, and offer a concessional cost of funds. Ultimately it will act as a catalyst to enable private investment which is not currently available and thereby enable a contribution to be made to carbon emissions reduction and cleaner energy.

So this is a unique opportunity this evening and it is part of the broader package of measures being put in place by this government to respond to the needs of our community to develop industry opportunities, to develop employment opportunities in new technologies industries, and ultimately to respond to the challenge of climate change which affects Australia and which affects the globe. I am keenly aware of the impacts of climate change very close to home on things like biodiversity in a very sensitive part of the world—the Dandenong Ranges. I regularly have conservation groups—organisations such as Emerald for Sustainability and other groups which support the promotion of biodiversity and maintaining biodiversity in the Dandenong Ranges. They regularly come to me and remark on how positive they feel that action is now meaningfully being taken by Australia to respond to climate change—that action is not being taken in a piecemeal way through a so-called Direct Action Plan but is being taken in a way which supports industry, which supports those who are landowners and agriculturalists, which supports households while we make the transition, and which ultimately comes back to supporting our environment and protecting that environment for future generations.

This government is strongly committed to reducing Australia's carbon pollution because we know that, if Australia takes no action by 2020, our carbon pollution could be, for instance, 20 per cent higher than in 2000. The Australian government is investing more than $5 billion in developing and commercialising clean energy technologies because we know that they will be crucial to Australia's efforts to reduce its carbon pollution emissions.

We have set a Renewable Energy Target of 20 per cent by 2020, and this means that by that stage one fifth of Australia's electricity will come from renewable sources such as wind, solar and geothermal power. It is for all those reasons that this important measure being considered this evening—the establishment of the Clean Energy Finance Corporation—is necessary. It is for this reason that we are taking steps to not only provide incentives for high-polluting business to alter its practices so that it becomes lower polluting through the carbon price mechanism. It is not only through this mechanism that we seek to change behaviours. It is not only through that but through the Carbon Farming Initiative that we seek to offer opportunities to capture carbon emissions and to offset emissions. And, finally, it is through this measure that we enable a market mechanism to be assisted by the intervention of the Clean Energy Finance Corporation to provide business opportunities, to provide employment opportunities, which go to support a properly functioning clean energy economy and our clean energy future.

It is for all of these reasons that this government has acted in a systematic, timely and well thought out way to develop a package of measures which enable our country to most efficiently make the transition to a clean energy future. There is a great deal of work yet to be done and we have engaged some of the best advice through those expert advisers who have provided their review on the operation of the Clean Energy Finance Corporation. It is through scientific advice and economic advice that we have formulated a range of policies—the carbon price, the Carbon Farming Initiative and the Clean Energy Finance Corporation—to deliver a package of reforms which provide us with a comprehensive means to respond to a clean energy future.

It is disappointing that those opposite have come here tonight once again simply to stymie debate on these issues. It is disappointing in the context of so many young people in my electorate and right around the country who have made their voices clearly known to me not simply through this week but through the course of my term as an MP and far beyond that period about the kind of future they want to see, about the clean energy economy that they want to see, about the opportunities that they want to see for our future. I am not going to squander that opportunity. Those of us on this side are not going to squander it. We are going to take the opportunity to change Australia for the better and we are doing it tonight through the Clean Energy Finance Corporation Bill 2012.

Ms MARINO (Forrest—Opposition Whip) (20:59): I was interested to hear the last speaker mention the stymieing of debate, when you consider that we have a $10 billion fund for consideration in front of us that was actually only allowed two hours with the economics committee. If you want to talk about stymieing debate, that is certainly where we need to start.

Tonight we are here to debate the Labor Party's bill to deliver its latest $10 billion slush fund. Of course, that is not what the government is describing this bill as, but then deceiving the Australian community has become business as usual for the Gillard government. We have to look at what this government says and then compare it to what it actually does. We see that yet again with this bill before the House. The Clean Energy Finance Corporation Bill establishes another bureaucracy whose goal is to waste borrowed money that ultimately the taxpayer will be liable for. How many more times is this going to happen in the term of this government? There is a litany of failed wasteful green schemes and failed wasteful green bureaucracy after green bureaucracy. The great tragedy when you look at this fund is that the government does not actually know what to spend the money on, beyond such broad and nebulous directions as 'the corporation is a mechanism to help mobilise investment in renewable energy, low-emissions and energy-efficiency projects and technologies in Australia' and 'the corporation will finance Australia's clean energy sector using financial products and structures to address the barriers that are currently inhibiting investment'.

Yet Australia already have products and structures that make low emissions and renewable energy attractive options, don't we? We have a bipartisan 20 per cent renewable energy target, which requires all energy suppliers to source one-fifth of their power from renewable sources by the year 2020. Failure to do so will attract penalties of hundreds of millions of dollars, much of which would have to come from state energy utilities. The existing production of around 15,000 gigawatt hours of renewable energy produced nationally is expected to have to increase by an extra 45,000 gigawatt hours over the next eight years, a total fourfold increase. Every unit of renewable energy power that suppliers fall short will cost them money. A penalty of $65 per megawatt hour would equate to $65,000 per gigawatt hour and $65 million per terawatt hour. At this price, if Australia only managed to double instead of quadruple its renewable energy production, our electricity suppliers would be facing annual fines of $1.95 billion. Now, that is an incentive. It is also a coincidence, given that $2 billion is the expected government contribution to the Clean Energy Fund annually as it collects its capital base. Otherwise, I presume, this cost will simply have to be added on to the cost paid by consumers—our Australian families and businesses.

Surely the renewable energy target is a major structure designed to increase low-emission energy production. It appears, however, that some observers think Australia will struggle to quadruple its renewable energy production in the required time, despite the obvious financial incentive. Getting three-quarters of the way to the target will still generate a billion dollars a year in penalties, which is, in effect, the government's second hidden carbon tax. This will be one more cost we can assume will be passed on to Australian energy consumers—to every house, every business and every family. So there already exists a structure to quadruple renewable energy production, yet according to the Gillard government this structure will be either inadequate or incompetent.

On top of the costs of the renewable energy target I have already mentioned, the carbon tax itself is supposed to be another structure the government designed to drive up the price of fossil fuel energy or, by default, subsidise the competitiveness of renewables. With a $23-a-tonne CO2 equivalent across the entire Australian economy, our nation has the most expensive carbon tax in the world. Australia's electricity generators produce nearly 200 million tonnes of CO2equivalent, which is, annually, over a third of our total emissions. At a cost of $23 a tonne, the impost they will have to pass on to consumers and industry is $4.6 billion, rising every year. Of course, free permits reduce the overall cost to some generators, but I note that no assistance is being offered to the Western Australian generators in my electorate, so many will pay the full cost.

Why do these two major pieces of Labor policy not create a sufficient environment for investment in renewable technologies? After all, they come with a billion-dollar revenue-raising capacity. Is the carbon tax a piece of environmental legislation, or is it social welfare and wealth redistribution coming to us stealthily like a wolf in sheep's clothing? I remind members of the explanatory memorandum for the clean energy future bill last year. It said:

A broad-based carbon price is the most environmentally effective and cheapest way to reduce pollution. A carbon price puts a price tag on carbon pollution. Under the mechanism, around 500 of the country's biggest polluters will be required to pay for each tonne of pollution they release into the atmosphere. This will have two effects.

It creates a powerful incentive for all businesses to cut their pollution by investing in clean technology or finding more efficient ways of operating.

A price on carbon will also create economic incentives to reduce pollution in the cheapest possible ways, rather than relying on more costly approaches such as government regulation and—

wait for it—

direct subsidies.

This is what the government said in their own clean energy future bill last year, that that would provide the mechanism so that the government did not have to rely on costly approaches such as direct subsidies. The explanatory memorandum to that legislation went on to say:

These incentives will flow through the economy. The carbon price will make lower-polluting technologies, especially clean energy technologies, more competitive and will boost investment in these technologies. In this way, introducing a price on carbon will trigger the transformation of the economy towards a clean energy future.

Well, what has happened? Why isn't this sufficient? These words should really be viewed through the usual screen of Labor Party distortion. What we do see, again, is the government saying one thing and doing another. That is not what they said in that clean energy futures bill and I hope those words will continue to be examined in the cross-examination of this bill before us now. Either the government misled the Australian people through the clean energy future bill or it is misleading the Australian people through this bill. It has to be one or the other. The government stated that the carbon tax itself would drive renewable energy technologies. So is the bill before the House today, the Clean Energy Finance Corporation Bill 2012, an acknowledgment by the government that the carbon tax will actually fail to deliver renewable technology in its own right—so it is not going to do what the government said it would do? Is this an admission of failure, or, should I say, just the latest admission of failure and wasted borrowed funds and bloated bureaucracy yet again? Or is it instead not related to another government failure but an attempt to develop a separate Labor-Greens slush fund?

The bill of course establishes the Clean Energy Finance Corporation, whose job it will be to oversee the expenditure and direct the outcomes the money will purchase. I wonder whether it will be more successful and more efficient than Labor's Fair Work Australia, that took four years to deliver a single report. Will there be better administrators than those who mismanaged Labor's disastrous pink batts program? I am particularly interested in this line in the explanatory memorandum:

The Corporation will apply capital through a commercial filter to facilitate increased flows of finance into the clean energy sector thus preparing and positioning the Australian economy and industry for a cleaner energy future.

What exactly will this commercial filter look like?

Mr Chester: The green loans program.

Ms MARINO: The green loans program. Is it the same commercial filter through which the government gazed when it pretended to see world action on pricing carbon—even though the world has basically walked away from such moves? Is it the same commercial filter that the government used when it told high-energy-using trade-exposed industries that their carbon tax would have no impact—even though we see job losses, cancelled projects and closures on a daily basis? We really need to know what commercial filter this corporation will apply.

There are already serious concerns that the CEFC may in fact have a distortionary impact on the market and not stimulate tangible, sustainable results for progress in renewable energy projects. It may well undercut finance and investment in existing projects that have had to secure commercial financing—they have had to have a commercial case for large-scale renewable energy projects, and I have no doubt that the $10 billion will not be successfully invested. Irrespective of this, the renewable energy generated will still be 20 per cent—20 per cent before; 20 per cent after—so where is the justification?

I am absolutely appalled at the projected $750 million of taxpayers' money as losses attached to this bill. This is in the government's own papers. The government is admitting upfront that it plans to lose taxpayers' dollars through the Clean Energy Finance Corporation Bill. I find that just appalling. Clearly, $750 million is chickenfeed to what the actual waste will be—$10 billion to pick Labor-Greens winners—and we will simply see questionable initiatives funded to support Labor and Greens ideologies. It will be without any question a Labor left-wing slush fund, aided and abetted by a board that will be appointed by the government and one that must consult with Labor ministers, a direct hands-on process. This is $10 billion being borrowed that Australian taxpayers will ultimately have to pay back. It is not in the government's budget. It is not part of the Labor government's $300 billion increase in the nation's debt ceiling.

I have actually seen, as other members would have seen, some of the you-beaut schemes that will be pitching for these funds. I have seen some in newspapers and I have heard of some being hawked around the halls of this House. There are all sorts of opportunists rubbing their hands with glee. They know this is a gullible government. They have been down this road before. We have seen billions and billions of borrowed taxpayers' dollars wasted by this government. The opportunists know that the government cannot deliver programs without waste and mismanagement and they cannot wait to get their hands on these taxpayer funds. But it comes at a cost to Australian taxpayers. This government is infamous for coming up with the wrong answers to the questions of the day facing this nation, and this is yet another example of Labor getting it wrong.

Ms PARKE (Fremantle) (21:11): I am very pleased to support the Clean Energy Finance Corporation Bill 2012 and related bills and to welcome the era of new technology development that they surely herald. I welcome this instalment in the government's carefully designed and far-reaching program for addressing carbon pollution, for addressing our reliance on hydrocarbons, and for setting up Australia as a leader when it comes to renewable energy and related technologies. This is a focused, forward-looking reformist Labor government, and we are getting things done, notwithstanding the vicissitudes of a minority parliament and a hostile coalition opposition, and we have just heard an example of that from the member for Forrest.

The policies and decisions of this Labor government, taken hand in hand with the resilience and creativity of Australian individuals and businesses, have made Australia a leader in economic management, and it is from that position of strength that we are leading this country through big-picture reforms in the areas of renewable energy and energy efficiency, in the areas of health and disability support, and in the areas of marine protection and transport infrastructure and reform. The clean energy legislation is a big part of that broad and deep reform effort, and it is a credit to the minister and the parliamentary secretary, to their staff, and the staff in the Department of Climate Change and Energy Efficiency that we stand on the brink of a new and promising trend of technological innovation in Australia.

Every day it seems there are events and challenges, both here in Australia and overseas, that can make it difficult to be optimistic about the world and our place in it. Terrible things happen and wicked problems persist. Economic crises are prompted by short-sightedness, poor regulation and greed. Economic successes are still too often characterised by inequality, selfishness and waste. Maybe that is an unnecessarily dark view, but it is one that can be hard to resist. And it is partly for that reason that we should recognise when we can the good things that we are capable of. In saying that, I strongly believe that the global effort to address the problems we have made for ourselves in the form of carbon pollution and hydrocarbon reliance will draw out some of the best human qualities. Like many people, I find it a bit sad that adversity is sometimes required to provoke the best in us, but I guess the best in us is worth having in any circumstances. The creation of the Clean Energy Finance Corporation is a significant development in our history, the point at which a great flourishing of new low-carbon or no-carbon energy sources and other energy efficiency measures will be developed as the mainstay of Australia's electricity needs in the decades to come.

Australia is far from alone in this effort, and indeed I have spoken before in this place to highlight the massive expansion of renewable energy investment and capacity that is occurring across the globe. As part of that global effort, this legislation is something that should make us all feel more positive and more optimistic about the direction in which we are headed as a nation. As a key component of the clean energy future package of reforms, these bills fit within a worldwide policy effort that gives me renewed hope in the idea of human progress and in the idea that we can learn from our mistakes and even outgrow the historical limitation of governing without enough regard to intergenerational needs or our shared international wellbeing.

The Clean Energy Finance Corporation, CEFC, is the part of the clean energy future package that will create an Australian economy that is more responsive to the needs of our burgeoning clean energy and energy efficiency industry. The government's $10 billion investment will play a supercharged enabling role in kick-starting new initiatives and in opening new private investment opportunities for low-carbon and no-carbon renewable energy projects. What is more, the CEFC will have the broader benefits of underwriting the improved design and construction of clean energy technology and the indirect benefit of creating lower cost technology. With the Australian clean energy market still in its early development, major obstacles exist in the currently limited and constrained allocation of capital for such initiatives. A number of these barriers were identified in the expert review chaired by Jillian Broadbent, and the structure and operation of the CEFC respond to the recommendations of that review.

The CEFC will function to stimulate private sector investment and financing for clean energy technologies. It will use a range of mechanisms to overcome the kinds of barriers identified by the expert review. For example, it will have the ability to provide direct funds, offer concessional cost funds, lengthen the available tenure of private sector loans, and favourably alter the allocation of risk amongst lending participants. By taking the lead in clean energy technology investments, the CEFC will act as a catalyst for the industry and for private market funding of new entrants. The corporation is not a grants program and the intention is not to compete with the private sector but, rather, to foster private sector energy growth in the clean energy market and associated industries by acting to overcome those existing private lending obstacles that are not really based on investment viability per se yet are real obstacles nonetheless in the current tight capital lending environment.

The board of the CEFC will be responsible for decision making and investments, and its operations are structured to avoid risks by being both transparent in its processes and of course fully accountable in relation to all individual investment decisions. The dividends from the CEFC earnings will be paid to the Australian Renewable Energy Agency. The funding provided to the CEFC will be a special appropriation of $2 billion per annum for five years from 1 July 2013. In addition, the corporation will receive operational and start-up funding through the budget of around $60 million over three years. The intention is that the CEFC will become financially self-sufficient, using its earnings to fund its operational expenses without further supplementary funding.

Appropriate capital finance support to underwrite the development of the emerging renewable energy sector is critical. Without such assistance, the huge potential of Australian inventors, innovators and entrepreneurs will be lost or, at best, it will go elsewhere. The importance of support in the form of capital finance is even greater now than it would normally be because capital markets are tight and constrained.

On that point, people need to remember what it is we are seeking to foster here. As Michael Ottaviano, the CEO of Carnegie Wave Energy in my electorate, has pointed out, the existing energy generation technologies and infrastructure that we all rely upon were not only developed with government support but wholly owned and run by government through almost all of the time in which electricity has been provided as a basic service to households and industry.

It is also salient to again emphasise that, where the Clean Energy Finance Corporation provides funding support, it will look to do so in a way that opens up avenues of private investment. This is the right and proper enabling role of government: first, to identify the country's long-term and strategic future needs; second, to recognise that these go above and beyond a much tighter horizon and profit frame in which business operates; and, third, to weigh both the wider costs of market inaction and the wider benefits of carefully rated risk and innovation.

I was very taken with a summary of the renewable energy development challenge that confronts all governments in an article by James Surowiecki in the 10 October 2011 edition of the New Yorker. In that piece he wrote:

… there are few industries where it makes a lot of sense for the government to complement the market by subsidising research and development. Renewable energy is one of them. That's because the energy market is not like most other markets. Indeed, the economics of alternative energy are such that private investors, left to their own devices, are bound to under-invest in it, since the considerable social benefits—cleaner air, fewer greenhouse emissions—accrue to everyone, not just to direct customers. That means that the economic rate of return is significantly less than the social rate of return. Energy markets are also dominated by entrenched, regulated companies, and that reduces the incentive for investment. Despite the immense size of the energy market, as of 2005 spending on energy R&D accounted for just 2 per cent of spending on R&D in the U.S. This creates an opportunity for the government to add value by investing smartly, just as it can add value by spending money on education or infrastructure, other areas where the social returns are greater than the economic ones.

That view is very much a part of how we have approached the task of setting Australia on the path to a cleaner and more sustainable energy future, with all the economic, environmental and social benefits this will deliver.

It is the same approach that the Labor government has taken with great success in first launching the incredible boom that we have seen in household solar PV systems, then gradually tapering our support as the industry's growing strength and the well-established private demand have made that higher level support unnecessary.

I am extremely pleased to support these bills and I am proud to be part of a Labor government that has fully applied itself to the challenge of reform, with all its difficulties but also most importantly with all its long-term rewards. I believe Australia will have a clean energy future. It is absolutely essential that we do and it begins with the work of this government in partnership with all the many and varied Australian innovators, inventors and entrepreneurs that we are seeking to support.

Mr BRIGGS (Mayo) (21:21): I rise to very strongly oppose the Clean Energy Finance Corporation Bill 2012 and the associated measures. I do so because I think the member for Fremantle, in fairness to her, outlined just then a very stark difference between the sides of the House. The Labor-Greens alliance, the coalition of Labor and Greens, believe very much in market intervention. They believe very strongly in taxpayers providing funding to what would not normally be commercially viable businesses.

Ms Plibersek interjecting—

Mr BRIGGS: The Minister for Health would be a big supporter of that. She does not know if she is a Green or a Labor Party member, but I tell you: at the next election she will have the Greens right on her door. I think the second highest primary vote around the country for the Greens at the last election was in the Minister for Health's electorate. Labor are now doing deals with the Greens to fund Christine Milne's pet project. It has gone from being the Bob Brown bank to the Senator Milne bank with the change in arrangements for the Greens. But what has not changed is that the Labor Party and the Greens are in coalition and this is the very worst of their policy positions.

As I said at the beginning of my remarks: in fairness to the member for Fremantle, she is very honest about what she believes the role of government is in society. I appreciate that in this place. There are not a lot on that side who are now honest about what they think the role of government is in society, but she is very honest about what she thinks is the role of government in society. It is that governments should pick winners and that governments should take taxpayers' money and make decisions that the market would not otherwise make. That is in effect what she has just said.

We heard the member for Fremantle say what a great job the government had done to build up the solar panel industry. Of course, they also tried with the pink batts industry with their assistance in that area. That did not work out so well. When they spent $1 billion trying to build up the pink batts industry, which, again, was all to the purpose of creating a clean energy future, they wasted $2 billion on the way through because it did not work—and this will not work either. This is $10 billion, however, and that is the most concerning part about it. In the last couple of days during estimates hearings it has already been admitted that over the forward estimates this agency is expected to lose some $300 million of taxpayers' money, which is on budget. Of course, this $10 billion is off budget very deliberately. It is another one of the off-budget schemes that the government are trying to pursue, like the National Broadband Network. They are trying to hide the fiscal loss to the Commonwealth by putting it off budget.

We already know from estimates hearings that the witnesses have at least been honest enough to say that they expect well over seven per cent of the money they are investing to fail—$300 million of Australian taxpayers' money on businesses that will not succeed. We should think about that. They are spending Australian taxpayers' hard-earned money on pet projects of the Australian Greens, Senator Christine Milne and the member for Fremantle. These guys are making these decisions because it suits their ideological pursuit, but it does not suit working families—remember them?—who are working hard every day to try to put away money for the Greens and their coalition partner, the Labor Party, to go and pursue their own ideological needs and desires. That is the worst aspect of this.

I think one of the most insidious parts of the climate change package that this government has brought before the parliament is this bill and this $10 billion. We have already seen how much waste is created by the Australian Labor Party. These are projects which the commercial sector will not fund. There are already very successful renewable energy companies in the marketplace that this money will undercut. One of the great ironies of this Clean Energy Finance Corporation is that the money it will invest will undercut the money of entrepreneurs who are already out there in the marketplace trying to do exactly what the Labor Party and the Greens will tell you they seek to do—create alternative energies. This bill will create a situation which will undercut the work and efforts of those companies.

We know that this bill has been designed by the former leader of the Greens, Senator Bob Brown, and his replacement, Senator Christine Milne, who was a Co-chair of the Multi-Party Climate Change Committee. I remind the House: this was a committee that was formed after the election because at the election the Labor Party's climate change policy was to have 150 Australians get together to tell them what their climate change policy should be, along with cash for clunkers. That was the climate change policy of the Labor Party at the last federal election. After the election, the Prime Minister, of course, did a deal with Senator Brown and Senator Milne and created this climate change committee, out of which emerged the so-called 'Bob Brown bank'.

As Senator Milne made very clear in her comments about the corporation, it was designed such that:

With a legislatively guaranteed stream of funding outside the budget, no future government will be able to undermine it without changing legislation.

It is a very deliberate means of getting Australian taxpayers' money and putting it into the areas that the Greens and the Labor Party favour. They will seek to provide government funding to commercial enterprises that the market has decided are not worthy of funding. We know how wise the Labor Party are with investing in private enterprise. Those of us who live in South Australia and Victoria know how well the Labor Party ran banks in the late 1980s and early 1990s. It happened in Western Australia as well. They turned South Australia from being one of the strongest states in a fiscal sense to being, now, the weakest state in a fiscal sense, excluding Tasmania, because of the damage that was done by their behaviour in trying to act like a bunch of bankers in the late 1980s and early 1990s. They do not run things well. Governments do not run things well. Governments do not make investment decisions which are in the best interests of Australian taxpayers. And this bill will not lead to a change in this regard. It will lead to billions upon billions of dollars being piled into non-commercial prospects. It will lead to massive waste. It will lead to pink batts writ large. It will lead to Australian taxpayers wondering yet again why it is they go to work and pay their taxes. It should not just be for Senator Milne and the Labor Party's frolics in spending Australian taxpayers' money. This is a very bad bill.

Debate interrupted.