The SPEAKER (11:01): I have received a message from the Senate informing the House that Senator Humphries has been discharged from the Parliamentary Joint Committee on Human Rights and that Senator Ruston has been appointed a member of the committee.

Mr MORRISON (Cook) (11:01): I rise to speak on the Freedom of Information Amendment (Parliamentary Budget Office) Bill 2012. The Labor Party does not have a clean record when it comes to freedom of information requests. I know this in particular from my own portfolio of immigration. The Office of the Information Commissioner released earlier this month a scathing report into the immigration department's handling of FOI requests under this government's watch, indicating a culture of cover-up and interference by the government. This report exposes Labor's claim of open and transparent government as a fraud. The current Prime Minister's promise to 'let the sunshine in' is about as hollow as the promise that there would be no carbon tax under a government that she leads. The report also raises serious concern within the department about giving the minister a so-called heads-up about what information is being released before making a final decision on an FOI request. This might be how it is done in Sussex Street in New South Wales but it is not how things should operate in an executive government or before this parliament.

Mr Bradbury interjecting—

Mr MORRISON: The minister at the table would know all about what happens at Sussex Street. He has been the beneficiary of this—

The SPEAKER: Order! The member for Cook—

Mr MORRISON: I was just responding to the interjections.

The SPEAKER: I was going to say to the Assistant Treasurer—

Mr MORRISON: If he wants to bring it on—

The SPEAKER: Interjections should not be responded to. I refer the member to the bill before the chair.

Mr MORRISON: Madam Speaker, the minister at the table may wish to reflect on this on his next trip to Darwin. The report raises major questions of political interference in the FOI process relating to Labor's most sensitive political issue: border protection. And the minister at the table took a keen interest in this issue when the boundaries of his own electorate somehow extended to Darwin at the 2010 election when 'the good admiral', as we know him, went up there spruik his claims. The commissioner's report also suggested that the minister for immigration and his office have tried to influence and delay the release of sensitive political information relating to Labor's border protection chaos—which continues to this day. There have been 40 boats and over 2,100 people this month—a record failure that has no equal by any government or any Prime Minister.

The SPEAKER: The member for Cook is addressing the issue of FOI in the budget office. I would ask him to return to that very important issue before the chair.

Mr MORRISON: The Information Commissioner decided to investigate the immigration department in April following many complaints of missed deadlines and suspected cover-ups, including a complaint made by the member for Mayo about the department obstructing six requests for information relating to the Inverbrackie detention facility. For each and every FOI request the member for Mayo submitted to the immigration department they missed time frames and failed to maintain contact.

When it comes to open and transparent government Labor's spin is not matched by their actions. While the coalition supports this bill in principle, we believe it needs to be thoroughly examined by the Senate Standing Committee on Legal and Constitutional Affairs to ensure the amendments are fair and proper. The coalition just does not trust this government when it comes to the detail or even the broad.

I turn now to the Parliamentary Budget Office. The Parliamentary Budget Office commenced operations in July this year. Its functions are to prepare election policy costings upon the request of authorised party representatives and independent members of parliament and to prepare policy costings outside of the caretaker period upon the request of individual senators and members of parliament. In addition it will initiate its own work program in anticipation of client requests and also prepare responses to budget related non-policy costing requests of individual senators and members of parliament.

The Parliamentary Budget Office is also tasked with providing formal contributions on request to relevant parliamentary committee inquiries. The Parliamentary Budget Office is an exempt agency under the FOI Act so that its services can be provided on a confidential basis. However, there is no specific exemption for documents related to Parliamentary Budget Office requests that may be held by departments and other agencies, which may therefore not be protected against release under the FOI Act. The purpose of this bill is to amend the FOI Act to provide an exemption for information held by departments and agencies that relates to a confidential request to the Parliamentary Budget Office. It also provides that an agency is not required to give information as to the existence or non-existence of a document where it is exempt under the new provisions. The successful operation of the Parliamentary Budget Office requires that its services be requested and provided on a confidential basis. The integrity of its processes would be compromised if access to requests were available via a backdoor application to non-exempt agencies.

The bill's explanatory memorandum notes that the bill protects public order by enhancing public administration. Specifically the aim of the bill is to protect the integrity of the Parliamentary Budget Office. Maintaining the integrity of the office is an integral element of policy development and public administration. Senators and members may be reluctant to request such analysis from the office in the absence of certainty that information provided in response to confidential requests will not be released under the FOI Act. The aim of this amendment is to provide this assurance. Although existing exemptions may apply to some potential FOI requests relating to Parliamentary Budget Office related documents held by agencies, it cannot be confirmed with certainty that they would apply to all such requests.

Also agencies currently do not have the option of denying or confirming the existence of a confidential Parliamentary Budget Office request. In its submission to the Senate legal and constitutional affairs committee inquiry into this bill, the Parliamentary Budget Office said:

… to facilitate its role in undertaking this confidential work for senators and members the Parliamentary Budget Office is an exempt agency under the FOI Act 1982. Without this exemption the Parliamentary Budget Office's effectiveness as a source of confidential budget analyses and policy costings would be seriously compromised. The proposed amendments to the FOI Act extend this logic to also provide an exemption under the FOI Act for information held by departments and agencies that relates to a confidential request to the Parliamentary Budget Office. The Parliamentary Budget Office is heavily reliant on other departments and agencies that relate to a confidential request to the office.

The Office of the Information Commissioner said in its submission that the exemption of the Parliamentary Budget Office would not be fully effective unless there is a similar exemption under the FOI Act for documents held by other agencies that reveal the contents of confidential communications between agencies and the Parliamentary Budget Office. The Information Commissioner did raise in its submission one concern raising the bill:

We raise for consideration whether a time limitation should be placed on the operation of the Parliamentary Budget Office exemption. The policy rationale for the exemption is that senators and members of the House of Representatives should have access to independent and non-partisan budget analysis and policy costings over the entire course of the three-year electoral cycle.

The commissioner believes it is not necessary that Parliamentary Budget Office documents should retain their exempt status for 20 years. The commission said a more reasonable limitation may be that the Parliamentary Budget Office exemption continues only for a short period after a general election, perhaps one year. No other concerns have been raised at this stage of the inquiry.

As I mentioned earlier, the bill has been referred to the Senate legal and constitutional affairs committee for consideration of the adequacy of the scope of the proposed exemption and of any concerns raised, including that of the Information Commissioner. The coalition supports the bill. However, we foreshadow amendments in the Senate pending the Senate committee's final report on 19 November 2012.

Mr STEPHEN JONES (Throsby) (11:10): The Parliamentary Budget Office is a good idea, and it is a good idea that was a long time coming. Put quite simply, the purpose of the Parliamentary Budget Office is to ensure that private members in this place can have their policies and their ideas costed. It means that, if members want to introduce private members' bills and those private members' bills are likely to have a cost associated with them, they are able to go to the PBO to ensure that they are appropriately costed. It means that members of an opposition party who do not have access to all the facilities of the agencies of state can access the Parliamentary Budget Office to ensure that, when they are putting forward policy proposals, those policy proposals can be appropriately costed. It means for the public at large that, when we are having a public debate about a contest of policies, we can do that in the appropriate context, because governments are about ensuring that we distribute scarce resources in the public interest and in the most appropriate way. It ensures that, when we are having those public debates, they include appropriate costings of contested policy ideas, particularly in an election contest when the people of Australia are being asked to make a decision about which side of politics will govern this great nation.

It is in the interests of the public and it is also in the interests of all members of this place. Had the Parliamentary Budget Office, for example, existed in 1987 when the then Leader of the Opposition John Howard launched the Liberal Party's tax policy for the upcoming election, they would not have been subsequently embarrassed by the fact that there was a $540 million black hole in their costings. They could have, quite simply, accessed the facilities of the Parliamentary Budget Office and presumably that gaping mistake in their costings would have been identified well in advance. So it is in the public and it is also in the good interests of all members of this place.

This legislation is designed to ensure that the Parliamentary Budget Office operates in the way that it was intended to. The purpose of the legislation is to ensure that we have a non-partisan and independent Parliamentary Budget Office, and one that will be used by members of this place.

The bill amends the Freedom of Information Act 1982 to protect the confidentiality of documents held by agencies in relation to confidential requests made to the independent Parliamentary Budget Office. The PBO is currently an exempt agency under the Freedom of Information Act, the FOI Act. It is exempt for good reason. The reason is that members of this place are unlikely to use the Parliamentary Budget Office if they were to think that their requests and submissions to the PBO would then be subject to an FOI discovery. For that reason the PBO is currently an exempt agency under the FOI Act.

However, the FOI Act does not provide a specific exemption for documents relating to PBO requests that may be held by departments and other agencies. Why would departments and other agencies have these documents in relation to FOI requests? Quite simply, a member, let's say the Leader of the Opposition, approaches the Parliamentary Budget Office for a request on some costings around some of their policy proposals. The PBO under its charter is able to make requests of a government agency to get information in relation to those requests. Under the law as it currently stands those requests may be FOI-able.

So, the purpose of this legislation is to ensure that you cannot do through the back door what is prohibited through the front door. It is currently prohibited through the front door that the PBO be subject to an FOI request, and what this legislation does is ensure that you cannot get that information through the back door by going directly to a government agency and cleverly crafting an FOI request which would cough up those otherwise prohibited documents.

The legislation will enhance the integrity of the independence of the PBO process, which is something that should be welcomed by all members of this place. It will further strengthen Australia's fiscal and budgetary frameworks by ensuring that information is protected and that independent advice can be given on budget, fiscal and financial implications of proposals of private members in this place.

As a consequence of this amendment, the bill also amends section 25 of the FOI Act to provide that an agency is not required to give information as to the existence or non-existence of a document where it is exempt under the new exemption for documents that relate to a confidential request to the PBO. It is not hard to imagine why this might be a necessary and important consequential amendment. It would be quite possible to craft an FOI request if you knew the proposals were being costed or, indeed, not being costed. It would be possible to craft an FOI request to a government agency and then either the existence of non-existence of that document could provide great political mileage to a person in this place who wanted to expose or embarrass the proponent of a particular policy proposal. Indeed, members of our esteemed media who report on the goings-on of this place might also seek to make a request similarly crafted for similar purposes. It is a sensible amendment to ensure that you cannot do through the back door what is prohibited and intended to be prohibited through the front door.

The bill also includes amendments to section 34 of the Privacy Act which provide that the commissioner, in carrying out functions under the Privacy Act—for example, investigating an act or practice of an agency that may be a breach of privacy—must not give a person any information as to the existence or non-existence of a document where it is exempt under the FOI Act. It is proposed to amend section 34 to refer to the new PBO exemption reflecting the amendment to section 25 of the FOI Act and ensuring that PBO documents are confidential.

The bill will operate retrospectively from the day after introduction. Retrospective legislation should be rare and this subject matter is one of those rare occasions when it is appropriate to ensure that discoveries of documents cannot reach back into the past to the beginning of the operations of the PBO, given that it was the intention of all members of this place that the discovery of such documents should not be available. The bill's limitation of the right of individuals to receive confidential information is reasonable and proportionate to its objective of protecting the integrity of the PBO and enhancing public administration.

These amendments, together with the crafting of the substantive legislation, are all aimed at a singular public purpose, and that is to ensure that, after establishing the Parliamentary Budget Office, funding it and ensuring that it is adequately funded to perform its purpose, it is actually used. All members of this place should see that it is in the public interest that a contestant in the political process should not be able to go to an election or go through three years of an electoral cycle and be able to put up policy proposals that are not adequately costed, inappropriately costed, or wilfully inappropriately costed, to escape public and parliamentary scrutiny. This bill will ensure that that public purpose is furthered—to encourage all members of this place to use the Parliamentary Budget Office. It is consistent with many of the reforms that we have introduced since Labor was elected to office in 2007.

To hear the shadow minister recently take a swipe at the record of this government in relation to our practice under freedom of information laws beggars belief, quite frankly. It is the equivalent of Colonel Sanders calling for vegetarianism. Their approach to FOI when in government was something that experts, members of the media and all right-thinking members in this place looked on with great scorn. You need look no further than their practice of using conclusive certificates as an example. This is relevant to the legislation before the House—because it is relevant to ensure that this legislation, which is directed at ensuring appropriate scrutiny of public policy proposals, is facilitated.

That is the complete opposite of what we saw under the previous government. The opposition spokesperson who spoke just recently on this issue was a member of that government. They scattered these conclusive certificates, which are designed for the sole purpose of precluding public scrutiny of policy proposals by the government, around like confetti. Then we hear a member of the opposition—a member of the Liberal Party—stand up here and make some snide comment about our commitment to freedom of information, when we put in place the greatest overhaul of the freedom of information laws as well as arrangements to ensure that the FOI laws work in relation to the operations of this place and the operations of government in exactly the way they are intended to—in the public interests of transparency. It stands head and shoulders above the operation and provision of any government in the history of this parliament. So the proposition by members opposite that somehow we are not committed to the reform of FOI and to ensuring that the legislation operates in the way it was intended cannot stand unchallenged.

Our FOI laws are good and proper, and the reforms that are being proposed by this bill are good legislation. The legislation is aimed at ensuring that the Parliamentary Budget Office operates in the way it was intended. Perhaps I can conclude by making this remark. Having funded and established the budget office, it is now incumbent on all members of this place to use it, to ensure that we do not have the embarrassing spectacle of parties or individuals going to an election with uncosted or inappropriately costed policy proposals. As a result of these reforms and of the legislation that was put in place by this government, there will now be no excuse for them not to use it. I commend the legislation to the House.

Mr PERRETT (Moreton) (11:23): I rise to speak to the Freedom of Information Amendment (Parliamentary Budget Office) Bill 2012 and particularly commend the member for Throsby on his contribution to the debate. I know he has a long history with this, because of his time with the CPSU, who would have covered many of the members who deal with freedom of information requests. So his words, particularly on the conclusive certificates, were particularly useful, and I will not go over the information he put forward in his speech.

Freedom of information is crucial for good government. That is the reality of a modern democracy. And I say this as a member of the Labor Party: I am passionate about democracy. Whilst I wear a Labor Party hat and am proud to be part of the Labor caucus, my faith and belief in democracy transcends that. FOI laws, which can be traced back to the Hawke-Keating time, are a particularly Labor initiative in terms of embracing the transparency that comes with good government. I say that as someone who comes from Queensland, where Premier Wayne Goss was instrumental in bringing dramatic transformation of the Queensland approach to the public service, and FOI is an important part of that.

Unfortunately I grew up in a time when Joh Bjelke-Petersen had a very cavalier approach to democracy. We had the gerrymander; we had infringement of civil rights; we had a very closed-shop approach to what democracy was. Sadly, today, in Queensland we have drifted back to some of those bad old days of Joh Bjelke-Petersen. However, the bill in front of us is about amending the Freedom of Information Act 1982, the Commonwealth legislation to protect the confidentiality of documents held by agencies in relation to the confidential requests made to the independent Parliamentary Budget Office.

The Parliamentary Budget Office is not far from where I am standing now. I think it is about a sand wedge away in golf terms. It would be good for those on the other side of the chamber to acquaint themselves with how close it is, a short walk. It would be great for them to commit upfront to taking their policy documents, when they are taken out of the bottom drawer that Andrew Robb referred to—

The SPEAKER: The member for Moreton will refer to people by their appropriate titles and return to the bill.

Mr PERRETT: The Victorian member of parliament whose electorate escapes me—

The SPEAKER: The member for Goldstein.

Mr PERRETT: When the member for Goldstein pulls those folders out of his bottom drawer, it would be great for them to take them over to the PBO to have some fair dinkum costings. I ran in the 2004 election and I remember one of the key issues in my electorate, the electorate I now represent, was about the Medicare safety net.

Mr Tony Smith: Mark Latham, was it?

Mr PERRETT: Mark Latham was the leader; that is correct. I remember the health minister at the time, the member for Warringah, going on Four Corners giving the rock solid, ironclad guarantee that the Medicare safety net would be a key part of that parliament. The election was on 9 October. By March the next year, the Medicare safety net—that rock solid, ironclad guarantee—was ripped away. Of course, as a responsible minister, he followed the Westminster tradition and fell on his sword and resigned from the Howard ministry—of course not!

The SPEAKER: The member for Moreton will return to the bill before the chair.

Mr PERRETT: I was pointing out for those opposite where the PBO is just in case they did want to visit it and acquaint themselves with the process—

Mr Billson interjecting—

Mr PERRETT: Not interested? It is close by anyway. Obviously the PBO is currently an exempt agency under the FOI Act. However, the FOI Act does not provide specific exemption for documents relating to PBO requests that may be held by departments and other agencies. As a result, requests for information made to agencies by the PBO and information provided to the PBO by agencies may not be protected. So perhaps this has been a reason why the opposition have not been prepared to take their policies over there to be costed. In order to avoid any chance that that would put them off, the bill before us will enhance the integrity of the independent PBO processes. Essentially the bill will further protect the confidentiality of the Parliamentary Budget Office's work and will strengthen Australia's fiscal and budget frameworks. This means that MPs can now be confident that the PBO will give independent and protected advice on the budget and financial proposals that they put forward to the people.

I have great faith in the independence of Australia's public servants and in Queensland public servants. I do not just say that because I am married to one of those public servants in Queensland, who has worked for a variety of state governments over the last 22 years. She served the National Party government under Joh Bjelke-Petersen, she served Wayne Goss, she served Rob Borbidge—and I think I have left off a National Party premier or two in between there—and also Peter Beattie, Anna Bligh and now Campbell Newman. Like every public servant, she does not serve a party; she serves the public. She gives advice. She acts independently and makes the decisions that are in the best interests of the public. I would hope that my premier in Queensland would recognise that public servants do have that great facility to be smart and clever and give frank and fearless advice and serve the state or the nation.

Sadly, we have nearly 14,000 Queenslanders lose their jobs in the context of 26,000 Queenslanders losing their jobs since Campbell Newman became Premier. It is not a good time to be looking for work in Queensland, sadly. Naturally, the bill before the chamber raises this question: when will the shadow Treasurer come clean and show the Australian public how he intends to fund his $70 billion black hole, which was exposed after the last election? He came clean the other day by indicating that he is going to rip off Australian families and get rid of the schoolkids bonus, even though we are about to give payments out in January to all of the parents in my electorate. The shadow Treasurer said this on Lateline on 23 October: 'So we've also previously said we're going to abolish the schoolkids bonus. It's on the record that we're not going to proceed with the schoolkids bonus.' That will be a horrible situation for the families in my electorate in January. They would not receive a payment if the member for North Sydney were in power. He is saying, 'No schoolkids bonus.'

The Liberal Party and the National Party are yet again showing their true colours, promising to cut payments that assist local families with the costs of putting their kids through school. Without the schoolkids bonus, a typical family in Moreton putting two kids through school would lose more than $15,000 over the course of their children's education. The schoolkids bonus means every local family on family tax benefit part A will receive $410 a year for primary school kids and $820 a year for kids in secondary school.

The DEPUTY SPEAKER ( Hon. BC Scott ): Order! Member for Moreton, I am struggling to get a connection between your words and the bill before the chamber, the Freedom of Information Amendment (Parliamentary Budget Office) Bill 2012. I would ask you to come back to the bill before the chamber.

Mr PERRETT: Thank you, Mr Deputy Speaker. Obviously, this is about funding election policies and how the Parliamentary Budget Office would accurately assess those. They will be able to do it independently by not being subject to scrutiny under freedom of information legislation. I know that you were not sitting in the chair when I started this wonderful discourse, Mr Deputy Speaker. But I am happy to take you to the Hansard later on. I will return to the legislation in front of us.

Obviously, the legislation before the chamber is about increasing the protection for and privacy of any request made of the Parliamentary Budget Office, whether it is by the Greens, by Independent members, by the Liberal Party or by the National Party. It is about making sure that there is good government. It will make sure that if you have a policy such as a parental leave scheme—and maybe you have not consulted with your caucus about it because you seek forgiveness for rather than consultation on such a policy—where you are giving parental leave to people earning $150,000 a year, you can have that policy looked at by the Parliamentary Budget Office and know that the costings and advice given by that office will not be subject to FOI, even if it is a Coles and Woolies tax, for example. This legislation will make sure that we have good and honest government. I commend the bill to the House.

Ms ROXON (Gellibrand—Attorney-General and Minister for Emergency Management) (11:33): I would like to thank honourable members for their contributions to the debate on the Freedom of Information Amendment (Parliamentary Budget Office) Bill 2012. The Parliamentary Budget Office is an important new office that has been established to provide members of parliament with independent and non-partisan advice on the budget cycle, fiscal policy and the financial implications of policy processes over the entire course of the three-year electoral cycle.

This marks a significant departure from the previous arrangements, particularly for non-government parties, who previously under the Charter of Budget Honesty Act were only able to have their publicly announced polices costed during the caretaker period. The bill also represents a new service for Independent members of parliament and parties with fewer than five members, who previously had no access to independent costings. A key element of the new arrangements is that outside of the caretaker period for a general election a senator or member can request the Parliamentary Budget Office to provide services on a confidential basis for policy costings.

When it was set up, the Parliamentary Budget Office was made an exempt agency under the Freedom of Information Act of 1982. However, the FOI Act does not currently provide a specific exemption for documents related to requests to the Parliamentary Budget Office that may be held by departments and other agencies. The possibility of public disclosure of the fact that the Parliamentary Budget Office has undertaken work on a confidential request represents a potentially serious barrier to the use of the services of the Parliamentary Budget Office by senators and members. This bill amends the FOI Act to provide an exemption for information held by departments and agencies that relates to a confidential request to the Parliamentary Budget Office.

The amendments will protect the confidentiality of the work of the Parliamentary Budget Office and will ensure that it operates as intended, with the parliament expressly exempting the Parliamentary Budget Office from the FOI Act. I welcome the opposition's support for this bill and commend it to the House.

Question agreed to.

Bill read a second time.

Ms ROXON (Gellibrand—Attorney-General and Minister for Emergency Management) (11:35): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr TONY SMITH (Casey) (11:36): I rise to speak on behalf of the shadow Treasurer and member for North Sydney on the Superannuation Legislation Amendment (New Zealand Arrangement) Bill 2012. Let me say at the outset that the coalition will support this bill. The bill seeks to enact the Trans-Tasman Retirement Savings Portability Scheme memorandum of understanding, which permits transfers of retirement savings between Australian APRA regulated superannuation funds and New Zealand KiwiSaver funds. The coalition supports initiatives such as this that strengthen the relationship that we share with New Zealand and also extend these benefits to citizens of not only our country but of New Zealand as well.

The 2011 census revealed that just over nine per cent of all overseas born persons living in Australia were of New Zealand descent, coming in at just over 483,000. New Zealand came in second behind the United Kingdom, which had the highest proportion of overseas born persons living in Australia at just over 1.1 million people. These statistics reveal just how close the ties are between our country and our Tasman neighbour, with Australia's population above 22 million.

The legislation before the House seeks to put in place provisions that allow for the portability of retirement savings between Australian APRA regulated superannuation funds and New Zealand KiwiSaver funds. It does so through various amendments to the Income Tax Assessment Act of 1997, the Tax Administration Act of 1953 and the Superannuation (Government Co-contribution for Low Income Earners) Act of 2003.

Once the funds are transferred, the rule of the country into which the funds have been transferred prevail, with some exceptions. Australian sourced retirement savings held in New Zealand KiwiSaver accounts may not be withdrawn to purchase a first home. Australian sourced retirement savings held in a KiwiSaver account may be accessed when an individual reaches age 60 and satisfies the definition of retirement at that age as set out in the Superannuation Industry (Supervision) Regulations 1994. Australian sourced retirement savings held in a KiwiSaver account may not be transferred to a third country.

New Zealand sourced retirement savings may only be transferred to and held by APRA regulated superannuation funds and may not be transferred to a self-managed superannuation fund. New Zealand sourced retirement savings held in Australia will not be able to be accessed until the age of retirement as defined in the New Zealand Superannuation and Retirement Income Act of 2001. Finally, New Zealand sourced retirement savings held in Australia may not be transferred to a third country. Due to the exceptions that I have just mentioned, the transferred funds must be separately identifiable once the funds have been moved.

As I said at the outset, the coalition welcomes this legislation. However, we note that the New Zealand government acted promptly on this agreement, with their legislation receiving assent back in September 2010.

Unfortunately, it has taken this government two years to bring this relatively simple bill to the parliament. This is a delay that the parliament is used to. The coalition would have expected to see these changes brought before the parliament a lot sooner.

The only other remarks I will make on behalf of the shadow Treasurer in relation to this bill centre around the fact that no explanation has been provided in the explanatory memorandum or the agreement as to why New Zealand residents cannot transfer their retirement savings into an Australian based self-managed super fund. Absent any evidence to the contrary, it seems that the restriction of transfers to APRA regulated funds has been driven for political rather than policy reasons. The SMSF Professionals' Association of Australia expressed their concerns in relation to this matter in response to the exposure draft of the bill. I will not quote them at length, but they certainly expressed their reservations and, on behalf of the shadow Treasurer, I can say that a future coalition government would seek to consult the New Zealand government with the aim of expanding the Trans-Tasman Retirement Saving Portability Scheme memorandum of understanding to allow for New Zealand sourced retirement savings to be transferred into Australian self-managed superannuation funds. As I said at the outset, on behalf of the shadow Treasurer, the coalition supports the passage of this bill.

Mr RIPOLL (Oxley—Parliamentary Secretary to the Treasurer) (11:41): The Australian government is committed to the closest possible relations with the New Zealand government and also with the people of New Zealand, and that is something that has been true for many, many years. As part of our Closer Economic Relations, the CER, and single economic market initiatives with New Zealand in 2007, a working group was established to consider options for the portability of retirement savings between Australia and New Zealand. In 2009 the government and the New Zealand government signed a memorandum of understanding to develop the Trans-Tasman Retirement Savings Portability Scheme. The scheme enables Australians and New Zealanders to take their superannuation with them when they move from one country to the other. As we all know, there are many exchanges between our countries. The bill benefits Australians and New Zealanders who move from one country to the other and who wish to take their superannuation with them.

More than 50,000 New Zealanders move to Australia each year, while there are about 14,000 people that leave Australia permanently to take up residency in New Zealand. The measure will assist individuals to streamline their financial affairs when they move between the two countries, consolidate their superannuation in the country of residence and avoid paying fees and charges on multiple accounts held in the two countries. The scheme will also assist Australian superannuation funds by removing small or inactive accounts belonging to former members now living in New Zealand from the Australian superannuation system. The scheme removes an impediment to labour mobility between Australia and New Zealand and enhances the development of a seamless trans-Tasman labour market.

The scheme is an important step in Australia's Closer Economic Relations with New Zealand and supports ongoing progress towards a single economic market. Both governments are committed to this goal through the Australia-New Zealand Closer Economic Relations trade agreement. This is the first time an international superannuation portability scheme has been implemented in Australia, so it is indeed a landmark development and a historic one at that.

I understand that the commencement of this scheme has been welcomed on both sides of the Tasman Sea, including by two key Australian super industry bodies—the Association of Superannuation Funds of Australia and the Australian Institute of Superannuation Trustees. There has also been significant interest and attention in New Zealand welcoming the progress of the Australian legislation and the commencement of this scheme once the legislation has passed.

This is good work that has been done in a timely manner by this government and forms part of a broader objective of having increasing and ever closer relations and relationships with New Zealand and benefits both countries. It benefits Australia and it benefits New Zealand. It is supported on both sides of this House and I commend the bill to the House.

Ms O'NEILL (Robertson) (11:45): This is a very important piece of legislation that is part of a suite of significant reforms in the superannuation area that this government is undertaking. I am pleased that those on the other side are also here articulating their support for the Superannuation Legislation Amendment (New Zealand Arrangement) Bill 2012.

As the parliamentary secretary has indicated, Australia absolutely is committed to the closest possible relations with New Zealand government. In fact, the moment that we are now at is a natural development of a long-term and sustained relationship. As early as the 1920s there were significant formal arrangements between our two countries to ensure and facilitate the free flow of people between both New Zealand and Australia. The landmark 1973 trans-Tasman travel arrangement has allowed Australian and New Zealand citizens to enter each other's country to visit, live and work without the need to apply for authority to enter the other country before travelling. Obviously that has enhanced the movement of New Zealand citizens to and from Australia and this has enhanced, I would argue, the economic conditions of both countries.

The number of New Zealand citizens in Australia certainly increases when economic times in Australia are good relative to New Zealand and decreases when the economy slows. The capacity to have people moving in and out of our labour market to enhance our own economic growth is a very sound arrangement that benefits the people of both our nations. At the heart of all of our legislation should be that consistent concern for the benefit of people.

As of 30 June there were approximately 647,000 New Zealand citizens present in Australia. This piece of legislation attends to that significant number of people who want to be able to ensure their retirement funds are safe. In considering the options for a portability retirement savings scheme between Australia and New Zealand, a formal working group was established in 2007. By 2009 both the Australian government and the New Zealand government had signed a memorandum of understanding to develop the Trans-Tasman Retirement Savings Portability Scheme.

To all those people who were involved in articulating a vision of what was possible and then preparing the necessary documentation—making agreements with relevant authorities to ensure a sound and safe and just structure—this is a red-letter day. It is an achievement of a goal that has been sought for some time by people with that interest. Essentially what this legislation will enable Australians and New Zealanders to do—and I want to stress that this is a voluntary thing—is take their superannuation from one country to the other. If someone wants to move their superannuation, this legislation will benefit that.

In terms of movement across our two countries, more than about 50,000 New Zealanders move to Australia each year and about 14,000 leave Australia to live permanently in New Zealand. When you are making such an important decision for the benefit of your family, obviously you would want to be able to be sure that there was a great deal of probity around it. This piece of legislation, at the end of a long period of consultation, has ensured that individuals will be able to streamline their financial affairs when they undertake a significant movement of their life and their family from one of these two great nations that formed the ANZUS Treaty and served so valiantly in the cause of freedom over many years as Anzacs.

As I said at the beginning of my commentary, this is just part of a suite of significant improvements and streamlining of superannuation capacity for Australians—and in this case to the benefit of New Zealanders as well.

This government has increased the superannuation guarantee from nine to 12 per cent, we have introduced low-income superannuation contributions—effective from 1 July this year—we also implemented a one-off refund of small excess concessional-contribution cap breach from 1 July 2011, and the superannuation guarantee for people who are 70 years of age, as a limit, will be abolished as of 1 July 2013.

I commend this bill as part of a significant suite of important reforms that have outcomes delivered by a determination to improve and enhance the life outcomes for Australians, and in this case New Zealanders as well. I certainly understand that the legislation and the commencement of this scheme have been welcomed by the governments and the people on both sides of the great Tasman Sea. I am pleased to report that ASFA, the Association of Superannuation Funds of Australia, and the Australian Institute of Superannuation Trustees have also indicated that they welcome this legislation. I understand that the New Zealand press has been particularly welcoming of the progress of this legislation and the commencement of this scheme, once the legislation is passed, and with those words I commend the bill to the House.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (11:51): I would like to thank those members who have contributed to the debate on the Superannuation Legislation Amendment (New Zealand Arrangement) Bill. I take this opportunity to acknowledge all the members of the House who have supported this bill and thank them for their support.

This bill introduces a scheme to allow the transfer of superannuation between New Zealand and Australia. Currently, Australians and New Zealanders working in Australia cannot transfer their superannuation when they leave Australia permanently; it must remain in their Australian superannuation fund until they are eligible to claim it, usually on retirement. The new scheme will permit individuals who move both ways across the Tasman to take their superannuation with them. Australians moving to New Zealand may transfer their superannuation to a New Zealand KiwiSaver scheme, New Zealanders moving to Australia may transfer their KiwiSaver benefits to their Australian superannuation fund. In this way many thousands of people will be able to consolidate their retirement savings in their country of residence. They will no longer have to pay fees and charges on accounts held in two countries. There are 483,000 people who were born in New Zealand who now live in Australia. This will be a marvellous development for those people. Superannuation funds will benefit from the removal of small or inactive accounts from the Australian superannuation system. These are accounts that belong to people who no longer live in Australia and who are no longer making contributions to their Australian fund.

This bill also enhances the development of a seamless trans-Tasman labour market by removing an impediment to labour mobility between our two great countries. The introduction of the scheme is an important step in our closer economic relations with New Zealand and supports ongoing progress towards a single economic market. Both governments are committed to this goal through the Australia-New Zealand Closer Economic Relations trade agreement. I commend this bill to the House.

Question agreed to.

Bill read a second time.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (11:53): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr BILLSON (Dunkley) (11:54): I rise to speak on the Tax Laws Amendment (2012 Measures No.5) Bill 2012. The coalition has a number of amendments to this legislation, which I understand the government is quite sympathetic to. My parliamentary colleague the member for Groom will be detailing those in much greater sophistication than I am able to at this time.

The bill does a number of things. It deals with the conservation tillage refund tax offset and some amendments to the definition about what is an eligible no-till seeder. It also phases out the mature-age worker tax offset, something I am particularly alert to, having been involved with the development of what was known as the mature age employment advantage in my electorate, where men and women over the age of 45 were finding it particularly challenging entering the workforce.

Through a local initiative that we organised through the Peninsula Job Team, we were able to bring together a range of providers to help mature-age people to re-enter the workforce with encouragement, which ultimately led to Prime Minister Howard announcing the mature-age worker tax offset in my electorate.

There are also some provisions dealing with gaseous fuels, and I am pleased that the coalition continues to be highly alert and receptive to the concerns of the LP gas industry, and the gaseous fuel industry more generally, about the impact of tax and compliance regimes on this important part of the economy. I am delighted that the member for Groom has arrived, and I might conclude my remarks at that point and thank the House for accepting that gripping contribution to the bill.

Mr IAN MACFARLANE (Groom) (11:55): Thank you very much, Mr Deputy Speaker—and, as this is my first opportunity at the dispatch box to do so, can I congratulate you on your election to Deputy Speaker. It has been some time coming, but good always prevails and right always comes to the fore.

I will be moving an amendment to this bill in the consideration in detail stage, as circulated, which particularly relates to the LPG component of the bill. I will now speak to that. Whilst the coalition and opposition in general supports the amendments proposed under the TLAB, we certainly do not support the sections of the bill as they relate to the introduction of a huge compliance cost, particularly to small business, in relation to the taxation and the levying of an excise on gaseous fuels. These fuels are LPG, LNG, CNG—or compressed natural gas. These fuels are of course not only clean-burning fuels, and therefore something that is helpful in terms of the environment—and I would have thought those in government would understand that—but, secondly, these are fuels which Australia is overly endowed with; in fact, we are exporters of these fuels. We export LNG from the North-West Shelf and we have an excess of natural gas in its forms of compressed natural gas and liquefied natural gas. Australia is heading towards being the largest exporter of that gas in the world.

What we are short of in Australia, unfortunately, is liquid fuel—that is, crude oil or condensate—and so it makes absolutely no sense to me, or to Australians in general, that we introduce an excise on these gaseous fuels, yet this is what the government did last year. So desperate for money are they that they will tax anything that doesn't move, and if it doesn't move they push it and then tax it. We know that they are desperate for cash, we know they spend money day in, day out that they cannot bring back into balance—and, of course, we saw last week with the MYEFO that they are able to actually get themselves in such a position where they are so desperate for money that they are now going to tax businesses, including small businesses with a turnover of $20 million or more. They are going to make them pay their income tax not quarterly but monthly. So they are going to make them pay 14 months' tax in 12 months. This just highlights how out of control the spending is by those who sit opposite us in government.

The requirements and compliance regime being introduced under this TLAB bill and the excise being placed on gaseous fuels by this government is extraordinary red tape. They come into government and say that they are going to ease the compliance burden; but, as we know, all they have done is increase it and increase it and increase it. There is compliance burden on the small businesses that I talk to, whether they are in my hometown of Toowoomba or whether they are in Whyalla where I was last week. Geez, they remember the Minister for Trade there well—not nicely, but they remember him well. I doubt they will ever forget him.

Mr Bradbury: They are still there.

Mr IAN MACFARLANE: Despite the predictions of the AWU, they are still there. They are just waiting for the return of a decent government that will abolish the carbon tax, abolish the mining tax, ensure that there is a predictable environmental permitting system and ensure that nothing changes so that they do not wake up every morning in Whyalla and find that the government has imposed another new tax.

What we have in front of us today is a compliance regime which allows—let us call it—John Smith's Tent World to sell LPG, and they have been selling LPG to happy campers for a long time. They now have an enormous compliance burden because, if that LPG is used in transport fuels, they now have to fill out a whole heap of forms to say that it was not. If it happens to be the local BP—and I have a local BP that I use in east Toowoomba—they refuel your car with LPG, if you have got an LPG car, and they also refill your gas cylinders for your barbecue or whatever. Their compliance burden under this bill is enormous, because some of the gaseous fuel they sell will be taxed and some of it will not be. So, rather than just having to report the fuel that is taxed, of course you have to report everything. This is a government that has taken red tape to a new level.

The compliance measures contained in this bill have not been previously announced. The LPG industry, small business and let alone the users of LPG have never been consulted about these compliance measures. Had they been, there would have been a more sensible approach to this measure. If we look at the detail and the complexity of this, we realise that the government has got absolutely no idea of what it is doing with it, other than burdening business with a whole new level of red tape. The government says that this measure is necessary to get around administrative difficulties—which they created. So they create an administrative difficulty by taxing a gaseous fuel that is more environmental friendly than conventional fuels and then they say to small business: 'You not only have to pay in terms of paperwork and red tape but you're to blame. You're the reason we're doing this.' How crazy are they?

These amendments are clumsy at best. They go way beyond and are more arduous and stricter than the current Excise Act obligation for conventional fuel sellers and others obliged to collect excise. Let us look at the model. For 100 years or thereabouts, governments have been collecting excises in various forms. We have a model that works. If you sell petrol or you sell distillate or if you sell perhaps a little bit of kerosene—not so much these days—then you have an excise regime which your business has to follow. It works. Everyone is used to it. Everyone understands it. So why don't we use that? No. Far too simple. Nowhere near enough red tape in that. So government is introducing a regime just for gaseous fuels which is far more onerous and far more arduous than the regime that is currently in place.

It is stated that this legislation will ensure the 2011 alternative legislation on excising gaseous fuel works as is intended. If the intention is to collect excise from businesses for gaseous fuels then we say firstly that that should not have been excised in the first place. We want to encourage the use of fuels for transport that are actually plentiful in this country in order to help our balance of payments and to make public transport cheaper so that we have buses running on CNG and trucks running on CNG and LNG, with less particulates, less pollution in the environment.

But then comes along the member for Lilley, the Treasurer. If he sees something he will tax it. So he has taxed it and now he has to try and work out how he is going to collect the tax. But, as I say, had he gone to the businesses and asked them how they would do this, this would not have been the way. Under this bill, premises for producing, importing or storing liquid fuels, petrol and diesel, are subject to licensing, and consequently untaxed liquid fuels do not appear in the marketplace. So that system works well. It has been around, as I say, for nearly 100 years. There are automatic remissions to fuel tax where LPG is going to be used for non-transport fuel, but that is after you have done all the paperwork.

CNG receives an exemption when it enters the marketplace as a non-transport use, but you have to identify that that has happened. It is not assumed that if Joe's Barbecue Shop is selling LPG that he is actually selling LPG for barbecues. You could never assume that, not if you are in government. You actually have to envelope, encase, that business in a pile of red tape to ensure that only those fuels that can be shown not to have been used in transport use are given an exemption.

The intention is that the compliance cost under the proposed regime will be lower than that applying to fuel tax to all gaseous fuels that enter the marketplace with subsequent fuel tax credits where appropriate. The gaseous fuel compliance regime would be based on obligations to maintain and produce appropriate records to provide access to premises, documents and goods. But in reality the government has introduced a layer of complexity not ever seen before in the excising and taxing of transport fuels. There is far more compliance, far more complexity, far more cost for small business and, of course—and here comes the next bit—it is far more difficult to be able to prove that you have done the right thing. So you have to keep your records for five years. You are open to an inspection at any time and under any terms. That places enormous pressure on small businesses not only to have the records but to have them there on site for inspection.

Subject to the following paragraph, schedule 3 is to be opposed because the amendments are more onerous and stricter than the current Excise Act obligations on conventional fuel sellers and others who are obliged to collect excise. We have a proven system; let us use that. Item 20 in part 2 of schedule 3, which will treat a forklift truck used off public roads as not being a motor vehicle for the purpose of the Excise Act is not opposed. They actually got one thing right, and we give them credit for that. We give them credit for actually realising it. I do not know if they have ever driven a forklift, but I have. If you have a forklift you are hardly going to be cutting laps around a city block in Toowoomba. They are there for the removal of produce, usually from the backs of trucks, or for moving produce round a warehouse.

In other respects, parts 1 and 2 of schedule 3 will increase the red tape burden, especially for small business and LPG, and the existing provisions in the Excise Act regarding record keeping, officials' access to premises and imposition of penalties for the supply of gaseous fuels subject to the fuel tax relief for transport use are amply sufficient. Why is it that this government does not get small business? Why is it, as Kim Beazley said famously once, the Labor Party is not the friend of small business? Why do they see a small business and want to tax it? Why do they see a small business and want to impose red tape? Why do they see a small business and make it harder for that small business to employ people? This is a clear example of what this government does to small business. There is no respect for them, no understanding of them, no understanding of the cost that they are burdening them with.

The coalition will not stand by quietly and watch small business get it in the neck again as a result of this government's incompetence and, of course, their fundamental failure to manage their own money—the fact that every time they look up they have to find a new tax to keep their wild and exorbitant spending in check.

In conclusion can I say, as I said at the opening, that these measures have not been previously announced. It is stated that the purpose is to ensure that the 2011 alternative fuels legislation works as intended, but I can assure those who sit opposite that if they consult with the coalition—and we accept that we lost the vote last year—with the LPG Association and with small business then we will find a way to make this work under the current compliance regime. We do not need a whole new level of red tape. There are, as I said, specific legislation exemptions—for example, where the duty has been paid at the same rate on each component of the blend—and we continue to work with the government to ensure that that works. Can I just say in conclusion, foreshadowing the amendment, that we are interested in good government. This is not good government.

Mr STEPHEN JONES (Throsby) (12:11): The Tax Laws Amendment (2012 Measures No. 5) Bill 2012 is the fifth tranche of legislation introduced in 2012 for the amendment of our tax laws. It shows that the government is committed to continually adjusting our taxation arrangements to ensure they are appropriate for meeting our revenue targets, to remove loopholes and unintended consequences as they are thrown up, to ensure that they continually operate efficiently and as intended, and to ensure that we meet our commitments to ensure that the tax take, as a proportion of GDP, is no greater than it was when we took office. The opposition spokesperson has recently made some comments about the size of the tax take under this government, but what he will not have told the House is that the highest taxing government in the history of this nation was the Howard government. The only way to measure this is to measure the ratio of tax to GDP. It is at record lows under our government. It was at record highs when we came to office. If you want to look at handing out gold medals for the highest taxing government in the history of Federation, you need look no further than the Howard government. You would not mind so much if they were not spending like drunken sailors at the same time, but that is indeed what they were doing, in stark contrast to those on this side of the House, who have done the hard yards in ensuring that we can find the savings in this year's budget, in the Mid-Year Economic and Fiscal Outlook statement and throughout the course of this year to ensure that we meet our commitments. You hear those on the other side of the House continually claiming that there are savings there to be found, but every time we put a saving up they are the first to be screaming, 'We can't support this.'

So I am very pleased to be speaking today on this bill, which contains a number of measures which deal with various taxation issues. Schedule 1 of the bill makes a minor technical change to the conservation tillage refundable tax offset, amending the definition of 'eligible no-till seeder' to ensure that the offset applies to the purchase of just the tool as well as the combination of the cart and the tool. This amendment will assist the government's objective of encouraging the uptake of conservation tillage practices by removing the existing requirement that a new cart also be purchased at the time a new no-till seeding tool is purchased. It follows industry feedback on the current eligibility requirements. It is a measure which should, and I hope will, enjoy the support of all members in this place.

Schedule 2 contains measures to phase out the mature-age worker tax offset, otherwise known as MAWTO, from 1 July 2012 for taxpayers who were not already 55 or older on or before 30 June 2012—that is, those born on or after 1 July 1957.

Those currently eligible because they were aged 55 years or older on 30 June 2012 are unaffected by the change and remain age eligible for the mature-age worker tax offset—that is, the provisions are not retrospective. By closing off the offset to new recipients and investing in better-targeted participation programs, the government will improve the value for money while protecting those who have built the offset into their household budgets.

The offset is a cost to revenue in the order of $450 million per year. It is not an efficient way to promote participation amongst those aged 55 and above. We remain committed to encouraging the retention and the re-entry into the workforce of those mature-age workers. It is estimated that under the existing arrangements, however, only 5,000 full-time-equivalent workers are encouraged into the workforce through the offset. This equates to a cost of about $90,000 per encouraged worker, hardly an efficient tax expenditure. We on this side of the House—and I hope that this is a measure which enjoys the support of all sides of the House—believe that there are more effective and efficient ways of pursuing this worthy aim.

It is important that the government channels its efforts to encouraging workforce participation among older Australians through more cost-effective programs. The government is introducing a new $26 million Mature Age Participation—Job Seeker Assistance Program, for example, from 1 July 2013 to provide eligible mature-age job seekers aged 55 and over with a peer based environment in which to develop their information technology skills, undertake job-specific training and prepare for work.

The government's $41 million response to the final report of the Advisory Panel on the Economic Potential of Senior Australians includes a $10 million initiative for new jobs bonuses, which will encourage businesses to employ older Australians who want to stay in the workforce—another example of a better-targeted program for assisting the retention and employment of older Australians.

And then there are the $1,000 bonuses which will be paid to employers who recruit and retain a mature-age job seeker for three months or more. I see the Minister for Employment Participation at the table. It is an excellent initiative, and I congratulate her on the great work that she has done in not only proposing this measure but ensuring that it has survived the rigours of the Expenditure Review Committee.

I also point to the $15.6 million extension of the successful Corporate Champions program to provide support to employers who wish to promote mature-age employment at their workplace. This is a scheme that I know through my work in my electorate has enjoyed a lot of support from the many retired professionals and executives who live in a few parts within my electorate, who have decided that they do not want to continue to participate in a full-time role in the work that they do but would be willing to provide voluntary or more part-time work through a program such as this.

All of these are excellent examples of how we can better target the assistance from government to employ and retain mature-age Australians.

There are several other schedules within the bill, most of which have been ventilated in the debate before the House. There is one provision that I will draw your attention to, and that is schedule 5, which amends the list of deductible gift recipients in the Income Tax Assessment Act to add the Diamond Jubilee Trust Australia. The Diamond Jubilee Trust has been established to raise funds in Australia for the commemoration of Her Majesty's diamond jubilee. I am a well-known republican myself, but that does not stop me wanting to support an important initiative such as this, because the purpose of this trust is to provide charitable and aid works in developing countries. It would be churlish of me indeed not to support such a worthwhile initiative.

These are all important amendments which should enjoy the support of all members in this place. I commend the bill in its entirety to the House.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (12:20): I think this is my first opportunity to speak with you in the chair, Mr Deputy Speaker Scott, so congratulations on your appointment. I begin by thanking all of those members who have contributed to this debate on the Tax Laws Amendment (2012 Measures No. 5) Bill 2012.

Schedule 1 amends the definition of 'eligible no-till seeder' for the purpose of the conservation tillage refundable tax offset, which is located in subdivision 385-J of the Income Tax Assessment Act 1997. This will allow primary producers access to the conservation tillage refundable tax offset where they purchase only a no-till seeding tool to attach to their existing cart. This small but important change will enable more primary producers to purchase no-till farming equipment without requiring them to replace their existing carts. This measure will help to achieve the government's objective of encouraging no-till farming practices, which can reduce emissions, increase soil carbon and improve productivity.

Schedule 2 will phase out the mature-age worker tax offset from 1 July 2012 for taxpayers who were not already 55 or older on or before 30 June 2012—that is, those born on or after 1 July 1957. The measure will not take away the mature-age worker tax offset from those people already receiving it. The government will improve value for money by phasing this offset out over time and investing in better-targeted programs, while protecting those people who already rely on the offset in their household budget.

Schedule 3 amends the excise law by putting in place a robust and sustainable compliance regime for gaseous fuels—that is, liquefied petroleum gas, or LPG; liquefied natural gas, or LNG; and compressed natural gas, or CNG—while keeping compliance costs lower than the fuel tax regime that applies to liquid fuels. The amendments ensure that suppliers of duty-free gaseous fuels, whether licensed or unlicensed, keep adequate records and provide access to ATO officials if required. There is an appropriate penalty regime to encourage compliance. The amendments also clarify the tax treatment of gaseous fuels used in forklifts and fuel manufacture.

Schedule 4 clarifies the Commissioner of Taxation's power to make legislative instruments to deal with the treatment of gaseous fuel blends instead of relying on legislative exemptions.

Schedule 5 amends the deductible gift recipient provisions of the Income Tax Assessment Act 1997. Taxpayers can claim an income tax deduction for gifts to organisations that are deductible gift recipients. The measure adds one new organisation to the act—namely, the Diamond Jubilee Trust Australia. Making this organisation a deductible gift recipient will assist it in attracting public support for its activities. The trust has been established to celebrate Her Majesty Queen Elizabeth II's diamond jubilee. The purpose of the trust is to deliver charitable projects for the support of individuals, with a focus on the poor and disadvantaged, through providing collected funds to the United Kingdom based Queen Elizabeth Diamond Jubilee Trust.

Schedule 6 amends the wine equalisation tax producer rebate provisions to ensure that a wine producer cannot claim a rebate for wine used in manufacture except where the previous producer or supplier provides a notice that a previous producer is not entitled to the rebate on part or the whole of that wine. The measure addresses a problem in the current law where multiple rebates can be claimed on the same quantity of wine. The amendments apply to assessable dealings on or after 1 December 2012 or the day on which this act receives royal assent, whichever is the later.

I note that the member for Groom has foreshadowed that he will be moving some amendments, but I also understand that, as a consequence of discussions that have been held since that time and an offer that has been made by the government to withdraw from this bill schedules 3 and 4, those that relate to gaseous fuels, this bill will proceed with the support of the opposition and that the member for Groom will not be moving the amendments that he has foreshadowed. I thank the opposition for their cooperation in this matter.

I do put on record, though, that the government does believe that schedules 3 and 4 of the bill both represent important improvements to Australia's excise system and that we will seek to reintroduce the schedules at another time. I foreshadow, then, that we will be looking to amend the bill to remove schedules 3 and 4 so that the remaining schedules of the bill can proceed. I seek leave to continue my remarks at a later hour.

Leave granted; debate adjourned.

Mr TONY SMITH (Casey) (12:26): It was remiss of me earlier when I spoke not to congratulate you, Mr Deputy Speaker, on your long overdue election to the office of Deputy Speaker. The Tax Laws Amendment (Clean Building Managed Investment Trust) Bill 2012 will not be opposed by the opposition. Members in this House would recall that this year's budget announced an increase to the managed investment trust final withholding tax rate on payments to residents in countries with which Australia has entered into an exchange of information agreement. The withholding tax rate was doubled, from 7.5 per cent to 15 per cent. The coalition quite rightly opposed that in the Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012. As the shadow treasurer articulated at the time, we opposed it because it was an increase in taxation. It had the potential to discourage investment in long-term infrastructure. It had the potential to decrease future foreign investment in Australia, increase Australia's sovereign risk profile and put Australia out of step with tax rates in the Asia-Pacific region, undermining our objective of becoming a financial services hub in the region.

I will take some of the time of the House to recount the history of this matter. It is a history that is well known to the Assistant Treasurer sitting opposite. Back in 2008, with great fanfare, the incoming Labor government, the Rudd government as it then was, announced it was reducing the relevant tax rate to 7½ per cent. It was announced in Labor's first budget and, back then, the Assistant Treasurer—not the Assistant Treasurer sitting at the table now but the Assistant Treasurer at the time, the member for Prospect and now Minister for Immigration and Citizenship—lauded this important reduction to 7½ per cent and pointed out that the reduction to 7½ per cent was designed to send a signal to the international community. It was designed to send a signal from the Labor government.

The sudden decision to double the 7½ per cent in this year's budget also sends an undeniable signal, which is that, when it comes to matters of taxation, this government cannot be trusted. When it comes to matters of certainty, the business community has every reason to hold the belief that the only guarantee from this government is that guarantees cannot be kept.

It was not just those on this side of the House who pointed that out at the time of those debates in late June this year.

The respected financial commentator Jennifer Hewett summed it up very well in the Financial Review at the time, when she made the point that the debate through the course of that last week in June showed:

Labor has developed an unenviable reputation for its willingness to change tax rates and structures for investments.

This completely undercuts faith in the permanence of reforms that do occur …

The legislation through this parliament of that tax increase took some time and had various permutations. We are back here today dealing with what is perhaps the last of those. At the time, the government decided to reward the Greens for their support for increasing the 7½ per cent rate to 15 per cent by announcing that they would come forward with a lower withholding tax rate, of 10 per cent, that would apply to payments to nonresidents by managed investment trusts that hold newly constructed, energy-efficient commercial buildings. That is what the substance of this tax law amendment bill is about.

I will run through the key elements briefly. They include a withholding tax rate, as I just said, of 10 per cent, to cover certain trust payments to a resident in a tax information exchange country. To be taxed at the final 10 per cent withholding rate, the managed investment trust's payments can comprise only income and capital gains from clean buildings and assets incidental to clean buildings. A clean building must be constructed after 30 June 2012, be a commercial building—that is, an office building, hotel or shopping centre—and hold a five-star Green Star rating as certified by the Green Building Council of Australia or a 5.5 star energy rating as accredited by the National Australian Built Environment Rating System. Even if a building meets the relevant green standards, it will be ineligible if construction began earlier than 1 July 2012. This will be the case even if significant works had not commenced by that date.

There are some commercial obstacles presented by the bill that might prevent this concession being widely utilised. They relate to making sure that the trust satisfies the conditions to be a clean building MIT and will require careful structuring of the trust. A clean building MIT is restricted to holding taxable Australian property assets. Income from assets reasonably incidental to clean buildings—billboards and signage, telecommunication infrastructure attached to a building, and car parking facilities—will not affect the trust being a clean building MIT so long as the incidental assets are of some substance. Income from past incidental assets will not prevent the trust being an MIT, provided that income is not greater than five per cent of the trust income from clean buildings. Refurbished buildings, even where the works would lead to satisfying the standards, are ineligible. Holding other types of buildings from which it receives income will prevent the trust being a clean building MIT. The 15 per cent rate will therefore apply to payments to these nonresidents. The criteria to qualify as a clean building could lead to the precaution of quarantining these types of buildings into discrete trusts, which of course would add to costs and inefficiencies.

The concession is probably going to prove quite difficult to assess. Certainly that is the view of industry bodies and advisory firms expert in this area. The explanatory memorandum is being overly conservative in stating that the cost to revenue of the measure will be small and unquantifiable over the forward estimates. Nevertheless, as I said at the outset, the coalition is not opposing this bill. It does represent a tax cut over and above the tax hike introduced by this government some months ago, albeit to a very discrete area. As I said, it cuts the rate of withholding tax to 10 per cent from 15 per cent for these clean building managed investment trusts. Its purpose is to repay the Australian Greens for their vote to double the tax from 7.5 per cent to 15 per cent, but, as I said, on behalf of the coalition, it is a tax cut and we will not be opposing it.

Mr BANDT (Melbourne) (12:35): I am pleased to rise on behalf of the Greens to support the Tax Laws Amendment (Clean Building Managed Investment Trust) Bill 2012. This bill is a win for the environment, it is a win for progressive business and it is an example of this parliament working properly. When the initial proposal from the government regarding withholding tax came before this parliament, the Greens had some concerns, as did a significant number of players in the business community and the progressive business community. They were concerned that the proposal might disproportionately impact on investment in clean buildings, in green buildings, in sustainable buildings. In particular, they were concerned that overseas pension funds that had higher standards of investment and that wanted to invest in places where they knew they would be getting a good return for their members and would also be helping to tackle global warming and make cities more sustainable might be disproportionately impacted. Indeed, according to the advice we had received and to what a number of people, including the Property Council of Australia said, it was these kinds of funds that were disproportionately higher players in investing in these kinds of sustainable buildings.

Equally of concern to the Greens is securing this country's revenue base. It is becoming crystal clear that there have been large numbers of promises and aspirations about what government should spend its money on, many of them incredibly worthwhile and areas that the Greens have been at the forefront of championing, from investment in schools to getting health into dental care to giving a $50-a-week increase to those who are on Newstart or youth allowance and are doing it toughest. What is becoming increasingly clear is that the money is running out. The government often boasts that they are keeping revenue as a proportion of GDP much lower than it was under former Prime Minister John Howard. To me, that is not a boast; it is a problem, because it means that we now, for example, find ourselves having in the order of $24 billion a year less revenue than we otherwise might have. That is part of the reason we see proposals like Gonski school reform being pushed out past 2020, other proposals unable to be funded in a timely manner and services increasingly at risk, such that we might not have enough money to fund the kinds of services Australians rightfully expect in an advanced, First World economy.

So we have the question of how we begin to secure the revenue base. The principle behind the government's bill was one that we, the Greens, supported. Because this is a parliament in which the diversity of the views in the community is represented, we were able to negotiate a sensible outcome. We will be in a position where we can not only help secure the Commonwealth's revenue base but also continue to drive investment in clean buildings and in sustainable buildings. I, as someone who represents an inner-city electorate, and the Greens are acutely conscious of the fact that a substantial amount of greenhouse gas pollution comes from cities, and that includes our built environment. We need to be doing everything we can to ensure that investors do make the choice to invest in buildings that will reduce energy usage, reduce pollution and reduce the costs to the tenants who live in them.

After discussions with the government, we are very pleased that the government agreed that a way of meeting both objectives would be to provide essentially a concessional rate for managed investment trusts in new energy-efficient buildings. I note that the coalition says that this is somehow some kind of payback, but that is not so. It is a genuine response to genuine concerns expressed by many in the business community, and I welcome the fact that the coalition will not oppose it. I commend the bill to the House.

Mr HUNT (Flinders) (12:40): Oh, dear! Oh, dear! This Tax Laws Amendment (Clean Building Managed Investment Trust) Bill 2012 is a shabby outcome. It is a partial concession from a government which has broken two promises. In 2008, as the member for Casey said, the government made a major point about the fact that it was sending a signal to the world that by reducing the withholding tax rate to 7½ per cent Australia was an investment destination. And now this bill comes against the background that it is doubling the withholding tax rate and, of course, it sends two messages to the world: firstly, that we are not to be trusted as a country under this ALP government and, secondly, that your investment, which was wanted in Australia, is not going to be so profitable. Therefore, desperately needed funds in the Australian building and construction sector, in particular, will be deterred from arriving in Australia.

In short, the broader context is that the government has led us to a situation where investment in Australia's building and construction sector and Australia's office sector is now less desirable than it was and its own logic of a reduction in the withholding tax rate is sending a reversed signal. That increase, that doubling, in the withholding tax rate is not only a broken promise and therefore a sovereign risk issue; it is also a very powerful signal about investment and whether or not Australia is a desirable destination.

This bill also comes against another broken promise. It is a very clear, unequivocal broken promise. The government went to the last election—and it had it on its books for some time—with the pledge of a $1 billion clean building green tax break fund. That is gone. That went in this year's May budget. The $1 billion green buildings tax break fund is gone, evaporated, eviscerated. It has disappeared. That was an express, clear and absolute promise. The Green Building Council, ASBEC—whose chair, a former state ALP minister Tom Roper was savagely critical of the government not just for the policy breach but also for the breach of faith with a pre-election promise—and the Property Council are all groups that relied upon the government in good faith and have been disappointed.

Against that background, instead of seeing an increase in the tax rate from 7½ to 15 per cent for qualifying clean buildings, this bill only sees an effective increase from 7½ to 10 per cent. Notionally, the government is saying this is a tax deduction from 15 to 10 per cent. In theory that it right, but only because it just doubled the withholding tax from 7½ to 15 per cent a few months ago. So it doubled the tax and then reduced some of it. It is still higher than it was five months ago. In summary: (a) there is confusion; (b) there was a breach of faith; and (c) the tax rate is still going to be higher than it was five months ago. The grand selling point is that it is not going to be as high as it might have been. It is not a government that is serious about foreign investment, it is not a government that is serious about supporting clean buildings and it is not a government that is serious about its promises.

This is slightly better than would otherwise have been the case, but it is no substitute for the government's own broken promise, and I would ask the minister in his summing up to address the broken promise. We will not oppose the government's reduction in the level of effective tax paid on clean buildings but we will certainly point out that the net tax paid and payable is going up as a consequence of a series of decisions over the last few months.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (12:45): Firstly I would like to thank those members who have contributed to this debate. The Tax Laws Amendment (Clean Building Managed Investment Trust) Bill 2012 provides for a final withholding tax rate of 10 per cent on fund payments from eligible clean-building managed investment trusts made to foreign residents in countries with effective information-exchange agreements. I understand that some members would prefer the 10 per cent withholding tax rate to be more widely available than this legislation provides. I note that broadening the scope of this concession would have fiscal costs. I also note that fund payments from managed investment trusts that are not eligible for this measure can be subject to a still concessional 15 per cent final withholding tax rate. This rate is half the 30 per cent non-final withholding rate from when we came to office, and half the 30 per cent that applies to company tax.

For these amendments to apply the managed investment trust must invest in new energy-efficient office, hotel and retail buildings that commenced construction on or after 1 July 2012. A proposed amendment to the bill, tabled today, will ensure that any works preparing the site for construction, and works undertaken below the lowest level of the proposed building, do not represent the commencement of construction for the purposes of the measure. This will make it clear that, in determining if the bill qualifies as having been commenced on or after 1 July 2012, the time of the commencement of the construction of the building is only determined by the time the works on the lowest level of the building, including any basement level, commenced.

This is consistent with the recommendation from the Parliamentary Joint Committee on Corporations and Financial Services, and can I acknowledge Madam Deputy Speaker O'Neill your role as the chair of that committee. I thank you for your work and for the work of your committee in preparing your very constructive report, which was reported on yesterday and recommended that the bill be passed, with this additional clarification.

I will address some of the comments made in the context of this debate by making the point that the 7.5 per cent rate that existed in relation to managed investment trusts prior to the budget measure that lifted the rate to 15 per cent was very low. If you compare it to the rates in comparable countries, competitor countries, then the government took the view that it was appropriate to ensure that we secure an adequate and a fair return on investments that do occur in this country. I also draw the attention of members in the House to the remarks contained throughout the Henry review that particularly make the point that location-specific rents are one area that government policy should be directed towards addressing in a way that will secure an appropriate return for the Australian people. That is what the budget measures did.

I also acknowledge the very cooperative way in which some other parties have engaged in discussions around this particular measure. We heard from the member for Melbourne, and from others in the other place, of the importance of ensuring that we continue to provide an adequate incentive for international capital to be invested in clean buildings in this country. The way in which that incentive will be built into our tax system is by providing a concessional 10 per cent rate in relation to distributions from managed investment trusts whose funds are directed towards investment in these clean building activities.

We believe that we have secured an appropriate and balanced outcome, one that makes sure that we continue to have very competitive rates in relation to our managed investment trust withholding rates. And notwithstanding that we also believe that we have struck the balance to ensure that the Australian people have secured and will secure an adequate return on investment and economic activity that occurs in this country, and it is important that we do secure the benefit of that for the Australian people. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (12:50): I seek leave to present a supplementary memorandum to the bill.

Leave granted.

Mr BRADBURY: I move the government amendment as circulated:

(1) Schedule 1, item 20, page 7 (lines 11 to 13), omit subsection 12 430(2), substitute:

(2) For the purpose of subsection (1):

(a) the construction of the building is taken to have commenced at the time the works on the lowest level (including any basement level) of the building commence; and

(b) the construction of the building is not taken to have commenced merely because works preparing the site for construction, or works undertaken below the lowest level of the building (including any basement level), have commenced.

Mr TONY SMITH (Casey) (12:50): The coalition is supporting this amendment. As the Assistant Treasurer outlined, these flow from the relevant parliamentary committee, of which you, Madam Deputy Speaker O'Neill, are the chair and I am a member. They sought some clarifications that needed to be made, and the government has accepted those.

In the course of speaking on these amendments, with respect to the contribution from the member for Melbourne it needs to be pointed out that his support of the government's legislation in June doubled the relevant tax rate that we have been discussing in this debate from 7.5 to 15 per cent. He claimed credit for this legislation, which reduces the 15 per cent rate to 10 per cent. As we have said, we have not opposed that. The second reading has occurred. It is a tax reduction over and above the tax doubling. But as the member for Flinders pointed out, it is a tax increase from prior to June and it is a tax increase from the government's 7.5 per cent rate, which they introduced—the rate that the Assistant Treasurer says was too low.

The constituents in the electorate of Melbourne need to know of the great triumph of the member for Melbourne in representing that electorate as a member of the Greens—an electorate that has lots of buildings in it. His net contribution has been to increase the relevant tax rate for green buildings. Before the member for Melbourne entered this place the general rate was 7.5 per cent for all buildings. Now, as a result of his dealing with this tax-increasing government, his net contribution has been to increase the rate to 10 per cent for clean buildings, and, of course, the general rate to 15 per cent. In this debate the member for Melbourne is one of those who says he likes to see a lot of sunlight in the debate, and there will certainly be sunlight on this issue.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (12:53): I note the comments of the member for Casey. I also draw attention not to what he said but to what he did not say. I was waiting for him to announce in front of us here today that, if elected, it would be coalition policy to restore the 15 per cent withholding rate to the 7.5 per cent that previously existed under this government. That would be a very significant contribution from a person who was a part of a government that, when they left government, left the rate at 30 per cent. But it is, of course, becoming commonplace in these debates that those opposite, conscious of the importance of us running a tight budget, jump up and down, whinge and complain but when it comes to the crunch you do not hear any announcement from them that they are going to restore the position as it was. In fact, perhaps the member for Casey would like to make such an announcement.

I am sure that the stakeholders that he referred to in his comments would very much welcome that contribution, but I would also suggest to the Australian people that, if one is listening to this debate, the absence of a commitment of that nature shows that this party, which in government delivered a 30 per cent rate, not 15 per cent and not the 10 per cent that we are debating today, is not serious about cutting rates. Of course, these rates relate to foreign investors and the contributions that they make to investment in Australia and the tax rates relate to the return that they receive. We believe 10 per cent in relation to clean buildings and 15 per cent in other respects is an appropriate balance. That is what we think strikes the balance appropriately.

Question agreed to.

Bill, as amended, agreed to.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (12:56): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr SIDEBOTTOM (Braddon—Parliamentary Secretary for Agriculture, Fisheries and Forestry) (12:57): by leave—I move:

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

Question agreed to.

Ms LEY (Farrer) (12:57): I am delighted to speak today on the Fair Entitlements Guarantee Bill 2012. This is a bill that replaces the administrative General Employee Entitlements and Redundancy Scheme, known as GEERS, which currently assists employees who have lost their employment due to the liquidation or bankruptcy of their employer and who are owed certain employee entitlements. The GEERS program was very proudly established by the Leader of the Opposition as workplace relations minister in 2001. As I said, this bill seeks to replace the administrative General Employee Entitlements and Redundancy Scheme, GEERS, and put it into legislation. At the moment it is an administrative scheme administered by the Department of Employment, Education and Workplace Relations.

The scheme was an important one and made a great deal of difference to members or employees who lost their jobs in circumstances where their employer went into liquidation and who therefore lost their entitlements. I think all of us as local members of parliament can recall instances where sometimes large employers went belly up at short notice, not necessarily through any fault of their own, and employees were left absolutely high and dry.

So at the time this was a very sensible and very compassionate creation of the previous, Howard government and, as I said, we all know of many circumstances where it did indeed work well.

This bill does not change the rationale for GEERS coming into action; it simply puts it in legislation. What it does change is the amount of redundancy that each worker can be entitled to under GEERS, and that is the key subject for discussion and the rationale for the coalition moving amendments to the bill that I foreshadow for the consideration-in-detail stage.

The primary objective of the bill is to set up a scheme for the provision of financial assistance, called an advance, to former employees where the end of their employment is linked to insolvency or bankruptcy of the employer. After making an advance, the Commonwealth assumes the individual's right to recover the amount that was advanced through the winding-up or bankruptcy of their employer. Many employees have to wait until the entire long, convoluted liquidation process is concluded, and often there may be other creditors ahead of them in the queue. That process is considerably shortened with GEERS. The employees are paid their redundancy by the Australian taxpayer, effectively, and then the Commonwealth embarks on the recovery of that money. Some of the key eligibility requirements of which the secretary must be satisfied in order for an advance to be paid include that the person's employment has ended, the end of the employment is actually linked to the insolvency of their employer, the employer is in liquidation or bankruptcy, and the person has unpaid employment entitlements that cannot be obtained from another source.

So this bill enshrines in legislation a redundancy package calculated at four weeks per year of service, instead of a total of 16 weeks, which is what it is at the moment under the department's administrative scheme. Four weeks for every year of service would add up, in many cases, to a considerable amount. Now, the coalition are very cautious about this because the redundancy package under GEERS always had, in line with community expectations, a cap of 16 weeks, so we will move an amendment that reinstates that 16-week cap. While we do not object to the movement of the scheme from administration to legislation, we believe that the scheme should be kept the same in that process.

Despite our strong support for GEERS, this bill, as I said, enshrines in legislation a redundancy package calculated at four weeks per year of service, and what this may well do is set a new, high bar for union bosses as they go about enterprise bargaining. That brings me to reflect on two problems with the legislation that were identified, and they have been captured by the Australian Industry Group in their comments on this bill. They have said that it will create major risks for the federal budget and would lock in arrangements which are unfair. It is not fair, they say, for employees in large, unionised workplaces to receive much more generous compensation upon insolvency than employees working for other companies. The bill protects redundancy entitlements for up to four weeks per year of service upon insolvency, and very generous redundancy packages typically operate in large, unionised workplaces. The problem with this is that four weeks per year of service is actually relatively uncommon. It is at the top end of entitlements even for unionised workplaces. Arguably, the provisions of this bill will fuel union claims for employers to agree to similar redundancy benefits in enterprise agreements; and why would they not point to this bill as the benchmark for redundancy payouts? That redundancy payout benchmark would be considerably different from what it is now—in fact, as I said, a new, high bar which could be an ambit claim in enterprise negotiations on normal redundancies, when GEERS is obviously not about normal redundancies.

Industry has been a strong supporter of the GEER Scheme: 99.9 per cent of employers do not become insolvent and leave their employees without their entitlements and, in the relatively small number of cases where the employees would have otherwise lost entitlements, GEERS has played an extremely important role.

I understand the government has increased redundancy protection under GEERS from the 16-week cap to four weeks a year of service uncapped prior to this piece of legislation, and industry did express concern at the time that such a generous increase in benefits was very risky. This risk remains. The bill would lock in these very generous benefits into legislation and the insolvency of even one large company with a generous redundancy scheme could be a major hit on the federal budget. It is not a popular position to take. Obviously employees are very keen that they receive all of their entitlements, and we are keen too that they are not left as insolvent as their ex-employers. Obviously employers themselves, in some respects, would say that it is good that the government is picking up the tab, but government picking up the tab is the Australian taxpayer picking up the tab. Somebody has to be fiscally responsible, even if the government does not want to be, in the current climate, so it is worth reflecting, in the context of this bill, on the position that the opposition is going to take on Labor's ever-increasing debt because every day this government has been in charge of the budget that debt has been increasing.

Labor has sought to increase the limit on the government's debt ceiling on four separate occasions now. The government amended the debt ceiling in 2008 to $75 billion, this was increased again in 2009 to $200 billion during the global financial crisis, in 2011 the government increased this limit yet again to $250 billion, and in the budget this year the government increased this limit to $300 billion. That is four times the debt ceiling has been increased. I make the point that much of that is well beyond the scope of the global financial crisis and well beyond the period at which the government's stimulus packages had expired. We certainly saw evidence today from a Treasury paper about exactly how unsuccessful those stimulus packages were. Designed to make people spend money, in fact they simply did not.

Mr Champion interjecting—

Ms LEY: Mr Deputy Speaker, the member opposite is a persistent interjector, and I would ask that you ask him to sit quietly.

The DEPUTY SPEAKER ( Mr Symon ): Order! There is too much conversation in the chamber. The member for Farrer should be heard in silence.

Ms LEY: So four times the debt ceiling was raised. Why has the government raised the debt ceiling? You raise the debt ceiling because you have to be prudent enough not to actually hit the top of that ceiling, go over it and cause the inevitable results with rating agencies. Total government debt on issue is well over $250 billion—that is the government's gross debt—and with further spending for projects such as the National Broadband Network, which I know is officially off balance sheet but it still costs the Australian taxpayer, and the Clean Energy Finance Corporation, who knows where the figure will land in May next year.

The coalition is taking, as I said, a fiscally responsible approach to this legislation. We recognise the importance of GEERS because we created GEERS. We know the good work that GEERS has done in our communities when all else has failed. I have two examples when GEERS was a lifesaver in my own electorate in the past few years alone. But this exercise of the government's is a tribute to its union bosses and the future negotiating power of those union bosses when it comes to workplace conditions, including redundancy. It is capturing that in the scope of what is a bill that should look after employees in extraordinary circumstances. This is just a concession to the trade union bosses via stealth.

The high bar that this legislation will set, by the way, is done outside the Fair Work Act. And if the Fair Work Act is as strong as the government claims that it is, and subject to rigorous review as it claims it is continually doing, then why not make the adjustments within the scope of the Fair Work Act? Why bring in this separate piece of legislation?

Ultimately a government with no proper agenda is going to have this scattergun approach—a piece of legislation to satisfy a particular interest group and perhaps in so doing wedge the coalition and say that we do not support employee redundancies or some such nonsense. People will see through that when the time comes. We do absolutely recognise the need for economic prudence.

There is a likelihood that we will see more redundancies under this government. MYEFO predicts unemployment to increase further. Business confidence in this government is incredibly low. The carbon tax has increased the cost of doing business and those opposite have cut apprenticeship incentives for employers, further exacerbating pressure on small businesses and potentially decreasing opportunities for younger Australians to pursue a trade. What worse statement of confidence in the future of our economy could there be than saying we do not need as many apprenticeship incentives for young people entering the trades? That nasty message under the radar, under cover of MYEFO, I think should send a shockwave through the sector of the Australian economy that cares about youth unemployment. Every time the government talks about unemployment it never mentions youth unemployment, because it is a government that does not have its priorities right and has failed in this respect as in every other.

I conclude by reiterating the coalition's support for GEERS. We created GEERS but we will be moving amendments to this legislation to simply cap the entitlements that employees may receive in this particular set of circumstances at 16 weeks. The scheme from our point of view will not change. The excuse that the government is giving that somehow it needs to legislate GEERS because it is not real otherwise I think is nonsense. Who is in charge of the Department of Education, Employment and Workplace Relations if it is not the minister? Why can't the minister direct the secretary of the department, as he obviously has on every single other occasion when GEERS has been used? That is just a smokescreen. The real issue here is raising the bar for future union bosses' negotiations about workplace conditions that will put employers and the economy in an impossible position.

Mr CHAMPION (Wakefield) (13:12): I listened very carefully to the member for Farrer's contribution to the House on the Fair Entitlements Guarantee Bill 2012. This bill is a legislative example of Labor's commitment to Australian values. One of those key Australian values is a fair day's pay for a fair day's work. Implicit in that old saying is the idea that you will get paid. We know that for decades when companies became insolvent it was workers who were often the last people in line to get not just their wages but their annual leave, their leave loading, their long service leave, their payments in lieu of notice and their superannuation, which is one thing that needs to be thought about in all of this as well. You frequently find in this situation that employers are not paying their superannuation payments either.

This went on for decades and decades. As an official of the shop assistants union in South Australia I saw it myself not just in big and medium companies but even in small companies. Sometimes it was not the fault of the company and its directors, sometimes it was just economic circumstance, but there were frequent occasions when it was their fault, was due to the phoenixing of companies or was due to neglect by directors and the like. I have seen many examples in my time of where workers have been treated appallingly in redundancy situations and left in very difficult situations. I worked for a company many years ago as a trolley collector.

Mr Briggs: You'd be too small to push it.

Mr CHAMPION: Yes, I was almost too small to push it—the member for Mayo is helping me out. But I was younger and stronger in those days. The company I worked for ended up in receivership, and I remember my friend, who worked at the company at that time, telling me about the scenes out the front of the company of people who had not been paid in months. We would all have stories and examples from our electorate and from personal experience of where this has occurred, and it is terribly unfair to those concerned.

We heard the member for Farrer talk about the benign generosity of the previous government, about how they magically arrived at GEERS: one day, Tony Abbott rolled out of bed and thought, 'I might set up a scheme protecting workers' entitlements.' That is the proposition they want to put to the House, but we all remember the circumstances in which GEERS was created. We all remember what prompted it—it was the fact that one of the then prime minister's relations, as I remember, was the director of a textile company. That was what happened, wasn't it?

Mr Briggs interjecting—

Mr CHAMPION: I am just telling of the circumstances that led to the Australian people becoming aware of this terrible situation, and that is what happened. I cannot remember the year—I do not remember if the member for Mayo was working for the prime minister at that time. Maybe GEERS would have been a better scheme if he had been.

It was not some sort of government program, or some sort of deliberate review by the Howard government that brought GEERS into place; it was politics. It was political pressure by the Australian people. It was the site of hundreds of workers being left without their entitlements. The Australian people demanded that something be done, and what we ended up with was GEERS.

GEERS is a taxpayer funded scheme, and I tend to agree with the previous speaker that it is of concern that taxpayers are picking up the bill for failed companies. There are other ways you could set up entitlement guarantee schemes, and if we were starting from year zero with a blank sheet of paper we might not get the taxpayers of Australia to underwrite such schemes—we might make industry do it itself. It is truly extraordinary for industry to make these complaints when at the same time they ask the taxpayer to fund schemes like GEERS.

But we are dealing with the structure as it is, and so we have put these entitlements into a legislative guarantee so that workers do not have to worry about people like the member for Mayo and others, one day in the distant future, being in government and ripping into entitlement schemes and the like. We know they go through periods of generosity towards workers, periods of being benign towards workers, and we know that at some point they tend to turn on workers, as Work Choices proves. I remember Work Choices; that apparently guaranteed all your entitlements as well—guaranteed that you might lose them, that is. We know it is important that we have some legislative guarantee for people's entitlements.

The previous speaker said that this is all about union bosses, and some sort of arrangement with them. It is actually about our relationship with workers. That is why we want to guarantee wages up to 13 weeks. That is why we want to make sure that workers get their redundancy entitlement capped at a maximum of four weeks of service per year. This is not some sort of rolled gold union guarantee—that is not uncommon, and certainly not at the top end of town. We know what kind of payouts they take when they leave companies.

Mr Briggs: Holden?

Mr CHAMPION: Not at Holden, but I can remember at David Jones years ago, when they were closing John Martin, a certain chief executive sailing off with a huge entitlement package while workers in South Australia, particularly long-term casuals, had to fight in court to get their redundancy payments. I remember that. It is quite common for the top end of town to have a different set of rules for separation packages, particularly in relation to stock options, than they have for the people at the bottom who actually do the work and create the value and the wealth.

The bill also guarantees payment in lieu of notice, capped at five weeks, and that is not an unreasonable thing to do. Workers do deserve notice. I have been in many situations and seen many situations, particularly in the textile industry, where companies would be saying to workers, right up until literally the day before they announced closures, that they would not be closing and that it was business as usual and all the rest of it. Often one of the things that hurt and frustrate workers most of all is the persistent lying that goes on up until closures are announced. Often workers know that the writing is on the wall; they hear the rumours. But what we often see is—and I will not call it lying—corporate obfuscation about what they are doing.

So, having a payment in lieu of notice is an important thing. Getting notice is an even nicer thing—and, of course, guaranteeing annual leave and long service leave. It should be stressed that often people in these companies—companies that are under economic stress—will not let you take your long service leave or will delay letting you take it and will delay letting you take your annual leave. So people bank a lot of leave. That is a common thing that happens.

These sorts of things are very important for workers—things like a safety net, a guarantee. We know that for decades they basically endured without these, and people lost vast amounts of money over the years, unable to obtain their funds. Or they sat in a line of creditors, behind banks and behind others, waiting for their entitlements—and we know that was a persistent worry.

There have been some unions, I have to say, who were particularly active in making sure this issue was front and centre, and the Australian Manufacturing Workers Union was one of them. I can remember them talking about this, particularly in the car components industry—people like John Camillo and John Gee, out there on the barricades making sure workers' entitlements were paid and making sure they had a guarantee of those entitlements. And I remember people like Bob Donnelly from the CEPU and others being out there on the shop floor making sure workers got their entitlements. But what we are doing here in this House is legislating to make sure union leaders do not have to fight battle after battle and fight after fight to make sure people just get their entitlements. We want to make sure that people have some reasonable certainty about their situation with regard to their entitlements in times of insolvency.

This is a very good bill. It proves that despite all the rhetoric of those opposite the Labor movement still exists for working people across this country. It puts into place important guarantees, and it should give everybody who believes in that old Australian saying about a fair day's pay for a fair day's work some reassurance that that still means something in this modern age.

Mr BRIGGS (Mayo) (13:23): I follow the member for Wakefield, who I acknowledge has many years of experience in these issues, being a former union representative and delegate with the SDA in South Australia. I understand it has been a difficult day for the SDA in South Australia today within the Australian Labor Party.

Mr Champion: We won on the floor!

Mr BRIGGS: You won on the floor. It was an empiric victory that Don had to have, and then prove later that he could happily stand aside and hand it over to Penny.

But I digress. Regarding the bill the member for Wakefield has spoken on—the Fair Entitlements Guarantee Bill 2012—I support the member for Farrer in saying that we will be moving a second reading amendment, which I will refer to later. There were many points on which I agree with the member for Wakefield, particularly relating to the actions some companies take towards the end, when they are clearly heading in the direction of not being able to survive. I think that has been shameful at times in our history.

I refer to a good example in late 2006 where a certain components company based in Sydney, with some South Australian ownership, treated their workers in a terrible way—which I think even today, interestingly, would still be a difficult issue for any government to deal with if an employer took such an attitude towards a certain company. I remember that a certain Sydney talkback host jumped on that issue and made great hay with it. But, truth be told, when an employer wants to act in that manner, it can treat people terribly. I think that is a very good point that the member makes. Equally, there are times when employers and directors make bad decisions or deliberately make decisions which seek to unfairly treat their workers. That is why we need protections in law in this country: to ensure that people are not unfairly treated. We do need a safety net, and we have always supported—I have always supported—the need for a strong safety net of entitlements for people in the workplace.

But what the member for Wakefield did not refer to, of course, is that there are times when organised labour and workers' representatives also make mistakes and also push too far in making companies pay for entitlements which are clearly beyond the capacity of certain companies to pay for into the future. They are unsustainable, and that equally leads to the unfortunate circumstances where companies cannot continue to operate and therefore go out of business. You have to wonder sometimes whether cutting your own throat is a good idea, and that certainly has been the case with many companies.

Equally, right now, today, as we speak, there are companies—including one big company that operates in the northern suburbs of Adelaide, in the member for Wakefield's electorate—who have agreed to arrangements which are very generous. When those companies are the beneficiaries of significant taxpayer support in the first place, you have to wonder whether these companies and these workers—

Mr Champion: Come down to the factory.

Mr BRIGGS: Of course the union tells its workers that this is a terrific idea, but at the end of the day, if it makes it harder for these companies to survive in a difficult time—when the dollar is undoubtedly putting pressure on manufacturing and when heavy manufacturing in Australia is suffering—and if heavy manufacturing plants agree to over-the-top, over-the-tote wages and send around letters claiming that the wages and conditions are not over the top and not over the tote odds, you do have to wonder if they are operating in their best interests. Of course, what that will lead to from time to time is companies going out of business.

What happened when the Howard government was in power—it was in 1999, I believe, when the first iteration of the GEERS scheme was put in place—was that the state Labor governments in particular and, in truth, federal Labor had failed to put in place protections for redundancy payments and certain entitlements over their years in power. This was reasonably non-controversial at the time of introduction, in the sense that there were some companies that went out of business leaving employees without their entitlements, and the Howard government moved to address that. But it became much more stressful and difficult and much more relevant on 12 September 2001, when Ansett went out of business. This is another example where, through both management decisions and overly generous employment conditions, the company could not survive. With changes occurring in the aviation industry, what happened was that the build-up of that pressure put that company under such stress that thousands of Australians lost their jobs, and many still campaign today for what they believe are their rightful entitlements, which they have not received from administrators and the like. The Howard government moved very quickly. Of course, at that time there were other international events which had people concerned about what was going on, and the Howard government reassured people, moved quickly and created the GEERS scheme, which they then built on immediately post the Ansett crisis and which assisted those workers at a time of great need.

The establishment of that scheme basically ensured that workers, in the circumstances in which they met the criteria, could be guaranteed redundancy payments that met relevant community standards. What that sought to do is, where organised labour, company directors, CEOs or owners of businesses made bad or inappropriate decisions and overly inflated certain entitlements, particularly in relation to redundancy, the taxpayer, while ensuring a safety net, was not going to be put on the hook for amounts that are far above community expectations. The member for Wakefield referred to certain high end employers whose shareholders agree to their packages of employment. They do not get picked up by the taxpayer in the event that the companies go broke, and nor should they be. I also note that he did not refer to certain other companies when he referred to high end employers.

What the member for Wakefield failed to mention is that what the government is doing here is trying to increase by stealth, in effect, the acceptable community standard for redundancy payments. From my years in industrial relations—about 15—four weeks per year has never been the community standard. It has always been capped. In fact, 16 weeks is at the high end or the generous level of the cap. By putting forward a bill in which you are changing the arrangements of the GEERS program in the first place and in which you are extending by stealth what the acceptable community standard the government is trying to establish a new benchmark and put pressure on Australian businesses to meet that.

The argument that will flow from unions in negotiations will be, 'If it's good enough for the government and if the government can guarantee this amount, so should you, Mr Employer.' This will flow down the employment food chain from big businesses, which will have to meet these new standards—and I am sure that in some circumstances they already have arrangements that are not dissimilar—all the way down to the smallest businesses, which cannot carry these new entitlements.

In the next 12 months, we will unfortunately see people lose their jobs. There is structural change going on in the company. We hear that constantly from the government and that point is right. We will also see very quickly a lot of smaller businesses signing up to agreements so that they do not have disputation in their workplace. There is now Fair Work legislation that makes it impossible for them to stand up to union bullying. They will agree to these arrangements. They will have to make changes to their businesses and they will be stuck with redundancy payments that they cannot possibly pay. What you will have is this perverse effect where more companies will be forced out the back door, to use a famous saying of a former Prime Minister in this place. That will be the outcome of this move by the government to uncap this entitlement. It will be unaffordable for many businesses. Pressure will be put on them through industrial negotiations to sign up.

We know, because business leader after business leader have told us, that these industrial negotiations are now skewed very much to organised labour rather than to the interests of employees, of businesses and of our economy. That is why we object and that is why we are moving, as the member for Farrar outlined, a reasonable amendment to improve this bill. That amendment will cap that amount at 16 weeks of pay. We believe that that is the acceptable community standard. People in the community would agree with that. But equally the taxpayer has to pick up these tabs. As the member for Wakefield said and as I remarked at the beginning of this contribution, there are many circumstances in which businesses go insolvent.

Some of them, many of them, are when company directors and businesses have made the wrong decisions about their business, undoubtedly. Equally I agree with the member for Wakefield that sometimes businesses handle those circumstances horrifically and do not treat their workers properly and that there should be some protection in the system for people, their families and their livelihoods. I think that is a perfectly reasonable position. That was the position that the Howard government adopted in 2001, and then built upon in the years following.

But what this bill does is unfairly put the taxpayer on the hook for entitlements which are far beyond community expectation. That is where we object and that is why we are moving to assist the government in improving this piece of legislation. While the Howard government were the authors, the designers and the people behind this move, and while the coalition support very much the strengthening of these provisions with the conditions that we have talked about, ensuring that there are conditions on how this money is accessed and that the normal insolvency provisions are followed, people should not expect that the government will pick up unreasonable entitlements.

Mr Deputy Speaker Symon, you know industrial relations well. You have been involved in industrial relations for many years and you know how this works. When there is a new entitlement in the system it flows through, like water flows down a drainpipe, because that is exactly how unions seek to get higher conditions in employment agreements. They start at the top, with the bigger guys who can usually afford it—not always, but most usually—and usually with the public sector. They move on to bigger employers and then it trickles down, right through to smaller businesses that often cannot pay the same generous entitlements that bigger companies do. If they do not meet those challenges, if they do not meet those set standards—and, of course, this is one of the great faults of the old tripartite system—they end up being put on the hook for conditions they cannot meet, even though employees have an expectation that they will meet them because the employer has signed an agreement with them under the pressure of organised labour.

We support the direction of this bill, and we have said that very clearly. But we do not support the uncapping of this entitlement. We say put a reasonable limit on it—a number of weeks' pay to a maximum of 16 weeks. I cannot see how anyone, particularly with experience in this field, could object to that—anyone who wants to protect the taxpayer from unreasonable amounts signed up by companies, sometimes under pressure, sometimes with agreements that are far outside community expectations and sometimes where people have acted inappropriately. Whatever the circumstances of the business going down, the taxpayer should not be required to pick up that fault at this level.

Unfortunately, the bill is badly thought through, and that is why we are trying to assist the government to fix it. We hope that the government will adopt this amendment, which is reasonable, to ensure that a good idea put in place by the Howard government is strengthened even further so that Australian families can have surety that their entitlements, in the event that their company goes broke, will still be there.

Ms BRODTMANN (Canberra) (13:38): I am very pleased to hear from the member for Mayo that there should be protections for employees because that is what the Fair Entitlements Guarantee Bill 2012 is all about. He harked back to the glory days of the Howard government, and I was reminded of what the Howard government did to Canberra and to the Public Service. It contrasts very dramatically with what the Gillard government is doing for the Public Service and its support for the Australian Public Service and for Australian workers. As the member for Canberra, which is an electorate with thousands and thousands of public servants, I have been a strident supporter of the Public Service for years, having been a former public servant for 10 years before I set up my own microbusiness, and I am a strident and strong supporter of the public sector in general.

The Gillard government has ensured that we have a stable public service and that we continue to build a stable public service.

We are always working towards making sure the Public Service is resourced to tackle current and future challenges and at the same time we are always looking to remove inefficiencies where they exist. We have been doing that since 2007, tackling a range of areas where we can drive greater efficiency in the Public Service, and we have recently done that with the recent announcements on travel and publications a range of other measures. So we are constantly looking for improvements in the Public Service and greater efficiencies at the same time as trying to ensure that we have a stable Public Service.

My passionate and strong advocacy for Canberra and for the Public Service is well known and well documented in this House, as is my support for small- and micro-business sector that work with and support the Public Service. I would like to use this opportunity to draw to the House's attention the fact that this evening my colleague the Minister for Small Business and I, as well as the shadow minister, will be launching the Parliamentary Friends for Small Business. It is the first time an organisation like this has been established. We are very much looking forward to the launch of that initiative. It was an initiative that I discussed with the former Minister for Small Business early on in my term and I am really pleased that we are finally getting it off the ground tonight. A am looking forward to all parties continuing to engage with small and micro businesses on their concerns to ensure that they are heard in the policy arena.

The reasons that members like me need to defend the Public Service and workers and to stand up legislation like this bill is because they are constantly under threat and attack by those opposite. The member for Mayo reminded us of what the Howard government did in terms of workers entitlements. It reminded me again of what he did in Canberra and also throughout Australia to the Australian Public Service. Those opposite are constantly criticising the Public Service. They are constantly criticising the value and the worth of the people who work in it. As a Canberran I have lived through the boom-and-bust mentality of those opposite and I know how damaging their policies can be.

I was one of the 30,000 Australians who lost their Public Service job when the Howard government was in power and they took the cleaver to the public sector. I was at that time posted to India and after only being there for four months I was told that my position had been abolished. I was asked to stay on for the year so that I could take part in a major integrated country promotion of all Australia's achievements in the nation. But then I was brought back here and basically had to reapply for my job. There were 50 of us in my cohort of workers in the public diplomacy sector before I left the shores of Australia for India. When I reapplied for my job in Australia there were only eight left. At the same time my now husband had resigned his job from the Canberra Time. We came back and did a bit of part-time work. The knock-on effects of Public Service job losses is not just by the individual but also by the spouses who may not be able to get employment themselves and also by their families and also the broader community.

I remember when I was in DFAT I came back to farewells being held in bulk. That is the legacy of the Howard government in terms of the Public Service. In that time, as I mentioned, 30,000 jobs nationally were lost. Over five years there was a decline in the Commonwealth Public Service here in the ACT of nearly 16,000 permanent jobs—15,800 to be exact. As I mentioned, it is not just the Public Service that feels the impact of that; here in Canberra every small business paid the price of the axe that was taken to the Public Service jobs. Many local shops were empty or only half full and house prices plummeted. The growth industry was removalists. People left town—our population dropped dramatically. It took us many years to rebuild in terms of an economy and in terms of growth.

It was the workers who lost out, workers who lost their entitlements as well as their income. As I said, it was not just public servants who experienced this; it was also businesses. Both business and non-business bankruptcies at that time jumped sharply as a result of the cleaver that was taken to the public sector.

I would just like to remind the House that the budget surplus that the Gillard government are committed to is designed to protect us against any further global economic turmoil and, however difficult this task will be, I know that the Gillard government will always seek to protect jobs and grow jobs, as we have—800,000 jobs, in fact—which is in stark contrast to those opposite, who proudly boast about Canberra-bashing and demonising the Public Service. The introduction of this bill will benefit a range of sectors—and it is not just in Canberra that this will be felt; it will be felt right throughout the nation—and it will have a significant impact on employee benefits.

I want to run through the details of the bill in terms of what it is actually designed to achieve. It will establish a basis for advancing unpaid employee entitlements so that eligible employees who lose their jobs and are owed entitlements are actually paid those entitlements when their employer is insolvent. Replacing the General Employee Entitlements and Redundancy Scheme, it will allow the Commonwealth to provide financial assistance in the form of an advance to cover certain unpaid employee entitlements when the end of the person's employment is linked to the insolvency of their employer. After an advance is made, the Commonwealth will assume the individual's right to recover the amounts advanced through the winding-up or bankruptcy of the employer.

Eligible employees will be covered for the following unpaid employment entitlements: wages of up to 13 weeks; redundancy pay, which will be capped at a maximum of four weeks pay per year of service; payment in lieu of notice, which will be capped at five weeks; annual leave; and long service leave. The key changes that this bill establishes include removing eligibility requirements associated with deed-of-company arrangements and mirroring bankruptcy arrangements; extending eligibility for entitlements that crystallise after the appointment of an insolvency practitioner, which is essentially to cover that portion of the entitlement that the insolvency practitioner is not obliged to pay; simplifying transfer-of-business rules, with effect from 1 July 2014; and removing the discretion to accept claims that are not made within 12 months of the end of a person's employment or the appointment of an insolvency practitioner.

The bill also includes arrangements for ministerial and/or departmental discretion to be used in a number of specific non-routine circumstances where the act of discretion supports the objects of the bill. These amendments are designed to address minor technical faults.

Clauses 12 and 25 of the bill refer to exclusions for changes in terms and conditions in the six months before the insolvency event; and, following the introduction of the bill, the department has re-examined these provisions and advised that the current drafting is not sufficiently wide enough to capture redundancy and payment in lieu of notice, as these are contingent liabilities that arise only on termination of employment. So the department has recommended that these provisions be amended to correctly reflect the intent that redundancy and payment in lieu of notice are captured.

I have highlighted some of the Gillard government's commitments to the Public Service and also to jobs but I also want to remind the House of the commitments to employee fairness that have been the tradition of Labor since its inception, since the beginning of the party. That is the reason we were established: to protect workers rights and conditions. I was reminded, when looking at this bill today, of work that I did in the Attorney-General's Department in the early part of my career, where the Labor government established the Insolvency and Trustee Service. It was the first service established to actually address bankruptcies and ensure that there was some legislation, and an agency, introduced to ensure that workers rights and entitlements were protected. Prior to that, we had seen what happened in the late eighties. There were a number of businesses that went bankrupt where the company director essentially left the country, in many cases with huge swags of money, leaving employees with nothing.

They were left with no pay, no entitlements, no conditions—nothing. So the initiatives and the legislation that we introduced, and it was the first such legislation for the nation at that time thanks to Labor, were designed to ensure that there were some protections for workers. As we know, these things change over time and we become more aware of gaps in legislation and it is good to see that we are constantly updating legislation to ensure that we are constantly looking out for workers and looking after workers to protect their rights and entitlements.

I commend this bill to the House. I believe it exemplifies all the best that is Labor and all that is good about Labor. The reason I joined the Labor Party is that it is all about workers' fair rights, workers' entitlements and ensuring that they are protected when the company or organisation that they work for goes belly up, becomes insolvent. It is unfair for workers to be exposed. Quite often it is not about an inadequate board of directors. Quite often it is about the circumstances and a business can no longer be solvent. But workers should not have to pay for bad economic circumstances or bad decisions by the board of directors. They should receive their fair share of entitlements and conditions, and that is what this bill addresses.

I want to come back to the Public Service and remind Canberrans of 1996, when the Howard government was in power, and remind them of the fact that at that stage there were 30,000 Public Service jobs lost in Australia, nearly 16,000 of them here in Canberra. House prices plummeted, local shops closed down and removalists found theirs was a growing industry as people left town. It took us a long time to recover from that.

I draw the House's attention and also Canberrans' attention to the comments made by those opposite about their desire to get rid of 20,000 public servants. I ask them to consider what that will mean for the Canberra and also the Australia of the next decade. Do we want to go back to 1996 when we did experience that slump in the local economy? It was not just about the local economy here in Canberra as it did have a significant knock-on effect throughout the region of Eden-Monaro and throughout the capital region of Canberra. If you went down to the South Coast you saw three out of four houses up for sale. Again, it had a knock-on effect all around here in terms of the farms and properties around this region and it had a knock-on effect for Queanbeyan. So it just does not affect the public sector here in Canberra; it affects hundreds of thousands of jobs throughout the region. I remind Canberrans to remember 1996 and reflect on the potential for 20,000 job losses.

Mr SIMPKINS (Cowan) (13:53): I appreciate the opportunity, in this short period over the next seven minutes before question time begins, to speak on the Fair Entitlements Guarantee Bill 2012. Clearly, this debate is fairly wide-ranging given some of the comments that have been made. I have just heard the member for Canberra talk about what happened in 1996. I think I should remind Canberrans of what happens when a house is left in disorder, when a government has led the country to live beyond its means and racked up $96 billion in debt. Someone needs to then come in and clean up the mess and I think it is not right for the team that left the mess to then blame the next team that comes in for the cleaning up of the mess. Whilst members from Queensland might be complaining about the things that take place in Queensland under the new government, the trouble is that when the last Queensland government left the place stayed in a mess with huge amounts of debt and someone needed to make the hard decisions.

The hard decisions had not been made for a long time. Largesse in government spending had taken place over many years in Queensland and someone needed to come in and do something about it. The reality is that the country now faces $257 billion of debt, thanks to those opposite. They have taken us from a net asset position of some $70 billion and now we are $257 billion in the red. Someone needs to clean up the mess.

We welcome the opportunity to speak about the Fair Entitlements Guarantee Bill 2012. This is an evolution from the previous legislation that applied, the General Employee Entitlements and Redundancy Scheme. The current Leader of the Opposition, the Hon. Tony Abbott, who was the workplace relations minister in 2001, established that scheme. It was to protect the employee entitlements of more than 90 per cent of workers who lose their entitlements when their company becomes insolvent.

Obviously there are circumstances in this country where certain companies might run into difficulties. A lot of companies in this country now face difficulties. There are a lot of businesses out there whose confidence has been sapped by this current government and now they are facing all sorts of problems. Every day in question time we raise the plight of these companies, and the government dismisses us and dismisses the interests of these businesses. It is not right. Thanks to the lack of confidence that this government has created across so many states, even in Western Australia now, we need to look at this Fair Entitlements Guarantee Bill. That is the problem that this country faces. Hopefully, after the next election there will be a greater degree of confidence and this country will start being able to move forward again.

The coalition will move an amendment to this bill to include a cap on the redundancy payment at 13 weeks. That is the right and appropriate thing to do, given that that is in line with Labor's very own Fair Work Act. The coalition was always very careful with the GEERS, the General Employee Entitlements and Redundancy Scheme, to ensure that the scheme kept in line with the community standard. The amendment that we propose would ensure that the standard—the high bar—of Labor's own Fair Work Act is maintained. We acknowledge the importance of looking after workers and making sure that, in circumstances in which businesses go under, something is done about entitlements and people are looked after. The eligibility requirements for these entitlements are that the person's employment has ended, the end of the employment is linked to the insolvency of the employer, the employer is in liquidation or bankruptcy, and the person has unpaid employment entitlements that cannot be obtained from another source.

We acknowledge that this needs to take place. This was the side that actually initiated this action when it needed to be done. The person that initiated it was the Leader of the Opposition, looking after people that needed to be looked after when the pressure was on, back in 2001. In this place, we are used to hearing how we are responsible for all the dramas in this country—that, when there is someone to blame, it is always us. But, back in 1996, when one side left this country in disorder, someone needed to clean up the mess. Now we face exactly the same circumstances, where one side is leaving this country in disorder—$257 billion of gross debt—and someone needs to come in and fix it up. I hope that, when the time comes, not only the rest of the country but Canberrans as well will remember that, when someone takes responsibility, this country can be brought back into order.

I appreciate the opportunity today to make comments on this bill. I completely endorse the amendment that will be brought forward to include a cap on the redundancy payment at 13 weeks. That will be in line with the government's own Fair Work legislation that they always stand by so completely. In any case, I look forward to the government considering what needs to be done and making sure that our amendment is fully accepted, because that is the best way to progress this matter.

Debate interrupted.

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (14:13): by leave—I move:

That the order of the day be referred to the Federation Chamber for debate.

Question agreed to.

The SPEAKER (15:27): Pursuant to section 65 of the Parliamentary Service Act 1999, I present the annual reports for 2011-2012 of the Department of the House of Representatives and the Department of Parliamentary Services.

Ordered that the reports be made parliamentary papers.

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (15:27): Documents are presented as listed in the schedule circulated to honourable members. Full details of the documents will be recorded in the Votes and Proceedings. I move:

That the House take note of the following documents:

Australian Radiation Protection and Nuclear Safety Agency Report for 2011-12.

Department of Climate Change and Energy Efficiency Report for 2011-12.

Department of Defence Report for 2011-12, incorporating the report of the Defence Materiel Organisation.

Department of Industry, Innovation, Science, Research and Tertiary Education Report for 2011-12, incorporating the report of IP Australia.

Financial Reporting Panel Report for 2011-12.

Primary Industries and Resources House of Representatives Standing Committee Farming the future: The role of government in assisting Australian farmers to adapt to the impacts of climate change Government response.

Private Health Insurance Ombudsman Report for 2011-12.

Takeovers Panel Report for 2011-12.

Tertiary Education Quality and Standards Agency (TESQA) Report for 2011-12.

Veterans Review Board Report for 2011-12.

Debate adjourned.

The SPEAKER (15:28): I have received advice from the Chief Government Whip that he has nominated Mr McClelland to be a member of the Committee of Privileges and Members' Interests in place of Ms AE Burke.

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (15:28): by leave—I move:

That Ms A. E. Burke be discharged from the Committee of Privileges and Members' Interests and that, in her place, Mr McClelland be appointed a member of the committee.

Question agreed to.

Mr BOWEN (McMahon—Minister for Immigration and Citizenship) (16:51): I move:

That this bill be now read a second time.

There are two bills being proposed at this time: the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 1) 2012-2013 and the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 2) 2012-2013. These bills seek an appropriation authority from parliament for the additional expenditure of money from the consolidated revenue fund. The funding sought in these appropriations is consistent with, and already budgeted for in, the Mid-Year Economic and Fiscal Outlook.

These bills require passage to provide additional appropriation to the Department of Immigration and Citizenship. These bills address the increased costs of irregular maritime arrivals resulting from the higher rates of arrivals and the implementation of the recommendations of the Expert Panel on Asylum Seekers—the expert panel—including capital works and services for regional processing facilities on Nauru and Manus Island, Papua New Guinea. The total appropriation being sought through these two bills is $1,674,982,000.

Turning now to the Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 1) 2012-2013, the total appropriation being sought is a little over $1.4 billion. This includes $110.6 million for Houston report measures, including $92.043 million to increase the humanitarian program by an additional 6,250 places to 20,000 per annum from 2012-2013; $8.181 million to increase the family reunion stream of the permanent migration program by 4,000 places; and $10 million to fund capacity-building initiatives in regional countries. It also includes $1.296 billion to meet expenses arising from the management of higher levels of irregular maritime arrivals and the operational expenses associated with the implementation of the expert panel's recommendations to establish regional processing centres on Nauru and Manus Island. This includes a $186 million accrual from 2011-2012.

This is the only party that is committed to delivering a proper and sustainable regional solution through the implementation of the recommendations of the expert panel, which was led by Angus Houston. As I previously indicated, the funding sought in these appropriations is consistent with, and already budgeted for, in MYEFO. No-one should doubt the government's commitment to implementing the 22 recommendations of the expert panel to break the people smugglers' business model and to help stop people dying at sea. This suite of measures, as outlined in the panel's recommendations, is the only way we will begin to see a reduction in the rate of boat arrivals. That means, of course, immediate implementation of the regional processing on Nauru and Papua New Guinea, which we are doing swiftly and effectively. We already have almost 400 people on Nauru and transfers will begin shortly to Manus Island. Nauru will have a capacity of 1,500 beds. It currently has about 500 places. We expect to see 600 places in Papua New Guinea as work continues on those facilities.

As I referred to earlier, the government has also increased Australia's humanitarian intake to 20,000, providing increased resettlement options for people in need from priority regions in the Middle East, Africa and Asia. Last week I announced the make-up of that intake, targeting those most in need, especially vulnerable people in camps around the world. We are providing opportunities for vulnerable and displaced people to pursue safer resettlement options in Australia. We are telling desperate people that there is a better way than taking a dangerous boat journey—a better way as part of an orderly humanitarian program. The messages here are that taking a dangerous boat journey will provide no advantage, that there is no visa awaiting people on arrival, no speedy outcome and no special treatment. This tells the lie to the people smugglers' spin. In the meantime the cost of processing and accommodating asylum seekers is expensive, as it always has been, but the only way to reduce these costs is to have fewer people arriving by boat.

No-one should doubt our commitment to doing that, but it is something that we could do much more effectively with the implementation of the Malaysia arrangement. We know that those opposite so long stood in the way of offshore processing legislation, refusing to let the government implement its border protection policies, because they did not want the government to succeed. We know that the Malaysia agreement can indeed break the people smugglers' business model and it is time to allow it to be implemented. No-one can deny that the combination of regional processing on Nauru and Papua New Guinea, along with transfers to Malaysia, would stop the flow of boats and provide an ironclad deterrent.

There is still some way to go before we see the real effect of the policies the government has been implementing, and people smugglers will continue to test our resolve. But there can also be no doubt that we are starting to see positive, if only early, results. To date the government has facilitated a number of voluntary removals to Sri Lanka, with more than 70 people choosing not to engage Australia's protection obligations and instead return home. More returns are expected—further proof that people smugglers only sell lies and make false promises about what awaits people in Australia.

Debate adjourned.

Mr BOWEN (McMahon—Minister for Immigration and Citizenship) (16:57): I move:

That this bill be now read a second time.

This bill provides additional funding to the Department of Immigration and Citizenship for the requirements for departmental equity injections and requirements to create or acquire administered assets to discharge administered liabilities. The total appropriation being sought in Appropriation (Implementation of the Report of the Expert Panel on Asylum Seekers) Bill (No. 2) 2012-2013 is $267,980,000. The government will provide to the Department of Immigration and Citizenship $267,380,000 of administered assets and liabilities, funding in this bill for the Offshore Asylum Seeker Management program. This is to meet initial capital costs required to establish regional processing centres on Nauru and Manus Island, as recommended by the Expert Panel on Asylum Seekers.

I note that the re-establishment of offshore processing in these places has the support of the coalition. The government will also be providing the Department of Immigration and Citizenship with $600,000 of departmental equity injections, funding in this bill for the settlement services program. This is for the departmental costs associated with the implementation of the recommendation of the expert panel to increase humanitarian migration to 20,000 places.

These are vital elements that go to the implementation of a suite of measures that can break the people-smuggling trade and save lives at sea by preventing these dangerous boat journeys in the first place. We do want to remove the incentive for people to travel to Australia by boat, whether it is by providing more offshore refugee places, removing the special humanitarian program family reunion concessions for boat arrivals or transferring post-August 13 arrivals to Nauru and Manus Island.

The way in which this government has been implementing the expert panel's recommendations provides clear evidence of our determination to break the people smugglers' business model. This is only the beginning. Transfers continue to Nauru while Manus Island will shortly start receiving arrivals, and work is continuing on both islands to increase capacity. Of course, as we continue to implement more of the panel's recommendations, we will start to see a greater impact on reducing boat numbers. Should the opposition or the Greens party, for that matter, choose to stop hindering the government, they would support the Malaysia agreement—an agreement the expert panel acknowledged was the pathway to a truly regional and sustainable solution to irregular migration. I commend the bill to the House.

Debate adjourned.

Mr RIPOLL (Oxley—Parliamentary Secretary to the Treasurer) (17:01): I move:

That this bill be now read a second time.

Schedules 1, 2 and 3 of the bill amend the Banking Act 1959, the First Home Saver Accounts Act 2008 and the Life Insurance Act 1995. The changes reduce from seven years to three the period of inactivity before bank accounts and life insurance moneys are treated as unclaimed. Currently, authorised deposit taking institutions are required to transfer accounts to the Australian Securities and Investments Commission where there has not been a deposit or a withdrawal, other than bank fees, for seven years. There is a similar requirement for life insurers except that the seven-year period is from when an amount becomes payable, such as when a policy matures. To help reunite people with their unclaimed money, details of all unclaimed bank accounts and life insurance amounts are published on the ASIC website. People can reclaim these bank accounts and life insurance amounts at any time. However, currently no form of interest is paid when they are reclaimed. Under the amendments the inactive period will be shortened to three years and interest will be paid at a rate equivalent to consumer price index inflation from 1 July 2013. This will ensure that bank accounts and life insurance amounts reclaimed from ASIC maintain their real value—a very important amendment and a very good one for consumers.

Schedule 4 of this bill amends the Superannuation (Unclaimed Money and Lost Members) Act 1999 to change the circumstances in which small lost accounts and accounts of unidentifiable members are required to be transferred to the Commissioner of Taxation and to provide for the payment of CPI interest on unclaimed superannuation money. The first change relates to small lost accounts. The account balance threshold below which lost accounts are required to be transferred to the Australian Taxation Office will be increased from $200 to $2,000 where the account has been inactive for a period of five years or the member is uncontactable. The second change relates to the tiny proportion of superannuation accounts where the member is unidentifiable. These are accounts where the superannuation provider is satisfied that it will never be possible for the provider to pay an amount to the member—for example, where they are missing both the member's name and tax file number. The period of inactivity before which the accounts of unidentifiable members are required to be transferred to the ATO will also be reduced from five years to 12 months. These amounts represent only a tiny proportion of superannuation—in fact, less than 0.1 per cent.

Individuals can reclaim at any time superannuation accounts transferred to the ATO. However, no form of interest is currently paid when they are reclaimed. Under the new arrangements interest will accrue and be payable from 1 July 2013 on all superannuation accounts reclaimed from the ATO, further boosting an individual's retirement savings—again, a win for consumers. The ATO has a number of strategies in place to help reunite members with lost super accounts to help reduce the number of inactive and unnecessary accounts. ATO programs like SuperSeeker have helped to reunite about 1.9 million lost and unclaimed superannuation accounts worth $3.2 billion—that is $3.2 billion going back to ordinary people for their retirement savings. This was done with their owners during the 12 months to 30 June this year. This was the first time the amount of lost and unclaimed super has declined, after reaching a peak of almost $21 billion at 30 June 2011. By transferring more small lost accounts to the ATO and paying CPI interest, these accounts will not only be properly protected from being eroded from fees and charges but will also maintain their real value over time.

The Treasury estimates that, under the current rules, a 20-year-old with $1,000 in superannuation can unknowingly have their super savings eroded to just $418 after five years by a range of fees and deductions. Fees and insurance charges typically exceed average investment earnings, even for accounts with $2,000. For example, a 30-year-old with $2,000 can unknowingly have their super savings eroded to just $1,250 over the same five-year period. However, as a result of the new arrangements a 20-year-old with $1,000 currently inactive in super is expected to be able to claim $1,131 from the ATO after five years—a boost to their superannuation savings of around $700 compared with the current arrangements. This is a massive win for consumers and a proper way to deal with people's retirement savings. A 30-year-old with $2,000 is expected to be able to claim $2,263 from the ATO after five years—a boost to their superannuation savings of around $1,000 compared with the current arrangements.

These are good and sensible changes that help reunite consumers with their lost bank accounts and superannuation accounts. This also maintains the value of those accounts into the future. The new arrangements will also help reduce the number of superannuation accounts that have unidentifiable members by reducing the period of time for which a superannuation fund can hold the account of an unidentifiable member. This will encourage funds to collect sufficient information to identify members during the period when contributions are being made.

Schedule 5 of this bill amends the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 to streamline the processes around the administration and distribution of unclaimed moneys and properties under the Corporations Act.

Currently unclaimed property, including unclaimed money, is handled by the regulator, by ASIC, on behalf of the Commonwealth and deposited into the Companies and Unclaimed Monies Special Account on receipt, CUMSA. Under the amendments, unclaimed property will be recognised directly in the Commonwealth consolidated revenue fund upon receipt by ASIC. Owners of unclaimed property will be able to lodge claims for unclaimed property at any time, the same as with any accounts—so nothing there changes. In addition, owners of unclaimed property will for the first time be paid an interest component equal to CPI inflation for amounts reclaimed after 1 July 2013.

I can inform the House that the Ministerial Council for Corporations has been advised of these changes to the corporations legislation in accordance with the Corporations Agreement 2002. Full details of the measures in this bill are contained in the explanatory memorandum. These are good, sensible changes. I commend the bill to the House.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (17:08): I move:

That this bill be now read a second time.

The government was elected in 2007 with a commitment to bring fairness, balance, flexibility and simplicity to the Australian workplace relations system. Prior to the 2007 election, Labor released two detailed policies on workplace relations, including a clear plan about how we would move from Work Choices to Fair Work. The government have delivered on our commitments. Under the Fair Work Act and the government's economic policies, 16,000 enterprise agreements covering more than 2.2 million Australian employees have been approved. Around seven million Australians are currently protected from unfair dismissal, and more than 800,000 jobs have been created since this government was first elected at the end of 2007.

There have also been landmark achievements in particular sectors. The historic equal remuneration decision for workers in the social and community services, the SAC sector, awarded wage increases of between 23 and 45 per cent to social and community service workers in recognition of the fact that their work had been traditionally undervalued due to the predominantly female work force. We now have consistent protections for TCF workers across the national workplace relations system, and we have now implemented a road safety remuneration system to make sure there are real protections for truck drivers across Australia who would otherwise face economic pressures to drive dangerously long hours that put all Australian road users at risk.

The government has also delivered on its commitment to undertake a review of our Fair Work Act within two years of its full implementation. On 22 December 2011 I announced an independent panel of three experts to review the fair work legislation. The terms of reference for the review were wide ranging, encompassing an assessment as to whether the legislation was meeting its objectives and any areas for improvement. The consultative approach the government adopted during the development of the Fair Work Act was mirrored by the review panel, which issued a discussion paper, received over 250 written submissions and held many meetings and round tables with a large range of stakeholders.

The panel's report was approved by the Office of Best Practice Regulation. The panel concluded that the Fair Work Act is working well and is meeting its objectives, and the economic outcomes under the Fair Work Act have been favourable to Australia's continuing prosperity. The panel made 53 recommendations to government. Since receiving the panel's report I have been discussing the recommendations with employers and employer organisations, unions, Fair Work Australia and the Fair Work Ombudsman as well as state and territory governments. I have also held two round table discussions with small business representatives to discuss the panel's report and the government's proposed response as well as other workplace relations matters that are important to small business, like compliance, advice and superannuation. It has become obvious from these consultations that there is broad support for around a third of the recommendations. These recommendations are reflected in the bill I am introducing today. I will continue to work with stakeholders on the remaining recommendations, with a view to introducing further legislation in the new year.

The key elements of the Fair Work Amendment Bill include four main elements: one, changes to the unfair dismissal provisions to improve the integrity of the application and hearing process and to align the time frames for making unfair dismissal claims and general protections dismissal claims at 21 days; two, changes to the structure and operation of Fair Work Australia as recommended by the review panel and proposed by the president of Fair Work Australia; three, a process for determining the most suitable funds to be listed as default funds and modern awards that meet the principles in the model outlined, by and large, by the Productivity Commission in a way which is workable for employers and employees; and, four, other technical and clarifying amendments recommended by the review panel for which there is broad agreement amongst stakeholders.

I want to place on record my thanks to the members of the National Workplace Relations Consultative Council, who have endorsed the government's broad approach in responding to the review, and to the NWRCC members who have assisted the Department of Education, Employment and Workplace Relations and Treasury in reviewing this bill and providing technical feedback.

Turning to the first of the key changes around unfair dismissal, under the Fair Work Act around seven million Australians are protected from unfair dismissal, and we are proud of that fact in the government. We are proud that the review panel did not recommend wholesale changes to the unfair dismissal regime, because it reflects a balance between the interests of employees and the interests of employers. We are proud that small businesses have told us that the Small Business Fair Dismissal Code is working for them. The proceedings before Fair Work Australia are improving, and the Fair Work Ombudsman is working with them on information and compliance. On this basis, we are waiting for the opposition to confirm that they will not wind back unfair dismissal protections for hardworking Australians and their families to anything resembling what they implemented when last in office.

However, this bill does amend the unfair dismissals and general protections provisions, as recommended by the panel review. The amendments are to ensure the right of an employee to bring an unfair dismissal claim is better balanced against the right of an employee to ensure that they are only required to respond to applications that are genuine and to ensure that Fair Work Australia has the power to deal with unreasonable conduct in relation to a claim, including dismissing an application and additional powers to award costs in certain circumstances. In relation to improving applications, the government has announced that the independent review panel recommendation that additional information should be required to be provided in applications about the circumstance of the dismissal is supported, and we will work with Fair Work Australia to implement that recommendation.

This bill will also implement the independent review panel's recommendation that the time frames for lodging an unfair dismissal claim and a general protections claim involving a dismissal should be aligned at 21 days. This will ensure that dismissed employees make the right claim in the right jurisdiction, this will ensure that employees have an appropriate time frame to seek advice about a dismissal so they can make this choice in an informed way and this will ensure that employers will respond to one claim in respect of a dismissal—not an unfair dismissal claim and later a general protections claim.

The panel's recommendations relating to costs orders where a party to an unfair dismissal matter has caused another party to incur costs by an unreasonable act or omission are also reflected in this bill. This recommendation reflects the panel's concerns that a few, a very few, unscrupulous lawyers and agents may be encouraging dismissed employees to pursue unfair dismissal claims without merit on a no-win no-fee basis. This government believes in protecting workers from unfair dismissal but also acknowledges that from time to time some people will pursue unreasonable claims. In these circumstances, there is a need to strike a balance. These amendments will enable costs orders to be made against a person or their legal representative when they have unreasonably pursued a claim but, importantly, will not stop a party with a genuine claim from robustly pursuing it through the avenues available to them. Similarly, the bill will allow applications to be dismissed in certain circumstances, such as when the applicant, without any reasonable explanation or excuse, has failed to attend a hearing or comply with an order made by the commission or has failed to discontinue an application after a settlement agreement has been concluded.

Let me make it absolutely clear: these amendments are intended to provide cost consequences for applications without merit and for actions taken during proceedings that are unreasonable; however, they will still ensure that employees with a genuine claim can fully pursue a remedy for unfair dismissal. This is balanced and fair. During my consultations, small business representatives have been supportive of these recommendations. My feedback from employers is that both small businesses and larger businesses believe they will benefit from these amendments in terms of reducing vexatious or speculative claims.

The second part of this bill is about technical amendments. The bill will implement several technical and clarifying recommendations made by the review panel, including that, in line with a recent decision of the full bench of Fair Work Australia, opt-out clauses cannot be included in agreements, and that under this government statutory agreements cannot be made with a single employee. There are also technical amendments implementing the panel's recommendations in relation to the notification requirements for scope orders and what may be included in a notice of representative rights to employees. The bill provides clarity around how protected action ballots can be conducted, while preserving the existing strict requirements and processes that must be satisfied before protected industrial action can be taken. It confirms that an official from one union cannot act as a bargaining agent for an employee where that union does not have coverage. And it implements the panel's recommendations to vary modern awards.

The third set of changes concern Fair Work Australia. The government is proposing a number of changes to the structure and operation of Fair Work Australia. A number of these changes were recommended by the review panel and further changes were proposed by the President of Fair Work Australia and considered by the members of the NWRCC. First, the government will give effect to the panel's recommendation to change the name of Fair Work Australia. The new name will be the Fair Work Commission. There has been much debate about the appropriate name for the national workplace relations tribunal in recent times. The government considers 'Fair Work Commission' accurately reflects the functions of this body and is consistent with the establishment and role of the commission within the fair work system. In particular, the commission takes its functions and powers from the terms of the Fair Work Act.

The bill includes administrative changes recommended by the review panel such as allowing any presidential member to make stay orders, allowing acting commissioners to be appointed if required and providing for the Governor-General to appoint the general manager on the nomination of the president. This change brings the procedure for appointing the general manager into line with the appointment of a registrar of the Federal Court.

The bill also includes additional measures relating to the internal structure of the Fair Work Commission that the government considers will improve the operation and the integrity of the body. The measures include creating two statutory positions of vice-president. This will assist in attracting senior practitioners to the commission, a highly desirable outcome given the significance of the matters that the commission deals with, and will ensure assistance can be provided to the president in managing the work of the commission as required.

The bill also contains a clear and transparent process for handling complaints against members of the commission. It also contains amendments to better deal with the disclosure of conflicts of interest. There are a number of procedural amendments relating to the handling of matters before Fair Work Australia such as allowing certain matters to be referred to a full bench when it is in the public interest to do so. These reflect terms used in previous workplace legislation and are designed to ensure that the commission can be responsive to the interests of the parties and respond effectively and efficiently to certain matters when required.

A further part of this bill concerns default superannuation funds and modern awards. As I announced on 15 October this year, this bill will include measures reflecting the government's response to the Productivity Commission's inquiry into default superannuation funds in modern awards. That inquiry delivers on the government's 2010 election commitment to review this important issue, and I thank the Productivity Commission on behalf of the government for their comprehensive engagement with this very important subject.

The government wants to improve the operation of the superannuation system to boost the retirement incomes of Australians into the future. Superannuation is a critical part of the industrial, economic and social safety net of our country. It provides a living wage for Australians in their retirement, allowing Australians to retire in comfort and with dignity. The default fund system is particularly important because it is relied upon by all employees who do not make active choices over their superannuation fund and are paid under an award. This is estimated to be a large proportion of all Australia employees. As noted in the Productivity Commission's report:

Over the eight years to 2011, default funds … averaged an after-tax rate of return of 6.4 per cent, compared with 5.5 per cent for non-default funds.

Notwithstanding this remarkable outcome, the government agrees with the Productivity Commission's recommendation that there should be increased transparency and contestability in the process of determining which funds should be listed as default funds in modern awards. The government also agrees with the Productivity Commission's view that the overarching consideration in choosing superannuation funds as default funds in modern awards should be the best interests of the employees whose hard-earned wages will be contributed to that fund.

We agree with the Productivity Commissioner, that the review should be conducted in an open and transparent way against clear and objective criteria. We agree that the process should be open to all funds with a generic MySuper product and that the analysis of the funds against a statutory criteria should be conducted by an expert panel within the Fair Work Commission, comprising experts with experience in superannuation, finance and investment management, as well as Fair Work Commission members.

The bill I introduce today includes measures to implement all of these recommendations as part of a new system for the selection of default funds in modern awards. Under the provisions outlined in this bill, all funds with a generic MySuper product will be able to apply to the Fair Work Commission for selection as a default fund on an equal basis, which will bring greater contestability to the system.

We will create an expert panel within the Fair Work Commission to assess funds on the basis of clear and objective legislative criteria. The panel will be made up of part-time members with suitable experience in superannuation, finance or investment management, as well as members of the Fair Work Commission. The government proposes the expert panel would also subsume the existing minimum wage panel. This will provide a broader pool of qualified experts to assist the work of the Fair Work Commission while ensuring that experts with appropriate expertise are used for particular functions. The criteria against which funds will be assessed are largely those proposed by the Productivity Commission. The expert panel will consider the applications in any submissions in an open and transparent process. The panel will determine which funds meet the criteria and will publish a list of funds that do so.

However, we acknowledge that awards must be simple and accessible for those who use them every day. It is not simple for an employer to choose a fund from a large generic list of funds with no indication about whether a particular fund is more suited to their industry or workforce than another. Employees will also want reassurance that default funds used for their contributions most appropriately reflect their particular characteristics and needs as workers in a particular industry. That is why the government has decided that a full bench of the commission will determine which particular funds from the expert panel's list are best suited to each modern award.

The best interests of employees covered by each particular award will still be the overriding consideration. The full bench will also do this task in an open and transparent way. The government proposes that each modern award could include at least two, but no more than 10, default funds, unless the commission is satisfied there are particular circumstances relating to a range of occupations covered by the award to warrant the inclusion of more than 10 funds.

The government has departed from the Productivity Commission's recommendations in this respect to ensure that each modern award remains simple, relevant and workable for the employers and employees in each particular industry each award covers. The process will occur every four years, in line with the four-year review of modern awards commencing in 2014. The government has adopted this approach as it provides the greatest benefits to Australian workers for the long term.

This approach will ensure that default funds listed in modern awards are the best performing MySuper funds, and modern awards continue to be simple and stable documents that best meet the needs of employers and employees covered by them.

In conclusion, this bill represents another important example of the government's ongoing commitment to provide a balanced and effective workplace relations system and a superannuation system that operates to maximise the retirement incomes of Australian workers. The bill follows extensive consultation on policy questions and technical detail, with many stakeholders, in particular members of the superannuation industry and members of the National Workplace Relations Consultative Council and their technical advisers through the committee on industrial legislation.

However, this is not the last step. I am committed to continuing to work with all stakeholders on making appropriate amendments to the Fair Work Act where there is a clear policy justification and where they reflect the government's clear policy frameworks. I and the government retain an open mind on all remaining recommendations from the Fair Work Act Review Panel and none of them has been ruled in or out. I note the opposition have said they support the overwhelming majority of the panel's recommendations. Given this bill reflects the non-contentious aspects of the panel's recommendations, including measures to improve the operations of Fair Work Australia and delivers an improved process for choosing default funds, default superannuation funds and modern awards I trust the opposition will support the bill and assist its passage through the parliament. I commend the bill to the House.

Debate adjourned.

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (17:45): I have had the opportunity to speak to members interested in this message in the chamber. The member for Lyne has indicated that he sees a link between amendment (9) and amendment (13). The government is proposing to disagree to amendment (9). The member for Melbourne also wishes to speak on amendment (9). I think it would suit the convenience of the House if I dealt with amendments (1) to (8), (10) to (12), and (14) to (27) first. I think there is support for that. That is certainly the view expressed to me by the opposition. We can then deal with amendments (9) and (13) separately. There will be debate on those. I move:

That the amendments be considered immediately.

Question agreed to.

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (17:47): I would like to indicate to the House that the government proposes that amendments (1) to (8), (10) to (12), and (14) to (27) be agreed to, that amendment (9) be disagreed to and that amendment (13) be subsequently agreed to. I suggest therefore, to suit the convenience of the House, that we first consider amendments (1) to (8), (10) to (12), and (14) to (27) and, when those amendments have been disposed of, to consider amendments (9) and subsequently (13). I move:

That Senate amendments (1) to (8), (10) to (12), and (14) to (27) be agreed to.

Question agreed to.

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (17:47): I move

That Senate amendment (9) be disagreed to.

Mr STEPHEN SMITH: Last night the Senate passed a number of amendments to the Defence Trade Controls Bill 2011 which the Senate has passed back to the House for concurrence via this message. As we have seen, there are 27 amendments to the bill. Of these, 24 are government amendments, two were moved by the Australian Greens and passed with government support, and one was moved by the opposition.

The government supports the 26 amendments which it supported in the Senate and opposes amendment (9) for reasons which I will outline subsequently. The bill was debated and passed, together with the Customs Amendment (Military End-Use) Bill 2011, which has also been amended by the Senate. The government also supports this amendment and will deal with that bill subsequently.

The Australia-US Defence Trade Cooperation Treaty was signed in September 2007. The treaty will improve two-way trade between Australia and the US in Defence goods, services and technology by eliminating the need for export licences for members of an approved community. The bill also introduces strengthened export control measures by introducing protections on the intangible transfer overseas of sensitive technology on the Defence and Strategic Goods List, the DSGL, such as supply by electronic means as well as controls on brokering the supply of listed sensitive Defence goods and technology. This will eliminate identified gaps in Australia's export controls system, align Australia with accepted international best practice and support international efforts to prevent proliferation of sensitive technology.

In September 2008, the Joint Standing Committee on Treaties recommended that binding treaty action be taken. In September 2010, the US Senate recommended that the treaty be ratified. Defence commenced consultations on the proposed legislation with public information events at major cities around Australia in late 2010. Defence consulted with stakeholders, including the university sector, as early as May 2011 before a draft bill was released for public consultation in July 2011. Industry provided detailed comments, including through the Defence industry advisory panel, chaired by Mr Ken Peacock.

The Defence Trade Controls Bill was passed by the House in November last year. On 10 November last year the bill was referred to the Senate Scrutiny of Bills Committee and the Senate Standing Committee on Foreign Affairs, Defence and Trade for further consideration. The preliminary report of the Senate Standing Committee on Foreign Affairs, Defence and Trade, tabled in the Senate on 15 August this year, recognised the importance of the legislation and generally supported the intention of the bill. The committee recommended Defence conduct further consultations with the university and research sectors on the impact of controls on intangible transfers.

At the time, I thanked the committee for identifying areas where the bill could be improved by further consultation. Further consultations were necessary to ensure the bill did not include any unintended consequences that might impact adversely on the university and research sectors. I asked Mr Peacock and the Chief Defence Scientist, Dr Alex Zelinsky, to conduct those further consultations.

In mid-September I wrote to the committee outlining the proposals put forward by Mr Peacock and Dr Zelinsky and indicated in-principle support by the government. The government also supported the round table process chaired by the Chief Scientist, Professor Ian Chubb, the former Vice-Chancellor of the Australian National University.

The proposals put forward by Mr Peacock and Dr Zelinsky were considered by the Chief Scientist's round table process and, as agreed by participants in the round table process, have been into the bill as government amendments. The Chief Scientist made an important contribution, as did representatives of the university and research sectors who worked very constructively with him. While some individual participants maintained specific concerns, the round table process concluded on 21 September this year with an agreed way forward on a range of amendments to the bill. The committee—Mr Peacock, the Chief Defence Scientist, the Chief Scientist and the university and research sector—made significant recommendations which ensured an outcome that will protect our national security interest while responding to university and research sector concerns.

On 10 October, the government circulated proposed amendments to the legislation which reflected the agreed outcomes of the Chief Scientist's round table. The Senate last night voted in support of all these amendments as well as additional amendments put forward by the other parties in the Senate, as I have described. The government has taken up all of the recommendations put forward by Mr Peacock and by the Chief Scientist. The government also supported additional amendments put forward by other parties in the Senate. These amendments set a minimum time frame of two years for the steering group, put the terms of reference for the steering group into the legislation, name the Chief Scientist as the chair of the steering group and task the steering group to advise ministers on whether Australia's export control arrangements are not more restrictive than US regulations on university activities. (Extension of time granted)

The government is not able to support one amendment passed by the Senate last night which, in the government's view, undermines the intent of the legislation and would significantly weaken efforts to strengthen Australia's export controls. Amendment (9) relates to a proposed exemption for the outcomes of fundamental research. This does not reflect the agreed way forward of the Chief Scientist's round table. The amendment would effectively exempt from the bill anyone who claims to be conducting fundamental research. This would mean a far broader effect than that caused by the US exception for fundamental research, which only applies to research outputs. Research inputs are subject to US export controls; there is no US exception that allows controlled technology to be exported from the US for fundamental research without US government authorisation.

For these reasons the government opposes amendment (9) and seeks the support of the House to disagree to amendment (9).

Mr ROBERT (Fadden) (17:54): To assist the House, I will put some brief comments to indicate why the coalition will be supporting the minister in his opposition to amendment (9).

On the subject of history: it is important to note that Prime Minister Howard signed the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation in September 2007 and that the Rudd government signed off on the subsequent implementation arrangements on 14 March 2008. Furthermore, the US Congress passed implementing legislation in September 2008, and the treaty received ratification consent by the US Senate on 29 September 2010. For two years they have been waiting for us to reach a point of decision.

This bill creates provisions for the establishment and management of the Australian defence industry in exporting goods and services to the US defence industry. Currently, Australian companies which need access to defence items or technology from the United States must seek an export licence from the US Department of State in accordance with the International Traffic in Arms Regulations: ITARS. The treaty removes the requirement for these licences to be obtained. The existing control regime has a focus on the export of physical goods, but the growth of technology and the provision of services over the intranet or through brokers is currently not being captured.

We firmly believe that there was insufficient consultation on this bill and on the resulting regulations—especially with the university sector, which will bear the full brunt of the legislation. The reaction has been mixed. Many concerns have been raised over the role of the US Department of State in approving Australian companies or individuals as trusted members of the Australian community. This process, in gaining such approval, is seen in some quarters as cumbersome, costly and time-consuming. Coupled with these concerns is the lack of confidence within the defence industry in the Australian defence controls office in making consistent decisions on what strategic goods can or cannot be exported. What is being proposed by the government remains unacceptable to the university sector, for reasons that have been made clear in submissions by Universities Australia and the University of Sydney.

There continues to be a fundamental difference of opinion between Defence and the sector about the scope of export controls in the US pertaining to research conducted in universities. The outcomes of the Chief Scientist's round table process are not sufficient because they do not guarantee that the university sector's key concerns about the scope of research activities to be controlled by the bill will be addressed. The government is asking the Senate, the Australian public research community and the House to accept its assurances that the government amendments will address unintended or unforseen consequences arising from the proposed trials. We are a little short of accepting the government's assurances on many issues. Given the complexity of the bill and the clear potential for negative impact on the public good—and, in particular, on the research sector—the Senate committee report reviewed the reforms proposed by the government and acknowledged that they were far from ideal. Both Universities Australia and the University of Sydney have suggested that the critical issue of Defence's controls of intangible supplies pertaining to university research, compared with the arrangements currently in place in the US, remain unresolved. At the very least we urge the government to ensure that Australia's system for the control of intangible supplies is no broader or more stringent in scope than the equivalent arrangements currently in place in the US and that they are in accord with the legal advice from White & Case.

We introduced amendments in the Senate to provide for the exclusion of research education information to be published in the public domain. The government has indicated to us in the strongest possible terms that our amendments will render the bill ineffective. The government's reasoning on this has been largely unconvincing; however, there is a time when it is necessary to err on the side of caution. This is one such time, given the serious subject matter encompassed by this bill and given the fact that the minister knows that I take bipartisan support on military operations and military engagement seriously. That bipartisanship means that I err on the side of caution if sufficient reasons have been raised that there could be an issue. We have been assured that the two-year transition period—it is in the Greens amendment, to their credit—which has been agreed to will give everyone breathing space with no penalties to be provided. The transitional period which the government has agreed to will enable all stakeholders to acquire an understanding of the bill's practical application. If it is proven to be unsatisfactory in any aspect, the bill can be amended at a later date, and I will champion its amendment if indeed the reassurances prove insufficient.

Mr MURPHY (Reid) (17:59): I wish to make some comments about the amended Defence Trade Controls Bill, which has generated concern among a number of very respected scientific research academics that I have consulted with. This bill in part seeks to implement new controls on intangible transfers—that is, transfers of information—relating to a wide variety of technologies with both military and civilian applications. The academics are concerned that the legislation, including the amendments, appears to produce the unintended consequence of significantly curtailing innovative research conducted in academic institutions.

It is clear that the Defence Trade Controls Bill does not intend to place undue restrictions on academic researchers or to control activities conducted in the course of normal academic research or education. However, the academics I have spoken with are very concerned that the original bill would not adequately protect against this possibility and would require amendment in order to protect the academic sector. I am aware of what happened in the Senate yesterday and I listened to the minister today.

At issue is the scope of impact of the legislation and its potential to subject to defence controls ordinary research activities across a range of fields. In particular, I believe it is sensible to exclude from controls basic and applied academic research conducted with the intent of generating knowledge and providing for the public good. Such research poses little risk to national security. It is not related to defence, munitions or other arms but, rather, the development of new technologies that support future industry and innovation. By contrast, potentially stifling this research poses significant risk for Australia's economic prosperity.

The shortcomings of this legislation's regulatory impact statement were highlighted in the Senate FADT Committee's preliminary report. Following the committee's preliminary report the academic sector engaged in consultations with Defence chaired by the Chief Scientist, Professor Ian Chubb. I am pleased that the consultations have resolved many of the concerns. The Senate committee's final report makes clear that this bill should not put universities in Australia at a disadvantage relative to their international counterparts.

Submission 11B to the Senate FADT Committee provides legal advice that the legislation presented to it would put in place stringent controls on public-good applied research that do not appear in comparable legislation in the United States, thus contradicting the committee's report. I understand that the Chief Scientist has other legal advice relating to the comparative disadvantage the legislation would cause for Australian academics. However, this evidence has not been part of the public record relating to this legislation or the Senate committee's inquiry. The Chief Scientist has publicly recommended that any potential negative impacts would be assessed and mitigated during the two-year trial period associated with the legislation. I am happy that the legislation now provides for this. I am convinced that Professor Chubb will seek positive outcomes for the sector during this period.

However, given the importance of this legislation and the potential for negative unintended consequences, the scientific research academics I have consulted with do not believe we can rely on post-legislative corrections to this bill to resolve the outstanding issue of comparative disadvantage. Under these circumstances, I trust that the legislation ensures that (1) it delivers on the post-legislation transitional arrangements that have been recommended by the Chief Scientist following round table discussions with Defence, the university sector and other stakeholders; (2) Australian university researchers are not placed at a disadvantage regarding export controls when compared with their colleagues in the United States; and (3) the Senate Foreign Affairs, Defence and Trade Legislation Committee plays a role in scrutinising the implementation of the export control regime.

The government believes we should not place undue restrictions on academic researchers or control activities conducted in the course of normal academic research or education. I want to put on the record here tonight that I trust that the two-year trial period provides anxious scientific research academics with a degree of comfort in this regard.

Mr BANDT (Melbourne) (18:04): I will speak to amendment (9) and amendment (13), which is coming up shortly, for the convenience of the House and to avoid having to repeat my remarks. Everyone who says that they support academic freedom and that they support Australia's independence in this Asian century will very soon have a chance to vote for it, because this bill, if it gets through in the form proposed by the government, will hamper research, hamper academic freedom and hamper our independence. Even worse, we are about to be asked to strip out of this bill a key protection that was inserted into it after the coalition moved an amendment that the Greens supported in the Senate.

This bill has a very wide scope. It catches research that is being conducted in connection with a list known as the defence and strategic goods list. It can be equipment, the nature of the research or the people with whom one is coming into contact that can potentially overlap with this list. This list has an index of 79 pages and is in itself a 380-page technical document. If your research overlaps with something on that list, you are caught by the bill. If that is the case, it is not simply that there are a few hoops you have to jump through. If your research is caught by this bill and you do not comply with the provisions of it, you face criminal penalties as a researcher in this country. You have to ask for a permit to have your research published.

It also affects the basic conduct of research itself—your communications with people in another country. It will affect you when people come from another country to visit you. If you collaborate with an institute in Asia, you will be caught by this. You are subject to criminal penalties if you do not comply with the requirements of this bill, which themselves are only understandable by reference to a 380-page technical document.

This is not some abstract point; this is going to affect research done all the time by people in this country. As the University of Sydney told the Senate, it will affect it will affect quantum physics research. One academic there said that this would be an onerous regulatory regime requiring allocation of the significant resources to monitoring and managing the requirements that would otherwise be devoted to research. He said:

Were this legislation in place at the time I was brought to Australia from the US to build a research effort in this area, I may not have come, given the potential difficulties it could cause.

This is not someone who is doing research, writing a blueprint for some weapon that they are about to send to another country; they are doing research in quantum physics. The government may say that this will not affect basic research, that it is only research done with an intended purpose. Having spent some time talking to researchers over many years, I know that so much of the research is done now in connection with a potential application and inventions like Wi-Fi come when you are researching something completely different, as CSIRO knows all too well. It is absolutely correct when the University of Sydney says that this will affect potentially melanoma research. One research says:

There would be a chilling effect on participation by foreigners in our biomedical research, and the probability that important research in human biology and medicine might never be done. There would be increased compliance costs, with resulting reduced effectiveness of Commonwealth research infrastructure funding, reduced effectiveness of private funding to independent research institutes, and slowing of research. In the health research sector it has been robustly demonstrated that investment saves lives and increases welfare, so a reduction of investment through increased costs, or non-approval of research, will have a real and potentially quantifiable cost in lives and human welfare.

And they tell us it will have an effect with respect to infectious diseases. Not only is that a laborious process of identifying whether or not you are caught by this act by reference to another document— (Extension of time granted)

Mr Robert: Keep it short.

Mr BANDT: I am told to keep it short by the shadow minister, who is asking me to not defend the amendment moved by the coalition in the Senate. This is incredibly important for the conduct of academics in Australia and their research. One of their main criticisms has been that this has been rushed through, some say to coincide with the future visit from the US Secretary of State. There has been complaint after complaint about how quickly this process has been pushed through this parliament, and the fact that it took the Greens in the Senate to get the two-year review that some on the government benches are relying on to now support the passage of the bill suggests that this bill had problems in it from the start. Of course, the government to their credit have acknowledged that there are problems and worked to find some solutions, but those solutions have not been found because we now still have at the last minute, just today, Universities Australia saying to this place that the Senate's decision—that is, the passage of the coalition and Greens amendment:

… to match the US exclusion from fundamental research is an important step in ensuring a level playing field for export controls. Universities Australia calls upon the House of Representatives to give this serious consideration, as the Senate has done.

The Society of University Lawyers tells us that there is a real likelihood that the bill as currently drafted may do more harm than the risks it seeks to address, and they seek the support of this place for changes. The National Tertiary Education Union says they are alarmed at the inclusion of an amendment which, if passed into law, would create a criminal offence for the publication of certain material related to dual use technologies. So here we have being rushed through a bill in which, at the last minute, the universities and the academics are pleading with us to include some basic protection for research that is not intended to be caught by this. I think everyone in this House would agree that national security is important and that there should be restrictions, as suggested in the Senate, on providing a blueprint for some kind of weapon to someone who is an enemy of this country. If we are really concerned about that, perhaps we should be looking at what we are doing with our potentially deadly uranium and where, after second and third countries, that might find its way and into whose hands.

If it was simply a bill about dealing with that, that would be one thing, but it is not about dealing with that. The government and the opposition know it, which is why there has been a scramble to find a solution. What we know, because the experts and the people who are going to be affected by this are telling us very clearly, is that if this passes we have not fixed the problem. In fact, we are now introducing a potentially chilling regime into research in Australia and we are doing it quickly when there is absolutely no need to do it quickly and there is every need to give our researchers more time so that we can come up with a solution.

I hear the government's point that the amendment which provides the exemption is broadly drafted. The Greens moved a different kind of amendment in the Senate which was unsuccessful but which provided a defence for academics, rather than an exemption, a defence they were able to rely on to avoid prosecution. That was unsuccessful, but in the absence of that defence we need this amendment to remain and we need this protection to apply. Otherwise we are about, for the first time, to introduce criminal sanctions on our researchers at a time when they are telling us, 'You do this and it will affect the biomedical research that we do, it will affect the research into physics that we do, it will affect the research into infectious diseases that we do.' It is up to us in this place to listen to them and to heed the last minute plea of Universities Australia that we do what the Senate do—that is, maintain Australia's independence and maintain the freedom of our researchers to conduct their own research without fear that they may end up in jail.

Mr OAKESHOTT (Lyne) (18:15): I support the words of the member for Melbourne. I ask, hoping it is the view of colleagues around me as well, for reconsideration by both the major parties in this chamber of supporting what looked to be an eminently sensible amendment, approved by the Senate yesterday, moved by Senator Johnston of the Liberal Party and supported by the Greens. But here in this chamber today, 24 hours later, we have the Liberal and National parties opposing the motion they themselves successfully moved in the Senate. I ask this chamber: what on earth has happened in the last 24 hours; who has talked to whom to force that change of position?

I would ask everyone to look at proposed section 9A. Od section 9A. On paper, you will see a sensible amendment that asks for nothing more than the same standards of access and exemptions for Australian researchers that apply to US researchers. What on earth is this chamber doing voting against equity for Australian researchers with their US counterparts? Why on earth, in our sovereign interests, would we be voting against that? That is what I ask both the Minister for Defence and the shadow minister for defence. I also invite the minister for education and the shadow minister for education to come down and participate in this debate to explain why bipartisanship on military affairs matters more than bipartisanship on education affairs in Australia's sovereign interests.

We are two days into the so-called Asian century. I have heard lots of talk about the importance of education and how partnerships with neighbouring countries in the Asia-Pacific are going to matter and will grow over time. This bill is the first action that we as a parliament have taken following the release of Ken Henry's work on Australia in the Asian century. This is a step backwards for those partnerships with other countries rather than a step forward based on the principles of open science and research, and partnerships and collaborations with neighbouring countries and institutions. This is the handing-over of command and control of the research sector to the minister at the table, the Minister for Defence—and, whilst I am sure that is not the intent, that is not the way it is being delivered in the UK and it is not the way it is being delivered in the US. I accept the need and the want for global agreements in this area, but we have handed over delivery of this to the Defence portfolio and saying Australian research in Australian education institutions is secondary to the wants and needs of Defence. We are entering McCarthyist territory if we accept that. It is extraordinary to see a minister being allowed to do that in a cabinet that says education matters.

I think it is telling that, in the last 24 hours, we have gone from seeing the Liberal Party, with the Greens, get this proposed section 9A approved in the Senate yesterday, for good and sensible reasons, to seeing the Liberal and National parties opposing it in this House today. I ask: what is going on? And I do not like what I think is the answer. It is of great concern who has got to whom over the last 24 hours.

I also put to bed the notion that this is just some University of Sydney issue, which is the pitch that has been made to me and others. I have emails from the Australian National University. I have emails from the University of Technology, Sydney. Universities Australia has today come out and said that what happened in the Senate last night was sensible and something that deserved this chamber's support. (Extension of time granted)I cannot understand why anyone would argue against what was approved in the Senate last night. If it is so broadly drafted that it means nothing, then so what? Leave it in.

The fact that we have a minister approving 26 amendments but only fighting one and we have a Liberal Party approving this in the Senate yesterday but now going against it in the Reps says that there is a dirty little story about section 9A that needs to be told by both parties. It is at the expense of the education sector in Australia. I ask both parties to stand up and explain exactly what the problem is with this proposed section 9A. It is in defence of open research and science.

I also want to raise the issue of proposed section 14A, which is the second issue of critical concern that remains in this bill and which was a late government amendment. I was not going to make an issue of that if coalition support for section 9A in the Senate was maintained in this House, but it looks like there is bipartisanship on removing 9A. That brings 14A into play, and what that says is quite extraordinary for the research sector in Australian education today. It says that, if any researcher—even those with good intentions and working in good faith—publishes what has to date been open scientific research for the public good, it is a criminal offence.

The McCarthyist intent may be honourable, but the delivery through this legislation is dangerous. It is jeopardising our commitment to a research sector in Australia that I would have thought is important to all of us in the many fields that we deal with in this chamber, from food and fibre production all the way through to the medical and health sciences. The kinds of science that are covered by this Defence Trade Controls Bill are innovation advancing public health, improving agriculture, mining and manufacturing, and supporting Australia's civilian innovation sector. That is because this research sometimes also has military applications. Open scientific research is, however, low or no risk in respect of military applications. For that reason, why on earth are we leaving that exposed, and why on earth are we therefore including a criminal offence for a researcher in that space?

I express my deepest want: for the minister, the shadow minister and the carriers of the education portfolios on both sides to have another look at this. Those two areas in particular should not pass in the form that they are in. We should be supporting what the Liberal Party put up in the Senate yesterday and had the potential to get through this chamber today. I find it extraordinary that they have chosen for some reason today to fold their cards. I will not. I will oppose this on behalf of the education sector of Australia, and I ask the shadow minister at the table to talk to his colleagues. They might get a win if they have another look at this.

Mr CRAIG THOMSON (Dobell) (18:23): I find it absolutely extraordinary that the Labor Party, in weighing up the choice between military and education interests, are putting military interests in front of educational interests. It is absolutely extraordinary that we find this situation—particularly from the government, who have prided themselves on the many good things that they have done in terms of education. A choice has been put there, a choice that they did not need to make—by adopting clause 9A they would get the outcome that they need—but they have decided to make a choice between education and military interests, and they have gone with military interests. I find that, on one hand, extraordinary.

I find it equally mind-blowing that the coalition can see the problems in the Defence Trade Controls Bill 2011 and, quite correctly, moved an amendment less than 24 hours ago, but 24 hours later they are actually going to oppose their own amendment here in this place. What is happening in this place? It is unprecedented that we are seeing this type of approach in relation to what should be bipartisan interests in making sure that Australia is a smart country, that we are giving every opportunity for researchers, rather than curtailing it.

What I think is most disappointing in this legislation is that, if this amendment is not passed, if we disallow what the Senate quite rightly put last night, we are going to end up with Australian researchers being treated in an inferior way to US researchers. I thought that in this country we were well beyond dipping the hat in colonial style to our partners, that we were a more mature country than that, that we had reached the stage where we could actually have partnerships on an equal footing, but apparently that is not the case. Apparently equal footing is something that the two major parties are going to oppose here in a bipartisan approach. That is absolutely extraordinary.

This legislation is complex, but one thing that almost every speaker in the Senate from both the Labor side and the coalition side complained about in this debate was that there was not enough consultation, that the matters had been rushed and that there were problems in relation to a whole range of proposals with this legislation, which is why the minister is here today making and supporting 26 amendments. But one of the most crucial amendments, an amendment that would have seen Australian researchers treated in the same way as those in the US, for some reason is being opposed.

In this country, under this regime, we are taking a totally different approach to that of the US or that of the UK. We are rushing through legislation. The great hope that both parties have said we have here—and I commend the contribution of the member for Reid, except that he is accepting that corrections can be made to this legislation in the two-year period afterwards. The history of this legislation is that it has been through Senate committees, where there were complaints about the way in which consultation had taken place—that it had been rushed. We are having it rushed into the Senate. We are having it rushed through the House of Representatives. For what reason? To disadvantage Australian researchers.

Surely, in this piece of legislation, the benefit of the doubt must go to the researchers. This amendment put forward by the coalition is in almost identical terms to that in the United States, so, if it were passed, we would see Australian researchers having the same provisions, the same issues, that they have in the United States. Instead, what we are doing is making researchers fear criminal sanctions, with up to 10 years in jail. The way both parties have approached this piece of legislation is a disgrace, and it does no credit to this House that we are going to end up where we are going to end up today.

Mr WINDSOR (New England) (18:28): I join with the other crossbenchers to express some concern about the rush that is occurring within this building today. I will make a suggestion to the minister in a minute and maybe the shadow minister will be interested to hear it as well. This is one of the few occasions in my parliamentary career in which I have seen this sort of activity occur. I saw it when the US free trade agreement was being debated. At that time, there were a whole range of side deals for a whole range of reasons outside the necessary interests of the Australian community. I reflected at that time that there were very real concerns about the way in which that particular deal was put together. I appreciate all the pressures in terms of the diplomacy et cetera and America being a friend—all of those things. But I think that if people were to go back and have a close look at the US free trade agreement and the implications that it has had and will have in certain areas—particularly in terms of pharmaceuticals and other products—as the years unwind, they would see reasons to slow this process down to give people a real look at what is actually going on here.

What has happened in the last 24 hours? I do not want to reiterate what previous speakers have said, but something has happened. The minister and particularly the shadow minister need to explain what has happened. What happened such that the position of the Liberal Party now is different to what it was 24 hours ago? People need to understand that.

I would urge the minister to take my next point on board. I suggest, Minister, that it might be appropriate to adjourn this debate and let some fresh air drift around on this issue so that people can better get their heads around it. The bill can be reintroduced, if required, when parliament resumes in a few weeks time. That would give people in the research industry, such as those at universities, more time. These people are genuinely concerned. I have had any number of emails, some particularly related to agriculture and agricultural research, an area that none of would think would be implicated in terms of relationships with the United States or defence—and during the striking of some of the free trade agreements over time most of us did not think that they would be implicated, either. The concerns that some people may have had were brushed aside, with people saying, 'No, that is not the intent.' But as time has passed it has become quite clear what the intent was.

The community needs to know how intentions have changed in the last 24 hours, and particularly how the positions that the Liberal Party, the National Party and the Greens took in the Senate have changed compared to what is happening now. I suggest to the minister and to the government that it may be in their interests and, more importantly, the interests of this debate that the debate be adjourned until we return in a couple of weeks time for the final week of parliament. I would like the minister to explain—and perhaps the shadow minister can as well—why that cannot happen. Why can't there be an adjournment of this debate until the parliament returns?

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (18:33): Let me go through some of the technical reasons why it does not make sense for this House to do anything other than to support the government's recommendation, which is to not adopt amendment (9) contained in the message from the Senate to insert a new section, proposed section 9A. Then I will respond to some of the comments from the floor.

It is worth bearing in mind, as I said in general terms in my earlier remarks, that the government, in response to the preliminary report from the Senate committee, asked Mr Peacock, the Chief Defence Scientist and the Chief Scientist to engage in consultations and a roundtable. Every one of the recommendations made at that roundtable have been adopted by the government, presented to the Senate and agreed to by the Senate. They are supported by the government on the floor of the chamber today. The suggestion that this has all been done in a great rush is, frankly, hyperbole and overegging it.

The Parliamentary Joint Standing Committee on Treaties recommended more than two years ago that legislation be brought into this parliament ratifying the treaty between the United States and Australia for trade in defence. Everyone at the time recognised that that would open up enormous possibilities for Australian industry, Australian defence industry and Australian education and research. It would open up enormous possibilities, because it means that you would not have to get individual export approval for every access that an Australian company might get to a US foreign material sale so far as defence is concerned.

I know that members have been focusing on the narrow issue of national security considerations in defence export areas, both in terms of the Australian context and in terms of the United States context. But let us just pause and remember for one moment that this treaty has been around for four or five years. The Parliamentary Joint Standing Committee on Treaties recommended ratification. The United States Senate effected ratification nearly two years ago to this day. A draft bill was put out for consultation with interested parties as early as May of 2011. When the preliminary report from the Senate came down earlier this year, I asked Mr Peacock, the Chief Defence Scientist and the Chief Scientist, Mr Chubb, to engage in consultations to address whatever reasonable concerns were expressed at that stage by the university and the research sector. Ever one of the recommendations adopted by the roundtable that was chaired by Professor Chubb, the Chief Scientist who used to be the well-respected vice-chancellor at ANU and who from memory used to chair the G8, has been adopted by the Senate and recommended by me for adoption by the House today.

Indeed, on 11 October, Universities Australia put out a press release saying how pleased they were with the fact that all of those things had been effected. Proposed amendment (9) in the message from the Senate, which I am saying that we should not adopt, was not part of these proposals.

It is a new proposal, found in the Senate. It is not part of these proposals.

On 11 October, Universities Australia, priding itself as the peak body representing Australia's 39 universities, said that they strongly supported those recommendations, all of which have been adopted in the Senate and recommended for adoption here. Today, and this is not said critically, they put out a press release saying that the House should give 'serious consideration, as the Senate has done,' to the amendment in question. I have done that and I have come to the conclusion that to do that would undermine, fundamentally, the basic structure of the bill and would not meet the standards required to ratify the treaty. Also, it goes further than is required to meet the balance between the national security and defence export requirements and freedom of academic research and freedom of research.

The adoption of amendment (9) would fundamentally undermine the fabric of the legislation. Today, Universities Australia said that we should give serious consideration to this issue and that:

The principle that Australian researchers are not disadvantaged compared to other countries will be embedded and refined through the two year pilot and transition period.

One of the strengths of the amendments circulated by the government, adopted by the Senate and presented here, is that the transition phase will allow all of those concerns to be observed, monitored and refined, if and when required. We have a transition period of two years, we have a steering group of industry, research and government representatives, chaired by the Chief Scientist. This group will consider the effect of the controls to ensure that they do strike the appropriate balance, as I have outlined: the balance between meeting our international obligations and academic and research freedom. There will be pilots during the transition period. Those assessments will come back to the minister—whether it is me; it will be the minister of the day. And, importantly, the bill does not include any domestic controls. We are talking here about export, so there is no imposition on research conducted and effected in Australia that is for domestic purposes.

Members have made the point that we should adopt this because amendment (9), the proposed section 9A, puts us on a comparable basis with the United States. That fails to appreciate a fundamental difference between the way in which the United States approaches these matters and the way in which we do. The effect of the amendment, in my view, would be that anyone who is claiming to be conducting fundamental research in Australia would be exempt from the provisions of the bill. That is a far broader effect than the US exemption, which is for fundamental research, but which only applies to research outputs. Research inputs are subject to US export controls. There is no US exception that would allow controlled technology to be exported from the US for fundamental research without US government authorisation. So, to say that this puts us on the same footing as US scientists is wrong, because they apply a fundamentally different approach. What we are doing is using our own law, our own approach and our own system to strike the appropriate balance between effecting the international obligation in ratifying the treaty and the national security requirements of defence exports. At the same time we are balancing that with academic and research freedom. If we have that balance wrong we have the two-year transition to make sure that that can be monitored carefully—pilot programs and a government-industry-academic-research steering group—to look at the effect of these measures in practice.

The bald assertion that somehow on the one hand we are putting ourselves in an inferior position to United States scientists, but that on the other hand we should adopt precisely their measures, misunderstands the fundamentally different nature of the way in which we approach these issues as a jurisdiction or a country, and the way in which the United States does.

To summarise those issues, the notion that we have been seized of these issues at six o'clock tonight is just wrong. This is a treaty proposal that has been floating around for years. The first draft bill emerged in the first half of 2011. There have been two Senate committee inquiries, a preliminary report and a subsequent one. There have been consultations conducted by Mr Peacock, the Chief Defence Scientist and the Chief Scientist, and the bringing forward of recommendations, all of which are recommended for adoption. The amendment in the message from the Senate, which I am recommending to the House we reject, was not part of those proposals. It fails from a fundamental mistaken assumption that the US system is the same as ours. It is not.

The measures before the House, on my recommendation, strike the appropriate balance. If for some reason in practice that is shown to be wrong you have a two-year monitoring pilot program with in-practice capacity to make whatever changes at the margins are required.

The essential and simple choice here is that we either effect legislation of sufficient standard to ratify the treaty, or we do not. To include amendment (9) would diminish the standard of the legislation required to meet the international obligation to ratify the treaty, and on that basis the House should reject it.

Mr ROBERT (Fadden) (18:43): Let me provide some brief comments back to the members of the cross benches. I thank them for their contributions and I understand some of their concerns—and from where they are sitting, some could say that things seem a little odd.

Let me refute the issue that there is some grubby deal between the government and the opposition. I think question time would leave the nation in no doubt that it is very difficult for the government and the opposition to agree on some very large issues, and the idea that we could do some backroom deal is, I think, a little silly in the extreme. However, there is no question and there is no doubt that the government and the opposition share an enormous bipartisanship when it comes to defence, and no-one can argue that I have shown anything other than bipartisanship in the key areas of defensive matters, including combat operations, troop dispositions, the welfare of our fighting men and women and, of course, our alliance structures.

The amendment last night in the Senate was moved in good faith. The government raised a range of concerns they believed were legitimate. They raised them forcefully, and they raised them in the spirit of bipartisanship. On the basis of that I was prepared to give the government the benefit of the doubt. Having dealt with this government now for four years as part of the shadow defence team, I have worked out when the government is dealing with issues that they truly believe are significant in the national interest and when they are dealing with issues that suit political interests. I must say, the government expressed this in very clear national interest terms—clear enough for us to say: 'We understand it. We respect your position. We will provide a degree of benefit of the doubt.' That degree, of course, is encompassed within a two-year 'cooling off period', for want of a better expression. That gives the parliament the opportunity within that space to assess, with very clear eyes, what—if any—impact there is.

Be under no doubt that if the research sector or the university is being fundamentally impacted the coalition will champion their cause vigorously. But right now the key issue in terms of defence and the trade treaty, which has been around for a long time—in the absence of overwhelming support or overwhelming evidence that the university or research sectors will be harmed—is to provide the government the support they need, and that is what I will be doing.

Mr OAKESHOTT (Lyne) (18:46): In what is hopefully a final response, I will say that I do not in any way, in speaking in this debate, question bipartisanship in defence matters. But I do place the charge before the House that the standard of bipartisanship in defence is now bipartisanship in creating criminal sanctions for researchers in Australian universities. That is the bipartisanship the crossbenchers today have spoken about that is of concern. It is not a matter of whether we support a defence treaty with the UN. I love Ambassador Bleich. I have been to America.

Mr Robert: You love him?

Mr OAKESHOTT: Well, he's great company. I do not question anything about Australia's relationship with the US. I actually think we can deliver the treaty agreements in a way, through this chamber, that has unanimous support in the lower house and the upper house as a really strong message from the Australian parliament. But we do not need, in defence terms, collateral damage. And the collateral damage of this bill is researchers at Australian institutions who are now, under law, potentially—under 14A—to face criminal charges if, even in good faith, they publicise their research in the way they have in the past. They have to now meet a standard of approval with the Minister for Defence, which is an extraordinary takeover of the education portfolio in the research field. That is the concern before the House today. It is not about whether we have a treaty arrangement with the US or about all that we want to deliver for the impending visit of secretaries of state—or any of the other reasons to enhance our relationship with the US. None of that is in question, but there is a charge before the House today that remains unanswered: that researchers are getting a raw deal through this legislation.

There is now a criminal offence that has been written into law, and I do not accept the minister's argument that Australian researchers, in a highly competitive area—an area we want to grow in this country—now face a lesser standard in their ability to do open research, collaborate, and have partnerships with other institutions and other researchers compared with researchers in the US and the UK, who are also meeting these similar defence treaty agreements. It is not a matter of whether we do it in defence; it is how we do it, and how we do it without impacting open scientific research and fundamental research in Australia today.

In the responses I just heard from both the minister and the shadow minister, I heard the word 'fundamental' about half a dozen times. And in a world where the Macquarie Dictionary seems to define all we do, I heard that we are fundamentally undermining the fabric of the legislation. I heard that Australia is fundamentally different in the way we do research compared with the US, and that the crossbenchers fundamentally misunderstand what is really going on here in this legislation. I also heard that the only reason so far that there has been a massive change of position from the coalition is that somehow there is an acceptance now that this would fundamentally impact on defence and military issues for Australia.

I put the words 'fundamental research' on the table. That is exactly what you are knocking out: fundamental research that was written into section 9A by the coalition, to their credit, in the Senate last night, for all the right reasons. And now, for some reason, they have backed away from it. And now, of all the 27 amendments before this chamber, this is the one the minister rejects. I put it to this House again: why? And the 'why' needs to be answered in full, in detail. I will not support any attack on Australian universities that this looks to be doing in its current form.

Mr BANDT (Melbourne) (18:50): Just very briefly, on this question that was posed very well by the member for New England—why can't we wait another month?—yes, there have been inquiries and round tables. But the criminal sanction that the universities and the academics are most anxious about, with very good cause, was circulated by the government as an amendment only after the Senate inquiry reported and after the round table. It is for that reason that there is, in effect, a last-minute amendment to a bill and an idea that has been out there for a period of time and that is causing great angst amongst our research community. If the issues were resolved we would not be having last-minute pleas from, on one hand, Universities Australia and, on the other hand, the National Tertiary Education Union on behalf of producers of research and those defending the rights of academics to freedom and independence for further consideration.

It is manifestly clear that this recent amendment imposing a sanction is not one that has the accord of key people in the sector. The Asian Century does not appear to have gotten off to a good first week. If it is the case that the United States is able to dictate what research we conduct and with whom, and to place a fundamental break on the work that is being conducted that is going to set this country up for the 21st century, this is a very worrying sign of things to come.

Mr CRAIG THOMSON (Dobell) (18:52): Can I say in response to what the minister has said that, if he is right that we have misunderstood the legislation, if he is right that the university sector has misunderstood the legislation, if he is right that the university lawyers have misunderstood the legislation, if he is right that the law firm that the universities got to do their work on have misunderstood the legislation, if he is right that the education union has misunderstood the legislation, if he is right that the coalition and Greens senators last night misunderstood the legislation, then surely he has made the case that the member for New England set out—that we should not be dealing with this legislation now, in such haste, until all of those parties understand the legislation, understand the intent, so that we can go forward.

The minister's response has clearly made the case that this legislation is contested, that people have different views about, and in his view is misunderstood, there is a very easy solution to make sure that this legislation is fully understood by all of those groups that he says misunderstand it: to not push it through tonight, to take up the offer that the member for New England put in good faith—and that is to reintroduce this legislation the next time we sit here in Canberra and spend that time making sure we understand the legislation, those groups understand the legislation and the industry understands the legislation; because there can only be two options here: either the legislation is in such a form that it is easily misunderstood or in fact the minister is wrong and it does have the effect that the crossbenchers have spoken about today, that it is deleterious to the research sector. It can only be one of those two positions, and surely, for such an important issue, it is worth making sure we get it right. This is something that should not be rushed through today. If we do this we are making a grave mistake and we need to be making sure that higher education is given the courtesy, the respect and the emphasis and priority that it deserves.

The DEPUTY SPEAKER ( Hon. DGH Adams ) (18:55): The question is that amendment (9) be disagreed to. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after 8 pm.

Debate adjourned.

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (18:57): I move:

That the amendments be agreed to.

Question agreed to.

Mr BRADBURY ( Lindsay — Assistant Treasurer and Minister Assisting for Deregulation ) ( 18 : 59 ): by leave—I move:

That the bill be now read a third time.

Question agreed to. Bill read a third time.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (19:01): I present a supplementary explanatory memorandum to the bill and seek leave to move government amendments (1) to (3), as circulated, together.

Leave granted.

Mr BRADBURY: I move:

(1) Clause 2, page 1 (line 7) to page 2 (line 6), omit the clause, substitute:

2 Commencement

   This Act commences on the day this Act receives the Royal Assent.

(2) Schedule 3, page 5 (line 1) to page 16 (line 11), omit the Schedule.

(3) Schedule 4, page 17 (lines 1 to 26), omit the Schedule.

These amendments relate to schedules 3 and 4 of the bill. There is disagreement in the House in relation to the substance contained therein, and the government has decided to withdraw those two schedules. They remain matters that we are committed to, but, for the purposes of not delaying the passage of the remaining schedules, we are moving these amendments.

Question agreed to.

Bill, as amended, agreed to.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (19:03): 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) (19:03): The Gillard government made an election commitment in 2010 to better protect the entitlements of Australian employees impacted by the insolvency or bankruptcy of their employer. This commitment, entitled the Protecting Workers' Entitlements package, was to provide the strongest protection of employee entitlements working Australians have ever seen. So I rise to commend to the House the bill which embeds our commitment to this package as it relates to the fair entitlements guarantee. In doing so, the Fair Entitlements Guarantee Bill 2012 will replace the existing General Employee Entitlements and Redundancy Scheme, GEERS, and enshrine the fair entitlements guarantee in legislation. Labor is proud to guarantee these additional protections for Australian workers under law.

The bill will provide certainty for Australian employees who find themselves without a job and left out of pocket when their employer becomes insolvent or bankrupt and cannot pay the workers the employment entitlements accrued by the workers which they are owed by their employer. On this side of the House, we know that employees who lose their job through the insolvency or bankruptcy of their employer have enough to worry about. They have to worry about where their next mortgage repayment will come from. They have to worry about what money will be available to cover unexpected bills and emergencies. Those of us on this side of the House believe that individuals should not have to worry about being paid what they have already earned.

This bill will protect Australian employees under circumstances which are brought about through no fault or choice of their own or their own actions. It will also ensure that Australian employees who are victims of employer insolvency or bankruptcy, where employment entitlements are owed, are supported by a government that actually supports Australian workers. In doing so, this bill will also enshrine Labor's commitment to the Australian sense of a fair go, by providing a legislative framework employees can rely on and an entitlement which, unlike the employment entitlements those opposite advocate for, cannot be scrapped with the flick of a pen.

This government has always recognised the importance of protecting the entitlements of Australian employees who suffer the effects of the insolvency or bankruptcy of their employer. This bill will replace the existing General Employee Entitlements and Redundancy Scheme, GEERS, and strengthen protection of unpaid entitlements, including redundancy, annual leave, long service leave, wages and payment in lieu of notice. The bill also improves existing GEERS arrangements by removing the eligibility requirement associated with deeds of company arrangements so that a minority of vulnerable workers are no longer disadvantaged; extending coverage to all entitlements that accrue where employees continue to work past the appointment of an insolvency practitioner; and simplifying transfer of business claims from 1 July 2014 so that employees will no longer be ineligible for assistance unless their new employer recognises their service and entitlement.

This bill represents a significant strengthening of the protection of the entitlements of Australian employees who are the victims of employer insolvency or bankruptcy. Contrary to some criticism, the bill does not open the door for a business to restructure at a cost to the taxpayer. The government has worked constructively with business in the development of this bill to ensure there are strong safeguards to ensure that people do not take advantage of the scheme by bumping up entitlements that would otherwise not be sustainable costs to the employer if they continued in business. Furthermore, this bill does not create a new community standard for redundancy entitlements; nor does it favour unionised workplaces.

The bill is simply structured to ensure that entitlements owed to an individual in the five broad areas previously noted, and in accordance with whatever their working conditions entitle them to, are able to be paid subject to reasonable thresholds.

This evening Labor delivers on its commitment for a clear and fair legislative framework to provide certainty and protection for Australia's workers, and with the passing of this bill the government will deliver on its pledge to Australian employees by providing a clear, fair and robust legislative framework to protect entitlements that Australians have already accrued at work. The Fair Entitlements Guarantee Bill is supported by the Labor government and a range of stakeholders.

I take this opportunity to thank the government members who spoke on the Fair Entitlements Guarantee Bill 2012 and hope those opposite will also support this bill, even if their amendments are defeated, to ensure even stronger protections for working Australians across our nation.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (19:08): I present a supplementary explanatory memorandum to the bill and seek leave to move government amendments (1) and (2) as circulated together.

Leave granted.

Mr SHORTEN: I move government amendments (1) and (2):

(1) Clause 12, page 13 (lines 14 to 16), omit "employ the person on the terms and conditions of that employment beyond the time that employment actually ended", substitute "meet the employer's obligations under the terms and conditions of that employment for the actual duration and end of that employment".

(2) Clause 25, page 21 (lines 3 to 5), omit "continue to employ the person on those more favourable terms and conditions beyond the time of the actual end of the person's employment", substitute "meet the employer's obligations under those more favourable terms and conditions for the actual duration and end of the person's employment".

Two minor amendments have been drafted to clauses 12 and 25 of the Fair Entitlements Guarantee Bill 2012. Clauses 12 and 25 of the bill refer to exclusions for changes in terms and conditions made in the six months before the insolvency event. The intent of these clauses is to enable favourable changes in conditions made within six months, such as a significant pay increase or improvement in redundancy entitlements or change from contractor to employee, to be disregarded where, having regard to the financial position of the employer, it was not reasonable to expect the employer could have adequately provided for those conditions. The amendments will clarify that, as intended, the rules in clauses 12 and 25 may be applied if the delegate is satisfied it was reasonable to expect that the employer could not meets its obligations at the end of employment as well as during the employment.

These proposed changes continue the existing arrangements under the General Employee Entitlements and Redundancy Scheme, known as GEERS, and provide increased assurance that employers will not seek to take advantage of the scheme of assistance by making favourable changes to boost entitlements, in the full knowledge that they are about to make the staff redundant.

Question agreed to.

Ms LEY (Farrer) (19:10): by leave—I move opposition amendments (1) and (2):

(1) Clause 23, page 20 (line 8), after 'that employment', insert ', up to a maximum of 16 weeks' pay'.

(2) Clause 23, page 20 (line 11), after 'employer', insert 'and the 16 weeks' maximum in subparagraph (i) has not been reached'.

In speaking very briefly, I would like to refer the House to my remarks made during the second reading stage of the bill. I note that the coalition is now moving an amendment to include a cap on the redundancy payout captured in this bill at 16 weeks, which I note is in line with Labor's Fair Work Act. Ultimately, we believe that, as the taxpayer has to bear the cost of these payments, it is most important that we keep these at a limit that is in line with community expectation. As noted by the minister, the bill actually enshrines in legislation a redundancy package, calculated at four weeks per year of service, which would, we believe, set a new high bar that union bosses could use as a new high bar in enterprise bargaining. The coalition maintains its fiscal prudence—its cautious approach—and we will keep the redundancy package as it is under GEERS now, in line with community expectations and capped at 16 weeks.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (19:11): We can advise the House that the government will be opposing the opposition amendments. Taking the member for Farrer's encouragement to be brief, we will try to do that. The reason we are opposing the amendments is that we had a policy on workers' entitlements before the last election, and we are implementing them. We do not believe that we should adhere to opposition amendments which were not flagged at the last election and are not part, as far as we can tell, of any appreciable opposition policy. It is policy on the run, which we have learnt about today.

Our proposition is that, subject to eligibility requirements, employees will be eligible for unpaid entitlements, including wages, redundancy pay, payment in lieu of notice, annual leave and long service leave. Under our bill, redundancy pay is capped at a maximum of four weeks per year of service, but this is not setting a new community standard. What this is doing is saying: 'If you already have a pre-existing industrial instrument which says that you are eligible for four weeks each year in the case of redundancy, we think that if a company becomes insolvent, you should not be short-changed.' This is not saying that everyone in Australia has a new standard, and it is fallacious to link the minimum standard of redundancy in the Fair Work Act, which is a minimum, and start saying that that is therefore the community standard.

The other reason we stand so strongly in favour of the four-week proposition is that, if these matters had been negotiated between employees and employers, we believe that the people most likely to benefit from this proposition are longstanding employees. Under the opposition's proposal, once you have basically done four years in a company, you get nothing more. What the opposition will be doing with their amendments is enshrining a short-term view of people's loyalty, saying that, at four years, that's it. If you have worked as a machinist in an automotive components company for 20 years, they are saying, 'You might as well have only worked there for four years, because that is all we are giving you.'

The other reason to oppose the opposition amendments, in essence, is this: workers do not rank first ahead of banks, so what this means in the corporations law system in terms of priority of entitlement when companies go broke is that, on one hand, if the opposition was saying they did not want any impost upon the taxpayer, then they would be moving a proposition to say workers should rank ahead of banks' secured interests, which they are not doing. What they want is the best of both worlds. They still want the banks to rank ahead of the workers— that is their choice; it is in their DNA—but what they are also saying is, 'We are going to short-change long-serving workers anyway.' You can't have it both ways. You can't deny the workers the right to have priority and still deny them the opportunity to get some recognition for their service under industrial instruments that they had already entered into. That is why we will oppose these amendments.

We certainly hope also that, in the event that the opposition is unsuccessful in getting its amendments up, it will still vote to protect workers' entitlements; after all, what we are by and large doing is implementing in statute an administrative scheme whose antecedents were formed in the Howard years. So what we see with these amendments is a short-changing of long-term loyal staff—no interest in ranking workers ahead of the banks' fixed secured interests. What we also see is a repudiation, in fact, of one of the few safety nets that the opposition put in place for workers when they were in government, imperfect though it was. So we would strongly urge the opposition not to vote against statutory protection for workers' entitlements in the event that their amendments are defeated.

The DEPUTY SPEAKER: The question is that the amendments be agreed to. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after 8 pm.

Debate adjourned.

Mr JOHN COBB (Calare) (19:16): I rise to speak on the Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill 2012. This bill is about trust; it goes to the heart of Labor's governance of our nation and asks the parliament to trust the Murray-Darling Basin Authority. The changes in this bill would allow amendments to be made without mandatory consultation with the public, without requiring the approval of the minister and via a regulation that is not disallowable. The MDBA would be given full responsibility for making the adjustments. Currently the basin authority does not fill me with confidence. Their public consultation process during the development of the basin plan showed that they just went through the motions. We all thought it would be better the second time, but they were not prepared to actually listen to the logical and reasonable concerns of the community within the basin. The basin plan has largely remained unchanged from the guide and there has been very poor details of, and transparency on, the science used in the decision-making process.

Unfortunately, under these amendments the MDBA will be placed in a more powerful position with no consultation being required and no recourse to the minister or the parliament. Furthermore, while the authority must seek and consider advice from the basin official committee it will not need to heed their advice and can carry on with its own agenda regardless.

The other issue is that the authority cannot make an adjustment that does not reflect an environmentally sustainable level of intake. Unfortunately, with Labor's amendments in 2008, the plan went from a plan to manage 30-odd Ramsar wetlands within the basin to 2,774 environmental sites. Let us be honest, that is a ridiculous overreach. Unfortunately, this amendment will encourage the government, under direction from the Greens, to add more and more environmental sites which are not based on science and force the authority to increase the take and further decimate rural communities. The coalition supports a mechanism that would allow for greater environmental benefits without imposing greater economic or social costs on the basin community. This is different from the government's view on social and economic benefits.

I want to go now to the cost of doing business in the basin. The reduction of water in the basin, without investment in infrastructure, has increased the cost of water production in the basin, which is having an impact on farmers struggling to get over the record drought. You have the same costs, for less water, spread among fewer people. So obviously it has increased enormously in some places, given the lack of planning that went into the buying in the first place. There have been enormous increases in costs for water transfer and water use by the farmers remaining. For example, the cost of doing business has increased by the removal of the 40 per cent AQIS inspection certificate rebate. That is a massive hit on our exporters, especially new and emerging industries, which have seen registration costs go up by 1,000 per cent.

They can talk about the Asian century—and I actually believe very strongly in it, especially with our near neighbours, some of whom they have gone out of their way to upset—but these things are a massive increase in costs that make exports prohibitively expensive. Add to this the world's biggest carbon tax—and irrigators obviously use a considerable amount of power. They are asking our businesses to break into Asian markets against companies from countries that do not pay the carbon tax. I am sure you can get the picture about adding to costs—and that is exactly what is happening with irrigation.

The final point on that is the importance of R&D in growing our production to make the most of it. The government talks about the importance of research, while wanting to reduce its involvement in and contribution to it. It says research and development is the key to capitalising on the Asian century, yet it axed Land and Water Australia and cut $63 million from CSIRO agricultural research—over $33 million was cut from the CRCs, and that means fewer agriculture CRCs are funded each year.

Labor also originally planned to support the Productivity Commission's report which recommended halving the government's contribution to R and D, and they have made no serious attempt at research into irrigation. In other words, you take away the water and people have to produce more with less. I do not see the government backing that with research. So the government says one thing and does another. But I guess we should not worry: they have put 'Asia' in the ministry title of the Minister for Trade, so they must be serious! And that is despite no funding and doing everything they can to undermine a lot of our opportunities in Asia, let alone anywhere else. I am concerned that the amendments in this bill will follow this similar pattern.

Just lately the government finally discovered investments in infrastructure and efficiency as the answer to delivering water to the environment. The government are using all this in their rhetoric now, but the facts are that they have spent $2 billion on water buybacks, while only $500 million of around the $5 billion in water efficiency projects and announcements last week were works and measures. The coalition has always supported priority investments, infrastructure and efficiency because they allow the government to recover water with minimal impact on communities—mind you, that was sharing the savings. On the other hand, while the $2 billion on water buybacks may be good for the stressed-out farmer, selling his water can be devastating for the community that has lost production, jobs and economic activity, leading to a loss in critical mass, leading to a loss in communities. It has actually brought about the situation where it is not the irrigators who are at the biggest risk but the communities that surround them.

I have no confidence that this government will invest in infrastructure over the longer term. Labor, supported by the Greens, will just revert back to the buyout of rural communities, because that is what the recently restored South Australian senator did. She just bought water without referral to where it was needed, without referral to any plan—without any plan, as a matter of fact, as I am sure the member for Watson is well aware.

If you go to Deniliquin, Griffith, Swan Hill, Mildura or Shepparton and ask anyone on the streets whether the water buyback has been good for their communities, there will be a loud and resounding, 'No,' echoing from the empty business houses. This bill does go to the heart of the government's credibility. As a government, we had a plan. The plan was investing in the infrastructure and the farm work to the irrigation and saving the river by doing efficiencies and working with the industry, not getting rid of it.

Mr Burke interjecting—

Mr JOHN COBB: I should not respond, should I, across the table, Deputy Speaker Adams, so I will not, except to say that the member for Watson knows very well that was only a contingency in certain circumstances. He knows that very well.

We know that when it comes to agriculture—if you will excuse the pun—agriculture is at the bottom of our food chain. Everything they have done in government backs that up. Since 2007 the annual operating budget of the department of agriculture has more than halved. But this should not surprise you, as the department of agriculture has actually removed the word 'agriculture' from its mission statement, which is now:

We work to sustain the way of life and prosperity of all Australians.

Okay, well, that is a good thought. But it would be good to think about the people who actually live, work and own—for whom agriculture is what they do. But they do not get a mention anymore. Under the previous government, the department's mission was:

Increasing the profitability, competitiveness and sustainability of Australian agricultural, fisheries, forestry and food industries and enhancing the natural resource base to achieve greater national wealth and stronger rural and regional communities.

That actually sounds like a mission statement for a section of the community that goes out of its way and punches above its weight and always has in Australia. However, none of those things apparently matter anymore. If the minister for agricultural is not standing up for agricultural then who is? I do not care what party you come from: when you have that job, your job is to work for it.

Getting back to the specifics of the issue, a mechanism that allows for a reduction of water required to achieve a target is a good thing. If the government can deliver outcomes to the environment by implementing investment in works and measures and that means outcomes can be achieved with less water, I am all for it. It is really the environment doing the same as the farm sector by learning to do better with less water. Perhaps, as I just said, those who work the environment can learn that as well. Farmers pride themselves on continuing to improve productivity and have been doing this for decades. If you water a wetland section by section, it makes sense that it will take less water than flooding the whole thing at once. It is the principle under which irrigation farms have operated for years. The world's population is heading to nine billion by 2030, so we cannot just cut production; we have to increase efficiencies, and we do have to learn to do more with less, which is why R and D should support that.

I will make a couple of comments in response to a speaker I heard earlier in the debate. Labor's member for Kingston said that if we do not restore this river there will be nothing: wetlands and flood plains will die. It does sound a bit like reckless negativity to me—I am not sure whether it is the Macquarie definition before or after it has been changed to suit the government. One thing is clear: the decade-long drought is over, the river is flowing and there are no RIP signs up on any of the wetlands. Yes, we do need to manage the river, but the government has no water plan on how to use the existing water. So the claims by the member for Kingston can only be a reflection on the government's inability to show how water will achieve improved environmental outcomes, because currently it is quite obvious that neither the government nor the Murray-Darling Basin Authority have any idea how they are going to use the water that is being lined up simply for the environment.

The big lie in this debate was when Kevin Rudd stood at the mouth of the river and said, 'Give me an ETS and I'll fill the river.' Actually, it filled without one. Droughts do come to an end, even one that was the biggest in the lifetime of anyone in this place. I do not step back from the fact that we need to look after the environment. But that was a lie.

Labor and the Greens must come to the realisation that, while it may be good for niche markets to grow organic food, if the whole world went organic the world would starve. Perhaps the recent delegation of Senator Wong to the second spot, since reinstated, as I hear—I will correct myself if that is just a rumour; perhaps the member for Watson—

Mr Burke: I've got no idea what you're talking about.

Mr JOHN COBB: Okay. The word is that the delegation of Senator Wong to the second spot has been reversed. Somebody stepped down, which would be a big thing to do, and it was before they had developed a watering plan which showed how outcomes could be achieved.

The reality is the Labor and the Greens have no skin in the game when it comes to seats in the basin and will never have any understanding of the basin communities. And it would seem they have never cared by the way they have processed this from day one. I repeat that: the problem here is that the Labor Party have no skin in the game when it comes to the Murray-Darling Basin, which is about half of one electorate. I support this mechanism but not without ministerial or parliamentary oversight so that the water required is lowered to achieve environmental outcomes, not to allow the government to expand its environmental imprint at the expense of basin communities. So I am unable to support this bill in its current form.

Mr RAMSEY (Grey) (19:31): I rise to speak on the Water Amendment (Long-Term Average Sustainable Diversion Limit Adjustment) Bill 2012. The adjustment mechanism referred to in this bill has some agreement within the Australian community from the various parties, including the ministerial council. Because of that, it deserves to be taken seriously. I believe there are still some deficiencies in that plan, but I am hoping the minister can progress the negotiations and reach a good, sustainable outcome for the river from one end to the other.

There are some deficiencies in this bill which will be addressed by the coalition's amendments, and I will come to those a little later. It is planned to return 2,750 gigalitres to the river and, as it has quite a lot of support across a number of communities, it deserves to be taken seriously. All of this falls within the coalition's long-term vision for the river system.

The sustainable diversion limits actually allow for flexibility within the management of the system. It seems to me to make sense that, as improvements are made within the system—whether funded by public funds or otherwise, but presumably funded by the taxpayer—the management plan has room to adapt. In that sense, I think a flexible arrangement is a good idea. If farm practices can be improved, presumably by public moneys, if production can be held stable or improved within the communities along the river, and if those communities are healthy in a financial sense, it makes some sense that there could be a reallocation of the water. Equally, if public moneys are spent to reengineer the river system and remove some of the constraints, to actually manage the water better in the flooding of the wetlands as we go down the river—and I am sure there are always improvements to be made in this area—then equally it makes sense that more water may become available for agricultural diversions. So it makes sense to have flexibility.

Importantly, decisions by the Murray-Darling Basin Authority must be made on sound scientific evidence, and the coalition has long been a supporter of this position. However, we do draw the line at a totally hands-off approach, divorcing the parliament from all responsibility. That brings us to the coalition's amendments in this area. Yes, the governing council, the Murray-Darling Basin Authority, should make the independent, scientifically driven decisions, but at the end of the day, we cannot totally muzzle the people's voice in this area. We live in a democracy and it is important that the people's voice be heard, and the parliament is the people's voice. That is why the coalition amendments seek to restore ministerial responsibility in this area. I hope we will be supported by the government. I think they are very good amendments.

In the end, decisions made by the Murray-Darling Basin Authority could conceivably have large impacts on the federal budget or even, depending on the appointments of the commissioners, make decisions that are not well based—decisions of the heart rather than of science. In that case, the government, the parliament, must have the room to intervene. For those that worry that the allocation of water would then become a political football, I would say they should watch an old episode of Yes Minister. I think the words would be: 'Any minister who chooses to overrule his independent authority is a very courageous minister.' I think it is right that we should put some power back in the hands of the minister but it should be used with great care. I am sure it would be, because any opposition worth its salt that would see a minister overruling his scientific council would wear some criticism.

It is important in this debate that the parliament understand the great significance of the Murray River in South Australia. The average diversion limit to South Australia from 1997 to 2010 was seven per cent. Of that, 75 per cent is for primary production.

As a representative of an electorate that has no irrigation in it but is a recipient of the Murray water—and the Murray water is very important to my electorate—I would just like to put the case at this stage for the sometimes much maligned non-irrigation use of water out of the river system. I make the case that anybody paying $3.73 a kilolitre for water is unlikely to waste it. In fact, they are likely to put it to very good use indeed. That price has risen by 50 per cent in South Australia in the last two years and that has led me to some criticism of the state government over a number of issues. Water has risen to $3.73 a kilolitre or by 50 per cent over the last two years.

If we take the City of Whyalla, which is often raised in this place by the government, it uses around 15 gigalitres a year. It supports a population of 23,000. None of that city could be there without the River Murray water. The water has a very high multiplier effect, and is very important to communities all through South Australia, including our irrigation communities. It is also important to note, from a South Australian point of view—I know members from the eastern seaboard may be a little tired of hearing this—that extractions from the river have been capped in South Australia since 1969: a period of 43 years.

Progress on achieving an outcome for national management of the Murray Darling Basin has been slow. And there has been a series of mis-steps and mistakes by the government, including the sight of irrigators burning the draft report of the Murray-Darling plan—an exercise, I think, which antagonised all players in this game. I think, in retrospect, even the minister may wish that that original report had not gone out in that form and that it had some more careful consideration before it went out. I believe that that very confrontational blooding of the public to the views of the report entrenched positions and made it harder to achieve an outcome later.

But it is important, I believe, that the coalition be part of the solution—that we do not frustrate an outcome in this area but actually work with the government to try and bring about the right results for the river. Now, let me say that while the figure of 2,750 gigalitres has been broadly agreed amongst some of the major parties, exactly how we arrive at that 2,750 gigalitres is still part of the debate, and I know the minister is probably working on this on a fairly regular basis. And I wish him well on achieving the right outcome, because whatever our political background, Australia will not thank us if we do not reach an outcome. And I want the minister to achieve that outcome.

That deals with this bill and the amendments that pertain to this bill, but it brings me back to the announcement by the Prime Minister and Jay Weatherill, last weekend, of the extra 450 gigalitres. We are still waiting for the detail of that announcement. It worries me that it appears to be another of the cheap and fairly empty commitments from the government.

Look at the government's recent form on the NDIS, the Gonski report, the national dental health plans, the recently announced participation in the Asian century and, now, the Murray River. These are all announcements without specific funding. There are plenty of lofty goals and no money. And they are all outside the life of this government and even outside the life of the forward estimates. So they become very empty promises. Empty promises about a river that was recently empty are really not good enough. I believe, with the government's form across all of those subjects, the government has resigned itself to losing the next election, and is setting up to attack the incoming government from opposition.

However, I do want to be part of positively moving this forward. So we wait to hear what those new commitments are that were made on the weekend. If the guarantees for future increases in environment flows are supported by irrigation efficiencies funded by the government, even though there does not appear to be much money in this announcement, then we should be flexible enough to allow for new circumstances. If the government of the day can find the money to fund these engineering works, both on farm and in the river, to release more water then we should be flexible enough to allow for new outcomes. But I think we need to draw some kind of line in the sand about the buyouts of licences that are currently occurring. We simply cannot afford to achieve all of those outcomes through buyouts. The minister knows that that would rip the guts out of too many communities. That is why we know this will be some kind of compromise between the parties.

It is very important that the government finds the money for the engineering works that can release water to the environment without damaging the communities down the river. That is something that I and the coalition have maintained ever since John Howard first announced the Murray-Darling rescue packages. It has been the long plan of the coalition to go down this path. We should continue to go down this path and we should continue to find the way that causes the least damage to the irrigation communities the length of the River Murray.

Mr KATTER (Kennedy) (19:43): I rise to speak on the Water Amendment (Long-Term Average Sustainable Diversion Limit Adjustment) Bill 2012. Once again, I find myself in a minority of one in this place. As the writer of a history book—we have sold 16,500 copies at $35; available at all good newsagencies—I can speak with some degree of pride about my country. Amongst its many great achievements I think the Snow Mountains Scheme was probably our greatest achievement. People with vision and determination—people like Minister Lemmon and Ben Chifley and the Liberal David Fairbairn—were very much a part of driving this idea. They could think big; they could see big.

Let us have a look at what this achieved. Half or maybe as much as 60 per cent of Australia's agricultural production comes from the Murray-Darling. The vast bulk of that comes from irrigation. Eight million mega litres are taken out of the 22 mega litres and used for irrigation purposes.

The people that ask for more water down the river are the greenies and people that want to go back to nature who do not believe we need any food. I, at one big debate, said there are 2,000 million people going to bed hungry of a night and there are going to be a hell of a lot more going to bed hungry of a night if we close down the Murray-Darling. They said we have got too many people. I said that is an interesting way of fixing it up; we starve them to death to get rid of that excess number of people. I had not thought of that idea before. But these people were not people with a sense of humour and none of them laughed. Ian Causley—one of the finest members of parliament I have served with in this place and a very successful minister for water, lands and agriculture in the New South Wales government—said 'when it rains the river runs and when it doesn't it doesn't'. Really, for those of us that live on these rivers, we know that is profoundly true. You can build all that dams and do everything you like and take backward somersaults at yourself but when it rains it runs and when it does not it does not.

For those people that want to say this is a problem, all right you address the problem by looking at—and I pay tribute to Pat Byrnes at the National Civic Council—the idea of environmental dams. If you want to get back to nature then you return the Menindee Lakes and the Lake Alexandrina to their natural state, which is no water in them. That saves nearly a million mega litres of evaporation a year from the Menindee Lakes—artificial lakes created by and for what purposes we are not entirely sure—and Lake Alexandrina, which seems to me to be entirely stupid since Lake Alexandrina is only a stone's throw from the sea. If you want to see a huge body of water, head 20 or 30 kilometres south and you can see the ocean; that will make you happy. But do not take a million mega litres out of the Murray-Darling.

The Clarence River diversion put up by Mr Coffey and his firm, Coffey and Partners, is a magnificent scheme. It is one of those ideas whose time should have come. To protect the waters and people that live in the Clarence River basin from the huge flooding that occurs in that river and to capture a little bit of the flood water and send it back through the range, take a little bit of water from the Clarence but put a huge amount of water into the Murray-Darling.

The recycling of water is a very simple thing. Simply taking the water from your washing and putting it into your septic or sewerage water is a very simple thing to do yet it halves—arguably more than halves—the consumption of water in the ordinary household. In Brisbane the stupid Labor government or the stupid Liberal government—I cannot remember which—banned the use of water tanks and then made them compulsory 10 years later. So there are a dozen ways in which you can approach this problem if in fact there is a problem. I need a lot more convincing. I remain the only member of parliament that has gone to all of the seminars on the Murray-Darling Basin in this place. I like to think that as a patriotic Australian and a thinking Australian I should have a good handle on it.

Please God, in my lifetime may some government in this place might be enlightened enough to do something about the waters of northern Australia. The northern third of Australia has three quarters of the nation's water. And none of that is being used except a couple of tiny little dams. Virtually not a single drop of it is being used. I take great pleasure in advising the House that my political party, as small as it is, is diametrically opposed to any further cutbacks in the Murray-Darling and wants a restoration.

I will be doing a tour through the back of New South Wales very shortly and I will be telling the people in each town that you are going to be a ghost town because half of your entire income is going to vanish. The stupid people in the white house in Canberra have taken away three million mega litres of your eight million mega litres. They have taken it away and you will not get it back unless you start thinking about voting for a party that believes that we should be bigger nation than we are, that we should have a bigger economy and that we should have the great vision of our forefathers that drought proofed one tenth of the this nation with that magnificent scheme.

When Strzelecki discovered Mount Kosciusko, he said he would name it after Kosciusko because Kosciusko was a man whose life was devoted to freedom and this is a freedom-loving country. He went on to say that the waters of the Snowy Mountains can change Australia and are one of the few undeveloped water resources left in the world that can achieve great things for a nation. I wish Strzelecki, the great Australian that he was, had come to North Queensland. We would have changed his attitude a bit on that one. This mighty scheme took was what was effectively a dustbowl of the lower Murray and the upper Darling and the Murrumbidgee and turned that dustbowl into a productive resource that feeds arguably 40 million people, most certainly over 20 million people. They turned it into a magnificent scheme that provides even today a 10th of our peak load power. Once again, the disgraceful people in this place tried to sell the greatest asset owned by the Australian people. They voted to sell it.

So we will do everything within our power, the little party that we are, to try and stop any further cutbacks and to return that water. And if there is a problem out there, then there are a dozen ways of solving it. We will get off our backsides and solve those problems, and put more water down, if you want more water down—not a great problem; not a great problem at all.

Once again, I finally return to the greatest builder in Australian history by a long way, Dr John Crew Bradfield, who built the Sydney Harbour Bridge, the Story Bridge, the University of Queensland, and the Sydney underground railway system, for which he got the international award for engineering for that year and should have got it, quite frankly, for that decade. Today we still use the underground railway system in Sydney; it is a strategic part of our traffic flows in Sydney, as is that bridge. What great foresight! What great vision!

This man said, 'If you fill up Lake Eyre you will have a hell of a lot of evaporation,' and I will be very technical: you will get over 30 million megalitres of evaporation a year. Remember that the Murray-Darling only has 22 million megalitres; you would get 30 million megalitres of evaporation, and it would be blown over the top of the Murray-Darling Basin.

The inquiry at the time, back in the thirties, said it would not work. It was a three-man committee, but the only one who knew what he was talking about was the meteorologist and he said that it would work. He was the only person on that committee who was technically qualified.

If you say, 'It won't work and it's not going to cause rain over the Murray-Darling,' then where is the 30 million megalitres going to go? Is it going to jump over the Great Dividing Range and set off into the Pacific Ocean? Is it going to go backwards? Is it going to go up into the atmosphere and cause carbon dioxide problems? No. I simply think that, like all water that goes into the atmosphere, it will precipitate when it runs up against a mountain range; that mountain range is the Great Dividing Range, and it would be blown up against that.

I must also say that the scheme of that great man, Bradfield, centred upon two possibilities, One, which of course we would do today, is simply to dig a canal up from Spencer Gulf and fill Lake Eyre with water, which is well below sea level. Alternatively, you could take a little tiny proportion of the massive floodwaters of North Queensland—but I do not think we would send that all the way down to Lake Eyre; I think we would use that on the black soil plains of Queensland. I think that is a much better idea than to fill Lake Eyre.

People say these ideas are ridiculous. Well, during the Great Depression in the United States they built the Tennessee Valley Authority which then produced more electricity than we produce in the whole of Australia put together—free, forever. They built a huge water highway, a channel through the Mississippi River; it went up 1,000 kilometres. It was navigable by quite big boats, actually. And of course they flood-proofed a lot of America as well. They also created the great agricultural juggernaut of the world, the United States' agricultural production. They did all of those wonderful things. Well, our forebears did too. But in this place today we are closing down what our forebears did. The pygmies are at it again! And on that note, I conclude.

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (19:55): I thank all contributors who have been involved in this debate. I should, in summing up, first of all explain the process from here, because a lot of people, with the different bills and the different parts of Murray-Darling reform, have been asking, 'What are the different votes that will come to the parliament?'

The vote that we take this evening is about the structure that a Basin Plan is allowed to have. It deals specifically with the codification of what is being referred to as a mechanism. Effectively, it is a way of saying that the recommended number—which, at the moment, we have seen is 2,750—has economic, environmental and social consequences; for each of those three, you cannot take backward steps, but if you can improve one of the three without hurting the others, the mechanism allows you to do so. There are some processes and some formality built into that in the bill that is before us. And that is the only decision that is effectively being taken tonight.

I will be introducing another bill which will explain how the government intends to interact with that mechanism. That will be the moment when the parliament has an opportunity to discuss the announcements that were made by the Prime Minister and the Premier of South Australia last week.

The third issue will be when I sign off on the Murray-Darling Basin plan. If anyone moves disallowance then that disallowance motion will also be before the parliament. I will not be in a position to do so until the bill before us now has been carried by both houses, because it actually underpins some of the structural aspects that would be contained within that plan. So either two or three of what I have just described will find their way through, to be in front of us in this parliament for the remaining sitting period.

To return to the bill in front of us, I thank everyone for their contribution to the debate. I acknowledge that there has been a strong and consistent refrain from the opposition on ministerial prerogative. I want to make clear both why that is not the government's position and why, when we get to the in-detail section, the government will be willing to look at a compromise proposal which has been negotiated effectively, as I understand it, with the opposition.

In the first instance, the argument that the opposition have been putting has been that it should not be an independent authority on its own; the decision should then fall back to the minister to approve or reject what the authority has recommended. Part of the reason that Prime Minister Howard and the then minister for water, the member for Wentworth, designed the Murray-Darling Basin Authority and the Water Act the way they did was to take the decision out of the hands of politicians, and that is our preference. For that reason I am reluctant to have processes which whack the decisions back into the hands of politicians after a plan and a structure have already been put in place. I do not believe it is the ideal way to go with policy. However, I do appreciate that the structure of how a mechanism can work is something that should have, in structural terms, a workability that is acceptable to both sides of the parliament.

With that in mind, while I understand that there is an amendment from the opposition already on the Notice Paper that deals with the ministerial prerogative part of it, I indicate now before we move to that stage of the debate the government has an amendment that incorporates all the aspects of the opposition amendments but adds a part that says that if that ministerial prerogative is exercised then any amendments that the minister puts through would be disallowable. We will deal with that when it comes. Given that our amendment incorporates all aspects of the opposition amendment, it is important to put on the record the context, which is that the government has arrived at this on the basis of the different contributions that have been made by the opposition in the course of this debate. It is not our preferred course of action. But we believe that the compromise that it offers will provide a way through. I commend the bill to the House.

The DEPUTY SPEAKER ( Ms K Livermore ): Before calling the next speaker in this debate, I will deal with the division that was called after 6.30 pm. I took the view that the deferred division should not be proceeded with until the minister speaking at 8 pm had completed his speech, and so I did not interrupt the minister. The debate is adjourned and the resumption of the debate will be made an order of the day for a later hour.

The DEPUTY SPEAKER ( Ms K Livermore ) (20:00): In accordance with standing order 133(b), I shall now proceed to put the question on the motion moved earlier by the minister on which a division was called for and deferred in accordance with the standing order. No further debate is allowed. The question is that amendment (9) be disagreed to.

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (20:19): I move:

That amendment (13) be agreed to.

Mr STEPHEN SMITH (Perth—Minister for Defence and Deputy Leader of the House) (20:22): Madam Deputy Speaker, I present the reasons for the House disagreeing to Senate amendment (9) and I move:

That the reasons be adopted.

Question agreed to.

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (20:37): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr BURKE ( Watson — Minister for Sustainability, Environment, Water, Population and Communities ) ( 20:3 9 ): I present a supplementary explanatory memorandum to the bill and seek leave to move government amendments (1) to (4) on sheet BN252 as circulated together.

Leave granted.

Mr BURKE: I move government amendments (1) to (4) on sheet BN252:

(1) Schedule 1, item 10, page 6 (line 11), at the end of subsection 23A(2), add:

; and (d) a requirement for the Authority not to propose an adjustment under paragraph (1)(a) or (b) without:

(i) inviting members of the public to make submissions to the Authority on the proposed adjustment; and

(ii) providing a reasonable amount of time for those submissions to be made and considered by the Authority.

(2) Schedule 1, item 10, page 6 (line 20), omit "is adopted", substitute "may be adopted".

(3) Schedule 1, item 10, page 9 (lines 12 to 18), omit subsection 23B(6), substitute:

(6) As soon as practicable after receiving the amendment, the Minister must:

   (a) consider the amendment; and

   (b) either:

      (i) adopt, in writing, the amendment; or

      (ii) give the Authority notice, in writing, that the Minister has decided not to adopt the amendment.

   Note: If a long term average sustainable diversion limit for the water resources of a particular water resource plan area (or a particular part of those water resources) is amended, the long term annual diversion limit for those water resources is also amended (see table item 7 of the table in subsection 22(1)).

(4) Schedule 1, item 13, page 9 (lines 28 to 32), omit the item.

I had an opportunity in my summing up to explain the reasons for these amendments. I do not propose to add to it.

Mr HUNT (Flinders) (20:39): The good part of the Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill is that it allows environmental works and measures to be counted in such a way as to mean that the pressure on farmers, farm communities and regional communities is diminished whilst achieving our environmental outcomes. The bad part of this bill was that it removed ministerial, and potentially parliamentary, scrutiny from the Basin Plan. That scrutiny did exist, contrary to what the minister said, under section 44(3), which gave the minister a power to act. That is now being effectively retained and we have put that forward and the government has adopted it. We are happy that the parliament is now sovereign again.

Question agreed to.

Bill, as amended, agreed to.

Mr BURKE (Watson—Minister for Sustainability, Environment, Water, Population and Communities) (20:40): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.