Mr DUTTON (Dickson) (12:03): I rise to speak on the Aged Care (Living Longer Living Better) Bill 2013 and the related bills. For the many of us who have had a relative requiring care, the experience can be a daunting and at times personally distressing experience. Irrespective of their financial position, our grandfather, grandmother, mother or father deserve respect, dignity and quality in their senior years. As family members we want to know what options are available for our loved ones. The simpler the system is to navigate, the better for all concerned. There should be opportunities for appropriate care in the home. Understandably, so many want to stay in the surroundings they love and that are familiar to them and their family. If they require residential care—low or high care—there should be options readily available, preferably in their local community.

I do respect the intent of aspects of the reforms that have been proposed. We know that there are many, many challenges ahead and the proportion of the population over 70 years of age is expected to double over future decades. The incidence of chronic disease continues to grow rapidly. One million Australians receive aged-care services subsidised by the Commonwealth, and that is expected to more than double by 2050. Despite this, the government's approach to aged care and much promised reform has been protracted to say the least. The government announced the Productivity Commission's terms of reference almost three years ago. The draft report was released in January 2011, and the final report was provided to the government in June of that year. The minister and Prime Minister did not publicly release the report until August 2011, and it took a further 250 days to respond to the PC's recommendations in the form of the Living Longer Living Better policy.

The government trumpeted the release on the day as a revolution for the sector. The government continues to claim that this policy is a $3.7 billion investment when it is not. Not surprisingly, stakeholders were initially enthusiastic given the flashy headlines. Looking at the finer detail, the proposals are nowhere near as ambitious as first made out. That has been a current theme across the last six years under the stewardship of this government. The government is saving over $560 million through means testing, and they include that as part of the so-called $3.7 billion investment. Over $2½ billion is being redirected from existing programs, including $1.6 billion from the Aged Care Funding Instrument. Places and funding are to be transferred from residential care to home care, and funding will be cut from the Long Stay Older Patients initiative. The net investment over four years is just $284.6 million, not $3.7 billion. In fact, it is less than one per cent of the existing aged-care budget over the forward estimates. The unanticipated changes to ACFI and how they are applied have reduced confidence in a sector already struggling to break even.

It is, to say the least, a ham-fisted and counterproductive way to initiate reforms. In the few months following the policy's release, $3.5 billion of capital projects were found to be in jeopardy as a result of the uncertainty caused. In fact, independent analysis undertaken by the Centre for International Economics for Leading Age Services Australia found a revenue black hole of more than $750 million for providers due to the ACFI cuts. The average reduction for each affected resident is estimated at between $20,000 and $30,000 in care funding every year. This corresponds with what we are hearing from providers, and it is particularly hard on the smaller operators and those in regional and rural areas.

The minister has implied that there has been rorting and 'unusual claiming'. However, at Senate estimates it was confirmed that there has not been a single prosecution in the last five years. The sector is crying out for incentives to invest in new capital to open new beds. The government's actions so far appear to have had the opposite effect. The other significant aspect, recently launched by the government, is the workforce compact. This complex arrangement appears to be linked to the funding lost through the ACFI changes. Under the compact, providers with 50 beds or more must have an enterprise bargaining agreement to receive that funding. Those with fewer than 50 beds do not require an EBA but must still comply with the compact obligations to access funding. In itself, this will impose further cost pressures, again particularly affecting smaller providers in rural and regional areas. Providers unable to comply with these requirements will not be able to access the funding.

Across the sector there is recognition that the hardworking staff in aged care need to be paid well for the demanding and important work they perform, but this proposal, certainly by any objective analysis, seems more about propping up the beleaguered HSU than about genuinely helping the workers, those in care or, indeed, the providers.

The bills before the parliament today enacting the government's Living Longer Living Better policy reflect a small hit-and-miss selection of the Productivity Commission's recommendations. Specifically, the bills: (1) remove the distinction between low-level and high-level residential care; (2) provide a new means test combining income and assets tests and new annual and lifetime caps on means tested care fees; (3) allow accommodation costs to be paid through a refundable lump sum, a rental periodic style supplement or combination; (4) make changes to home care, including requiring contributions for people that enter home care on or after 1 July 2014; (5) establish a new aged-care pricing commissioner; (6) extend the operation of the accommodation bond guarantee scheme to new bond arrangements reflected in the government's reforms; and, finally, establish the new Australian Aged Care Quality Agency to replace the Aged Care Standards and Accreditation Agency from 1 January 2014.

The Aged Care (Living Longer Living Better) Bill 2013 removes the distinction between low care and high care, which is intended to provide one approval process for residential care. It is argued by the minister that this will reduce reassessments and allow individuals requiring a permanent residential care place to access services according to need. The bill proposes changes to the residential care subsidies and fees for residents who enter care on or after 1 July 2014. This includes a new means test combining income and asset tests and new annual and lifetime caps on means tested care fees. As stated in the minister's second reading speech an annual cap of $25,000 will apply for means tested fees, with a lifetime cap of $60,000. Both are to be indexed. Any contribution does require an appropriate safety net. We do not want a situation where people are precluded from necessary care because of what they are required to pay. It is appropriate that the proposed contributions and respective caps are examined as part of the Senate inquiry.

I recognise that there is a delicate balance between funding quality care, ensuring affordability of care and the sustainability of the system overall. In relation to accommodation costs the bill will allow fees to be paid through a refundable lump sum, or a rental periodic-style supplement, or a combination of the two. It is stated that aged care providers will not be able to distinguish between care recipients based on means of payment. Clause 52G(3) provides that the minister may by legislative instrument determine the maximum amount of accommodation that an approved provider may charge, including the maximum daily accommodation payment amount and the method for working out the refundable accommodation deposit. The bill also proposes a new form of home care to replace community aged care packages, extended aged care at home and dementia packages. An income tested care fee will apply to home care for all except pensioners. This again will be capped by year and by lifetime.

The Aged Care Pricing Commissioner is also established for the stated purpose of making decisions on pricing issues. The functions of the commissioner are as follows: to approve extra service fees; to approve accommodation payments that are higher than the maximum amount of accommodation payment determined by the minister; and other functions as determined by other acts or by the minister by determination. Whilst I acknowledge that there are lead times for these changes, the independent review proposed in the legislation is not to commence until 2016 and will not report to parliament until 30 June 2017.

The two bond security amendment bills extend the operation of the Accommodation Bond Guarantee Scheme to new accommodation payment arrangements. The Australian Bond Guarantee Scheme, prescribed in the 2006 act, provides a mechanism by which the Commonwealth may repay outstanding bond balances to care recipients should a provider become insolvent or be unable to refund the balances. There is also the capacity for the Commonwealth to recover the cost of refunding these bonds which is amended through the relevant act to reflect the changes to accommodation payments.

The Australian Aged Care Quality Agency Bill 2013 establishes a new agency. This is to replace the Aged Care Standards and Accreditation Agency from January next year. Aged care providers will be responsible to it for quality assurance of aged care services delivered in the home or a residential facility. The functions of the new agency are as follows: accrediting residential care facilities; conducting quality reviews of home care services; promoting high quality care, innovation and continuous improvement amongst approved providers of aged care; and providing information, education and training to approved providers of aged care.

I am yet to be convinced that red tape in what is already a highly regulated sector has been appropriately streamlined or that it has even been genuinely a priority for the government in this process. I do support high standards and efficient regulation to ensure consistent, quality services for the many vulnerable people in care, but nothing is achieved by unnecessary red tape except a diversion of much needed resources away from those most in need. If we want an innovative and efficient sector, unnecessary red tape cannot be ignored.

The related Australian Aged Care Quality Agency (Transitional Provisions) Bill 2013 enables the transfer of assets and liabilities from the Aged Care Standards and Accreditation Agency Ltd to the Commonwealth to facilitate the establishment of the new agency. Over $20 million was included in the budget for the Aged Care Financing Authority and over $14 million for the Aged Care Reform Implementation Council. About half the council's budget is for communications. The financing authority's role will be to provide independent advice on pricing and financing issues. It will make recommendations about subsidies and payments. It will also approve higher fees for accommodation and extra services not covered by subsidies. While there may be good intent and while we do not disagree with some of the functions performed, there has been a proliferation of separate bureaucratic structures under this government; in fact, it is a hallmark of this government. We believe more focus should be on the resources for front-line services and reducing where possible costly bureaucracy.

The government's time lines are peculiar on these bills. Despite years of deliberation, the bills were only introduced in the last sitting period, and the minister has said that they should be passed immediately. The government has set the snail pace of these reforms to date. The government has not brought the bills on for debate until today. I am not sure why or how procedurally the minister was expecting to ram the bills through the parliament. This is far from what should be normal process.

The coalition is keen to support good reform in this important area. Disappointingly for some, the reforms proposed fall very well short of what was promised. The House should remember that this is the minister who is responsible for delivering 16 early psychosis prevention and intervention centres, yet since 2010, when that promise was made, a grand total of zero of the 16 has been delivered. This is despite the Prime Minister herself saying:

I want to be absolutely clear—mental health will be a second term priority for this Government.

Those people right across the Australian community in the mental health sector, those people who access services provided by mental health providers or, indeed, those people in the aged-care sector can add that quote from the Prime Minister to the long list of broken promises that has come to plague this government. For the aged-care sector, this is not a good track record, and it comes on the back of so many other implementation blunders across the rest of government.

The bills have rightly been referred to a Senate inquiry, and the coalition will carefully consider the findings and the submissions. A number of changes will be enacted by regulation rather than legislation, and some of that detail is yet to be provided and will also require responsible scrutiny. This House should have the opportunity to properly consider any complex changes to aged care. The Senate inquiry provides that opportunity. We need to ensure that we can at least achieve the best outcome from what is before us.

In closing, I want to say to the many providers that I have spoken to around the country, particularly regional providers, that we hear their concerns. We do share their view that this minister has a tin ear when it comes to the concerns that they have raised either with the government or through the peak bodies about some of the sections within this act. It is exactly the reason that we set up the Senate inquiry and asked for people across the sector to provide input so that we can improve this legislation. As I say, the time lines on this legislation have been protracted. It has gone on for the last six years. It is interesting to note that out of the billions of dollars that this government wasted in its response to the GFC not one dollar was spent on aged care: no money for additional infrastructure or for providers, no money in wage compacts, no money for patients and services provided to the clients and residents within aged-care facilities—not a dollar.

This government came into power in 2007 promising that it would reform the aged-care sector. This minister has only been in the portfolio since the second half of these six years of the disastrous Rudd-Gillard government, but the dysfunction has continued up until this very day, and we are seeing it play out in this bill. We all want to see a better outcome for older Australians in terms of their interaction with the aged-care system, and the coalition is committed to trying to resolve some of those outstanding issues. We wanted to entertain consideration of this bill, but we also wanted to ask for providers, for care givers, for people of good intent to come forward to that Senate inquiry to make sure that their detail was provided, that their concerns were aired, and we expected that the government would listen to some of those concerns. This is a government that cannot be trusted. It says, 'Trust us in the detail; we've got the bare bones of the legislation now and we'll rush all of the other detail through in another process,' but this government cannot be trusted.

The Treasurer will deliver the speech tonight that people are anticipating will chart some way forward from the disaster of the last five or six years, but people will not get the outcome that they want from this Treasurer, they will not get the outcome that they want from this government, because that has been the track record over the last six years. Because of this government's dysfunction, because of distractions with leadership, because it has promised surpluses and then failed to deliver them, because it has spent money and run us into enormous debt, it is unfortunate that people who are looking for aged care-services in our country today have suffered because of that distraction. They have suffered because this government decided that aged care was not a priority for the Rudd government and it has not been a priority for the Gillard government.

I think the responsible course of action for this government to take would be to listen to the concerns of those who raised them, quite rightly, in the Senate process and to look at sensible amendments that could be proposed to try and improve this bill. As a parting gesture to the Australian people, with only a few months to go before the next election, in the dying days of the Gillard government, please listen to those concerns of the aged-care sector, of the aged-care providers and the people who seek care and are being cared for in these facilities around the country. Listen to the expertise that they bring to the table.

Listen to their concerns about this compact. They do not want to feather the lifestyle of people like Craig Thomson who now occupy the upper echelons of the HSU. That is what this bill provides: it is taking money away from one part of the aged-care sector and seeing it, at least in part, dispersed back through the HSU. The HSU is a disgraced union body in this country. The member for Dobell, I note, has just been told that he cannot run again for the Labor Party—three months before the election. It is absolute contempt that the Labor Party has for the people in the seat of Dobell and, indeed, that through his own actions he has.

This bill seeks to confer an ultimate benefit on the HSU. People are asking why is that the case, why divert money away from aged care and impose another cost burden on aged-care providers in terms of having to engage with the HSU? Why do they need to do that? I will tell you why: because they decide the preselections of people who sit on this government bench. They decide the preselections of people like Craig Thomson and others who come into this parliament and ultimately decide whether or not they will direct their backbenchers, and frontbenchers, to vote for Julia Gillard or Wayne Swan or Kevin Rudd or Bill Shorten or Mark Butler or—

The SPEAKER: Order! The member will refer to members by their appropriate titles.

Mr DUTTON: whoever it is, Madam Speaker, that seeks leadership of the ALP. That, when you cut it all down, is what a significant part of this bill is all about. And that is why the Australian public continue to express disgust in this government.

They cannot sort out their own internal issues and therefore those in the aged-care sector have suffered. They do not want to listen to the outcome of the Senate inquiry because essentially all they have sought to deliver through this bill is not reform to the aged-care sector but a blank cheque to the HSU and to the other unions involved. That will be an albatross around this minister's neck. This minister will seek leadership of the Labor Party at some point into the future—I am sure he will; he is an ambitious person.

The SPEAKER: The member will return to the bill before the House.

Mr DUTTON: For a long time, Madam Speaker, this minister has fooled the industry, but I find as I move around the country talking to providers that they are now starting to see through all of the smoke and mirrors. They are now starting to see this bill for what it is. It is not about a reform of the aged-care sector. If they were serious about doing that they would have done it five or six years ago. They would have applied at least one dollar of the billions of dollars they wasted to the aged-care sector to help build infrastructure and to make it more affordable for people on low incomes to go into aged care, but they sought to do none of that. They pushed it off to the Productivity Commission to try to get through the last election. Then, when they had the Productivity Commission recommendations, they sat on them and pushed them aside because they had run out of money. That is what happened with this government's approach to aged care. Then they tried to pretend that they had some $3.7 billion huge investment, but when you strip it down it is a net extra spend of $250 million over that four-year period and a shameful exercise in deception by this government and by this minister. They need to be called for it.

So what have we done? We have tried to engage constructively with the sector to work out how this bad bill could be improved. What could be changed to improve the situation for aged care in this country? How could we make it easier for people to find their way through the mess of aged care and find a place for that grandmother, grandfather, mother, father or loved one? That is what we sought to do through the Senate inquiry process, and yet what does this minister do? This minister says, 'We are going to ignore that Senate inquiry process, we are not going to listen to the recommendations of the sector, we are not going to listen to people of good will who sought to make this bill better; we just want to deliver for the HSU.' That is really the only objective that the government seeks in this bill. They want to make sure that they repay a dividend to their union bosses, and that really sums up what this whole sad, six-year period in our country's history is about.

This is what it amounts to. The puppeteers have pulled the strings for the last six years, and we have seen it play out through leadership changes which have impacted on the government's desire in this area. This is the point. This government has been distracted by its own leadership deliberations, by the knifing of Kevin Rudd and by the proposed resurrection of Kevin Rudd—not to be. This government, whilst it has been distracted by that, has not concentrated on aged care or the millions of Australians in the future who will seek aged-care services for their loved ones. The government brings this bill in at the eleventh hour of this dying government because they seek to repay a dividend to those union bosses who supported their entry into this place. Craig Thomson—

The SPEAKER: The member will refer to members by their appropriate titles.

Mr DUTTON: I am sorry. The member for Dobell stands as the monument of the HSU and the government's activities in this place. He stands here as a reminder to all Australians that this government has not had its eye on aged care. In this bill they have one focus, and that is to repay their very heavy due to the HSU. That is what this minister needs to account for.

Accordingly, I move:

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

"the House is of the opinion that further consideration of this bill, and the related bills, should be deferred until the Senate Standing Committee on Community Affairs has reported on its inquiry into the bills."

The SPEAKER: Is the amendment seconded?

Dr Southcott: I second the amendment.

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

Mr GEORGANAS (Hindmarsh—Second Deputy Speaker) (12:28): I am very pleased and very honoured to speak on the Aged Care (Living Longer Living Better) Bill 2013 today, because this bill delivers security, certainty and fairness for millions of older Australians. It delivers fairer and more flexible arrangements for people looking to stay at home or to move into aged care. This bill is very important to me and to many of my constituents. As I have said many times in this place, the electorate of Hindmarsh has one of the oldest demographics in the country. Twenty per cent of the residents of Hindmarsh are age 65 and over. Many say it is the oldest electorate in the country; I like to say it is the wisest electorate in the country, because with age comes wisdom, and I have benefited greatly from the many older constituents in my electorate.

In my electorate, there are an extra 870 high-care places and 968 low places thanks to the extra funding in 2010 and 2011. On 20 April 2012 we heard the minister announce the $3.7 billion for the Living Longer, Living Better aged care reform. That is a huge increase, and what it means is that people are being looked after when they need to be. As we have heard, many of these people have worked all their lives and paid their taxes. Many have fought in wars. They deserve the best treatment and care that we can possibly give. These people have contributed so much to this wonderful nation. They built the foundations that have allowed us to prosper.

There are a lot of wonderful facilities in and around my electorate that are providing these new places and they deserve, very quickly, due credit for their hard work in this process. They include places like St Hilarion, an Italian nursing home that looks after many more people than just Australians with Italian backgrounds; the ECH; Southern Cross; Masonic Homes; St Basil's; St Martin's; Kilparrin Nursing Home; and the Ridleyton Greek Home for the Aged. All of them do a wonderful job in caring for and looking after those in need in their old age. In addition, I would like to thank the tireless efforts of the staff from each facility who look after those residents to ensure that their lives are happy and comfortable.

This government has also delivered 475 community aged packages in my electorate of Hindmarsh. This is in addition to the 54 extended aged-care at home packages and 20 extended aged-care at home dementia packages. We know how important it is for people to be able to stay in their homes. When you speak to people in my electorate, the majority say that they wish to stay in their homes and be cared for there. These extra packages are very beneficial.

The committee that I currently sit on recently finished an inquiry into dementia and how as a nation we can best care for people living with this condition. Australia is a wealthy nation and Australians are living longer. It is fantastic that we are living longer. Medical breakthroughs allow us to live longer. They allow our bodies to keep going and to keep supporting us for many more years than people in the past. Medical breakthroughs have been good for us. But there is another story. People with dementia are unfortunately growing in numbers. We know that by 2050 the number of Australians with dementia will quadruple. We will have quite an epidemic on our hands unless we do things now to put things in place to look after those people.

We know that not everyone is going to need aged care when they get older. In fact, we would all probably—as I said earlier—prefer to stay home and have the care required to look after us offered there. That is why the government also gave over $3 million in 2011-12 to centres in my electorate for day therapy. Day therapy gives older people the chance to come along and take part in activities away from home. This is a big thing. When you get older, you may lose some mobility and confidence. Having support so that you can get out to one of these day centres is a great thing.

This bill also addresses some of the issues facing those who care for our older Australians. Aged-care workers are some of the lowest-paid workers in Australia. They perform the vital task of looking after our parents, our grandparents and our great-grandparents—the older Australians in our community. We know that most Australians who pursue a career in aged care do it for much more than the financial reward. But pay rises are a big incentive to work in this growing industry. With the aged-care workforce needing to almost triple in size by 2050 to support our ageing population, we need to act now to attract and retain aged-care workers.

That is all part of the Living Longer, Living Better aged-care reforms. The Australian government announced that up to $1.2 billion will be provided to address the workforce pressures. We know that the current workforce is one of the oldest workforces. That is what the demographics of the aged-care workforce in Australia tell us.

Funding will flow through from July by way of a workforce supplement, delivering pay rises for aged-care nurses, care workers and others in the aged-care industry who look after older Australians. An additional one per cent pay rise will be available, above minimum annual wage increases or other wage rises which are negotiated through enterprise bargaining agreements, for workers who are employed by aged-care providers who meet the requirements of a workforce compact.

What does that mean? A personal care worker, who is currently paid the award rate and who is employed by an aged-care provider who meets those requirements would, effectively, see a pay rise close to 18 per cent over four years. Enrolled nurses will receive 25 per cent higher pay and registered nurses close to 30 per cent, in the same situation.

The second part of the Addressing Workplace Pressures initiative is the Aged Care Workforce Development Plan, which will begin in mid-2013. An expert advisory group will be established to focus on better ways to support the aged-care workforce. This group will seek to ensure that, on top of wage increases, those aged-care workers get benefits, including improved career structures; better training and education; and better work practices, including lowering the high rate of workplace injuries in aged care.

The workforce supplement is part of the Addressing Workforce Pressures initiative, which will be delivered in two parts through the aged-care workforce compact and through the Aged Care Workforce Development Plan. These are very important initiatives. As I get around in my electorate and talk to aged-care providers, one of the biggest issues they raise is maintaining and retaining the workforce required to look after older Australians in their facilities.

Another big and fairly complex issue in my electorate is multicultural aged care. The Australian government is committed to ensuring equitable access to high-quality, culturally-appropriate aged care for all people from culturally and linguistically diverse backgrounds. As I said, this is extremely important for my electorate because I have a very high number of Greek Australians and Italian Australians who migrated here in the fifties and sixties, all as young men and women, perhaps in their 20s, perhaps even in their teens or late 20s, who today are the fastest ageing Australians in my electorate. They are now at the stage where they are already needing services or are starting to need them. They are not the only ones. People from culturally and linguistically diverse backgrounds have specific needs that must be addressed. Those needs can be as basic as having familiar food available.

We know that when people develop, for example, dementia, nothing is worse than not being able to speak the language or know what people are saying to you. We know that many older Australians revert to their native tongue when they develop dementia. It might simply be a case of employing bilingual workers who can speak the language of the resident, make them feel comfortable so they feel they are being listened to. All these things are contained within the new strategy, which aims to ensure that aged care is inclusive of people from all backgrounds.

Initiatives outlined in the strategy also include a rolling review of the National Aged Care Advocacy Program, to include an emphasis on promoting, supporting and maximising access to advocacy for older people from culturally and linguistically diverse backgrounds, their families and their carers. It also includes ensuring that the Aged Care Complaints Scheme is promoted to those linguistically diverse background communities, including the use of interpreting and translating services, and working with the culturally and linguistic diverse background sector to provide the cultural competency training for promotion and incorporation into all aged-care services. It also includes developing structured pathways to facilitate the employment of appropriate bilingual staff in the aged-care system. There has been a lot of work going towards ensuring that we have in place a system that caters for all Australians, no matter where they come from or what their background is.

I am very proud of this bill and that is why I am supporting it. One day we as a nation will be judged on how we have looked after our elderly. As I said earlier, many of the people that we are talking about today have paid their taxes all their lives, have worked hard and have gone through wars just to ensure that the foundations of this country are steadfast so that we can live a better life than they did. I am proud to support this bill and I commend it to the House.

Ms MARINO (Forrest—Opposition Whip) (12:40): I support the amendments moved by the shadow minister, because we know that under this government the aged-care system in Australia is rapidly approaching crisis point, particularly if you live in an electorate like mine, which is a rural and regional one, or one of those that involve smaller providers. Prime examples are in Western Australia, where last year the federal government allocated 1,564 additional residential aged-care places to our state. However, only 314 of these beds were actually taken up—it is a great indication. In the preceding year, of the 1,208 beds on offer only 507, or 42 per cent, were taken up in WA. What is worse, over the last three years 786 bed licences, the licence that provides the funding for aged-care beds were handed back to the government—283 of those were from Western Australia. Now in WA we are some 2,400 beds short of our aged-care requirements. That is a lot of people in my state and in my part of the south-west.

The government has chosen not to fund aged care in the way it needs to. Instead, it has wasted billions of dollars on unrealistic dreams and schemes that often have turned out to be nothing less than a nightmare. This is a at time when the group referred to as the baby boomers, those born between 1946 and 1964, start to enter retirement—that section of our community who are now between 46 and 65 years old and are looking at their retirement and aged-care solutions. It also looks as though we will have to defend their superannuation savings from being grabbed by what is just an incredibly wasteful Labor government.

Around nine per cent of our population is aged 70 years or older. That is expected to rise to 13 per cent by 2021 and 20 per cent, around 5.7 million people, in 2051—and this government has sat on its hands. By 2050 over 3.5 million Australians are expected to use aged care each year. As we are ageing we are acquiring more complex healthcare conditions and changing disease patterns, resulting in increasing and changing aged-care needs. The challenges include a larger, increasingly culturally diverse, ageing population. I see that in my electorate.

The dependency ratio in 2007 was six people of working age for every person aged 67. By 2047 this will be almost halved, to 3.2 people of working age for every person aged over 67. So with fewer people generating taxation revenue, care options of concessional and assisted aged-care residents, those with the least resources, will be jeopardised. And at this crucial time, under a dysfunctional Labor government, the agenda in Australia has been to remove support for residential-aged-care provision and waste taxpayers funds hand over fist in so many ways.

The fact that we are debating this bill prior to an election shows that this government has not prioritised aged care at all. It is no wonder that residential aged-care providers are not taking up those bed licences. Despite promises of reform, five years on under this government there is very little actual change in the communities—my communities and your communities—where it is so desperately needed. We have seen the government undertake a litany of reports and reviews, including 20 reviews and three Productivity Commission reports. They were continually ignored. They were put off until now when here we are, just prior to election, discussing aged care. They were continually ignored or responded to with more inquiries without a decision being made or anything being done to secure aged care into the future. However, the bills only cherry-pick a few recommendations of the Productivity Commission report Caring for older Australians, which brings us to the focus of the bill before the House today.

The government's changes to aged-care funding which came into effect on 1 July last year under the Living Longer Living Better program represent, in effect, a knife to the heart of small regional aged-care service providers. I know that because they have told me. When the Labor Party and the Labor government spruiked their plan as the panacea for our aged-care system, they deliberately failed to tell the Australian people that this program in fact claws back $750 million from the aged-care sector over the next 2½ years. The actual practical result, as opposed to the misrepresentations of the government, is that residential aged-care providers will receive less funding for new patients than they got for patients last year. That is what my aged-care providers are telling me. The 2012-13 budget alone will see $500 million of ACFI funding ripped out of a sector that is already under pressure.

Grant Thornton reported, in the Living Longer, Living Better reform report #2, of June 2012:

In the last two months since the Government's reform announcements, over $3.5 billion in planned aged care development projects have been shelved.

That is the actual result. A very frail elderly Australian entering aged care in the current year brings with them federal funding of around $56 to $63 a day less than a resident admitted in the last financial year. Given the average turnover rate in aged-care facilities of around 50 per cent per annum, by the end of the current financial year half of the residents will be supported at this new lower rate. One can only imagine what it is doing in the smaller facilities. I know you can well imagine it, Mr Deputy Speaker Scott. At the end of the next financial year, nearly all of the residents will be on the lower rate of funding. For a 40-bed unit, this would represent a loss of funding of close to half a million dollars by 2014-15. With only 40 per cent of residential aged-care providers operating in the black, I just wonder whether this government has been asleep in developing this policy and presenting it at this late date, so close to the election.

In its media release of 10 August 2012 entitled 'Aged care providers facing a $750 million revenue shortfall', Leading Age Services Australia asserts:

Aged care providers face a revenue black hole of more than $750 million over the next two-and-a-half years …

It also outlines research findings as follows:

… 89 per cent of aged care facilities will face "unrecoverable" losses of revenue under the revised funding model, which came into effect on 1 July, 2012.

"This ultimately means an average reduction of between $20,000 and $23,000 in care funding for each affected resident every year" …

…   …   …

"The average loss per aged care facility is more than $125,000 each year, with some facing revenue shortfalls of up to $560,000. Smaller and rural facilities are potentially the most affected.

I know that also for the reason that these are the providers that come and speak to me directly.

Many aged-care providers in regional Australia are already losing money. The government members need to come out into the regional areas and see exactly what this is doing. Funding for residential aged care is managed under ACFI, the Aged Care Funding Instrument, in which levels of acuity—nil, low, medium and high—are assessed over a range of biological and behavioural factors determining the funding received. The factors are categorised as activities of daily living, behaviour and complex health care, and there are 12 in total. The levels are frequently reviewed in individual patients. In one case recently, from my electorate, the patient's level of acuity rose from low to medium in the behavioural section, due to deteriorating behaviour; however, the payments actually dropped by $18 a day. Astoundingly, as the need increased, the funding reduced.

Given the impending increase in aged-care needs bearing down on Australia in the form of our ageing population, this assault on the viability of residential aged-care providers is not acceptable or sustainable. A $56-a-day loss equates to $392 a week, or $20,440 a year, per patient. The onset of this issue will be insidious; it will be gradual, as more and more residents are turned over and lower payments become far more common. Crunch time will probably be at the end of the current financial year, when the new budgets for these providers are prepared. And if, as I heard, we are to be judged on how we treat our most vulnerable, the Labor government's new funding model is definitely a fail. This is why aged-care providers cannot afford the additional beds: they are already losing on each and every bed, so extra beds means greater losses. And that is why, of the 5,278 new residential aged-care places allocated to Western Australia since 2007, only 910, or 36 per cent, have been taken up, simply because they do not attract sufficient funding. Well, now they are going to attract even less. This government is making it even harder for our elderly by cutting support to the most needy and the most frail.

The other issue to be addressed in the government's changes is Labor's new agenda of interfering in management through the workplace supplement. In aged care the Labor government, as it has in childcare, has sought to enhance union control and government interference. It offers more money for wages, but receiving it can cost providers more than they actually receive. Aged and Community Services WA estimates that an aged-care provider who operates a small 31-bed regional facility would be eligible to receive $17,000 under the workforce supplement principles but in order to receive this would have to commit to an additional $30,000 in wages. That is a false economy—and a devious manipulation from a government becoming famous for such actions.

At the last federal election the coalition outlined our plan for the first-ever four-year agreement, and we set out some areas that we believe ought to be included in any agreement. We are committed to the delivery of a high-quality, affordable and accessible aged-care scheme that meets the needs and the preferences of older Australians. Our goal has always been to provide the very best care, whether in the community or in residential care, and particularly for people in rural and regional areas like my own electorate. The fundamental work on the first-ever aged-care provider agreement is certainly going to be retained. I certainly support the amendments moved by the member for Dickson. And I would say to those members opposite who have not spent time discussing how Labor's policies are actually impacting smaller rural and regional providers that I strongly encourage you (1) not to have aged care as a last resort of this government just prior to an election and (2) to actually get out there and talk to them on the ground; go and talk to the people in my electorate this is affecting so badly—perhaps the people at Tuia Lodge in Donnybrook. I had a whole raft of different providers, not just from my electorate but from other electorates, come to visit me just to say how badly this is affecting them. They are concerned about their ongoing viability. They are desperate to be able to provide the supports and services the people in their care need, and they so desperately want to provide these supports and services. But the government is putting all of that at risk.

I know in talking not only to the providers but to the staff as well that they are very passionate about what they do; they are passionate about the people in their care. And I know that the people who live in those communities desperately want to be able to spend their last years in small facilities in their own communities, and that is the type of facility that is on offer out in our electorates. We need to work hard to make sure these providers are in a position to offer opportunities for people in those smaller communities to actually receive the aged care they need in their local community. So, on that basis, I support the amendments moved by the member for Dickson.

Ms BRODTMANN (Canberra) (12:54): My electorate of Canberra is the largest by population in Australia, so I proudly represent a very large number of older Australians, older Canberrans and older people who look to government to help them make sure that as they live longer they also live better. There are more than 1,100 residents in mainstream residential aged-care facilities in my electorate and I have had the pleasure of visiting many of them. I have spent a lot of time talking with residents and staff and families. Most recently, last week, I was out at Brindabella Gardens visiting Eileen Pegrum, who turned 100 last week, and I am visiting a number of other people who are turning 100 throughout this year, Canberra's centenary year, to drop flowers off for them and take some cake and just catch up with them.

Just recently, I visited Alice Lukac at her home in Isaacs and I spent a wonderful morning with her family—her grandchildren, her daughter her granddaughter and her great granddaughters. They are very interested in education and it was wonderful not just talking to the family about their aspirations for education but also talking to this woman in the family home about her history. I visit many Canberrans throughout the course of my job every week, and it is a great pleasure in many ways to sit at their feet and just listen to the stories and the contributions they have made to Australia and, most importantly, to Canberra—people out at Araluen and St Andrews and Goodwin and Brindabella. I have also hosted a very well-attended aged-care forum with Minister Butler and I have taken the minister to meet with aged-care providers and residents around the electorate as well. He has always been very well received and has always listened very closely to the needs and the discussions with those residents, staff and families at those aged-care providers.

Canberra is fortunate to have so many quality aged-care providers and services; however, we all recognise that the system needs to be constantly improved to meet changing demands. The current aged-care system needs to be reformed to meet the needs of an ageing Australia, and that is what we are doing. I know that, when it comes to aged care, the preference is for people to stay in their family home for as long as possible. We all want to be able to age with dignity in our own home. But, when that is not possible, we all want to be assured that there are aged-care services offering certainty and stability and dignity.

I know, from speaking to the many people in my electorate in aged-care services and the providers, that there are three things of particular concern to my community. The first is the quality of care that is being provided in the aged-care sector, the second is the financial cost associated with aged care, and the third is being confident of access to the right information to make the right choices. I have no doubt that the legislation the government is introducing today will vastly improve the way aged care is delivered in Australia.

The government's $3.7 billion Living Longer Living Better reform package contains five bills that build on the Productivity Commission's recommendations. Many Canberrans who are involved in the aged-care sector made submissions to the Productivity Commission inquiry into caring for older Australians, and these bills represent Labor's plan for the future aged-care needs of all Australians. These are major reforms that will benefit both the key providers of aged-care services and those who need them.

Others will speak in more detail about the specifics contained in these bills, but I want to talk today about the positive impact these reforms will have in my electorate. These reforms will increase and improve the supply of aged-care services so that the sector can better address changes in demand. In a generation's time the population of people aged over 65 is expected to increase from about 3,000,000 to over 8,000,000. Labor recognises that current and future demographic changes are placing increasing pressures on the aged-care sector, which is why we are aiming to increase and improve the supply of services.

In a growing electorate like Canberra, which also serves as a regional hub and provides care to many people living in the capital region, this is a significant and welcome reform. Labor understands that families and those receiving aged-care services want to have better information so they can have greater choice and greater control. That is why we have sat down with industry and with aged-care consumers and age-care workers to create these reforms.

In all areas of health care, access to transparent information and choice is vital. Labor has initiated a raft of improvements for consumers in all areas of health care. Most importantly, empowering people to meet their aged-care and healthcare needs is at the centre of our reforms. I know these measures will be welcomed by aged-care providers and aged-care consumers.

In my many visits to aged care homes and in my conversations with providers and residents, workforce issues are almost always raised with me. They are always, if not at the start of the conversation, in the middle of the conversation. They are up there. We must have a stable, skilled and dedicated workforce to deliver the reforms Labor is bringing about. These bills specifically address the workforce issues in aged care with measures to attract and retain a skilled and capable workforce. There is up to $1.2 billion in funding to address workplace pressures.

I note that the Minister for Mental Health and Ageing just recently announced 72 new aged-care nursing scholarships as part of Labor's commitment to boost the aged-care workforce. This was in addition to an investment of more than 2,800 scholarships over four years. The scholarships provide financial support for people to study nursing at university or to undertake continuing professional development. They also support people who wish to undertake nurse re-entry studies—that is particularly important. These scholarships are part of the government's efforts to address workforce pressures, with the aged-care workforce needing to almost triple in size—as my colleague pointed out—by 2050 to support our ageing population.

I am particularly supportive of the measures that will expand, support and improve access to aged-care services for people with diverse needs. I know the Greek population here has its own aged-care facility and it is particularly important that the diverse needs of Australia's population and of Canberra's population are factored into future aged-care services. My electorate is not just large but very diverse. In all areas of service provision, understanding and catering to a range of different people's needs is critical. This is something the government truly understands and is acting upon. For my electorate, this means the quality of aged-care provision will continue to improve, and Canberrans can feel confident that their loved ones will receive the best quality care possible.

The other issue raised with me is the financial cost of aged-care provision. This is a vexed issue, and I know there are different views in the sector about how to address it. In these bills we see measures that will improve the equity and the sustainability of aged-care sector financing. People entering the aged-care system need to understand exactly how much they have to pay, what they are paying for and why. The current system of government subsidies and user contributions for both residential and home care can vary. The changes we are introducing will greatly improve transparency and provide greater clarity. These reforms will result in better alignment of financial arrangements and ensure a more sustainable future for aged-care funding. Under these reforms, those who can afford to help pay for the aged care will be asked to do so while those who cannot afford to pay will still be able to access aged care.

Through these bills, the government is building a more sustainable future for aged-care funding and giving consumers real choices about how they pay for their care. For the first time, people will have real choice in how they pay for the accommodation they receive. At the same time, we are also improving the regulation of residential aged care. We are making sure there is more opportunity for care recipients and their families to purchase additional services. We are creating an aged-care system that will be simpler to navigate, will be fairer and that will create a better pathway for transition from home to residential care.

We are creating a new veterans supplement, dementia supplement and workforce supplement. We are investing millions into dementia research and help for those affected by this condition. From 1 July next year there will be just one type of approval for permanent residential care. There will also be greater continuity of services, and it will be easier under these reforms for people to move through the aged-care system.

In broad terms, these are the major changes contained in these bills. They are measures that have undergone extensive consultation, particularly here in my electorate of Canberra. I understand that the consultation process has been welcomed and was positive, and that following the introduction of these bills there will be ongoing information sessions both here in Canberra and throughout the country.

Labor is introducing landmark legislation that will create an aged care system that will meet the demands and wishes of our ageing population. I commend the bills to the House.

Mr McCORMACK (Riverina) (13:05): I rise, following on from the member for Canberra, who spoke about the importance of seniors wanting to live with dignity in their own homes and that if that were not possible, with certainty and stability in aged care facilities such as retirement villages and nursing homes. On that point I certainly agree with her wholeheartedly, as I am sure all members in this House would.

We do have an ageing population, and that is why discussion about the Aged Care (Living Longer Living Better) Bill 2013, Australian Aged Care Quality Agency Bill 2013, Australian Aged Care Quality Agency (Transitional Provisions) Bill 2013, Aged Care (Bond Security) Amendment Bill 2013 and Aged Care (Bond Security) Levy Amendment Bill 2013 is so vitally important. Whilst I agree with the member for Canberra on some of the statements she made on the Commonwealth being able to provide for those people in their twilight years, certainly her side of politics has not helped our aged people to be able to live with the dignity that they deserve.

During the 2010 election campaign, the Prime Minister, Julia Gillard, stated that aged care reform would be a second-term priority. In the same election campaign the Prime Minister had to deny that she had not supported big increases to the age pension because 'old people never vote for us'. Last year this Labor government, which tonight will deliver its sixth successive budget deficit, cut $1.6 billion from the aged care funding instrument, the ACFI, to fund a $1.2 billion workforce compact. The ACFI is the means by which Commonwealth subsidies are allocated to residential aged care providers. The government justified this by publicly suggesting widespread rorting was occurring amongst aged care providers, even though there has not been a single—not one!—prosecution in five years. An entire sector has been tainted—sullied—by this outrageous claim.

This government has undertaken numerous reports and reviews, including 20 reviews and three Productivity Commission reports. These reviews and reports have either been ignored continually or responded to with even more inquiries without any decisions being made to secure aged care into the future. Five years on, there is still no change on the ground—five years on.

In 2010 the government asked the Productivity Commission to undertake an inquiry into the aged care system, and the final report, Caring for older Australians, was released by the Prime Minister and the Minister for Mental Health and Ageing, Mark Butler, on 8 August 2011. Eight months later, on 20 April 2012, the Prime Minister and Minister Butler announced the government's response to the report entitled Living longer. Living better.

The bills before the House today implement those parts of the package which require legislative changes, whilst implementations that required no legislative action began in April 2012. The Living Longer Living Better package of the five bills we are debating now does not resolve many outstanding viability issues for providers. These bills seek to: (1) remove the distinction between low-level and high-level residential care so there will be only one approval process for residential aged care; (2) provide a new means test, combining income and assets tests and new annual and lifetime caps on means-tested care fees; (3) allow accommodation costs to be paid for through a refundable lump sum, a rental periodic-style supplement or combination; (4) make changes to home care, including requiring a contribution for people who enter home care on or after 1 July 2014; (5) establish a new aged-care pricing commissioner; (6) extend the operation of the Accommodation Bond Guarantee Scheme to new bond arrangements reflected in the government's reforms; and, finally, establish the new Australian Aged Care Quality Agency to replace the Aged Care Standards and Accreditation Agency from 1 January next year.

In typical Labor style, the government has cherry-picked from the Productivity Commission report, with industry sources estimating that only five to eight per cent of the recommendations have been adopted. We heard the member for Canberra just moments ago talking about how the government had consulted, how it had made wide-ranging representations to the sector. However, we all know, certainly in this House and certainly on this side of the House, just what the level of Labor consultation goes to. It is not sufficient, it is not adequate; it is never anywhere good enough. The final report received extensive industry support, with 500 submissions made to the Productivity Commission during the inquiry and an additional 500 made following the release of the draft report. Yet Labor all too often ignores the advice it has been given, as it certainly did when it decided to come out with a report following on from the Productivity Commission's, and it does not go far enough to talk to the industry sectors, whether it is agriculture, defence or, in this case, aged care.

According to a Grant Thornton report from June 2012 following the announcement of the Living Longer Living Better package, more than $3.5 billion worth of planned aged-care development projects have been shelved. Further, an August 2012 media release from Leading Aged Care Services stated that aged-care providers face a 'black hole of more than $750 million over the next 2½ years'.

The Aged Care (Living Longer Living Better) Bill 2013 will remove the distinction between low-level and high-level residential care, so there will be only one type of approval for residential aged care. The minister has argued this will mean fewer reassessments and allow individuals requiring a permanent residential care place to access any service to meet their needs. The bill will make significant changes to the residential care subsidies and fees for recipients who enter care on or after 1 July next year. This will include a new means test combining incomes and assets tests and new annual and lifetime caps on means tested care fees. As the minister outlined in his second reading speech, the annual cap of $25,000 will be applied for means tested care fees, with a lifetime cap of $60,000. These fees are also both to be indexed.

With regard to accommodation costs, this bill will allow fees to be paid through a refundable lump sum, a rent or periodic style supplement, or combination thereof. Aged-care providers will not be able to distinguish between care recipients based on how they will pay for their accommodation. Clause 52G-3 will provide that the minister may, by legislative instruments, determine the maximum amount of accommodation payment which an approved provider may charge a person, including the maximum daily accommodation payment amount, and a method of working out the refundable accommodation deposit.

This bill will also introduce a new form of care, home care, from 1 July 2013 which will replace community aged-care packages, extended aged care at home and extended aged care at home dementia. An income tested care fee will also be applied to home care for all except full pensioners. This fee will also be capped by year and lifetime, starting on 1 July 2014. The Aged Care Pricing Commissioner will be established under this bill to make decisions on pricing issues. The functions of the commissioner will be to approve extra service fees, to approve accommodation payments which are higher than the maximum amount of accommodation payment determined by the minister, and other functions as determined by other legislation or by the minister. Furthermore, this bill provides for an independent review to commence in 2016 and a report to the parliament by 30 June 2017.

The Aged Care (Bond Security) Amendment Bill 2013 and the Aged Care (Bond Security) Levy Amendment Bill 2013 will extend the operation of the accommodation bond guarantee scheme to new bond arrangements reflected in the government's reforms. The Australian bond guarantee scheme as prescribed in the 2006 act provides a mechanism by which the Commonwealth may repay outstanding bond balances to care recipients should a provider become insolvent or unable to refund balances. There is also the capacity for the Commonwealth to recover the costs of refunding those bonds according to the Aged Care (Bond Security) Levy Act 2006, which is amended to reflect the changes to accommodation in the Aged Care (Living Longer Living Better) Bill 2013.

The new Australian Aged Care Quality Agency, to replace the Aged Care Standards and Accreditation Agency from 1 January next year, is established under the Australian Aged Care Quality Agency Bill 2013. This new body will be the sole agency which providers of aged care will deal with in relation to quality assurance of aged-care services providers, whether in the home or in a residential facility. The functions of the new agency will be to accredit residential care facilities; conduct quality reviews of home care services; promote high-quality care innovation in quality management and continuous improvement amongst approved providers of aged care; and provide information, education and training to approved providers of aged care. The Australian Aged Care Quality Agency (Transitional Provisions) Bill 2013 will enable the transfer of assets and liabilities from the Aged Care Standards and Accreditation Agency Ltd to the Commonwealth to facilitate the establishment of the new Australian Aged Care Quality Agency from New Year's Day 2014.

On 7 November last year I hosted the shadow minister for ageing and mental health, Senator Concetta Fierravanti-Wells, in my electorate of Riverina. We held a forum attended by a large number of aged-care providers and interested people at Griffith to discuss their thoughts and concerns about the Living Longer Living Better proposals specifically and aged-care services more broadly. We also visited Scalabrini Village, Griffith, where Lauren Kingsbury showed us through before we visited the Griffith Neighbourhood House to discuss with Monica Beckman the facility and the funding needs it has to continue to provide much-needed services to the community—a community, I might add, which has been hard-hit in recent times by poor water policy from this government, and a community which has an ageing population. Many of those people came to this country to start a new life after the ravages of World War II. They did everything this government required of them in building a wonderful city and a wonderful community, and they now deserve the very best treatment in aged-care services that this country and this government can provide, because they have done their bit to help this nation—certainly to grow food to help feed this nation and others—and now we owe it to them to repay that faith that they showed in this country. Many of them, of course, are Australian born, and they too have done their bit—more than their bit, I might add—to help this country and to make it the great food provider that it is. It behoves us to make sure that we look after those people in their twilight years.

One of the major failings of this package is the opportunity the government has missed to reduce the administrative burden—and haven't we heard that on so many levels, in so many speeches that I and many of my colleagues have given—and the red tape and, in too many cases, the green tape. In a sector already swaddled in red tape, this package will deliver even more regulation. The point is repeatedly made—and indeed, was made at the aged-care forum in Griffith that I hosted—that aged-care nurses spend a significant amount of time on unnecessary paperwork. This package is only going to make the piles of paperwork grow and grow and, unfortunately, grow.

The coalition wants reform in partnership with the aged-care sector, and we will provide that. Hopefully, we will be able to do that after 14 September. We do not believe fundamental reform should be imposed from above. Should we be elected to government, we will deliver the first ever aged-care providers' agreement framework, which will be the cornerstone of all of our policy. We want this agreement in place within a year of our taking office in order to begin the real reform that this sector so desperately needs and that Labor has continually failed to deliver.

In my time available, I will also mention the Haven's recent $7.8 million upgrade, which was completed and opened on 27 March. I was fortunate enough to be at that opening with the general manager of that fine organisation, Shane McMullen. Interestingly, the renovation and enlargement of 36 single rooms within the Nan Roberts Community, the construction of two more rooms, improvements to staff facilities and all of the rest were done without government grants. Recurrent funding was used to complete the upgrade, and the South Wagga Lions Club, a wonderful community organisation, did so much work and so much fundraising to make that a reality. All too sadly, in regional areas communities are left to fund their own projects. I could mention the radiotherapy centre at Wagga Wagga, where the community pitched in when there was no—or very little—government help forthcoming to make sure that they got their own facility, which is now the pride of southern New South Wales as far as those facilities are concerned. It is used all too frequently, I might add, because of the number of cancer sufferers and patients in southern New South Wales. But it is still a marvellous and necessary facility. At the moment, there is a very dedicated group of people working to provide palliative care services in Wagga Wagga. Hopefully, this government or a future government will be able to provide much-needed funding for that particular issue and that particular cause, which is so very vital in Wagga Wagga and, indeed, the Riverina electorate I represent.

Mrs MARKUS (Macquarie) (13:20): I rise to speak on the Aged Care (Living Longer Living Better) Bill 2013 and cognate bills. I believe that one of the ways we as a society are judged is the way in which we look after and care for our elderly. Those in aged-care facilities are at a very vulnerable and sometimes difficult stage in life. We have all been in a position where a grandmother, grandfather or parent has had to go into aged care, and as fellow human beings we know that our elderly deserve not only dignity but also respect at this stage of their lives. We have a responsibility to the aged—to our seniors—to provide them with the best services and care available and to support the service providers who engage and respond to their needs.

During the 2010 election campaign the Prime Minister said, 'If re-elected, further aged-care reform will be a second-term priority for my government.' Australians can add that statement to the list of broken promises by this Prime Minister. We have seen a government undertake a litany of reports and reviews, including 20 reviews and three Productivity Commission reports, which are continually ignored or responded to with more inquiries without making any decisions to secure aged care into the future.

Despite promises of reform, five years on there is very little evidence of real change on the ground, where it counts the most. After five years of Labor's neglect our aged-care system needs urgent change to provide viable and effective aged-care services for older Australians. Labor has failed to undertake proper and sustainable reform and to make the hard decisions to give effect to it. It is clear that the Living Longer Living Better package of five bills does not resolve many outstanding viability issues for providers. Under these reforms there have been cuts from the Aged Care Funding Instrument—ACFI—that have placed substantially more pressure on the sector. The bills only cherry pick a few recommendations of the Productivity Commission report Caring for older Australians from August 2011. They add to regulation in what is already a highly regulated sector. The bills establish the framework for the workforce compact, which has created uncertainty, potentially will be costly for providers, relies on cuts to ACFI and appears to be a political mechanism to unionise the sector.

Only the coalition has a clear plan for the future of aged care in this nation. We understand that it is only by working closely with the sector and consulting those who are on the front line that real reform can be achieved. We want to work in partnership with the ageing and aged-care sector to achieve sustainable reform through our first-ever four-year aged-care provider agreement. Older Australians in the sector are no closer to knowing how structural reform would be introduced and how it would affect the care they receive and where they receive it.

The ageing of our population is one of the biggest social issues facing Australians and is an issue that needs to be addressed now, not somewhere down the track or into the future. Australians are living longer, but we have a rapidly ageing population. In its Global ageing 2010: an irreversible truth, Standard & Poor's rating service said that age related spending on health, pensions and aged care in Australia is estimated to rise to 14.4 per cent of gross domestic product in 2050. It is currently 9.6 per cent. Around nine per cent of our population is aged 70 years or older, and this is expected to rise to 13 per cent by 2021 and to 20 per cent—around 5.7 million people—in 2051. As we are ageing we are acquiring more complex health conditions and changing disease patterns, resulting in increasing and changing aged-care needs. With fewer people generating taxation revenue, care options for concessional and assisted aged-care residents—those with the least resources—will be jeopardised.

There is growing and alarming evidence that the aged-care sector cannot provide the care that Australians expect. There are real economic implications for our nation because of our ageing population, and these implications have not been taken seriously by this government. Until there is a proper structural reform of the sector, the care and wellbeing of senior Australians is in jeopardy. Australia has one of the most advanced aged-care systems in the world. However, it can be complex and difficult to navigate. Currently over one million older Australians are receiving aged-care services subsidised by the Australian government. It is expected that by 2050 over 3.5 million Australians will be using aged care each year. Formal aged-care services are delivered through around 8,000 outlets across Australia, including about 3,660 agencies registered as delivering services funded through the HACC program, 2,095 operational community care services delivering community packages, and more than 2,700 operational residential aged-care facilities. The number of over-85-year-olds, which are the main users of aged-care services, will increase from around 400,000, or 1.7 per cent of the total population, in 2007 to 1.6 million by 2047—about 5.6 per cent for the population. The Department of Health and Ageing estimates that by 2050 aged-care expenditure will account for three per cent of GDP and a bit more than 827,000, or five per cent, of the Australian workforce may be engaged in the provision of aged care.

If there was ever a call to action for reform of aged care, this is it. These statistics are alarming and call for careful planning and action. However, at a time when there is increasing demand for services, providers are walking away from the sector because of the lack of viability of providing high-care beds and the increase in compliance demands of the government. It has been reported that up to 60 per cent of aged-care facilities are operating in the red. That is a staggering amount and reflects the economic situation that many providers find themselves in. Providers are handing back licences, and senior Australians are having to wait longer or travel further to find a bed, thereby placing extra pressure on the public hospital system and, most importantly and unfortunately, on their families. This is in contrast with the situation that we would hope to achieve under the coalition.

The Productivity Commission's final report, Caring for older Australians, was publicly released by the Prime Minister and minister on 8 August 2011. This report focuses on a shift from the current ration system based on licences and packages to an entitlement based system whereby aged care would become part of the health system. Other key features of the report include the creation of a single Australian seniors gateway agency and the recommendation that funding be replaced by a single national care co-contribution regime, which would apply across the aged-care system, whether services are delivered in the community or in a residential aged-care facility. It took the Australian government over 250 days to respond to 58 recommendations within the Productivity Commission's report. When that response finally came it was announced with great fanfare as supposedly extensive reform of the aged-care system. Whilst the headline figure of $3.7 billion over five years sounded impressive, the actual amount of new money to be spent was $577 million. Furthermore, many of the changes will not start until 1 July 2014, so the effect will not be felt until well after the next federal election. The coalition and I acknowledge that one of the failures in the aged-care reform package is the missed opportunity to reduce red tape. This is something that the sector has been urgently demanding. In a sector already wallowing in red tape, this package will heap on them more red tape and more bureaucracies to deal with. The coalition has been advised that aged-care nurses spend on average a third of their time on paperwork. Under this package, things are only going to get worse.

This is not real reform; this is another case of Labor talking but not doing anything. Some key issues have caused major concern to stakeholders: the decision to rip $1.6 billion out of the ACFI, the $1.2 billion workforce compact, and the establishment of the Aged Care Financing Authority. One critical need to be addressed is the almost 321,600 Australians living with dementia. When in government, the coalition committed $320 million in the 2005 budget to help fund the Dementia Initiative, making dementia a national health priority. Despite this initiative proving invaluable to help dementia sufferers, and a government evaluation of October 2009 finding the initiative successful, Labor deliberately dropped funding for this program. It was pleasing to see that at a subsequent meeting of health ministers dementia has now been made a national health priority. The coalition is committed to delivering a high quality, affordable and accessible aged-care scheme that meets the needs and preferences of older Australians.

At the last federal election, the coalition outlined its plan for the first ever four-year agreement and we set out some areas which we believe ought to be included in any agreement. We undertook to provide certainty of care through the first ever four-year aged-care provider agreement with the aged-care sector, and as part of that process we outlined various areas for inclusion in such an agreement. There was a very positive response. Since the last federal election, the coalition has continued to listen to the aged-care sector. We will be revising our policy before the next federal election. The fundamental framework—the first ever aged-care provider agreement framework—will be retained. It is important to stress that this is the first ever aged-care provider agreement. It would ensure certainty and engagement for the aged-care sector. In much the same way as the pharmacy agreement shapes that sector, this agreement would set the framework for aged care in Australia for the next four years.

The coalition plan to reduce red tape as an important component of our four-year agreement. Providing flexibility and certainty, we want to work with the sector to cut red tape in ways which will provide efficiencies without compromising the quality of care. The agreement will deliver better and more affordable aged care by: reducing red tape and enabling nurses to get back to nursing residents; providing certainty for aged care for older Australians, underpinned by a high quality framework; delivering value for money through revised subsidy arrangements; ensuring certainty for the aged-care workforce; establishing a more flexible and viable aged-care provider network to meet care needs now and in the future; and ensuring that the comfort and safety of older Australians is maximised.

The coalition want reform in partnership with the aged-care sector. We do not believe that fundamental reform should be imposed from above. Given the opportunity to govern following the next federal election, we will immediately commence consultation with stakeholders in the ageing and aged-care sector on the framework for the aged-care provider agreement, including consideration of the recommendations of the Productivity Commission. The coalition want an agreement in place within a year of taking office.

The coalition does not want to pre-empt the contents of any negotiated agreement. The agreement framework establishes a formal pathway for future dialogue between the minister, the government and stakeholders to more effectively consider ongoing issues regarding timely and appropriate access to aged care. It will guarantee flexibility and much needed certainty in the sector. Principal Endeavour aged-care facility, in the electorate of Macquarie, have the following statement in their mission statement:

Our aim is not just to provide a home, but to provide a lifestyle surrounded by a caring, active, wholesome community.

I too believe that this should be the aim of every aged-care facility, but this can only happen by real change and reform and through the government partnering with the sector to allow them to do what they do best. I support the amendment moved by the shadow minister today and commend it to the House.

Mr OAKESHOTT (Lyne) (13:33): I strongly support these bills finally passing into the House. It has been disappointing that it has taken so long for them to finally make it to the chamber, but I hope that they do pass this House and the other place relatively quickly, because I know there are many, both in the workforce and as aged-care providers, in the sector who are very keen to see this legislation pass.

In my electorate on the mid-North Coast of New South Wales and, indeed, on the east coast, aged care is the boom industry of the moment. Quite often, it is not seen as an economic driver and an economic sector, but for my region and, indeed, for the east coast, we are seeing more growth in aged care than in industries such as mining and more jobs in health and community services than in the mining sector. It does fly under the radar, but this is an incredibly important economic driver for the east coast and for regions like the mid-North Coast of New South Wales as service provision for our ageing demographic becomes more and more important in Australia over the coming years. I am certainly a strong advocate of getting the aged-care sector right and making sure that we provide the best quality of care possible for the many residents in our area who, in a number of different ways, require services.

By way of a stocktake, in the Lyne electorate on the mid-North Coast of New South Wales, we currently have 409 community aged-care packages; 40 Extended Aged Care at Home packages, known as EACH packages; and 24 Extended Aged Care at Home Dementia packages. All of those touch only the surface of what is really required. I think that is a mood shared by all members in this chamber. Whilst each of these packages is certainly welcome, the need far outweighs what is being provided to date by all levels of government and by both sides of parliament. Ensuring that a quality level of service is provided in what is a growing market in communities such as those on the mid-North Coast is an enormous challenge. In 2012-13, 144 home care package places were also advertised in the mid-North Coast aged-care planning region.

I am not one to criticise the aged-care sector at all. At times, various stories emerge in this parliament or in various communities that shock you, but they are rare. I believe that the quality of care in Australia today is at a level of excellence that we as a country should actually be very proud of. Both our monitoring and reporting standards are some of the best in the world and, again, I do not think we sing the praises enough of our culture of care for the various stages through the ageing process.

Every day on the mid-North Coast I see quality providers, a quality workforce and families of carers who really do rally around their family members, who work their way through the spectrum of care and who really want to see the best outcome possible for them. We as Australians should enhance that culture and, hopefully, this range of bills today will be another step along that journey.

I have tracked these bills pretty closely with the support of some local aged-care providers, whom I would like to mention: Dennis Marks, the CEO of Bundaleer Care Services; John Butler, the CEO of Nambucca Valley Care Ltd; Errol Curran, the Director of Residential Aged Care Services and the Chief Financial Officer of the Bushland Health Group; and Steven Quirk, Chief Executive Officer of St Agnes' Parish, Catholic Care of the Aged, in Port Macquarie. Others have been involved at various times in our roundtable meetings that we have been holding. The group wanted to take up with the government a range of detailed issues that have emerged, in particular with Minister Butler, to the point where, three or four months ago, I brought them down to Canberra and the minister kindly met them. It looks as though, as a consequence of some of those meetings, there have been some changes to the final bills. That has been a worthwhile process. The feedback from the group at this stage is that this package of bills is not going to cure all ills. It is not going to get the workforce pay to the level it should be, to be competitive to attract the absolute best staff possible, but it is a step forward.

Likewise, there are some issues for mid-tier residential providers in lower socioeconomic communities. There are still some question marks about this aged care reform package continuing to allow those very noble and important providers to stay viable. But I am fully aware that the government is watching and tracking that and, if there are issues that emerge, hopefully all governments will be very quick in responding to that. As one part of a suite of measures, this package of reforms I think is one to support, and hopefully the House supports it relatively swiftly.

This fits in well with some local work that we have been doing. The mid-North Coast is one of the first regions in Australia to develop a dementia care plan. We do have an epidemic in Australia coming, if not arrived, in the area of dementia. Rather than just wallow in the concerns of the epidemic hitting us, I am really pleased that our community has come together and put a bit of a strategy together that will align well with these aged care reforms. And I would encourage government to have a look at the work we have done and to provide what resources are possible to allow our region to maximise the work we have been doing locally in trying to deal with the very high number of dementia patients now, and with the significant growth expected in the near term.

The other point I did want to make is on the jobs plan we put together locally. As I said before, the health and community service area is our boom industry of the moment on the mid-North Coast, and so aged care workforce needs are really important to us. I wanted to take this chance to thank the many people who have been involved in the many meetings in making sure our workforce needs meet the demands. They include the local employment coordinator, Renee Hawkins, the aged care workforce coordinator, Jan Johnson, and the new group that has come into town, the Aged Care Workforce Innovation Network. This group is now funded by the Australian government and led by the aged care peak bodies in partnership with the Community Services and Health Industry Skills Council and is now starting to pull together some really good work in our region to address a lot of these workforce needs today and into the future.

I am pleased that, because our region has been working so hard with so little and had to collaborate a lot, we have now become one of the regions to lead in this workforce innovation network. Collaboration is one of the keys that allows that industry development work to take shape. Very quickly, of the 10 regions funded, the mid-North Coast is looking like one of the standouts because we have been collaborating on the smell of an oily rag for a long time, and had to do that to basically survive as a region. I thank everyone involved in that process, both within and around government but also more importantly at a committee level, for really investing time and energy into the many meetings—everyone hates meetings, but they have made a difference and they certainly are setting us up as a region where our aged care workforce will be viable and strong, our providers will be viable and strong and our quality of care, therefore, will be viable and strong.

I think the mid-North Coast is one of the best places in Australia for anyone to hit retirement age. That is not only for the healthy living issues and all of our wonderful beaches and rivers, but also for that spectrum of care around aged care, when and if required. I hope these bills go through, I hope they go through with bipartisan support and I hope they make a big difference in once again taking a step forward in the quality of care for the aged care sector in Australia today.

Debate adjourned.

Mr ALBANESE (Grayndler—Leader of the House, Minister for Infrastructure and Transport and Minister for Regional Development and Local Government) (13:44): by leave—I move:

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

Those bills will be listed tomorrow because the Federation Chamber is being used today as part of the budget lockup.

Question agreed to.

Mr CIOBO (Moncrieff) (13:46): I am pleased to rise to speak in the debate on the Aged Care (Living Longer Living Better) Bill 2013 and cognate bills and to follow those speakers who have been speaking before me. I think it is important in the context of a debate about aged care to get an appreciation of what is happening to the demographics of Australian society. We know and we hear frequently that Australia is an ageing nation, like many other Western democracies. We have seen our birth rate decline, so much so that in fact we are now below replacement level with respect to our population. The reason that Australia continues to see an overall net increase in population is migration.

The fundamental point that we have with respect to this cognate debate is what is taking place across Australian society. We know that our population is ageing. The ageing of our population is in every respect the biggest social issue that faces Australia. Australians are generally living longer and as a consequence we have a rapidly ageing population. To put some context around it, about nine per cent of our population is aged 70 years or older. That is anticipated to rise to 13 per cent by 2021 and to reach 20 per cent by 2051. That will be just shy of six million Australians aged 70 and over.

The consequences of the proportion those aged 70 and over increasing from nine per cent of our population to 20 per cent are profound. It is appropriate that today of all days—budget day—we consider what the ramifications of an ageing population actually are. The ramifications are significant and varied. In many respects it was the recognition of the ageing of Australia's population that gave rise to an important major public policy change to take place: the introduction of the GST. That reform was a coalition reform that we undertook because we knew it to be in Australia's long-term interest. It was opposed by the Labor Party, despite the fact that only years earlier the Labor Party had championed the cause for a broad based consumption tax, on the basis of political opportunism while the coalition took the hard decision to introduce a new tax. It was a tax that we knew would not be popular. It was a reform that we undertook not because we knew it was going to win us votes on the street but because we knew it to be necessary for Australia's long-term interest. It stands in remarkable contrast, frankly, to the way that Labor has gone about introducing the carbon tax. Unlike the coalition, who said, 'We will introduce a GST if you elect us,' the Labor Party said, 'We will not introduce a carbon tax', and they did the exact opposite. In fact, who can forget the Prime Minister saying, only six days out from the last election, 'There will be no carbon tax under a government I lead'? Lo and behold, we discovered only weeks later that, in fact, she was going to impose not only a carbon tax but the biggest carbon tax in the world. That is the difference between the approach of the coalition historically and the approach of the government.

With an ageing population the question is: how do we from a public policy perspective deal with the challenges we will face? For example, one of the consequences of an ageing population is that there will be an increasing dependency ratio. Whereas in 2007 approximately six people of working age for every person aged over 67 was the dependency ratio, by 2047 that ratio will be down to 3.2 people of working age for every person aged 67 and over. What does that mean? What does a decrease from six people for every person aged over 67 to 3.2 people for every person aged over 67 mean in terms of the fiscal consequences for all Australians? The fundamental inescapable truth is that it is basically bad news. It is good that Australians are living longer; it is good that Australians are ageing, but the fiscal challenges it presents are profound. Whereas the Australian government can now rely on approximately six working Australians for every one person aged 67 or over, by the late 2040s there will only be three working Australians for every person aged over 67.

The reason that it is a significant problem from a fiscal perspective is that those aged 67 and older, not always but generally, have a heavier reliance on the public purse. Whether it be in healthcare costs, in the pension or in other forms of support and concessions they would like to have available to them, the fact is that Australians that live beyond the age of 67 typically take the view—and in many respects they are entitled to take this view—that: 'I've worked my entire life, I've paid my taxes, I've made my contribution to Australian society, and I expect henceforth to reap some of the dividends of a lifetime of earning income.' The fiscal problem with someone aged over 67 is that with a greater reliance on the public purse comes an increased need for it to be funded. As the proportion of people aged 67 and over goes from nine per cent of the population to 20 per cent of the population—more and more people being a bigger drain on the public purse with fewer and fewer people to pay for it—it represents a challenge that somehow must be funded.

Those that are not particularly charitable might take the view that it is a problem that only this side of the House concerns itself with. Those less charitable might say that only the coalition is genuinely concerned about how we fund future challenges. We know, based on the form of this government, that the Labor Party do not particularly care about how we fund future challenges. That is the reason why the Labor Party will stand up and make announcements such as during this Living Longer Living Better cognate debate and package of bills. That is why they will put forward reforms such as Gonski or the NDIS without the appropriate safeguards to make sure there is funding in place to provide the necessary future funding required to meet those liabilities. That is important because any government that signs up the Australian population to future liabilities—be it Gonski, be it NDIS, be it aged-care reform—needs to make sure it is not putting on future generations of Australians a tax burden so significant that they are no longer able or willing to fund it.

In the debate around aged care, this is the consequence. When you shift from six taxpayers funding every person aged 67 and over down to just over three taxpayers funding every person aged 67 and over, it means that the tax burden on those people is significant. When you view that in the context of the current debate that will be taking place in this chamber tonight, we know that there are some serious challenges ahead. That is part of the reason why the coalition introduced the GST, but more importantly it is the reason the coalition was so committed to paying down debt. It is the recognition of the fact that Australia's population is ageing that drove the coalition to pay off the $96 billion of debt the Labor left when they were last in office. It was at the core of the coalition's economic approach: to pay down debt and to put our economy and our country on a strong, stable footing, knowing full well that in future decades there will be very significant drawdowns on the public purse. Those drawdowns must be met by taxation across the population. That is why we paid down debt.

The problem that we have now is that as we shift over the coming decades to having only three people paying all the liabilities expected by a person aged 67 and over—with only three people shouldering the tax burden to support the generous pensions and generous healthcare entitlements and concessions that that person is expecting—it makes it very expensive. And not only will meeting the recurrent liabilities that exist be expensive; this government has racked up $172 billion worth of deficits in the last five years. Australia's net debt currently sits at around $140 billion. We know that it is going to get a hell of a lot worse tonight.

We saw two weeks ago Labor saying—despite on over 400 occasions promising that this year's budget would be in surplus—that this year's budget will in fact be yet another deficit. On 400 occasions, Labor said, 'We will deliver a budget surplus.' The member for Oxley, who is at the table, circulated a newsletter to his electorate that said, 'We delivered a budget surplus.' But what do we actually know? Two weeks ago they said, 'No, cancel that. There's not going to be a budget surplus. It was going to be $1 billion of surplus but now it is going to be a $7.5 billion deficit.' That was two weeks ago. One week ago, they changed it. They said: 'Scratch that. It's not going to be a $7 billion deficit; it's actually going to be a $12 billion deficit.' That was one week ago. Then a matter of about 72 hours ago—

The SPEAKER: The member for Moncrieff might refer to the bill before the chair.

Mr CIOBO: I am talking about the challenges of an ageing population, Speaker.

The SPEAKER: It would be great if you talked about the actual bill before the chair.

Mr CIOBO: We know that 72 hours ago it shifted from a $12 billion deficit to a $17 billion deficit. If we are going to be serious and look older Australians in the eye and say, 'We can afford to pay for aged care,' and if the government wants to be serious about saying that they can meet the challenges of an ageing population when we shift from nine per cent of the population being over 65 to 20 per cent of the population being over 65, then I say that it is crucial that this government tells us how much debt and deficit they have racked up over the past five years. The reckless spending by the Labor Party must stop. For as long as Labor keeps spending and borrowing and spending and borrowing, the simple reality is that the Australian population in decades to come will have to shoulder the burden. And it is unfair not only for older Australians but for new Australians. The consequences of Labor's policies affect both ends of the spectrum. It is young Australians who will have to shoulder this debt and deficit burden for decades to come. It is young Australians who are in schools today who will have to carry the heavy tax burden as a consequence of Labor's reckless spending over the past five years. Older Australians will also pay the price.

While the Labor Party can have packages of bills entitled 'Living Longer Living Better', while they can claim to be introducing $500 million of new spending, the simple reality is that this is not new money that has come from fiscal prudence; it is money that is being borrowed from abroad. That is entirely consistent with an approach that the Labor Party has had over the last five years that has seen them borrow money from aboard to spend locally on all sorts of projects that they deem to be warranted. Unlike for much of the spending, there is some support for the Living Longer Living Better package and the need to make sure that older Australians are well cared for. But there has been so much waste from the Labor Party. Who can forget pink batts? Who could forget the blow-outs on border protection? We have seen so many blow-outs under this Labor government—

The SPEAKER: The member for Moncrieff should not forget the bill that he is referring to.

Mr CIOBO: over the last five years. I know that aged Australians are very concerned about it. Aged Australians know that they have worked hard and for decades they have paid their taxes, and they expect the government to look after them. But now when the real pressure is on, the Labor Party has abandoned older Australians just as it has abandoned young Australians who will have to carry the burden and pay the taxes. That is the reason the coalition has a problem with these bills.

Debate interrupted.

Mr HAYES (Fowler) (16:43): by leave—I move:

That the Offshore Petroleum and Greenhouse Gas Storage Amendment (Compliance Measures No. 2) Bill 2013 be referred to the Federation Chamber for further consideration.

Question agreed to.

Ms OWENS (Parramatta) (17:00): On behalf of the Standing Committee on Economics, I present the committee's advisory report incorporating a dissenting report on the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 together with the minutes of proceedings

Ordered that the report be made a parliamentary paper.

Ms OWENS: by leave—The committee supports the passage of the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 which makes important and beneficial taxation and superannuation changes. The committee also recommends that the Treasury undertake further consultation with industry groups on an aspect of schedule 5 of the bill.

There are eight schedules in the bill. The committee did not receive any submissions on schedules 2, 3, 4, 7 and 8. The report focuses on issues raised in the other schedules—1, 5 and 6. Schedule 1 defines a 'documentary' for the purpose of accessing film tax offsets and makes explicit that game shows are not eligible programs. Currently, there is no definition of a documentary in the Income Tax Assessment Act 1997. The definition of 'documentary' to be inserted is based on the Australian Communications and Media Authority Guidelines, as was used by Screen Australia prior to the Lush House case. In the committee's view, it is a reasonable response by the Australian government to reinstate the definition that Screen Australia had previously used in administering the producer offset. The committee noted industry stakeholder concerns that the definition lacks flexibility. The committee believes there is a need for ongoing dialogue between Screen Australia and the industry to ensure that the application of the definition in schedule 1 remains responsive to the evolving documentary genre.

Schedule 2 exempts from income tax the ex-gratia payment made to people affected by natural disasters in Australia during June 2011-12 and 2012-13. It is warranted to extend these disaster assistance plan payments and their tax exempt status to New Zealand citizens holding non-protected special category visas who were affected by these disasters.

Schedule 3 enables eligible businesses to continue to pay GST instalments if they subsequently move into a net refund position. It will allow businesses to continue to make their business activity statements annually and retain the cost advantage of not having to submit a quarterly statement. Entities that are not paying GST by instalments and are already in a net refund position remain ineligible to use the instalment option.

Schedule 4 adds six entities to the list of deductible gift recipients, making donations to these organisations tax deductible. Schedule 5 will provide a legislative basis for identifying and merging multiple superannuation accounts within the same fund. Many super funds are already performing these mergers. Groups who participated in the inquiry supported the intent of schedule 5 to reduce the amount affected members pay in multiple sets of administration fees and insurance premiums and consequently increase retirement savings.

However, some industry groups expressed concern that the wording of the proposed subsection 108A(1)(c) could place undue liability on trustees by obligating them to examine each individual member's best interests rather than on a general trust fiduciary law basis, which is understood as acting in the collective best interests of members. The committee's view is that schedule 5 is making an important change to help super members maximise their retirement savings but recommends further Treasury consultation with industry groups to ensure that undue liability is not being inadvertently placed on trustees who are working in good faith for the benefit of their members. The committee also urges the Australian Prudential Regulation Authority to provide funds with guidance on circumstances which should trigger individual consideration of what constitutes a member's 'best interests'. Where funds are dealing with complex cases, the committee believes trustees should seek input from the affected members.

Mr CIOBO (Moncrieff) (17:06): by leave—I will be brief. In terms of additional comments to the committee report, coalition members of the committee raised some concerns we had with respect to two schedules of the bill. In broad brushstrokes—and with emphasis on the word 'broad'—coalition members would agree with a number of the assertions made by the committee chair but, specifically with respect to schedule 1, coalition members felt it necessary to highlight that it was very clear there had been for all intents and purposes no consultation with industry with respect to the proposed changes as outlined in this schedule 1. Whether it was SPAA, the Screen Producers Association of Australia, or others that appeared on the day, it was clear that the first they really knew about it, the first opportunity that industry had with respect to the proposed changes, was when the draft bill itself had been put into the public domain. It would appear they took the view that it was, for all intents and purposes, a foregone conclusion. Coalition members highlight the fact that this is hardly the way to conduct good public policy and on that basis made some comments in our additional comments.

Schedule 6 is the super co-contributions. The reality is—and coalition members believe Australians recognise this but we want to highlight the fact—that the Gillard Labor government is again seeking to cut government super co-contribution benefits for low-income earners. As much as the Labor Party like to make out that they are a friend of low-income earners, the simple reality is that there have been so many changes on so many occasions that now it is clear that they are far from being a friend.

After promising not to make any changes to superannuation in the lead-up to the 2007 election there have been, in fact, numerous changes invariably designed to undermine incentives for people to voluntarily save more toward their retirement. As well as reducing the concessional contribution caps, the government has cut super co-contribution benefits for low-income earners and imposed additional taxes of more than $8 billion on people's retirement. They have reduced concessional contribution caps from $50,000 and $100,000 per year, depending on your age, under the previous coalition government down to $25,000 per year across the board—a substantial reduction. This means anyone wanting to save more super per year than that low threshold has to pay the top marginal tax rate.

Targeting low-income earners saving for their retirement, Labor has also already reduced super co-contribution benefits for low-income earners from a maximum of $1,500 down to $1,000, while also reducing the matching rate from 1.5 down to one to one. This legislation proposes to cut the maximum super co-contribution benefit for low-income earners again, this time in half, down to just $500,with a similarly reduced matching rate halved from one to one down to 0.5 to one. Overall, the Labor government has cut super co-contribution benefits for low-income earners by more than $3.3 billion by far.

In summary, coalition members want to highlight and make very quickly on the record that this is not a government that is committed to low-income earners, despite all the rhetoric to the contrary. The simple and inescapable conclusion to reach is that, beyond the headlines, this legislation is going to make it tougher for low-income earners, not easier.

Mrs BRONWYN BISHOP (Mackellar) (17:10): This legislation purports to implement recommendations 3 and 11 of the House of Representatives Standing Committee on Legal and Constitutional Affairs in its report, A time for change: yes/no? of 2009. An expert panel was established to look at the question of change for local government recognition, and the final report came down in 2011. We are now looking at the Referendum (Machinery Provisions) Amendment Bill 2013, merely 124 sleeps away from the proposed date of the referendum and indeed the election.

If you look back through the history of referenda in this country, you will find that very few have been held concurrently with an election—for the simple reason that, when you are dealing with the Constitution, it is felt that it is important that it be an issue in its own right and should not be confused, or confusing, for the electors as they vote on election day. Indeed, there should be a proper timeline to prepare for it, as the Electoral Commission stated in its own submission to the enquiry. They said that if it were truncated there were all sort of risks about the information not being given properly to Australian voters.

Recommendation 3 said that the yes/no pamphlet, which is an important part of any referendum, should be posted and received by every elector. The yes/no pamphlet has the yes case and the no case being put so that every elector can make their decision on proper information. It is required by the existing 1984 act, which, of course, was introduced by the Hawke government.

The coalition opposed this recommendation. The Standing Committee on Legal and Constitutional Affairs said that the pamphlet should be sent to every household, not to every elector. I think it is important to point out that in this current government, throughout this term, the government and the Special Minister of State has introduced several pieces of legislation that remove the term 'elector' and replace it with 'person'. This seems to be the next step in the government's desire to remove 'elector' from all relevant legislation. From this side of the House, we believe that the 'elector' and constant reference to the 'elector' is pivotal in maintaining a proper sense of voting, be it at elections or on referendums.

I will be moving in the consideration in detail stage two amendments, one of which will be to remove the provisions of this bill contained in the schedule which indeed remove the need for the yes/no pamphlet to be posted, and I accentuate 'posted', to each elector. The bill substitutes the phrase, 'sent to each address'.

We are also concerned that the bill—again getting rid of the term 'posting' and substituting 'sending'—will allow the Electoral Commissioner to send information to an address that he considers appropriate. It is a strong belief of the coalition that the Electoral Commissioner should not be assessing what is, or is not, an appropriate address—particularly an email address, which, in his second reading speech, the minister stated was contemplated. Rather, the AEC should be concerned to meet the provisions of the existing act and focus on maintaining the integrity of the role.

It is interesting to note that there is no official register of emails for electors. There is no data here in the census that shows how many people have email. If you look at the American experience, they have on average about 1.6 email addresses each. Moving away from the effectiveness of the pamphlet being posted to each elector, I and the coalition think it is a fundamental and important part of ensuring a referendum to change our Constitution, the fundamental document which allows Australia to be governed for the peace, welfare and good government of the people. We are concerned about the provision that is contained in the schedule that they should be permitted to send the pamphlet by email simply does not stack up in this current environment. It may in the future. I do not know that. But I do know right now that it does not.

We have vigorously opposed automatic enrolment and the use of government departments to provide the AEC with information to be used to automatically enrol people to the electoral roll. The coalition sees this as a further request by the AEC for information on electors above and beyond what has already been provided. Email addresses are a phenomenon of the last 10 years and were not highly used or relevant in the last referendum held in 1999. Currently there are no statistics collected on the number of electors who have email addresses but the census does reveal that 19.6 per cent of dwellings do not have internet access, let alone a preferred email address. In Australia, as I said, there is no data that shows how many people have an email address. Indications from the Parliamentary Library are that the figure in Australia of people having email addresses is likely to be higher than in America. People only have one fixed electoral address but they can have many email addresses.

The second amendment that I will be moving when we come to consideration in detail deals with that section of the Referendum (Machinery Provisions) Act 1984 which is section 11(4). This amending bill seeks to suspend the operation of section 11(4) for the period up until the end of election day. It is important to point out that this provision was placed in the legislation to curtail unnecessary expenditure—to put a cap on. It specifically says:

The Commonwealth shall not expend money in respect of the presentation of the argument in favour of, or the argument against, a proposed law except in relation to the preparation, printing and posting, in accordance with this section;

(aa) the preparation, by or on behalf of the Electoral Commission, of translations into other languages of material contained in those pamphlets;

(ab) the preparation, by or on behalf of the Electoral Commission, of presentations of material contained in those pamphlets in forms suitable for the visually impaired;

(ac) the distribution or publication, by or on behalf of the Electoral Commission, of those pamphlets, translations or presentations (including publication of the internet);

(b) the provision of the Electoral Commission of other information relating to, or relating to the effect of, the proposed law; or

(c) the salaries and allowances of members of the Parliament, of members of the staff of members of the Parliament or of persons who are appointed or engaged under the Public Service Act 1999.

Specifically, if that clause were to be suspended from operation, as this bill wishes it to do, it would leave it open to the government to spend as much money as it liked promoting one case or the other. The Standing Committee on Legal and Constitutional Affairs report of 2009 did recommend to ensure that spending is directed to referendum education and to equal promotion of the yes/no arguments. There is no provision in this enabling machinery legislation that requires any money spent by the government to be spent equally on the yes case and the no case which was clearly in the minds of the people who made the recommendation in the committee itself.

Further, the Spigelman report—which is the shorthand expression for the expert panel on constitutional recognition of local government—has pointed out that there is a need to ensure that the case for the proposed constitutional change is not left solely to politicians and the local government representative. It goes on to talk about, if it wishes to have it passed, having other people in the community who are convinced of the need for this to occur. Bear in mind we have 124 sleeps left until what Alan Jones likes to call 'clean-up Australia Day', the election day, and we are also to have this referendum on that day—obviously aimed to try and confuse the issue, I suspect. We are looking at the government wanting to have complete freedom to have a media campaign of one sort or another, probably in accordance with the existing regulations for advertising but it would be unfettered by this provision in the machinery legislation.

It is also interesting to note that the Spigelman report found that, having commissioned research to be done about the support for a proposed referendum which has only just been announced, that fewer than 30 per cent of voters can be said to feel a sufficiently strong commitment at this time to the idea of recognising local government to provide high confidence they would support it at a referendum. So as we are at this late stage, where every indicator, including that of the AEC itself, is saying that a truncated period in which to prepare all of the information for a referendum would expose the referendum to risk of insufficient information being made available, I think it is eminently reasonable that we do not suspend that provision which puts a cap on the amount of money that can be spent because in this particular circumstance, where we have a budget coming in tonight that is going to show I think Labor's 20th deficit in a row and show that we are in a fiscally constrained period, it is economically irresponsible to be spending money outside of the provisions already contained in the Referendum (Machinery Provisions) Act to ensure that information is properly sent out to the electors of Australia to make up their minds one way or another.

In concluding my remarks in this second reading debate, we will be moving two amendments in the consideration in detail stage. The first relates to the need to continue to send—that is, post—the yes/no case to every elector and the second amendment is to remove the provision that would suspend the provisions of section 11(4). In speaking in this second reading debate I have foreshadowed the amendments we will move because the coalition believes when you are looking at conducting a referendum to alter our Constitution that it is a critically important issue that the Australian people need to be well appraised of, that they need to be properly informed so they can make up their minds, that they should not be subject to expenditure which is not evenly divided between the yes and no cases, and that at a time when we are fiscally restrained it is really economically improper of the government to propose to spend additional money, which presumably they will have to borrow to spend, outside the provisions that are already satisfactorily provided for in the existing legislation.

Mr DREYFUS (Isaacs—Attorney-General, Minister for Emergency Management, Minister for the Public Service and Integrity and Special Minister of State) (17:25): I thank the member for Mackellar for her contribution to the debate on the Referendum (Machinery Provisions) Amendment Bill 2013. Last week the Prime Minister announced that the Australian government will hold a referendum on 14 September to ask Australians to financially recognise local government in our nation's Constitution. If agreed by the Australian people, the amendment will make a modest but important change to our Constitution so that the existing practice of federal government support for local communities is formally recognised in our Constitution. The change would formally recognise the reality of our three-sphere system of government in Australia. The Australian government works closely with local governments every day to deliver vital services to communities, and I expect the referendum proposal will receive broad and bipartisan support in this federal parliament and across the country.

Making two small, sensible amendments the Referendum (Machinery Provisions) Amendment Bill 2013 helps to ensure that electors are able to make an informed vote in the referendum. These amendments will allow for stronger, more efficient communication with Australian electors. This bill implements the government response to two recommendations made by the then House of Representatives Standing Committee on Legal and Constitutional Affairs in its 2009 report A time for change: yes/no? It is personally pleasing to be here today as the Attorney-General and Special Minister of State implementing recommendations from a House of Representatives Standing Committee on Legal and Constitutional Affairs report prepared at a time when I served as chair of the committee.

In the 2009 report the committee made several recommendations to amend the Referendum (Machinery Provisions) Act 1984. Under section 11 of this act the Australian Electoral Commissioner must arrange for arguments in favour of and against the referendum proposal to be printed in a pamphlet and posted to each elector. As the A time for change:yes/no? report noted:

The printed pamphlet as the primary method of communication has been in place since 1912 and retains support from many within the community.

…   …   …

This requirement to post material to every elector has been the subject of much criticism.

Recommendation 3 of the report was that, instead of posting the pamphlet to each elector, it be sent to each household. The amendments contained in this bill implement this recommendation but do so in a slightly different way than originally proposed. The amendments allow the Australian Electoral Commission to use the addresses they hold for Australian electors. Rather than attempting to describe what a 'household' is in the referendum act, it is more sensible to be able to draw on the existing database of addresses. Listening to the member for Mackellar's speech, it would appear that she has misunderstood the provision in the bill. I want to stress that email addresses are not provided for as an alternative to the use of postal addresses; they are an additional method of communication with electors that is proposed by this amendment. The whole intent of this amendment is to make sure that there will be as full communication as possible with Australian electors.

The bill also allows the Australian Electoral Commission to send pamphlets to any other address it considers appropriate, and I have mentioned the additional provision to allow pamphlets to be sent to an email address again if that is seen as appropriate. Many electors share residential addresses—for example, two adults who share a domestic partnership with, perhaps, adult children living at the same address. This amendment is aimed at making sure that the referendum pamphlet reaches Australian electors at least once, with less unnecessary and costly duplication. It is a provision which will save money.

The bill also implements recommendation 11 of the committee report, which was to lift the current limitation on spending imposed under section 11 of the Referendum (Machinery Provisions) Act. As many submitters to the A time for change report pointed out:

… the restriction on Commonwealth expenditure is a barrier to the development of better and more effective referendum process.

I would adopt the comments made by the member for Mackellar a moment ago about the need to ensure that electors are as informed as possible. That is what the lifting of this current limitation on spending is directed to. As the legal and constitutional affairs committee found in its recommendations:

It is apparent that referendums require a flexible and adaptable approach … the Committee is of the view that the funding level for referendum campaigns should be determined on a case- by-case basis and that decision should be taken by the Australian Government.

This bill lifts the limitation on government spending from when this bill commences until polling day for the 2013 general election. Lifting the limitation on spending is a sensible amendment which was also adopted in conjunction with the 1999 referendum—that is the last time that the Australian people were asked to vote on a change to our Constitution. The form of this provision in this bill to lift the limitation on spending is in exactly the same form as that used by the Howard government in 1999. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Mrs BRONWYN BISHOP (Mackellar) (17:32): I move amendment (1) circulated in my name:

(1) Clause 4, page 2 (lines 6 to 14), omit the clause.

This relates to clause 4 of the bill, which suspends the subsection of the act that places a cap on the expenditure that the government may make with regard to the holding of a referendum—which we now know, in fact, is to be held. In supporting the proposal that we should remain with simply the yes/no case being properly prepared and posted to each elector—which will be the subject of the second amendment proposing that it goes to electors and not to households—I refer to the fact that the Electoral Commission pointed out that, if there were not sufficient time for the preparation of additional material to be put together, the risks that would be invoked because of the short time frame between now and the holding of the referendum could include the following. I read from their submission dated 1 January 2013:

Should the AEC not commence preparation of the referendum campaign components until 1 March—

and I point out that we are now at 14 May. One of the risks referred to is:

… elevated potential for criticism by stakeholders, interest groups or the wider public (during the campaign or afterwards) if they perceive that the campaign advertising:

did not effectively inform voters

adversely impacted on formality rates

was biased towards one side or the other

the advertising material was culturally deficient for special audiences, or the style of presentation did not adequately address special audiences

The submission referred to:

limited opportunity to defend against the above criticism if robust market testing was not able to be conducted in the truncated time frames available

a risk that completion of the referendum work in the truncated timeframe will jeopardise other final election preparations …

In other words, the Electoral Commission itself has said that that this short time frame that is now available for the preparation of material for a referendum on 14 September is going to pose risks as to whether or not it is seen by the Australian people to be properly conducted. This, of course, would only be compounded by the fact that not every elector is to receive a copy of the pamphlet individually.

The Special Minister of State and the Attorney-General pointed out that in 1999, when we had a stand-alone referendum, this clause was suspended. But, of course, at that stage it was a stand-alone referendum, not one held concurrently with an election, and therefore the confusion element was not there. Secondly, it was at a time when we were having surpluses, the government was in good financial shape, the country was being well run and we were not in the parlous financial state that we presently are in. As I said earlier in my speech in the second reading debate, if the additional expenditure which the government wishes to make were to be allowed by suspending this clause, it would mean that we were being fiscally irresponsible in spending money that does not need to be spent and could be put towards some other good cause. So, when we are looking at the importance of not suspending this clause, I would say, firstly, that it is financially sound and, secondly, that it is heeding both the report of Mr Spigelman and the predictions of the Electoral Commission itself as to why, in this truncated time, it would be unwise to embark on additional expenditure which is outside the parameters of section 11(4).

Mr DREYFUS (Isaacs—Attorney-General, Minister for Emergency Management, Minister for the Public Service and Integrity and Special Minister of State) (17:37): Mr Deputy Speaker, the government opposes this amendment. This is a proposal by the opposition to retain a cap on spending that has been in the referendum (machinery provisions) legislation since 1912. That is where the member for Mackellar wants to take Australian electoral processes back to—1912.

The context is that this whole matter of what was to be the machinery provisions to apply to the next referendum to be held in our country was considered by the Legal and Constitutional Affairs Committee in a report in 2009, and we seem to have a change of heart by this opposition because the opposition members of that Legal and Constitutional Affairs Committee in 2009 supported the removal of the limitation on spending for the purposes of referendums. But, of course, this opposition, represented here by the member for Mackellar, is nothing but negativity and obstructionism. One can only say that what has just been said by the member for Mackellar borders on the bizarre. She has quoted from an AEC submission to the joint select committee into the holding of this referendum, and the particular passage from which she read refers to the risk of inadequate advertising material, in particular such matters as the risk that the advertising material in association with the referendum would not be culturally adequate, would not be culturally specific enough, and a range of other risks—all of them directed properly by the Australian Electoral Commission to its concern that the Australian electorate be as fully informed as possible.

So what is the response put forward by the member for Mackellar? It is to propose that there should be no advertising; it is to propose that the only communication with Australian electors for the purposes of this referendum on recognising local government in our Constitution—bringing our Constitution a little bit alive and bringing it into the 21st century to recognise existing practice—is a yes/no pamphlet, a device that was invented in 1912, which is where the member for Mackellar wants to take us back to.

The removal of this cap on spending was supported by opposition members in 2009, and no explanation has been put forward by the member for Mackellar as to why it should not now be proceeded with. I would add that all parties, historically, have recognised that an effective referendum campaign—effective meaning that there is a high level of interest and a high rate of engagement by the voting public, not by the ultimate outcome of the vote, but effective in the sense of engagement—requires much more government input and financing than simply a yes/no pamphlet.

In 1999, $4.5 million was spent on a public information kit for the referendum on the republic, and $15 million was divided between the two opposing committees—there was a yes committee and a no committee—and another $16.9 million was provided to the electoral commission for the yes/no pamphlet and related advertising costs. That is a total of $36.4 million spent by the Howard government in 1999 on that referendum. The Howard government, quite properly, recognised the need for a range of funding avenues. I just quote again from what the Legal and Constitutional Affairs Committee noted about this subject. They said:

The increased funding allocated to the 1999 referendum to provide for both educational material and further campaign advertising illustrates the significant difference between what is necessary for an effective referendum and what is provided for in the Machinery of Referendums Act… the Yes/No pamphlet alone is insufficient to educate and engage the public.

The reality is that starving this campaign of sensible, reasonable funding will mean that the Australian community is unaware of and disengaged from the information that they need to make an informed vote in September. It is shameful. This opposition when in government removed the cap on spending for the purposes of a referendum and explained in detail why it was necessary to do so, seemingly understanding then in government that simply sending out 2,000 words in the yes case and 2,000 words in no case in a pamphlet to Australian electors was not sufficient. This is what the then-Attorney-General, Daryl Williams, had to say on the removal of the cap:

In order to make an informed decision, the Australian people must have access to relevant information about our system of government and the proposal for change. The government believes that public funding should be made available to support a vigorous and engaging public presentation of the arguments for and against change.

This opposition does not want that; it does not want the Australian people to be informed. Fundamentally they are an antidemocratic opposition.(Time expired)

Mrs BRONWYN BISHOP (Mackellar) (17:42): I think that it is important to make a couple of points. Firstly, the existing legislation was passed in 1984 by the Hawke government. There were referenda in 1984. That is a long way past 1912.

It is important that people are properly informed, and that is why we are insisting that the pamphlet should be sent to each elector, not a household where it can simply be taken by one member of the household and disposed of and nobody else can even see it. It is important that it goes to each elector. I cannot stress enough how important it is—when we are talking about either the electoral roll for election purposes, or we are talking about conducting a referendum—that individual electors have to be the centre and main focus, not some grandiose plan that you can put information out there and hope that people will pick it up via advertising, squandering money at a time when we simply do not have any money.

The reason that I made a differential between what happened in 1999 and what is happening now is that then we had the money we could afford to spend. This time we do not have the money to spend. We have a government which is going to bring in another deficit here tonight, a deficit every year from Mr Swan in perhaps swan song. Indeed, if we are to be seen as fiscally responsible—as we wish to be—and live within our means, then you do not squander money on a campaign which is not necessary and at the same time deny the right of electors to receive directly information concerning that change.

We had a lot of fire and brimstone from the Attorney-General, and that is fine in firepower terms, but I do not think it is very convincing in terms of the need not to spend money unnecessarily, but to properly inform electors with the emphasis on electors as distinct from householders, and also to ensure that we do not go down the slippery slope of thinking that without properly connecting each individual elector you can have a proper referendum with people being properly informed. Point No. 1: if you want people to be informed, send the information to them directly and as an individual, not as a collective.

Mr DREYFUS (Isaacs—Attorney-General, Minister for Emergency Management, Minister for the Public Service and Integrity and Special Minister of State) (17:45): The member for Mackellar has just spoken to her second amendment, as I understand it, and this is also—

Mrs Bronwyn Bishop interjecting—

Mr DREYFUS: On that basis, I will simply say that there is a complete hollowness in the member for Mackellar attempting to suggest that it is a desire to save money that is prompting this restriction of information to the Australian public about this practical and important change to our Constitution. I say again: the removal of the cap on the spending in association with referendums was accepted by opposition members in the deliberations of the House of Representatives Standing Committee on Legal and Constitutional Affairs back in 1999, and for good reason. You simply cannot say in the 21st century that this procedure is possible by use of a Yes/No pamphlet, a printed pamphlet, a procedure first devised in 1912. The member for Mackellar might point to the fact that the particular act of parliament that we are now seeking to amend was passed by this parliament in 1984, but the provision for the Yes/No pamphlet, which was taken up almost in identical words in the 1984 act of parliament, was first introduced to referendum procedures in 1912. We have not used the Yes/No pamphlet at every single referendum since 1912 for a range of reasons, but at most referendums it has been used. That procedure dates from 1912 and that is where the member for Mackellar would take us back to.

There is something grossly inconsistent about the two amendments that are being put forward here by the member for Mackellar: on the one hand saying that the opposition do not want to spend any money in ensuring that there is appropriate information provided to Australian electors and, on the other hand, saying that they want to retain the wasteful expenditure of sending an individual package of the Yes/No pamphlet, even if there are five, 10 or 15 of these packages going to the same household. The Australian Electoral Commission has pointed to the wastefulness of that expenditure of an additional $4 million. We will save $4 million by not sending this Yes/No pamphlet to every single elector—and that is what the member for Mackellar wants to happen—but rather by sending it to addresses. There is a gross inconsistency in saying that, on the one hand, 'We don't want to spend any money,' and then in the next amendment, saying, 'We want to spend an additional, wasteful $4 million in order to send it to every elector, apparently on the basis that that provision has been there for a long time.

The purpose of lifting the cap is to make sure that appropriate means of communication are used. By that, I mean the use of the internet—which perhaps the member for Mackellar has now discovered—the use of television advertising, something that did not exist in 1912, or the use of radio advertising, which also did not exist in 1912. I assume that the member for Mackellar has got some awareness of these modern communication techniques. We are now in the 21st century and, because we are in the 21st century, there is a need to provide for proper communications techniques. I will quote again from what the committee had to say in its 2009 report:

The increased funding allocated to the 1999 referendum to provide for both educational material—

because that is what we are directing this to—

and further campaign advertising illustrates the significant difference between what is necessary for an effective referendum and what is provided for in the Machinery of Referendums Act.

The committee went on to say:

The processes and campaigns introduced for the 1999 referendum—

the last time we went to a referendum in this country—

suggests that the current provisions are not working, and specifically, that the Yes/No pamphlet alone is insufficient to educate and engage the public.

The member for Mackellar wants to neither educate nor engage the public, as shown by these amendments.

Mrs BRONWYN BISHOP (Mackellar) (17:50): I think it is important to, again, point out that the date of the existing legislation is 1994, as passed by the Hawke government, and that there have been referendums since that time. It is also important to point out that the $4 million that the minister would like to save in postage is, presumably, money he would like to spend on promoting heaven only knows what. Although that committee proposed, back in 2009, that any additional expenditure be provided equally for the yes and no case, there is no provision for that in this amendment bill, just merely to suspend section 11(4). We believe that it is important—and, again, I stress this—that every individual elector receives the information, that they may individually be informed. The minister seems to be saying, 'No, that's not necessary. One pamphlet into any old household and then we will make up for it by having a full-on advertising campaign, paid for by the taxpayer, without any provision for it to be fair expenditure on a yes or no case.'

I think that, when the Hawke government introduced this legislation back in 1984 and put a cap on expenditure, it was a sensible thing to do. In this time, when we are so stretched for cash, when we are so indebted as a nation, to waste money by spending like this is fiscally irresponsible. So I put forward a number of reasons as to why we should oppose the suspension of section 11(4). I think those reasons are compelling and I would commend those reasons to the House.

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

Mrs BRONWYN BISHOP (Mackellar) (18:04): I move opposition amendment (2):

(2) Schedule 1, items 1 to 3, page 3 (lines 4 to 21), omit the items.

The amendment removes those sections from the bill which would enable the yes-no case to be sent to households—

Honourable members interjecting—

The SPEAKER: Order! The member for Mackellar has the call.

Mrs BRONWYN BISHOP: It would mean that the yes-no case could be sent to households, as distinct from electors. As I said in my second reading speech, we believe that it is imperative that the concept of an elector is fundamental to the proper carrying out of an election and, indeed, of a referendum. So we believe that it is vitally important that this provision be removed so that we may return to the situation of the 1984 act, whereby every elector would receive the yes-no case. It would also prevent the Electoral Commissioner from making decisions about which address he may deem the fit one to send material to. As I pointed out in my second reading speech, with regard to emails, there is no available email register. There is no proper knowledge of which people have email addresses and which do not. At this stage, for 2013—it may be different in the future—we should maintain the position of posting, not sending, the yes-no case to every elector as an individual.

The SPEAKER: The question is that the amendment be agreed to.

The SPEAKER: The question now is that this bill be agreed to.

Mr DREYFUS (Isaacs—Attorney-General, Minister for Emergency Management, Minister for the Public Service and Integrity and Special Minister of State) (18:18): by leave—I move:

That this bill be now read a third time.

The SPEAKER: The question is that the bill be now read a third time.

Sitting suspended from 18:25 to 19:30

Mr SWAN (Lilley—Deputy Prime Minister and Treasurer) (19:31): I move:

That this bill be now read a second time.

Stronger economy, smarter nation, fairer society

Tonight this Labor g overnment makes the choice to keep our economy strong and invest in our future.

To support jobs and growth in an uncertain world.

To chart a pathway to surplus through responsible savings.

And to ensure no Australian is left behind because of the circumstances of their birth or misfortune in their life.

Speaker, n o government gets to choose the global economic circumstances in which the budget is framed.

But you do get to choose the priorities for the nation.

Labor chooses a stronger, smarter, and fairer Australia.

An Australia where our schoolchildren get the opportunity to reach their full potential with $9.8 billion invested in new school funding.

An Australia which gives dignity to people with severe and permanent disability through the historic $14.3 billion investment in DisabilityCare Australia — this is a proud moment for our country.

An Australia with the critical infrastructure we need to drive our economy forward — with $24 billion new investment in road and rail.

An Australia where our prosperity spreads opportunity to every postcode in our nation.

Speaker, tonight, we put in place the savings to fully fund these priority investments for 10 years and beyond—an achievement unprecedented in our nation's history.

We make these historic investments in the Labor tradition from a position of strength.

The facts are, under Labor ' s economic leadership:

Our economy is 13 per cent bigger than before the global financial crisis.

More than 950,000 jobs have been created with more Australians in work than ever before—there is no fact we are prouder of.

For the first time ever we have a triple-A credit rating from all three global agencies with a stable outlook—one of only eight countries to do so.

And all this with contained inflation and new record low interest rates.

That is because we got the big calls right on the economy.

Now we enter a period where new choices must be made.

Challenging global conditions and the high Australian dollar have put huge pressure on the b udget and led to a significant reduction in expected tax receipts totalling over $60 billion over the four years to 2015-16.

Speaker, w e face a clear choice.

Radical cuts to the bone that would risk jobs and our economy.

Or a sensible, calm and responsible approach that puts jobs first.

We have always put the interests of working Australians first.

In this b udget, we do so again.

Just because the global economy took an axe to our budget does not mean we should take an axe to our economy.

Just as we shielded Australi a from the worst during the global financial crisis we will continue to follow the responsible middle course.

Two simple but powerful words are at the heart of our approach and they mean an awful lot to every Australian watching tonight : j obs and growth.

Speaker, b ecause of our deep commitment to jobs and growth we have taken the responsible course to delay the return to surplus and due to a savage hit to tax receipts there will be a deficit of $18 billion in 2013-14, because we put jobs and growth first.

The alternative, cutting to the bone, puts Australian jobs and our economy at risk — something this Labor government will never , ever accept.

Speaker, t his is our choice.

To those who would take us down the European road of savage austerity I say the social destruction that comes from cutting too much, too hard, too fast is not the Australian way.

Instead, we a re making targeted, sustainable savings of $43 billion over the forward estimates.

To deliver a measured and balanced consolidation of around half a per cent of GDP a year on average from 2013-14.

Since mid-2009 we have fully offset all new spending with savings measures and that continues tonight.

This discipline gives Australia a responsible pathway back to balance in 2015-16 and surplus by 2016-17.

It is a fairer way forward by helping modern families with targeted assistance for the everyday pressures , by delivering the schoolkids bonus and through the low - income super contributions.

A smarter way forward : providing businesses with a skilled workforce , boosting incentives to innovate and adapt, to reap the benefits of the Asian c entury.

And a stronger way forward : investing in education and training, boosting productivity , protecting and creating jobs, growing the economy and keeping inflation and interest rates low.

Economic and fiscal strength

Speaker, t onight we build on Australia ' s resilience during the global financial crisis and its fallout.

Our nation ' s outlook is bright and our economy is set to grow faster than most of the developed world.

Real GDP growth of 2¾ per cent in 2013-14 and three per cent in 2014-15.

By mid-2015, our economy will be 22 per cent bigger than before the global financial crisis, outstripping every other major advanced economy.

An economy in transition

From this position of strength, our economy is undergoing an important transition.

Our nation ' s largest resource investment boom is shifting to a boom in production and exports.

As the resources boom enters its new phase, the economy is also transitioning towards broader sources of growth.

And while our opportunities are great and our future bright, this transition will not be seamless.

Unemployment is forecast at 5¾ per cent in 2013-14, up slightly, but still among the lowest in the developed world.

This transition comes against the backdrop of a profound shift in the global economy.

The weight of economic activity is shifting towards our region.

As the Asian century unfolds, there are many new opportunities.

Not just in mining also for our farmers, manufacturers, and service providers but only if we make the choice to invest.

Because you do n o t want to find yourself in the fastest growing region in the world, with yesterday ' s economy.

You can no t be a first-world economy in the 21st century if you have n o t laid the groundwork to seize the opportunities.

Training a highly skilled, educated and productive workforce.

Supporting business to be innovative and competitive.

Investing in high- quality infrastructure.

Ensuring a strong, fair and sustainable tax system.

All achievements of this b udget.

And you can no t be a first-world economy in the 21st century if you a re not on the path to a clean energy future.

As is widely accepted, putting a price on carbon pollution is the lowest cost and most efficient way to tackle dangerous climate change.

This budget recognises as we move to an emissions-trading scheme the carbon price is likely to be lower as is associated spending—reflecting lower costs to the economy, households and business.

We will continue to deliver existing household assistance, including increases in pensions, allowances, family payments and other benefits, and ensure future assistance remains adequate.

Weaker tax revenue

While our economy remains resilient, powerful global forces and the stubbornly high Australian dollar have savaged budget revenues.

Not since Hawke and Keating floated the dollar has it remained so high.

This has put acute pressure on prices and company profits weighing more heavily than expected on tax receipts.

Speaker, l et u s be clear about the magnitude of the hit to revenue.

This year we face the second largest revenue write - down since the Great Depression.

Since last year ' s b udget, expected tax receipts for 2012-13 have been written down by $17 billion.

And since our mid-year update in October, there has been a total revenue write - down of over $60 billion over the next four years.

Company taxes, capital gains tax, resource rent taxes have all been hit.

We ha ve seen almost $170 billion wiped off our tax receipts since the global financial crisis .

The tax-to-GDP ratio in 2013 is estimated to be 22.2 per cent, 1.8 percentage points lower than the average of the five years prior to the global financial crisis .

It i s as simple as this —i f we were taxing Australian families and Australian businesses like our predecessors did, we woul d have an extra $24 billion in taxes in 2013-14 and be comfortably in surplus every year of the forward estimates.

The hit to our tax collections will see our very low level of net debt peak at 11.4 per cent of GDP, still less than one-eighth the level of major advanced economies.

This b udget sets a sensible pathway to surplus, while making room for the big investments in our nation ' s future.

We ha ve put in place over $180 billion in responsible savings over six budgets since 2008-09.

And we have been putting structural savings in place since day one.

The long-term savings we ha ve made over the last five years add up to over $300 billion by 2020-21.

Of course, these savings involve some very difficult decisions.

But Labor has always tackled the reforms our nation needs.

We take the difficult decisions knowing they allow us to fully fund b etter schools for our children , the historic creation of DisabilityCare Australia and of course the next wave of nation building.

Building a smarter nation

Speaker, w e know that a smarter Australia means a stronger Australia.

An Australia able to grasp the opportunities of the Asian century .

A skilled workforce and a strong, productive and resilient economy.

We know we wi ll only win the economic race in the Asian c entury if we win the education race.

Our current school funding system is broken — it i s failing our children.

That i s why we are transforming our nation ' s schools by investing $9.8 billion in new school funding.

Delivering more teacher training , extra resources for school libraries , specialist language assistance and literacy assessments in the early years.

We are also ensuring funding will grow for every school.

The b udget fully funds this investment over the next decade, meaning we can return to surplus without leaving our children an education deficit.

Building on our unprecedented investments in early childhood education and care with $660 million to continue the national partnership that will achieve universal access to preschool .

And establishing a $300 million Early Years Quality Fund to support our childcare workers.

Speaker, t his Labor g overnment has delivered a 75 per cent funding increase for university places, supporting around 189,000 more university students.

And in this b udget we ensure this funding continues to grow sustainably.

Tonight we announce an additional $97 million investment to boost the number of Commonwealth-supported university places, and an extra $186 million for research infrastructure.

Speaker, the investments we make tonight will ensure our children are equipped to take up the high-skill, high-wage jobs of the future.

On this side of the House, we believe every Australian child deserves the same opportunities in life, and a child's postcode should not determine their future.

Building a fairer Australia

Speaker, the fair go is at the heart of everything Labor stands for.

That's why we're so proud to establish DisabilityCare Australia, the National Disability Insurance Scheme.

Supporting Australians with significant and permanent disability has long been in our nation's heart.

In March we put it in our nation's laws, and tonight we put it in our nation's budget.

Following in the huge footsteps of Medicare and Labor's record of historic social policy reforms.

In 2018-19 around 460,000 Australians with significant and permanent disability will get the support they deserve.

Our current disability system is underfunded, unfair and fragmented.

For too long, people with disability have been denied the opportunity to live a life many of us simply take for granted.

For too long, Australia has failed to reform this broken system. Speaker, tonight we right this wrong.

We provide choice, control and dignity to people with disability.

This could mean the difference between getting the right wheelchair now or waiting three long painful years using a wheelchair that doesn't fit.

It could mean the difference between a shower every day, or only once a week.

This budget will fully fund our share of DisabilityCare Australia, beyond the next decade.

From 1 July 2014 the Medicare levy will increase by half a percentage point.

The money raised will be placed in a special fund for 10 years and only used for the additional costs of DisabilityCare Australia.

Tonight, we end the cruel lottery of our current system.

Speaker, the government is investing $64.6 billion in health funding, up 40 per cent since we came to office.

This includes National Health Reform funding for state and territory governments who will receive unprecedented growth of 35 per cent for public hospital services over the next four years.

This includes $14 billion in 2013-14 which grows to $19 billion in 2016-17.

This means that health funding to every state and every territory will grow over the forward estimates.

As a cancer survivor, I've experienced the high quality treatment provided by our health system but I know more needs to be done to prevent, detect and treat this disease.

Tonight's budget builds on the $3.5 billion we've already invested in cancer prevention, detection, treatment and research.

We continue the fight against cancer, investing over $226 million in world-leading cancer care.

Investing over $100 million in screening for breast, cervical and bowel cancer.

Supporting critical chemotherapy medicines, and investing $23.8 million for life-saving bone-marrow transplants.

Funding a third prostate cancer research centre and continuing support for the two existing centres.

Supporting CanTeen's work with young people living with cancer, and supporting those affected by lung cancer.

Speaker, Labor also has a strong record of supporting older Australians.

We introduced the largest single increase in the age pension in 100 years, and we introduced the superannuation guarantee which we're raising gradually to 12 per cent starting from 1 July this year.

We're improving aged care services through our $3.7 billion Living Longer Living Better package.

Tonight marks another step in the Gillard government's plan to turn grey into gold and harness the wisdom of our senior Australians.

We will invest another $127 million to help senior Australians continue their active engagement in society and introduce a pilot program to help downsize their home without affecting their pension.

We're also tackling entrenched disadvantage.

Committing $777 million to renew the National Partnership on Closing the Gap on Indigenous Health Outcomes.

And funding a new transitional national partnership to continue vital homelessness services.

Building a stronger economy

So we are investing in Australia's human capital, at the same time as we are investing in our economic capital.

Nation-building infrastructure

We have already invested a massive $36 billion in roads, rail and ports.

Tonight we continue our ambitious program with a new $24 billion investment in the next wave of nation building infrastructure.

It's critical to invest in both urban road and rail infrastructure.

Traffic congestion costs commuters time with their families and is estimated to cost our economy up to $20 billion a year by 2020 if not addressed.

That's why we have committed more to urban public transport infrastructure than all our predecessors since Federation combined.

But there is more to be done.

So tonight we're investing in transformational public transport projects like Brisbane's Cross River Rail and Melbourne Metro.

These projects will change the way these cities work and allow them to grow into the future.

We're also putting funds towards productivity-enhancing infrastructure in Sydney—the M4 extension and M5 duplication—and funds that will see the missing link between the F3-M2 constructed.

We will partner with the private sector and state governments to deliver these critical projects as efficiently as possible.

We are also investing in the Gateway North Upgrade in Brisbane, Melbourne's M80 Ring Road, and the South Road Upgrade in Adelaide.

And in our regions we are investing in the Swan Valley Bypass in WA, the Bruce Highway in Queensland, the Pacific Highway in NSW, the Midlands Highway in Tasmania and the Tiger Brennan Drive in the Northern Territory.

These investments will boost productivity, build capacity, improve safety, and relieve congestion, as well as improving the quality of life in our communities across the nation.

The National Broadband Network is putting Australia at the cutting edge of broadband technology and turbocharging productivity for decades to come.

Tonight we announce $12.9 million to connect more local councils to the NBN and provide training for small business and not-for-profits in 20 regional NBN rollout sites.

Supporting business to innovate

Speaker, the strength of our economy also depends on the ability of Australian businesses to win work at home and abroad.

We're boosting innovation, productivity and competitiveness through our $1 billion Plan for Australian Jobs.

Investing over $500 million to create industry innovation precincts around Australia.

And providing $378 million to stimulate private sector investment in entrepreneurial small to medium-sized enterprises.

Part of our plan to support and create jobs, building on our loss carry-back and instant asset write-off reforms for three million small businesses.

Meeting industry ' s skills needs

Speaker, as well as having the infrastructure for the future, we must also ensure our economy has the skilled workers it needs.

Labor has increased annual funding for skills and training by almost 50 per cent.

Tonight we build on that record, with a $69 million Alternative Pathways to the Trades program, providing more flexible pathways for 4,000 Australians undertaking trade and technical qualifications.

We have created a $45 million Skills Connect Fund to deliver more effective workplace training for all Australian businesses.

Workforce opportunity

Speaker, this Labor government will do everything in its power to boost workforce participation and support transitions to employment.

Tonight we continue our support by allowing Newstart recipients to earn around $1,000 more a year before their payments are affected, the first increase in more than a decade.

We are also supporting parents in their efforts to balance work and family with around 280,000 parents already reaping the benefits of the nation's first Paid Parental Leave scheme.

Our scheme has been in place for two years, is fully funded, affordable, sustainable, equitable, and supported by every member on this side of the House.

Stronger regions, resilient rural communities

Speaker, tonight we announce new reforms to build stronger regions and more resilient rural communities.

Over $330 million to support the historic Tasmanian forests agreement, and continuing our investment in Tasmanian economic growth and jobs.

Nearly $100 million for a new farm household allowance to support farmers in hardship, part of the National Drought Program Reform.

And a new Farm Finance package to help farmers struggling with debt, providing concessional loans, more rural financial counsellors, and a better approach to debt mediation.

This comes on top of the almost $1 billion of investment in the Regional Development Australia Fund supporting the infrastructure needs and sustaining economic growth in Australia's regions.

We also commit another $200 million for Reef Rescue to help farmers improve the quality of water entering the Great Barrier Reef.

Recovering from natural disasters

Speaker, Australians well know the devastation nature can unleash on our country, our communities, and our people—from floods, cyclones to bushfires.

Since 2010-11, Labor has paid $5.7 billion to the states to support disaster relief.

We expect to pay a further $6.2 billion over the five years from 2012-13, including $1.9 billion to help Queensland through the January floods.

Tonight we invest $40 million to rebuild local council infrastructure to a better and more resilient standard.

Strong foundations

And Speaker, as we build a stronger Australia for the future, we continue to honour those who laid the foundations of our country's strength.

As the Centenary of ANZAC draws near, we honour the hard work and sacrifices of Australian service personnel and their families.

We build on our previous commitment to commemorating the Centenary of ANZAC investing a further $25 million and expanding veterans mental health services.

And this budget funds the core defence capabilities required to protect Australia's national security interests.

Royal commission

We have also provided the Royal Commission into Institutional Responses to Child Sexual Abuse with the resources required to go about its important work and ensure survivors have the support they need.

Enduring savings

Speaker, this budget makes historic investments in our children's education, in care for our most vulnerable citizens, and in building our nation.

But you only get to make the big investments if you are willing to make the savings to fund them.

To fund the critical investments over the next decade and to return the Budget to surplus, this Government has made $43 billion in savings over the forward estimates.

In addition to the savings already mentioned we are:

improving the sustainability of the family payments system by extending indexation pauses; not proceeding with increases to family tax benefit part A announced in the 2012-13 budget and abolishing the baby bonus; while providing new support for families of newborns through family tax benefit part A;

closing loopholes and protecting the corporate tax base to ensure multinationals and big businesses are not being given an unfair advantage;

better targeting superannuation tax concessions to improve the system's fairness, sustainability and efficiency;

improving the sustainability of the health budget through phasing out the poorly-targeted net medical expenses tax offset and making changes to the timing of Medicare Benefits Schedule indexation;

changing tobacco indexation to make it more consistent with consumers' purchasing power;

continuing to grow overseas development assistance to 0.5 per cent of gross national income, but deferring the target date by one year from 2016-17 to 2017-18; and

continuing to improve the responsiveness of income tax instalments for all large entities.

Choosing our future

Speaker, tonight this Labor government has made the choice—a clear choice—to keep our economy strong and invest in our future.

We've chosen to give every child a world class education, and to make sure no Australian is left behind.

We've chosen a responsible path to surplus while supporting jobs and growth. To make our economy stronger, our nation smarter and our society fairer.

Labor has a proud record of making visionary choices that strengthen this great nation.

The Age Pension … Medicare … Universal Superannuation … Paid Parental Leave … The National Broadband Network … Pricing Carbon.

And with the ground-breaking investments I have announced tonight, we build upon that proud Labor tradition.

This is the Australia that Labor governments choose.

Because creating prosperity and spreading opportunity are the values that drive this Labor government every single day.

I commend the bill to the House.

Debate adjourned.

Mr SWAN (Lilley—Deputy Prime Minister and Treasurer) (20:00): For the information of honourable Members I present the following documents in connection with the Budget of 2013-14:

Budget strategy and outlook,

Budget measures,

Australia's Federal relations, and

Agency resourcing,

Ordered that the documents be made parliamentary papers.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (20:01): I move:

That this bill be read a second time.

Appropriation Bill (No. 2) 2013-2014, together with Appropriation Bill (No. 1) 2013-2014, is a principal bill underpinning the government's budget.

This bill proposes appropriations for agencies to:

make payments to the states, territories and local government;

make payments tocertainCommonwealth authorities and companies;

meet requirements for departmental equity injections; and

meet requirements to create or acquire administered assets and to discharge administered liabilities.

The bill seeks approval for appropriations from the Consolidated Revenue Fund of just over $4.8 billion. I will now outline six of the more significant amounts.

First, the Department of Broadband, Communications and the Digital Economy would, will receive approximately $1.3 billion to contribute equity to NBN Co Limited to allow the continuation of the rollout of the National Broadband Network.

Second, AusAID, the Australian Agency for International Development, will receive approximately $604 million. The majority of this amount is to provide for Australia's contribution towards the 17th replenishment of the International Development Association, which is part of the World Bank. Australia's contribution will allow the International Development Association to provide loans and grants for programs that enhance economic growth, reduce inequalities, and improve living conditions in low-income countries.

Third, the Department of Defence will receive an equity injection of approximately $683 million to enable the purchase of military equipment and the construction of support facilities, as announced in the 2013 Defence White Paper.

Fourth, the bill will provide the Department of Infrastructure and Transport with approximately $383 million for the Roads to Recovery program under which funds are distributed to local councils, and state and territory governments responsible for local roads in areas where there are no councils.

Fifth, the Department of Finance and Deregulation will receive an equity injection of approximately $318 million. This relates mainly to three matters:

the relocation of Department of Defence facilities from the Moorebank Intermodal Terminal site in Western Sydney to a purpose-built facility through the development of the Holsworthy Barracks;

the construction of a new facility for the Australian Quarantine Inspection Service to safely monitor the importation of animals and plant material before release into Australia; and

the redevelopment of the Villawood Immigration Detention Centre to meet current standards for design and fit-out of immigration detention facilities.

Sixth, the government will provide the Department of Agriculture, Fisheries and Forestry with $210 million for the provision of concessional loans under the Farm Finance initiative. The loans are for viable agricultural businesses for the purpose of productivity enhancements and debt financing.

All the appropriations in Appropriation Bill (No.2) 2013-2014 are other than for the ordinary annual services of the government.

Debate adjourned.

Mr BRADBURY (Lindsay—Assistant Treasurer and Minister Assisting for Deregulation) (20:05): I move:

That this bill be now read a second time.

The purpose of Appropriation (Parliamentary Departments) Bill (No. 1) 2013-2014 is to provide funding for the operations of:

the Department of the Senate;

the Department of the House of Representatives;

the Department of Parliamentary Services; and

the Parliamentary Budget Office.

This bill seeks approval for appropriations from the Consolidated Revenue Fund of just under $185 million. Details of the proposed expenditure are set out in the schedule to the bill and the Portfolio Budget Statement for the Parliamentary Departments.

Due to the establishment of the Parliamentary Budget Office, this bill now provides for the finance minister to be able to consider determining an advance to the Presiding Officers of up to $300,000 for the Parliamentary Budget Office. This would only be provided if the finance minister was satisfied that there is an urgent and unforeseen need for expenditure during the 2013-2014 financial year, and where schedule 1 to this bill had not provided sufficient appropriation.

All the appropriations in Appropriation (Parliamentary Departments) Bill (No.1) 2013-2014 are for the parliamentary departments.

Debate adjourned.