Mr IAN MACFARLANE (Groom—Minister for Industry) (09:01): I move:

That this bill be now read a second time.

The Australian Workforce and Productivity Agency Repeal Bill 2014 provides for the repeal of the Australian Workforce and Productivity Agency Act 2008 and the abolition of the Australian Workforce and Productivity Agency.

This bill is a critical part of the government's agenda for reforming governance arrangements for vocational education and training, as well as rationalising the number of portfolio bodies across government—and we certainly need to do that.

The Australian Workforce and Productivity Agency Act 2008 establishes the legislative framework for the Agency, which provides independent advice in relation to Australia's current, emerging and future skills and workforce development needs.

As part of the winding down of the agency's operations, it is the government's intention that the agency's staff and functions be transferred into the Department of Industry to strengthen resources and the capacity of the Department of Industry to provide targeted advice.

The agency has made a valuable contribution to policy development and refinement in key areas of skills and workforce development. I would like to take this opportunity to thank all serving and prior board members for their involvement and engagement with the agency and its policy and research.

I took the opportunity to speak to each of the board members and thank them for their contribution. Many people have done a great deal to improve the productivity and skills of young people in particular, and the contribution of the board members should be acknowledged.

I commend the bill to the House.

Debate adjourned.

Mr IAN MACFARLANE (Groom—Minister for Industry) (09:04): I move:

That this bill be now read a second time.

Australian apprenticeships are a critical component in ensuring the Australian economy has all the skills it requires for future competitiveness. I have to say, Madam Speaker, how important this is in improving the competitiveness of Australian industry right across the board. It is a great opportunity for companies to take advantage of apprenticeships and improve their productivity, but, of course, the goal is to ensure that apprentices are able to gain the skills that they will need for a long and successful career and profession of their choosing. For the individuals who undertake them, apprenticeships also provide a valuable pathway into long-term employment.

Some of us see a skill and a trade as equal and as important as a degree at university, and we as a government will do everything we can to ensure that those opportunities are made available.

We know around 20 per cent of trade apprentices drop out by the end of their first year and, in fact, 30 per cent by the end of the second year; and that is an opportunity lost. Apprenticeships provide an opportunity to secure a career and it does not mean they will be in that career all their lives, but they miss the opportunity of that first step towards employment and long-term ability to earn a wage. Despite promising employment prospects and earning potential, many young people find the first few years of an apprenticeship financially difficult.

The government is taking action to support Australian apprentices when they need it most—to help them complete their apprenticeship and deliver these valuable skills to the economy. The Trade Support Loans Bill 2014 introduces and underpins the Trade Support Loans to provide assistance to Australian apprentices from 1 July 2014.

Trade Support Loans are concessional, income contingent loans, which function in a similar manner to FEE-HELP loans received by university students, and provide for up to $20,000 over four years directly to apprentices undertaking an apprenticeship in a priority occupation or qualification.

Implementation of the bill is estimated to have an impact on fiscal balance of $439 million over the forward estimates.

To encourage apprentices to complete their training, the loan amount received by an apprentice will be reduced by 20 per cent when they successfully complete their training. This is an incredibly important part of this initiative. It says to apprentices: 'Complete what you are setting out to do and we will provide you with a 20 per cent discount on the debt you accumulate. That is to say that we place a great deal of importance on you finishing your trade. There is no point in getting halfway through something and giving up. We know it is difficult and we know you need support. We know that this support is what you require.'

The goal is as much to get the apprentice to finish their trade training as it is to support them during that training. By providing a 20 per cent discount, the government is basically offering them a $4,000 gift—their debt is reduced by $4,000.

Trade Support Loans will be available to apprentices in occupations and qualifications on the priority list that I will determine as the minister. The priority list will include traditional trades such as electricians, plumbers and carpenters whose highly skilled occupations significantly contribute to productivity and to the economy.

I had the opportunity to address the HIA conference a few weeks ago on the Gold Coast, and they were insistent that their apprentices be included in this scheme. I am pleased to say that in the case of electricians, plumbers and carpenters that they are, because that industry wants to have the young people of today turned into the tradespeople of the future. They want to stand behind them all the way. They want to see the government doing that. In particular, they want to incentivise those trade trainees to complete their trade so that they are there to provide the workforce.

The loans will be repayable at the same income thresholds as Higher Education Loans Program loans for a university student, so apprentices do not have to repay any money until they are earning a sustainable income with repayments made through the Australian taxation system.

Apprentices will be required to opt in to the loans regularly. Unlike Tools for Your Trade, where the money was basically thrown at apprentices and there was no ownership or feeling of responsibility related to those payments, apprentices will actually have to sign up to these loans every six months. This will make sure that they are fully aware of what they are taking on. By doing this, the intention is to give them the opportunity to reassess their personal circumstances and make an informed decision about continuing to receive loans. This will reduce the risk of apprentices unintentionally accumulating large debts.

To provide support where it is needed most the loans will be paid in monthly in arrears to a total of $8,000 in the first year, $6,000 in the second, $4,000 in the third and $2,000 in the fourth year of the apprenticeship. The loans are more heavily weighted to the first two years when support is needed most. We want to address these startling dropout rates for apprentices in their first and second years that I mentioned earlier.

Australia's future productivity and competiveness depend on a skilled and trained workforce. Learning a trade is invaluable to the individual, the community and the economy, but learning skills does not come cheaply. The measures in this bill will provide the regular financial support required for apprentices to complete their training and move into a paid job as quickly as possible. That is our goal: to get, particularly, young people, but all people who decide to take up a trade, through their training and into a job where they not only become a productive member of the economic community but they have the financial security that we want.

By implementing Trades Support Loans, this government is actively contributing to improve the apprenticeship completion rate, currently around 50 per cent. Really, that is something that we must address. We must get that completion rate up. When an apprentice does not complete their training, there is a substantial loss of time and financial commitment as a result. This translates directly into lost opportunities for the economy because fewer skilled workers are available and fewer productive gains can be achieved without them. Ongoing support such as that provided by the government's Trade Support Loans will help mitigate these losses to apprentices, employers and the national economy.

This bill will further the government's commitment to delivering highly-skilled individuals in priority trades where there are growing skills shortages, and will deliver the improved productivity and competitiveness that the Australian economy needs.

The best feature of these loans, of course, is that they are interest free. Interest free for the term of the loan, and we expect the term of the loan to be something like seven years, indexed each year by the rate of CPI. I know there are those who do not understand the difference between interest and CPI, but CPI is an adjustment for the cost of living. Interest is what you pay on money. So we are giving these loans out interest free, and the saving for an apprentice who, let us say, takes a couple of years to get to the earning threshold before they start repaying it over five years, as against a commercial loan—were they able to get an unsecured commercial loan—that they may have to take out to buy a motor car so they can get to work or pay for whatever they need to to sustain themselves during their traineeship, is at least $8½ thousand. In fact, if you were using real figures it is probably closer to $10,000. But let us take a conservative number: if you add the $8½ thousand to the $4,000, this is now worth to the apprentice in training some $12½ thousand, or more than double the tools for the trade. We are confident this initiative will not only help young people in particular get through the challenge of working in their apprenticeship and completing their training but also get them into productive work.

Debate adjourned.

Mr IAN MACFARLANE (Groom—Minister for Industry) (09:16): I move:

That this bill be now read a second time.

The Trade Support Loans (Consequential Amendments) Bill 2014 makes consequential amendments to existing principle legislation as part of the Trade Support Loans Program.

Debate adjourned.

Mr HARTSUYKER (Cowper—Deputy Leader of the House and Assistant Minister for Employment) (09:17): I move:

That this bill be now read a second time.

Today I introduce the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 to strengthen the job seeker compliance framework.

It has long been a feature of our welfare system that job seekers in receipt of income support are asked to do certain activities in return for that taxpayer-funded benefit.

This includes actively looking for work, undertaking activities to improve their job prospects and taking up a suitable job offer.

The coalition firmly believes in the importance of this mutual obligation.

Our recent budget contained a number of measures to strengthen the mutual obligation and job seeker compliance frameworks.

The bill I present today gives effect to the budget measure to tighten the rules for job seekers who refuse a job, or persistently fail to meet their requirements.

This bill will help to restore the integrity of our welfare system and ensure that available resources are used efficiently and effectively.

The coalition understands that most job seekers in receipt of income support do the right thing by the taxpayer.

Most job seekers want to work and make the effort to find and keep a job.

However, there are some job seekers who do not meet their mutual obligation requirements and are abusing the system.

The former Labor government encouraged this poor behaviour by weakening the rules regarding the application of penalties for serious failures.

Serious failures include refusing a job or persistent noncompliance in meeting participation requirements.

Currently, a nonpayment period of eight weeks may be applied in cases of a serious failure.

However, the changes introduced by Labor allowed people to waive the penalties for a serious failure simply by doing additional activities such as more intensive job search.

In 2012-13, there were 1,718 serious failures for refusing a job and, of these, the penalty was waived in 68 per cent of cases.

In that same year, there were 25,286 serious failures for repeated noncompliance and of these, the penalty was waived in 73 per cent of cases.

And of those waived, nearly one-third were for a job seeker's second or third episode of noncompliance.

These penalties were waived not because the job seekers were vulnerable or the jobs were unsuitable, but simply because the job seeker elected to do an intensive activity instead.

The coalition believes that the changes introduced by Labor have undermined the integrity of the job seeker compliance system.

The ability to continually waive the penalty means that job seekers who commit a serious failure can avoid the financial consequences of their actions, and continue to receive income support, despite their poor behaviour.

This is not right.

It is important that there are stronger deterrents in our system for those job seekers who abuse the system.

As I said, most job seekers do the right thing but some job seekers deliberately choose to avoid their responsibilities.

This bill will ensure that the existing financial penalties for more serious failures are applied more rigorously and in keeping with community expectations.

The government does not believe it is appropriate for a job seeker to refuse a suitable job and remain on welfare.

Anyone in receipt of a taxpayer funded income support payment should be prepared to accept any legitimate, suitable work that they are capable of doing.

The bill will ensure that all job seekers who refuse an offer of suitable work—or fail to accept a suitable job—are required to serve their eight-week nonpayment period.

Job seekers in these cases will not be permitted to have their penalty waived through participation in intensive activities.

It will remain the case that job seekers will not be forced to take work that is clearly beyond their work capacity and that their individual circumstances, such as homelessness, will still be taken into account.

Some job seekers also fail to meet expectations with regard to participating in activities designed to improve their job prospects, such as meeting with their employment service providers or participating in activities.

Where a person is persistently and wilfully noncompliant in meeting these requirements then a nonpayment penalty of eight weeks may be applied.

Unfortunately, the changes introduced by Labor also allowed this penalty to be waived through participation in intensive activities.

This means that there is now no meaningful consequence for people who are repeatedly noncompliant.

The absence of a real financial penalty for this group of job seekers means that people have no real incentive to change their behaviour for the better.

This bill limits the number of times a job seeker may have the penalty for persistent noncompliance waived.

In the future, job seekers will only be allowed to have this penalty waived once through participation in an intensive activity.

This is consistent with the original intent of the waiver provisions, which was to encourage job seekers to re-engage with their employment service provider and resume their participation activities.

By limiting this waiver to one occasion only, job seekers will be provided with a clearer incentive to fully meet their participation requirements into the future.

Conclusion

The government knows that there is little tolerance in the broader community for job seekers who repeatedly flout the rules.

Stakeholders, including social welfare groups, have been clear in their dealings with me that resources must be directed to those job seekers who do the right thing.

There are simply not enough resources to allow money to be provided to those job seekers who are not prepared to help themselves.

The changes I have outlined today will save $20.5 million over five years.

This is money that is better spent on repairing Labor's budget mess and meeting other priorities.

The changes in this bill are only targeted at that cohort of job seekers who refuse a suitable job without reasonable grounds and those who are wilfully and persistently noncompliant.

Those job seekers who do the right thing have nothing to worry about.

I trust that that those opposite will support this bill.

After all, it was the member for Adelaide, as Minister for Employment Participation, who said:

'A strengthening of the compliance system will mean that more job seekers are actively engaging in work experience activities, in training and in participation programs, so that they can find and keep a decent job.'

This is exactly what our bill seeks to achieve: more job seekers meeting their mutual obligation requirements and moving from welfare to work.

This bill will assist the government to ensure the integrity of our income support system by ensuring that the penalties for serious failures are applied more rigorously.

The bill underscores this government's commitment to reinvigorating mutual obligation, consistent with taxpayer expectations.

Debate adjourned.

Mr NEUMANN (Blair) (09:25): I rise today to speak on the Health Workforce Australia (Abolition) Bill 2014. I do so as a member of parliament but also as shadow minister for ageing. We know that this is a particular challenge in the aged-care sector. We have about 350,000 workers in the aged-care sector—doctors, nurses, allied health professionals—and by 2050 we will need a million or more people working across that sector, so it is crucial that we get the health workforce right. At Federation about four per cent of Australians were over 65 years of age; currently 14 per cent are over 65. By 2050, at the latest, it will be 25 per cent. Dementia is a major problem facing this country. We currently have about 300,000 people suffering from dementia and we will have nearly a million by 2050. More doctors, more nurses, more allied health professionals and more carers will be required to meet those challenges.

We have many ups and downs with respect to workforce development but, when the former Labor government was first elected in November 2007, about 74 per cent of Australians were suffering as a result of a workforce shortage with respect to general practitioners. So we set about trying to address this issue. Sadly, the legislation before this House, which abolishes Health Workforce Australia, is a retrograde step with respect to getting rid of that cycle of boom and bust in the development of the workforce.

Health workforce planning is absolutely crucial. It is essential for the demographic challenges we face in the future across the health sector and across the aged-care sector. The crucial need for more funding for health and aged care was recognised by the Queensland Treasurer yesterday in his budget speech in the House in George Street in Brisbane. He actually mentioned the fact that the current federal government is 'turning its back on the challenges of health funding.' He said, 'The federal government thinks that the states can survive with less' and we see in this legislation before the House that the government thinks that workforce development can survive with less as well. This is a tragedy and a shame.

After the federal election last year, we saw the first hint of the Abbott government having a closer look at HWA and other health agencies when the now health minister said ominously on Sky's Sunday Agenda:

… we want to be complemented by the Commission of Audit, but I’ve already started to look at the composition of some of those agencies.

At Senate estimates on 20 November 2013 the Assistant Minister for Health, Senator Nash, confirmed that HWA was under a funding freeze which affected its support for clinical placement funding. But it was not until the Abbott government finally released National Commission of Audit report—delayed surreptitiously and obviously until after the Griffith by-election and the WA Senate re-run were over—that it became clear that HWA's days were numbered. The Commission of Audit argued that there were too many government bodies in Australia and that this leads to duplication and overlap, unnecessary complexity, a lack of accountability, the potential for uncoordinated advice and avoidable costs.

The commission recommended that five of the 22 agencies within the health portfolio be consolidated into the Department of Health. Shamefully and tragically, Health Workforce Australia was one of those agencies. Apparently the commission believed it was appropriate that HWA be amalgamated and considered a clinical training unit. So it was no surprise that in the budget we saw this vital agency abolished by the Abbott government.

The government claims that getting rid of HWA is a simple streamlining of officialdom. It is simply untrue. It is instructive to recall, as I said, the state of the Australian health system we inherited in 2007 after 11 years of neglect from the Howard government. The Australian Institute of Health and Welfare made it crystal clear on the eve of that federal election that the Howard government had abdicated its responsibilities by cutting funding consistently compared to the states and territories across the board, particularly in health and hospital funding, and in primary health care.

At the time that Labor came to power in 2007, Australia was experiencing a grave shortage of doctors, nurses and other health professionals. This was keenly felt in my community where the then Ipswich and West Moreton division of general practice had reported a shortage of doctors and nurses after a study on the health issues in my community.

The report indicated that in the Ipswich region there was one GP for every 1,609 people. Worryingly, the report suggested this problem was likely to worsen as this workforce aged, and many local doctors were reaching retirement age. Within five years we would have a critical shortage of GPs at the front line of health services in the Ipswich and West Moreton region. The report highlighted some of the major health challenges in the areas as preventable and chronic diseases such as obesity, diabetes and heart disease—the challenge of smoking rates and alcohol abuse.

This budget cuts funding for preventative health strategies, cuts and abolishes so many agencies dealing with those problems, including the one that is before the chamber today—the workforce agency that deals with the development and planning for our future workforce challenges—is a backward step. It will leave that obligation to the states and territories. It is an abdication of national responsibility and is a federalist model gone mad.

The Howard government left us with that cycle of boom and bust. The problems were identified by the Productivity Commission in its 2005 report, Australia's health workforce. The commission recognised that there were health workforce shortages across the country and that some shortages may be potentially short term—for example, shortfalls in nursing and allied health professionals could be rectified relatively quickly, but others were long term such as retention and re-entry.

These shortages remain persistent, and the commission confirmed what Australians in rural and regional areas, such as my area, knew already: that they were being affected badly by the shortfall. As the report neatly put it:

In particular, apart from nurses, the relative number of health professionals diminishes for communities located further away from major centres.

referring to places like Brisbane, Sydney and Melbourne.

In the area of education and training, the commission referred to 'rigidities, fragmentation and disconnects in the system.' The report highlighted:

… a lack of coordination between health planners and those responsible for allocating the number of university places across the various health professional areas, resulting in gaps between health service needs and the numbers of appropriately trained professionals.

So the commission was scathing about what had happened under the Howard government, and we saw that in practice in my community. The commission was quite clear about one of the major reasons for the health workforce shortage. They said:

The health workforce is planned, educated, deployed, funded and regulated by a myriad of different public and private entities. This can be advantageous in a number of respects. For example, it provides for the development and application of specialised knowledge in specific areas.

But the number of entities involved, and especially the division of responsibility for the various parts of the health workforce system between and within governments, results in conflicting objectives, inefficiencies and cost and blame shifting

That is what we are going to experience and see in the future with this legislation.

At this time health workforce planning was the domain of two committees: the Australian Medical Workforce Advisory Committee which was responsible for medical workforce planning; and the Australian Health Ministers' Advisory Council responsible for non-medical workforce planning, including nursing and allied health. So it was a hodgepodge—an alphabet soup. The Productivity Commission recommended the Labor government's commitment, strategy and funding, and the creation of Health Workforce Australia.

Faced with these challenges, we set about doing it. In a national partnership agreement we directly committed $1.38 billion to a package and the states and territories put aside $540 million. We introduced the Health Workforce Australia Bill in 2009, fairly soon after we are elected, to establish this new agency. It was agreed across COAG—Labor and Liberal states and territories agreed to this. The stakeholders expressed some concerns at the time, and we responded by accepting amendments to the bill so that the functions of the agency would not include responsibility for the accreditation of clinical education and training. We made amendments; we listened to the stakeholders. We put people such as medical academics, nurses and experts in rural recruitment and rural workforce in the agency. We did that in consultation with the states and territories. They were precisely the kinds of experts you would want and expect to have in an agency that deals with health workforce planning. We acted in response to the need of the Australian population. We did it on the recommendation of the Productivity Commission and we did it with the concurrence, consent, approval and approbation of the states and territories. Through this legislation this government is doing exactly the opposite. The work that has been done by Health Workforce Australia is crystal clear—evidence based health workforce planning, capacity building, targeted reforms, innovation and reform of the health workforce in this country, international recruitment and retention programs—the list goes on and on. We received an interim program report from them for approval by AHMC. We announced further funding of $425 million for clinical training and we provided it for 83 agencies across 470 projects on workforce planning, for everything from simulated learning environments to integrated regional clinical training networks to clinical supervision projects—all with the concurrence of the states and territories. Health Workforce Australia produced a groundbreaking report, Health workforce 2025, analysing trends, providing recommendations, setting forth strategies. We listened to what they had to say.

It takes no imagination to understand why those opposite want to get rid of this. They say they are in favour of good evidence based policy but with this legislation they are showing exactly the opposite. They are going back to the pre-Rudd government period. They going back to the mid-2000s, when there were ups and downs in workforce development. What the government are doing has been criticised by the Royal Australian College of General Practitioners. Its president, Dr Liz Marles, has been very critical. She said:

Investment in a well-trained general practice workforce is the key to delivering a high quality, cost efficient and accessible healthcare system.

The chair of the Public Health Association labelled the plan to get rid of the agency 'short-sighted'. Former president of the AMA Dr Steve Hambleton reported that at a meeting with the minister on 9 October 2013 he had:

… emphasised the important contribution the HWA had made to improved workforce planning, and the need for such work to continue.

But the Abbott government are continuing regardless. They are not listening to the stakeholders. They are not listening to the Productivity Commission. They are not listening to the states and territories. The minister obviously has not read the Productivity Commission's 2006 report Australia's health workforce, which recommended the creation of HWA. He may not have read the report Health workforce 2025. He is certainly not listening to the states and territories in relation to this. This is a short-sighted, ideological decision made because they do not like anything that involves the word 'planning'. As if the market works in this area! It does not work and has been shown not to work. Even Liberal states and territories agreed that what we did was the way to go.

This legislation is not the way to go for the future development of our workforce. We face enough challenges in health and ageing in the future, in getting doctors, nurses and allied health professionals in our public and private hospital systems, in our nursing homes and in community care. You do not meet those challenges by abolishing the agency that is doing the planning, running the projects and doing the investment across this area. The government are not listening to the experts on climate change. They are not listening to the experts on education. They are not listening to the experts on health. They are certainly not listening to the experts across this field. They are not even listening to the states and territories owned and run by their own side of politics. (Time expired)

Dr HENDY (Eden-Monaro) (09:40): I rise to support the bill and to condemn the Labor Party for leaving a debt and deficit disaster requiring the necessary budget repair that we are now implementing. The measures in this bill, the Health Workforce Australia (Abolition) Bill 2014, form a part of a budget that is absolutely necessary to secure Australia's economic future. We need to put health funding on a sustainable footing. The budget outlines a clear plan—in fact, the only plan—that will address Labor's debt and deficit disaster. When the coalition last left office Australia had a $20 billion surplus and $50 billion in the bank. But over six years Labor squandered this and ran up five record deficits, with a further $123 billion in projected deficits and gross debt headed towards $667 billion.

The antics of the Labor Party remind me of a quote heard now and again which is attributed to all manner of important people. It has been said that 'the American republic will endure until the day Congress discovers that it can bribe the public with the public's money'. I have seen this statement variously attributed to Benjamin Franklin, to US President John Adams and even to the famous French political commentator Alexis de Tocqueville. It turns out that the original statement was made by none of these notables but, rather, by a more obscure person named Alexander Fraser Tytler. Tytler is believed to have written that democracy 'can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits, with the result that democracy collapses because of the loose fiscal policy ensuing'.

I do not subscribe to such sentiments and I think the last election result proves that I am correct. The Australian public are much smarter than that. However, the Leader of the Opposition and his crew seem to work on the political theory that they just have to promise more spending and they will get away with it. What a remarkably craven bunch they are! As I have said, we are stopping the rot and putting health expenditure back on a sustainable footing—but, of course, no surprise, Labor is opposing this bill. In his budget in reply speech the Leader of the Opposition talked about meeting with a Queanbeyan family. Queanbeyan is a town in my electorate. The Leader of the Opposition scored an own-goal when referring to that family. He noted that 'like many Australians they aren't wealthy, they work hard to make ends meet'. But he went on to say 'they balance their budget'. Well, if it is good enough for that Queanbeyan family to balance their budget, maybe the Labor Party should listen to them.

As the Minister for Health said, this bill will streamline the delivery of health workforce policy programs by removing an unnecessary level of administration and bureaucracy. Over the last six years, the health bureaucracy continued to increase in size, with 21 stand-alone agencies operating outside the portfolio department. A bureaucracy of this size is unsustainable. Again, as the minister says, the coalition government is determined to get every possible dollar away from administration and bureaucratic processes and back into frontline services. This bill is part of that process. The government is committed to reducing red tape and duplication, delivering a smaller and more rational government footprint.

Health Workforce Australia was established by the Rudd government under the now expired four-year National Partnership Agreement on Hospital and Health Workforce Reform, agreed by the Council of Australian Governments in November 2008. HWA became operational on 1 January 2010. Under the national partnership agreement HWA was to act as a national body working to health ministers to streamline clinical training arrangements and support workforce reform initiatives. All jurisdictions were to provide funding to HWA. However, the states and territories have not contributed any funding as agreed. That was to be $540 million over four years. The Commonwealth government has been the sole funder of HWA, committing $1.05 billion since its establishment.

Following the passage of this bill, programs and functions of HWA will be transferred to the Department of Health. I say again that the government is not withdrawing support for the health workforce; it is delivering on its commitment to reduce red tape and streamline programs. Savings will support front-line health services and programs. Indeed, the budget does not cut funding for health at all. Annual federal assistance to the states for public hospitals will increase by more than nine per cent every year for the next three years and by more than six per cent in the fourth year. That is a 40 per cent increase over the next four years. We are increasing funding for states to run public hospitals by more than $5 million from $13.8 billion in 2013-14 to $18.9 billion in 2017-18. The overall annual health spending will increase by more than $10 billion or 16 per cent from $64.5 billion in 2013-14 to $74.8 billion in 2017-18. The government is also putting the growth in health spending on a more sustainable trajectory from 2017-18, but every year it will continue to grow.

Let me also say a few words about GP co-payments. From 1 July 2015 previously bulk-billed patients will contribute $7 towards the cost of standard GP consultations. Ten years ago, we were spending $8 billion a year on Medicare; today we are spending $20 billion. So we are asking everyone to make a modest contribution to ensure that Medicare is sustainable in the long term. A strong safety net will be put in place. Concession cardholders and children under 16 will only pay the contribution for the first 10 visits each year. The government will not be wasting this money. Every dollar of savings in health expenditure in the budget will be reinvested back into the Medical Research Future Fund. There is a very important point to make here: the government is not introducing a co-payment as much as reintroducing it. Prime Minister Bob Hawke actually introduced it in the 1991 budget. He and his health minister, Brian Howe, fully supported it. Someone else who has supported it is the member for Fraser, who also happens to be the shadow Assistant Treasurer. He is supposedly the brains trust for the Labor Party economic team. When he was studying for his PhD, which he got—

Ms King: Mr Deputy Speaker, I rise on a point of order. I note that the bill is about the abolition of Health Workforce Australia; it is not about broader measurers within the budget.

The DEPUTY SPEAKER ( Hon. BC Scott ): I am listening very carefully to the member for Eden-Monaro. It was wide ranging, which I would admit to with the former speaker; but I will remind the member for Eden-Monaro of the bill before the chamber.

Dr HENDY: This is a bill about the Health Workforce Australia agency, and of course that is about expenditure of $1 billion in the health area. Obviously, how we are making health spending sustainable into the future is directly relevant to this bill, Mr Deputy Speaker. If I may continue to make my remarks, I was talking about co-payments as a central part of the health spending of the budget and I was noting that when he was studying for his PhD—that is, the shadow Assistant Treasurer—which he got in 2004, not that long ago, he argued in relation to a co-payment, and I quote him from a 14 April 2003 article in the Sydney Morning Herald:

A just doctor's fee will aid the needy but deter the frivolous ...

The shadow Assistant Treasurer says that he no longer supports this policy and that he was a naive university student when he wrote these comments. He does himself a disservice.

For my sins, I have also done a PhD. Can I tell the House that to get a PhD, it usually involves a minimum of four years research, where you grapple with the subject day after day, coming to grips with every argument, every nuance and every alternative argument. After four years, you come to a considered decision. It would appear that, in the space of four weeks, the shadow minister has dumped four years of careful consideration. Political expedience will do that to you.

The coalition has a strong record of making sensible investments in Australia's health and medical workforce. As the Minister for Health has said, the Howard government invested in nine medical schools, which has resulted in the increase in medical students graduating now. The number of domestic school graduates per year has more than doubled since 1996. The government has committed to doubling the Practice Incentives Program teaching payment from $100 to $200 for each hour teaching session provided to a medical student. It will better compensate general practices for the consultation time dedicated to teaching; it will encourage more general practices to provide much-needed teaching opportunities; and it will to strengthen the future workforce. The measure will benefit approximately 3,000 general practices, and it is expected that approximately 20,000 students per annum will be provided with teaching sessions. A rural loading of up to 50 per cent will also be applied to payments to practices in rural and remote locations. Indeed, I want to acknowledge that this rural loading is so important for electorates like mine.

Further, the government is also investing $40 million in up to 100 additional medical internships each year in non-traditional settings, including private hospitals regional areas. This will provide more certainty for students and, to alleviate pressure on public hospitals for training, priority will be given to positions and rotations outside of major metropolitan centres to bolster the medical workforce in rural and regional areas. As a member for a regional seat, I strongly endorse this measure; it will inject talented medical students into areas of great need. I commend the minister for such a practical measure.

The coalition will also provide infrastructure grants to general practices on the basis of an equal commitment from the practice. This will leverage private investment and help ensure efficient and productive use of resources. The government has committed to provide up to 175 grants for rural and remote general practices to expand facilities to support teaching and training of medical students and registrars. The grants of up to $300,000 will be provided to successful applicants and require a matched contribution from the practice. The measure will benefit the GPs, registrars, medical students and the community in inner-regional, outer-regional, remote and very remote Australia, where the grants will be targeted. These practices face unique challenges in the provision of health care. Providing more opportunities for medical students to experience rural and remote practice will encourage students to pursue careers outside of metropolitan areas once they graduate and help address the maldistribution of the medical workforce in Australia.

While talking about infrastructure, I am happy to confirm that the coalition government will continue with its $160 million commitment to the Bega Valley community to build the new South East Regional Hospital in the town of Bega. This is a major project in collaboration with the New South Wales government; we hope it will be completed in 2016. The New South Wales government is contributing $10 million and will be responsible for the ongoing operation of the hospital. Only in February this year was it announced that the tenders for the main works were awarded the Brookfield Multiplex. Do not let people think that this is the Labor government project, just because they announced it before the 2013 election. It is taking form and substance under a coalition government. We are actually getting the work done.

Finally, the government will also significantly expand the number of GP training places. GP training places will increase by 300 from 1,200 to 1,500 new places in 2015. This significant increase in training places will create more vocational training opportunities for this workforce, freeing up more junior doctor training positions for new graduates coming through. I also note that the Australian General Practice Training program has a distribution target that requires 50 per cent of training to occur in rural and remote locations. This is another step in the right direction—more GP training places will mean better medical delivery, and for a regional electorates such as mine that 50 per cent requirement that training occur in rural and remote locations recognises our needs. In conclusion, this government is making sensible changes to reduce waste on duplication and bureaucracy so that sustainable investments can continue to be made to services and programs that benefit our health system and our future workforce. I commend the bill to the House.

Ms KING (Ballarat) (09:54): I too rise to speak on the Health Workforce Australia (Abolition) Bill 2014, which seeks to repeal the Health Workforce Australia Act 2009 and absorb Health Workforce Australia's functions and programs back into the Department of Health. As we have heard from a number of contributors to this debate, Health Workforce Australia was established by Labor to provide a national, long-term, coordinated approach to health workforce planning and reform to ensure that Australia's health workforce can meet Australia's health needs into the future.

One of the points that the new Minister for Health likes to trot out is the glib line that these are all just bureaucracies and that they have no value at all. This measure is counter to the government's own claim that they are seeking to put health on a more sustainable footing. Leaving aside that this has now been revealed to be a mere fig leaf for breaking their own election promise of 'no cuts to health', they are cutting health and they are heading down a path of substantially changing the Medicare system we have in this country. I note also that not a dollar, as noted in the previous speaker's contribution, is in fact being reinvested in the health system, in medical services, in public hospitals or in doctors, where there is apparently such a crisis of sustainability, which blows the government's own arguments out of the water.

Clinicians are saying that where huge efficiencies are to be had in health—and you can look at academic paper after academic paper—is in the areas where we try to achieve consistent clinical practice across the country, tackling issues that lead to adverse events in hospitals. We know from the data that, in terms of readmissions to hospitals because of clinical failures, they are occurring and they are occurring on a more regular basis than they should be, and we actually have to deal with issues of quality and safety. We have to tackle issues that lead to those adverse incidents in hospitals and readmissions. We need to look at other clinical settings—for example, infection control, improving the quality and safety of clinical practice. Who oversights all of that work? Who actually brings stakeholders together? Who teaches people about the important clinical guidelines and how you actually work? They are organisations like Health Workforce Australia, like the Australian Commission on Safety and Quality in Health Care. They are the organisations that are actually driving efficiency and productivity in health. The government, in this bill in particular, is in fact going counter to its own false arguments.

In 2006, the Productivity Commission was asked to look at the whole issue around the health workforce, and it concluded that a more sustainable and responsive health workforce was needed. The report went further by highlighting the complexity of Australia's health workforce arrangements and the numerous organisations and agencies involved in health workforce education and training. In other words, what we had at the time was lots of smaller agencies, inconsistencies between the states and territories, lots of different committees and a bit of a hodgepodge when it came to health workforce planning. It was getting better in terms of GPs—not so great in specialists but in terms of nursing and allied health it was literally a mess.

In response to that Productivity Commission report, in 2008 Labor took a proposal to COAG, which then agreed to the formation of a national health workforce agency to work across jurisdictions to build more effective, streamlined and integrated clinical training arrangements and to support workforce reform initiatives. The legislation establishing Health Workforce Australia was introduced in 2009 and in 2010 Health Workforce Australia commenced their work, partnering with higher education providers, the training sector, the health sector, employers, professions and regulatory bodies to deliver a sustainable health workforce for Australia. The key responsibilities outlined for Health Workforce Australia were national funding, planning and coordination of clinical training across all health disciplines and across jurisdictions, supporting health workforce research and planning, funding simulation training, and progressing new workforce models and reforms.

Health Workforce Australia in that short time has established itself and developed a track record in national health workforce planning. It has broad support from across the health workforce peak bodies in this country, and it has broad support from states and territories in its role. In 2012, Health Workforce Australia produced the first national long-term projections for doctors, nurses and midwives, titled Health workforce 2025—doctors, nurses and midwives. It set out the workforce needs of Australia in critical workforce groups over the future. The report highlighted that, under the arrangements and policy settings at that time, Australia would face a significant shortage of nurses and doctors by 2025.

Labor deliberately set this agency up as separate from the department. Any of the people who have worked either in the department, as I have, or in agencies outside know the extraordinary tension that exists between policy development and the implementation that occurs. What we have seen constantly in this particular space is a really important debate, one I want to highlight here. The department has been very keen for a long time to get Health Workforce Australia and the funding associated with it back in the department. It has been very keen. I know that the department is not that keen—I am not going to refer to personalities within the department—to have too many separate agencies outside. With a new government coming in, I am very concerned that basically this has just been one of the agencies that has been put up to be brought back into the empire without any real thought being given by the government to what that actually means. I just caution the government about always taking on absolute face value every single piece of advice it might get. It needs to come up with its own ideas, and this one, I think, is concerning.

Since being established, Health Workforce Australia has funded close to 8½ thousand new quality clinical training places for students across 22 disciplines. Through the Simulated Learning Environments Program, Health Workforce Australia has increased simulated education hours by 115 per cent. I visited the John Hunter Hospital recently, where they were having an emergency theatre operation performed. They had their specialists, their nursing staff and their anaesthetists there going through the important practices that they needed to do. They talked about just how critical it had been to get the extra funding from Health Workforce Australia and the huge change they had had in the way they were doing clinical training within their hospital and bringing clinicians from other hospitals into that facility to make sure that they improved clinical training.

Mr Ewen Jones interjecting—

Mr Laming interjecting—

Ms KING: I note the interjectors, and I note particularly that one of the interjectors is a former clinician, who I would think would actually be concerned that his own profession does not support the government on this measure. His own profession does not support this bill, so I am interested that he happens to have somehow forgotten where he has come from as he has come into this place.

Taking on the challenges of workforce distribution and responding to the identified needs of rural and remote communities across Australia, Health Workforce Australia's efforts have delivered an additional 446 nurses and allied health professionals in those areas. Health Workforce Australia has also commenced work on an innovative reform strategy for the rural and remote health workforce and also for the Aboriginal and Torres Strait Islander health workforce, an area where there are critical shortages.

In direct response to the House of Representatives report Lost in the labyrinth, the agency, in conjunction with the Australian Medical Council, has jointly funded the construction of Australia's first National Test Centre, which will serve to expedite testing of international medical graduates seeking to practise in Australia.

All of this planning and program activity is critical if Australia is to have the health workforce able to meet the health needs throughout Australia into the future, and it is critical if communities all over Australia are to be well served with good access to healthcare providers. As I have said many times in this place before, Australia's population is ageing, and we have increasing rates of chronic disease. If Australia is not planning and positioning itself in relation to the workforce needed to care for our future population, then we are going to be in strife.

This government is determined to undermine and rip apart universal health care for all Australians and revert to the old way, its way, of a haphazard and unplanned approach to workforce planning. Labor knows that that did not work, which is why Health Workforce Australia was established as a separate entity from the department and why funding was appropriated to support the unified, national approach to the health workforce for all Australia. A key issue arising out of the Health workforce 2025 report was the importance of and need to improve the national coordination of medical training by working with trainees, employers, educators and governments through a National Medical Training Advisory Network. If the government is to do away with the agency established to lead and drive this work in a coordinated way, it is not clear who or what entity it expects to carry on with it.

I have already outlined that Health Workforce Australia's programs were addressing the issue of the distribution of the health workforce, in addition to increasing workforce numbers. The government can run their line on delivering front-line services—and I heard that from the other side here—as much as they want to, but, unless you invest in, plan, coordinate and train the health workforce of the future, there will be no-one to deliver those front-line services, no-one to deliver them in rural and regional communities, no-one to deliver them in Indigenous communities and no-one to deliver them in the outer metro areas, where there is extraordinary pressure on those services. So you can just see that there is an absolute myth in the way they are constructing these arguments.

Another really well-progressed initiative of Health Workforce Australia was the Expanded Scopes of Practice Program. I note particularly their extended-care paramedics project as well, ensuring that extended-care paramedics are able to assess patients in their own homes, reducing the number of presentations to emergency departments and reducing the number of patient transfers—an area of health efficiency, I would have thought. These advance paramedics are being trialled in South Australia, Tasmania, the Northern Territory and the Australian Capital Territory.

I note that even the government's own Commission of Audit has acknowledged the Expanded Scopes of Practice Program and suggested that this type of reform go further. Who do you think is going to do that work? Health Workforce Australia is at arm's length from government, at arm's length from the department, in an incredibly contested space. Who do you think is now going to lead and develop that work? The abolition of Health Workforce Australia is anticipated to 'save' the government $142 million. The minister would have us believe that no support is being taken away from the health workforce, but how can you take $142 million out of clinical training, placements and planning and still be maintaining support for the health workforce?

When Labor came to office we inherited the now Prime Minister's caps on GP training places. We in fact doubled the number of places to 1,200 and increased this number each year so that Australia has top-quality, well-trained GPs moving through the ranks to provide Australians with the primary care they need. Under Labor the number of nurses in training grew by 11,000 and the number of specialists in training by 5,000. And we invested through Medicare Locals, providing funding to plan and fund extra health services that were supporting around 3,000 front-line health workers like GPs, nurses and psychologists. The investments that Labor made to supporting and growing Australia's high-quality health workforce were having an impact on all regions and enabling services to be delivered by a well-trained health workforce.

As at February 2013, Australia's health workforce totalled 1.3 million, made up of 25,000 GPs; 24,000 specialists; 290,000 nurses; 14,000 midwives; 12,700 dentists and 4,000 more people employed as dental therapists, hygienists and prosthetists; 1,254 Aboriginal health workers; and almost 94,000 registered allied health professionals—all doing critical work in this country. Abolishing Health Workforce Australia is not the way to continue to support planning in this area.

Labor will not and cannot support this bill because it is counter to the government's own arguments about how you get efficiencies in health. If you want to improve clinical training and education and get efficiencies in health, if you actually want that to occur, then you have to have an agency that is driving it. These are not bureaucracies. These are important organisations that are seeing important work done in the area of health efficiency. (Time expired)

Mr LAMING (Bowman) (10:09): As we inherited a health system that ran out of money, as we pore over the performance of a Labor government that never saw a cause they could not fund, we come here today to look at Health Workforce Australia. I think it is only appropriate that we recognise that the many good employees in that agency did great work over four years and that some very important reports were prepared, written and disseminated. But the work of Health Workforce Australia in doing that good work is now done. We now have to reinvest in the front line of health and that has been a clear message from the coalition government.

Australia is one of the most sparsely populated countries in the world, with one of the highest performing health systems. Keeping up that quality care in every corner of this nation, wherever citizens choose to live, is a daunting task. I say to the 35,000 GPs out there, the 290,000 nurses and the 100,000 allied health workers all over this great nation: thank you for what you do every day, and the interference from government—certainly if I have anything to do with it—will be as minimal as possible. Thank you for caring for Australians from dawn to dusk; for the after-hours work you do; for your coordination of complex care in tiny towns. To all of you: thank you. Be you from Cape York to Kalumburu, from Byron Bay to Busselton, we have an incredible health workforce.

With that workforce come some pretty big challenges in health distribution, capacity and training, but it is not one where we need to count our successes by the number of floors in the high-rise building where we have bureaucrats offering support. This is not to be measured by how many pot plants are watered, how many water bubblers we have and how many people we can employ in major cities worrying about country areas. No, this is about supporting the front line, and that is what this government is determined to do. When you have a health system in a nation like Australia endeavouring to deliver world-class care in remote, rural and regional areas as well as in our cities where there is high need, the one thing we must be sure of is that we never take a dollar away from that old man who needs a new hip, that we never take a dollar away from that woman who needs cancer treatment, all in the guise of needing better organisation.

I can appreciate that no matter what country you go to, no matter great their health system is, if you talk to people they will find problems. The natural Labor inclination for every challenge is to set up another agency. That government set up so many agencies they ran out of acronyms—they could not come up with any more acronyms. We have over 20 health agencies now, all with their own individual backends, their own administrative systems, their own support systems, and all operating in a space where it gets so complex they need yet another agency to tell agencies how to talk to each other. There are a dozen health agencies collecting health data using different criteria so that we cannot even perform basic comparisons with that information that is so expensively collected.

I say to Australian practitioners out there in the health system that we as a government want you to go and serve the people and we know a third of Australians do not live in capital cities. You have seen governments from both sides of the fence—let me give some credit—working on that really important proposition. But when the Abbott government came to power we said we just did not need more floors in a high-rise building in a capital city to fix a problem. We know that if we are going to fix a workforce problem we do so with a workforce solution—and you start with your students. You make it more possible for them to get scholarships. You make it more attractive for them to be supervised by our great clinicians. You create more general practice training places. You free up some funding for infrastructure, not in a GP Superclinic handout. That is not how we do it on this side. We provide matching funds so that regional practices will invest their own money and truly utilise that investment efficiently in infrastructure to help GPs train others and train their successors.

I have lived in a country town that had a retiring general practitioner. The fear in that town at the thought of losing a general practitioner was palpable on the street, outside the Foodland, outside Australia Post. Attracting practitioners out there is a complex balance of supporting Medicare and supporting access, supporting those good country people who take out private health cover and often do not use it greatly because there is not even a private hospital in town.

We have got to support access to the PBS by looking after that pharmacist and making sure that he or she can afford to run that business. Then we have to make sure that support for ancillary and allied health care is such that allied health workers will leave the cities where they train and set up their shingle in those small towns. That is the essence of a workforce solution and that is the coalition's approach to doing just that.

I do not want to take the remaining five minutes to pull apart the achievements of Health Workforce Australia. I have already said that some of their reports were valuable and welcomed. The Health workforce 2025 report gave us some pretty sobering statistics, about being over 100,000 nurses short within 15 years and, depending on productivity and 'business as usual' modelling, we could well be short by up to 1,500 to 1,800 general practitioners. In the end, those figures told us what we already knew. They told us we had workforce challenges ahead. The 'do nothing' scenario, business as usual, was never going to happen, because sensible governments were going to make changes between now and then to ensure Australians had the support and the services that they need.

Let us make no mistake: we are getting close to the appropriate numbers of many of our health professions. There is still room for more nursing training. We have a maldistribution issue, an issue of redirecting the health effort to areas where it is most needed. That was to be the focus of Health Workforce Australia but, like most entities established by the previous Labor government, they were hopelessly and overly broadly commissioned. They were expected to do everything and, in the end, they did a few things well. However, we are replete with examples of poorly-spent money.

I understand the Growing our future report and the emphasis upon respecting, encouraging and cultivating our Aboriginal health worker population is really important. We need those Aboriginal health workers. But I am not sure that we needed to develop the community's understanding by funding a television documentary to do so. I have got no problem with really great but modest causes being done pro bono. I have no problem with engaging the university sector—PhDs and those who are aspiring to earn one—getting involved in solving some of our great problems. But I do not think that, as long as our health system will always need more money on the front line, we should be doing things like funding large and complex online hubs in the hope that they will be used by practitioners. There are way more modest ways to get to the same solution.

When I heard about the National Inventory of Innovation I thought to myself, 'How many hardworking GPs actually have time to look at online innovation hubs?' In reality, if you are going to refocus and refashion general practice in regional Australia, start by talking to the local GP. Do not start by setting up an empire in Adelaide and then wondering what you can create from the fifth floor that will reinvent health workforce in Australia.

Health Workforce Australia embarked on a very important piece of work, looking at cancer workforce in Australia. We have significantly refashioned cancer service delivery in this country, but we are still vexed with major publicly funded cancer services in large cities and smaller cancer services in regional cities and the way in which these interact. Health Workforce Australia were right to turn their attention to that topic. But, in the end, have they significantly changed the business model of cancer in this country? The answer is no—a fascinating expose of the challenges of getting cancer workforce out into our regional cities and towns but, in the end, very little change.

The National Health Workforce Innovation and Reform Strategic Framework was published in the middle of last year. It was a comprehensive course of action for a range of reforms that would have been appropriate to help regional workforce. But I put to you: that is the job of the department. The previous speaker, who claims to be a bureaucrat in a past life, acknowledged the tension between policy creation and service delivery. But that is not an excuse sufficient to create new agencies; it is an excuse to fix the problem in the department. The department is big enough, well-resourced enough, to attack some of these major workforce challenges without the need for these extra agencies.

We also know that Health Workforce Australia worked on a prescribing pathway for those who are not general practitioners, nondoctors. Controversial as that is, that was never going to address a workforce problem in this country. But resources were devoted there.

Workforce agencies, states and territories would have been grateful that there was yet another kid on the block working on getting people out into the bush. Aspen Medical were relocating thousands of health workers to Central Australia, only to have yet another provider, Health Workforce Australia, lay claim over four years of effort in relocating 400 workers. That is a drop in the ocean and that is not what we expected to have another provider doing when, in fact, we have these rural health workforce agencies already fully commissioned and fully funded in every state in this country. Recruitment is a challenge and it is complex. But that is not an excuse for another agency. Fixing up the recruitment process, simplifying the immigration process for incoming health practitioners from overseas who apply to be registered here, is not an excuse to get more, independent double-dipping and silo-structured agencies operating out of, in this case, Adelaide, trying to fix a problem that really should have been sorted out, without the need for the agency in the first place.

Health Workforce Australia put together a Reconciliation Action Plan, released, I think, in April 2013. One of how many? I do not know. I ask: how many reconciliation action plans were read by health practitioners? How many of them were downloaded? With the greatest of respect, I am very keen to see as many reconciliation action plans put together as possible, but I do not see the need for massive transfers of government resources to develop them. Plans focusing on fostering these relationships are utterly welcome, but not large transfers of taxpayers' money to achieve them.

We have had 500 health leaders come together for a conference, the first national conference in, I think, 2012, Reshaping Australia's Health Workforce. There is no problem if it is cost recovery 100 per cent. I have no problem with a health leaders' group. There is no problem with a group of 500 young health leaders getting together online, at no cost to the taxpayer, because that is how it should work. There is no problem with cultivating those great policymakers, but there is no need for taxpayers' money to be diverted or consumed in the process.

Then we had the launch of the HWA Connect, an online interactive consultation hub. Just in case you are confused, it is different from the online resource. That was developed because there were so many of these outputs coming from Health Workforce Australia that you needed one place where you could find them all. So the next thing we knew was that we had the Integrated Regional Clinical Training Networks; the nursing workforce retention and productivity group; the National Medical Training Advisory Network; the mental health peer workforce; the Rural Medical Generalist Framework; the International Medical Graduates' Orientation and Supervision project; and Health LEADS Australia all on this resource, again, created from taxpayers' money.

You can only go so far, Deputy Speaker. You have to appreciate that. In the end there is only so much money that you can convince yourself is well spent from a fifth floor in Adelaide. Ultimately we have to go and confront the coalface that is working in small and regional communities and high-need urban communities where there is significant urban poor. That is where we need to make sure workforce is available, to make a real difference to Australians' health.

In conclusion, I have emphasised that we have a changing environment, an ageing workforce as well as an ageing population, a new raft of diseases, social and economic determinants of health that are changing and ever more complex and the imposition of highly expensive technology, and health is one of the few areas where you cannot really replace labour with capital. No matter how much capital you invest in this system, you need labour to run it. It is one of the most complex areas of public policy and one of the most complex areas of public service. There are probably more groups and more politically active groups engaged in delivering services here than in any other part of the economy. So I thank the people that do that work. I commend those that try and improve the system and lift their head away from caring for patients to dream of a better system, but most of them, no matter how much you look at, will argue that more investment in something like Health Workforce Australia was really only adding undue complexity and bringing a risk of waste of taxpayers' money to the table.

I am glad to see the back of Health Workforce Australia. I acknowledge that in their time they did good work. I think in retrospect history will record that they pulled together some useful reports. With those completed, it is now time to move on and reinvest in the frontline by building capacity, by investing in more students, by freeing up general practice places, and by having rural infrastructure funding that can be partnered with GP investment we can do just that. We can transform the situation in regional general practice and we can make sure that those in outer met and inner urban poor get all of the care that they need, complex arrangements provided by teams of health practitioners. But in the end the one thing that Australians will welcome will be the passing of an entity that for four years produced useful reports but was at risk of having an overly broad commission and letting down those who need health care most.

Mr KELVIN THOMSON (Wills) (10:24): In my 2014 budget reply speech I said I was going to devote more time to health policy issues and become more expert in these matters. In delivering on that, yesterday I had the opportunity to speak at some length about preventive health and today I want to make some observations about our health workforce. The Health Workforce Australia Abolition Bill seeks to repeal the Health Workforce Australia Bill 2009 and absorb Health Workforce Australia's functions and programs into the Department of Health.

In 2006 the Productivity Commission report Australia's health workforce concluded that a more sustainable and responsive health workforce was needed. The report also highlighted the complexity of Australia's health workforce arrangements and the involvement of numerous bodies at all levels in health workforce education and training. In 2008 COAG agreed to the creation of a national health workforce agency that works across jurisdictions to establish more effective, streamlined and integrated clinical training arrangements and to support workforce reform initiatives. The Health Workforce Australia Bill back in 2009 established a national health workforce agency, Health Workforce Australia. Since its establishment Health Workforce Australia produced Australia's first ever national long-term projections for doctors, nurses and midwives with the publication in 2012 of Health workforce 2025: doctors, nurses and midwives. This report highlighted that under current policy settings Australia will face a significant shortage of nurses and a shortage of doctors by 2025.

Australia has become highly dependent on migration of international health professionals, particularly in rural and remote communities, as a consequence of a lack of sufficient attention to training young Australians to take up health workforce roles. In the 2013-14 budget the previous Labor government invested more than $344 million in Health Workforce Australia to support Australia's healthcare system and its workforce, especially in rural and remote areas. Health Workforce Australia has delivered an additional 446 nurses and allied health professionals to rural and remote communities. It is very surprising to me and quite unacceptable that Australia is one of the least self-sufficient nations amongst comparable OECD countries in terms of meeting our health workforce needs through domestic training efforts. It is even more remarkable that, despite this, what we are seeing today is skilled nurses finding it difficult to find work. The proportion of international nurses we bring into Australia each year on 457 visas is comparable to the proportion of nurse graduates who find themselves unable to find work. Seriously, how are Australian nurses meant to transition from graduate into experienced nurses if the opportunities to work, experience and refine their skills are not available to them? It is wrong and foolish and short-sighted that Australian nurses are not given employment priority. Instead, hospitals and managers are getting bonuses for bringing in foreign nurses and getting them to sign up with universities to do masters and PhDs in nursing at great expense to the migrants themselves and at great cost to the wider Australian society. While this is going on, many excellent local nurses with years of experience are now unable to find work.

In a submission to the 457 Visa Integrity Review the Australian Nurses and Midwifery Federation pointed out 'the sorry state of the employment prospects for new nurse graduates, with an increasing number struggling to find work, with many rejected for work by employers that use international recruited nurses under the 457 program'. They urged the panel to resist calls for any deregulation that will remove or dilute current protections or safeguards, particularly to labour market testing, English language requirements and current obligations regarding wages and employment conditions. I believe the nurses federation is quite right to urge the government not to water down the 457 visa program. The underemployment of nursing graduates, despite the employment of large numbers of offshore nurses, is inconsistent with the key policy objective of the temporary migrant worker programs. There is a clear policy disconnect here that needs to be addressed.

The nurses federation estimates that, in 2013, 60 per cent of Tasmanian nursing graduates were unable to find work; in Queensland only around 28 per cent of new nursing graduates secured positions with Queensland Health; in 2014, only 600 of 2½ thousand graduates were employed; and, in 2013, 800 graduates in Victoria, 400 in Western Australia and 280 in South Australia could not secure positions. An online questionnaire of new graduates undertaken by the nurses federation revealed further troubling anecdotal evidence of large numbers of new graduates failing to find employment in their field; many graduates receiving numerous employment rejections—and in one case over 70; most graduates fortunate enough to obtain employment being engaged on a precarious basis through agency, part-time or casual arrangements; many graduates going to great lengths to obtain work—for example, by moving interstate and separating themselves from their families; most employers who were named in the questionnaire as rejecting new graduates using 457 labour; and, finally, and I think most seriously, most new graduates are saddled with a HECS debt and many are disillusioned that they studied at all.

Indeed, if this government gets its way in deregulating student fees and increasing the interest on student debts, young student nurses will be at risk of being in the demoralising position of having no jobs and going deeper and deeper into debt. I agree 100 per cent with the nurses federation that the current labour market testing requirements need to be strengthened to include employer obligations such as the need to advertise locally and nationally at market rates; offering relocation, housing and utility assistance where required; reporting on specific measures taken to employ disadvantaged groups, local job seekers and recently retrenched workers; and, where possible, making sure that new graduates have a reasonable chance of filling vacancies.

Graduate nurses are our future. Initiatives need to be in place to ensure that they are placed in employment upon completion of their degrees, otherwise the future of Australian nursing will be one of shortages of nurses and dependence on overseas recruiting. Given the proposed changes to the federal budget, it is a bleak outlook for thousands of nursing graduates each year who are desperate to be employed but are often losing out on job opportunities to nurses recruited by hospitals and other facilities on 457 visas. The nurses federation is right when saying in their submission that, putting aside the demoralising and devastating effect that this has on new graduates who are unable to find work after undertaking a three-year tertiary course, it also represents a loss in investment in the education of professional health workers and a loss in the contribution of these potential workers to the healthcare systems—absolutely.

In the light of these facts, one has to seriously question how well temporary migrant worker programs like the 457 visa program are serving this country. I think it would be crazy to further liberalise the program. The only reason for doing this would be to undermine the pay and conditions of local workers. Yet, this is what the government with its 457 visa review seems to want to do. The situation is so grim that there is an online petition circulating calling for a review of the issuing of subclass 457 visas for nurses in Australia which has over 27,000 signatures. Anyone interested can find the petition on the website candobetter.net. Online comments by supporters of this petition include: 'We must give priority to Australian nurses over 457 visa holders; our future depends on it' and 'Destroying the reasonable expectations of employment of nurses born here is cruel, unnecessary and shameful'.

The 457 visa program, in my view, needs tightening to ensure that Australian workers and young people are given priority over temporary visa workers. Immigration department figures released in May show that there were over 110,000 457 visa workers in Australia on 31 March this year, up by over 6,000 or 5.9 per cent compared to 12 months ago. The 457 visa workforce is growing much faster than Australian employment generally. This is completely unjustifiable in the present jobs climate. It is a recipe for increasing unemployment with all the misery and hardship that accompanies that. It is all very well for ministers opposite to say that everyone has to earn or learn, but how are you supposed to earn even after you have learned when we have over a million people in Australia on temporary visas, which give them no work rights—a docile workforce who employers prefer because they can be sent packing from the country if they speak out about their rights at work?

The Liberal government is allowing too many employers to access 457 visas without any obligation to look for Australian workers first and young people especially are losing out. Under the coalition, around two-thirds of all 457 visas are not subject to any employer obligation to advertise the job and test the local labour market, and nearly half of all 457 visas are still going to younger foreign workers aged 30 or less. Prime Minister Abbott promised 'no cuts to health' but the abolition of Health Workforce Australia through this bill is another example of that promise being broken. Labor established Health Workforce Australia to provide a national, long-term, coordinated approach to health workforce planning and reform to ensure our health workforce can meet the increasing demand for health services now and into the future. Health Workforce Australia has had a proven track record in national health workforce planning, which is crucial if Australia is to have a health workforce able to meet the health needs of Australians wherever they live into the future.

Health Workforce Australia has funded 8,400 new quality clinical training places for students across 22 individual disciplines. It has supported a 115 per cent increase in simulated education hours in 2012 through the Simulated Learning Environments Program. The Health Workforce Australia report Health workforce 2025 shows the current medical training system is inefficient and there is an uneven distribution of the medical workforce, which of course particularly affects rural and remote communities.

A key policy action from Health Workforce Australia's report was to improve the national coordination of medical training by working with trainees, employers, educators and governments through the National Medical Training Advisory Network. A Medical Observer article following the budget quoted medical experts who condemned the proposal to merge Health Workforce Australia into the health department. It said that, in the view of the President of the Royal Australian College of General Practitioners, Liz Marles:

… the move would risk destabilising general practice training …

and in the same article the CEO of the Public Health Association Australia, Michael Moore, was said to have labelled the plan short-sighted. Mr Moore argues that the merged organisations would have neither the same independence nor influence if they were combined with the health department. Professor Simon Willcock, who sat on the board, also pointed to the good work Health Workforce Australia have done in developing databases and around workforce projections, and he lamented:

It would be a shame to see all of that work not continue.

So, if this bill is passed, this complex but important planning work will not occur on a national level, and the burden will fall to the states and territories.

I regret that this government seems determined to dismantle universal health care and consign our country to a return to a piecemeal approach to health-workforce planning. I am concerned that this will result in a boom-and-bust cycle in the supply of doctors, nurses and midwives. This scenario is unsustainable and unaffordable, and it will result in a health workforce which will not be able to meet the increasing demands for health care, now and into the future.

Mr EWEN JONES (Herbert) (10:38): Could I just ask the member for Wills a question? He quoted at length—for about 11 minutes—in his speech stories from the nurses' federation about the role of nurses and where we were going and all that sort of stuff: what did Health Workforce Australia do about it? Isn't that what they were supposed to be doing? The member went through this whole account of what Health Workforce Australia is; he spent nearly three minutes on Health Workforce Australia in his speech. But isn't that what they were supposed to be doing? Wouldn't that be a core responsibility for Health Workforce Australia? Isn't that what we should be talking about here? Isn't that the role of the department?

I would like to back up the member for Moreton. No-one is saying that Health Workforce Australia has not done a good job. No-one is saying that they all deserve to be sacked; no-one is saying that at all. What we are saying is that their work has finished. Their plan was for four years. Their strategies were to:

Measure and monitor Australia’s health workforce requirements.

Improve the efficiency and capacity of training pathways.

Improve the efficiency of migration pathways.

Support the participation of Aboriginal and Torres Strait Islander people in the health workforce.

I just do not see what that work has done.

I want to make a couple of real points here. There was a four-year agreement that all Australian governments were to provide funding for Health Workforce Australia. It has expired. However, the states and territories have not contributed any of the agreed funding. So, once again, you have a Labor federal government making decisions for other levels of government which are never going to be supported. Right from the get-go, this thing has fallen over—it has fallen at the very first hurdle. The Commonwealth government has been the sole funder of Health Workforce Australia, committing $1.05 billion since its establishment. Where is the money from the states? This is all supposed to be under the National Partnership Agreement on Hospital and Health Workforce Reform. This was supposed to be an agreement between the states and the federal government. When they said, 'Are we all going to put in?' it was, 'Yeah!' So they all signed up. But no money was ever put in from the states. So where does the actual agreement come from?

What we are doing with the Health Workforce Australia (Abolition) Bill 2014 is streamlining the delivery of health workforce policy and programs through removing unnecessary levels of administration and bureaucracy. We could not have been clearer about what we were trying to do when we talked about our overall strategy on health. The Minister for Health, who is sitting at the table, was very clear in all my conversations with him and in all he said in the press. Our philosophy was about getting the goods to the customer and about removing the number of hands through which the goods had to pass before they got there, because at every stage along the way you lose some money—the more levels of bureaucracy you put between the source and the recipient, the less money gets to the recipient. It is just like farm produce: the product goes from the farm gate, through a wholesaler to a retailer, and the more hands the product goes through, in going from the farm to the end-user, the more expensive that product will be. So it makes perfect sense to me that, if we can cut down the levels of bureaucracy and the numbers of people who are standing in the way of getting our health dollars to our people—to the people in the community, the people we are supposed to be helping—then the better off we will be.

This government has committed to doubling the Practice Incentives Program, or PIP, Teaching Payment from $100 to $200 for each three-hour training session provided to a medical student. Can I just tell you a story to show what we are trying to do in this country and what is actually happening out there? It feeds into what we are trying to do here.

I have a good friend in Townsville and he had a doctor from the Congo who was doing training with him. A 64-year-old man came in to see them and he presented with pneumonia. The doctor from the Congo, who was being supervised by my friend the Australian doctor, gave this man some Panadol and was going to send him home. My friend stopped him at the door and said to the doctor, 'Why did you do that?' And the doctor said, 'Well, he's 64 years old and he's got pneumonia; he's going to die. I'm sending him home.' My friend said, 'Not in Australia, mate; not in Australia.' So what we have to do is to make sure that we get our doctors and GPs to be able to understand exactly what is required to be a GP here. We need to be able to pick up on those things.

I think most of us here who have a good relationship with our GP will understand just what role they play in our lives. I know that when I go to my GP she can tell from the first time she looks at me how much trouble she will find I am in when I get into the room. This is what a good GP will do for you. So if we can do anything to assist GP practices, and if we can do anything to assist people who provide primary health care, that is what we should do. We do not assist primary health care by establishing another building in another city or another capital city around Australia to rake out these sorts of things.

I do not want to sound flippant, but there were 21 agencies developed by the previous government. It is sort of like that scene from Yes, Minister with the hospital with no patients: 'But the hospital has won prizes for its efficiency!' And Hacker says, 'But there are no patients!' The reply is, 'The patients would ruin it!' The patients ruin the health system. It is like 'education is wasted on the young', but they are the necessary part of it. That is why we are there! And that is why the work of Health Workforce Australia has been completed and it should be rolled up.

The previous government just had a problem with letting go. As the member for Bowen has reminded us, they did do some very good work but when you start to self-perpetuate to try to find out what you are trying to do and what you stand for, and if you give people such a wide brief that they no longer actually produce anything of significance, you have to wonder why they are still being funded. I believe that the Labor Party would say, 'We are going to employ someone to build your house. But when the house is built we still want to keep that bloke on, because we don't want him to lose his job. So we should just keep on funding him all the way through. It is that sort of thing that we just have to do.' Sooner or later the job is done.

This government is also investing $40 million in up to 100 additional medical internships each year in non-traditional settings including private hospitals in regional areas. Townsville is the perfect example of this. We have a number of full-fee-paying doctors who have come through their training at universities throughout Australia who otherwise would have been cast to the wood heap if it were not for the health minister of Australia at the time, Peter Dutton—sitting at the table here today—saying that we cannot let this happen.

So we had all these interns taken into the Mater Hospital Pimlico in Townsville and put to work there. They are predominantly overseas students but educated in Australia. I will 'sort of' quote the Minister for Health when he said, 'Look, we understand that your parents and your country have supported you to be here and we can't really come out and say that we want you to stay in Australia. But, gees, it would be handy if you all met a partner here, settle down in Townsville and became members of our society—never went home, got citizenship and stayed here for ever.' Those are the sorts of things that we must do. But this internship is about making sure that we get value for these people in completing their degrees, and making sure that they come out as good a doctor as we can possibly handle.

This government has also committed to provide up to 175 grants for rural and remote general practices to expand facilities to support teaching and training of medical students and registrars. The grants of up to $300,000 will be provided to successful applicants and require a matched contribution from the practice. In Townsville we have a GP Super Clinic which was promised in 2007, promised in 2010 and was actually built—it has the signs up, has the car park marked out, has the beautiful frosted glass and everything—but still not opened, seven years after being promised. Not one thing—$6 million down the gurgler with nothing happening. And they built that thing less than 800 metres away from an existing GP practice.

The GP around the corner had to pay for his own facility. The physio across the road from the GP had to pay for his own facility. He carries that loan, but the GP Super Clinic that the federal government brought in, ostensibly to take the pressure off the emergency department—but this one will only be open from seven in the morning until nine at night—was never going to bulk-bill anyone, even when bulk-billing was the course de rigueur. That is not going to take the pressure off the emergency department. So this thing was an abject failure from day one and should never have progressed beyond that. But the previous government could not let itself get away with that and just kept on pouring money in, in direct competition with someone around the corner who has a mortgage and loans in trying to make a business run. What we will do is to enhance the practice that is there dollar for dollar and to enhance the medical training facilities.

The government will also, significantly, expand the number of GP training places. GP training places will increase by 300—from 1,200 to 1,500 new places in 2015. The significant increase in GP training places will create more vocational training opportunities for this workforce, freeing up more junior doctor training positions for new graduates coming through. The Australian General Practice Training program, which the government's commitment will expand, has a distribution target that requires 50 per cent of training to occur in rural and remote locations.

James Cook University in my city of Townsville had a medical school established under the prime ministership of John Howard. That was one of the greatest achievements of Peter Lindsay, the former member for my seat. And they are turning out doctors who work as registrars all around Northern and regional Australia. We are trying to work on programs where we can do the New Colombo Plan, where people can actually do some training and placements in places like Papua New Guinea, the Solomon Islands and out to Fiji. We should be able to do those things. That is why making the decisions as close as possible to the student and to the client will actually happen.

In the time I have left I would like to address a couple of things in relation to Aboriginal and Torres Strait Islander health. Obviously, this is a concern for everyone in this House and everyone in this House takes a great deal of interest in relation to our first Australians. It is of great concern to me, being from a regional area, that we do see a lot of Indigenous people in hospital. If you walk through the Townsville Hospital, the number of Aboriginal and Torres Strait Islanders is absolutely shocking. This overrepresentation is a cause for great concern.

Of course, Townsville is a regional centre so we do have people flying in for treatment, but the number of Aboriginal and Islander people in the hospital at any one time just beggars belief. There is something going seriously wrong out there, and it comes down to education; it comes down to example and education.

I have Palm Island in my electorate, where domestic violence is a massive issue. It is a massive issue all throughout the Pacific. In my electorate we have domestic violence and major health issues, but it comes down to access to the clinician and access to education and example.

We have Matthew Bowen in North Queensland—probably the greatest full-back of all time. He is currently overseas for a couple of years with Wigan. I can tell you one story about Matthew Bowen. On his first trip away he scored a try for the Cowboys. They gave him a can of beer and they said, 'Congratulations!' He took a mouthful out of it and said, 'I don't know how you can drink this stuff!' and poured it out. He is a father of two kids and he has a partner, Rudie. He is a great family member and still loves going home to Hopevale. His mum is a teachers' aide.

I would love to see Matthew Bowen go around and talk to the kids about the choices he made to get there. More than that, I would love to see someone like his mum, who still works as a teacher's aide at the Hope Vale State School, sit down and talk to parents about the choices and decisions she made to make sure that Matthew Bowen was given the opportunity and given the diet that actually mattered for him to come through as the person he did. We can do those things that are so close to the ground, which will cost so little money, but which will yield actual tangible results for someone that we actually know. More than that, a parent should know that giving a child a can of Fanta at six o'clock in the morning may keep them quiet for a little while but is not good for them. We must address this issue because they are dying too quickly and too soon.

People like Michael Gleadow of Connect'n'Grow, who had nothing to do with Workforce Australia, has come up with a program of taking healthcare workers into schools such as Abergowrie College and Shalom Christian College. They have dedicated facilities there to make sure that he is able to get these people to go through training so they know how to take blood pressure, know what the vital signs are, and can do basic health care there. He has a stitch-up with Deakin University so they can become nurse clinicians and health workers. It has become a career path for a lot of people who care about the community.

If we can get those sorts of decisions made at that level by someone who has just come up with an idea and goes and gets some equipment from Catholic Education to go into these places, we get the good result. I thank Health Workforce Australia for what they have done but their time is over. It is time for people on the ground to do what we need to do.

Ms HALL (Shortland—Opposition Whip) (10:54): It was interesting to hear the member for Herbert raise issues of alcohol abuse, obesity and domestic violence associated with alcohol abuse. I just remind him that he voted to abolish the Preventative Health Agency last night in this parliament. It was an agency that actually provided education and did exactly what he was calling for.

This Health Workforce Australia (Abolition) Bill 2014 is a very short-sighted piece of legislation. It is legislation that will have an enormous impact on health workforce planning in Australia. The member for Herbert was another member of this parliament at the time health work planning was ad hoc and led to a maldistribution of the health workforce across all health disciplines in Australia. Health Workforce Australia has addressed this maldistribution. It has planned and looked to the future of the health workforce needs of this country and the health needs of our society.

Health Workforce Australia ensures that the Australian government and the state governments work together to provide the health workforce and the services that Australians need. It is a fantastic advance and it is very short-sighted for this government to seek to abolish it. Planning is an ongoing process as needs change. There is not a start and a finish date. That is particularly apparent in health. You need to have health prevention, you have got to have strategies in place and you need to look at best practice for treatments. Every Australian needs to be able to access health care.

Health Workforce Australia is an independent body that works across jurisdictions. It has responsibility for the national coordination of planning and training of Australia's health workforce. It undertakes complex planning that would otherwise fall to a state or territory. Abolishing Health Workforce Australia is a very reactive approach to health workforce planning—the kind that we saw in the past. The removal of Health Workforce Australia will lead to a return to the boom-and-bust approach to the supply of doctors, nurses and midwives because the system responds in a very ad hoc fashion.

Health Workforce Australia has provided a planned expansion of its clinical training program. It funds clinical placements of health students across Australia and allows them to complete the full clinical requirements of their training. One of my bibles on health and health workforce is The blame game, a report on the inquiry into health funding that was brought down in 2006. The terms of reference were given to the Standing Committee on Health and Ageing by the Prime Minister, the then health minister. That report made some interesting findings in health workforce shortages before Health Workforce Australia came into existence.

Health Workforce Australia came into existence to address the maldistribution of the health workforce across Australia, a situation where some Australians could receive health care and others could not. I have referred to this quote made by Terry Clout, the then CEO of the Hunter New England Health Service, a number of times in this place. He said:

If you are in metropolitan Sydney, or if you are in New South Wales, the further you are from the Harbour Bridge, the greater the impact of the shortage of trained doctors, nurses and allied health staff …

That was brought about by the previous policies that saw restrictions put on universities and other colleges and it impacted on the workforce. I would also like to refer to this excellent document that says, 'Health workforce shortages in Australia have developed over a long period of time'. That is what the committee found at that time. In response to a perceived oversupply, a cap was placed on the number of medical school students that could be trained. Once again it was a very ad hoc approach to the provision of GPs across Australia. It identified a number of other issues in relation to shortages, but the key message that the committee received was that it was an ad hoc process; it was a reactive process; there was no long-term planning, and every move, every decision, was made in a reactive way. That was why Health Workforce Australia came into being.

I would now like to refer to another report of the health and ageing committee; this one was brought down in March 2012. It is called Lost in the labyrinth: report on the inquiry into registration processes and support for overseas trained doctors. This once again excellent document highlights that in 2008 the COAG National Partnership Agreement on Hospital and Health Workforce Reform announced that it would establish Health Workforce Australia. It states that Health Workforce Australia was established:

To facilitate more effective and integrated clinical training for health professionals, provide effective and accurate information and advice to guide health workforce policy and planning, and promote, support and evaluate health workforce reform.

That is what health workforce planning is about. I am pleased that the minister is here in the chamber now so I can say to him: this is a really short-sighted decision.

Health Workforce Australia plays a vital role in the planning of the health workforce across Australia. It ensures that we do not go back to the boom-and-bust approach that we had in previous times. It ensures that all Australians, no matter where they live, can access quality health care. Whether it is doctors, hospital nurses, community nurses, physios or other allied health professionals, you need to plan so that you can train the right number of health professionals. You need to plan to ensure that the people undertaking the training are distributed across Australia so that a situation does not exist in which the further you are from Sydney Harbour Bridge in New South Wales the poorer the service that you will receive.

Health Workforce Australia manages and oversees the workforce. It has looked at increasing supply. It has improved the capacity and the productivity of the health sector. It has worked on clinical education, because in a health workforce you need to have ongoing education. It has looked at the immigration and training of overseas doctors. It is a program that looks at the system, the funding and the payment mechanism, to support new models of care and expanded roles. It has been redesigning and creating evidence based alternatives, looking at scopes of practice and developing strategies for aligning incentives around productivity and performance. That is what health workforce planning is about. That is what we need in this country. We need a situation where we have a trained workforce and a workforce that is evenly distributed across the country.

A number of projects have been put in place under Health Workforce Australia. It has implemented actions to address health workforce shortages. It has worked very closely with the Australian Medical Council. It has worked on workforce innovation and reform programs. It has worked in five main domains: health workforce reform for more effective, efficient and accessible service delivery; health workforce capacity and skills development; leadership for the sustainability of the health system; health workforce planning; health workforce policy, funding and regulation.

It really makes me sad to think about the problems that were exacerbated by poor planning and an ad hoc approach to our health system before Labor came to power in 2007. After all our struggle, after the big input, after the effort that so many people made to address the problems that existed, it really makes me sad that we are returning to those days.

I would like to reiterate that Health Workforce Australia provides a national, long-term, coordinated approach to workforce planning and reform, to ensure that our health workforce can meet the increasing demands for health services. It has a proven track record in national health workforce planning, and that is critical for all Australians. It has provided the first national, long-term projection for doctors, nurses and midwives, with the 2012 report, Health workforce 2025: doctors, nurses and midwives. I was astounded to see that this was actually the first publication of this kind and then to learn that the body that oversaw the production of this document is now going to be abolished. It shows how short-sighted those on the other side of this parliament are.

Health Workforce Australia has funded 8,400 new clinical training placements for students across 22 disciplines—once again ensuring that we have in place the health workforce that Australia needs for the future. It supported a 115 per cent increase in simulated education hours in 2012 through simulated learning environment programs. That is very, very important. It is imperative that our health workforce has ongoing training.

If this bill is passed it will lead to a situation where complex planning work will not occur at a national level, and that will place a burden on the states. It will lead to a fragmented system, a system that will not benefit Australians that rely on this parliament to ensure that we have the right type of health policy in place and the right bodies established to look at the planning and the future needs of health within Australia. This is truly bad legislation. I implore the Minister for Health to rethink this, and I encourage members on the other side of this House to cross the floor and vote with the opposition. (Time expired)

Ms OWENS (Parramatta) (11:09): I applaud the member for Shortland for making such a definitive and accurate statement at the end of her speech—that this is incredibly bad legislation. The background to the Health Workforce Australia (Abolition) Bill 2014 is quite interesting and in many ways it mirrors the history of a bill we discussed yesterday, which was the Energy Efficiency Opportunities (Repeal) Bill 2014. The Health Workforce Australia (Abolition) Bill 2014 and the Energy Efficiency Opportunities (Repeal) Bill 2014, which we discussed yesterday, both have their beginnings in the last years of the Howard government.

COAG commissioned a report from the Productivity Commission on Australia's health workforce back in 2005—again in the last years of the Howard government. It was quite forward-thinking: looking ahead to the ageing of the population; looking at the uncoordinated and complex arrangements across the states and the federal government; and looking at the lack of management of Australia's workforce, education and training as we move into the future. That report came down and a few years later, in 2008, the Council of Australian Governments, which had commissioned the Productivity Commission's research, agreed with the then federal government to provide a combined funding of over $3 billion to a national partnership agreement on hospital and health workforce reform—an incredibly important and quite difficult agreement to reach, but reached by all state governments and the federal government because they recognised and understood that there was a serious lack of forward planning and a lot of waste and inefficiency in the way that this nation managed the development of its health workforce.

As a result of that partnership agreement, Health Workforce Australia was formed in 2009. This organisation had a complex task in front of it, including the funding, planning and coordinating of clinical training across all health disciplines, the funding of simulation training, supporting health workforce research and planning and progressing new workforce models and reforms. All reports of the work done by Health Workforce Australia are positive. It has done remarkable work. It released in 2012 a report looking at the needs of the health workforce through to 2025.

I note the comments of previous speakers that Health Workforce Australia has in fact been so successful that it has now done its job. They said the same thing yesterday about the Energy Efficiency Opportunities Program—that, in a short period of time, it had done a remarkable job and had already succeeded. That, of course, is clearly untrue. We all understand that we still have chronic shortages of GPs and specialists in regional and rural areas. We understand the ageing of the workforce and the changing needs of the health workforce and what that will lead to. We understand the rise of preventable illnesses, such as diabetes type 2, obesity and liver and kidney failure. We recognise the changing demographics of this country and how that will impact on our health needs. Having an organisation like Health Workforce Australia to plan how we respond to those changing needs is incredibly important, because, if you discover that there is a shortage in one area, it takes a country 10 years to actually train from scratch the expertise that it needs to respond to that shortage.

I note that in parallel to this abolition of Health Workforce Australia—which would address those training needs in the long run—the current government have also made it easier for people to come in on 457s. So perhaps their intention is to return to the Howard years, when the training needs of the health workforce were not being met and the solution was to bring health professionals in from elsewhere. While we probably as a nation of our size will always need to do that, if it is possible to look far enough ahead for Australians to actually be trained in the fields that we require, that is a far better option for our people and for the nation.

I also want to talk about this notion that abolishing Health Workforce Australia is about efficiency and cost reduction. The current government has a very strange concept of cost, in that for them it seems that the only cost that matters is the bottom line of the federal government. But in the system of federalism that we have, where we have six states and a Commonwealth government, in order to reduce costs across the nation, in order to make the nation more efficient, in order to reduce the nation's costs, you actually have to do it in a way which does not just transfer the cost from one government jurisdiction to another. When Health Workforce Australia was first formed it pulled the roles from those states into a central place.

So it reduced duplication and inefficiency in the planning mechanism for our health workforce and created a more efficient system for the nation. True, it was an additional cost for the federal government but it was a reduction in costs for many of the departments around the states, and I would say also a reduction in costs for people who had invested considerable time in their health workforce training through university who were finding it very difficult to get clinical placements.

Again, you cannot look at reducing costs and efficiency without looking at how your policy impacts on the costs for families and the budgets of students. We knew back in 2008 and we still know that there are areas of the workforce where people are graduating from the university component of their training and finding it incredibly difficult to get the clinical placements they need. If we as a nation are supporting the training of health professionals through an extremely complex and expensive university course only to leave them sitting idle out of the health workforce because they cannot get that all-important clinical placement, the waste and inefficiency is quite extraordinary. It is not on the bottom line of the government—this government seems to care about its own bottom line—but it is on one of the bottom lines that forms the wealth of this nation.

In one of my earlier lives I worked at the Australia Council. One of the jobs I had quite early on was to reduce the paperwork burden for our many clients. I managed to do that quite considerably. I introduced a number of mechanisms which substantially reduced the reporting requirements—and through the application process as well. One of the things you learn early on when you set about doing that is that the easiest path you can take is to move the cost to someone else and the most difficult path you can take, which is the most effective, is to make the costs disappear completely by making an element of the work unnecessary.

This bill, strangely enough for a government which talks about efficiency and cost cutting, takes that easy approach. It improves the federal government's bottom line by transferring the inefficiency and the cost through to state governments and to people who engage in study, who may not be able to find the clinical placement that will allow them to give back that investment by the taxpayer and their families in their education.

It is always worth looking at the views of stakeholders when a government puts up a proposal such as this because it is quite common when governments suggest abolishing something that looks like regulation that the field will say, 'Yes, good idea, let's go there.' If we listen to the government, they seem to believe that everybody wants the removal of all regulation, regardless of whether it has a benefit. But, if you look at the comments made by the major interest groups, there is almost universal support for the work that Health Workforce Australia has done. There are the usual small concerns about clarify of purpose where there might be duplication with a federal department, all things which the stakeholders say can be easily fixed, but overwhelmingly the support is there. In the Bills Digest prepared by the Parliamentary Library there is quite a lengthy report on the positions of major interest groups, which states:

A Medical Observer article following the Budget quoted medical experts who condemned the proposal to merge General Practice Education and Training with Health Workforce Australia (HWA) and consolidate them into the health department. In the view of the President of the Royal Australian College of General Practitioners, Liz Marles, ‘the move would risk destabilising general practice training’.

The second expert:

Public Health Association chair, Michael Moore, labelled the plan short-sighted. Moore argued that the merged organisations would not have the same independence nor influence if they were combined with the health department.

The third expert:

Professor Simon Willcock, who has sat on the boards of both organisations, also pointed to the good work HWA had done in developing databases and around workforce projections and lamented that it would be a shame to see all that work not continue.

… Croakey blogger Jennifer Doggett’s opinion was that it was difficult to assess what effect mergers, abolition of agencies and rationalisation would have on the health sector as insufficient information had been given about what function … of the organisation would continue—

and where again an incredible lack of certainty about what this change means for the work that Health Workforce Australia is doing. She also said:

… there are also risks that some valuable and cost-effective activities being undertaken by these agencies will cease.

Prior to the 2013 election, the Australian Medical Association made comment on a whole range of coalition policies. The AMA is traditionally supportive of conservative policies but it said clearly prior to the 2013 election that it would 'oppose any cuts to the planning and analysis done by Health Workforce Australia'. After the election, in October 2013, Australian Medical Association President, Steve Hambleton, emphasised the value of Health Workforce Australia during a meeting with health minister, Peter Dutton. It is worth noting that the AMA continues to support the work done by and the existence of Health Workforce Australia. As I said earlier, there are some small criticisms occasionally of agency’s recommendations and some questioning of duplication, but they are things that a good government would set about fixing, things that a good government would set about making stronger. A good government would look at the efficiencies that have been gained since this organisation was formed back in 2009 and build on them. A good government would work to improve the efficiency of our training spend in the areas of the health workforce.

In spite of comments from government members that the whole thing has been fixed now and we can abolish this organisation because it did such an extraordinary job in four years that it is no longer necessary, we know that that is not the case. Australia is one of the least self-sufficient nations among comparable OECD countries in terms of meeting our health workforce needs through domestic training efforts. Part of that is because of the decisions the Howard government made to cap training places for doctors and we in government dramatically increased the number of places for both doctors and nurses and the number of clinical places as those people moved through the university to try to address that, yet we remain even now, some 10 years later, a country that is not as self-sufficient as many other comparable nations in the domestic training efforts for our health workforce. Immigrant health workers in OECD countries, in the broader context of highly skilled migration, are incredibly important, as they are in Australia. But we can lift our game in the training of Australians, for these incredibly important jobs in an area that is only going to grow as our population increases.

There is a second issue which we need to address as well, which is the decline in GP proceduralists as a proportion of the total GP workforce, particularly in regional, rural and remote areas—from 24 per cent in 2002 to 12 per cent in 2000. That is an extraordinary halving of the proportion of GP proceduralists in regional, rural and remote areas. We also know that there is a growing gap, for example, between the fees that GPs are paid and the fees that specialists are paid, which means that fewer and fewer people remain in the GP area and more and more move into specialist areas. That is an issue which will affect our capacity to serve our population in primary health care and in many ways to keep our population healthy.

It is a mistake to abolish Health Workforce Australia. It was formed in 2009 after a Productivity Commission report back in 2005, at the request of all of the state governments and the federal government at the time. It is serving an incredibly valuable purpose in ensuring that our health workforce is appropriate to the needs of the country. It is doing it incredibly well. Its work is not done, and it should be left alone to do its incredibly important work.

Mr FITZGIBBON (Hunter) (11:24): Having spent three years throughout the course of the 43rd Parliament trying to wreck this joint, the Prime Minister now in government is determined to wreck the country. There is much bad news in budget—bad news for pensioners, bad news for the unemployed, bad news for families, bad news for motorists and particularly bad news for those in rural and regional Australia. But I cannot think, frankly, of anything more threatening to those in rural and regional Australia than a diminution of our health workforce planning. There is no greater role for any government than the provision of affordable healthcare services to its people. Nothing, maybe other than the defence of the country, is more important for the broad community. The abolition of Health Workforce Australia is a backward step which undermines our capacity as a country to properly plan our health workforce and therefore properly deliver health services to our people.

We have an ageing population in our health workforce, like so many areas of our economy, and that is posing a bigger challenge than ever before. There was a Productivity Commission report—and I know those who sit opposite, including the Minister for the Environment at the table, are fans of the Productivity Commission, as, I am happy to say, am I. This was not a lightning bolt idea from the former government. Health Workforce Australia was a considered policy proposal first from the PC and then of course considered by COAG. In other words, it was an agreement by the then Labor government here in Canberra and each of the state governments around the country, because it was a good idea. It was a good idea to, for the first time, have some real policy based strategies for our workforce issues.

In my electorate for many, many years—the first 10 years, almost, of my 18 years in this place—there was no bigger issue than the capacity of people to see a GP. People who live in the capital cities, including people in this place, would not understand this concept. In most capital cities there is a doctor, a GP, on just about every corner. It is the reason bulk-billing rates are so much healthier in the capital cities—in most areas, at least. That is, there is competition amongst GPs. We are lucky just to see a GP in rural Australia. But, thankfully, with the advent of the Rudd government in 2007 that situation dramatically improved. It improved because of initiatives of the former Labor government. It improved because we have taken health workforce planning by the nose and done something about the issues. Today, I am happy to say, in places like Cessnock, Maitland and right throughout the upper Hunter—although it is not always easy, still, to see a GP and bulk-billing rates are not what I would like them to be—things are much better than they were for the first 10 years I was in this place, including throughout the period the now Prime Minister was minister for health, an appalling period in health policy in my opinion.

It is not just GPs and the capacity to see them; it is the training of GPs. I have always said the best way to ensure that bush communities, rural communities, have a GP or two, and hopefully three, is to train people from the bush—the people who are most likely to go back and live and practise in the bush. That is why we were making sure more rural students had an opportunity to do medicine. We were funding the training of more nurses and other clinicians, and I fear this is all going to be unravelled as a result of this government's approach to health planning.

I fear for our Medicare Locals. When a doctor unexpectedly leaves a rural town in my electorate, I go to the Medicare Local. They are the people who understand the structure of our health workforce in the Hunter Valley. They are the people who know where to go, whose door to knock on, to find a replacement doctor, to provide the relevant incentives et cetera. If Medicare Locals go, it will be a big hit on GP services in my electorate.

This goes to another point. It is a point I made in this place yesterday. If you cut $80 billion out of the budgets of the states, it will have ramifications and knock-on effects. I am asking myself whether the state government in New South Wales is today willing to pledge, despite these cuts from the Commonwealth, that it will maintain all the public health services in my electorate that we have enjoyed up to this point.

I fear for Kurri Kurri Hospital, for example, which has been a marginal hospital because of the size of the town but is a hospital that delivers important local community services, including some specialist services. Will the New South Wales state government agree today that Kurri Kurri Hospital or any other hospital in my electorate will be protected despite these massive cuts? And it is a question that all those who sit opposite and represent rural and regional areas should be asking their Prime Minister today—the member for Braddon and the member for Eden-Monaro. I should say that the member for Eden-Monaro at least had the courage to talk on this bill—one of only four on his side. He was one of only four in here defending this, despite their huge backbench—one of only four backbenchers in here prepared to back this proposal to abolish Health Workforce Australia. I want a guarantee from both the Prime Minister and the New South Wales Premier that no public health services will be reduced in my electorate as a result of both that $80 billion worth of cuts and what they are doing in this particular bill. I am opposed to this bill absolutely. It is a backward step, and it should be rejected.

Mr STEPHEN JONES (Throsby) (11:30): I am delighted to have the opportunity to speak on an important matter but saddened that the occasion that brings us to the chamber to discuss health workforce needs is the proposed abolition of this agency. I take the opportunity to congratulate the member for Kingston and shadow parliamentary secretary for health for the great work that she has done in bringing before the House the egregious dangers that are contained within the Health Workforce Australia (Abolition) Bill 2014, because it warrants a great deal of scrutiny—a lot more scrutiny, I have to say, than we are able to have, because members of the government's own backbench, as the member for Hunter has pointed out, do not have the courage or the wherewithal to come in here and talk about their own government's proposal.

It is important to the whole nation to get and keep doctors, nurses and allied health professionals, but nowhere is it more important than in rural and regional Australia. It is important because regional Australians experience poorer health outcomes compared to their fellow Australians in metropolitan Australia. Regional Australians have a higher rate of injury, arthritis, obesity and melanoma, a higher incidence of suicide and a higher incidence of chronic diseases such as diabetes. They have a greater tendency to smoke, to drink and to engage in riskier behaviours. They have poorer survival rates for cancer and a shorter life expectancy, anywhere between one and seven years less, the further away you get from a major urban centre.

With these stubborn facts in mind, you would think that more effort would be put into addressing the maldistribution of doctors, nurses and allied health professionals between city and country. In the major cities, Deputy Speaker, you will be surprised to know that you can find about 220 specialists per 100,000 of the population. But, if you move into regional areas like my own or even further out into the bush, you will see that ratio drop to 48 in 100,000. Just compare the two. Focus on that for a moment: 220 specialists per 100,000 people in the city; 48 per 100,000 in the bush. And, for hospital non-specialists, in the major cities there are 41 per 100,000 compared to just 18 per 100,000 in outer regional areas. So a national health workforce strategy to address the workforce pipeline, the supply of medical professionals and health professionals, particularly into regional and rural Australia, is absolutely critical.

The health workforce is under tremendous pressure, and it is only going to get worse, in part because of the very measures that are being debated before the House today. Today there are about 1.3 million Australians who work in the Australian health industry, according to the 2011 census. That is about six per cent of the total workforce. We have an ageing population on the other side of the ledger, and that is going to bring in significant health needs. By 2050, there will be 2.7 people of working age to support every Australian above the age of 65. We know we have a problem now, but if we look into the future—and it is the not-too-distant future—we know that we have a significant problem, because we know that there is an increased usage, particularly in the primary care space, by older people when it comes to accessing health services. If we think we have an issue now, we have not seen anything yet.

It is not a new problem. It is not as if this is the first time that this parliament has been apprised of the issue. It is not, because in 2005 the then Howard government commissioned the Productivity Commission to inquire into this issue, in part because of the pressure that was put upon them by the then Labor opposition. They commissioned a report, and the report was published on 22 December 2005. Amongst the many conclusions, it said that there would 'continue to be poor health outcomes in particular regions and for particular groups'. It said workforce strategies and 'inflexibilities and inefficiencies' in workforce arrangements are 'major contributors to these problems'. The Howard government commissioned the report. It came up with the answers, but the government sat on the report and did not listen to the answers.

Wind the clock forward. On winning government in 2007, the then Rudd government made addressing these issues one of its highest priorities. We knew that we could not do it alone. We knew that we had to work together with the state governments and the territory governments, which have principal responsibility for delivery, particularly in relation to hospital care. So we worked through the health ministers council and through COAG to ensure that we could get a coordinated response. We knew it needed to be a national, large-scale response which was cross-jurisdictional. We also knew that we had to work with the relevant professional bodies. That is why today Health Workforce Australia is partnered with state and territory governments, with higher education institutions and the professional training sector, with healthcare bodies, with employers and with all the professional and regulatory bodies to ensure that we are working together to address the health workforce needs now and into the future.

I can say there was some success. We know that any of the things you do in this space take some time to turn around because of the long time it takes to take somebody from high school through university, through professional training and then into the health workforce. We did see an improvement under Labor: 74 per cent of Australia faced a medical workforce shortage when we took office in 2007 but by the time we left office the distribution of GPs had improved across regional areas. This was a tremendous achievement, but we definitely had our challenges because of the deliberate decisions of the now Prime Minister, when he was health minister, to effectively put a cap, a lid, on the number of new GPs entering the system. We had a big hole to fill, a big job to do, but significant steps forward were made, particularly due to the work we were able to put in place through Health Workforce Australia.

We knew that we needed one strategy, not five, six, seven or eight, because Australians know that wherever they live they should have access to a decent health service and to a GP or primary healthcare provider. It should not matter whether you are living in Queensland or Tasmania, in the Northern Territory or the Australian Capital Territory, we need a national strategy to address these shortages. We made agreements with the states and territories and tackled the burden of resolving this monumental problem, rather than leave it to each state and territory to go their different ways trying to resolve it on their own. So Health Workforce Australia has led the way nationally and that has been paying off. We have produced the first national long-term projections for doctors, nurses and midwives, because if you do not know what the problem is you are not going to know what the solution will be. We have funded over 8½ thousand new quality clinical training places for students across different disciplines. We have supported a 115 per cent increase in simulation education hours and delivered 446 nurses and allied health workers to regional communities. In addition, we have improved the national coordination of medical training with the National Medical Training Advisory Network. None of this would have happened without the work of Health Workforce Australia.

We knew this was all under threat with the election of a coalition government, but there was cause for some hope, particularly in rural and regional Australia. When people in rural and regional Australia looked at the various candidates they were going to vote for and considered their policy options they may have had a look at the National Party health platform and gained some hope from statements such as this in the Nationals' policy:

We will enhance incentives for doctors and health professionals to take up regional practice and stay there. And we will go further with the advent of a dedicated Federal Minister for Regional Health to specifically oversee regional healthcare and the needs of regional patients.

That must have given them some hope, if that was what they were going to do. And when the platform talks about the role of the minister for regional health it says:

When health policy decisions are being made regional concerns must be championed by a dedicated Minister with regional experience and a primary focus on the welfare of regional Australians.

Those who read that and voted on that policy platform must feel devastated. If they were listening to budget estimates a few nights ago they would have heard their minister for rural and regional health confess under questioning from a Labor senator that she had not even been consulted on the rural and regional impact of the GP tax and that she was not interested enough in this issue and its impact on rural and regional Australia to ask the department to do some research or modelling on the issue. You would have thought the party that is dedicated to representing the interests of rural and regional Australia, apprised of the maldistribution of doctors and allied health professionals and apprised of the discrepancies in health outcomes for rural and regional Australians when compared to their brothers and sisters and cousins in the city, would at least be taking some interest in the impact of the GP tax and the other healthcare changes on rural and regional Australians. What we see is a complete lack of interest. What we see is National Party failure and ministerial failure.

What is the government's answer on this? We see with the bill before the House that part of their answer is to abolish the only Commonwealth agency which is focused on addressing workforce shortages in the health professional area, particularly in rural and regional Australia. But that is not where they stop. It seems they have got three bows to their answer to workforce shortages in the health industry. The first is to abolish the agency which is overseeing. The second is to make it harder to get a medical education: slash the per capita funding to universities, with a 20 per cent cut on average in funding to universities, including to regional universities that have a medical school; take the lid off student fees, which we all know is going to lead to an increase in fees; and double the rates you pay on your student debt. What is the impact of this going to be on medical students? The vice-chancellor of the University of Melbourne says that he expects significant increases. A medical degree currently costs a student about $80,000 for the life of that degree. That price will go up to anywhere between $100,000 and $183,000.

Those who come from a regional area and those who have a great university like the University of Wollongong, which runs a postgraduate medical degree, will know that if somebody is giving up a job, perhaps already incurring a student debt and going back to university to take up postgraduate medicine, this will be a massive disincentive for new doctors, new nurses, new allied health professionals to take up a course of study which will lead them to becoming a health professional.

The government are abolishing the only agency and they are making it harder and more expensive for somebody to train to be a health professional. Their answer, effectively, is to let the market rip. We know what happens when the market rips in the area of health workforce distribution. You can see as many doctors as you like in Bondi, but try to see a doctor in Dubbo or west of there and you will see the disparities. This is bad legislation, built on a bad plan and it should be rejected.

Ms CHESTERS (Bendigo) (11:45): The Health Workforce Australia (Abolition) Bill 2014 before the House seeks to repeal the Health Workforce Australia Act 2009 and to absorb this agency and its functions into the Department of Health. We will see the important work done by this agency transferred. My concern about this bill is simple: it seeks to water down the important role that the Australian government plays in national health workforce planning. This bill seeks to undo the good work that has been done by the previous government in tackling this important area.

This agency is an independent body and it works collaboratively with a number of agencies, stakeholders, and has direct links with states and territories, which is vital. We on this side of the parliament acknowledge that states, territories and the federal government are in partnership when it comes to meeting the health needs of our community. National health workforce planning is critical to addressing the looming crisis that we have not just within our cities but within our country when it comes to having the workforce we need to ensure that we are meeting the health needs of people wherever they live.

That is why it is so important that we have a national plan. We need to acknowledge that the training that is done of these health professionals is largely the responsibility of our national federal government. Yet where these people work is in the states. That is why it is so important that we have an independent body to bring those stakeholders together, to bring levels of government together and to ensure that we have the workforce in training and ready to meet the health needs of our future.

In the past, the result of the reactive approach to medical and nursing training, immigration and workforce overseas recruitment was a metro-dominated distribution of health professionals. This has affected regional areas like mine in ensuring that we have the health professionals to meet the health concerns of people in our region. We still have health workforce challenges, particularly in country areas. Workforce recruitment is tough. It is more expensive than in metropolitan cities. Retention remains one of the key issues and a major challenge and it is another reason why it is so important that we have a strong long-term plan and an agency to do that work.

Whilst it is important that we acknowledge that recruitment is an issue, it is just as important that we have a strong plan to retain health professionals in rural and remote areas. As the distance from metropolitan areas increases, the retention of rural health professionals becomes more problematic. Rural communities are currently unable to recruit and retain the health professionals that they need and, as a result, we are seeing access to health services as a problem. We are seeing poorer health standards in our regional communities. One measure that speaks to this problem so loudly and so clearly is the lower life expectancy of people living in rural and particularly remote areas. As my friend the member for Mallee quite often states in the media publicly—and on any occasion that he can—people living in regional Victoria have a life expectancy of 4.7 years less than people living in major cities. One reason is not being able to access affordable and available health care and having their health professionals in their town and communities when they need them.

If we focus specifically on medical practitioners, GPs and specialists: is there a shortage in regional areas? The answer is yes. Quite often, when I am out in the smaller towns in central Victoria I talk to people and they tell me stories about how the books of their doctor—for example, in Heathcote—are full. They cannot get into the books. They have to travel to Bendigo to visit a GP.

The difference between the number of specialists in the city and country is also a major issue. Data released by the National Rural Health Alliance speaks to this difference. In major cities there are roughly 134 specialists per 100,000 population. Yet compare that to inner regional areas where there are 63 per 100,000 and, in outer regional areas, 43 per 100,000 population. It is a huge difference. Then we compound that by the distances in our remote and regional areas and the travel that is required.

Only on the weekend was I speaking to people, talking about how they constantly travel to Melbourne and about the associated out-of-pocket costs for people living in Bendigo and further out from Bendigo by having to travel to Melbourne to see their specialist. That is because we do not have enough specialists in the regions. It is important that we tackle these issues. That is another reason why we need one agency that is independent nationally, such as Health Workforce Australia, addressing these issues.

In the cities there are ample opportunities for GPs and specialists to work in private practice, to work in corporate practices, to be salaried in hospital positions or work in bulk-billing medical services. In the bush there are not the same opportunities for doctors and this is one of the reasons why we believe we have such an issue when it comes to retaining and recruiting doctors. Our doctors just do not have the same opportunities. There is also more expected of them, which again makes it harder to recruit people to the area. Take, for example, our small hospitals in my electorate. In Castlemaine, Heathcote and Kyneton, local GPs are expected to be on the on-call roster for their local hospital. In Castlemaine and Heathcote it works quite well. However, there is currently a problem in Kyneton, a dispute which has meant that the current hospital does not have local GPs on the roster in rotation. Again, what we need is workforce planning not just at a state level but at a federal level to ensure that we have enough doctors in the places that need them. Understanding planning for the health workforce is vital if as a nation we are going to resolve and solve the ongoing GP issues across regional Australia. It sounds like a task for a health agency that is an independent body that works collaboratively with a number of key stakeholders and has direct links with states and territories, just like the agency that this bill seeks to abolish.

It is not just with GPs where we have a critical area to look at, it is also allied health professionals. Many regional and rural communities, including my own, struggle to attract the staff that they need for allied health. A study by Monash University made a number of significant findings in this particular area. Annual turnover in regional areas for allied health professionals was on average 35 per cent whilst in the city it was only 28 per cent. Retention rates were also an issue: on average in the city 12 months after starting it was 82 per cent, yet in some of our most remote areas retention rates were as low as 64 per cent. The study also finds that the cost associated with recruiting allied health professionals to the regions was much higher. In the city it was roughly $26,000 whereas in the country it was $45,000. It is a study that speaks to policy needing to address directly not only recruitment but that funding to those agencies, those hospitals, needs to be increased to recruit. It highlights again the need to have a national framework and a national agency. It is another task for a national agency focused on health workforce planning.

The other problem with this bill is that it does not say anywhere that the agency is not working. We know from our previous speakers that Health Workforce Australia is working. During the last four years there are many examples of how it is working. It has established the National Medical Training Advisory Network. It has examined the barriers and the enablers to entering the workforce. It has investigated the increasing need for self-sufficiency within the medical workforce. So if the Health Workforce Australia agency is working and there is still a need for workforce planning, as I have demonstrated, particularly in regional areas, why is the government seeking to abolish this very important organisation? It can only be described as pure Liberal ideology, an ideology and an attitude that is against universal health care and against ensuring that we have equity that takes into account where you live.

This attack on universal health care is no clearer than in the moves the government made on budget night. It was not just about the abolition of this institution but also about the cruel health cuts and funding cuts to the regional areas and the new GP tax. In my electorate the hits on budget night were huge, with nearly $29 million cut from Bendigo electorate hospitals over the next five years. Bendigo Health takes the largest whack, which is $25 million to be stripped from now up to 2018. There is almost $1 million from Kyneton District Health, which is one of our small hospitals. Today Kyneton District Health will get a visit from the state Liberal Premier, although we do not know how long he will be the Premier, and he is staging a photo op at the Kyneton hospital. He is doing the first sod turn for the Kyneton ambulatory care centre. I mention this because this centre was first funded by the federal Labor government budget in 2011, yet it has taken three years for the state Liberal government to finish the planning and to get on with the job of building. Why has it taken this government so long? If it has taken three years to do the sod turn, how long till we expect the centre to be open? This delay smacks of a deliberate political decision to give the Premier an opportunity to stand in front of a project with his candidates in an election year. We are months away from an election and its speaks volumes about the politics of the Liberals and the politics of our state government and our federal government. It is politics before the health of central Victorians, it is politics and ideology before the health workforce of central Victorians.

Having worked closely with paramedics and nurses in Central Victoria, I know the commitment that they make to our region. Currently in regional Victoria we are in the midst of an ambos crisis. We do not have enough paramedics working in the area. This is another area where we need workforce planning. When you talk to nurses at the Bendigo Health or at our small hospitals, they speak of the worry that when they retire there are not enough younger nurses coming into the hospitals to replace them. This is another area where we need workforce planning. When you look at the people who are taking up the specialist nursing courses, like midwifery and so on, it is again another area where we need workforce planning. I suppose you do not want to do the planning if you know fewer people will be going into those training courses, because of the exorbitant fees they will have to pay to complete their courses.

In conclusion, what we have seen is the good work being done by Health Workforce Australia. It is improving our services. We are seeing that it is tackling the issues in our regional areas. We are seeing that it is ensuring that students have the best possible training and that models of care are being delivered in the most appropriate ways. This is an agency with purpose. It is an agency achieving its goals, yet this bill seeks to abolish it. This bill speaks as another example of Liberal ideology; it is another cruel cut from budget night that will not only put the health of all Australians at risk but also make it harder for people in regional Victoria to seek the professional help, the medical help they need and when they need it.

Mrs GRIGGS (Solomon) (12:01): As many of us recall, 26 March was 'red tape repeal day'—by any measure, a red letter day for this government, business operators and workers from all across the country. This government has a very clear objective when it comes to red tape. As it is very clearly outlined in the Australian Government Guide to Regulation, this government seeks to ensure that regulation is never adopted as the default solution but rather is introduced as a means of last resort. The Health Workforce Australia (Abolition) Bill 2014 is another step on the way towards the government achieving its goal of stripping away unnecessary and wasteful red tape. The bill is intended to streamline the delivery of health workforce policy and programs by removing an unnecessary level of administration and bureaucracy that currently weighs down this very important component of health service delivery.

The Abbott government has detailed 10 principles for Australian government policymakers that should drive policy development now and into the future. Mr Deputy Speaker, I will share those with you so that they are on the record. No.1, regulation should not be the default option for policy makers. The policy option offering the greatest net benefit should always be the recommended option. No. 2, regulation should be imposed only when it can be shown to offer an overall net benefit. No. 3, the cost benefit of new regulation must be fully offset by reductions in existing regulatory burden. No. 4, every substantive regulatory policy change must be the subject of a regulation impact statement. No. 5, policymakers should consult in a genuine and timely way with affected businesses, community organisations and individuals. No. 6, policymakers must consult with each other to avoid creating cumulative or overlapping regulatory burdens. No. 7, the information upon which policymakers base their decisions must be published at the earliest opportunity. No. 8, regulators must implement regulation with common sense, empathy and respect. No. 9, all regulations must be periodically reviewed to test its continuing relevance. Finally, No. 10, policymakers must work closely with their portfolio deregulation units throughout the policymaking process.

It is a fairly safe bet that if these guidelines had been followed the Health Workforce Australia legislation would never have made it through the House. Over the past six Labor administrations, the health bureaucracy continued to increase in size, with no immediately obvious improvements in the delivery of health services. At last count, there were 21 stand-alone agencies operating outside the actual portfolio department. A bureaucracy of that size incurs significant costs to build up and maintain. This diverts much-needed resources from areas that directly benefit patients. The coalition government is determined to get every possible dollar away from administration and the bureaucratic process and back into front-line services, and the passage of this bill will assist in achieving this aim.

Health Workforce Australia, or HWA, was established under the now expired four-year National Partnership Agreement on Hospital and Health Workforce Reform, agreed by the Council of Australian Governments in November 2008. It is worth remembering that back in 2008, nationally, I think there was only one non-Labor government in power in Australia—and that is a sure-fire recipe for unnecessary regulation to bind the smooth operation of the bureaucracy. HWA was established to provide financial and other support for the delivery of clinical training and to carry out research, as well as to collect, analyse, and publish data relating to the health workforce. In addition, it was charged with developing and evaluating strategies for the development of the health workforce. It became operational in January 2010. All Australian governments were intended to provide funding to HWA; however, the states and territories have not contributed any funding, as was agreed.

The Commonwealth government has been the sole funder of HWA, committing $1.05 billion since its establishment. This is approximately $250 million a year, with no contribution from the jurisdictions. Should this bill be passed, programs and functions of the HWA will transfer to the Department of Health, which, I am advised, has the capacity to fulfil the agency's function. This government is not withdrawing support for the health workforce—far from it. It is, however, delivering on its commitment to reduce red tape and streamline programs. Savings will support front-line health services and programs—and what is really important here is front-line health services. It is what health funding should be doing—that is, putting resources into front-line health services.

The coalition has a strong record on making sensible investments in Australia's health and medical workforce. The previous Howard government invested in nine new medical schools, which have resulted in an increase in medical students graduating right now. I am further advised that the number of domestic school graduates per year has more than doubled since 1996. The Northern Territory Remote Clinical School with sites in Alice Springs, Katherine and Nhulunbuy was founded in 2005 and is part of the Northern Territory Medical Program. This initiative is run by Flinders University. It aims to give students the opportunity to take training in rural environments and also offers support to health professionals working in these remote teaching locations.

The coalition and, in particular, the health minister are committed to providing proper and responsible training for health practitioners. This government has committed to a doubling of the Practice Incentive Program payment, from $100 to $200 for each three-hour teaching session provided to a medical student. This provision directly benefits the teacher and will better compensate general practices for the consultation time they dedicate to teaching. It will also encourage more general practitioners to provide much-needed teaching opportunities and will work to strengthen the future workforce. Approximately 3,000 practices are expected to provide PIP teaching sessions, which translates to about 20,000 students every year. A rural loading of up to 50 per cent will also be applied to payments to practices in rural and remote locations, which will be a fitting reward for the legion of GPs who service the Territory's bush centres.

The government is also investing $40 million in up to 100 additional medical internships each year in non-traditional settings, including private hospitals in regional areas. This will provide more certainty for students and alleviate pressure on public hospital training. I will certainly be working with the Darwin Private Hospital, in my electorate of Solomon, to secure some placements. I welcome the fact that priority will be given to positions and rotations outside major metropolitan centres. That is a welcome development, and I will make it my work to ensure that it works to the advantage of Territorians.

The coalition will provide infrastructure grants to general practices on a dollar-for-dollar basis. The intention is to leverage private investment and help ensure the efficient and productive use of resources. This is in stark contrast to the wasteful GP superclinic program, which saw promises and taxpayer dollars literally splashed around with precious little accountability to monitor what exactly was going on. The government has also committed to providing up to 175 grants for rural and remote general practices to expand facilities to support the teaching and training of medical students and registrars. This will be particularly beneficial when the construction of the Palmerston Hospital is completed. The grants of up to $300,000 will be provided to successful applicants and, again, will require a matched contribution from the practice. This measure will benefit the GPs, registrars, medical students and communities in regional remote and very remote Australia, where these grants will be targeted. It goes without saying that these practices face unusual challenges in the delivery of health services and health care, and it would be a great opportunity for medical students to experience life in rural or remote health practices. I hope it will also encourage students to pursue careers outside the comfort of metropolitan areas once they graduate.

Another measure which I hope will benefit families in Darwin and Palmerston is the planned expansion of GP training places. Australia wide, GP training places will increase by 300—from 1,200 to 1,500—in 2015. This will create more vocational training opportunities for this workforce and free up more junior doctor training positions for new graduates who are coming through. The Australian General Practice Training Program, which this commitment will expand, has a distribution target that requires half of training to occur in rural and remote locations. This government is making sensible changes to reduce the waste of duplication and bureaucracy so that sustainable investments can continue to be made in services or programs that benefit our health system and the future workforce. This can only work to the benefit of families, pensioners and workers in Darwin and Palmerston.

I commend the bill to the House.

Mr ZAPPIA (Makin) (12:12): If this was good legislation, coalition members would be tripping over themselves to come into this chamber and speak in support of it. Instead we have seen only a handful of them bother to do so—probably because they know they can defend neither this legislation nor the $50 billion of cuts in health spending that the Abbott government brought in in its first budget. This is one of only several cuts made by the Abbott government in that budget. Having gone to the 2013 election promising not to cut health spending—in addition to a range of other promises—the Abbott government has now managed through this budget to unite people from across Australia. Regardless of political leanings, regardless of whether we are talking about community groups or even political groups such as the premiers of the various states, people from across Australia are united in condemnation of this government's $50 billion of cuts to health spending across the country.

But the criticisms are not confined to politicians and other levels of government. The Rural Doctors Association has issued press statements critical of the health program cuts. The AMA has issued similar critiques. Yesterday I received the May 2014 bulletin of the Australian Dental Association. I will quote the last two sentences of the bulletin:

All in all, funding the dental care has been less impacted than other areas of health. Nonetheless, the losses outweigh the gains.

I repeat the words 'less impacted than other areas of health' and 'the losses outweigh the gains'. This is a non-political and independent analysis of spending in respect to the dental areas.

The South Australian Health Alliance—an alliance of South Australia's leading health unions, health consumer groups, community groups and service providers—have come out strongly with their concerns about the Abbott government's cuts to health programs. I can understand that; particularly coming from South Australia, I am aware that the federal government has cut funding to South Australia by $655 million over the four-year budget forecasts. This is made up of $444 million in cuts to specific purpose payments, $120 million of cuts to national partnership agreement funding for public hospitals, $42 million of cuts to national partnership agreements funding for financial assistance for longstay patients and $50 million of cuts in other health initiatives.

This legislation seeks to repeal the Health Workforce Australia Bill 2009 and transfer Health Workforce Australia's functions into the Department of Health. It has already been stated by the member the Kingston that most of those losses will occur in South Australia, and so it is not at all surprising to hear the concerns of the South Australian Health Alliance. Transferring a program to an existing department may sound like a reasonable thing to do—particularly if it really is going to save public funding; under those circumstances, it could be defended. However, a close analysis of this decision to axe Health Workforce Australia will show that it is short-sighted. It is a decision that will ultimately result in more costs being incurred and no national coordination of planning and training Australia's future health workforce. That in turn will reduce Australia's ability to deliver the very high standard of health services across the country that we would all expect.

The effect of this legislation will be that the responsibility for planning and training Australia's health professionals will fall onto the individual states, as it was prior to the legislation coming into effect. It will result in an uncoordinated, piecemeal approach, rather than a coordinated national approach. The approach we currently have and the legislation that currently covers Health Workforce Australia resulted from a Productivity Commission report of 2006—a report initiated by the Howard government, but not implemented by it. When Labor came to office, we implemented it because we needed a national approach to preparing and planning the medical and health workforce for this country. With the implementation of Health Workforce Australia we have for the first time reliable statistics and reliable projections of the numbers of doctors, nurses and midwives that we need into the future. That in turn enables us to plan for the training of the health professionals that are required to take the place of those who retire or otherwise get out of the industry.

Yesterday the Rural Doctors Association issued a media release, warning that the Abbott government's decision to shut down that general practice education and training will erode the high-quality GP training that new medical graduates currently receive. According to the release:

We have very high standards in Australia for the selection and training of GPs, and this been developed over many years. In many respects, Australia's GP training system is the envy of many other countries. It is crucial that these standards are maintained and not destroyed overnight simply because the current government wants to get the budget back into surplus in the shortest possible time frame. This would be a false economy.

The Rural Doctors Association, I believe, reflects the views of people in country areas broadly and certainly reflects the views of those doctors who are working in country areas.

It has been one of the challenges of state governments in this country for a long time to try to ensure that we get enough health professionals in country areas. It has never been easy; it has been very difficult. We have tried to provide incentives for health professionals to do so, but I am aware of many country towns that are still struggling to get the health professionals they need. Just when it appears that we are making some progress through programs that are currently in place, the government comes along and says, 'We are going to cut those programs.'

It is not surprising that the Rural Doctors Association is very concerned about the cuts and is raising concerns. These are the people that you would expect to know most about health services in their communities, and yet the government clearly is not listening to what they are saying. I would have thought that any good minister and any good government would take advice from the very bodies that know most about the issues they are dealing with. But that is simply not the case here, because the government is prepared to put budget cuts ahead of the needs of communities.

This policy comes on top of a series of other cuts to health services made by the Abbott government. Only yesterday we learnt that $9.9 million has also been cut from the training of nursing and allied health students in Tasmania: nursing scholarships will cease from 1 July of this year and allied health scholarships from 1 July 2015. Yesterday in this House we also saw the abolition of the Australian National Preventive Health Agency—another short-sighted decision by the Abbott government. Health preventive programs inevitably have a substantial cost saving for our health system and for the nation. It is much more cost-effective to prevent illness than to treat it. That should be understood by all. It is a common theme and a common message from all health professionals: prevention is better than cure. We have a process and a system in place that the government, again, has chosen to disband or move to another department. It is incredibly short-sighted, and it is not surprising that so many health organisations across the country have come out in condemnation of it.

With these decisions that the government are claiming will save money now, inevitably health costs will be compounded and transferred into the future. The government are transferring those additional costs to future governments and future generations. Of course, the government, and the Minister for Health, who I see is in the chamber, will not be around to wear those future health costs; they will be someone else's problem. That is not responsible government. Responsible government is about doing the right thing for today's generation and for future generations.

There are 1.3 million Australians working in the health sector. It is a major employment sector. It needs good management to make sure that it is balanced and well supported. When Labor was elected in 2007 the health workforce was in total disarray. There was no national strategy or planning for future needs. We had a shortage of health professionals across several health professions. We had a great deal of difficulty in getting GPs and other health professionals to work in country areas. We had a frustrating process in place for international medical graduates to have their qualifications recognised in Australia and then be cleared to work as health professionals in the country. I can recall raising this matter on several occasions and I can recall meeting with several health professionals in my own office. All of them expressed their frustration at having their qualifications properly recognised so that they could take up the job they had been offered but which they were not able to do until they had been cleared. We had the Howard government even threatening to take over hospitals, starting with the Mersey hospital in Tasmania. There was also a limitation on the number of medical places that were made available to students within our universities. This highlights just how chaotic the health system was when we came to office.

The Labor Party set about reforming the process and the system. Many of the reforms we introduced have made the system better. It is only a relatively short period of time that those reforms have been in place, but they are already making a difference. Following the election of the Abbott government, the first thing it is doing is dismantling everything that has been put in place and cutting $50 billion in health funding on top of that.

I have heard the denials from the Prime Minister and the Minister for Health about cuts to health funding by the federal government. Their problem is that nobody believes their denials. Their problem is that all of those who have studied the budget and who need to know exactly what is in it for them have come out in condemnation of the government. The government's problem is that none of the premiers believe their spin that there are no cuts to health spending in this country. None of the professionals around the country that work in the health sector believe their spin that there has not been $50 billion of cuts to the country. And none of the people that I speak to in my community, as I get around, believe their spin that there has not been $50 billion of cuts to health spending in this budget over the forward estimates. The government's problem is that they know that they have made cuts that are going to deeply hurt the Australian community and deeply hurt the health profession more broadly. It knows those decisions are not popular. No amount of spin, no amount of weasel words and no amount of denial by the minister when he comes into this place will change the fact that health spending in this budget has been cut by $50 billion and that that will have devastating effects for people right around the country.

Mr DUTTON (Dickson—Minister for Health and Minister for Sport) (12:26): I thank all of those members who have contributed to the debate on the Health Workforce Australia (Abolition) Bill 2014. I put on record the government's firm commitment to our health workforce across the country. That was evidenced in the budget, where health funding increases year on year and hospital funding increases by nine per cent next year, nine per cent the year after, nine per cent the following year and six per cent in year 4. I say thank you, very much, to those members in particular who have pointed out the fact that when this government came to office it inherited a health portfolio that, in addition to those people who are working hard within the department, had 23 outside agencies. I point the attention of members opposite to an article in the Australian. Ironically, its chief political correspondent and the author of the piece is Matthew Franklin, who went on to become a spin doctor for then Prime Minister Rudd. In his article Mr Franklin quotes Mr Tanner, the former Labor finance minister, as saying:

The indiscriminate creation of new bodies or the failure to adapt old bodies as their circumstances change increases the risk of having inappropriate governance structures,

Mr Tanner went on to say:

This in turn jeopardises policy outcomes and poses financial risks to the taxpayer.

The article further quotes Mr Tanner as saying:

The more agencies you have, the more embedded fixed costs that you have.

This government is staying true to the sentiment within Mr Tanner's contribution. Indeed, any good government would want to make sure that it had efficiency, because in the end governments are guardians of taxpayers' money. We have inherited an enormous amount of debt from the Labor Party. It is our responsibility to clean up their mess and clean it up we will.

The Health Workforce Australia (Abolition) Bill 2014 will close Health Workforce Australia and transfer the programs and functions of HWA to the Department of Health. The bill is not about a withdrawal of support or resources for the health workforce but about this government delivering on its commitment to remove duplication and red tape so that there can be more focus on the policies and programs that directly support our health workforce. We want to deliver a smaller and more rational government footprint. We know that without our health workforce we would have no healthcare system. We also know that there remain issues with the availability, mix and distribution of the health workforce, but another health workforce bureaucracy is not the way to address these issues.

Labor's policy of style and announcement over substance and delivery is on display in relation to this area. HWA has added an unnecessary level of administration and bureaucracy. Valuable resources have gone into the significant overhead costs that come with running an agency. By transferring the functions and programs of HWA to the Department of Health we can save money by reducing duplication and we can continue to support programs to build our health workforce. All priority activities will continue to be delivered. The organisations funded by HWA can be assured that all current funding agreements will be met. The Commonwealth government will continue to work with the states and territories, private health employers and the professions towards national health workforce planning and reform.

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

Mr DUTTON (Dickson—Minister for Health and Minister for Sport) (12:42): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fraser) (12:42): I move:

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

"While not declining to give the bill a second reading, the House recognises the benefits of a strong mining sector, and supports a fair taxation system to share the benefits of our minerals wealth with all Australians."

Labor believes strongly that the mining industry has an important part to play in Australia's economic prosperity. The shadow Treasurer was indeed just commenting to me during the division about his recent visit to the Santos control centre in Brisbane, and I have enjoyed many productive conversations with Australia's miners. Mining constituted 80 per cent of the growth in the last quarter, giving a lie to those who have run a scare campaign suggesting that a profits based mining tax would debilitate the mining industry.

In a recent speech the shadow minister for resources, the member for Brand, gave to the Australian Resource People Summit in Perth, he noted several important facts about the future of the LNG industry:

In the none-too-distant future revenue to the Commonwealth and to the States of Australia from LNG production will be greater than the revenue from iron ore.

Already LNG has surpassed coal.

He said:

Think of LNG prices as one blade of a set of shears and productivity as the second blade of the shear.

The member for Brand also talked about the importance of floating LNG and the innovation that comes from maritime engineering excellence, referring to the embrace of floating oil production in the Timor Sea in the 1980s and discussing the transformation that is taking place worldwide with the United States on the verge of becoming a net energy exporter for the first time since World War II. In South America, the newly widened Panama Canal opens next year, which will provide passage for an estimated 12 million tonnes of LNG a year, a thought no-one had in the planning six years ago when the work to widen the canal began. There are 16 floating LNG projects now—in Israel, Indonesia, Brazil, Canada, Mozambique and the United States.

The mining industry has a strong future and we on this side of the House welcome that. We do, however, recognise that it is important that there be a fair tax regime in place. On this side of the House, we have made that case from an equity perspective. Those on the Labor side of the House tend to be more concerned about inequality than those on the coalition benches. But there is also a conservative argument for it, a Burkean argument for it. As Edmund Burke said, we are here not just for the current generation; we are informed by the generations that have gone before us and we need to make decisions for the generations to come. A fair resource tax system for minerals in the ground is absolutely fundamental to that. As Ross Garnaut noted in his excellent new book Dog Days: Australia After the Boom:

More and more of the load is carried by income taxpayers with limited opportunities for avoiding taxation, and is economically distorting, unfair and probably politically unsustainable.

He pointed out that one of the benefits of carbon pricing was that it lowered the taxes on work while increasing the burden on pollution.

The measure in the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014 is a sensible measure to prevent base erosion within the mining industry. It was first announced by then Assistant Treasurer David Bradbury in the 2013-14 budget. There was an Assistant Treasurer who was serious about tax reform, a man who has now taken up a senior position, not a political appointment but one won in his own right, focusing on taxation in the OECD. Yet, now, this government not only lacks an Assistant Treasurer of that calibre, it indeed has no Assistant Treasurer at all. While Arthur Sinodinos has stepped aside, the government is left with the finance minister sharing the burden of Assistant Treasurer. That cannot be the entire explanation for the government's bumbling and its hapless performance in selling this budget, but the lack of Arthur Sinodinos's voice into the budget preparation is surely part of that. On this side of the House, we support sensible measures to prevent base erosion within the mining industry. We recognise that it is important to protect the concession that allows companies to immediately deduct costs incurred in genuine exploration activity, but that in recent years it has been apparent that companies were using this deduction to claim expenses not associated with genuine exploration activities.

The measures in this bill amount to more than a billion dollars of government revenue over the forward estimates. That is a good thing and is welcomed by this side of the House. What is less welcome is that while the government is closing this particular loophole, it is leaving many other loopholes open. More than a billion dollars has now been forgone in measures that were to tackle base erosion and profit-shifting. More than a billion dollars is around the price of a new hospital, a new hospital that could have been built if this government had been serious about tackling multinational profit-shifting. It is a government that is happy to talk the big talk in the G20. In Davos, the Prime Minister said: 'The G20 will continue to tackle business artificially generating profits to chase tax opportunities.' Fine words, but how have they been backed up in action?

Unfortunately, the only action this government have taken on multinational tax integrity is to dump Labor's thin capitalisation reforms and to show strong signs that they are going to backtrack on the transparency measures, measures that would see the largest 200 companies in Australia publish their tax paid. It is a reasonable measure that has been certainly supported by all of the constituents whom I have spoken to about it, and reflects the fundamental notion in integrity that sunlight is the best disinfectant.

The government wants to bring this secrecy back when it comes to reporting tax paid. It wants to dump measures on multinational profit-shifting. To be specific, Deputy Speaker Broadbent, because I know you like the specifics on these things, the government has dumped a measure for reform in the offshore banking unit regime, costing the forward estimates $180 million. It is not going to proceed with legislative elements of the measure to improve tax compliance through third-party reporting and data-matching, costing the budget $113.1 million. It will not proceed with changes that would have applied to multiple-entry consolidated groups, costing the budget $140 million. It will not proceed with the abolition of section 25-90, costing the budget $600 million. It will not proceed with changes to offshore banking units, costing the budget $100 million. The total of all that is $1,133.1 million. Over a billion dollars in measures that protect tax integrity have gone by the wayside from a government who say everyone has to bear the burden.

Everyone is not bearing the burden and Australians will be rightfully outraged when they see that this is a government that is going soft on multinational profit-shifting, so it can go hard on single mums, the unemployed and pensioners. That is not sharing the burden; that is transferring resources from the most vulnerable to the most affluent in the community. It is a government that thinks it is okay to spend $40 million raising the non-concessional superannuation cap on people who put more than $150,000 a year into super. Putting it at 15 per cent a year, we are talking about people with million-dollar incomes. So the government sees fit to put aside $40 million to assist people with incomes of $1 million a year or more, while at the same time saying to unemployed Tasmanians in the north-west of Tasmania, where I visited recently with Senator Anne Urquhart, that they have to wait six months in order to get unemployment benefits—that they are to be punished, effectively, because the unemployment rate on the north-west of Tasmania is higher than the national average. It is a dreadful measure, and one which could have been averted if this government were serious about cracking down on multinational profit-shifting.

An honourable member interjecting—

Dr LEIGH: I hear an interjection across the chamber about the Greens, who, of course, joined with the government to put in place a measure for unlimited debt last year and will join with the government again to put in place an unfair parental leave scheme—tens of billions of dollars going to the most affluent Australians.

These sorts of measures are deeply concerning to the Labor members on this side of the House. The measure that we are debating today is a Labor measure, brought forward by the great tax reformer David Bradbury. And we are pleased to see it implemented—make no mistake—but we want to see the government have as much enthusiasm about closing the other tax loopholes which are currently causing the burden to fall on the most vulnerable Australians.

Compared to the honest benchmark—as the member for Cook noted yesterday, the only honest benchmark—the Pre-Election Economic and Fiscal Outlook, the budget deficit is increased this year, next year and over the forward estimates. This is a budget that breaks promises. Worst of all, it is a budget that is deeply, deeply unfair. We need a government that is serious about cracking down on multinational profit-shifting, and we do not have that government today.

The DEPUTY SPEAKER ( Mr Broadbent ): Is there a seconder for the motion?

Ms Collins: I second the amendment.

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

Mr BALDWIN (Paterson—Parliamentary Secretary to the Minister for Industry) (12:54): I rise today to speak to the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014. This bill limits the immediate deduction for expenditure on mining, quarrying and prospecting rights, and information first used for exploration. The measure will make the cost of these rights and information deductible over 15 years or the effective life of the right or information, whichever is the shorter. This bill is intended to remove the exploration tax concession for trading of late-stage exploration rights and information where the price is expected to reflect the value of resources discovered rather than the right to explore. The measure will improve the focus of the immediate deduction on genuine exploration and on the acquisition of unexplored tenement rights from issuing authorities.

This bill is very important to ensuring that the mining industry—in particular, coalmining—can continue to grow and thrive in the Hunter. The coalmining industry is a source of employment in the Hunter, and the benefits flow on to nondirect mining industries, such as mining equipment sales and manufacturing—even right down to the coffee shop that sells the miners breakfast and lunch. We need to continue to encourage the industry's leaders to search for new territory so that new opportunities can be gained for our residents.

I will turn now to the carbon tax and the mining tax. The Minerals Council of Australia estimates that around 10,000 jobs were lost in the past two years after prices for thermal and coking coal fell by between 50 per cent and 70 per cent. In my area this rings true, and over the past year we have read about hundreds of jobs being shed from coalmining, with only a small percentage being sent to another mine located out of the Hunter. The council also blames the carbon tax, which is an $800 million impost on the coal sector. And not a single competitor abroad pays that tax.

The fact that the carbon tax is still crippling the economy astounds me. Does the Labor Party want to stifle Australia from keeping its AAA credit rating and stop Australia succeeding in the global marketplace? The coalition government has introduced legislation to repeal the crippling carbon tax and the massive mining tax. The carbon tax is stifling Australia's economy, and we have been charged with the job of getting Australia's economy moving and improving. The Labor Party needs to get on board and repeal the crippling carbon tax and the mammoth mining tax to reduce the cost pressures on mining and mining related businesses. These businesses can expect costs to fall by around $87.6 million per annum as a consequence of just repealing the carbon tax.

The carbon tax removal legislation has already passed this House. There is only one person standing in the way of getting it through the Senate, and that is the Leader of the Opposition, Bill Shorten. He and his Labor senators have refused to listen to what the Australian public have said. So Bill Shorten needs to make a decision: does he stand up for those jobs in the mining industry or the interests of the green movement? Repealing these taxes will boost business confidence and assist in growing the economy.

There is no doubt that mining is important to the Hunter. To demonstrate the effect of the mining industry in my area, I would like to call upon a report from Deloitte Access Economics, Prospects and challenges for the Hunter region. This study found that 40 per cent of the state's coal resources are located in the Hunter Valley. It also found that the mining industry accounts for almost a quarter of the Hunter's economy. That makes it the major direct employer, with the industry employing around 17,700 full-time workers. This figure represents about 7.2 per cent of the regional workforce. The report predicts that the Hunter's mining sector is expected to expand over the next 20 years or so, with additional coal production and the emerging coal seam gas sector. The mining sector is projected to contribute 24.2 per cent of the total regional output in 2036, representing an increase of almost two per cent from 2012. With that expected increase in coal and coal seam gas production, we need to stop red tape getting in the way of future Hunter mine owners finding the product. We need to cut the red tape getting in the way of opportunity and increasing Australia's economy.

The nondirect mining industries of construction, transport and wholesale trade that contribute to the Hunter coal supply network rely on this industry continuing its success. The workers in these mining related industries constitute around 15 per cent of the economy, and employ around 37,400 full-time workers.

To bring it home, recent job cuts in the mining sector have seen unemployment creep up to 5.5 per cent. The mining downturn in the Hunter and the recent closes of Glencore and Integra coal mines have had an impact. In the Hunter we have witnessed the recent job cuts in the mining sector. In March Australian coal mines succumbed to the cuts pressures in the industry, with mining giant, Glencore Xstrata, announcing the closure of Ravensworth Underground Mine in the Hunter Valley. With thermal coal prices slumping close to a four-year low, the Hunter Valley mine was no longer profitable and will be closed by September. This closure will affect around 130 workers at the mine and it follows several other coalmine closures and deferrals of new coalmines over the past two years.

The Glencore Xstrata statement blamed the closure on low coal prices, high mining costs, the higher Australian dollar and geographical constraints. The closure has been coming for some time, as the mine had previously shed 35 workers late last year. And the carbon tax and the mining tax are all cost imposts on the mining industry.

Glencore Xstrata is the world's biggest exporter of thermal coal. It has already reduced its Australian workforce by more than 10 per cent over the past 18 months in a bid to improve its productivity and its profits. Then, just last month we learned that Integra is to slash 500 jobs from the Glennies Creek underground mine and the Camberwell open-cut mine near Singleton in the Hunter Valley—again, blaming coal prices. Integra told employees that although operations would be shut down, facilities would be maintained. It has also blamed poor coal prices for its decision. However, the good news is that the mine will still be maintained and only closed until profitable again.

Coal prices have dropped more than 30 per cent over the past two years, forcing many companies to reassess their operations to ensure that they are economically viable. The company had been planning to start a new longwall operation at the Glennies Creek mine, but that project is now uncertain.

That is over 600 workers in the Hunter alone. We need to help the industry to become profitable again. We need to cut the red tape and repeal the mining and carbon taxes so that we can be competitive in the global marketplace and increase employment in the area.

The mining downturn affects other industries, all the way through hospitality, manufacturing and even medical. The effects of the mining downturn do not stop at the mine workers. The effects flow down through the nonmining related businesses that supply the mines, their workers and their families. The Newcastle Herald's Ian Kirkwood recently profiled three Singleton businesses. Mr Kirkwood profiled Singleton contract company, Pit Patrol, Hunter Valley Glass and Windscreens and the Coal Rock Coffee and Cafe. Pit Patrol's general manager, Aaron Goadsby, said:

Pit Patrol began in 1993 with a single utility servicing the Camberwell mine.

Now, the company did courier work for most of the region's mines, and had two dozen utes and a dozen trucks, with subcontractors' vehicles taking the fleet to 50.

Like a huge range of Singleton and Muswellbrook businesses, Pit Patrol is feeling the pinch from the mining downturn.

The article continues:

At Hunter Valley Glass and Windscreens, David Flynn said he supplied to "everyone in the community from a mirror in a house to multinational coal companies".

With 14 employees on the books, he, too, had avoided the need to reduce his staff, but he acknowledged that mining companies had "asked for efficiencies" from suppliers like him.

And finally:

At Singleton's Coal Rock Coffee and Cafe, Donna Valentine said things were very quiet early in the week.

"It's very hard to make it balance on Mondays, Tuesdays and Wednesdays" …

She said that due to the miners' anxiety regarding job cuts that there had been a downturn in spending:

… they put off buying that takeaway coffee or that sandwich."

That was a report written by Ian Kirkwood.

I want to turn to WesTrac and their factory partial closure. WesTrac make mining equipment, and they laid off workers from my electorate in Paterson. This was despite receiving a federal grant of $6 million for the facility at Tomago. The 630 job cuts announced by Caterpillar Earthmoving Equipment agent, WesTrac, last year made my electorate of Paterson an indirect victim of the slump in the coalmining industry. Many of my constituents made up the workforce at the new Tomago headquarters. The Tomago workers were the hardest hit, with an estimated 210 jobs going from the firm's Hunter workforce of around 700.

This employer was one of the mining related businesses in the Hunter region which was reacting to the end of the investment phase of the mining boom. Unfortunately, it will not be the last. This particular business's job cuts came as a surprise to my electorate, following a significant investment by the federal government into that business back in 2007. But that is the impact that the coalmining industry has had on the community in the Hunter as a whole.

It also further added to the issues of youth unemployment in Paterson, as half of the job losses were apprentices. These young men and women began their apprenticeships in the belief that they were pursuing a steady, lucrative and responsible career path. The youth unemployment figure in my electorate of Paterson is nothing to celebrate. The Australian Bureau of Statistics estimates that the unemployment of 15- to 24-year-olds sits at around 7.1 per cent, and if the industry stays in this state of downturn it is a figure that will only increase.

There is no silver bullet to fix this problem, and we need to save them from a life on welfare dependency and get them into our workforce. We can do this by cutting the red tape and allowing new employers to enter into the area, and by allowing the spirit of opportunity to take hold. As I have said before, I believe that anyone can succeed with opportunity, enterprise and ambition. The question I ask is: why are we still stifling entrepreneurial Australians from achieving their maximum potential? The answer is: Bill Shorten.

The former Labor government left us with a big financial debt—a massive debt. And we are charged with the responsibility of cleaning it up. They recklessly overspent and underplanned. It is we, the coalition, that have brought responsibility back to spending. It is we, the coalition, that have begun cutting bureaucratic red tape. It is we, the coalition, that are trying repeal the crippling carbon tax and the monstrous mining tax. It is we, the coalition, that are standing up for sustainability and for Australian jobs.

We need the Labor Party to help push these bills through so that Australian businesses are placed back into a position where they are able to thrive, invest and create jobs with confidence. I pledge my support for this bill in its original form. I hope it will inspire those with an interest in coalmining, quarrying and prospecting to take an opportunity and dare to dream. And, by taking that chance, declare to the world that Australia is indeed open for business and a player in the global market.

I commend the bill in its original form to the parliament. I reject the amendment moved by the previous speaker, Dr Leigh.

Mr VARVARIS (Barton) (13:08): I rise to speak in favour of the Tax and Superannuation Laws Amendment (2014 Measures No. 3) bill 2014. The changes to immediate deductibility that the bill seeks to enact were committed to by the Gillard government in March last year and legislated by the coalition this month as part of a package of bills to restore simplicity, fairness and integrity to the Australian tax system. This bill seeks to better target tax deduction on expenditure granted to the taxpayer to 'genuine exploration activity' in the procurement of mining exploration rights and information.

In order to give my fellow members background to the concerns which gave rise to the bill, I quote from a statement by the Gillard government Treasury on the 14th of May 2013:

Some taxpayers are claiming an immediate deduction for mining rights and information purchased at a late stage, after natural resources have effectively been discovered. If the purchaser then undertakes some limited additional 'confirmatory' activity, they can claim an immediate deduction for the full purchase price. This means that the immediate deduction is effectively claimed for the value of natural resources that have already been discovered.

The Gillard government announced in mid-2013 that it would legislate to revoke immediate deductibility for assets first used in mining exploration, with the exception of mining rights acquired from the government and farm-out arrangements. In recent years, concerns have arisen that immediate deductibility was being taken advantage of in cases where no 'genuine exploration' is intended, such as the case in which a taxpayer is already aware that a commercial opportunity exists in the area targeted for exploration. The imaginary scenario provided in the previous government's proposal paper outlined a situation in which initial mining rights by Explorer Coalition. are met with an immediate $10-million deduction after Explorer Coalition. carries out significant exploratory work on a site at considerable cost. However, Explorer Coalition goes on to sell mining rights to the same site to Miner Coalition. for $300 million. Now, Miner Co. may carry out some minor 'confirmatory' exploration work in relation to the same site, which had already been subject to exploration by Explorer Coalition, but is essentially already aware that the site contains the resources which are being sought for commercial exploitation. But Miner Coalition goes on to claim an immediate deduction of $300 million for the cost of acquiring the mining rights, despite carrying out only cursory 'confirmatory' exploration work. This scenario is the essence of the integrity and tax erosion concern that the government has and provides a clear example of the way in which industry practice is going beyond the original policy intent of the Income Tax Assessment Act 1997.

To summarise the purpose of this bill, I quote from the explanatory memorandum:

This bill is an integrity measure which is designed to ensure that the immediate deduction for rights and information fulfils its original purpose of encouraging genuine exploration. There was evidence that the immediate deduction was being used to obtain a deduction for the value of resources already discovered rather than for the right to search for yet to be discovered resources. This is outside the policy intent of supporting genuine exploration.

Therefore, these changes were announced by the previous government with the aim of protecting the tax base from erosion and restoring integrity in taxpayers' deductibility claims for the purchase of mining rights and information from another taxpayer. This is an intention to guide tax policy which the coalition fully supports and is now implementing. Once the legislation is in effect, expenditure on assets used in exploration by taxpayers will depreciate over the life of the asset or over fifteen years, whichever comes first. The initial acquisition of mining rights and information from government issuing authorities will not be affected by the changes, as it is industry practice in acquiring exploration rights from other taxpayers that is presenting an integrity concern.

The components of the bill also still provide immediate deductibility to expenditure incurred following the generation of new mining information or the acquisition of geophysical or geological information data packages.

Furthermore, co-exploration agreements or farm-in farm-out arrangements, which often involve small explorers, will not be affected. These arrangements grant third-party access to a mineral interest for the purposes of testing, drilling or exploration. It is also important that the government will continue to provide immediate deductibility for the costs incurred by a taxpayer themselves in generating new information or improving existing information.

All of these exceptions demonstrate that the bill does not seek to merely protect the tax base or save money by removing concession measures. Rather, it seeks to provide tax concessions for genuine exploration activity. There are a number of benefits to the mining sector, the government, and the Australian people which we will gain as a result of passing this legislation. Firstly, projected revenue in excess of $1 billion over the forward estimates will be credited to the government from reduced or targeted tax concession to the acquisition of mining rights and information.

Secondly, this is an integrity measure and, as such, an essential in protecting the tax base from erosion by overuse and misuse of tax concessions. Just as one duty of government is to provide tax concessions to activities and initiatives which benefit the Australian community or take the strain off the public sector, it is an inherent obligation of government to protect the tax base from misuse and to preserve concessional tax measures for the purpose for which they were originally intended. It is only by preserving the tax base that the government can continue to incentivise those activities which provide significant spillover benefits to the economy.

Thirdly, by limiting tax concessions to genuine instances of exploration, the government will provide incentive measures for genuine exploration while resolving significant integrity concerns. By changing concessions to the mining sector from immediate deductibility to depreciation over the shorter of fifteen years or the life of the asset, this bill ensures that while concessions remain they will be better targeted to the original intent of the concessional measures.

It also ratifies the original policy intent of the measures, which should always be in mind when governments amend legislation, and ensures that tax concessions are only granted for activities which legitimately benefit the Australian community and economy, not exploration rights sought for the purposes of deductibility.

Ultimately, the bill restores and maintains the integrity of the tax system and mining sector interaction with the system. In legislating in this area, the government is remembering how important it is to continually re-evaluate how taxpaying bodies interact with tax concession schemes to better target those activities which have spillover economic benefits for Australia.

A further benefit which was at the forefront of the government's mind when introducing this suite of legislation was certainty. When business is met with instability and hesitation in projected legislation, it is afflicted with operational uncertainty. This was the case in this area of legislation. When the coalition assumed government last year, we found that as many as 96 measures in the area of taxation and superannuation reform had been announced or proposed and then never legislated. Some of these announcements dated as far back as March 2001; a case of governmental procrastination which had become unacceptable, given the impact that such announcements have on the business community and the decisions it makes about how it is to operate.

Operational uncertainty is one of many consequences of unstable and irresponsible government which paralyses the market. By finally legislating in this area and providing business with certainty as to government policy, the coalition is providing certainty to businesses and consumers, boosting consumer confidence in a new way.

I want to speak briefly about the coalition's appreciation for the mining sector. The government supports the mining sector because the government wants to see a strong Australia and a strong economy which produces jobs for Australian workers. Indeed, the mining sector has provided Australia with one of the most significant areas of economic and jobs growth that we have seen over the past twenty years. Our minerals and resources sector has been the great wave of growth that our country has ridden into the 21st century. It is a cause of great national pride, and government should not seek to hinder or clamp down on the productivity of the sector.

However, the government's strong support for the mining and exploration sector does not mean the government will sit back and relax about tax-base erosion or integrity concerns. It is because we support mining activity to such an extent that we have to safeguard the sustainability of the sorts of tax concessions we provide the sector. If we continue to see the sort of tax-base erosion that has been produced by the increasing number of deductibility claims in this area, the government will be unable to deliver on its intention to provide tax concessions. Put simply, threats to Australia's tax base are ultimately a threat to Australia's sovereignty. Our aim entering the election period was to restore integrity and fairness to the Australian taxation system, and this bill is one measure which goes towards fulfilling this aim. Furthermore, we are resolving the legislative backlog which resulted from years of governmental procrastination and stagnation. Such backlogs produce operational uncertainty in business, in this case within the mining sector.

Ensuring the compatibility of the Australian tax system with a productive private sector, especially in the case of Australia's signature resource sector, has always been a priority of the coalition. However, it must be fair and simple, and any amendments must be delivered with legislation so that we do not cause unrest or uncertainty for business. This commitment is in line with our pledge to provide stable and predictable government.

Restoring integrity to our tax system and resolving the legislation backlog left by our predecessors is an ongoing task. However, the progress on these goals accomplished by this legislation is significant, and this is a bill worthy of your support. Thank you.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (13:19): I would like to start by thanking all those that have contributed to this debate—in particular, those on the coalition side who made a contribution that I thought was appropriate; they recognised the bill that is before the House. It stands in stark contrast unfortunately to the pious amendment that has been moved by the shadow minister at the table. I have to say that is entirely consistent with Labor's failure to recognise the results of the last federal election and entirely consistent with Labor's ongoing commitment to their mining tax. The amendment moved by the shadow assistant Treasurer once again attempts to portray Labor's failed mining tax as in some way being a fairness tax or a benefit to Australia and to her people.

One wonders how long Labor will keep up the charade of being supportive of a mining tax that has some $16 billion or so of expenditure associated with it, but in reality—as we saw in yesterday's question time answer from the Treasurer—placed Labor on a platform where it missed the projection by some 97 per cent. I think the Treasurer described it as a 'once-in-100-year event'. But the most telling aspect of it is that the Australian Labor Party—still, on a bill like this—attempts to make mischief and attempts to hold out that the mining tax is in some way in the interests of the Australian people. The amendment that was moved underscores yet again how completely out of touch the Labor Party is. Frankly, it baffles me how a former government, a now opposition, could continue to pretend that this tax—which has failed to make 97 per cent of its forecast revenue, and is being thrust once again before the House as part of the national debate about the future of our country—is in any way, shape or form a positive step.

I would have thought that any sane person, having put forward a policy initiative and having seen that policy initiative raise three per cent, approximately, of its forecast revenue—a policy initiative that is responsible in part for some of the significant tens of billions of dollars of debt this country faces—would run a mile from it. But, instead, the Australian Labor Party actually puts it up as a pious amendment to the bill that is before the House as some kind of pathetic, desperate grasp to say, 'Don't worry about the actual results; let's just keep all the discussion about principle. Don't worry about the fact that the execution of policy by the former Labor government yielded a spectacular failure. Don't worry about facts like that; let's just talk about why we believe as a matter of principle this should be done.'

The DEPUTY SPEAKER ( Mr Broadbent ): The member for Moncrieff is to sum up.

Mr CIOBO: I am speaking to the amendment, Mr Deputy Speaker.

The DEPUTY SPEAKER: I do not think so.

Mr CIOBO: The amendment, Mr Deputy Speaker, with all due respect, says:

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

"While not declining to give the bill a second reading, the House recognises the benefits of a strong mining sector, and supports a fair taxation system to share the benefits of our minerals wealth with all Australians."

I would seek your direction, Mr Deputy Speaker, but I would have thought that my comments about Labor's approach with respect to the mining tax fall completely within the pious amendment.

But there is good news. Maybe some good news is what the Deputy Speaker needs—and there is some good news, Mr Deputy Speaker. The good news is that not everyone in Labor is adhering to their failed approach. I will give you some good news. The member for Perth—

Ms Macklin: What does this have to do with the bill?

Mr CIOBO: I can only refer the member for Jagajaga, once again, to the amendment that has been moved by the Australian Labor Party. The member for Perth has made it clear—

The DEPUTY SPEAKER: Order! The parliamentary secretary will resume his seat. Member for Fraser, I hope this is reasonable.

Dr Leigh: Mr Deputy Speaker, the parliamentary secretary is defying your excellent ruling.

The DEPUTY SPEAKER: There is no point of order.

Mr CIOBO: The good news is that the member for Perth, according to media reports, said, 'We've got to get rid of this damn tax.' That was reported as her comments to caucus yesterday. This is the 'damn tax'—to use her words—that the former Treasurer referred to as 'an historic reform'. This is the damn tax about which the former Treasurer, the member for Lilley, said, 'The mining tax linked investments cannot be made without mining tax revenue'—this is the $16 billion of associated expenditure—which, by this very amendment, the Labor Party is attempting to drag back onto the floor of the chamber and to defend as being in some way a step in the right direction, as being in some way a policy initiative that ought to be supported, and highlighting, again, that apparently that Labor's failed mining tax supports 'the benefits of a strong mining sector, and supports a fair taxation system'.

Even though corporate miners in Australia are among some of the biggest taxpayers in the nation, even though corporate miners in Australia pay significant amounts of royalties to state government and even though corporate miners in Australia pay substantial amounts of payroll tax, the Labor Party runs the line that in some way the mining sector is not making its fair contribution to Australia. On each of those fronts, let me make it clear that the coalition does not support the amendment that was moved by the Australian Labor Party. We do not support it and we do not support Labor's failed approach.

Specifically, this bill—that is, not the amendment; the bill that was moved by the government—is an integrity measure that is designed to prevent the immediate deduction for mining, quarrying and prospecting rights first used for exploration being used outside its intended purpose. The measure is necessary to ensure the sustainability of this concession over the long term. The cost of mining, quarrying and prospecting rights first used for exploration will be deductible over the shorter of 15 years or the effective life of the right or information.

The government is continuing to work with industry to address concerns around permits acquired through farm-out arrangements and interest realignments, which will remain immediately deductible. This will protect the acquisition of rights and information for genuine exploration by ensuring its tax treatment supports the acquisition of unexplored tenements. We do not support the amendment. I commend the bill to the House.

The DEPUTY SPEAKER: Order! The immediate question is that the amendment be agreed to.

Question negatived.

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

Question agreed to.

Bill read a second time.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (13:29): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

The DEPUTY SPEAKER ( Hon. BC Scott ): Order! It being 1.30 pm, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.

Dr LEIGH (Fraser) (16:15): I move:

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

"whilst not declining to give the bill a second reading, the House condemns the Government's inaction on multinational tax avoidance that have resulted in broken promises in the budget leading to tax increases and cuts to essential services."

In March 2010 the United States Congress enacted the Foreign Account Tax Compliance Act, also known as FATCA. The aim of the act was to improve compliance with US tax laws. FATCA imposed certain due diligence and reporting obligations on non-US financial institutions, including Australian institutions. Two years after the passing of FATCA, the member for Lilley, Wayne Swan, the then Treasurer, met with United States Treasury Secretary Timothy Geithner in Washington and issued a statement on 7 November 2012 announcing that Australia had commenced formal discussions for an intergovernmental agreement with the United States to minimise the impact for Australians of FATCA. That statement noted that an intergovernmental agreement would also improve existing reciprocal tax information-sharing arrangements between the Australian Taxation Office and the United States Internal Revenue Service, which would help ensure Australian tax laws are effectively enforced so that Australian businesses and individuals who pay their fair share of tax are not disadvantaged by those who seek to evade their tax obligations.

Under the agreement which has been signed with the United States and was announced by the Treasurer on 28 April this year, we now have an intergovernmental agreement which sees Australian financial institutions complying with FATCA. Under this arrangement, a broad range of Australian financial institutions are affected: banks, building societies, credit unions, specified life insurance companies, investment funds, custodial institutions and some brokers. Those financial institutions are to be required to register with the US IRS.

Under this bill, from 1 July 2014 the affected financial institutions will review customer accounts to determine whether they are reportable accounts, US citizens or US tax residents under the intergovernmental agreement and will report to the ATO in the 2015 calendar year the required account information for the 2014 calendar year, which will then be passed on from the ATO to the IRS. This bill puts in place those appropriate arrangements in order to see Australian institutions complying with FATCA.

It is pleasing for those of us on this side of the House to see the end of these negotiations, begun under the member for Lilley and concluded under this government. The Labor Party welcomes sensible steps to assist tax authorities in ensuring compliance with tax regulations. What we are concerned about, however, is that while the government has managed to conclude this deal, it has dropped the ball on multinational profit shifting. More than $1 billion of loopholes have been opened up under this government, which will allow multinational firms to shift profits overseas. So while dual Australian-US citizens will be affected by FATCA, the multinationals will be able to continue to shift profits overseas. In a speech earlier today I listed the measures, five of them, on which the government has backtracked. The total amount is $1.1 billion.

Multinational profit shifting is a painfully detailed area and we were fortunate in government to have Assistant Treasurer David Bradbury focusing on these reforms for us. It might be helpful to the House if I outline in straightforward terms how multinational firms shift profits out of Australia and into low-tax jurisdictions. One simple example that members might think about is an arrangement in which the Bermuda arm of a company sells the Australian arm a paperclip at a cost of $1 million. The Australian company then claims that as a $1 million tax deduction and the money is effectively shifted offshore. That particular loophole has been closed, but a parallel trick can still be played with debt, in which the Bermuda subsidiary makes a multimillion dollar loan to the Australian arm and effectively $1 million a year is shifted out of Australia in the form of interest payments. Those interest payments are a tax deduction in Australia and the profit can be moved to Bermuda, where the company tax rate is considerably lower.

The concern that the Labor Party has on this is that multinational profit shifting will invariably become more tempting as industries internationalise. As more and more business is done over the internet, we are moving from a closed economy to a very, very open economy. And a government which is going soft on multinational profit shifting is a government which is increasingly going to miss out on revenue. Australia already has a higher than average share of revenue collected from company taxes, and so failing to close company tax loopholes is a significant issue for Australia. And because this government is unwilling to close corporate tax loopholes it has to do things like taking money away from children on the first day of school—getting rid of the schoolkids bonus payments, which is targeted towards low- and middle-income households, because it is going soft on multinational profit shifting. The Treasurer talks the big talk when he is at the G20, as the Prime Minister does when he is at Davos. But when it comes to actually walking into this House and passing bills which see multinationals pay their fair share of tax, this government is not up to the job. As a consequence, ordinary Australians will have to pay more tax or receive lower services.

The total effect of the government's budget was to increase the deficit. Don't take my word for it: the member for Cook in question time yesterday said:

If I go back to the PEFO—as we know, the PEFO is where the officials tell the truth about what the budget really is from the previous government. From the previous Government, that's what it does, that's what it does.

A little repetitious, but you get the idea. PEFO is the true state of the books, so let's compare where we are at under the true state of the books, the Charter of Budget Honesty state of the books, with the current budget.

The current budget's deficit is higher this year. It is higher next year and it is higher over the forward estimates. So what the government has done effectively in this budget is to redistribute resources—redistribute them from the most vulnerable to the most affluent. This is not only a failure of the fair-go test, because those who were most vulnerable have, after all, been doing it worse over the past generation, a generation in which incomes have risen faster for billionaires than for battlers, but now we have a budget that transfers resources from battlers to billionaires. A simple example of that: the budget raises the non-concessional superannuation cap pushing it from $150,000 to $180,000—a measure which will help some of the most affluent.

But the vulnerable Australians do not just have low incomes; they also spend a larger share of their incomes. In fact if you look at those in the bottom income group, they tend to spend all of their incomes; and those in the top quintile tend to save about a quarter of their incomes. So, if you take $10 billion, you move it from the bottom quintile to the top quintile and then you take $2½ billion out of the economy. What would that do? You would expect it to have a hit on retail trade, and we are already seeing retail trade figures down. You would expect it to have a hit on consumer confidence, and we have the ANZ Roy Morgan Consumer Confidence measure now falling faster than at any time since the global financial crisis. We have the Westpac Melbourne Institute consumer confidence survey at nearly a three-year low.

Part of what is going on at the Westpac Melbourne Institute consumer confidence survey is that confidence has fallen to a lousy 74.9 among Labor voters. I have news for those opposite: Labor voters may not have supported them in the last election but, if you are a retailer, a dollar coming out of the wallet of a Labor voter is just as good to you as a dollar coming out of the pocket of a coalition voter. This pessimism in the economy is hurting retail trade.

Robert Menzies liked to say that about half the people didn't vote for him at each election and they could not all be wrong. It neatly sums up the value of bipartisanship but it is particularly important when we are thinking about economic policymaking. Governments must govern for all Australians. They must recognise that retailers are depending on the spending of coalition voters and Labor voters alike. But a government which is behaving as political scientist Judith Brett wrote recently like 'a bunch of winners taking it out on the losers … It all feels a bit like student politics and its short-term point-scoring, its payback and its intense personal antagonisms'. A government of that kind is a government which will not engender confidence in the economy.

Perhaps we should not be surprised then that the Australian Institute of Company Directors biannual survey found that fewer than one in three company directors believe the federal government is having a positive impact on their business decisions and consumer confidence.

This is a measure which improves transparency, and it is good to see this government supporting transparency. As Justice Brandeis said—that is not 'the-would-be Justice Brandis'; that is the real United States Justice Louis Brandeis—sunlight is the best disinfectant. I am a strong supporter of transparency, but it does strike me as strange that the government is very keen on transparency for US-Australian citizens in exchanging information between the ATO and IRS but less keen on transparency when it comes to what has happened in our detention centres, what is happening with boats.

When it comes to the Australian Charities and Not-for-Profits Commission, a commission set up to ensure transparency in the charitable sector and to ensure that Australian donors can see the organisations to which they are donating, the government wants to scrap the ACNC and reduce transparency in the charitable sector.

The government is yet to hold a single community cabinet, a great transparency measure introduced under Labor. The government has said that it will not release the Treasury blue books under the freedom of information laws as they were after the two previous elections.

The government in another anti-transparency move has taken the Family Impact Statement out of the budget. The family impact statement was put in the budget by Peter Costello, and maintained when the Rudd and Gillard governments were in office. We thought they were a good thing, so we kept them there. This year they disappeared, and families will not be surprised as to why. If you are a family in the bottom quintile in income distribution, families with children lose 6.6 per cent of their disposable income as a result of this budget; they lose more than $1 in $20. The poorest single parent families with children lose more than $1 in $10—$1 in $10 is being taken out of their wallets as a result of this. No wonder the government is backtracking on transparency with the Family Impact Statement.

On the measure championed by Labor, which would have required the tax commissioner to publish the amount of corporate tax paid for entities with a total income of $100 million or more, the coalition has already sent out strong signals that it is not going to proceed with that particular transparency measure. They were so proud of that particular announcement that they brought it out in the first week of the new year—not normally a time in which you announce the things that you are very excited by—but the time when then Assistant Treasurer Arthur Sinodinos chose to drop the story to the Australian Financial Review.We have heard nothing of it so far, but I am deeply concerned that this transparency measure will be dropped as well.

The opposition supports this sensible measure. The FATCA agreements were initiated under Treasurer Swan and concluded under Treasurer Hockey. I wish the spirit of this bill would better pervade the government's actions. Transparency is good enough for FATCA and it ought to be good enough for other areas of government policymaking. If it is good enough to close down tax loopholes to stop tax minimisation then it ought to be good enough to close down tax loopholes that are allowing a billion dollars of tax owed by multinationals to escape.

The DEPUTY SPEAKER ( Mr Broadbent ): Is the amendment seconded?

Mr Fitzgibbon: I second the amendment and reserve my right to speak.

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

Mr SUKKAR (Deakin) (16:30): I want to briefly speak on the Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014. I want to congratulate the Treasurer, Joe Hockey, on so quickly coming to the aid of Australian financial institutions and concluding the FATCA agreement. The unilateral decision by the United States has meant that Australian financial institutions with any presence in the United States could be subject to a withholding tax rate of 30 per cent. In announcing the signing of the agreement, the Treasurer highlighted the importance of this change in reducing the burden on Australian financial institutions and in particular that due diligence that would be required from Australian institutions in managing each of the accounts that may or may not be relevant to the FATCA requirements. In order to comply with the relevant reporting obligations, Australian financial institutions would have been required to undertake a range of procedures in identifying all relevant accounts. Broadly, FATCA requires foreign financial institutions to provide the US Internal Revenue Service with information on US citizens living abroad who have more than $50,000 in their accounts. So it is a wide-ranging and significant compliance burden on Australian financial institutions.

The commencement of the regime is looming on 1 July 2014, as the member for Fraser said, and it will obviously have a huge impact on Australian financial services. One of the reasons that Australia has had to enter into the agreement with the United States which is now the subject of this bill is that Australian privacy laws generally prevent compliance with these US based regulations and some Australian state and territory antidiscrimination laws could also prevent the interrogation of customer accounts based on US citizenship. In recognition of the fact that many of these domestic laws would otherwise prevent foreign financial institutions from fully complying with FATCA, the US developed an intergovernmental agreement approach to manage these legal impediments, simplify practical implementation and reduce compliance costs for relevant financial institutions. That is why I congratulate the Treasurer, Joe Hockey, for moving so quickly to sign the intergovernmental with the US in April.

As always, this government has its eye on the ball when it comes to making sure that our businesses are not weighed down with red tape and unnecessary administrative costs. Unfortunately, that was not the case when those opposite were in government. Treasurer Joe Hockey was advised soon after last year's election that 96 tax and superannuation announcements, with one dating back as far as March 2001, had not been legislated. One of those announcements related to FATCA. The former Treasurer announced his intention to negotiate an intergovernmental agreement with US on FATCA in November 2012, but it was not signed by the former government. This slack approach was not fair on Australian businesses or consumers and it created uncertainty, particularly with the likelihood of a withholding tax applying to Australian financial institutions. That approach has changed and we have ended the uncertainty with the subject of this bill. We are listening to businesses and consumers.

Importantly, the Australian Bankers Association welcomed the signing of the intergovernmental agreement. Steven Munchenberg, chief executive of the ABA, said:

We congratulate the Australian government in securing this agreement. It will enable Australian investors and savers to more easily access the US economy without suffering a prohibitive 30 per cent withholding tax cost.

This is an essential development in facilitating capital flows into and out of Australia while having best practice regulation.

The current and previous governments' work in this area will ensure Australia continues to have one of the world's most competitive financial services sectors, a major factor in economic growth.

Again, I want to congratulate the Treasurer for ensuring that the uncertainty that applied with the possible application of a withholding tax in the United States is not an issue that Australian financial institutions have to worry about any further.

There are of course compliance costs associated with this measure. As a government, we are proud that the approach we have adopted ensures that the compliance costs are the lowest of all the available options. Again, it is to ensure that capital that flows in and out of Australia can be as free as possible and not subject to interest withholding tax. I again congratulate the Treasurer.

Mr GILES (Scullin) (16:36): I rise to make a contribution on the Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014. As previous speakers have noted, this bill in effect requires Australian financial institutions to collect information about their customers who are likely to be taxpayers in the United States of America and to provide that information to the Australian Taxation Office which will, in turn, provide that information to the US Internal Revenue Service. This of course gives effect to the Australian government's commitments as set out in the Agreement between the Government of Australia and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA—the Foreign Account Tax Compliance Act—which was signed in Canberra in April 2014, as the member for Deakin noted a moment ago.

FATCA has been described by TheEconomist as 'by far the biggest catalyst' of a movement towards global tax-transparency or, indeed, tax fairness. I note that the UK has also, in the aftermath of FATCA, taken what may be regarded as similar steps to the US, and that the OECD is progressing the implementation of a single global standard for the exchange of relevant information. This year's G20 finance meeting in Sydney endorsed common standards for sharing account information across borders, with automatic exchange taking effect by the end of next year. This is an important development—although, as is the case with the bill before us, there is obviously considerably more work to be done.

I note in that regard—and I think the member for Deakin also touched on this—the very important work that the former Treasurer and Deputy Prime Minister, the member for Lilley, did in the lead-up to this bill, by commencing the formal discussions between Australia and the US following a meeting between the Treasurer and US Treasury Secretary Tim Geithner in November 2012. I also note the important work that former Assistant Treasurer David Bradbury did in the area of cracking down on corporate profit-shifting and tax minimisation schemes. I congratulate him on his recent elevation at the OECD. It is well deserved and I wish him very well, though I think it is appropriate that I also say that he is very much missed in his former role in this place in the government of Australia.

The FATCA is an American law, developed to reduce offshore tax evasion and regain federal tax revenues from American account holders at foreign—that is, non-American—financial institutions internationally. It obviously, in that regard, has implications for Australia and Australia's financial institutions. The impetus for the act in America was a 2009 court case in which Swiss bank UBS was found to have assisted American nationals to evade paying American taxes. As a result, UBS agreed to pay the US government US$780 million in fines, in restitution, and also to provide the names of suspected tax cheats. There has obviously also been some significant subsequent litigation in this area. According to the US Department of Justice, the use of offshore bank accounts to avoid paying American taxes costs the US Treasury, in total, at least US$100 billion annually. This is of course a cost to American society of the same magnitude.

The wide-reaching FATCA was passed in the 111th Congress as part of the 2010 Hiring Incentives to Restore Employment Act, the HIRE Act, becoming law in March 2010, and requires individuals to report their financial accounts held outside of the United States; and foreign—again, that is, non-United States—financial institutions to report to the IRS about their American clients. To enforce the FATCA, it has become necessary for the US government to sign agreements with foreign governments such as Australia's, allowing the trade of individuals' financial data.

Labor welcomes any sensible steps to assist tax authorities, whether in Australia or overseas, to ensure compliance with tax regulations. The Treasurer has acknowledged that some multinationals are not even paying their fair share of tax anywhere and called for a global response. I welcome this, too. But there is more to be done—much more.

This government has demonstrated a significant gap between its rhetoric and its actions when it comes to ensuring that multinationals pay their fair share of tax within Australia. By not proceeding with similarly sensible measures, as are implemented in this legislation, the Australian people have forgone over a billion dollars in revenue. This is resulting in cuts to essential services. And, as the member for Fraser has noted, every dollar avoided by multinational companies must, in effect, be paid for by Australian taxpayers and businesses, or, of course, by cutting services—essential services maintaining the fabric of our society. We have seen with this budget which side this government is on. It asks those with the least to do the most, time after time after time, as we heard in the matter of public importance discussion only a few minutes ago.

Ultimately, I think it is important to acknowledge that cracking down on multinational profit-shifting is not just about making sure that firms pay their fair share of tax, important as that is. Critically, it is also about making sure that the burden of tax is fairly shared across businesses.

I am reminded of the comment of the Justice of the Supreme Court of the United States, Oliver Wendell Holmes Jr: 'Taxes are what we pay for a civilized society.' That was as prescient of the debate in Australia at the moment, as we argue in this place and outside it about what makes a civilised society. I note the context for that remark. It was made in a dissenting judgement in a 1927 case involving a Spanish tobacco company seeking to minimise its tax arrangements on insurance in the Philippines, then subject to the law of the United States. Even by today's standards—the standards that FATCA is engaged in working through—it was a very complicated case. But His Honour saw through the complex taxation arrangements then, and we must do our best to do likewise now. To quote him more fully: 'It is true … that every exaction of money for an act is a discouragement to the extent of the payment required, but that which, in its immediacy, is a discouragement may be part of an encouragement when seen in its organic connection with the whole.' This notion of an 'organic connection with the whole' is one that deserves some greater consideration.

I believe that this principle is at the very heart of taxation. Taxation should never be seen in isolation, as those opposite and their right-wing cheerleaders insist it should be. It is true, of course, that our roads, schools, hospitals and all of our services are, in large part, funded from tax revenue, but this is part of a broader purpose—that purpose being, of course, to build a society where people are not left behind or excluded because of the material circumstances in which they entered this life.

This is why the coalition's budget has been so devastating, because its basic message is: if you are not born into comfort then you will not get to fully participate in society. And this is why we, on this side, describe the budget as cruel. To say to someone that, no matter how hard you work or how smart you are or how well you apply yourself, you do not stand a chance to get ahead in life because your parents' wealth does not allow for it—this is cruelty. Interestingly, that seemed to be acknowledged to some extent by the former Prime Minister, John Howard, in his contribution at the National Press Club today.

Countries that have progressive taxation systems tend to have the least inequality and, in turn, tend to be more collectively prosperous and productive. One only needs to look at the Scandinavian examples as proof of this—evidence, as opposed to neoliberal theory. Can those opposite point to examples of prosperous, productive and equal societies that operate under these sorts of neoliberal regimes? I doubt it, and I again reflect on the contribution of John Howard, a former conservative Prime Minister, in his remarks on the state of the US society.

I am pleased that the US has passed laws to crack down on tax evasion and that Australia is assisting with collection. But it is somewhat ironic that the US is where those opposite look to as a model for Australia, whether it is for universities, health care or gated communities more generally. The US system is in too many respects based on concepts of user-pays exclusivity. It applies a moral lens to those who, for instance, cannot afford to take on massive amounts of debt, who cannot find work or who until recently could not afford health care. It divides their community into haves and have-nots, deserving and undeserving. This has never been the Australian way, and it cannot be so in the future.

I applaud the US administration for getting the high-roller tax evaders to pay their fair share wherever they may be. I note that these measures are permanent, not temporary like this government's deficit tax on high earners. Our government could learn from the US government to treat foreign companies and people the same as it treats Australian companies and people. What is this government doing to tackle Australians seeking to evade taxes here and abroad?

I return once more to Holmes' decision:

The result of upholding the government's action is just. When it taxes domestic insurance it reasonably may endeavor not to let the foreign insurance escape. If it does not discriminate against the latter it naturally does not want to discriminate against its own.

Indeed, getting foreign or domestic companies or wealthy individuals to contribute to the running of a society and system of government from which they derive a profit or protection from is entirely just.

And so the principles of this legislation are supported by Labor. But again, it is only part of what is needed to be done. The government wants to repeal Labor's tax transparency reforms. These reforms would have ensured the public could see how much tax Australia's largest companies are paying. They are supporting transparency for US citizens vis-a-vis their tax obligations, but not for large businesses here. If the government are serious about making sure companies pay their fair share of tax, why are they trying to let these same companies hide how much tax they are paying?

Mr Ciobo: This is your best speech so far!

Mr GILES: Well, one day it might be as good as one of your best ones. Stephen! If I am very, very lucky!

Mr Ciobo: I know!

Mr GILES: And one day I might get the same audience as is sitting behind you now too!

Mr Vasta: What? Quality like me?

Mr GILES: The coalition is also not proceeding with Labor's changes to the offshore banking unit regime or the abolition of section 25-90, which allows companies to deduct interest expenses on debt related to foreign untaxed income. According to the government's figures in MYEFO, this will cost Australian taxpayers around $700 million. So while the US is cracking down on people evading tax, the coalition government seems to be doing the exact opposite—indeed, facilitating it.

At the heart of this debate is a discussion about the revenue-raising capacity of the government and its distribution of this finite resource. Governments all over the world, faced with structurally lower revenue bases, are facing the choice of whether to accept this neoliberal dogma and go down the austerity path of cutting people loose and dividing the haves and the have-nots, or to get those most able to to do their fair share of the heavy lifting.

Most importantly, we do need to have a broader debate about the role of government which, of course, partly manifests itself in this taxation debate. To this extent, the government has started this debate with its neoliberal, extremist budget. For the record, I take this opportunity to say that I believe that there is such a thing as society, and that there is a major role for government in society. Those opposite say that government should get out of the way so that we are left with a dog-eat-dog, survival-of-the-fittest contest that punishes the weak. I believe that government can, indeed must, be a check on the unfettered power of the strong over the weak.

And so, in supporting the important principles and the intergovernmental agreement that are enabled through this legislation, I also express the hope that it might inspire further action for Australia as a responsible global actor, but also domestically, to ensure that fair contributions are made to support a fairer society.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (16:48): I want to thank those members who have contributed to this debate. The Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 gives effect to Australia's obligations under the treaty status Agreement between the Government of Australia and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA.

The bill will require Australian financial institutions to collect and provide certain financial account information as specified in the agreement annually to the Australian Taxation Office which, in turn, will provide it to the United States Internal Revenue Service. This will enable Australian financial institutions to comply with the United States Foreign Account Tax Compliance Act in the most cost-effective way possible. In particular, I draw the attention of the House to page 34 of the explanatory memorandum, which details the compliance cost saving this bill will bring about—a saving of more than $583 million over 10 years. The bill will also help to enhance the tax system integrity by providing for improved cooperation between Australia and the United States for the purpose of preventing tax evasion.

I note the amendment that has been moved by the shadow assistant Treasurer, and also take this opportunity to highlight that the government will not support the opposition's amendment. And I note that while there has been a good contribution by government members in relation to this debate, unfortunately, we see another pious amendment that has been moved by the Australian Labor Party in relation to this bill. This time, of course, it is reflecting on the fact that they believe the government should be doing more in relation to multinational tax avoidance. I cannot help but think that once again we see a situation where Labor's narrative in the House sits at strange odds with the general community perception about Labor's economic approach.

The actual amendment that has been put before the House sits, and dovetails quite nicely, with Labor's ongoing narrative that the way in which—as best as I can tell—Labor intends to pay for their multi tens of billions of dollars of additional spending is to look at being able to recoup additional revenue through the use of the kinds of initiatives that they allude to in this amendment.

And so it is that I consistently hear from Labor members opposite—and we heard it in the contribution of the shadow assistant Treasurer and from the member for Scullin—that Labor's approach in relation to now wanting to put some $38 billion to $40 billion of spending back into the budget is that it will be funded through a crackdown on multinational institutions. The amendment that has been put in relation to this debate goes to the core of Labor's attempt to try to pretend that that is in some way going to provide the revenue that they need to bring about the kind of fiscal consolidation that the government is focused on.

Unfortunately though, the facts simply do not accord, yet again, with Labor's narrative in relation to both those issues—those two issues being multinationals paying tax and the second being their ability to raise enough revenue to make sure that those additional spending initiatives that Labor would like to reintroduce into the budget are actually able to be covered off.

We have seen the Labor Party attempt, very poorly, to make changes to transfer-pricing rules in 2012 and 2013. They did it through the Tax Laws Amendment (Cross‑Border Transfer Pricing) Act and through the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Act 2013. It was very clear to the coalition then that the consequence of those acts was going to be that the government was going to massively ramp up compliance costs but not actually get the balance right with respect to ensuring that compliance versus the integrity of the tax system would be in fact balanced. Labor is big on rhetoric when it comes to this matter but their follow-through is, unfortunately, quite poor.

The coalition, in contrast, has a proud track record in this sense. We have long supported legislation that counters transfer-pricing, having introduced the original legislation in 1982. In fact, the Treasurer identified addressing base erosion and profit shifting as one of the key issues that G20 finance ministers are focusing on throughout this year. Indeed, in the February meeting of finance ministers in Sydney as part of the G20 process, the Treasurer was able to steer a very good outcome for those G20 members to ensure that there would be strong in-principle agreement. It actually was part of the BEPS process—that is, base erosion profit shifting process—which is taking place throughout this year. There is action by the coalition both in an historical context—having moved the original legislation—and now more recently through our activities in the G20.

I say to the Australian Labor Party a very simple message—that is, the government is actually acting on base erosion and profit shifting. Labor's approach was heavy-handed when it came to red tape and compliance. Labor's approach has failed miserably. Most importantly, not for one second should Australians hold the view that Labor's narrative, their attempt to pump some $38 billion or $40 billion back into the budget, will be covered off by an attempt to try to squeeze more money out of international institutions. The government is alert to failings in this regard. The government is making reforms and, in fact, the coalition is leading international discussions in making sure that the BEPS issue is addressed. It stands in stark contrast to the kind of political games the Australian Labor Party are playing with an amendment such as the one that has been moved by the shadow Assistant Treasurer.

Fundamentally, the Australian Labor Party needs to recognise that they need to make some hard decisions when it comes to fiscal consolidation and when it comes to putting the budget back on the right track. They cannot mask their decisions by saying, 'Well, we will find the additional revenue for $30 billion or $40 billion of additional spending by magically squeezing more money out of multinational institutions.' No, that is in fact not going to provide anywhere near the kind of revenue the Australian Labor Party is proposing. Rather, what Labor need to do is undertake some of the tough choices about making sure that Australia as a nation and the federal government as an entity live within their means.

When I hear contributions like that from the member for Scullin, who made comments that he believed the budget unfairly put too much pressure on pensioners, for example, and on those of lower socioeconomic status, I say to the members opposite, 'Why is it that Australian Labor members profess so much concern for pensioners yet will happily turn a blind eye to the fact that they are lumbering the next generation of Australians with debt that will take decades to repay?' I stand at the dispatch box here and when I look up at the Australian students in the gallery I know that those children are going to be the ones that will be paying off Labor's debt for the next 20 or 30 years. I say to the children of Australia that they are going to be responsible for paying back this government's largess for decades. I say to the Australian Labor Party we do not need lectures about there being an unfair burden on particular elements of the community. Because the reality is that the Australian Labor Party are being grossly hypocritical by making comments like 'it is unfair that this particular group is penalised' meanwhile conveniently ignoring the fact that the very real impact of the past six years of Labor's failed economic approach has been that young Aussie kids are now indebted and will take 20 or 30 years to pay back that debt.

The reason that is germane to this debate is because the fig leaf that Labor use, trying to explain how they can possibly put forward a proposal to reintroduce $30 billion or $40 billion of spending back in the budget, is to miraculously find the revenue in multinational institutions. I have heard it from the shadow Treasurer. It is not only the shadow Assistant Treasurer who comes up with these pithy little amendments; it is also the actual shadow Treasurer—the alternative Treasurer of the country—who turns around and makes comments such as 'we will find the revenue from multinational institutions who are not paying their fair share'.

I think it is important that all Australians recognise that while these kinds of amendments are fun and games for the Australian Labor Party and might tick some kind of factional box for the shadow Assistant Treasurer, the reality is that it will not provide anywhere near the revenue that Labor needs. Labor needs to actually step up to the plate, make some hard decisions and recognise that the populist approach to economics got them into trouble in the first place. It will not get them out of trouble until they have the fiscal discipline to implement the kinds of tough decisions that mean Australia can live within its means. In rejecting the opposition's amendment, I also take this opportunity to commend the bill to the House.

The DEPUTY SPEAKER ( Mr Mitchell ): The original question was that this bill be now read a second time. To this the honourable member for Fraser has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (16:59): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fraser) (17:00): I move:

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

"whilst not declining to give the bill a second reading, the house condemns the Government's attack on universal health care through its introduction of the GP tax."

The Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 has three parts. It increases the Medicare levy low-income threshold, the point at which the levy starts to be paid, for families and their dependent children or students, in line with movements in the CPI, commencing in 2013-14. It contains amendments to protect against situations where taxpayers have anticipated the impact of announcements made by the previous government in regard to tax law which have been overturned by the current government and as a result have been left worse off—this is taxpayers who have filed tax returns; lest any listeners think this might have broader applicability. Thirdly it is to introduce an integrity rule to limit the ability of taxpayers to avoid paying tax by dividend-washing, which is a taxation loophole created by the tax treatment of franking credits.

The opposition welcomes the government's decision to increase the Medicare levy low-income threshold but we will not resile from our condemnation of the government's attacks on the universality of health care in the country or its very clear broken promises.

From 1969 to 1993 elections were fought in this country over Medicare. This side of the House defended it; that side of the House, the conservatives, worked to bring it down. That period, nearly a generation, was a time in which the coalition attacked Medicare. Now they have a chance to rip into health care again.

It is not just Labor members who are saying that; it is Liberal state premiers, health ministers and treasurers. NSW Premier Mike Baird, when asked about the federal health cuts, said:

The impact starts on the 1st of July. The equivalent here in New South Wales is over 300 hospital beds in funding disappears.

He also said:

The cuts have an immediate impact, and we’ve seen that in health, in terms of the funding in health, what we are seeing in the next 12 months is hundreds and hundreds of hospital beds … impacted. This cannot proceed.

Liberal health minister in New South Wales, Jillian Skinner, said:

There is no doubt there have been significant cuts to the funding of state hospitals in the federal government’s budget, …

It is cost-shifting and NSW will have to accommodate a loss of more than $1 billion over the forward estimates for hospital services.

Andrew Constance, Liberal Treasurer in New South Wales said:

We are deeply concerned about what this budget means for health and education services.

Campbell Newman, the LNP Premier of Queensland, said 'a big red cross is cutting health and education spending. It's not acceptable.' He also said:

Essentially, the Prime Minister and the Treasurer are saying 'well, you guys have to but deal with health and education, but we're going to take away the money for you to achieve the things that need to be achieved.' We're also concerned about the co-payment. And I know that Premier Napthine particularly agrees with me that this could see people using ambulances more frequently and also turning up at our emergency departments rather than put their hand in their pocket to go and see a GP. It is again of great concern that this has been done with in a way without sitting down with the states and territories to properly plan it.

Tim Nicholls, Liberal Treasurer Queensland:

Well, the potential impacts for it could be, for example, you'd have to wait longer to get treatment at a hospital, because we wouldn't be able to have as many doctors or nurses on hand to be able to treat people.

An editorial in the Medical Journal of Australia this week starkly outlined the view that health professionals have taken about this government's approach to health care. Written by Andrew Wilson, the Director of the Menzies Centre for Health Policy, it says:

Chronic disease is a common cause of shortened working life, even when it doesn't kill.

The direct effects of the proposed federal Budget on prevention include cuts to funding for the National Partnership Agreement on Preventive health, loss of much of the money previously administered through the now defunct Australian National Preventive Health Agency, and reductions in social media campaigns, for example, on smoking cessation.

The cuts to preventive health are particularly short-sighted. When bringing down the budget, the Treasurer spoke about the importance of long-term thinking. Yet nothing better epitomises short-termism than cuts to preventive health.

It was my pleasure last year on behalf of the Minister for Health to launch the first report of the Australian National Preventive Health Agency. It was a very thoughtful report that looked carefully through the costs and benefits of preventive health treatments, and focused on issues ranging from obesity to road safety, from smoking through to exercise. Yet that agency is being slashed.

The editorial in the Medical Journal of Australia by Andrew Wilson is also concerned about the government's proposed $7 co-payment for GP visits:

Other studies confirm that health care visits for preventive activities are the ones most reduced by financial hardship or disincentives.

The editorial goes on to note concern about hospitals:

The Australian Government's commitment to index its contribution to public hospital costs to population growth and the consumer price index will be insufficient to meet the predicted increase in demand for health care.

Blind Freddy knows that health costs have been running faster than inflation for decades, and so these changes in indexation are going to hit the ability of Australia's healthcare professionals to tackle some of the big healthcare challenges.

It is a pleasure to have the member for Blair here in the chamber with me. I know he has been a tireless advocate of closing the gap on Indigenous health. Yet, as he has so articulately pointed out, the cuts to health in this budget are going to make it harder to meet the Indigenous targets, to close the gaps in healthcare outcomes. Indeed, these outcomes, as he has pointed out, could be widened. The gap between Indigenous and non-Indigenous Australians could be widened by the decisions that are made in this budget.

These decisions are not simply wrong; they are a breach of promise. There is a reason that the Prime Minister and the Minister for Health are so keen on trotting out things that I wrote over a decade ago when I was in university, and that is because they do not want to talk about what they said when they were campaigning to be the government of Australia. They were very clear that there would be no cuts to health and education; yet we are seeing more than $80 billion of cuts to health and education as a result of the budget.

In addition to not honouring the National Health Reform Agreement, the Abbott government has cut $368 million out of health by abandoning the National Partnership on Preventive Health and another $201 million by breaking their promise and not honouring the National Partnership Agreement on Improving Public Hospital Services. These cuts are going to lead to the sacking of nurses and doctors, the closure of hospital beds, putting off infrastructure upgrades and sacking frontline healthcare workers like psychiatric nurses and psychologists.

Labor is fighting these changes, as are health experts across the country. The Australian Medical Association's national conference has called for an overhaul of the model proposed by the government because of its potential effects on the most vulnerable patients in the community. Steve Hambleton, the outgoing AMA President, said:

Overseas evidence shows that better health outcomes are delivered when barriers to primary care are low.

Front line primary care services are very efficient and are a low cost part of the Australian health system.

Encouraging patients to access this part of the health system reduces pressure on the hospital sector and can avoid the need for more expensive medical interventions.

Co-payments can hit vulnerable groups hard.

It is particularly striking that both the Prime Minister and I have shifted our view on co-payments since the early 2000s. In 2002 the Prime Minister said that co-payments were 'madcap'. He has since shifted from that view to now be at odds with health experts in Australia. I have shifted my view too, and I am proud to say that I now stand with Australian health experts and organisations like the Australian Medical Association and the Medical Journal of Australia—deeply concerned by the impact that this government's healthcare policies will have on the most vulnerable.

Brian Owler, the Sydney neurosurgeon widely known as the face of the 'Don't Rush' road safety campaign has said:

If a large proportion of their patients can't afford to pay the co-payment, then those practices might still be bulk-billing, but it will be the GP that bears the cost, and who will be financially worse off … the only way they could do it would be to see more patients. Instead of doing 6-minute medicine, they'll go to 4-minute medicine. That's not something that we want to see happening.

The government have claimed that they are going to set up a medical research fund but, in fact, as has been pointed out this really is like something out of The Hollowmen—a fund which is currently funded only by ripping out money from existing funds. Really, it is the trick pulled by Peter Costello with the Future Fund. It is not a serious investment in medical research for the future. This government's healthcare policies will leave Australians sicker and show a lack of concern for the most vulnerable.

The DEPUTY SPEAKER ( Mr Mitchell ): Is the amendment seconded?

Mr Neumann: I second the amendment and reserve my right to speak.

The DEPUTY SPEAKER: The original question was that this bill be now read a second time, to which the honourable member for Fraser has moved as an amendment that always 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.

Mr McCORMACK (Riverina—Parliamentary Secretary to the Minister for Finance) (17:11): The government came to office determined to restore integrity to the tax system. Our first order of business was to deal with the backlog of 92 announced but unenacted tax measures. This backlog was the source of considerable uncertainty for taxpayers and their advisers.    We moved quickly to announce a position on 28 of those measures and a predisposition not to proceed with the remaining 64 subject to consultation. With the benefit of discussions with the tax profession we then announced a firm decision not to proceed with 48 of those 64 measures.

While this includes measures that some taxpayers would wish we had decided to legislate, at least everyone now knows where they stand—and that is important. In some cases the Commissioner of Taxation announced an administrative approach which permitted taxpayers to reasonably anticipate a change in the law before it occurred, usually where the announced change was expected to operate retrospectively and to be beneficial for taxpayers. In deciding not to implement some announced but unenacted measures, the government also resolved to deal fairly with those taxpayers who had availed themselves of this approach.

Schedule 2 of this bill provides taxpayers who reasonably and in good faith anticipated particular tax law changes from having their tax liability reassessed or adjusted. Importantly, this is a specific accommodation that applies to a discrete list of unenacted measures. It is not a green light for taxpayers to anticipate tax law changes generally either now or in the future, including in respect of those measures the government has announced will proceed. Within the measure there are also safeguards. It will not prevent the Commissioner of Taxation from amending an assessment to give effect to a decision of the AAT or court on review or appeal.

Schedule 3 implements one of the measures the government has decided to proceed with, specifically to deny a taxpayer the benefit of franking credits they receive as a result of dividend washing. The measure addresses a loophole and helps to restore integrity to the tax system.

Acting swiftly and decisively on announced but unenacted tax measures means that we will be able to embark on the development of a tax white paper without a large backlog hanging over us. That does not mean that we will shy away from making the tough decisions that are needed in the short term to get the government's finances back on a credible path to surplus. We did that with the recent budget. We are getting on with the job of restoring integrity of the tax system. We are getting on with the job of getting Australia's finances back on track.

We are introducing a three-year temporary levy at a rate of two per cent on individuals with taxable income in excess of $180,000 per annum. This recognises that everyone has to contribute to the task of rebuilding the nation's finances. We are also reintroducing indexation of fuel excise. Clearly, this will have implications for people, particularly those in regional and rural Australia, who travel long distances. We recognise that. But people from rural and regional Australia also understand that if you are going to build roads for the 21st century then you have to pay for them. In difficult fiscal conditions, with borrowings still at record highs, this is a responsible and measured approach to securing additional roads funding.

Over time we want a tax system that rewards hard work, enterprise and entrepreneurial endeavour. We also need a tax system that is simpler and that is more resilient to changes in the way commerce is conducted these days. Thanks to the government's swift and decisive action we can focus on that task without being weighed down by a backlog of measures stretching back more than decade. I commend the bill to the House.

Ms OWENS (Parramatta) (17:15): I rise to speak on the Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014. I am quite pleased to do so because it gives me an opportunity to talk about a number of things which are either on the government agenda or well and truly included in the budget. The first one is the Medicare levy. This bill ensures that families who were previously exempt from paying the levy will continue to be if their incomes have increased in line with or less than the CPI. As such, it provides more low-income earners with free access to health care and that is a very good thing. It also provides protection for taxpayers who inadvertently failed to realise that there are changes to the tax law. It is a protection provision which gives certainty to taxpayers who are negatively impacted by the unenacted announcements by the previous government, providing that they acted reasonably in anticipating the announcement by previous governments.

This is a very good inclusion in the bill because there is, of course, a great deal of uncertainty out there at the moment with the way this government has handled itself. There are of course bills before the Senate now to abolish the loss carry-back provisions as of July last year which still have not passed the House. There are bills that abolish the instant tax write-off for small business as of 1 January this year that are still before the Senate. There is a debt levy coming as well. There is a range of things on their way and there is the abolition of the quarterly R&D credits for small business. So there is a range of things out in the ether generating quite a bit of uncertainty for business. We are likely to see, because of the lack of clarity by the government on a whole range of things, people getting caught in the middle between what they thought was going to happen and what actually does happen. In particular, I would like to talk about the Medicare levy and the changes this government has included in its budget. I want to say first that these changes are incredibly harsh and we all know that.

We are going to see people in large numbers unable to afford to go to doctors because of the GP tax. I want to point out once again, as I have a number of times in this House, that the pain the government is inflicting on families through this action is not improving the bottom line. The government claims over and over that these are harsh measures. They accept that they are harsh but they say they need to do them because they need to bring the budget back into surplus. Yet, when you look at the figures and at what they are achieving through harsh measures such as the GP tax, they will not bring the budget back into surplus any faster. In fact, the bottom line is slightly worse than it was in the Pre-election Economic and Fiscal Outlook.

We heard from the Minister for Immigration and Border Protection yesterday in question time about how PEFO contains the real figures—the figures that the government and the opposition do not have their hands on. If you compare what the government is achieving in its bottom line in this budget compared to PEFO, you see that the deficit will be $5.8 billion worse in 2014-15, which is this budget year, $12.4 billion worse in 2015-16 and $6.4 billion worse in 2016-17. When they come to the dispatch box and talk about these harsh measures being a way to improve the bottom line, we should all remember that, despite all the bluster and all the rhetoric, they have not managed to improve the bottom line at all. Their principal reason for inflicting so much pain through this self-confessed harsh budget is to improve the bottom line, yet they fail to do so by their own accounts.

The GP tax is a particularly harsh measure. We know anecdotally from people around the country, from doctors' surgeries and from professional organisations, that we are already seeing people cancel appointments on the basis that they cannot afford to go, even though the GP tax has not yet been introduced. It is a very cruel broken promise. It is designed absolutely as an attack on Medicare. We know that the Liberal conservative government has no love for Medicare. We know that because we have seen over decades how they have behaved when they got to the government benches. In the Whitlam years, we introduced Medibank. It was railed against by the conservative parties of the day and they managed to abolish it during the Fraser years. We introduced Medicare again in the Hawke and Keating years and then in the Howard years we saw the rates of bulk billing decline dramatically to such an extent that in some regional towns in particular you could wait several months to see a bulk-billing doctor. We know that they do not like Medicare.

After the Howard years we got back into government and started to work on raising bulk-billing rates again. We succeeded. In fact, in my electorate of Parramatta the bulk-billing rate at the end of 2012-13 was 95.3 per cent and 1,250,000-plus visits to doctors were bulk billed. Were the GP tax imposed on those visits in 2013, my electorate would have lost $9.1 million, which should have gone into my local economy but would have gone directly into the coffers in Canberra. That is an extraordinary amount of money for a community to lose and is an incredible impost on people who are least able to afford it.

In addition, in my community we also lost $80 million from the Westmead Hospital local services and a share of $8 million for the Children's Hospital at Westmead and two of my medical research institutes, the Westmead Millennium Institute and the Children's Medical Research Institute, had funding totalling $22 million removed in December last year and $100 million was removed from Westmead Hospital itself. So we have already had substantial cuts to the bottom lines of two of my hospitals and two of my medical research institutes, and now on top of this we are going to see quite a punitive $7 per visit tax, plus a tax on pathology and imaging.

I was down at one of my very good local health centres recently, a health centre in Harris Park which has a number of GPs plus specialist services. It is open until 10 o'clock at nights. It is open on public holidays. It works very closely with the local emergency department at Westmead Hospital. Emergency knows when it is open and quite often sends people down to the centre. I was talking to them about the red tape burden of this GP tax and the burden that they are expecting it to have on their patients. They were telling me about the high obesity and diabetes levels in Harris Park. In the neighbouring council of Holroyd, which sits up against Harris Park, the diabetes rate is 10 per cent of the population. Ten per cent of the population in that community have diabetes, and well over 50 per cent are overweight or obese. They were telling me about the regime of some of the more serious diabetes cases, who go to the doctor literally every second day to have bandages changed and have their blood tests when they need them. What an impost this would be on a person that actually had to go to the doctor every two days. What would happen? In fact, they had had some feedback from one of those people, who had said they probably could not afford it. The consequences of not affording it, if you have diabetes at that level, is amputation. It is effectively amputation. We will see people who need to go to the doctor who will not because of this $7 GP tax, and we will see people who think that maybe they need to go to the doctor who will put it off because of this $7 GP tax.

The irony in all of this—it would be funny if it were not serious—is that cutting support for primary care does not ultimately reduce your health costs. In fact, in the long run it increases them. It is an almost universal truism that what is best for the patient is actually cheaper for the taxpayer. It is cheaper for the taxpayer to immunise than to have whooping cough. It is cheaper for the taxpayer for people to go and have their blood tests and find out about an underactive thyroid or whatever, or diabetes, than let it go for a while. The earlier a person finds out and the earlier the medical intervention, the cheaper it is for the taxpayer and the better it is for the patient.

What is, of course, best for all of us is a focus on health in the first place, a focus on preventive health and staying healthy. But we have seen this government slash funding to preventive health, abolish the Australian Preventive Health Agency altogether and walk away from the federal responsibility for keeping people healthy. We saw John Howard do that as well. I remember sitting on this side between 2004 and 2007 debating issues of health and hearing the Prime Minister of the day, John Howard, talk about how the federal government does not have responsibility for preventive health. Again, it is an example of a government that considers that its bottom line today is more important than the bottom line of the future or the health of future generations. This is not a government that is prepared to invest now to save costs 10 or 15 years down the track and to save costs for families who ultimately will bear the price of this mistaken policy.

I am not the only one. We on this side are not in any way the only ones who are saying that this is a bad idea. We have had people, from doctors and the professional associations, talking about this, saying that this is a bad idea and that it can only lead to people avoiding visits to the doctor that they otherwise should have. In fact, we know from international experience that people will not seek preventive care or follow-up treatment where a GP co-payment is applied. That is exactly the opposite of what we need in this country. The only people advocating for this are the Abbott government and the Commission of Audit. The AMA, the college of emergency physicians, the Doctors Reform Society, the Public Health Association, the Royal Australian College of General Practitioners, the Consumers Health Forum, the Australian Healthcare and Hospitals Association and countless health academics and economists have advised against this tax, but the government is going to do it anyway. They have advised against this tax for two reasons. It will cause people who should go to the doctor to put it off or not go at all. Ultimately, when that happens, it increases the health cost, not decreases it. I, like so many on this side of the House, urge the government to seriously reconsider this. This is a bad tax that affects the health of our community and affects, ultimately, our health costs down the track. I condemn it. We on this side condemn it.

Mr HOGAN (Page) (17:28): I will digress in a minute, because we seem to be talking about a lot of things that are not in the Tax and Super Laws Amendment (2014 Measures No. 2) Bill. I will come to those in a minute. An important aspect of this bill is that we are going to increase the Medicare levy low-income threshold for families for the 2013-14 financial year to be in line with movements in the consumer price index. This will ensure that the thresholds keep pace with consumer prices and that low-income families who did not pay the Medicare levy in 2012-13 will continue not to pay it in 2013-14 if their incomes have increased in line with or by less than the CPI. This is very important because, as you know, if you do not index those types of thresholds, with bracket creep you can start to get people who are affected by that.

The low-income threshold for couples and families will increase by $674 to $34,367, and the phase-in threshold will increase by $793 to $40,431. The amount added for each dependent child will also increase by $62 to $3,156. This will put money back into the wallets of low-income earners. And, as the Parliamentary Secretary to the Minister for Finance noted earlier in this debate, this bill is also about restoring integrity—and, might I add, certainty—to the Australian tax system.

Just to digress, though: the other side have been speaking a lot about things that are not even in this bill. Can I just comment on the Medicare co-payment and talk about what that is going to fund. That is going to fund the Australian Medical Research Future Fund. Earlier speakers on the other side were talking about things like preventative health and other issues. This fund will do more for preventative health and do more for the prevention of disease than anything that the history of this country has ever seen. On this side of the chamber, we are builders. We build things. We are about making this country better, stronger and, in this context, more healthy. We want this fund to be a world leader in medical research. How exciting is that for every citizen of this country?

I heard the member for Fraser talk earlier about how it is a trick. I think that is what he said. I think his words were that it is a trick like the Future Fund, which Peter Costello started. Well, if it is anywhere near as successful as the Future Fund, bring it on. The Future Fund, as we know, was—again—this side of politics building something. It was this side of politics looking into the future and wanting things to be sustainable. We saw that we had public servants who were going to retire, and there was nothing put away for the obligations that the government had for their superannuation, so that fund was started by this side of politics because we ran a responsible budget. We put $50 billion into it, and over the last six or seven years that has grown—I am not sure of the exact number—to be about double what it was. So there we have now a $100 billion fund which is sitting there because we built it, which has every public servant's superannuation obligation funded. That is what the medical research fund is like. If the medical research fund is nearly as successful in getting results for preventing disease and for improving the health of this country, that will be absolutely fantastic.

As the Parliamentary Secretary to the Minister for Finance also noted, we were elected, and we were confronted with a backlog of 92 announced but not enacted tax and superannuation measures, one of them dating back as far as March 2001. Again I come back to the point of sustainability. The one thing that tax systems have to have is certainty so that the investing public and businesses know what is in the tax system and there are not any surprises there. The tax system—unfortunately, as some people may think—has to be not only certain but competitive. I know that you know this, Mr Deputy Speaker Kelly. You have a business background. You have business experience, and you know that companies now can move. Companies are not always confined by geography. There have been examples where countries have lowered the corporate tax rate and—guess what?—they have collected more money. So our tax system not only has to be about certainty, which this bill certainly is, but also has to be competitive.

The backlog that this bill is dealing with had created considerable uncertainty for many taxpayers in the business community. The government has taken decisive action to resolve this backlog. We quickly moved to announce our support for 28 of these measures and a disposition not to proceed with the remaining 64, subject to consultation. We do not make decisions like those the member for Wentworth continually tells us about—decisions about NBN on the back of beer coasters—or irresponsibly. We make decisions because we consult. We go to people in the real world, in the real business world or the real tax world. We go through; we analyse it, and we make responsible and—dare I say it—adult decisions. That is what this bill is about with these tax measures.

Following the discussions that we had with the community, we said we would not proceed with 48 of those measures. However, in deciding not to go ahead, the government had to resolve how to deal with those taxpayers who had, in good faith, anticipated these changes before they were enacted. So again, as adults, being responsible, we said that because they had acted in good faith it was incumbent upon us also to act in good faith, and those protections would be measures in this bill.

The protection provision will protect and provide ongoing certainty for taxpayers who have self-assessed on the basis of the particular announced taxation measures that the government has decided not to proceed with. The commissioner's usual amendment and recovery powers apply in circumstances where the conditions for protection are not met. The measure does not apply more generally to measures that are not listed or to those that may not proceed as a result of future decisions.

The third aspect is related to dividend washing. Every sector of the economy and every sector of our world certainly has its own language, and 'dividend washing' is obviously very specific to the finance world. A lot of people get very confused about it. This is also referred to as 'distribution washing'. It allows an entity basically—Mr Deputy Speaker Kelly, you may well understand this and have dealt with this—to obtain multiple franking credit entitlements in respect of a single underlying shareholding. Common sense tells you that that should not happen.

To dividend wash, an entity sells shares shortly after becoming entitled to receive the franked dividend in respect of those shares, then shortly afterwards the entity purchases a new and substantially identical set of shares that also provides an entitlement to another fully franked dividend. This dividend washing enables sophisticated shareholders to effectively trade their franking credits to each other, with some shareholders receiving two sets of franking credits for the same parcel of shares. This practice can allow foreign shareholders who cannot use franking credits to sell their franking credits to domestic investors who can use them.

This measure amends the tax law to deny the benefits of any additional franking credits received as a result of dividend washing. The measure is targeted at sophisticated taxpayers who are exploiting a loophole in the existing provisions. Investors operating within the intent of the existing law will not have anything to worry about. Since this measure was announced, dividend washing already has been significantly curtailed.

This is a tax bill. As a country we need certainty in our tax laws and we need our tax laws to be competitive. As a government we look at the two sides of the equation: one side is spending; the other side is income, which is tax collection. What the budget and this bill are about, as we say in this chamber every day, is for our spending to be sustainable. For people who rely on the age pension, on the public health system, on the public education system or on any other welfare spending of this government, we want that to be sustainable. And for that to be sustainable the spending has to be responsible. On the tax side of the equation, that has to be competitive and certain. When you get both of those right, people can live in a system and know that they have comfort.

Unfortunately, a lot of governments and a lot of countries around the world do not get this right. It is very easy for a politician when they are in government—dare I point over there, Mr Deputy Speaker—to walk around throwing money around. That is very easy and it is lovely—there is nothing like walking into a group of people and splashing some money around because you might well feel like a hero. When politicians do that too often—there are many countries in Europe, and I would put the United States in the same category, where politicians do too much of that—without being responsible, they get themselves into trouble.

As a country we had the best set of books. Six years ago, when the coalition left government, we left this country with the best books in the world. We had a $20 billion surplus in the last year we were in government and we had put $50 billion aside into the Future Fund. We had a great set of figures. We were able to fund the welfare programs, health and infrastructure with certainty because we were being responsible. In six years we went from having the best set of figures in the Western world to having the fastest-growing debt of any country in the Western world. The result, in just that short space of time, is that we are now spending $1 billion a month in interest. That rolls off the tongue too easily, but that is $12 billion a year. What could we spend that on? One of the biggest infrastructure projects in my electorate, Mr Deputy Speaker Kelly, is also a major infrastructure project in the country: the duplication of the Pacific Highway. Do you know how much it is to do that? Do you know how much federal money is going into that? It is $5 billion to $6 billion. It has been a massive infrastructure project that is taking us decades to build and $5 billion or $6 billion worth is left to do. That is a lot of money. That is half of our interest bill in one year. The sad thing about that, Mr Deputy Speaker—and you know this because you have been a businessman—is that we will have that interest bill again, next month, next year. We have not repaid the debt; that is just the interest on the debt.

This bill with its taxation measures are about certainty. They are about businesses being able to function in this economy efficiently, effectively and with certainty so that as a government we can fund the essential services like health, education and welfare, as we should. I commend this bill to the House.

Dr JENSEN (Tangney) (17:41): Today I am pleased to rise in support of the Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014. This bill has been brought on to address three matters. One is to increase the Medicare levy low-income thresholds for families in line with increases in CPI. These changes ensure that Australians who did not pay the Medicare levy in 2012-13 will continue to be exempt if their incomes have risen in line with or by less than CPI. The second is to introduce measures to protect taxpayers who have self-assessed on the basis of particular announced taxation measures that the government has decided not to proceed with. The third is to improve the fairness of the taxation system by amending tax law to deny an entity the benefits of any additional franking credits that an entity receives as a result of a known process known as distribution washing.

On 13 May the Treasurer passed down the coalition's first budget. It was a tough budget but it was fair budget. At the heart of the budget was the notion to restore integrity to Australia's finances. We delivered a budget of both saving and building. It is a budget that ensures that we will get back to living within our means, just like households must do. In delivering the budget the coalition ensures that the effort to restore the mess left by six years of Labor chaos and calamity is shared amongst all Australians, while at the same time ensuring that it is done in a fair and equitable manner.

The changes under schedule 1 build on this notion by ensuring those Australians who did not pay the Medicare levy in 2012-13 are not unfairly affected by having the Medicare levy imposed on them if their income has risen in line with or by less than CPI. This measure leaves more money in the pockets of affected families, money that will make the day-to-day costs of living easier. It is an important measure because last year I and the Liberal Party campaigned on a platform of easing cost-of-living pressures for families. This is one such measure that will support that promise. The coalition is the best friend that Medicare has ever had. The Minister for Health has already spoken to the challenges Australia's health system faces and I commend Minister Dutton's recent speech to CEDA to anyone who is interested in the reasons for reform in this area. In short, the coalition is making the tough decisions to ensure the health of our system is sustainable into the future.

It is a disappointment that those opposite and their brethren in the other place would block the coalition's plan to fix Labor's mess. Their publicly stated aversion to passing around $18 billion worth of announced reforms to health, education and welfare is without foundation. Nor do those opposite respect our mandate to repeal the carbon tax and the mining tax, which would further ease pressures on the household budget. As has been restated many times in this place, scrapping the carbon tax will save households up to $550 annually. Schedule 2 of the bill, importantly, puts in place measures that bring to light the inefficiency of the dark Labor Rudd-Gillard-Rudd years.

Soon after the government was elected we were advised that 96 tax and superannuation announcements, with one dating back as far as March 2001, had not been legislated. In November the Treasurer and Assistant Treasurer announced that the coalition would finally deal with the backlog of announced but unlegislated tax and superannuation measures. This backlog created a significant operational uncertainty for businesses and consumers. Labor never did or never will appreciate the real-world consequences of stalled decisions on business. They never understood the impact of the delays and indecision and they still operate in a policy myopia bereft of any understanding of the importance on acting upon announcements.

Schedule 2 exists because of Labor's failure to deal with 96 tax and superannuation announcements before the change of government. These were measures that were announced and shelved to gather dust, because they were too busy concentrating on infighting and not on the important job of running the country—infighting and dysfunction that led to the fastest spending growth and the third largest increase in net debt in the OECD. It is a burden that those on the other side deny and are happy to wash their hands of, instead choosing to foist the responsibility for the decisions they made upon the next generation. This legacy is costing Australia $1 billion per month in interest payments or $500 annually for every man, woman and child in Australia. This is money that could be directed at hospitals, improved roads or schools. What is sad about the need to repay this money is that it is not being captured within the Australian financial sector. This is good money that is being sent overseas.

What were some of those 96 measures that were ignored or too uncomfortable for Labor to deal with? There was the famed self-education expenses cap, a proposal that would put a cap of $2,000 on the amount people could deduct for self-education expenses. At the time, the world's best Treasurer said that this was to target people who made large claims for first-class airfares, five-star accommodation and expensive courses.

Unfortunately for the member for Lilley, the reality could not be further from the truth. It does not take much to scratch the surface and discover that 80 per cent of the people who claimed this benefit are earning less than $80,000 annually. I was pleased that the coalition, sensibly, did not proceed with this measure. People on this side of the chamber will recall Labor's grand plan to close down the car-leasing industry with their proposed changes to the fringe benefits tax laws. These changes would make it harder for people to have a company or salary-sacrificed vehicle.

This $1.8 billion hit would have, according to the Australian Salary Packaging Industry Association, affected roughly 500,000 employees. Approximately 70 per cent of these people are on a salary that is less than $100,000 per annum—everyday Australians whose employers wanted to provide an additional benefit to their salary package and be more competitive in the marketplace.

Because the coalition understands business and does the hard yards to understand the real-world impact on people's hip pockets, we scrapped this misguided tax. It was a commitment we took to the election and one that we honoured.

As promised by the Treasurer, today we are honouring our commitment to the Australian people. Today we are ensuring that those people who self-assessed their taxation in good faith that Labor would stick to their word and implement the measures they announced while in government will not be penalised. The changes in this bill are retrospective acknowledgement that people made decisions on the little trust that they had left in Labor, believing they could deliver on their promise, only to be bitterly disappointed.

I am proud of our government's ability to hit the ground running and make decisive decisions that were holding business to ransom, decisions that deal with the ineffectiveness of those members opposite.

At heart, I believe in ensuring that we have a fair tax system and our amendments to schedule 3 of this bill are another step towards ensuring equity is maintained.

Those in a position to take advantage of the share market should adhere to the spirit of the rules governing the purchase and selling of stocks. Currently, sophisticated investors can undertake a practice known as 'distribution washing'. This occurs when an entity sells an interest shortly after becoming entitled to receive a fully-franked distribution in respect of that interest and then, shortly after, purchases a new and substantially identical interest that also provides a second entitlement to another fully-franked distribution.

The imputation system contains integrity rules to ensure that franking credits benefit only the true economic owners of shares and to ensure that franking credits are only available to shareholders in proportion to their shareholdings.

As was highlighted by the Parliamentary Secretary to the Treasurer, distribution washing contravenes both these principles. By closing this loophole we are ensuring that the tax system remains fairer for all. We are ensuring that those who have the capacity to take advantage of the share market are doing so in a way that does not give them an unfair advantage. This measure will raise $60 million, money that can be reinvested in health, education and building the roads of the 21st century. Already, since the announcement of the policy, there has been a significant decrease in activity that could be perceived as distribution washing.

While this affects a small portion of the market, it is important to note that trading activity has continued to grow. The coalition went to the election promising the Australian people that we would fix the budget. We promised to create jobs and we promised to break the cycle of debt and deficit that had been placed upon the Australian people. We made these promises because getting the economic fundamentals right is in the Liberal Party's DNA. Today the ABS announced that Australia's gross domestic product grew 1.1 per cent in the first three months of the year to bring Australia's annual growth rate to 3.5 per cent over the 12 months to March. This means on an annualised basis Australia's economy is now growing more quickly than the US, UK or New Zealand. In the words of the Treasurer, we can be cautiously optimistic that our plan is working.

Dr Carl Sagan once stated, 'You have to know the past to understand the present.' When the coalition left office in 2007 Australia had $20 billion in surplus and $50 billion in the bank. Australia is in the position that we are today because of the decisions Labor made over the last six years: decisions like the pink batts scheme, concocted and costed in two days with little or no consultation. Those two fateful days left a dark legacy and the stain upon the nation with the death of four good citizens and an economic cost of more than $2.8 billion. Decisions like the $16 billion BER for the construction of Gillard memorial halls that were overpriced and in some cases not even fit for purpose. Decisions like the gold-plated fibre-to-the-home NBN, which was conceived between Prime Minister Rudd and communications minister Stephen Conroy in a plane with an initial public investment of $4.7 billion. But, as was shown upon the review last year, it ballooned out to more than $73 billion and would have missed its completion date by three years. Decisions like the economic stimulus package which sent $900 cheques to around 27,000 Australians living overseas and 21,000 dead people.

The coalition is committed to ensuring sensible measures are put in place to address those failings, wrongs that left a Labor legacy of 200,000 more unemployed people, gross debt that without action was projected to rise to $667 billion, $123 billion in cumulative deficits, more than 50,000 illegal arrivals by boat, the world's biggest carbon tax and $191 billion in unfunded spending measures. It is now time for Australia to start repaying the credit card. Since coming to government we have taken practical steps to give Australia the bright future it deserves. The Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 is another step on the road to recovery. I commend the bill to the House.

Mr LAMING (Bowman) (17:55): This is an opportunity to commend Australia's tax and transfer system and in particular shine a light on schedule 1 of this bill, which makes changes to the Medicare low-income threshold. With your indulgence, Deputy Speaker, I will focus specifically on the schedule that has not been addressed in the debate so far: changes to the low-income threshold which make a significant change for people living with incomes in the range of $20,000 to $35,000. I mention it because it is almost an untold story in the budget and many of us look with a certain bemusement at left-wing journalists who attempted to make broad assumptions about how people would be worse off in the 2014-15 budget when in reality they were unable to incorporate some of these very positive changes around safety nets that gave low-income Australians a real chance of being able to both afford the health system we are in at the moment but also weather periods when there are significant out-of-pocket costs.

Every health system in the world grapples with this simple fact that there are some people with chronic, complex and expensive health needs but there are also people who experience individual years of very high out-of-pocket health costs. Australia has quite an elegant way of dealing with it through safety nets introduced under the Howard government. I guess one of my concerns is that the level of understanding of these safety nets is quite poor. When you speak to people who are potentially eligible for the safety nets, many have not registered with the Department of Human Services to be eligible. Many are not tracing their use of general practice, optometric and other Medicare eligible out-of-hospital services to know that they are hitting the safety net at all. This is a very important piece of information not just because they exist but because in this budget we work to strengthen those thresholds for low-income earners and it appears in this legislation under schedule 1. I want to emphasise that now.

Stepping back in context, Australia has the most finely balanced, exquisitely balanced, health system on the planet with about half our population having access to private health insurance and half using a very high-quality public system. We achieved that balance not by accident. We achieved it by a coalition committed to getting there. We got there through health minister Dr Michael Wooldridge and his three-pillared approach to building confidence in private health care: the 30 per cent rebate that has been the subject of considerable detrimental tweaking by the previous Labor government; the Medicare levy surcharge, where if you do not take out private health insurance you pay an additional Medicare levy of between one and 1.5 per cent; and, finally, community rating, which works to ensure that, regardless of your health and age, you can enter and contemplate private health insurance even if you live in Rockhampton without having to be concerned about paying more. While there are obviously elements of adverse selection avoided, some people do criticise that system because of the moral hazard around potentially engaging in unhealthy behaviour but still paying the same price for your private health insurance. That is one for another day.

Back to the Medicare levy, the surcharge for high-income earners who do not take up private health insurance is probably the most powerful of those three. It is a piece of policy unique to Australia, which was the first to adopt it in the late 1990s. Once again it is one of those elements of coalition social policy that has been looked at, examined and adopted in other parts of the world. The Medicare levy surcharge was in place mostly as a way to get more people to take out private health insurance, but let us make one thing clear: the Medicare levy does not pay for the Medicare system. The entire Medicare levy component, as discussed in schedule 1 of this bill, is only about 15 per cent of the total Medicare bill, so it is a contribution but in no way covers it.

At these levy calculations which change as a result of this budget and this bill, we know that at lower incomes people who are not paying tax into the system are not actually triggered to pay the Medicare levy. That makes perfect sense, doesn't it. What happened in this budget was that these thresholds were increased even more than CPI. That has important implications for some people who are living in those income ranges. If you are below the threshold, and that is $20,542, there is no Medicare levy payable. Between about $20,000 and $24,000, you are paying for 10 per cent of any of your excess above the $20,000 figure. But once you hit that $24,168 then the entire taxable amount is subject to a Medicare levy surcharge. These are reasonable as are the pensioner tax offset concessions, which ensure that if you are receiving a full pension the same thresholds are not triggered and you do not start paying a Medicare levy. For every reason this is good policy because there is no point having a tax churn down in the group or pulling into a tax system simply to pay a levy. That makes good sense.

What is important are the changes that we have made to the Medicare safety net. We have seen reductions, significantly, to $400 for singles and families, $700 for those who receive family tax benefit part A and $1,000 for others. People do not even know that these safety nets exist in many cases, and they need to. They need to know that the coalition has worked to ensure that families who are living in various parts of Australia can now still come under the one family safety net. That is an important piece of policy that makes our health system even more affordable.

The last important piece of policy intervention was to cap the amount relative to the scheduled fee that can be charged from an out of pocket, and that would be to prevent gouging in instances of very high medical bills that depart significantly from the Medicare scheduled fee. That makes sense and it avoids that gaming situation where a medical practitioner may say, 'You've already hit the safety net for the year so all of this will be paid for by the government, so please don't feel bad about this particularly large bill.' That gets addressed as well. People need to know when they hit the $400, $700 and $1,000, these simplified, much lower and much stronger safety nets are now in place thanks to the Abbott government. The Howard government was responsible for these safety nets. The Abbott government has strengthened them and schedule 1 of this bill works in a complementary way to ensure that people who are not paying tax are not hit by the Medicare levy.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (18:02): I thank those members who have contributed to this debate. Schedule 1 of the Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds in line with the consumer price index.

The families' threshold will increase from $33,693 to $34,367 and the threshold for each dependent child will also increase from $3,094 to $3,156. The amendments to the Medicare levy low-income thresholds apply to the 2013-14 year of income and future income years. The Medicare levy low-income thresholds for individuals and pensioners have already been increased by more than the growth in the consumer price index between 2011-12 and 2013-14. Full detail of this measure is contained in the explanatory memorandum.

Schedule 2 of this bill introduces an important measure to protect taxpayers who have self-assessed on the basis of particular announced taxation measures the government has decided not to proceed with. This protection measure arises from this government's decisive action to restore integrity to the taxation system by clearing the large backlog of announced but unenacted measures left by the previous government. This backlog created considerable uncertainty for affected taxpayers and their advisers. The protection provision will provide ongoing certainty for taxpayers that were impacted by an unenacted announcement for which protection is provided. Full detail of this measure is contained in the explanatory memorandum.

Schedule 3 of this bill amends the tax law to deny an entity the benefits of any additional franking credits that an entity receives as a result of distribution washing. To distribution wash, an entity sells an interest shortly after becoming entitled to receive a fully franked distribution in respect of that interest, then shortly after purchases a new and substantially identical interest that also provides a second entitlement to another fully franked distribution. The imputation system contains integrity rules to ensure franking credits only benefit the true economic owners of shares and to ensure franking credits are only available to shareholders in proportion to their shareholdings. Distribution washing contravenes both these principles by enabling sophisticated shareholders to effectively trade their franking credits and by enabling some shareholders to receive two sets of franking credits for effectively the same parcel of shares. It effectively allows foreign shareholders who cannot use franking credits to sell their franking credits to domestic investors.

Since the announcement of this policy, there has been a significant decrease in activity that could be perceived as distribution washing. Of course, this only affects a small portion of the market. Overall trading activity has continued to grow, with the value of trading increasing by five per cent since this policy was announced. Addressing distribution washing by closing the loopholes will support investment by improving the efficiency and integrity of the tax system. It will also help ensure the long-term sustainability of the imputation system for all Australians. Full detail of this measure is contained in the explanatory memorandum.

I note that the shadow Assistant Treasurer has once again moved an amendment in relation to legislation before the House and take this opportunity to advise that the government will not support the amendment that has been moved by the opposition.

Dr Leigh interjecting—

Mr CIOBO: I hear the shadow Assistant Treasurer say it is groundhog day. We continue to see silly amendments being put forward by the opposition, but it is entirely consistent with the silly approach Labor adopted to economic policy in Australia.

I note in the amendment that the Labor Party attempts in some way, shape or form to make reference to the government's co-payment by referencing, to use the words of opposition, 'the government's attack on universal health care through its introduction of the GP tax'. The extraordinary thing about this is that the shadow Assistant Treasurer, the person who has moved the second reading amendment, is indeed the one person who it would appear at first blush on the opposition benches is least able to move this amendment. I wonder whether the actual reason this amendment has been moved by the shadow Assistant Treasurer has less to do with a belief in policy or more to do with an attempt by the shadow Assistant Treasurer to earn some stripes with respect to his credibility amongst his Labor brethren.

In particular, the fact that the shadow Assistant Treasurer would attempt to, in some way, insinuate that a co-payment for a GP consultation is not an appropriate policy tool is slightly strange, given that the shadow Assistant Treasurer has put forward his strong support for a Medicare co-payment in the past. In fact, in 2003, in The Sydney Morning Herald, the shadow Assistant Treasurer wrote:

As economists have shown, the ideal model involves a small co-payment—not enough to put a dent in your weekly budget, but enough to make you think twice before you call the doc. And the idea is hardly radical.

He also said:

At the heart of the problem is that in health care, as with other goods and services, free provision leads to overconsumption.

So you can understand, I am sure, Mr Deputy Speaker, my slight bemusement at the amendment that has been moved by the shadow Assistant Treasurer, and you can understand the reason that not only I and other members of the coalition but also, no doubt, members of the public wonder about the true rationale for the amendment that has been moved by the shadow Assistant Treasurer—because clearly, given the shadow Assistant Treasurer's academic background in economics, and given the writings that I have just quoted from The Sydney Morning Herald, which the shadow Assistant Treasurer provided, I assume, as an op-ed, you can understand that the shadow Assistant Treasurer is in fact a devotee of a co-payment when it comes to medical consultations.

Dr Leigh: Mr Deputy Speaker, I rise on a point of order under standing order 68 and the Speaker's ruling earlier today. I made a personal explanation earlier today, making it clear that I do not now support a GP co-payment, and I would ask you to instruct the honourable member not to force me to re-litigate that personal explanation.

The DEPUTY SPEAKER ( Mr Craig Kelly ): I thank the member for Fraser. The Parliamentary Secretary to the Treasurer has the call, and I would ask that he take into consideration the requirements of section 68 as explained by Madam Speaker earlier today.

Mr CIOBO: I will certainly do so, Mr Deputy Speaker. So let me be quite particular with the words I use. It is very clear that the shadow Assistant Treasurer held the view that it is not radical for there to be a co-payment with respect to medical consultations, and, furthermore, that the fundamental problem with the so-called free provision of a service is that it leads to overconsumption. I have no doubt that the aspirational side of the shadow Assistant Treasurer means that he has now got to walk away from his economics background, and he has now got to walk away from his true belief.

But that goes to the very core of the point I make, which is that there is, understandably, a clear understanding on this side of the House, and among the general public, that this amendment has been moved for the very same reason that the shadow Assistant Treasurer jumped to his feet just now, and indeed the exact same reason that the shadow Assistant Treasurer offered a personal explanation, and indeed the same reason why the shadow Assistant Treasurer has walked away from his belief that a co-payment is good policy—for one reason and one reason alone, and that is that the shadow Assistant Treasurer wants to make sure that he is in lock-step with Labor Party policy. And so—

Dr Leigh: Mr Deputy Speaker, I rise on a point of order. As you are aware, members may not impugn the motives of other members, and I would ask you to draw the speaker's attention to that part of the standing orders.

The DEPUTY SPEAKER: The parliamentary secretary has the call, and I do draw his attention to that part of the standing orders.

Mr CIOBO: I take that on board, Mr Deputy Speaker. But it is self-evident to anybody who has been listening to this debate—and not only to this particular debate but to the general debate around a co-payment—to understand the rationale for the decision of the shadow Assistant Treasurer.

So it is that we see the Labor Party walk away from good policy. We see the Labor Party walk away from good economic policy, from good social policy and from an appropriate initiative taken to attempt, in some way, to make sure that Australia lives within its means with respect to the budget.

So the fundamental problem with the amendment that has been moved by the shadow Assistant Treasurer is that Labor is not proposing—either through this amendment or in the discussion that they have been having through the media and with the general community—to put forward any alternative plan for how Labor would fund the policy approach that Labor believes this country should be taking. It is one thing to be as populist as possible. In fact, it is understandable that an opposition, having been comprehensively rejected by the Australian public, would take the view that they need to do all that they can to attempt to appeal to the masses, so to speak, in their policies. But it is a separate thing for an educated individual like the shadow Assistant Treasurer to walk away from sound policy, to walk away from an approach that he himself was a fierce advocate for, for many years—a position which he took the decision to walk away from only in the last several days, knowing full well that it was done to benefit him politically. So the question that the constituents of Fraser can ask themselves legitimately, and the question that the constituents of Fraser can ask legitimately of their federal member, is: how many other matters of principle is he prepared to walk away from in pursuit of his political career? That is the fundamental question that the electors of Fraser can ask. How many other matters of principle is their elected representative willing to walk away from in pursuit of his ambition? Because it is crystal clear that he is prepared to walk away from this matter—something that he has believed in, obviously, for more than a decade.

Unfortunately, the approach of the member for Fraser—that is, the approach to reject sound policy in pursuit of short-term populism—is entirely consistent with the broader approach of the Australian Labor Party. The Australian Labor Party's approach with respect to this amendment and, more broadly, economic policy, is to reject any adherence to sound policy and to embrace a short-term, knee-jerk reaction in the hope that they can in some way build some political credibility off the back of some of the short-term concern that elements of the community express with respect to the budget initiatives that were announced.

I have said on numerous occasions, and the Prime Minister, the Treasurer and others have said on numerous occasions, that we understand that this budget and the initiatives within the budget are not popular in all strata of society, and we understand that there are elements in the community that dislike some of the initiatives. But the fundamental, inescapable fact is that these decisions are a consequence of six years of reckless spending, of six years of poor economic management and of six years of a failed economic approach that meant the pathway this nation was on, where we were borrowing a billion dollars a month just to service the interest on the debt that Labor had accumulated, was unsustainable. But for the fact that Labor had racked up so much debt and so much deficit in such a relatively short period of time, these kinds of decisions would not be necessary.

If Australia were as healthy today in an economic sense as it was when the Australian Labor Party was first elected back in 2007, these types of choices would not necessarily have to be made. But now, faced with a crippling debt burden and faced with a prognosis from the independent Parliamentary Budget Office that indicates that unless structural change is made now, Australia will not be able to respond in the future, this government has done the right thing and taken the decisions that needed to be taken in order to live within our means. I commend the bill to the House.

The DEPUTY SPEAKER ( Mr Craig Kelly ): I thank the Parliamentary Secretary to the Treasurer. The original question was that this bill be now read a second time. To this, the honourable member for Fraser has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (18:18): by leave—I move:

That this bill be now read a third time.

Original question agreed to.

Bill read a third time.

Dr LEIGH (Fraser) (18:19): I move:

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

"whilst not declining to give the bill a second reading, the House condemns the Government for eroding market based incentives to protect the environment."

I will return to the specifics of that second reading amendment after briefly outlining the purpose of this bill.

The Excise Tariff Amendment (Product Stewardship for Oil) Bill 2014 will increase the rate of excise and excise equivalent customs duty applying to oils from 5.449 to 8.5 cents per litre or kilogram to address the cost of the Product Stewardship for Oil scheme. The kinds of oils to which this would apply, as I understand, are oils like kerosene, turpentine and thinners.

The opposition supports any move to ensure thoughtful and sustainable use of our precious natural resources. The Product Stewardship for Oil scheme—the PSO—encourages increased collection and recycling of used oil in Australia by providing oil recyclers with product stewardship benefits.

But unfortunately, the government's commitment to protecting our natural environment does not extend much further than tokenistic gestures. The government simply has no credibility when it comes to the environment. In fact, the member for Batman beside me will sometimes interject when the Minister for the Environment jumps to his feet: 'He's not the Minister for the Environment! He's the Minister against the Environment!' A government that lacks a minister for science effectively lacks a minister for the environment.