WYATT ROY (Longman) (10:07): On behalf of the Joint Standing Committee on Treaties, I present the committee's Report 140: Treaty tabled on 13 May 2014: Agreement between the Government of Australia and the Government of the United States of America to Improve International Tax Compliance and Implement FATCA—interim report.

Report made a parliamentary paper in accordance with standing order 39(e).

WYATT ROY: Today I present the Joint Standing Committee on Treaties Report 140, an interim report on the committee's inquiry into the agreement between the government of Australia and the government of the United States of America to improve international tax compliance and implement the Foreign Account Tax Compliance Act, or FATCA.

The agreement is an unusual treaty action in that it has been negotiated to assist Australian businesses in complying with a United States tax law.

FATCA comes into effect on 1 July 2014.

To ensure the agreement and its related legislation is in place by that date, the Treasurer, the Hon. Joe Hockey MP, wrote to the committee to request that the committee expedite its consideration of this agreement.

If the 1 July deadline is not met, Australian financial institutions with interests in the United States will be faced with either significant compliance costs associated with FATCA or a withholding tax of 30 per cent on income derived in the United States.

The committee, despite reservations about the agreement, appreciates that it must make the best of a less than satisfactory situation.

Accordingly, the committee resolved to support the Agreement between the Government of Australia and the Government of the United States of America to Improve International Tax Compliance and Implement FATCA and recommend that binding treaty action be taken.

The committee will table a final report on its inquiry into this agreement in due course.

On behalf of the committee, I commend the report to the House.

Mr BANDT (Melbourne) (10:11): I move:

That this bill be now read a second time.

There are few credible commentators left anywhere who do not regard the decision by the so-called coalition of the willing to invade Iraq as one of the most significant mistakes in modern Western foreign policy. At the time, Iraq was not threatening war. We now know too that there never were the 'weapons of mass destruction' that we were told there were. Australia committing troops to this war was wrong, not just for the credibility of those who made that flawed decision but, primarily, for those on the front line and of all parties involved in the conflict. The decision by Australia to send our troops to war in Iraq, based on an untruth, has meant that we have become complicit in the hundreds and thousands of deaths of Iraqis that resulted and in the deaths of those who continue to lose their lives. We have also become regarded by a generation of young Iraqis an occupying force. For the record, it is important to state what the casualties as a result of the war are. None of the estimates are fewer than 100,000. Some are higher than a million. And, as is now clear, this conflict has entered a terrible new phase which means that the numbers of people who continue to die in the ongoing sectarian conflicts across Iraq continue to rise. This is an unparalleled tragedy. The latest news reports suggest that ISIS has advanced closer still to the Iraqi capital, Baghdad.

I would like to make this point about the Defence Amendment (Parliamentary Approval of Overseas Service) Bill 2014, which I am introducing today. If this bill had become law in 2003 and parliament had the authority over troop deployments, perhaps the folly of this engagement, the true nature of the flawed decision, would have been revealed if the decision to deploy troops had been fully and publicly debated by parliament. If parliament had had the chance to debate the Iraq war and the sending of our troops into conflict, it is arguable that we would not have been complicit in this disaster. And make no mistake: the possibility that Australia commits troops again in some form or another to Iraq is now real.

Back in 2003, we were told that our involvement in Iraq would stabilise the country and bring peace and was the best way to tackle terrorism. Yet look at Iraq today. More war does not cure more war. Iraq today shows that. And yet more war is what some commentators are advocating. But the Australian parliament, seemingly the country's pre-eminent decision-making body, remains powerless over debating and deciding on sending troops to war. The need for the parliament to have the authority to deploy troops is therefore very real. Following Iraq, of course, Australia has also fought a long and costly war in Afghanistan. By 'costly', I am primarily referring to the cost of the Afghan war on Australian troops. Forty troops have lost their lives in Afghanistan, and two Australian defence personnel lost their lives in Iraq.

It is because of the seriousness of committing troops to conflict that the Australian parliament must debate such a momentous decision. There are few more momentous decisions that a country can take than to go to war or to send its troops into conflict. More often than not, this involves young men and women putting their lives on the line. For this reason, above all else, it is to me and to the Greens inconceivable that such a momentous decision is left to the executive alone. As we saw with the parliamentary debate on Australia's involvement in Afghanistan in 2010, each elected representative that has spoken made worthwhile contributions on behalf of their constituents—constituents who, through their representatives in a democracy such as ours, should have a say in any question to deploy troops.

That the Defence Act does not currently allow for that level of decision making, scrutiny and debate on such important questions is, I believe, a failure of democracy. The Defence Amendment (Parliamentary Approval of Overseas Service) Bill 2014 inserts a new section 50C into the Defence Act to require that decisions to deploy members of the Defence Force beyond the territorial limits be made not by the executive alone but rather by parliament as a whole.

This bill was initiated by the former Australian Democrats and supported by the Australian Greens, who took carriage of the bill after 2007. It is the latest iteration of bills introduced into the Senate since 1985 that aim to increase the transparency and accountability of governments by involving parliamentary discussion and scrutiny of the decision to deploy Australian military forces to overseas conflicts. It was reintroduced by my colleague Senator Ludlam in late 2008 and referred to the Senate Standing Committee on Foreign Affairs, Defence and Trade in August 2009. The committee, while neglecting to hold a hearing, nonetheless made a useful critique of the bill without undermining its essential purpose, in its report of February 2010. Senator Ludlam's dissenting report into the bill provided the transcript of an informal 'hearing' undertaken subsequent to the majority committee decision not to take evidence directly. I am proud to be the latest in a line of parliamentarians to sponsor a bill with this purpose.

This bill seeks to address the absence of checks and balances on the power of the executive which are characteristic of, and broadly considered essential to, any functioning democracy. Under the Defence Act 1903, the Prime Minister can commit Australian troops to conflict zones without the support of the United Nations, the Australian parliament or the Australian people. The Prime Minister can exercise this power as part of the government's prerogative powers or through a cabinet decision. The absence of appropriate checks and balances on this decision-making power saw the Australian Prime Minister rapidly deploy troops to an illegal war in Iraq in 2003 without consulting the people's representatives in parliament. A lesson can and must be learned from this kind of mistake, which is more easily made when a handful of people take closed and secret decisions on behalf of a nation without due consultation or participation.

This bill would bring Australia into conformity with principles and practices utilised in other democracies like Denmark, Finland, Germany, Ireland, Slovakia, South Korea, Spain, Sweden, Switzerland and Turkey, where troop deployment is set down in constitutional or legislative provisions. Some form of parliamentary approval or consultation is also routinely undertaken in Austria, the Czech Republic, Italy, Japan, Luxembourg, the Netherlands and Norway. Even our ally the United States has a similar provision that subjects the decision to go to war to a broader forum—section 8 of the US Constitution quite clearly says, 'Congress shall have power to declare war'.

Arguments against utilising our democratic structures on the important issue of troop deployment made by governments include that it would be impractical, restrictive and inefficient. Such arguments, though, ignore the fact that parliaments can and do make complex and nuanced decisions, and rapidly when necessary. But, as we have seen, decisions about war and peace made in undue haste that do not enjoy the mandate of the population are not legitimate or acceptable, especially when they involve sending Australia's sons, daughters, fathers and mothers into battle.

There are appropriate exemptions made in this bill that do not interfere with the non-warlike overseas service with which Australian troops are engaged—and I refer the House to section 50C(11). There are also appropriate exemptions in the bill to provide for the practicalities of situations where parliament cannot immediately meet—and I refer the House to section 50C subsections 3 and 7, which provide for the Governor-General to be able to make a proclamation regarding the declaration of war, provided that parliament is then recalled within a period of two days.

The decision to deploy troops overseas into a war zone is always difficult, always dangerous and always important. Such a decision should always demand debate and scrutiny and should be one that Australian citizens can own and be engaged in. When we look at other states, and so-called security sector reform during post conflict restructuring phases, we require security forces to be retrained and, importantly, decision making to be restructured to conform to democratic principles. A core component of regaining public faith in an effective security sector is placing it under democratic control. One standard espoused by the international community is military forces coming under the general rules of parliamentary control—accountability and other procedures seen as important in establishing transparent and legitimate government.

It is time that Australia joined its closest allies and like-minded democratic states by involving the parliament in the decision to send troops into battle. Only by returning the power to deploy troops overseas to the most representative branch of government, by requiring both houses of parliament to agree, can sufficient debate and scrutiny exist for a decision to made democratically—for a decision to be as representative of the will of the Australian people as possible. I commend the bill to the House.

The SPEAKER: Is the motion seconded?

Mr Wilkie: I second the motion and reserve my right to speak.

Debate adjourned.

Mr ALBANESE (Grayndler) (10:21): High-speed rail has the potential to revolutionise interstate travel in this nation. Linking Brisbane and Melbourne via Sydney and Canberra is an ambitious project that requires legislators of today to show that vision, to think beyond the next election and ask what they can put in place for the future. The 1,748 kilometre line would, according to the high-speed rail study produced last year, cost $114 billion. It would require 80 kilometres of tunnels, including 67 kilometres in Sydney alone.

According to the study I mentioned, a high-speed rail line would also have major benefits. It would allow people to travel from Brisbane to Sydney and from Sydney to Melbourne in less than three hours. The study also found that, for the Sydney to Melbourne sector—which it recommended should be built first—there would be an economic benefit of $2.15 for every dollar spent. In particular, high-speed rail would supercharge the economies of the regional centres through which it would pass, including here in Canberra. These also include the Gold Coast, Casino, Grafton, Coffs Harbour, Port Macquarie, Taree, Newcastle, the Southern Highlands, Wagga Wagga, Albury Wodonga and Shepparton. These benefits would be significant and far-reaching.

After receiving the report, we indicated as a government that we would allocate $52 million to begin the serious process of planning for this project, including securing the corridor. This bill, the High Speed Rail Planning Authority Bill 2013, would put the mechanism in place to establish a high-speed rail planning authority to include representatives of the Queensland, New South Wales, ACT and Victorian governments as well as local government delegates and railway experts. At the heart of this bill is the idea that, while high-speed rail is a long-term project, it is nonetheless a project whose time will come—for two reasons. Firstly, as the feasibility study noted, trips down the east coast of Australia are expected to grow by about 1.8 per cent a year over the next 20 years—meaning they will increase by about 60 per cent on current levels by 2035. It is not possible to handle that amount of traffic using roads and airlines. Secondly, while the current government does not believe in meaningful action on climate change, its position is unsustainable in the long term; as the reality of a carbon constrained future becomes more and more apparent as each year passes, the case for high-speed rail will become even more compelling. It would take cars off the road and reduce the number of aircraft that would otherwise be required.

This is a result of a considered view—a considered view from a group that included the former Deputy Prime Minister Tim Fischer, Jennifer Westacott of the BCA, the head of the Australasian Railway Association, Bryan Nye, sustainability expert Professor Peter Newman of Curtin University, the RTBU's Bob Nanva, the deputy secretary of my former department, Lyn O'Connell, and Professor Sue Holliday, a planning expert from the University of New South Wales.

This view was adopted unanimously as a recommendation to government and yet this government took the $52 million that was allocated for this process out of the budget in May. This is in contradiction of the current minister, Minister Truss's statement to the AusRAIL 2013 conference in Sydney after he was appointed, where he said:

You cannot designate a corridor through our cities, suburbs, towns and rural landscapes without being willing to purchase the affected lands and that will be expensive and without an immediate return.

The minister also promised to consult with state and territory leaders about the project. That is why we are putting forward this bill. That is why the government should reinstate the $52 million that it took out of high-speed rail—to support the high-speed rail authority and to coordinate the beginning of the preservation of the corridor for that project. For that you need planning, but you also need investment. The former government put that in place. The current government has removed it.

The day-to-day demands of this parliament are indeed great, but what the Australian people expect is a government that will look forward to the future. High-speed rail is about vision, it is about transforming our regions, it is about reducing our emissions, and it is about effectively being able to travel from our capital cities down the east coast. The study that we put in place indicated that it was viable and this government should provide that support. The start of that would be support for this bill. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (11:59): I move:

That this bill be now read a second time.

The Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2013 is one of two bills to repeal the equivalent carbon tax on synthetic greenhouse gases.

These bills are part of the broader legislative package to abolish the carbon tax. This bill amends the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 so that importers of synthetic greenhouse gases and products containing those gases will not incur a liability to pay the equivalent carbon tax for synthetic greenhouse gas and equipment imported after 1 July 2014. This will reduce costs for businesses using these gases, including for refrigeration and air conditioning.

Debate adjourned.

Mr ABBOTT (Warringah—Prime Minister) (12:01): Today the government reintroduces the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013. As I said back in November of last year when I introduced this bill for the first time, the Australian people have already voted on this bill and now the parliament again gets its chance. The people have spoken, and now it is up to this parliament to show that it has listened.

The Australian people pronounced their judgement against the carbon tax. They want it gone and this bill delivers. It delivers on the coalition's commitment to the Australian people to scrap this toxic tax.

The budget that the government delivered recently was tough but it was visionary. It was about setting this country on the path to long-term structural change. But a cornerstone of this government's plan for a stronger economy, for lower taxes, for less regulation and for stronger businesses, is the repeal of the carbon tax.

The first impact of this bill will be on households whose overall costs will fall by about $550 a year on average. Because of this bill, household electricity bills will be around $200 lower next financial year without the carbon tax.

Household gas bills will be about $70 lower next financial year without the carbon tax. Prices for groceries, for household items for services will fall, because the price of power is embedded in every price in our economy.

This is a bill to reduce the bills of the Australian people. That is what it is. It is a bill to reduce the bills of the people of Australia.

When the price of power comes down, the Australian Competition and Consumer Commission will be ready to ensure that these price reductions are passed onto households and to businesses.

But—and this is important—family and pensioners will keep the tax cuts and the benefit increases already provided. The carbon tax will go but the carbon tax compensation will stay so that every Australian should be better off.

Repealing the carbon tax will reduce costs for all Australian businesses—for every single one of them.

The previous government said and argued that only big business paid the carbon tax, but this simply was not true. Every small business paid the carbon tax through higher electricity and gas bills and higher costs for suppliers.

As well the carbon tax acts as a reverse tariff. Not only does the carbon tax make it more difficult for Australian businesses to compete abroad; it makes it more difficult for domestic businesses to compete at home, because there is no carbon tax on imports.

Repealing the carbon tax removes over 1,000 pages of primary and subordinate legislation. Repealing the carbon tax cuts the size of the climate change bureaucracy. So repealing the carbon tax will reduce the cost of living, make jobs more secure and improve the competitive position of our country. That is what it does. It reduces the cost of living, it makes jobs more secure and it improves the competitive position of our country. Why would anyone be against that? Particularly, when it is what the Australian people voted for.

Repealing the carbon tax is what the employers and the jobs providers of our country want now. The Business Council of Australia, for instance, supports the wind-up of the current carbon pricing mechanism, because it places excessive costs on business and households and because our carbon charge is now one of the highest in the world—that is what the BCA says about the carbon tax.

The carbon tax has ripped through the economy hitting schools, hospitals, nursing homes, charities, churches, council swimming pools and community centres. It has hit each and every group, and each and every individual that uses power. That was always its goal to make electricity more expensive. That was the intention of the previous government to put power prices up, because that was their way of reducing emissions.

The intention of the new government, of this government, is to put power prices down by axing this toxic tax and by using other means to reduce emissions. By reducing the cost of electricity and gas we will help to make households better off, workers more secure and our economy stronger.

No-one should be in any doubt—the government is repealing the carbon tax in full. We are repealing the carbon tax in full. We are doing what we were elected to do. Others have said that they would terminate the carbon tax, but they were only renaming it. Well, we are not renaming it; we are abolishing the carbon tax in full.

Repealing the carbon tax at the end of the financial year provides certainty for business and it simplifies the transition. It means that the government will not be proceeding with the previous government's legislated carbon tax increase that would have taken effect from 1 July.

Unfortunately, the new government cannot undo the past. We can only make the future better, and that is precisely what we intend to do. Under this government the carbon tax will not apply from 1 July, so there will be no need for further compensation packages. We will end the merry-go-round of carbon tax industry assistance that takes from one pocket and puts less back in the other.

We will ensure that the benefits of repealing the carbon tax are passed on to consumers. The ACCC will have further powers to take action against any business that engages in price exploitation in relation to the carbon tax repeal. There will be penalties of up to $1.1 million for corporations and $220,000 for individuals.

It is prudent to do what we reasonably can to reduce carbon emissions, but we do not believe in ostracising any particular fuel and we do not believe in harming economic growth. Climate change is a serious issue and we do have strong policies to come into place so that we do rest lightly on the planet. The government is repealing the carbon tax because there is a less complicated and less costly way to reduce greenhouse gas emissions, a way that will actually reduce emissions and will not damage the economy.

So we will scrap the carbon tax and then proceed with our direct action plan. The centrepiece of this direct action plan will be the Emissions Reduction Fund, a market-based mechanism for reducing carbon dioxide emissions, a fund that provides a powerful and direct additional incentive for businesses to reduce their greenhouse gas emissions.

The $2.55 billion fund will use positive incentives to reduce Australia's emissions and it will prioritise cost-effective targeted means to do so. It is an incentive based approach that will support Australian businesses and households to lower their energy costs at the same time as reducing Australia's emissions. It will see us plant more trees, get more carbon captured in soils, clean up power stations and use smarter technology. We believe that by the time the five per cent reduction kicks in in 2020 we will have an overall reduction in our emissions of some 22 per cent off 2000 levels of business as usual. This is serious action about a significant problem.

The carbon tax is a $9 billion hit on our economy this year alone. It is a $9 billion hit on jobs, a $9 billion burden on investment and a $9 billion burden on Australians that we just do not need. This bill gets rid of it. This bill is the government's bill to reduce the Australian people's bill, so I commend the bill to the House. I move:

That this bill be now read a second time.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:12): I move:

That this bill be now read a second time.

The Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2013 is one of two bills to repeal the equivalent carbon tax on synthetic greenhouse gases. These bills are part of the broader legislative package to abolish the carbon tax.

This bill amends the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 so that manufacturers of synthetic greenhouse gases will not incur a liability to pay the equivalent carbon tax for synthetic greenhouse gas manufactured after 1 July 2014. This will reduce costs for businesses using these greenhouse gases, including for refrigeration and air conditioning. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:14): I move:

That this bill be now read a second time.

Together, this bill, the True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2013, and the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 ensure that final assistance allocations under the Jobs and Competitiveness Program are accurate so that businesses are not over- or under-allocated assistance in 2013-14.

This bill imposes a levy which recovers the value of over allocated free carbon permits received under the Jobs and Competitiveness Program for the 2013-14 financial year.

For constitutional reasons, this bill imposes the levy to the extent that it is not a duty of customs or excise. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:15): I move:

That this bill be now read a second time.

Together, this bill, the True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2013, and the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 will ensure that final assistance allocations under the Jobs and Competitiveness Program are accurate so that businesses are not over- or under-allocated assistance in 2013-14.

For constitutional reasons, this bill imposes the levy to recover overallocations to the extent that it is a duty of excise. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:17): I move:

That this bill be now read a second time.

The Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2013 provides for an exemption from the equivalent carbon price for the import of bulk synthetic greenhouse gases between 1 April and 30 June 2014 if certain conditions are met. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:18): I move:

That this bill be now read a second time.

The Customs Tariff Amendment (Carbon Tax Repeal) Bill 2013 amends the Customs Tariff Act 1995 to remove the elements of this act that were legislated by the former government to apply the carbon tax through the fuel tax and excise system.

Importantly, this will reduce the increase in excise-equivalent customs duty on aviation gasoline and aviation jet fuel that represents an equivalent to the carbon tax applied to Australian imports.

Currently, Qantas imposes a carbon price surcharge of between $1.93 and $7.25 per passenger on all domestic flights, depending on the distance travelled. Virgin Australia imposes similar surcharges.

The repeal of the carbon tax will reduce one of the major components of airline costs and enable airlines to pass on a significant saving to travellers.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:19): I move:

That this bill be now read a second time.

This bill, which amends the Excise Tariff Act 1921, reduces the increase in excise on aviation gasoline and aviation jet fuel that is applied when an equivalent carbon tax is applied to Australian manufactured fuels.

Around $200 million was raised in 2012-13 by applying the carbon charge to aviation fuel.

This bill will reduce one of the major components of airline costs, which can be passed on to travellers and consumers.

The bill also reduces the act's complexity by removing references and notes associated with the imposition of the carbon tax. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:20): I move:

That this bill be now read a second time.

The Clean Energy (Income Tax Rates and Other Amendments) Bill 2013 is part of a package of bills to remove the carbon tax.

This bill amends elements of the Clean Energy (Income Tax Rates Amendments) Act 2011 to repeal the second round of personal income tax cuts due to start on 1 July 2015.

The government understands households will continue to face cost-of-living pressures.

That is why the government is keeping the current carbon tax related personal income tax thresholds and the fortnightly pension and benefit increases.

In its final budget handed down on 14 May 2013, the former government deferred a second round of personal income tax cuts and booked a $1.5 billion saving over the forward estimates.

But the former government never followed through by legislating this change.

This bill repeals legislated amendments to the Income Tax Rates Act 1986 so that the statutory personal income tax rates and thresholds do not change on 1 July 2015.

This bill also amends the Clean Energy (Tax Laws Amendments) Act 2011 to repeal related amendments to the low-income tax offset.

This bill also repeals legislated amendments to the Income Tax Assessment Act 1936 so that the related amendments to the low-income tax offset do not take effect on 1 July 2015.

Overall, the repeal of these amendments means that the tax-free threshold will remain at $18,200.

The second personal marginal tax rate will remain at 32.5 per cent. And the maximum value of the low-income tax offset will remain at $445.

This bill legislates the $1.5 billion saving that the former government announced during the 2013-14 budget but never legislated.

A first round of tax cuts to compensate for the introduction of the carbon tax has already been delivered. We will deliver further savings to Australian households of $550 next financial year on average with the removal of the carbon tax. In short this is our saving for the Australian people. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:23): I move:

That this bill be now read a second time.

This bill abolishes the Clean Energy Finance Corporation by repealing the Clean Energy Finance Corporation Act 2012.

The Clean Energy Finance Corporation (Abolition) Bill 2014 differs from the previous bill in that it provides a transitional period of up to six months, rather than the previous 28 days from royal assent.

The government has made clear commitments to support clean energy projects through direct action, and specifically through the Emissions Reduction Fund. The renewable energy target also provides strong incentives for businesses to develop clean energy solutions.

The Emissions Reduction Fund and the renewable energy target are in addition to strong commercial incentives for businesses to undertake clean energy projects in order to reduce costs.

This repeal bill will transfer the CEFC's existing assets and liabilities, including the CEFC's investments, to the Commonwealth. These assets and liabilities will be managed by the Treasury.

Funding to manage the CEFC's existing assets and liabilities and meet contractually committed payments on investments will be met from the CEFC's existing funding, which will be transferred to a new CEFC transitional special account.

Future moneys that were due to be appropriated to the CEFC annually until 2017 will be returned to consolidated revenue.

The bill also provides for excess funding to be returned to consolidated revenue at any stage if it is no longer needed for managing the CEFC's assets and liabilities. I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for the Environment) (12:26): I move:

That this bill be now read a second time.

The Australian people delivered a clear message on 7 September 2013 that they do not want a carbon tax.

The government is meeting this promise to the Australian people by repealing the carbon tax.

Repealing the carbon tax will boost Australia's economic growth, increase jobs and enhance Australia's international competitiveness by removing an unnecessary tax which hurts businesses and families and fails to do the fundamental job.

Repealing the carbon tax will reduce annual ongoing compliance costs for around 370 liable entities by almost $90 million per annum.

Repealing the carbon tax will lower retail electricity prices by around nine per cent and retail gas prices by around seven per cent, as opposed to what they would otherwise have been in 2014-15 with the carbon tax.

Repealing the carbon tax will remove over 1,000 pages of primary and subordinate legislation.

This bill is therefore part of a package of bills which contribute to the government's delivery of its commitment to repeal the carbon tax, reduce cost of living pressures and remove unnecessary bureaucracy.

This government is working to repair the budget, to lower taxes, to lessen regulation and build stronger businesses. We face an economic environment that demands greater rigour in the spending of public money.

The government has a longstanding commitment to abolish the Climate Change Authority, because it is not needed. I say this again with no disrespect to the highly professional members and staff of the Climate Change Authority. We will simply bring its relevant functions in house: into the Department of the Environment. Our pledge to abolish the Climate Change Authority will make a contribution to improving the budget.

The government is already well placed to receive authoritative advice on climate change matters from existing government bodies.

We have the Bureau of Meteorology to advise on climate trends and climate science. We have the CSIRO to advise on the environmental effects of climate change, climate science and the most appropriate and effective technological and scientific responses to climate change. We have an entire department of state—in the form of the Department of the Environment—dedicated to providing the government authoritative advice on environment and climate change policy and international trends and policies.

The government is clear—evidenced by our reintroduction of the carbon tax repeal bills today—that the carbon tax will be repealed and will be replaced with a more environmentally and economically responsible means of actually reducing our emissions.

We are abolishing the carbon tax to reduce cost pressures on households and businesses, boost economic growth, increase jobs and enhance Australia's international competitiveness.

The government is also abolishing the carbon tax because it does not work—it does not do the job for which it was purportedly created.

It does not work because, at its heart, the carbon tax is an electricity tax. It therefore relies upon the assumption that people will either change demand for or supply of electricity.

Yet the carbon tax has been a $15.4 billion burden on the Australian economy in its first two years. However, in its first year Australia's emissions fell by less than 0.1 per cent.

This scheme simply does not work to reduce our emissions. Instead it reduces economic activity, reduces jobs and brings pain to Australian households and small businesses.

Let us be clear. Climate change is a serious and fundamental issue. The government fully accepts the science of climate change. The government is committed, clearly and absolutely, to its unconditional emissions reduction target to reduce emissions by five per cent below 2000 levels by the year 2020.

This target is significant. It represents a major reduction below business-as-usual levels, as the Prime Minister set out. Over 30 years from 1990 to 2020, Australia and the United States are projected to achieve an almost identical net reduction.

The government has said it will consider further action and targets in 2015, as has been its policy, on the basis of comparable, real, demonstrated global action, in particular by major economies and trading partners.

The government believes there is a fundamentally better way to reduce emissions than through this carbon tax.

The government will reach its target through Direct Action with the Emissions Reduction Fund at its centrepiece. Our plan is to efficiently and effectively source low-cost emissions reduction and improve Australia's environment.

Through the Emissions Reduction Fund we will provide incentives for abatement activities across the Australian economy, rather than through pushing up prices in the hope of making electricity unaffordable.

Last week I introduced the Carbon Farming Initiative Amendment Bill 2014 into the House. This House and the Senate will soon have the opportunity to vote on this bill, to expand the Carbon Farming Initiative and make a real difference to the environment and boost businesses' productivity.

The Emissions Reduction Fund will support projects such as upgrading commercial buildings for energy efficiency, improving energy efficiency elsewhere of homes and industrial facilities, reducing electricity generation emissions, capturing landfill gas, reducing waste coalmine gas, reforesting and revegetating marginal lands, improving Australia's agricultural soils, upgrading vehicles and improving transport logistics and managing fires in savanna grasslands.

Countries around the world are implementing schemes which work best for them. In Australia we will introduce a scheme that works best for Australia—one which will reduce emissions, while not pushing up prices and not shutting down Australian businesses.

I will now turn in brief to the details of the bill. The bill repeals the Climate Change Authority Act 2011 in order to abolish the Climate Change Authority.

The bill makes consequential changes to other legislation to reflect the fact that the authority will no longer exist. To this end, references to the authority in other legislation will be removed, including references which allow for the sharing of information with the authority or concerning the authority's financial management.

The bill provides that the limited functions of the authority that are required in the future will continue. The bill amends relevant acts to provide that the legislated reviews of the Carbon Farming Initiative, the National Greenhouse and Energy Reporting Scheme and the renewable energy target will be undertaken at the direction of the minister.

It is my intention that these reviews should be undertaken by the Department of the Environment, which has the requisite skills and expertise to do them. The review of the renewable energy target is currently being progressed, in cooperation between the Department of the Environment, the Department of the Prime Minister and Cabinet and the Department of Industry.

Lastly, the bill transfers any assets and liabilities of the authority to the Commonwealth and makes arrangements for the winding up of the authority's activities.

The abolition of the authority is expected to result in a saving of $21 million over the forward estimates, further improving the budget bottom line. For all of these reasons, I commend this bill and all related bills to the House.

Debate adjourned.

Mr CIOBO (Moncrieff—Parliamentary Secretary to the Treasurer) (12:35): I move:

That this bill be now read a second time.

This bill repeals the Minerals Resource Rent Tax (MRRT), as well as discontinuing or re-phasing those measures that were introduced by the former government on the expectation that their cost would be met by mining tax revenues.

These related measures came at a very significant cost to the budget, and the failure of the MRRT to return any meaningful revenue meant the former government had to borrow money to pay for these unsustainable commitments.

By repealing or re-phasing the measures related to the mining tax, this bill seeks to make a start on repairing the damage caused to the nation's finances and put the budget on a more sustainable footing going forward.

Together, the measures contained in this bill will improve the budget position by over $12.6 billion by 30 June 2017.

Schedule 1—Repeal of the MRRT

Schedule 1 of the bill repeals the minerals resource rent tax with effect from 1 July 2014.

The repeal date for the MRRT of 1 July 2014 simplifies administration by aligning the repeal with the financial year reporting period. Taxpayers will not accrue any further MRRT liabilities from this date.

Australia's mining tax has had a long and tortured journey.

It was, of course, born out of the Henry tax review, which was commissioned by the first Rudd government.

One of the key recommendations was for a resource super profits tax (the RSPT). The original RSPT was forecast to raise $49.5 billion over a five-year period from 1 July 2012.

This was to be a big hit to one of Australia's most successful industries. At the time, the reaction from those in the resources sector could only have been expected.

Ultimately, the announcement, consultation and handling of the RSPT was a large contributing factor to the downfall of former Prime Minister Rudd.

In taking over the Prime Ministership, former Prime Minister Gillard made it a key benchmark of her leadership to resolve the impasse with the resource sector which had enveloped her predecessor.

The former Gillard government struck a deal with three of Australia's biggest miners, RIO, BHP Billiton and Xstrata, and from this the minerals resource rent tax was born. The new version of the mining tax also included an extension of petroleum resource rent tax to onshore projects.

Forecast revenue on the new version of the mining tax was significantly revised down when compared to the original resource super profits tax. It was forecast to raise $26.5 billion compared to $49.5 billion over the five-year period from 1 July 2012.

Following the second version of the mining tax, there were three further variations, and forecast mining tax revenue has been written down in nearly every subsequent budget and MYEFO update.

In February last year, the former Treasurer and current member for Lilley was forced to release just how much the mining tax had raised to that date—after being in place for six months it had raised just $126 million.

Since its inception from 1 July 2012, the mining tax has raised only $340 million in net terms.

The mining tax has many design flaws which will preclude it from raising meaningful revenue, particularly when government administrative costs are taken into account.

We persistently called on the former government to explain how key details of their mining tax worked, particularly in relation to the upfront tax deduction from the market valuation method which is used to calculate tax liabilities for the minerals resource rent tax.

The mining tax is a flawed tax. And what is worse, it imposes large administrative costs on operators in the resources sector trying to comply with the complex tax.

The repeal of the minerals resource rent tax will save millions of dollars in compliance expenses for small, medium and large entities.

So far, in the almost two years of its existence, less than 20 taxpayers have contributed to paying the net $340 million raised by the MRRT, but around 115 miners have been required to submit MRRT instalment notices while making no net payments.

That is around 115 taxpayers all complying with the MRRT legislation, but not actually paying any tax.

Therefore, not only is the MRRT a complex and unnecessary tax which has failed to raise the substantial revenue predicted by the former government, it imposes a significant regulatory and compliance burden on the iron ore and coal mining industries, and has damaged business confidence which is critical to future investment and jobs.

The repeal of the MRRT will restore confidence and promote activity in the mining industry, creating jobs and contributing to the prosperity of all Australians. It sends a clear signal that Australia is determined to remain a premier destination for mining investment, and is once again open for business.

Mining companies in Australia will continue to pay their fair share of tax through state royalties and company tax.

The mining tax is also a fiscal disaster. The former government had linked over $16.5 billion of expenditure to this tax over the four-year period to 30 June 2017.

The repeal of the mining tax and associated measures will improve the budget's bottom line by over $12.6 billion by 30 June 2017.

The benefits to the budget would have been much larger if the bill had not been blocked by the opposition in March.

Australia can no longer continue to borrow money to pay for these measures.

We need to do what is responsible and repair the budget, and the removal of the mining tax and its associated expenditure is a step in the right direction.

Schedule 2 — Loss carry back

Schedule 2 of the bill repeals the MRRT related loss carry-back provisions that enable companies making a tax loss of up to $1 million in the 2012-13 income year and subsequent years to recoup taxes paid on an equivalent amount of taxable income in a prior income year.

The bill provides that, from the 2013-14 income year, companies can only carry their tax losses forward to use as a deduction for a future year, consistent with arrangements prior to the MRRT-related amendments.

The removal of this measure will improve the budget position by $950 million by 30 June 2017.

Schedule 3 — Small business instant asset write-off threshold

Schedule 3 of the bill amends the instant asset write-off threshold provisions.

The instant asset write-off amount was increased to $6,500 in two stages as part of both the mining and carbon tax packages.

The MRRT package dealt with the increase from $1,000 to $5,000, whilst the carbon tax package dealt with the increase from $5,000 to $6,500.

This legislation before the House returns the write-off amount back from $6,500 to $1,000, effective from 1 January 2014.

From that time, small business entities will be able to immediately deduct the value of a depreciating asset that costs less than $1,000 in the income year the asset is first used or installed ready for use. This is consistent with arrangements that existed prior to the MRRT related amendments.

However, the single small business pool arrangements will be preserved to maintain lower business compliance costs.

Under these arrangements, assets costing $1,000 or more will be allocated to the existing general small business pool and depreciated at a rate of 15 per cent in the first year and 30 per cent in subsequent years.

If the value of a small businesses' general small business pool is less than $1,000 at the end of the income year, the small business can claim a deduction for the entire value of the pool.

The improvement in the budget position from reducing the instant asset write-off from $6,500 to $1,000 will be $2.6 billion by 30 June 2017.

Schedule 4 — Deductions for motor vehicles

The bill also provides that from 1 January 2014, motor vehicle purchases made by small business entities will no longer be eligible for an accelerated depreciation of $5,000.

Motor vehicle purchases by small business entities using the simplified depreciation rules will instead be treated as normal business assets under the concessional capital arrangements available under subdivision 328-D of the Income Tax Assessment Act 1997.

Under these arrangements they will be depreciated at a rate of 15 per cent in the year in which the asset is first used or installed for use and then 30 per cent for all subsequent years.

The removal of this measure will improve the budget position by $450 million by 30 June 2017.

Schedule 5 — Geothermal energy

The bill will repeal the extension of the income tax exploration provisions to geothermal energy exploration so that geothermal energy exploration and prospecting expenditure is not immediately deductible.

Amendments are included to provide a capital gains tax (CGT) roll-over in cases where a geothermal exploration right is merely exchanged for a geothermal extraction right relating to the same area. This ensures that a capital gains tax liability will not be inappropriately incurred, consistent with the treatment of other mining rights.

This measure was announced by the former Gillard government as part of the final design of the mining tax. It was raised in discussions between the former Gillard government and the Policy Transition Group, which was set up to advise on the technical design of the minerals resource rent tax.

The Policy Transition Group did not include this change as a specific recommendation but, rather, made an observation about the anomaly of the inconsistent treatment for geothermal exploration, noting that the issue was outside the parameters of the terms of reference.

The removal of this measure will improve the budget position by $10 million by 30 June 2017.

Schedule 6— Superannuation Guarantee Charge percentage

Schedule 6 of the bill delays further increases in the superannuation guarantee rate by two years. The super guarantee rate remains at 9.25 per cent until 30 June 2016 and then rises to 9.5 per cent on 1 July 2016. It then increases in increments of half a per cent a year until it reaches 12 per cent on 1 July 2021.

Further changes to the superannuation guarantee schedule, announced in the budget, will be introduced as an amendment to this bill.

These changes would not have been required if the bill had not been blocked by the opposition in March.

Schedule 7— Low Income Superannuation Contribution

Schedule 7 of the bill abolishes the Low Income Superannuation Contribution (LISC). The bill ensures that the LISC is not payable in respect of concessional contributions made on or after 1 July 2013.

The government will revisit concessional contribution caps and incentives for lower income earners once the budget is back in a strong surplus.

Low- to middle-income earners may be eligible for the superannuation co-contribution to boost their retirement savings.

The removal of the low income superannuation contribution will improve the budget position by $2.7 billion in cash terms by 30 June 2017.

Schedule 8 —R epeal of income support bonus

The bill repeals the income support bonus. The bonus was funded from the anticipated revenue from the MRRT.

Participation in the workforce is the best way to ensure economic stability and the payment system is geared to promote this while ensuring that a safety net exists for those requiring help.

This bill will abolish all future payments of the income support bonus from royal assent of the legislation.

The removal of this measure will improve the budget position by over $900 million by 30 June 2017.

Schedule 9 — Repeal of schoolkids bonus

The bill also repeals the schoolkids bonus. The government intends to offer a more efficient, targeted approach to improving education outcomes for students through effective education policies, rather than bonus payments to individuals.

The removal of this measure will improve the budget position by almost $4 billion by 30 June 2017.

Conclusion

The government has consulted with key industry stakeholders since the repeal of the MRRT was announced as a priority election commitment of the government, including a round of public consultation on the exposure draft legislation.

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

Debate adjourned.

Ms KING (Ballarat) (12:49): I rise to speak on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014. I note that the government is intending to proceed with the savings this bill will realise. In fact, before introducing changes to the Medicare safety net that the government announced in the budget, substantial changes were made to the Medicare safety net that will realise even further savings than the savings realised in this bill.

I acknowledge that the measures in this particular bill—this is not one of the budget bills—were initially announced in the budget Labor handed down in 2013. Obviously, that has been at the front of my mind when we were considering what the Labor opposition will do with these bills. It reflects that Labor was capable of finding—and did find—substantial savings within the Health portfolio to ensure the sustainability of Medicare, without ripping the system apart, as this government intends to do. We were able to find savings through means testing of private health insurance—something that I understand the now Abbott government intends to reverse—and through a range of other measures in health. This bill represents one of them.

I note that the measures contained in this bill were not taken in the context of ripping apart Medicare. They were not taken in the context of the introduction of a GP tax, making it harder for people to visit a doctor. That part of the system is, we know, the most efficient part of the system. The measures in this bill were not taken in the context of increasing the cost of medicines to many Australians. They were not taken in the context of ripping over $50 billion from the states for our public hospital system—$50 billion worth of cuts which will start on 1 July and will see bed closures, longer waiting times in emergency departments and longer waiting times for elective surgery. None of these was mooted by Labor, and none of these was under consideration when the measures in this bill were introduced.

Labor will, of course, support sensible measures that ensure the sustainability of Medicare, but that is certainly not what the Abbott government's budget handed down on 13 May will do. In fact, the changes announced in the budget are the most significant attack on Medicare in 30 years. They are changes that the former vice president of the Australian Medical Association Professor Geoff Dobb described as setting health care in Australia back 50 years.

This bill increases the general threshold of the Extended Medicare Safety Net to $2,000 from 1 January 2015. The Extended Medicare Safety Net has been in place since 2004 and provides additional Medicare benefits to Australians who often, due to serious illness, have high out-of-pocket costs for out-of-hospital Medicare services. The Extended Medicare Safety Net was put in place by the former Howard government due to the inequality that was emerging in the health system, where particular groups of people had very high medical costs and were finding those out-of-pocket costs beyond their means.

At present there are two Extended Medicare Safety Net thresholds: a concessional threshold of $624.10 for Commonwealth concession-card holders and recipients of Family Tax Benefit A as well as the general threshold, which is presently at $1,248.70. Both these thresholds are indexed to the consumer price index. The Extended Medicare Safety Net benefits are paid in addition to the Medicare rebate and in addition to any benefits received as part of the original Medicare safety net. As part of these changes, a family or individual will need to incur an additional $751.30 in out-of-pocket expenses for out-of-hospital services, in one year, to qualify for the Extended Medicare Safety Net.

From 1 January 2015, this bill proposes to temporarily suspend the automatic indexation arrangements of the general threshold. This bill also proposes to remove the requirement for the chief executive officer of Medicare to require in writing that a family registered for the Extended Medicare Safety Net confirm their family composition when they approach the Extended Medicare Safety Net threshold. This is needed because Medicare keeps track of individuals' Medicare expenses, for the purposes of calculating eligibility for the Extended Medicare Safety Net, but is unable to do so for families. The changes proposed in this bill instead allow the CEO to determine the most appropriate method of contact.

I note from the Department of Human Services' evidence before the Senate community affairs committee on this bill that there is no intent to reduce the information people get about where they are up to, in terms of the safety net entitlement or in ensuring they are aware that they are approaching the threshold. That is something Labor welcomes. Labor is, however, concerned about what is happening overall in this government's budget and what this government intends to do to Australia's healthcare system.

Increasing the cost of health care is consistent with this government's approach to the Health portfolio. To date, the government's approach to health has been to restrict access to services, increase costs and introduce changes that will result in a more inequitable health system. I note that the additional changes to the Medicare safety net announced in the budget will result in savings of over $267 million over four years. These are savings that will be realised by providing far less compensation to people when they reach the safety net. In the budget measures, the government has meant that people will hit the threshold a lot of earlier—but unfortunately they will not get as much money back once they do hit the threshold.

These are substantial changes proposed in the budget to the Medicare safety net. In ensuring that people do not become confused about what is happening with the safety nets—because they are inordinately complex and I acknowledge that has been the case for some time—it was my expectation that the government would not seek to progress this bill, that it would wait until it introduced its budget measures. However, the government has taken the decision to proceed with this bill, so we will have a period where the Extended Medicare Safety Net thresholds will have one measure in place and then, following the government's budget measures—if they pass through both houses of parliament—in 2016 there will be an entirely new system for the safety net. That is something the government has decided to do, and there will be substantial confusion for many people as those safety nets change. Obviously that is a matter for the government, given it has decided to proceed with this bill.

The intention of this bill when it was mooted under Labor's last budget was to better target the Extended Medicare Safety Net. It would have realised savings of around $105.6 million over four years, all of which were designed to be reinvested into Australia's health-care system. I note from the budget handed down on 13 May that the proposed government changes to the Medicare safety net will come into place from 1 January 2016. The budget changes will see the original Medicare safety net, the Extended Medicare Safety Net and the greatest permissible gap replaced with a new Medicare safety net from 2016. They will realise savings of $267 million—not savings, according to the government, that will be reinvested for accessing healthcare services. They are to be reinvested, I understand, in the Medical Research Future Fund. Those $267 million will be realised by reducing the amount the government covers once a family or individual reaches the safety net.

The budget change proposes to pay 80 per cent of any out-of-pocket costs capped at 150 per cent of the Medicare benefit schedule fee. The out-of-pocket costs that accumulate to reaching the safety nets is also proposed to be capped at 150 per cent of the MBS fee. One of Labor's principal concerns about the changes being proposed overall to health care, by this government, is the effect upon out-of-pocket costs. We have a Senate inquiry looking at out-of-pocket costs in health care and what is happening to people. Many are experiencing significant pressures on their family budgets because of out-of-pocket costs in health care. We know they have been increasing.

In 2011 and 2012, out-of-pocket spending on health and medical services by Australians was a $24.8 billion. This percentage is high by international standards, and the changes the government is proposing in its budget will significantly worsen that situation. In fact, the government's measures are quite deliberately designed to transfer costs from the Commonwealth onto individuals through higher out-of-pocket expenses. The government makes no apology for that; they are quite deliberately increasing out-of-pocket costs. They call it transferring the responsibility and making people share the responsibility for health care, but I am not sure that people understood that this is what they were getting when and if they voted for the Abbott government.

The Senate Community Affairs Legislation Committee certainly considered this bill, and it should be noted that the submissions were received before the government handed down its first budget. Submissions received argued that increasing the Extended Medicare Safety Net threshold to $2,000 will affect healthcare affordability for consumers, with adverse implications for individuals' health and wellbeing. National Seniors Australia observed that it may be difficult for consumers to find this extra money each year if they are on a tight budget.

The Consumers Health Forum noted that Australians, on average, spend more than $1,000 a year in out-of-pocket costs. They warned that costs are already forcing consumers to make difficult decisions, including whether or not to seek medical attention, fill prescriptions and prioritise their own healthcare needs. National Seniors Australia provided similar evidence to the community affairs committee, noting that, for older Australians, out-of-pocket costs can escalate quickly for a variety of reasons. These included the gap between the Medicare rebate and fees charged by service providers, the lack of safety net coverage, the cap on specific items in the Medicare Benefits Schedule, the lack of private health insurance cover and gap payments and/or annual limits on services covered by private health insurance.

We know—for example, from the lack of modelling done on the impact of the proposed GP tax on Australians with chronic illness—that this government has not properly considered what effect its hurtful policies will have on the health care of Australians and on the financial viability of many families' budgets. The changes proposed in the budget will be particularly harmful for Australians with a chronic illness, and it concerns me that, in considering this bill, none of the people who were able to put in submissions to the Senate Community Affairs Legislation Committee had any knowledge of all of the measures that the government intended to introduce that would be increasing out-of-pocket costs.

With respect to this bill, it was noted in submissions to the Senate Community Affairs Legislation Committee—with the Consumers Health Forum particularly noting—that:

There are a significant number of consumers experiencing chronic illness. Some of that is debilitating; some of it is manageable. They will obviously be the highest end users who are likely to reach the threshold quicker.

These concerns were, of course, shared by Diabetes Australia, who noted that:

For many, the safety net and its increased reimbursements is an important contribution to the significant expenses associated with managing their condition.. Raising the safety net threshold and having people pay more may worsen access to the recommended cycle of care and the recommended [six] monthly monitoring.

The report from the Senate Community Affairs Legislation Committee noted submissions from the Consumers Health Forum and Diabetes Australia, where they said:

… there are consumers with chronic health conditions and high-level healthcare needs to whom the concessional EMSN threshold does not apply. Diabetes Australia expressed concern about these consumers' capacity to access affordable healthcare, to manage their illness and prevent the development of further complications. … A representative from CHF stated: 'there are high users of the system who are not necessarily concessional users of the system'.

What is important to keep in context is that this is one change that the government proposes to make as part of a suite of changes that will make health care much more expensive, less accessible and much less equitable in this country.

The key question about the decisions made in the recent budget, particularly when it comes to health care, is absolutely one of fairness. The Prime Minister claimed before the election—which we now know not to be true—that there would be no cuts to health. The budget handed down on 13 May well and truly blew that out of the water. There is no question that the budget attacks low- and middle-income earners; it attacks parents, it attacks workers, it attacks families and it attacks some of the most vulnerable in our communities.

The change proposed in this bill is from a government that is intent on ripping $80 billion out of health and education and $50 billion out of Australia's public hospital systems—again, cuts which start on 1 July. It will mean fewer beds, it will mean pressure on emergency departments and it will mean longer waiting times for elective surgery. In their budget, the health minister and Prime Minister have quite deliberately shifted the cost of health care onto the states and onto patients. It is important to see this bill now in that new context.

The government is proposing, through its budget measures, the lowest share of Commonwealth funding for hospitals since the Commonwealth started funding hospitals after World War II. After decades of Commonwealth-state squabbling over cost shifting, the health and hospitals reform that Labor was able to negotiate in government led to a new accord between the Commonwealth and states—one that saw the Commonwealth agree to fund 50 per cent of efficient growth in hospital funding. That was a commitment that was shared in their pre-election policy by the Prime Minister before the last election.

Instead, what we saw in this first budget is that the Prime Minister has washed his hands of responsibility for Australia's healthcare system and the wellbeing of Australians. Why is the government doing it? The government is doing it because it is determined to dismantle Medicare piece by piece and create a two-tiered health system here in this country—one in which the private sector plays a much stronger role and one in which we see a two-tiered system emerge where, if you have money, you have one set of access and one set of services available to you, and if you do not have money, you have a residual system. The Commission of Audit belled the cat on that one. As part of their recommendations, they very clearly said that one of the options the government should explore is having Medicare as a residual system—their words, not mine.

Not content with just ripping up the national partnership agreements on public hospitals, prevention, public dental and improving public hospitals—as well as abolishing Australia's first National Preventive Health Agency and taking $3 million out of the National Tobacco Campaign—this government also wants Australians to pay more to visit their doctor and pay more for their medicines.

The changes in this bill, therefore, will be much harder to be absorbed because of the government's decision and its intention to introduce a $7 tax every time Australians visit their doctor. As we are to understand it, the $7 GP tax will not go towards any safety net, so you will not be able to count that as an out-of-pocket cost that goes towards your safety net. The Prime Minister and the Minister for Health are shifting the cost of health care onto patients who in this country already pay very high out-of-pocket costs. The government wants to slug every Australian an extra $7 when they visit their doctor, and that is not just when you go for a routine check-up with your doctor or when you get a cold; the $7 applies to pathology. It applies to radiology, so when you go and get an X-ray you are also slugged the $7 GP tax. Right across the board Australians will be hit with this $7 tax. The health minister and the Prime Minister claim that this $7 GP tax is to ensure the sustainability of their healthcare system. In fact, I saw the Minister for Health out doing a press conference again, trying to argue that case. But, as the President of the AMA, Associate Professor Brian Owler, said on Jon Faine just last Friday:

At the end of the day the GPs are not the problem with the sustainability of the health care system, they are the solution.

He is absolutely right.

The government's argument for the changes that it wants to bring in with the budget is based on a problem that does not exist and figures that are just plain wrong. We have a Treasurer who does not know the average number of times Australians see their doctor each year. He persistently gets that figure incorrect. The health policies of this government are ill-conceived and they will certainly hurt patients. General practice is the most efficient and cheapest part of the system; it is where people go to stay well, to get well when they are suffering for illnesses and for preventative health or to manage their chronic conditions. It is where we want them to go to manage those conditions.

So why would you want to put a barrier in place to prevent people from accessing the health care they need? The reason those opposite want to impose a tax on families, on pensioners and on patients every time they visit a GP is because they want to see the end of universal health care as we know it. They want to see an American-style two-tier health system in this country, where those who can afford health care get the service and those who cannot only get part of the service.

The coalition claims that the money from the tax will be used to fund the Medical Research Future Fund. While investment in medical research is critical, you do not do it off the back of sick people. You do not fund it by taxing families, pensioners and patients every time they visit their doctor. Last week at consideration in detail the Minister for Health could give no guarantee that the level of National Health and Medical Research Council grant or fellowship funding would continue at the same level and be guaranteed over time. So we know what the government's real intention is for the Medical Research Future Fund. It is about over time replacing NHMRC funding.

This GP tax is a very poor health policy. It is a bad health policy. It is policy that hits middle- and low-income earners the most. It hits the most vulnerable Australians—those with chronic disease—absolutely the most. We know that the health minister and the government have done absolutely no modelling on the impact that this $7 GP tax will have on the chronically ill, on GPs themselves and on emergency departments—no modelling whatsoever on a tax that hits everyone. And around the country not one healthcare expert believes that this is a good idea. It is a pretty big feat, frankly, to do something that no health minister has ever done before: unite the entire health community against you and against your policy. It is a pretty big call for a health minister actually to have been able to do that. Around the country, as I said, there is not one healthcare expert who believes this is a good idea.

All the Prime Minister can say when questioned on his cuts to health and, in particular, cuts to hospital is: 'Where's the problem? I don't see a problem. What's the big deal here?' It just shows the contempt that this Prime Minister has for our health system and for patients and families across the country. This Prime Minister does not think it is a big deal that he is ripping $50 billion out of public hospitals. This Prime Minister does not see a problem with slugging Australians with a $7 GP tax every time they get sick and need to visit their doctor or access pathology or radiology. This Prime Minister does not see a problem with fewer hospital beds, increasing elective surgery waiting times or more pressure on emergency departments. He does not see a problem at all. And this Prime Minister does not see a problem with ending universal health care and Medicare as we know it.

On this side of the House we do see a problem. We see a very big problem, a problem that sees the ripping apart of Medicare at its seams. Its fundamental principle is universal access. It is a system that has served this country well for 30 years and should continue to serve this country well but for this government, which is absolutely determined to dismantle it.

The measures that are contained in this bill, of course, were thought of long before we had any of the government's proposed changes. They were, as I said at the outset, contained in Labor's last budget. They are measures that, in fact, Labor thought long and hard about but were measures we felt were necessary savings to improve the capacity of the health system to continue to provide health care. They were savings that we found without ripping apart Medicare, without imposing a GP tax every time you go to visit the doctor and without ripping $50 billion out of the states' agreements for public hospitals. All of those measures are things the Abbott government has decided are priorities in health care. I remain concerned that all of the policy decisions in health being made by this government are all about increasing costs to patients and removing responsibility from the Commonwealth for the provision of health care and that we are seeing increasing out-of-pocket costs in health beyond what was envisaged when Labor first announced details in this bill.

I remain concerned that the government has taken the decision to proceed with this bill despite the fact that it intends to introduce further changes to the safety net that will realise over $200 million in savings and that there will be a very confused system of safety nets in this country until those measures are debated and, if they are, passed. That being said, the opposition will not oppose this bill. I recognise that this was a bill originally introduced by Labor. But the government should not take that to mean that that will be the same for any other changes to the Medicare safety net, changes to the Medicare safety net which in fact rip over $200 million out of out-of-pocket costs for consumers. I now move a second reading amendment:

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

"whilst not declining to give the bill a second reading the House notes that the bill is one of many changes the government is proposing that will increase the cost of healthcare"

The government has taken the decision to proceed with this bill in the context of substantial changes to the healthcare system which will see massive increases in out-of-pocket costs for Australian consumers. It has taken the decision to proceed with this bill in the context of the GP tax, slugging every Australian $7 every time they go to visit the doctor—$7 for every child in every family when they go to visit a doctor; in the context of charging $7 every time someone needs to access radiology and pathology; cutting $50 billion out of public hospitals, those cuts to start on one July this year; and taking the decision that will see a substantial increase in the cost of medicines when people actually need to access those as well.

So I note that the government is proceeding with this bill in that context as well as taking the decision to proceed with this bill in the context of its own proposals to substantially change the Medicare safety net. I do happen to believe that there is a debate to be had around the better targeting of the Medicare safety net. I think there was a debate—and that is exactly what Labor was trying to do with these bills. There are many Australians, particularly Indigenous Australians, for example, who never reach the Extended Medicare Safety Net but who do have substantial problems with their health. I think there is a case to argue around the better targeting of these safety nets and sometimes some of the perverse outcomes that occur when you are actually talking about pricing within the system. I am not convinced that what the government is deciding to do in fact addresses any of that. Its budget measures are, in fact, really about substantial savings measures. It is claimed that they provide a better safety net, that people will hit the safety net earlier—but in fact they will get less money back, so I am not sure how that better targets the system.

As I said, the measures contained in these bills were originally proposed by Labor. We will not stand in the way of those. But I do remain very concerned about what is happening in out-of-pocket healthcare costs and I certainly remain concerned that the government has very, very little care for what in fact is happening for the health of Australians and has very, very little care about what it is actually doing in health policy. In fact, it is trying quite deliberately attempting to transfer costs on to patients, to dismantle Medicare and to introduce a two-tiered health system—one that Labor will not let the government do and one that certainly the Australian Labor Party will be standing against.

Debate adjourned.

Mr DREYFUS (Isaacs—Deputy Manager of Opposition Business) (13:14): The Regulatory Powers (Standard Provisions) Bill 2014 is, in effect, an initiative of the last Labor government. A bill in substantially identical terms was introduced into the parliament by the then Attorney-General, the Hon. Nicola Roxon MP, but it lapsed at the end of the 43rd Parliament. That bill had the same name. It was the Regulatory Powers (Standard Provisions) Bill 2012.

This bill is an important part of the former Labor government's legacy on regulatory reform. It stands in very sharp contrast to the empty rhetoric of the Abbott government's 'repeal day' that we saw back in March. That was the supposed bonfire of regulation, which, of course, fizzled. It was a media stunt that involved the repeal of several hundred inoperative provisions, a manoeuvre which did not in any real sense cut red tape or deliver savings to the community. This bill, by contrast—a Labor initiative—will simplify operative legislation. What the bill will do is reduce inconsistency and duplication across regulatory regimes. The bill will not only simplify and streamline the statute books but will make it easier for individuals to access and understand the law. It could reduce the size of a new Commonwealth act—setting up, for example, a new agency—by up to 80 pages. The bill is one of the initiatives of the Labor government's Clearer Laws project. The Clearer Laws project was designed to increase access to justice and improve the accessibility, equity, efficiency and effectiveness of the federal justice system by simplifying and streamlining the statute book.

The bill is based on existing provisions in Commonwealth laws, including the Crimes Act 1914. It is consistent with Aguide to framing Commonwealth offences, civil penalties and enforcement powers approved by the Labor government's Minister for Home Affairs in September 2011. It is also the subject of a drafting direction, an instruction issued by First Parliamentary Counsel, which requires all drafters to comply with the direction. This too will ensure a consistent approach is taken to the bill's provisions.

The bill is a law of general application for the enforcement of regulatory regimes that other acts must refer to and trigger for the bill's provisions to apply. It is a regulatory device which we now see in the criminal code. It is possible to point to other parts of the Commonwealth statute book where this device is used—where, by setting up a set of standard provisions, it is possible for the drafter of legislation that comes after to, simply by reference, incorporate those standard provisions in the new law which is to be made.

As the Labor government had intended, the bill will be implemented in three careful stages. To activate the bill's provisions, new or existing Commonwealth laws must expressly apply the relevant provisions and specify other requisite information such as persons who are authorised to exercise the applicable powers.

The bill will provide greater clarity for agencies that utilise regulatory powers, and for Australians and Australian businesses that are the subject of a regulatory regime. Currently, agencies with a regulatory function may enforce a number of different regulatory regimes, each of which may have different governing legislation. Similarly, businesses may be subject to a number of different regulatory regimes that have slightly different enforcement and investigatory powers. It is to be hoped that, over time, many Commonwealth agencies will find themselves in a position to adopt this standard regime. Obviously, that will have the potential to both simplify and improve the comprehension of the powers exercised by Commonwealth agencies.

The powers that the bill provides will only be available to a regulatory agency if their governing legislation triggers or engages the bill. The powers contained in the bill can be triggered in whole or in part by a regulatory agency's governing legislation. For example, a regulatory agency's governing legislation may be amended to trigger only the part of the bill that deals with enforceable undertakings.

Showing that this bill represents quite a long history of consideration by this parliament, the Senate Legal and Constitutional Affairs Legislation Committee has looked at this bill not once but twice. It looked at the Regulatory Powers (Standard Provisions) Bill 2012 and made a recommendation dealing with the point I have just mentioned. In the previous version of the bill, it had provided for the standard provisions to be triggered by a regulation. The Senate Legal and Constitutional Affairs Legislation Committee thought it appropriate that, rather than having the provisions triggered by regulation, the provisions would not be triggered other than by legislation in order to ensure that there was full parliamentary oversight of this. Their recommendation that the standard provisions only be triggered through primary legislation has been picked up in the bill which is now before the House. The Senate Legal and Constitutional Affairs Legislation Committee, having now looked at the Regulatory Powers (Standard Provisions) Bill 2014, observes that that has occurred and expresses satisfaction that the recommendation that they made on the 2012 bill has now been picked up.

It is obviously the case that some regulatory agencies' powers go beyond the scope of the standard suite of regulatory functions that are provided in this bill. One could point to agencies like the Australian Federal Police or the Australian Security Intelligence Organisation, which require specialised regulatory powers. They will continue to exercise powers under the specific laws that establish those organisations and confer powers on them. It is not envisaged that agencies like the Australian Federal Police or the Australian Security Intelligence Organisation would need to trigger any of the standard provisions that we see in this bill.

The small number of submissions that were made to the Legal and Constitutional Affairs Legislation Committee in relation to the current bill included a submission from the Fair Work Ombudsman and a submission from ASIC which were, in essence, making the point that I have just made—that not all of the powers in the standard set of provisions are going to be entirely appropriate for every single agency. It is for that reason that this structure provides for not all of the standard provisions to be adopted. You can have the situation that an agency might adopt none or some or all of the standard set of provisions that are included in this bill.

I can say that this bill is real regulatory reform; it is not the hollow stunt of the government's self-described 'bonfire of regulations' that we had back in March. It is a bonfire which fizzled. But I fear that the government remains caught up in their own rhetoric of red tape and deregulation. There is a need to cut through the government's empty rhetoric about supposed red tape and deregulation to examine in every case what is actually proposed. I fear, at this stage, that the government is still, for example, proceeding with its proposed repeal of the Independent National Security Legislation Monitor—something that the government announced on its repeal day. That office, the Independent National Security Legislation Monitor, is responsible for reviewing quite onerous legislation in the national security area to ensure that the restrictions that are imposed by that legislation are still necessary. In a very real sense, the Independent National Security Legislation Monitor is responsible for an ongoing kind of regulatory reform. It is a body that is directed at removing unnecessary laws and regulation. I can say that the Independent National Security Legislation Monitor, in his final report tabled last week, cuts through the government's rhetoric about red tape and deregulation. In a few—

The DEPUTY SPEAKER ( Hon. BC Scott ): Order! The debate is interupted in accordance with standing order 43. The debate mat be resumed at a later hour and the honourable member will have leave to continue his remarks when the debate is resumed.

Mr DREYFUS (Isaacs—Deputy Manager of Opposition Business) (15:25): As I as saying before question time, there is a need to cut through this government's empty rhetoric about supposed red tape and deregulation and to look always at what is actually proposed. In that regard, the inaugural Independent National Security Legislation Monitor, the eminent Australian lawyer Bret Walker QC in his final report, tabled last week, cut through the government's rhetoric with a few pithy statements about the proposal to abolish his office and the legislation which created his office. He said there was no prior consultation with the INSLM before it was announced that repeal of the INSLM Act would be sought by the government as part of the reduction of red tape. Mr Walker went on to say:

The proposed repeal of the INSLM Act has been explained as "designed to reduce bureaucracy and streamline government" by removing "duplication of responsibilities and between different levels of Government".

Mr Walker said:

The INSLM is not aware of any other officer, agency or "level" of government doing what Parliament required to be done by the INSLM Act enacted in 2010.

To finish: in case it were not clear, the Independent National Security Legislation Monitor as almost his last act in office had this to say about the government's supposed 'bonfire of red tape':

Given the enacted purposes of the office of INSLM, I dissent from its description as red tape.

It is important to distinguish between the kind of pretence and charade that this government has been engaging in with its supposed bonfire of regulation and real regulatory reform. Unlike the government's false bonfire of regulations, unlike the government's proposal to abolish the Independent National Security Legislation Monitor, this Regulatory Powers (Standard Provisions) Bill 2014 is real regulatory reform. It is almost identical to the bill which the Labor government introduced in 2012, and the present federal opposition supports it.

Debate adjourned.

Mr RUDDOCK (Berowra—Chief Government Whip) (15:28): I declare that the following bills are referred to the Federation Chamber for further consideration: the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014 and the Regulatory Powers (Standard Provisions) Bill 2014.

Mr IRONS (Swan) (15:29): I rise to speak on the Trade Support Loans Bill 2014. The Australian government is committed to building a high-quality and nationally consistent Australian apprenticeship system which supports apprentices and responds to the needs of employers and the economy. There may be some members in this place who have done an apprenticeship. I did one myself back in the seventies. After completing form 4 at Blackburn High School I decided I wanted to be an electrician. I entered an apprenticeship with a one-man business in Eltham and then moved to a company in Doncaster which was closer to home. Part of the reason for that was transport issues. I was too young to drive and on many occasions ended up hitchhiking from Eltham to Box Hill North, often after dark. In the seventies that is just the way it was. Today we would be horrified to know that 16-year-olds were hitchhiking home late at night from work.

This bill goes part way to addressing the financial and transport challenges that apprentices face in today's economy. Apprenticeships are declining in Australia, but I know there are many industries and people who want to see an increase in apprenticeships. There are a couple of people from the Air Conditioning and Mechanical Contractors' Association in the gallery today—David Eynon, who is the CEO, and Chris Smith, President of AMCA. Chris is from WA. It is great to see them in the chamber. I know they have a major interest in apprenticeships. There are major changes planned for the refrigeration mechanic apprenticeship courses. Energy Skills has initiated a project to dramatically alter the apprenticeship training program for refrigeration mechanics. The project is being guided by a steering committee which has representation from AMCA on it.

I see the member for Chifley leaving. He might be interested to hear that my first take-home pay as an apprentice back in 1974 was $39 for one week. Things have moved on since then. It was at a time when apprenticeships were still being focused on as a genuine vocation to aspire to and to achieve after people left school. People then were more focused on getting apprenticeships than they were going to university. Things have turned around since then. Part of this bill and part of the reason for the bill is that we want to make sure that being an apprentice is sustainable not only for the apprentices but also for the businesses who provide the opportunities for apprentices. That is what this bill leads to.

I know the member for Cunningham expressed some concerns over school aged apprentices accessing loans. I am pleased to inform her that trade support loans for those under 18 are consistent with other education loans that can be accessed by students under 18, such as HELP. Similar to HELP, information will be available to apprentices and parents to ensure they are aware of their responsibilities undertaken with the loan. It is also worth noting that apprentices must opt-in to the loan every six months, ensuring they remain aware of the accruing loan.

I know the member for Cunningham has moved a second reading amendment. The coalition will not be supporting that amendment. We will be supporting the bill in its original form. I know she has a deep interest in trade. She was a TAFE teacher and I have served on the education committee with her. But this is part of a total package of measures by the government to fix the debt and deficit problems left by the previous government. It is in this context that I do support the bill in its original form.

The bill's immediate purpose, as I said before, is to make available loans to apprentices to help their cost of living and learning during the course of their apprenticeships. Australia needs a skilled workforce for its future competitiveness in industries like the air conditioning industry and particularly those industries that feed into our massive mining industry. We are constantly told that there is an overall shortage of skilled tradespeople in the economy. In Perth we certainly need these skills more than ever on the major construction projects going on everywhere you look in the city and of course across the mining sector.

The latest official data from the Department of Employment on skills shortages in Western Australia lists state-wide shortages in trades such as solid plasterers, stonemasons, roof tilers, panel beaters, locksmiths and electrical line workers—all trades that are needed in a growing economy. My son is working as a bricklayer at the moment. He is hoping to gain an apprenticeship in the next short while and he is very keen to take advantage of the loan. It has been described as an offset as there is a loss of the Tools For Your Trade payment of $5,500. But if they complete the apprenticeship there will be a $4,000 rebate if they take up the full $20,000 and over that period of time the $1,500 and the HECS-style loan will be greatly assisting them in achieving an income that tradespeople can achieve under the current system. If you look at some of the trades that are working in the mining industry, I am sure we would be happy with the income they are receiving. They will be able to pay that back as a HECS-style loan.

I hear from constituents who try to find an apprenticeship place for their son or daughter but cannot as they are told there are no available places. Yet overall in Perth we are seeing a decline in the number of apprenticeships being started and completed. This bill hopes to encourage people wanting to be apprentices. The latest available statistics from the WA Department of Training and Workforce Development show a decline in apprenticeship commencements across all regions of WA of 10.1 per cent in the 12 months to the end of 2013. Apprentice commencements in electrical trades, for example, have fallen by about 17 per cent since 2011.

There is enormous interest in this bill, as we can see by the number of speakers. In the short time I have left I will wrap up by saying that what I am most proud about Swan is that there are currently 5,184 apprentices in the electorate of Swan, which is the fifth-highest electorate in Australia for number of apprentices. I guess that comes down to having a transport industry and over 20,000 businesses within the electorate of Swan. Of these 5,184, there are 2,103 undertaking an apprenticeship in a skill listed on the National Skills Needs List. They are supported by the Swan TAFE, which is in Carlisle in my electorate.

There are many members wishing to speak on this bill, and there is limited time remaining for the debate, given the need to get the support from those on the opposite side, have the legislation passed, and get it underway. We need to have this program ready to commence on 1 July 2014. The next speaker will give us passionate reasons why this should not go ahead and why we should support the amendment. The coalition will not support the amendment. I yield the call to the next member and conclude by commending the bill in its original form to the House.

Mr FITZGIBBON (Hunter) (15:38): I rise to support the amendment put forward by the member for Cunningham. It is welcome that all sides of the House are focused on what is a very important issue—that is, maintaining an appropriate level of skills in this country and in this economy and, on that basis, keeping us internationally competitive.

I speak on this bill with possibly more authority than most, having been an apprentice myself. I am an auto-electrician by trade and proud of it. If your car is older than about 1985, I am sure that I could still fix it for you. If it is more modern than that, then I might struggle a little bit with the new technology. I left school at 16. I did not like school all that much, I must say. I only ever wanted to do two things: a trade and to play first grade football for my hometown. These were two aspirations I achieved, I am happy to say. I was apprenticed by a wonderful couple by the name of Eryl and Marcia Lightfoot. They ran a workshop in my hometown of Cessnock, and I enjoyed the experience very much and am thankful to them to this day for that opportunity. After that, I went into my own business, which I operated with a partner, Greg Stacey, for around 10 years before going on to a less honourable trade called politics.

Ms MacTiernan: It would appear you have a private sector background, and your hands are dirty!

Mr FITZGIBBON: I have had my hands dirty, yes. I thank the member for Perth. I have been to TAFE and I did block release in those days, because auto-electricians were far and few between, and obviously there was not a critical mass of apprentices to hold regular TAFE courses. So we would go off to Sydney for a week at a time—I suppose five or six weeks a year. Interestingly, in my earliest days, I stayed at the Villawood detention centre. If that does not highlight some of the struggles apprentices face, particularly earlier in their time as an apprentice, nothing would. I made a few mates there and we did not stay in the Villawood detention centre too many weeks. I think we found ourselves a caravan in Bass Hill. Support from the government to pay for the accommodation for the caravan would have been welcome at the time.

Apprenticeships are a complex area. I know those on the other side of the House like to say that they place as much value on apprenticeships as they do on a university degree. I place as much value on apprentices as I do on university graduates, but I do not know what the former statement means. I will keep trying to work that one out. But I know that it is a very popular statement, because members of the government know that people out of their own community like the idea of apprenticeships unfolding in the same way as they did historically, and they would like to see the government trying to rekindle that old environment.

Times change. In my day, apprentices finished apprenticeships. I do not understand for the life of me why 20 per cent do not get beyond the first year now and some 30 per cent, as I understand it, do not get beyond the second year. Years 1 and 2 are the worst paid of all as the employer gets virtually no return for your work effort, because you simply do not have the skills to be making a high-value contribution to the business or the workforce. But when years 3 and 4 come around, you are making a substantial and technical contribution and the employer is in a position to pay you more. If the government really placed the same level of value on apprenticeships as they do on university degrees, they would not spend so much of their time trying to drive down the wages of tradesmen. That is their mantra: 'We could be more internationally competitive if we could pay our workers less, including tradesmen.' There is a contradiction in that approach, and it is one worth highlighting for this chamber.

Having said that, we are talking about ensuring our international competitiveness by making sure that we have skilled people. We will not have skilled people if we do not indicate to them that after their apprenticeship there is a reasonable salary to be earned. That is what has to be kept in mind first and foremost. The member for Swan made the point that, too often, tradesmen, after completing their apprenticeships, are poached by other employers. In my own region, and in the mining regions generally, including in Western Australia, that is typical of the mining industry. I know it is a great source of frustration for those who secure and engage those apprentices. I would dip my hat to someone who came up with a solution for that economic dilemma, because I do not see one. We must continue to do all we can to bolster the supply of tradesmen through apprenticeships. This bill takes away one initiative the former Labor government had, to encourage people into apprenticeships and to complete their apprenticeships, and replaces it with another. I am not going to get into a debate today about which is the better system. I would like to think that most out there in the community do not care much, as long as we are working together to address what is a serious problem and a challenging issue.

I am happy to acknowledge that the government has factored into its scheme a 20 per cent discount in the final year of the loan payment as an additional incentive to complete the apprenticeship. There are some aspects of the loan scheme that concern me—like very young kids being capable of raising a loan and therefore putting themselves into substantial debt for someone of that age, potentially without the authority of their parents. I understand that hasn't been clarified, and we need to watch these things very closely.

I know that it is very difficult to administer a policy design which requires the apprentice to spend the money on certain goods or services only. I accept that but I think this is a program that will need to be watched very, very closely to ensure that the money is not misspent and that young people do not find themselves in debt without completing their apprenticeships—a debt which the minister describes as interest free. But it is also a debt that is indexed to the CPI and therefore grows over the term of the loan, which I think is worth pointing out.

Regions like my own are often described as insufficiently diverse. This is a topic of conversation at the moment because, as we all know in this place, the coal prices have collapsed in the case of coking coal from $320 a tonne only 18 months ago to something like $120 a tonne at the moment. When the coal price falls and mining turns downward, we feel it in the Hunter.

I remind people that we are a very diverse economy in the Hunter. In fact, mining only makes up about 10 per cent of the economy. Our biggest contributors are of course the services sector—health and education, in particular. We have very significant thoroughbred breeding, agriculture, viticulture and tourism industries. We have got new growth industries like the CSIRO Energy Centre promoting renewable energies in our region

We are struggling in manufacturing because we have difficulties with the dollar, and I congratulate HunterNet for recently organising a round table so that we could discuss how we might overcome those problems. Certainly for those employers, apprentices are an issue, apprenticeships are an issue, and we were told at that round table from a number of employers that they are employing nowhere near the number of apprentices they previously were. In their case, it is about the state of the manufacturing sector but it is another reminder that we must constantly work on keeping up the supply of apprentices.

In the good old days, BHP steelworks trained thousands and thousands and thousands of apprentices—I forget the number; I know it was in the thousands every year. They not only trained apprentices for themselves but provided tradesmen for the whole valley, including the mining industry, and they are no longer there. We need other broader policies to ensure that employers take on the responsibility of training apprentices. The coalmining industry does it to an extent, but I think they could do more.

The other point I would like to make is that we need training providers for these young people. In the Hunter Valley providers like Hunter Valley Training Company have popped up and is now very effectively and efficiently providing some of that training, but in all regional areas we need public institutions. We need a strong TAFE system that both employers and apprentices can rely on to secure the training they need to bring a young apprentice from day one on the broom through to a fully-fledged apprentice.

I do not oppose the loans scheme. I am concerned about the indebtedness for some kids. I am hopeful that the government will watch closely to ensure that it does not run out of control. I think government members have to acknowledge that you will not encourage apprentices into trades while you are telling people the best way to fix all the ills of the economy is to pay people less. More broadly, you need to have training institutions in place that kids in regional Australia can access. It is not like the capital cities where you can get a bus around the corner and find yourself a TAFE place or a place with a private training provider; sometimes the training facilities can be a long way away as was the case when I was a kid.

Governments need to focus on public institutions like TAFE, because the reality is that these will not always be viable concerns. If it is all right to subsidise loans to kids to encourage them into apprenticeships and to complete their apprenticeships, then it is all right to subsidise TAFE training courses that at the end of the day will form the basis of our skills model here in this country.

I think there is a very strong message for governments at both the state and federal level to recognise the importance of our TAFE system, the efficacy of putting public money into structures that provide outcomes like tradesmen and therefore the need to ensure that our TAFE system is adequately funded.

Again, in the second reading amendment I think the member for Cunningham made some very good points. The government made no mention of getting rid of Labor's program prior to the election so that makes this bill officially another broken promise on the part of those on the other side.

But they are in government. They say they want to bolster the supply and completion rates in apprenticeships. We certainly will not stand in their way. They believe a loans system is a better way to go. We thought that our Tools For Your Trade system, a cash payment to kids, for the same reason was adequately doing that job. I suppose the proof will be in the pudding. We will know in a few years time which scheme worked more effectively. We will not stand in the government's way of changing from one scheme to another and rebadging the scheme, so I suppose they can claim credit for it, if it goes well. We will be reminding them, if it goes badly. On that basis, we will not be opposing the bill in this case.

Mr BALDWIN (Paterson—Parliamentary Secretary to the Minister for Industry) (15:51): The aims of these bills, the Trade Support Loans Bill 2014 and Trade Support Loans (Consequential Amendments) Bill 2014, are to help address apprentice drop-out rates, to improve completion rates. We have a duty of responsibility as a government to get people job ready, job steady, to infuse them with the skills and, in particular, to encourage, support and develop young people in the completion of their apprenticeships.

The current scheme is clearly not working. The evidence shows that young people are not completing apprenticeships. In fact one out of two fails to complete an apprenticeship. The facts of the matter are: this government has decided to invest $1.9 billion in loans over the forward estimates at a cost of around $439 million over the forward estimates. The member for Hunter, the previous speaker, said that this was a broken promise because we had said nothing before the election. That is not true in any way, shape or form. This was one of our key priorities going into the election. It was a key priority. I remember the announcement well—the $20,000. So to say that—

Mr Fitzgibbon: What? Abolishing Tools For Your Trade?

Mr BALDWIN: Member for Hunter, you are absolutely wrong on this one. You cannot cover it up. We made it very clear that we would be replacing the program.

Secondly, Ms Bird, the shadow minister, said in this debate that she did not understand how young people would be able to afford their uniforms and their tools. The reality is that this program delivers $8,000 to first year apprentices. The reality is that young people will actually be better off in their first year. It will be paid monthly in arrears and it is an opt-in process. If people do not want to engage in this loan system, they do not have to take it up and they can opt out at any six-month renewal.

We need to incentivise the completion of apprenticeships. We will achieve this by offering a 20 per cent discount to those apprentices who complete their apprenticeship. Over the full scheme that is the equivalent of a $4,000 rebate. NCVER did a survey in 2010 that found that 38.7 per cent of apprentices leaving trades did so because of the associated wages in the early years of an apprenticeship. I can reflect on that. I am a tradesman myself. I was an apprentice fitter/toolmaker. I can remember the princely sum I earned as an apprentice—admittedly this was more than one or two years ago—of $10 a week. That was pretty hard to get by on, but jobs were plentiful and opportunities were great.

Today cost-of-living pressures are a lot higher and it is arguable that wages paid to apprentices would not meet the true costs of living for those people but, as other speakers have said and many more will say—and from my experience as both an apprentice and a tradesman—most first year apprentices are a liability to the company. In the second year they are less of a liability but are still a liability because they are not generally producing a profit for the company. It is only when they get to their third and fourth years that they are assets in that they are bringing in a return to the company. Apprentices are a long-term investment by a company. We the government are prepared to co-invest in that. We will provide $20,000 through the trade support loans, with $8,000 being paid in the first year, $6,000 in the second year, $4,000 in the third year and $2,000 in the final year. This investment of taxpayers' money will deliver a real, measurable outcome.

We want to see an end to the dropout rates. I will give you some examples of the dropout rates that have been put to me. Let us look at the rates for automotive and engineering, which is ANZSCO grouping 32: in 2006, 51.5 per cent completed their apprenticeship; in 2007, 49.5 per cent; and in 2008, 50.1 per cent. For electrotechnology the completion rate was 57.6 per cent in 2006, 57.1 per cent in 2007 and 54.1 per cent in 2008. Let us look at hairdressing: the completion rate in 2006 was 37.7 per cent, in 2007 it was 38.9 per cent and in 2008 it was 37.8 per cent. That shows there is an inherent problem in the system.

Employers cannot afford to pay higher wages for first year apprentices. That is why the government needs to step in and provide support. Because it is a loan the money can be used at the discretion of the participants in this loan program. It can be used as a wage subsidy, to buy tools, to make an investment or to save up for a ute if they are a builder or the like. The reality is that we have to do something different because we have to deliver a real outcome, and that outcome will be measurable improvements in completion rates for all apprentices.

I will curtail my comments there because there are a lot of speakers. It is important that these bills go through so the program can commence on 1 July. I encourage members opposite to get behind this, to support it, particularly if they want to see completion rates in apprenticeships improved. I commend these bills to the House.

Mrs ELLIOT (Richmond) (15:57): I rise to speak on the Trade Support Loans Bill 2014 and the Trade Support Loans (Consequential Amendments) Bill 2014. As we have heard, these bills establish the Trade Support Loans Program for Australian apprentices. These loans will be concessional and income contingent with a lifetime limit of $20,000. The loans are repayable when the individual's income reaches the Higher Education Loan Program, HELP, repayment thresholds. The bills also provide for a 20 per cent discount to be applied to the loan incurred when the apprentice has successfully completed their apprenticeship.

I have a range of concerns about this government's approach generally to training and some of their cuts to education, particularly how they relate to many of the broken promises we have seen since the election. Prior to the 2013 election the Prime Minister announced the trade support loan, but he failed to tell apprentices and their families that he intended on scrapping Labor's $1 billion Tools For Your Trade program. He failed to tell those considering an apprenticeship that the $5,500 per apprentice under Labor's program would be axed. Our program was in recognition of the significant costs that apprentices often have for items such as uniforms, tools and the necessary safety equipment. They often have a whole range of significant costs.

We have seen this broken promise. We have seen a lot of broken promises throughout the budget and, in terms of what we had in place for apprentices, there certainly was another in this case. Before the election the Prime Minister had promised Australia's 400,000 apprentices more financial assistance to help them learn their trade and then find a really good job. But now, after the election, he is ripping away some of that support and breaking that promise in taking away the Tools For Your Trade program. What was equally disappointing was the industry minister's response to all of this—saying that it did not really matter because, under that other program, the apprentices were just spending their Tools For Your Trade money on tattoos and mag wheels. Quite frankly, this is very insulting; that is certainly what a lot of apprentices and their families have conveyed to me. It is incorrect and it shows how out of touch he and the government are when it comes to issues relating to training.

The fact is the government has replaced the payment we had in place with a debt. Apprentices cannot now buy their equipment without taking out a loan. They will have no choice but to sign up to the loan because the government has left no other financial support in place. As the shadow minister, the member for Cunningham, has said, Labor will not oppose the Trade Support Loans bill, but she did move an amendment. I understand that amendment includes a request that the House notes that the government has failed to: advise apprentices that they would be abolishing the Tools for Your Trade program, thus leaving Trade Support Loans as the only form of assistance for the purchase of tools; adequately explain in clear language the interest rates and full liability of these loans; offer adequate protection for school based apprentices aged under 18; offer fair and reasonable transition arrangements for current apprentices; put in place adequate privacy protections for the large volumes of information that will be acquired through the Trade Support Loans Program; and offer apprentices the option of lump sum payments in order to purchase expensive items. These are all very good amendments in relation to this matter.

Youth unemployment is unacceptably high, particularly in regional communities like mine on the North Coast of New South Wales. The Prime Minister has said that our young people must earn or learn, but he is taking away so many of the programs which actually support them to do so. These comments were echoed recently in The Australian when Tony Nicholson, the director of the Brotherhood of St Laurence, made the point that the earn or learn requirement demanded of young people requires the government to provide support and training programs to assist young people gain the skills they need in the workplace.

The fact is the Abbott government has taken the axe to support for so many training programs for apprentices. There is a whole range of programs. As well as axing the Tools For Your Trade program, they have axed the Australian Apprentices Access program, which assisted vulnerable job seekers who found it difficult to enter employment with nationally recognised prevocational training support and assistance. This program was delivered by local providers who worked with local employers to deliver training to meet industry needs. Participants received individualised, intensive job search assistance.

Also axed was the Australian Apprenticeships Mentoring program which targeted apprentices who may face barriers to participation. Mentoring programs usually focus on that first year of training when, as we know and have heard today, apprentices are often at the most risk of withdrawing from their apprenticeships. Also axed was the Apprentice to Business Owner program which helped tradespeople who had completed their trade training make informed decisions about whether or not to start a business. The program provided business management skills to ensure participants have sound financial business plans and meet the requirements associated with employing staff. There was a whole range of programs.

The Abbott government have demonstrated they really do not understand the need for these important training programs. What they have slashed is a billion dollars in investment in skills and training for our workforce. I will read through some of these, including some of the ones I mentioned before; it is quite a long list. There are programs like the National Workforce Development Fund; the Workplace English Language and Literacy program; the Australian Apprenticeships Access program; Accelerated Australian Apprenticeships program; Australian Apprenticeships Mentoring program; the National Partnership Agreement on Training Places for Single and Teenage Parents; the Alternative Pathways program; the Apprentice to Business Owner program; the Productive Ageing through Community Education program; and the Step into Skills program—a whole range of programs that focused on upskilling existing workers to meet the needs of the modern workplace.

What is also a concern with the introduction of this bill is it raises a whole series of questions in terms of what the impacts will be, particularly in rural and regional areas. Will horticultural and agricultural students, who have lost their Tools For Your Trade grants, be eligible for Trade Support Loans? Another important question is: will parents now be responsible for a 16-year-old school based apprentice's $20,000 Trade Support Loan? In Senate estimates, the government confirmed they are looking to outsource debt management for Trade Support Loans. Realistically, is the government happy to potentially saddle young apprentices with $20,000 debts and leave them in the hands of private debt collectors? This raises a whole host of concerns as well.

We know that many apprentices have huge start-up and continuing costs for necessary tools and equipment but now they will be left with the debt under the Abbott government's program, rather than being provided important funds to purchase tools and get going in their chosen trade.

By comparison with all this Labor, when in government, put in place real support to help young people—particularly those in regional and rural Australia—to get in and finish an apprenticeship and undergo training. What we are seeing is this government gradually ripping away a lot of that support. We are also seeing very harsh actions by state Liberal and National Party governments, who are making massive cuts right across education. They are very harsh cuts in terms of slashing resources and funding for TAFEs, which provide such a great training resource, particularly for younger people in regional areas. We have seen them cutting many courses. We have seen them closing campuses. We have seen some real concerns about fee increases. We have seen staff numbers cut. This could have a devastating impact. I know first hand what a great job TAFEs do in my area, the North Coast of New South Wales. There is an outstanding network of TAFEs there that really provides fantastic training for our young people. All that is under threat from the actions we are seeing from both federal and state governments.

It was great to see last week the Leader of the Opposition in New South Wales, John Robertson, announce some Labor policies to protect TAFE. It was fantastic to see those initiatives. He said that, if elected in New South Wales, Labor will abolish the Baird government's massive fee hikes to TAFE courses. He went on to say:

Labor will always treat TAFE is a central part of our public education system … We will stop the mass sackings, cuts to courses and the massive fee increases to ensure we have a fair and affordable vocational education and training system in New South Wales.

I commend the Leader of the Opposition for his very strong action in terms of the initiatives that Labor would introduce if in government in New South Wales, because it has been devastating to see what these cuts have meant to students right across the state—particularly for those in regional areas like my own.

It is only Labor that has properly provided funding for education and training right across the board. From this government we tend to see ongoing cuts in the training and education sectors. We were devastated to see in the budget those broken promises—that $80 billion in combined cuts to hospitals and schools is a major amount; some of those cuts to education will be devastating for younger people. Also of major concern in terms of accessing education was the deregulation of university fees. This has had a major impact and many people have raised concerns about what that will mean for families—particularly, again, from regional areas. Before the election the Prime Minister and all his then shadow ministers were saying, 'We will ensure the continuation of the current arrangements of university funding.' That has been a broken promise because the budget cut $5 billion from university funding, resulting in forecasts for fee rises of 40 to 60 per cent just to recoup the shortfall. We have also seen the government impose an interest rate of up to six per cent on those debts and the deregulating of universities, which makes it absolutely inevitable that fees will rise. That is a concern that many people have approached me about, particularly families who are so worried about how their children will be able to access university, knowing that it will be out of their range. We have seen some forecasts of jumps in fees that are quite frightening. Of course, there are often so many associated costs for people from rural and regional areas to even access a university, so those increases will add to that. It is a really big concern, not just from the perspective of a broken promise but because it means people from regional areas are more disadvantaged in being able to access any educational opportunities.

What we have seen across the board is this government cutting so much funding for training and so much funding for education and higher education. It is disheartening and upsetting, firstly to see a broken promise and then to see how it impacts people, particularly younger people, who will not be able to access adequate training. I am particularly worried about how the trade support loans will saddle younger people with huge debts they will have to carry and that will have a huge impact on their lives. That is combined with some of the massive TAFE cuts that we are seeing right across the states. We are certainly seeing that in New South Wales, where it is a big concern. Overall, it shows that the government is out of touch in so many areas. We saw that throughout the budget, with the cuts to pensions and to health, but education has been one of the biggest areas of concern that shows how out of touch the government is about being able to providing for people, particularly younger people, right across the country.

Contrast all of that with what Labor did in government with our focus on education. I certainly saw that in my area, particularly through the Building the Education Revolution. More than $115 million was invested in 90 schools. We see every day what a positive benefit that has been to young people throughout the North Coast. In contrast, we are now seeing a government that is ripping away so much support for education and for funding.

Labor are supporting this bill, as I said. We have moved the second reading amendment which contains proposed changes that we think are particularly important, especially those that provide protection for school based apprentices. There is a growing interest in school based apprenticeships, which are being accessed by a lot of younger people and we want to make sure that protection is in place for them. That is why all of these proposals are very worthy ones. We have to have a fair and reasonable transition arrangement to make sure those apprentices are properly looked after. The adequate privacy provisions are also very important, given the large volumes of information. But what concerns us most is that the government are abolishing the Tools For Your Trade program. I think it was such a good program to have in place, so it is a real concern that that is happening. We will be supporting this bill, but these proposed changes are vitally important, particularly from the perspective of clear language relating to interest rates and the full liability for these loans. When it is much younger people who will be taking up these loans, it is very important that they are fully aware of the ramifications of what they are signing up for. That is why I am focusing on the importance of the proposed amendment to this bill.

Dr STONE (Murray) (16:11): I very strongly support this Trade Support Loans Bill 2014 and the Trade Support Loans (Consequential Amendments) Bill 2014. In fact, I think the Trade Support Loans scheme is one of the best things we introduced in the budget and I am so pleased that it is likely to commence and at last give our trade trainees some semblance of a decent income, as early as July this year.

I am amazed by the previous speaker, the member for Richmond, whose main complaint was that we had done away with a lot of the old regime of trade training in Australia! Well, thank goodness we did, because we had the number of people turning to trades as a career in Australia on a steadily declining trajectory and less than half of our trainees in trades finished their qualification. There was something seriously wrong. I think it began in Victoria in particular when a Labor state government decided that they would abolish the old technical secondary schools. The idea was that if you were in a tech school you must be an inferior student and you would surely therefore be better off, in terms of feeling good about yourself and learning a decent set of skills for a future career, if you went to what they then named a secondary college.

Tech schools were abolished and everyone was supposed to go along to these secondary colleges. Technical teachers right across the state lost their jobs. All the great equipment that was used in automotive training, carpentry, plumbing and boiler making was lost to the system. Labor rejoiced because they had a one-stop shop for all students in secondary schooling in Victoria. That was the beginning of the rot—it set in from that point. Right now the coalition government are trying to reinstate technical training in schools with our trades training centres. I am very pleased to have a number of these being established in the electorate of Murray, but they have nothing like the comprehensiveness and very local access that we used to have with the old technical schools.

We know it is incredibly hard for a young or even a middle aged or mature aged trainee in a trade to survive on the current wages that are paid. What we are introducing with this bill is a fantastic opportunity to almost double—to increase by 40 per cent—the income of a trades apprentice so they can survive even if they do not have supportive parents or they are not living at home or they are mature aged with perhaps a partner and children. They will have up to $20,000 in, of course, a completely voluntary loan which will be indexed in line with the CPI. The apprentices will be paid amounts totalling $8,000 in the first year of their apprenticeship, $6,000 in the second year, $4,000 in the third year and $2,000 in the fourth year. These loans will be repayable under arrangements very similar to the Higher Education Loan Program, or HELP. In other words, you do not start to repay your debt until your income reaches a certain threshold.

This is about the coalition recognising that we should not have two standards when the country is considering the needs of our up-and-coming skilled people in the next generation. For a long time we said people getting university degrees were eligible for HECS loans. We said that university students could also have special loans available through the universities themselves. Now we say: so should trainees in trades. Of course they should. This is, I think, a great step. It should, for the sake of so many of our trade trainees, have happened a long time ago.

The previous speaker lamented the loss of the $4,000 tool-kit grant, which was Labor's best effort. Those tool-kit grants were able to be claimed early in the apprenticeship and there was no accountability—there was no requirement that a receipt be forwarded to anyone to show that the apprentice had actually bought tools with this grant. As I say, the vast majority of apprentices gave up on their apprenticeships very early in the piece, which was very disappointing. I suppose it was like the pink batts program, cash for clunkers and GroceryWatch: a good idea from someone all of a sudden, but, with the way Labor managed it, it did not give the individual any better way to live on their very low salaries. They, hopefully, got a box of tools, but it did not keep them in food and fuel for their vehicles.

This is an extraordinarily important bill. I am pleased to note that, in my electorate of Murray, there are 3,055 apprentices in training. I have to say that the majority of the apprenticeships being undertaken are not on the National Skills Needs List. I hope more of our young Australians become familiar with that list when getting career guidance. These $20,000 loans will be available in particular to those who are undertaking an apprenticeship that is on the priority occupation list—but, for the benefit of the previous speaker, who never does her homework, yes, they are also available to agricultural and horticultural apprentices. Yes, they are. It would not have taken much to look that up.

I strongly support this bill. It is going to make a huge difference to the numbers of people who will then be able to support themselves—in fact, live—on the very low apprenticeship wages. I hope it will give them better direction as to which trades are most in need in Australia. I hope more women can take up apprenticeships in what have traditionally been male gender dominated areas like construction and automotive. I certainly am most concerned that, as expressed by the previous speaker, the member for Richmond, we still have this denigration of trade training in Australia where we say it is second rate—'It's not as good as university education, so, no, you shouldn't have the support from the public purse that we have been offering university students for a very long time.' I commend this bill to the House and very much look forward to the program commencing in July.

Mr NEUMANN (Blair) (16:17): I am pleased to support the Trade Support Loans Bill 2014. The budget coincides with the country shows that I do every year in my electorate. I have been to Kilcoy, Marburg, Toogoolawah, Esk, Lowood, Ipswich and, last week, Rosewood, and I can say that people are very anxious about the budget. They are very anxious about the changes that this government intends to make. They feel deceived by this government. I have spoken to pensioners, self-funded retirees, young mums, students as well as businesspeople who feel very much aggrieved at what they are experiencing. Last weekend, at the Rosewood Show, I spoke to people furious about the $7 GP tax.

Mr Tony Smith: Mr Deputy Speaker, I rise on a point of order. The member does need to at least address the substance of the bill before the House. I thought he was beginning a preamble; it is turning into a treatise. There are many opportunities in the House for him to give his opinion and his experiences at all of his country shows—and we all in outer metropolitan and rural electorates go to those—but this is about the Trade Support Loans Bill and he has to at least make reference to it.

The DEPUTY SPEAKER ( Hon. BC Scott ): I thank the member for Casey and I remind the member for Blair to confine his remarks to the bill before the chamber.

Mr NEUMANN: If the member for Casey had seen my notes, the next sentence says that I had spoken with young people about their apprenticeships. So he got in a moment before I was about to turn to the substance of the bill, but I thank him for talking about my preamble and reminding my constituents of the many mobile offices I conducted in the last month or so.

These apprentices who have spoken to me are very concerned over what they are experiencing, but I also have spoken to many mums who have discovered that the Tools For Your Trade program has been cut, leaving their sons and daughters stranded in their apprenticeships. I received an email from an apprentice baker in my electorate and it is pretty typical of what my office have received and the feedback we have got in relation to the budget measures that are before the chamber today. It is an email from a guy called Adrian Lowe. This is what he writes in his email:

My name is Adrian Lowe. I'm 28 and an apprentice baker,

I have 3 children and a stay at home wife due to our youngest is a new born

My apprenticeship is up at the start of November which means I will not be getting any of the money promised to me for completion of the apprenticeship.

I am out of pocket almost $2800 which would have helped if I cannot secure a new contract as a baker at my place of work

The money would have help pay bills in between jobs.

Not to mention I signed a contract with the government to complete my apprenticeship and they will help me to do so financially.

That is pretty typical of the response that I have received at the many mobile offices I referred to and that my office has received as well. We have been contacted by registered training organisations concerned about the impact the axing of the Tools For Your Trade program will have on their apprentices and also about the substance of the bill before the chamber.

The government proposes to provide trade support loans for Australian apprentices. These loans will be concessional and income contingent, with a lifetime limit of $20,000, indexed from 2017. They are repayable when the individual's income reaches a certain level, equivalent to the higher education loan repayment threshold. It is available to young apprentices aged 16 to 18 years. There is a discount to be applied to the loan upon the Australian apprentice successfully completing the apprenticeship. In my office, as I said at the beginning of my speech, we have seen anxiety as a result of the changes this government is bringing in. Apprentices in their second, third or fourth years of their apprenticeships had budgeted for their Tools For Your Trade payments that are not going to be paid. These apprentices often had instalment payments on a car or other types of commitments that they had made. They were struggling on low wages and were trying to educate themselves and get the kind of training and education they needed to enhance their skills, talents and abilities to get the job they wanted in the future—as a carpenter, an electrician, a plumber, et cetera.

There is concern and confusion from these apprentices, their families and the training organisations about Trade Support Loans. And I have spoken to people like Anita Dwyer, from Apprenticeships Queensland in my electorate. I spoke to her recently one Saturday—at the Ipswich Cup, to be honest with you—about the impact on her organisation and, particularly, on those apprentices that she deals with each and every day. Anita is currently the President of the Ipswich Chamber of Commerce as well, so she is well qualified to talk about the impact on apprentices of these budgeted changes.

Australian apprentices had no idea that the now Prime Minister intended to scrap the Tools For Your Trade program prior to the 2013 election. They might have heard a bit about his Trade Support Loans—a loan, a debt. And they might have seen him spruiking on the TV in his hardhat, his safety vest—the high-vis orange vest—about the loans, surrounded by apprentices. Oddly enough, he failed to mention these intended loans were to be the only income support that his government would offer apprentices.

On 26 August 2013 in The Sydney Morning Herald it was reported that the now Prime Minister visited a mechanical manufacturing firm in North Brisbane. And he was talking up his loan scheme. The Tools For Your Trade was not mentioned until the final link of the Sydney Morning Herald story, which says:

The coalition loans will be made available in addition to the commonwealth Tools For Your Trade incentive scheme, a spokesman for Mr Abbott later confirmed.

They were an optional extra. But now they are a substitute. So which was it? Before the election they said one thing; after the election they said another. That is pretty typical of this government—'no changes to pension', 'no cuts to education', 'no cuts to health'. It is typical of this government to say one thing before an election and do another thing afterwards. Either way, they believed they had a choice in relation to Trade Support Loans or, indeed, Tools For Your Trade.

Apprentices, like so many others, have been hit by this government's budget. They learnt the truth on budget night. And it would have come as a real shock to a lot of people, as it did in my electorate of Blair. The Prime Minister cut $2 billion from apprenticeship support payments and investments in skills training targeted at apprentices. The Tools For Your Trade program was cut. We have seen $1 billion taken out. On top of that—as I mentioned earlier today in a 90-second speech—we saw $950 million stripped away from trade training centres. I have about four in my electorate and they are terrific with the work that they do. They get young people prepared for apprenticeships and prepared for the workforce—real-life experience, partnering with industry and with organisations like Apprenticeships Queensland. And earlier today I mentioned we had the Ipswich Region Trade Training Centre, and that Apprenticeships Queensland is partnering with Ipswich State High, Bundamba State Secondary College, Lowood State High, Bremer State High and Rosewood State High. That is the kind of thing that makes a difference—genuine partnership with schools, with providers, with apprentices.

What this government has done is actually to trash its credibility across this space. Apprentices in later years of their apprenticeships, or those about to complete, will now miss out on these expected payments. They had thought they were going to get them. The comprehensive range of targeted vocational programs for assisting apprentices to find, keep and thrive in their apprenticeships will be cut. Those opposite did not have the fortitude and integrity to actually tell apprentices before the election what was going to happen. So, many of them would have voted thinking that they had options, and they did not. That is the reality.

We have seen, of course, the minister make some interesting comments about apprentices wasting their money. In fact, the Minister for Industry, Mr Macfarlane, actually gave short shrift to any complaints in relation to this. And he said in Fairfax Media on 17 May this year:

We've got evidence that they—

referring to apprentices—

were spending the money on tattoos and mag wheels for their cars, and birthday parties.

It is not often a minister feels he can so arrogantly denigrate those whom his legislation will now adversely affect. It is extraordinary that that is the case.

In contrast, by the way, was the minister's statement in the second reading speech:

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.

Is the minister suggesting that all apprentices were wasting their Tools For Your Trade support payments? Does he really think that the Tools For Your Trade was propping up the tattoo industry? Is that his real perspective? He might have a different opinion if he spoke to the apprentices in my electorate in South-East Queensland who contacted me. He should not insult young people in this way.

One of the justifications for this government scrapping the Tools For Your Trade is its belief that apprentices were wasting their payments perhaps on tattoos, mag wheels, parties or something else. We designed the Tools For Your Trade program when we were in government to provide initial payments to assist apprentices with significant costs—tools, uniforms and vehicles—at the start of an apprenticeship which might present a deterrence to them commencing. The minister complained on 17 May 2014 that they certainly did not have receipts for their tools. Perhaps the minister can direct us to the section in the Trade Support Loans Bill which requires a receipt for the purchase of apprenticeship-related items in exchange for a Trade Support Loan payment. I bet he cannot. Surely the minister has prohibited tattoos, mag wheels and party products in the legislation. He has not. He cannot because there are no such restrictions or requirements in relation to the bill.

The government's main argument for the introduction is this will improve completion rates of apprenticeships. But, in fact, that is not the case. We all agree that apprenticeship completion rates are too low. But they do not understand that the 2010 Apprenticeships for the 21st Century Expert Panel provided a detailed report in relation to this issue, and talked about the challenges and the complexities in relation to it.

The expert panel reported considerable qualitative research that identified four recurrent issues contributing to non-completion: workplace or employer issues, lack of support, low wages and not liking the work. The panel identified problems with the workplace or employer as a cause of 'a significant proportion of attrition in apprenticeships and traineeships'.

Mr Baldwin interjecting—

Mr NEUMANN: That is what the expert panel said. On page 24, if the interjector wants to read it, it says that workplace and employer issues were wide-ranging including 'excessive unpaid overtime, too few hours, not being allowed to take breaks, or not being paid correctly are common concerns'. It went on:

Personal safety concerns through both workplace bullying and unsafe work practices are also relatively common.

The panel reported, on page 35, research suggesting that workplace or employer issues are 'of critical importance in the early stages of an apprenticeship or traineeship as they often have an immediate effect'. This lack of support inside and outside the workplace is consistent with the non-completion rate research. Although wages were another factor that the expert financial panel identified, even after the 2013 Fair Work Commission decision that dramatically raised apprenticeship wages—those opposite did not like it at all—apprentices remained fairly relatively low-paid workers.

The expert panel identified considerable debate about the extent of their impact. While low wages play some role in the decision not to complete, it is rarely the prime reason. Where wages were a reason for non-completion it was often due to a concern about wages anticipated when the apprenticeship was completed rather than the wages during the apprenticeship itself.

Finally, not liking the work was another reason for non-completion. The expert panel reported that many of these issues involved a lack of understanding by the apprentice as to what their apprenticeship entailed and the expectation of the employer.

The expert panel identified many issues, but those opposite ignored the advice. They do not like experts, whether they are scientists or climate scientists—or anything to do with innovation and research. They do not like experts and they ignored the expert panel in relation to this. There is no evidence at all that the half billion dollars that they are spending across this area will make a difference.

We targeted programs in the Australian Apprenticeship Mentoring Program and the Australian Apprenticeships Access Program. Those on the other side of the chamber have cut funding. There is a whole range of funding that they cut, including $2 billion in the skills program, over $1 billion directly supporting apprentices and a whole plethora of organisations. Those on the other side of the chamber should hang their heads in shame in relation to these matters.

Mrs McNAMARA (Dobell) (16:32): I rise to support the Trade Support Loans Bill 2014 and cognate bill. As the member for Dobell, I am committed to increasing local employment opportunities for our school leavers and job seekers, and to providing real support for apprentices on the Central Coast. Increasing the support offered to apprentices is crucial if we are to encourage more job seekers to take up, and, importantly, complete apprenticeships.

This government is committed to building a high-quality and nationally-consistent Australian apprenticeship system which responds to the needs of employers and the economy and which supports apprentices. Trade Support Loans have been developed to specifically address the needs of young job seekers wanting to undertake apprenticeships, and to reverse the trend of falling apprenticeship completion rates.

Unfortunately, apprentices have been let down by the former Labor government, who failed to provide them with the necessary support to complete their apprenticeships. Over the past decade, only half of those who commenced an apprenticeship, attained their qualification. Measures introduced by the former Labor government failed to address this damning statistic. This just is not good enough. Trade Support Loans provide real support for apprentices to complete their skills training and provide stronger incentives for young Australians to become apprentices.

The introduction of Trade Support Loans will see more apprentices in the Australian workforce, meaning there will be a greater capacity to fill the diverse and changing needs of our modern Australian economy. Specifically, Trade Support Loans are designed to assist apprentices with the costs of living and learning during their apprenticeships. For an individual, failing to complete an apprenticeship can be damaging to their self-esteem and often carries a financial burden. For businesses, a non-completion represents an unfulfilled investment, which, in trying economic times, can be a disincentive to providing opportunities to young people.

These factors shape our commitment to building a high-quality Australian apprenticeship system which supports apprentices and responds to the needs of employers and the economy. As a government, we acknowledge the need to support young job seekers commencing apprenticeships. Trade Support Loans will encourage a greater take up of apprenticeships and will provide ongoing support to apprentices. Analysis undertaken by the National Centre for Vocational Education Research indicates that the main cause of non-completion is low wages. This is particularly true in the early years of an apprenticeship, accounting for one quarter of all non-completions.

This government's Trade Support Loans specifically target the cause for low completion rates. Significantly, our Trade Support Loans are a hand up, not a handout. Trade Support Loans replace the former Labor government's unsustainable Tools For Your Trade, which failed to provide adequate support to apprentices. Trade Support Loans provide apprentices with the flexibility required to support their training and studies. Apprentices will have the discretion to use their trade support loans as an income supplement to purchase equipment and tools, to support their studies and to cover external course fees. An apprentice can also elect to use their Trade Support Loan to start up their own business at the completion of their apprenticeship.

In my maiden speech, I spoke of our duty and obligation to the young people of Dobell to plan for their future skills and employment. In Dobell, one in two students obtain Year 12 qualifications and only 14 per cent of people aged 17 to 22 years are engaged in tertiary education. As of April 2014, there were 8,534 people undertaking apprenticeships across the Central Coast and Hunter region. This figure represents approximately 16 per cent of all people undertaking apprenticeships in New South Wales. It is estimated that there are currently over 4,000 people seeking an apprenticeship or training on the Central Coast.

The former Labor government's economic mismanagement has resulted in a distinct lack of opportunity for apprentices on the Central Coast. Working with local businesses, we must actively encourage the employment of apprentices and support employers who provide such opportunities.

Karen Drinan, a small-business owner, believes Trade Support Loans would be beneficial to an apprenticeship as they would assist with the costs associated in completing an apprenticeship. Karen stated:

Unfortunately for many apprentices, wages are low until their third or fourth year. These Loans will assist apprentices with costs such as tools, TAFE fees, transport and everyday expenses—which will increase their ability to stay in an apprenticeship.

One of Karen Drinan's current apprentices, Mark Dumpleton, is due to complete his apprenticeship in October. Mark has welcomed Trade Support Loans, saying that if he had had access to the loans at the commencement of his apprenticeship he would have used the Trade Support Loan to supplement his wages and living expenses, such as his car registration.

Trade Support Loans have also won support from group training organisations who specialise in matching young people with apprenticeship opportunities. Michael Bennett, Chief Executive Officer of HTN, a leading group training organisation in the hospitality industry, has welcomed the announcement of Trade Support Loans, saying: 'The Trade Support Loans will provide much needed support to young people completing an apprenticeship.' Greg Best, General Manager of Central Coast Group Training, has called Trade Support Loans 'one of the most significant and progressive policy initiatives in the past decade'.

The introduction of Trade Support Loans will offer the required level of assistance to apprentices and help reverse the trend of increasing non-completion rates. This is central to our commitment to build a high-quality Australian apprenticeship system that supports apprentices and responds to the needs of employers and the economy. Locally, our future productivity and competitiveness depend on a highly skilled and trained workforce.

I am personally committed to supporting our young job seekers as they undertake apprenticeships. I commend this legislation to the House.

Ms RYAN (Lalor—Opposition Whip) (16:39): As many in the House know, before I joined this place I was a school principal. I am also the mother of three sons, two of whom have been apprentices. As a teacher and principal, I worked with students and my own children to plan and secure work placements that would build their skills and give them the best chance at securing a trial for an apprenticeship.

This meant writing to or ringing local tradespeople, sometimes up to 40 plumbing companies. I worked to enrol students in VET and TAFE courses to pursue training, work placements and certification to boost their chances of securing an apprenticeship. As a year-level and senior-years co-ordinator, I was responsible for cohorts of students' pathways and work-experience engagements, trade tasters and work-ready programs. I saw the pride in the young students I taught when they secured an apprenticeship. As a mother I shared, in a much more personal way, the excitement and promise an apprenticeship creates. An apprenticeship was their pathway to the future, a secure qualification that set them up.

I know too, first-hand, that being an apprentice is hard. The minimal trainee wage is hard to live on. Most continue to be supported by their families whilst an apprentice. The families in Lalor work hard, often for a modest wage, but they are mostly happy to support their children in this way, where they can. In addition to receiving a training wage, apprentices often have other financial pressures placed upon them. They may need to contribute to the cost of their TAFE courses, incur travel costs and purchase tools.

The Tools For Your Trade program went some way to addressing the monetary pressures faced by apprentices. No-one really likes lending their tools! Small businesses found it difficult to ensure the apprentices had the right tools to make a useful contribution. Tools that are for general use are often not cared for like tools you may own yourself. That is why this program was so valuable. I know from my own home the excitement this program created—the message it sent to young people that their work, their commitment to their trade, was valued by the community, that the community had a vested interest in their success and completion.

A young carpenter, mechanic, landscaper, electrician and pastry cook, to name a few, all rely on specialist tools to do their work. The Tools For Your Trade program meant that apprentices could purchase tools whilst training. These tools enabled them to become more productive employees and also to value and care for their tools. We know there is a skills shortage in Australia and that is why we must ensure a vibrant and active apprenticeship system is in place.

It is not easy to take on a young trainee in a small business. It places an administrative responsibility on the business, and not every apprentice ends up being a good fit for an employer. Over the years there have been lots of programs to support businesses and apprentices to make the skilling pathway easier. We have seen, in recent years, an over-reliance on the 457 visa to fill skill shortages. Surely this reliance could be reduced if we ensured our young people were skilled in the employment areas we need. Programs like Tools For Your Trade went some way to assist.

While there is some merit in having the training costs picked up through a HECS style loan, why does this have to come at the cost of the Tools For Your Trade program? As a school principal and mother, I saw the pride in securing an apprenticeship. I also saw students return to school after six or so months when apprenticeships did not work out. I remember one young student who suffered terrible bullying in the workplace. This all came to a head after he was shot in the shoulder with a nail gun. A terrible situation, you will agree.

Sometimes these young apprentices need support. The Australian Apprenticeships Mentoring Program was one such support program. It largely focused on the first year of an apprenticeship, the time when most dropouts occur. The Australian Apprenticeships website proudly lists the benefits of this program and provides a list of successful case studies, showing how a mentor program assists the business and apprentice to work through issues. There is, however, one very sad line on the program website. In a section titled, 'Who can apply for funding?', it states:

The Australian Apprenticeships Mentoring Program is now closed to new applications. No further projects will be funded under this Program.

It is a similar scenario with the Australian Apprenticeships Access Program and the Apprentice to Business Owner program, also now scrapped. These are further examples of this government's lack of real support for training. You can make noises about the young needing to learn or earn, but if there are no jobs and no training support, I am not sure how this can happen.

Those opposite cite low wages as the main reason for non-completion and, in its place, want to put debt. I am not sure this will convince apprentices that they are earning more. And how will that debt be recouped? What will happen if an apprentice fails to complete their traineeship? Hopefully, from my experience, they will return to school. The trade support program means many will have accumulated a debt for a part-skill they are unlikely to use. They will end up leaving school with a debt already hanging over their heads.

There is another group that has the potential to leave school with a debt. Some young Australians are actually lucky enough to commence their pathway to work through a school based apprenticeship. The trade support loans mean that someone as young as 16 may get saddled with a loan before they have even left the school gate. Why am I concerned with the young acquiring these debts? There is no provision in the legislation for them to have a parent or an adult with them when they sign up for the debt. This cannot happen at a bank or credit union, so why should these young people be put at risk without some form of protection? And with the government considering outsourcing the debt management to private providers, who knows how many may get caught up with a $20,000 loan and be left in the hands of private debt collectors, not all of whom are known to have compassion as part of their remit?

There is also confusion within the government about the loan scheme, with government ministers showing confusion recently about the implementation. When asked about the scheme in question time on 2 June 2014, Minister Macfarlane said:

There is no doubt that the loans are interest free. It gives me an opportunity to highlight the great regard and delight from industry in relation to the trade support loans. The loans, as the shadow minister knows, are indexed annually with CPI.

He mentioned two loan interest measures in the same sentence. The department's website and the budget papers make it clear that loans will be indexed. I quote from Budget Paper No. 2:

Trade Support Loans will be provided at concessional interest rates and capped at $8,000 in the first year of the apprenticeship, $6,000 in the second, $4,000 in the third and $2,000 in the fourth.

Loans will be indexed by the Consumer Price Index and repaid on an income-contingent basis through the taxation system, similar to the way HELP loans are repaid.

This is not the only example of the government not being across the detail of budget initiatives. If they are not across the detail, how can we have faith in their ability to deliver the program? Some apprentices who drop out may never return to training and study, leaving them to a working life, most probably on a low income, with this trade debt always there. Some will never achieve a wage that allows them to repay the debt.

There is another aspect of these trade loans that not many have mentioned: they are only available to those apprentices who are training for a skill on the National Skills Needs List. As discussed earlier, we do have a skills shortage in Australia. Most skills on the national needs list are weighted to the traditional male dominated industries—building, mining, telecommunications and the like. There is some call for hospitality and hairdressing, but with the list so heavily weighted to the male dominated industries, our young female trainees will not have access to the trade loan scheme. I also note that the skills list changes over time. So it is very difficult for careers guidance counsellors and schools to help prepare students for what will be supported and what will not.

The government has already ceased the fee exemptions for childcare trainees. They have taken childcare support away from the mainly young mums wanting to return to study, and now young women are effectively being blocked from accessing this initiative, as poorly designed as it is.

Last week, I met with the National Growth Areas Alliance, a group of councils that represent the high-growth communities across Australia. They drew to my attention the 2014-15 State of the Regions reportfrom the Australian Local Government Association. This report should sound the alarm to Minister Macfarlane about investing in skills and workforce development, particularly for young people in regional areas. The report identified the areas with the highest youth unemployment rate. It highlighted that youth unemployment is a persistent problem, particularly in regions in transition.

It is more important than ever that the federal government supports our young people on their pathways to employment. We know that the trade loans scheme was an election promise, but we did not know that it would result in the minister decimating support to apprentices by taking the axe to other programs such as the Tools For Your Trade payments program, the Australian Apprenticeships Access Program, the Australian Apprenticeships Mentoring Program and the Apprentice to Business Owner Program. I know, from my own experience, how excited young people get in the first and second years of their apprenticeship about the potential for them to become small business owners. I know that that program, and the support given to those young people to make that transition, was critical in them continuing in their trade beyond their apprenticeship.

This government also axed the Youth Connections program which helped to give vulnerable young people a second chance to obtain training and employment. I have seen firsthand the success of this program on some of the most vulnerable in our community. Combined, despite the loan scheme, these cuts to programs are just not fair. On top of that, the Liberal state governments are implementing savage cuts to TAFE which have resulted in fees rising, courses being cut and the closure of TAFE campuses.

The Abbott government is insisting that young people need to earn or learn, yet they are ripping away all the programs to support our young people into apprenticeships, employment and education. I suggest that the minister needs to look at supporting our young people on their pathways to employment instead of axing the mentoring and access programs that support them.

Mr VARVARIS (Barton) (16:50): It is undeniable that, as a national community, we need highly skilled tradespeople engaged in training and employment for the sake of Australian industry. The trade support loans that the government will provide to apprentices will ensure that young people are obtaining the priority skills they need for long-term employment and the skills that Australia needs for productivity and competitiveness. These loans will provide up to $20,000 over four years in a HELP-style concessional loans scheme to assist with the considerable expenses of living and learning. Apprentices will pay back the loans, once they can afford to, through the Australian tax system. This is a steady, manageable and reasonable means of repaying this loan. Contrary to the perception of the Greens, this loan will only take on average five years to repay, not 50 years.