The SPEAKER (09:01): I present report No. 34 of the Selection Committee relating to the consideration of private members' business on Monday, 19 October 2015. The report will be printed in the Hansard for today and the committee's determinations will appear on tomorrow's Notice Paper. Copies of the report have been placed on the table.

The report read as follows—

Report relating to the consideration of private Members ' business.

1. The committee met in private session on Tuesday, 13 October 2015.

2. The committee determined the order of precedence and times to be allotted for consideration of private Members' business on Monday, 19 October 2015, as follows:

Items for House of Representatives Chamber (10.10 am to 12 noon)

PRIVATE MEMBERS ' BUSINESS

Orders of the day

1 SOCIAL SECURITY (ADMINISTRATION) AMENDMENT (CONSUMER LEASE EXCLUSION) BILL 2015 (from Senate): Member to move second reading ( from 10 September 2015 ). :

Time allotted—10 minutes .

Speech time limits—

Ms Macklin — 10 minutes.

[Minimum number of proposed Members speaking = 1 x 10 mins]

Mover may speak to the second reading for a period not exceeding 10 minutes — pursuant to standing order 41.

Notices

1 MR CHRISTENSEN: To present a Bill for an Act to amend the Fair Work Act 2009, and for related purposes. (Fair Work Amendment (Prohibiting Discrimination Based On Location) Bill 2015).

(Notice given 13 October 2015.)

Time allotted—10 minutes .

Speech time limits—

Mr Christensen — 10 minutes.

[Minimum number of proposed Members speaking = 1 x 10 mins]

Presenter may speak to the second reading for a period not exceeding 10 minutes—pursuant to standing order 41.

2 MS PLIBERSEK: To move—

That this House calls on the Minister for Foreign Affairs to support a parliamentary debate during the current sitting on the Australian Government's strategy in response to the crisis in Syria and Iraq.

(Notice given 13 October 2015.)

Time allotted—20 minutes .

Speech time limits—

Ms Plibersek — 5 minutes.

Other Members—5 minutes each.

[Minimum number of proposed Members speaking = 4 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

3 MS MARINO: To move:

That this House:

(1) notes that the jobs of the future will require science, technology, engineering and mathematics skills;

(2) welcomes the Government's ongoing investment of $9.7 billion in science, research and innovation; and

(3) acknowledges that the Government is:

(a) delivering on its promised Industry Innovation and Competitiveness Agenda; and

(b) putting science at the centre of industry.

(Notice given 16 September 2015.)

Time allotted—50 minutes .

Speech time limits—

Ms Marino — 10 minutes.

Next Member — 10 minutes.

Other Members—5 minutes each.

[Minimum number of proposed Members speaking = 2 x 10 and 6 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

4 MS PARKE: To move:

That this House:

(1) notes that:

(a) there is considerable evidence that payday lending and consumer leases are not properly regulated and that both financial practices are causing serious harm to low income Australians;

(b) irresponsible and immoral lending is endemic in the payday lending industry, which is growing rapidly and developing new online opportunities to encourage people to borrow with insufficient consideration of their capacity to bear the exorbitant and poorly regulated interest costs that payday lending involves;

(c) the Australian Securities and Investment Commission review of payday lending found that 24 per cent of loans were taken out by Centrelink customers and 54 per cent were taken out by customers who had two or more payday loans in the previous 90 days, a clear indication that they are caught in a cycle of repeat borrowing;

(d) consumer leases can involve an effective annualised interest rate of 240 per cent, and generally mean that vulnerable consumers pay three or four times the value of basic household items like refrigerators or washing machines;

(e) consumer leases operate with lower consumer protection standards under the National Credit Code, though such agreements are not materially different in effect from credit contracts;

(f) in 2013-14 nearly half of Radio Rentals' $197 million revenue was received through the Centrepay system which allows payments to be directly debited from a consumer's Centrelink account; and

(g) Senator Cameron has brought a Private Senators' Bill that seeks to remove consumer leases from access to the Centrepay system; and

(2) calls on the Government to:

(a) ensure that the recently announced review into the 2013 reforms to payday lending focuses on securing the wellbeing and protection of low income Australians irrespective of the effect this has on the profits of companies that practice this kind of often predatory lending;

(b) act quickly to stop consumer leases being used to prey on vulnerable and low income Australian households by ensuring that consumer leases are subject to the same standards and controls as credit contracts, and by introducing stricter controls on the currently outrageous and indefensible costs involved in such arrangements, including the requirement to prominently disclose the total cost of all contracts; and

(c) support Senator Cameron's initiative in removing access to Centrepay for consumer lease companies and amend section 123TC of the Social Security (Administration) Act 1999 to include a definition of consumer leases for this purpose.

(Notice given 18 August 2015.)

Time allotted—remaining private Members ' business time prior to 12 pm.

Speech time limits—

Ms Parke—5 minutes .

Other Members—5 minutes each.

[Minimum number of proposed Members speaking = 4 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

Items for Federation Chamber (11 am to 1.30 pm)

PRIVATE MEMBERS ' BUSINESS

Notices

1 MS OWENS: To move:

That this House:

(1) notes that:

(a) National Week of Deaf People runs from 17 to 24 October 2015;

(b) one in six Australians are affected by hearing loss;

(c) there are approximately 30,000 deaf Auslan users with total hearing loss;

(d) projections for 2050 indicate that one in every four Australians will have hearing loss; and

(e) 90 per cent of people born with hearing impairment are born into hearing families;

(2) congratulates the deaf community and celebrates its outstanding contribution to the nation;

(3) acknowledges Auslan as the language of the Australian deaf community;

(4) reaffirms the need for deaf people to be fully included in the Australian community;

(5) recognises that significant challenges still exist for the deaf community when dealing with governments and government departments; and

(6) encourages the Government to improve communication with the deaf community by ensuring that information is translated into Auslan on its websites.

(Notice given 12 October 2015.)

Time allotted—30 minutes .

Speech time limits—

Ms Owens — 5 minutes.

Other Members—5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

Orders of the day

1 MARRIAGE LEGISLATION AMENDMENT BILL 2015 (Mr Entsch): Second reading—Resumption of debate (from 12 October 2015).

Time allotted—10 minutes .

Speech time limits—

All Members—5 minutes each.

[Minimum number of proposed Members speaking = 2 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

Notices—continued

2 MS VAMVAKINOU: To move:

That this House:

(1) notes that:

(a) October is Breast Cancer Awareness Month and that Monday 26 October 2015 is Pink Ribbon Day; and

(b) breast cancer remains the most common cancer in Australian women and the second most common cancer to cause death in Australian women;

(2) calls on the Government to:

(a) support Breast Cancer Awareness Month;

(b) promote early detection; and

(c) encourage women, especially women aged 50 to 74 years, to have a mammogram every two years; and

(3) acknowledges:

(a) the invaluable work done by the National Breast Cancer Foundation and the Breast Cancer Institute of Australia, especially in supporting important research into treatment and a cure;

(b) the fundraising efforts of the broader community and pays tribute to the significant contribution the Australian public makes to the overall fundraising effort; and

(c) the heroic efforts of the women, men and their families who have experienced the breast cancer journey.

(Notice given 12 October 2015.)

Time allotted—50 minutes.

Speech time limits—

Ms Vamvakinou—5 minutes.

Other Members—5 minutes each.

[Minimum number of proposed Members speaking = 10 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

3 MRS GRIGGS: To move:

That this House:

(1) recognises that:

(a) the Government is investing in significant new capabilities for the Australian Defence Force (ADF);

(b) these capabilities include but are not limited to the acquisition of Boeing P-8A Poseidon aircraft, Northrop Grumman MQ-4C Triton unmanned aircraft, 58 more Lockheed Martin F-35 Lightning II joint strike fighters and two new Boeing C-17A Globemaster III transport aircraft; and

(c) the former Government's cuts to Defence funding led to 119 projects being delayed, 43 degraded and 8 cancelled; and

(2) notes the importance of providing our ADF personnel the equipment and capabilities they need to perform their roles.

(Notice given 16 June 2015.)

Time allotted—30 minutes .

Speech time limits—

Mrs Griggs — 5 minutes.

Other Members—5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

4 MS MCGOWAN: To move:

That this House:

(1) notes that:

(a) inconsistencies exist between federal and state court procedures in relation to the direct cross examination of a victim by an accused person;

(b) specific state laws are in place to prevent an accused person from directly cross examining their victim in sexual offence cases and, in some states, family violence protection order cases—in such cases, an accused person must have legal representation to cross examine the victim;

(c) in family law cases nationally, there are no legislative protections to prevent an alleged perpetrator of violence who is unrepresented, from directly cross examining their victim; and

(d) intimate partner violence is the top risk factor for death, disability and illness in women aged 15 to 44—the added fear and trauma of cross examination by an alleged or known perpetrator of violence is a continuation of violence; and

(2) calls on the Government to amend family law legislation to ensure that in situations of family violence, an unrepresented litigant alleged or known to have perpetrated violence is unable to directly cross-examine the victim.

(Notice given 13 October 2015.)

Time allotted—remaining private Members ' business time prior to 1.30 pm.

Speech time limits—

Ms McGowan—5 minutes.

Other Members—5 minutes. each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this should continue on a future day.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:03):

I move:

That this bill be now read a second time.

The Migration Amendment (Complementary Protection and Other Measures) Bill 2015 is the final instalment in a package of legislative reforms that implements the government's election commitments to ensure a more effective and efficient onshore protection status determination process.

Following the passage of the Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Act 2014 (the Legacy Act) in December last year and the Migration Amendment (Protection and Other Measures) Act 2015 in March this year, this bill amends the statutory framework in the Migration Act relating to the determination process for persons seeking protection on complementary protection grounds.

Complementary protection is the term used to describe a category of protection for people who are not refugees, as defined in the Migration Act, but who cannot be returned to their receiving country (that is, their country of nationality or country of former habitual residence if they do not have a nationality) because there is a real risk that they would suffer a certain type of harm that would engage Australia's international non-refoulement (or non-return) obligations under the International Covenant on Civil and Political Rights (ICCPR) and the Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (CAT).

Specifically, this bill will amend the Migration Act to more closely align the statutory complementary protection framework with the statutory refugee framework, as recently inserted by the Legacy Act.

Without these amendments, there is an inconsistency between the two frameworks. In particular, a person who would be refused protection under the current refugee framework for one of the new exceptions to the refugee test relating to internal relocation alternatives, effective protection measures or behaviour modification could satisfy the complementary protection test because those exceptions are not yet included in the complementary protection framework. This bill addresses this inconsistency, and in doing so, will restore Australia's intended interpretation of Australia's complementary protection obligations.

To be clear, as is the case under the current statutory complementary protection framework,non-refoulement obligations will not be engaged in every case in which a person claims that they will suffer some type of harm if returned to another country. This bill will not alter the requirement that in each case there must be substantial grounds for believing that, as a necessary and foreseeable consequence of being returned, there is a real risk that a person will suffer significant harm of a particular type as contained in the relevant human rights treaties, namely:

the arbitrary deprivation of life;

having the death penalty carried out;

being subjected to torture;

being subjected to cruel or inhuman treatment or punishment; or

being subjected to degrading treatment or punishment.

Rather, the bill will clarify the interpretation of various concepts used to determine whether a person will face a real risk of suffering significant harm so as to give rise to a non-refoulement obligation.

This is now necessary as there have been instances of several persons having been found to meet the complementary protection criterion on a wide variety of grounds, such as selling adult movies and drinking or supplying alcohol in countries which severely punish those activities, despite the fact that the government, consistent with our international obligations, did not intend for such cases to be covered by the legislation. There have also been several persons who have been found to meet the complementary protection criteria where they have been involved in serious crimes in their home countries, or are fleeing their home countries due to their association with criminal gangs. Therefore, in tightening the various tests that determine whether there is a real risk that a person will suffer significant harm, this bill will diminish the likelihood of such persons being granted Australia's protection.

The bill will clarify that, in relation to complementary protection, a real risk of significant harm needs to relate to all areas of a receiving country. This amendment aligns the criteria for complementary protection with the existing criteria under the refugee framework in the Migration Act.

In the case of complementary protection claims, a person who could relocate to a safe part of the receiving country upon their return to that country would be found not to face a real risk of significant harm. In considering whether a person can relocate to another area of the receiving country, a decision maker is required to take into account whether the person can safely and legally access an internal flight alternative such that it would mitigate a 'real risk' of 'significant harm' to the person. This test is consistent with international jurisprudence on Australia's non-refoulement obligations under the ICCPR and the CAT.

The bill also amends the provision relating to a generalised risk to put beyond doubt that complementary protection is only available where the real risk of significant harm is faced by a person personally, rather than being an indiscriminate risk of harm faced by the population in the receiving country generally.

This amendment is not intended to elevate the level of risk which must be demonstrated to satisfy the 'real risk' test under complementary protection grounds. Rather, and consistent with international jurisprudence on the interpretation of the ICCPR and the CAT, this amendment clarifies that, while the existence of a consistent pattern of gross, flagrant or mass violation of human rights in the relevant country is a relevant consideration, such circumstances of themselves will not meet the necessary threshold of constituting a 'real risk' of 'significant harm' for the purposes of complementary protection.

There may be occasions, however, where levels of generalised violence in a country can become so dangerous, consistent or targeted towards groups as to pose significant harm to individuals. It may be possible in such circumstances that the level of risk faced by a person in an area of generalised violence may crystallise into a personal, direct and real risk of harm in their case. This amendment ensures that such issues are taken into consideration in the analysis of a person's complementary protection claims.

This bill will amend the provision relating to state protection measures when determining whether a person faces the relevant risk of harm relating to complementary protection to clarify that a person will not face a real risk of significant harm if effective protection measures are available to the person through state or non-state actors in a receiving country.

This amendment aligns the criteria for complementary protection, relating to state protection measures, with the equivalent provisions in the new refugee framework and makes clear that, when determining whether a person engages Australia's complementary protection obligations, consideration must be given to the level of effective protection available in the receiving country to ascertain if such protection will mitigate the risk of harm towards the person. The intention of this amendment is to clarify, consistent with Australia's non-refoulementobligations under the ICCPR and the CAT, that the level of protection offered by a country to a person must only be sufficient so as to mitigate a 'real risk' of 'significant harm' to them, rather than provide them with 'perfect' or preferred circumstances under which the person might wish to live.

The bill will also introduce a provision to exclude a person from complementary protection who could take reasonable steps to modify their behaviour so as to avoid a real risk of significant harm in a receiving country, other than a modification that would conflict with the person's innate or immutable characteristics, or which is fundamental to the person's identity or conscience.

The aim of this provision, an equivalent of which exists in the refugee framework, is to reflect that some harm could be brought about by a person's own voluntary actions—by, for example, breaking the law upon their return to the country—and that in some circumstances it is reasonable to expect a person not to engage in such actions so as to avoid a real risk of harm.

To be clear, while this bill makes several changes to the framework for assessing protection claims on complementary protection grounds, it does not, however, affect the substance of Australia's adherence to its non- refoulement obligations. Australia's non-refoulement obligations under the ICCPR and the CAT are absolute and cannot be derogated from. Therefore, even if a person is considered ineligible to be granted a protection visa—on character-related grounds, for example—Australia would still be bound by its non-refoulement obligations not to remove that person to their receiving country in respect of which there are substantial grounds for believing that, as a necessary and foreseeable consequence of the person's removal to that country, there would be a real risk that the person will suffer significant harm. The government will continue to comply with these obligations and Australia remains bound by them as a matter of international law.

Further, this bill does not amend the risk threshold for assessing Australia's non-refoulementobligations under the ICCPR and the CAT. The 'real chance' risk threshold for assessing complementary protection in the Migration Act will remain intact. It currently applies to both the refugee and complementary protection contexts and is not amended in either context by this bill.

I wish to foreshadow that the government will no longer be proceeding with the amendments in the Migration Amendment (Regaining Control Over Australia's Protection Obligations) Bill 2013 (the Regaining Control Bill). The House would be aware that the Regaining Control Bill was introduced into the parliament in December 2013 and has remained on the Senate Notice Paper since this time. The Regaining Control Bill seeks to repeal the complementary protection provisions from the Migration Act. Consequently, Australia's non-refoulement obligations would be managed through an administrative process.

In determining to discharge the Regaining Control Bill from the Senate Notice Paper, the government has considered the concerns raised by the parliament and its relevant committees on certain aspects of the bill. On balance the government considers that the best way forward is for the complementary protection provisions to remain in the Migration Act but be modified slightly as per the terms of this bill. This will ensure that Australia continues to align with the practices of other like-minded countries, including New Zealand, Canada, the United States of America and many European countries.

Since the introduction of complementary protection into Australia's protection visa processes in March 2012, various judicial interpretation issues have arisen in the current legislative framework, which has resulted in the broadening of Australia's complementary protection obligations in a way that goes beyond current international interpretations. As a result, there have been instances in which an individual's claims have been found to meet the complementary protection criterion despite the fact that the government, consistent with its international obligations, did not intend for the legislation to cover such cases.

It is therefore necessary to restore the intended interpretation of the complementary protection provisions in the Migration Act so as to ensure that only those who are in need of Australia's protection will be eligible for a protection visa on complementary protection grounds.

This bill also makes several technical amendments to the statutory framework in the Migration Act to ensure that the existing provisions in the Migration Act work as originally intended and will not change the substance of the amended provisions.

I commend the bill to the House.

Debate adjourned.

Mr THISTLETHWAITE (Kingsford Smith) (09:15): I support the passage of these three bills, the Customs Depot Licensing Charges Amendment Bill 2015, the Import Processing Charges Amendment Bill 2015 and the Customs Amendment (Fees and Charges) Bill 2015. This package of bills, which relate primarily to customs processes and charges associated with trade related activity, are due to commence on 1 January 2016. The changes contained within these bills were included in the 2015-16 budget as part of the response to the joint review of border fees, charges and taxes, commonly known as 'the fees review', undertaken by the Department of Immigration and Border Protection, Customs and the Department of Agriculture and involving consultation with interested stakeholders.

The fees review focused on identifying where border-charging arrangements could be improved to better support future border operations and outcomes for industry. This was done with a view to ensuring that, as far as possible, full costs were recovered for the operation and administration of these schemes by the Department of Immigration and Border Protection. The fees review considered changes to current charges, fees and taxes, as well as new approaches to charging in the future. It covered charges levied by the Australian Customs and Border Protection Service, the Department of Immigration and Border Protection and some import related fees and charges applied by the Department of Agriculture. The fees review covered current major charging arrangements at the border, including import-processing and passenger movement charges levied by Australian Customs and Border Protection; import related fees and charges recovered by the Department of Agriculture, such as full import declaration charges, container charges and registration fees; visa application charges administered by the Department of Immigration and Border Protection; and current and future cost-recovery-based charging for services, particularly those resulting from industry demand factors. The changes contained within the Customs Depot Licensing Charges Amendment Bill, the Import Processing Charges Amendment Bill and the Customs Amendment (Fees and Charges) Bill are designed to generate $107.6 million over the forward estimates.

The Department of Immigration and Border Protection processes and assesses applications, issues licences and manages the compliance framework for warehouse and depot licence holders and for customs brokers. Cost recovery charges are imposed on individuals and businesses holding or applying for these licences. All consignments imported into Australia are assessed by the department to ensure that Australian government requirements are met, and importers are required to make an import declaration for air, sea and post consignments valued above $1,000 and air and sea consignments valued at $1,000 or less.

The Department of Immigration and Border Protection undertakes a number of activities on import declarations to ensure that the border and community protection risks are managed appropriately. These activities include cargo examinations and inspections; processing of import declarations and documents receipting; design and development of profiles and targeted compliance activities; analysis of intelligence leading to strategic, operational or tactical services in relation to import processing; investigation and prosecution of serious breaches of legislation; provision of advice to industry on the import and export environment; and determination of risks associated with transactions, threats and border controls.

Import processing charges, or IPCs, are generally paid with other mandatory government charges such as import duties or the goods and services tax. Import declarations are lodged within the integrated cargo system and identified charges attributable to the department and Agriculture are also collected through the system. The agricultural proportion of the charges is remitted to the Department of Agriculture.

The mechanism for imposing the various fees and charges also differs across the licensing categories. The Department of Immigration and Border Protection undertakes a number of activities in relation to licence application processing and ongoing compliance monitoring in licensed brokers and establishments. These include: desktop assessments of applications; site inspections of warehouse and depot facilities; interviews with prospective broker licence applicants; the granting of licences; renewal processing and invoicing; an ongoing compliance program of site visits for warehouses and depots; ongoing monitoring for broker licensing and corporate support and infrastructure in support of licensing staff systems and processes; and, of course, fit-and-proper person checks.

Although licensing fees were originally imposed to recover the full cost of administering the licensing activities, the fees review identified a shortfall in the recovery of costs within some programs amounting to approximately 30 per cent of customs broker charges. Licensing fees have remained fairly static since their introduction in 1997, which has resulted in under-recovery of costs and revenue associated with the operation and administration of these particular charges and this scheme by the Department of Immigration and Border Protection. In 2013-14, the department received $242.4 million in revenue through import processing charges, which was approximately $10.3 million less than the $252.7 million in expenses allocated to IPC related activities. This is a classic example of the under-recovery of costs associated with some of these charges.

The Customs Amendment (Fees and Charges) Bill and the Customs Depot Licensing Charges Amendment Bill will consolidate all licensing charges into a single act, with the aim of simplifying the legislation, and will introduce new charges to better align the changes and the charges with cost-recovery guidelines. The new charges include a warehouse licensing application fee of $3,000 up to a maximum of $4½ thousand; a warehouse licence variation charge of $300 up to a maximum of $450; and a customs broker licence application charge of between $130 and $195 for individuals and between $1,300 and $1,950 for businesses. This is aimed at, hopefully, reducing the cost burden of licensing programs and ensuring applicants are better prepared prior to applying for a licence.

The Customs Amendment (Fees and Charges) Bill will introduce a small fee increase for an import declaration of imported goods and the Customs Depot Licensing Charges Amendment Bill will increase the price of existing warehouse and custom broker and licensing charges in line with cost-recovery guidelines. The Import Processing Charges Amendment Bill will make three major changes. The first is to broaden the cost base for import and warehouse declaration charges by recovering the cost of the Department of Immigration and Border Protection's cargo and trade related reform initiatives. The second is to simplify the charging arrangements for sea cargo, air cargo and postal import and warehouse declarations by imposing the same charge regardless of the method of importation. The final change is to introduce a standard higher fee for documentary import and warehouse declarations, recognising the additional work required to process documentary declarations.

In conclusion, Labor support this package and associated changes, which are in line with our continued commitment to maintaining a responsive, efficient and robust customs authority and to ensure that government cost-recovery guidelines are being met in the administration and operation of these important schemes by the Department of Immigration and Border Protection.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:24): I thank the member for his contribution to the debate on these three bills. These bills will give effect to the changes proposed as part of the joint review of border fees, charges and taxes. The review focused on identifying where the government's border charges could be consolidated and improved to better support Australia's future border operations. The bills increase and restructure import processing charges and introduce new charges in the warehouse and customs broker licensing regimes. The increased and new charges will provide critical funding for improvements in trade and travel facilitation and will support improved security at Australia's borders. The changes strike the right balance between supporting Australia's international competitiveness and ensuring the cost of maintaining integrity of our border is appropriately shared with those who use it.

Question agreed to.

Bill read a second time.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:26): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:26): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:27): by leave—I move:

That this bill be now read a second time.

Question agreed to.

Bill read a second time.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:27): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms MACKLIN (Jagajaga) (09:27): I am pleased to be speaking on the Social Services Legislation Amendment (Cost of Living Concession) Bill 2015. This new cost-of-living concession bill has arisen because the South Australian Labor government has provided welcome support for pensioners, concession card holders and other low-income Australians. It consists of a $200 per year payment to help pensioners and concession card holders with cost-of-living pressures. This bill introduces a measure to exclude the cost-of-living concession payment made by the South Australian government from being assessed as income under the social security and veterans' affairs income tests—so Labor supports this bill. We support the bill because it is good for South Australian pensioners.

Let me say on the record today that we very much welcome the South Australian Labor government's decision to stand up for pensioners and vulnerable Australians. We know that this Liberal government certainly never would. We know the Liberal government here in Canberra has cut money to pensioners, and this is the reason why this new payment is being made to pensioners in the first place. Let us get the facts right about South Australia.

Mr Williams interjecting—

Ms MACKLIN: Let us let us get the facts right about what this member, in South Australia, actually voted for. He voted for a cut to the indexation of the pension. Thank you to the member for Hindmarsh for his interjections, so I can remind all of the voters in Hindmarsh that he voted for a cut to the pension that would have amounted to an $80-a-week cut over 10 years. That is what the member for Hindmarsh voted for. That is exactly what he voted for. He also voted to increase the age pension age to 70. I hope the voters in Hindmarsh are listening and that they know that the member they voted for at the last election broke the promise that was made before the election that there would be no changes to pensions. The pension indexation cuts were voted for by each and every member of the Liberal and National parties, including the member for Hindmarsh.

The reason we are here today is that the Liberal government's 2014 budget, which was supported by the member for Hindmarsh, included a cut of $1.3 billion—$1.3 billion ripped out of the pockets of pensioners. We know what that would have meant if the South Australian Labor government had not helped pensioners out. It would have meant a cut to the concessions that pensioners rely on for essential services like electricity, gas, transport fares and council rates. All pensioners would have been worse off because of the Abbott-Turnbull government's cuts in the 2014 budget that the member for Hindmarsh supported. I see that the member has gone a bit quiet.

Mr Williams: You aren't worth listening to!

Ms MACKLIN: He wants another go! Keep interjecting, because I will keep reminding people what you voted for—that you wanted each and every one of the pensioners in Hindmarsh to be $80 a week worse off. The recent cut in the assets test also went through this House with the vote of the member for Hindmarsh. There was no warning before the last election. That was yet another broken promise by the member for Hindmarsh. Don't worry: all the pensioners in Hindmarsh know all about it.

Last year, we had a different Treasurer who liked to go on about lifters and leaners. No doubt the member for Hindmarsh agreed with the previous Treasurer that somehow the pensioners in Hindmarsh were leaners and deserved to have their pension concessions cut. The South Australian Labor government did not agree with that view. Labor did not agree with that view. We think that pensioners deserve support. That is why Labor governments do things to help pensioners and not the reverse.

Everybody here wants to try to forget that the Liberals tried to cut $1.3 billion from pensioner concessions. But I remind the member for Hindmarsh and every single member of the Liberal and National parties that pensioners have not forgotten. They have not forgotten. They know that each and every Liberal and National Party member of this parliament voted for the $80-a-week cut to the pension over the next 10 years with reductions to pension indexation. Pensioners will not forget that. They will not forget that this government wants to increase the age pension age to 70, which would mean that this country had the oldest pension age in the developed world.

Pensioners also will not forget that this Liberal government tried to cut the deeming thresholds for pensioners, which is another way to cut the pension. The member for Hindmarsh voted for that as well. Pensioners certainly will not forget the latest Liberal Party betrayal, which was the cut to the pension assets test. Three hundred and thirty thousand pensioners across Australia, quite a few of them in the member for Hindmarsh's electorate, are all going to be worse off because of this latest cut to the pension.

Labor opposed these measures. We understand how important it is to support pensioners. We understand just how critical it is, wherever pensioners are living. Whether it is Hindmarsh or in other parts of Australia, pensioners know that the only party that they can rely on is the Labor Party. It was the Labor government that delivered the most significant increase to the pension since the age pension was first introduced, more than 100 years ago, and it is only Labor that will make sure that pensioners are better off.

Pensioners understand that they have been completely lied to by Liberal Party and National Party members, including the member for Hindmarsh, who told them before the last election that they would have no changes to their pension. Plainly, that is not true. Pensioners in South Australia are very pleased that the South Australian Labor government has provided this new $200 payment to pensioners. Labor, in the federal parliament, welcomes this measure and it also welcomes the exclusion of this income from the means test for social security and veterans' affairs payments.

Mr ZAPPIA (Makin) (09:36): I support all of the comments made by the member for Jagajaga in respect of this matter. I welcome the opportunity to speak about the Social Services Legislation Amendment (Cost of Living Concession) Bill 2015. As the member for Jagajaga has just pointed out, Labor will be supporting this bill. The bill, effectively, excludes the cost-of-living concession payment made by the South Australian government from being assessed as income under the social security and veterans' affairs income test.

As has just been pointed out by the member for Jagajaga, and write quite rightly so, in their first budget after the 2013 election, the coalition government abolished the National Partnership Agreement on Certain Concessions for Pensioner Concession Card and Seniors Card Holders. They did so without, at any time in the lead up to the 2013 election, telling pensioners across Australia that they would be doing that. They did so after having told pensioners and given them the assurance that there would be no changes made to pensions in this country. Yet, on coming to office, one of the first things they did was cut payments and support measures for pensioners in a range of areas—which I will get to in a moment—particularly with respect to the national partnership agreement that had been in place since 1993.

This was an agreement that had been honoured in the past not only by Labor governments but also by the Howard government throughout all of its term in office and, at no stage, had the Howard government suggested that it should not honour that agreement. Yet this coalition government, on coming to office, not only walked away from the agreement but also, in doing so, walked away from pensioners and hid behind the pathetic excuse that the concessions funded were state government responsibilities. The member for Hindmarsh, which the member for Jagajaga quite rightly alluded to, not only supported the cuts made but also stood up here and defended the cuts being made, saying that these were responsibilities of the state governments. It is notable that there is no single member of the coalition that even wants to speak to this bill.

Let me go to the background of where the $1.3 billion that was cut by the coalition arises from, because the national partnership agreement, as I said a moment ago, goes back to 1993. The origins of it are this—and these are not my words, these are the words of the Parliamentary Library:

The NPA had its origins in a decision by the Australian Government to extend access to the Pensioner Concession Card (PCC) to all pensioners, including part-rate pensioners, from 1993.Eligibility for concessions provided by the state and territory governments is linked to the PCC. Therefore the cohort of pensioners eligible for concessions expanded. Recognising this, the Australian Government agreed to provide funds to the states and territories to cover some of their increased costs from 1993. The formal 1993 agreement allocated set amounts to each state and territory, to be indexed and adjusted for growth in state pensioner populations over time. The Australian Government funding would be in the form of a Specific Purpose Payment, requiring states and territories to provide an agreed set of concessions on essential services to all pensioners.

That makes it absolutely clear that the payments were made to the states because the federal government wanted to expand the program.

In wanting to expand the program, the states quite rightly said, 'We are happy to do that if the federal government funds the expansion.' The federal government at the time did so and the states secured that commitment through an agreement—and 20 years later, this coalition government is the first government to walk away from that agreement. It is a shameful act given that this was a clearly set out and negotiated arrangement between the federal government and the states. For members like the member for Hindmarsh, and other South Australians who have come into this place, to try to claim that these were state government responsibilities not only shows that they were prepared to walk away from the pensioners of South Australia but shows their complete ignorance of the background to this concession payment.

The South Australian government, to its credit, introduced a $200-a-year payment to offset the federal government's cuts. The payment will offset cost-of-living pressures such as council rates and electricity, gas and water bills. Previously, council rate support was provided through a direct concession that appeared on council rate notices each year—an amount of $190. In its first year, the cuts meant a hit of about $28 million for South Australia, with that amount projected to rise each subsequent year. The state government decided that a better way of managing this matter would be to provide a direct payment of $200 to the eligible recipients each year and allow them to manage their finances as they saw fit. If a person has a pensioner concession card, a Veterans' Affairs card, a low-income healthcare card or a Commonwealth seniors healthcare card, they will be able to access the $200—or part thereof, depending on their income. It will also go to people who are on Newstart allowance, sickness allowance, widow allowance, youth allowance, partner allowance, parenting payment, bereavement payment or special benefits, as well as to Community Development Employment Program recipients, ABSTUDY recipients, Austudy recipients and people who are on the New Enterprise Incentive Scheme. That is my understanding of who may be eligible for the $200-a-year payment.

In the past, because the state government directly funded the concession through the $190 that went to council rates, the $190 was not assessed for income purposes for the recipients of that payment. Because it is now a direct payment, we need to ensure that that continues to be the case. In other words, recipients should not be penalised for receiving the support as a direct payment when it is replacing a cut made by the federal coalition government to support that was previously not considered as income. This bill does exactly that and of course we support it.

The bill also goes to the heart of the attack on pensioners by this government. As I mentioned, the member for Jagajaga has quite rightly pointed out the range of cuts this government has tried to introduce—in most cases unsuccessfully—since coming to office with a direct impact on the income of pensioners in this country. For South Australia this is an important issue, because South Australia has an ageing population. The figures suggest that there are more older people in South Australia than in most other states. This is especially true of Hindmarsh. I am well aware, through my discussions with my good friend and former colleague, the former member for Hindmarsh, Steve Georganas, that the pensioner community in Hindmarsh is considerable—and they were very concerned about this cut when it was made.

It was not just the pensioner concessions. If it were, the government might have been able to sweep it under the carpet. The truth is, this was a government that tried to balance its budget on the back of the lowest income families in this country, and that includes pensioners, many of whom really found it tough to make ends meet. The $190 cut to their council rates has now been replaced by the $200 a year payment from the state government. I have spoken with some of those people in my own electorate at a one-on-one level, and they are very genuine when they say that it will make a difference to their income levels. I can recall the debate in South Australia when the state government decided to make the payment and the welcome relief that was clearly evident across the pensioner sector as a result of the state government having agreed to make the payment. In the first year the South Australian government simply funded the $190, but then they introduced the payment as an ongoing measure, and that brought the relief that people were looking for.

This goes to the heart of how pensioners have been treated in this country, and certainly in South Australia, by the federal coalition government. We not only saw the cuts made as a result of the $1.3 billion being slashed from the states for this purpose but then we saw this government try to increase the Medicare co-payment, starting at $7 and then going to $5, and then it put a freeze on the doctors' MBS payments. All of these measures go to the heart of the income of pensioners. We acknowledge time and time again in this place that our pensioners, for one reason or another, quite legitimately have to go to the doctor on a regular basis. Every time they do, these additional costs impact on their ability to continue to make ends meet, yet this government decided that that was something it wanted to do. Then by changing the assets test, supported by the Greens, some 330,000 current pensioners also had their incomes affected. Again, I have had people contact my office, and my constituents have contacted me, saying that this is not fair and it will affect their income.

We have a government which, whichever way you turn, has decided that pensioners are easy pickings. Can I say to the members opposite, to the Member for Hindmarsh, who is sitting in the chamber right now, that I am sure he knows full well that the pensioners in his electorate are not happy with the way this government has treated them. They are not happy with the fact that, prior to the election, they were told that there would be no cuts made and ever since we have seen one form of cut after another being made; they are not happy with the fact that they are being asked to tighten their belts to find cuts out of their meagre income each year whilst the big end of town is allowed to go scot-free and continue in many cases to make huge profits and pay very little tax; and they are not happy with the fact that this government is playing off one sector of the community against another.

I want to conclude with this comment: the state government in South Australia, the Weatherill government, to its credit worked through this issue methodically and carefully. There was a long debate about it at the time—it went on for several months—and the state government decided that it would best manage this program by allocating a direct payment of $200. It did so because it knew that there were some current anomalies in the system of who was entitled to council concession rates and who was not, particularly with respect to those people who might have been living in what we call housing trust homes in South Australia. It came to the conclusion that the fairest way to support pensioners, concession card holders and welfare recipients in South Australia was to give them a direct payment of $200 and allow them to choose how they would use it to offset their cost-of-living expenses. Of course it is a direct payment to them, and the thing we do not want to see is that money being treated as income, which in turn will affect their income. If it is assessed as income it will affect the income they might receive as their pension payment and the like. As the member for Jagajaga has quite rightly said, we support this measure because it simply puts into effect the intent of the $200 payment.

Finally, I will say this: not one of the coalition members opposite has decided to come in and speak on this motion. I am not surprised about that because the truth of the matter is that they would be speaking on a matter which they instigated and which they are responsible for—a $1.3 billion cut to pensioners across this country. But it also highlights, in my view, the fact that, whilst they might publicly say they care about pensioners, they do not even have the courage to come in here and speak about pensioners or take a stand on behalf of them, and that is shameful. With those comments, once again, we support this measure.

Mr PORTER (Pearce—Minister for Social Services) (09:50): This Social Services Legislation Amendment (Cost of Living Concession) Bill 2015 will exclude the cost-of-living concession payment made by the South Australian government from being assessed under the social security and veterans' affairs income test. I thank all the members opposite for their contributions and for their admonitions that someone courageously speak, which I am very happy to do. But I would note that, as a preliminary matter, this a beneficial measure for certain people—

Ms Macklin: Minister, you have to.

Mr PORTER: Well, indeed, but it still takes a bit of courage. This is a beneficial measure for certain people who will be receiving new payments. You might have been confused, Mr Deputy Speaker, as to whether this is a beneficial measure, after hearing members opposite, but it is indeed a beneficial measure. If I might, just by way of summing up, explain why.

From September 2015, the South Australian government is introducing a new cost-of-living concession payment. That payment will replace the South Australian council rates concession, which was previously a discount on rates bills. That measure ceased on 1 July 2015. Under the old South Australian council rates concession, eligible people received a $190 per annum rates discount. Now, the new cost-of-living concession payment that will be operative in South Australia will be a direct payment to eligible people rather than offering, as was the case under the old system, a discount off people's rates bills, which was the previous way the South Australian council rates concession operated.

There are two elements to the new South Australian cost-of-living concession payment. The first element of the cost-of-living concession payment provides an annual $200 direct payment per household to pensioners, other income support recipients and low-income earners who are homeowner-occupiers. Self-funded retirees in receipt of a Commonwealth seniors card will receive an annual $100 direct payment per household under the cost-of-living concession payment in South Australia. The second element of the South Australian cost-of-living concession payment is that support has been extended to include tenants, whereas the previous council rates concession was solely limited to homeowner-occupiers. Under the cost-of-living concession payment, pensioners, other income support recipients and low-income earners who are tenants will be able to receive an annual $100 per household direct payment. So, well done to South Australia in undertaking its obligations in this regard.

The Commonwealth, providing this income test exemption, the subject of the present bill, is consistently acting with the income test exemption that was put in place for the Western Australian cost-of-living rebate scheme in 2012—in fact, a scheme I remember well because it was enacted by an excellent Treasurer at the time!

Ms Macklin: Self-praise is no recommendation!

Mr PORTER: I think, members opposite, it was actually Mike Nahan, at that stage, so don't get too excited. If an income test exemption was not granted for the cost-of-living concession payment then some recipients of the payment, in particular part-rate pensioners, could be disadvantaged compared to current arrangements. They could receive the similar level of assistance from the South Australian government via direct payment rather than as a discount off their rates bills, but the Australian government pension would be reduced. So, essentially, the bill exempts the new payment from being assessed as income for social security and veterans' affairs entitlements purposes.

If I might just roughly summarise: the previous South Australian system, being a discount, never fell into the assessable category of income for social security and veterans' affairs entitlements purposes, that having been transformed into a direct payment could possibly have been assessed as income; this bill ensures that it will not be and is thereby a beneficial bill to pensioners in South Australia. The bill ensures that people's social security and veterans' affairs income support payments are not affected by receipt of the new payment and, therefore, that they receive the full benefit of the cost-of-living concession payment that the South Australian government has enacted. Again, I thank all the members opposite for their contributions to this debate.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Mr PORTER (Pearce—Minister for Social Services) (09:54): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms MACKLIN (Jagajaga) (09:55): Labor will support the Social Services Legislation Amendment (Low Income Supplement) Bill 2015 today, despite recognising, I have to say, that this is yet another broken promise from the Abbott-Turnbull government. Before the last election, the Liberal-National party promised to keep all of the payments associated with the clean energy future package; yet today the Liberals are abolishing one of the payments that formed part of the compensation that came with Labor's reforms to move Australia to a low-carbon economy. This supplement is paid to around 7,000 low-income Australians who do not receive the same level of assistance as other families through tax cuts or social security payments that were introduced to offset the average cost of the carbon price. It is also worth acknowledging that welfare organisations like the Australian Council of Social Service have arrived at a similar position on this measure. In a media release earlier this year, ACOSS stated that 'it is appropriate that this supplement is abolished'. ACOSS noted that the supplement had not been widely taken up since its introduction in 2012.

As we have always said, we will support sensible savings when the government puts them forward. We do understand the task of fiscal repair and we will take decisions that improve our nation's finances when appropriate. But I add that we will only do so when the savings do not offend our fundamental sense of fairness. Labor will support the bill.

Mr PORTER (Pearce—Minister for Social Services) (09:57): This is a 2015 budget measure that was previously introduced in the Social Services Legislation Amendment (Youth Employment and Other Measures) Bill 2015. It is being reintroduced in this bill, the Social Services Legislation Amendment (Low Income Supplement) Bill 2015. The Social Services Legislation Amendment (Youth Employment and Other Measures) Bill 2015 was, sadly, negatived in the Senate on 9 September 2015. I thank the member for Jagajaga for her contribution. No doubt it spells the beginning of a very convivial and constructive relationship between us on savings measures which invariably will have to be found inside the portfolio over which I now have stewardship.

I think that this is a very good example of a savings measure where there is excellent reason for bipartisan support for the removal of a supplement. The low-income supplement was to cease from 1 July 2017 and there were very few claims for the low-income supplement, as has been noted by the member for Jagajaga. Very few claims have been received and it was administratively a complex claim to administer. Upon interrogation upon assuming government, it was fairly clear to us on this side of the House that the service delivery costs based on the estimated take-up for administering this payment themselves exceeded the financial benefit gained by eligible individuals. So, with the abolition of the carbon tax, the assistance, in the view of the government, was no longer appropriate or required, particularly given that the administration costs actually exceeded the amount of money that was to be applied to eligible individuals. Ceasing the low-income supplement is part of an important suite of budget measures to support the sustainability of the social security system and the nation's budget.

If I might offer the House some slightly more detailed explanation as to the administrative waste that was being occasioned had this supplement been continued, the measure itself that we have before the House in this bill will deliver savings of $42.9 million over the forward estimates. As has been noted, the program had a very low take-up rate and was administratively a complex payment. Around 6,000 people are likely to no longer receive the payment from 1 July 2017. Around 70 per cent of those 6,000 people who qualify for the payment will continue to receive the energy supplement with their FTB payments.

Based on the original estimates of what were expected to be higher take-up rates, the Department of Human Services receives around $19 million per annum to deliver the program. If the program were to continue with $19 million per annum appropriated to deliver the program, recipients were only set, on our estimates, to be provided with around $2.5 million in payments a year. Had this payment been allowed to continue and were it not to be removed—and I acknowledge the bipartisan support of members opposite—we would have been putting the taxpayer to the expense of $19 million per annum to administer a program that handed out $2.5 million per annum, and that is a situation which is absurd. So it is quite proper that this be removed. Service delivery costs and administering the payment far exceeded the financial benefit gained collectively by the individuals who were eligible.

The supplement, which was originally included in the household assistance package, we might add, is excluded from any commitment to keep current pension and fortnightly rates while scrapping the carbon tax, as it was always an annual claimable payment of $300. It was never a regular fortnightly payment; it was an annual, lump-sum payment. With the abolition of the carbon tax, as has been noted in this House many times, households are, on average, $550 better off and the assistance that is to be removed in this bill is no longer required, and it is, of course, to the enduring benefit of the Australian taxpayer that they not provide $19 million a year in administration to pay out $2.5 million a year in payments. I certainly recommend this bill to the House.

Question agreed to, Mr Wilkie dissenting.

Bill read a second time.

Mr PORTER (Pearce—Minister for Social Services) (10:01): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mrs McNAMARA (Dobell) (10:02): The Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 seeks to simplify the existing compliance framework and assist job seekers in understanding what is required of them when they receive income support. This is achievable by renaming all short-term financial penalties as no-show no-pay failures. This language is straightforward and paints a clear picture to job seekers. The message is clear and simple. Job seekers now know that, when on income support, if you fail to show up or participate or undertake your mutual obligations to seek employment, you should not expect to receive income support.

The obligation placed on job seekers to accept suitable employment or undertake training confirms the status of the social security system in Australia—that is, Australia's income support system is intended to help or act as support for those in our community who face genuine difficulty in obtaining paid employment. The income support system is not designed to be an alternative for those who simply refuse to work. This bill maintains all existing protections for vulnerable job seekers, including the Department of Human Services carrying out conversations with job seekers and properly evaluating and assessing if a fair and genuine excuse exists. A conversation may seem trivial but often leads to a much clearer picture of the individual circumstances of the job seeker. Naturally, rights of appeal still exist for those who disagree with the position of the department. More important than all of this is the discretion available to employment service providers. This refers to the ability of employment service providers to determine whether or not to enforce compliance measures or utilise other strategies to re-engage job seekers. This discretionary policy is crucial in ensuring the job plan that has been developed to get an unemployed person into the workforce is tailored to the individual.

The objective and main focus of income support is, of course, to get as many people as possible off government support and into meaningful paid employment. As has been said on numerous occasions, the best form of welfare is employment. Getting more unemployed people into the workforce is a major priority of this government. This government has committed $6.8 billion over four years to encourage job seekers into the workforce. The $24.5 million provided for the reforms proposed in this bill is a small but crucial investment into the entire Australian social security system. This funding is about getting people into work and off government support. It is about changing community attitudes and the attitudes of many unemployed. It is about enforcing mutual obligations, but, importantly, it is about getting people into employment.

Employment not only means income. It bring self-worth and confidence. It brings choices and opportunities. As I have stated numerous times in this House, this government is committed to assisting and supporting people to obtain long-term sustainable employment. I am committed to this because I am conscious of the benefits of work not only to an individual but for their families and the broader community.

When I spoke to the 2014 bill in October last year, I stated then that Australians are generous by nature and always willing and ready to put their hands in their pockets to help those in need. This government strongly believes in a hand up, not a handout. We are always there to give a hand up, but what we need to ensure is that we do not fall into the trap of giving unsustainable handouts to receive nothing in return.

The measures within this bill are not unreasonable. We are simply asking those individuals looking for work and receiving income support to fulfil their mutual obligations. We are asking them to not only honour the Australian taxpayer and the role of employment agencies but help themselves by increasing their chances of finding work. This legislation is not about penalising those genuinely requiring a helping hand during difficult times. It is about making sure the right thing is done by those receiving income support, insofar as doing the right thing for themselves, their families, their self-esteem and their community. I commend this bill to the House.

Ms HALL (Shortland—Opposition Whip) (10:07): This bill, the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, is more of the same from the government. We now have a new Prime Minister, a new leader, but unfortunately we have the same old policies being put forward by the same tired government with the same speakers coming out time and time again, reiterating what they have said many times in the past. This proposed legislation seeks to put in place measures that were announced in the 2015 budget to strengthen the job seeker compliance framework by providing stronger and more immediate consequences for job seekers who do not meet their mutual obligations.

This bill seeks to allow a job seeker's participation payments to be immediately suspended if the job seeker fails to enter a job plan. On the face of it, that sounds very reasonable. A person should immediately enter into a job plan. But what sort of consideration is undertaken in that job plan? Is it something that the job seeker has input into, or is it something that they are basically told they have to do? I hear regularly that a person's background, training, skills and interests are not considered in this type of job plan. The consequences of this is that you are sending people off to interviews and setting them up for failure. They go to the interview and they are rejected, even if it is a mutual obligation such as the Work for the Dole program, for instance. If that person is not suitable, if that person does not have the personal requirements that are needed for that job, if that person does not have the skills that will be needed for the job, they will be told, 'Thank you for coming to the interview, but we do not need you. You will not be suitable for this job.'

I will give an example. I heard recently of an aged-care provider in the Shortland electorate to whom a number of participants for a Work for the Dole program were referred. An aged-care facility is a place where there are a lot of vulnerable people. One of the people that were referred was somebody that had a criminal record, and it was not a criminal record for something minor; it was for a major assault. This was a person that demonstrated that they would be unsuitable to work in an aged-care facility. But the person's job plan had been put in place, and the job plan identified Work for the Dole, and the JSA identified that it was appropriate to refer this person to an aged-care provider. This demonstrates very graphically that the detail that goes into designing a job plan is not sufficient. It is all about getting people back to work. It is not about considering the long-term benefits for that person who is a job seeker. It is just a matter of referring a person to a job and saying, 'Welfare's better than work,' rather than looking at why that person has been a long-term beneficiary of welfare.

The reasons for a person receiving welfare are very complex. For people unable to secure a job, people who have been unemployed for very long periods of time, it takes more than going to an employment provider and having the provider say: 'We're going to develop and implement a plan for you. This is what you're going to do.' It takes a lot more than that to get a person into work. You need to identify the barriers that prevent a person from actually accessing a job. You need to work out why that person has been unemployed for such a long period of time. Once you have identified that reason, then you need to look at the steps that need to be taken along the way to get a person to the point where they will be employable and where they can actually enter the workforce. It is absolutely pointless to refer people off to interviews and to develop a job plan that does not actually look at all the issues. All that is happening is that that job seeker is being set up for failure, and it is costing the government money because the employment provider can say that they are doing this work.

A penalty will also be borne by the job seeker if it is determined that they acted in an inappropriate manner during a meeting. That can be imposed as well. The bill also allows a job seeker's participation payment to be suspended when a job seeker fails to participate in an activity without a reasonable excuse. It would be suspended from the instalment period in which the failure is determined, not from the following fortnight as is currently the case. I have had numerous constituents come to me and tell me that their payment has been suspended. I had one person come to tell me that their payment had been suspended because their car broke down on the way to an interview. They showed me proof of this. It took them quite a significant amount of time to get their payment reinstated. During that period of time, they really struggled. Another constituent had to attend a funeral. Maybe the death of a family member is not deemed important by this government, but this constituent believed that attending their father's funeral was vitally important. If they had not attended their father's funeral they would have had to live with that fact for the rest of their life. They informed the employment service beforehand but, still, their payment was cut off. There are numerous mistakes that are made along the way too. I feel that the compliance is all on one side of the record.

There is nobody in this House who believes more strongly than I do that every person who is unemployed should have the opportunity to get a job. I have spent a very big part of my life helping people find jobs. But this is not the way to go about it. This is punishing people and not taking into account the whole picture and every detail that is needed to get that person to work.

The bill seeks to allow a job seeker's participation payment to be suspended immediately, as I have said, if it is deemed that that job seeker is not putting in place appropriate job search efforts. I refer back to the first example I gave of a person who has a serious criminal record and has been very long-term unemployed. That person needs a plan that deals with a number of issues. They need an employment service that understands the issues that are preventing that person from entering the workforce. They need special assistance. They need a special plan. They do not need to just be in a situation where they are jumping through hoops. Jumping through hoops will not lead to anyone actually securing employment.

A job seeker who fails to accept work will no longer be able to have their penalty waived by re-engaging and undertaking additional activities, even if that would cause hardship. This is very harsh legislation. It is legislation that is not about the person; it is about this government trying to cut their deficit, a deficit that has doubled since they came to power. It demonstrates that this is a government that are not about the people. It demonstrates that this is a government that does not understand real issues that affect real people when they are looking at engaging in the workforce and obtaining employment. Nothing more graphically demonstrates the failures of this government to engage, consult and consider all the issues than this piece of legislation.

The opposition have previously supported similar moves that closely align suspension of penalties incurred in relation to missed appointments—and this is the point I would like to make. We should be protecting the rights of the job seeker to allow them to have that reviewed. It is very simple: they should have the right to have the decision reviewed. We want to protect the rights of the job seeker to show a reasonable excuse. Surely attending your father's funeral should be considered a reasonable excuse if you present the funeral notice—but no. We want to prevent the government's attack on the scope of 'reasonable excuse'. This government is bloody-minded. It is harsh. It does not consider the person. Labor's protection and approach has been very successful in reducing the average suspension time for missed appointments. A reduction of suspension times means that a person is not thrown into financial hardship. It means that the government is listening to people and actually trying to get on with what all of us in this House want—and that is for people who are unemployed to find a job.

It is really hard in our society to survive without any money. If you lose your job, you have no money. If you have no parental support, how do you pay for your food? How do you pay for your housing? You can go and seek assistance from one of the charities. I see this as the government shifting their responsibility onto charities. If the charities can help you, they will. But the suspension period really does create a lot of hardship for that person. It can lead to them losing their accommodation, if they are paying rent, and many other aspects of their lives can be impacted on.

I will end where I began. This is a government that may have changed its leader but it is a government that has the same policies, the same philosophy and the same ideology. It is a government that is not about creating employment and getting people into jobs. Rather, it is a government that is about cutting the budget deficit, a deficit that has doubled since it has been in power.

Mr JOHN COBB (Calare) (10:22): I rise today to speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015. This is about government doing the right thing by the taxpayer, most certainly, but it is also about doing the right thing by those who are not taking the responsibility for themselves, their families and their nation as seriously as they might. At the end of the day, they are going to be better off—as are the country and taxpayer—if they are employed or seriously seeking to become so. This legislation does it through introducing more immediate consequences and stronger penalties for job seekers who fail to meet their obligations. The changes build on the no-show no-pay reforms introduced last year.

Since those changes taken last year we have seen more job seekers attending their reconnection appointments. The bill reaffirms the government's commitment to reinvigorating mutual obligation for job seekers in receipt of support income. In other words, it is doing the right thing by the taxpayer and the country, and it is our job to ensure that happens. The changes implemented ensure job seekers are doing their part and if they do not comply with their obligations they will now be held accountable for them.

Job seekers are obligated to enter into the Employment Pathway Plan. The EPP sets out a number of activities a job seeker must engage in, to become more employable, in return for income-support payments. It recognises that some people are not, in their current state, employable. It is not just about saying, 'Go out and get a job.' They are being helped, they are being urged and they are being assisted, but they have to play their part as well. Under this amendment, if a person refuses to enter into an EPP they will face penalties and payment suspensions. In addition, the job seeker may incur a penalty equivalent to a working day's payment for each day they continue to refuse without good reason. This is not without a safety net but it is there. The measure will act as a safeguard against people not properly engaging with the job search.

Under these changes, financial penalties will also apply to people failing to behave in an appropriate manner at an appointment. I think you can work out what that means. It means you actually have to try when you get there and not deliberately ruin it. Those who choose to behave badly during an appointment, without a legitimate excuse, may have a penalty amount deducted from their job seeker's participation payment. There is no value in a person attending an appointment when they deliberately undermine the purpose of it. It is about pushing responsibility onto the job seeker so they are held accountable for their actions. It will also see more immediate penalties for failure to participate in activities like Work for the Dole or job interviews.

Currently, the legislation only allows for penalties to be applied in future fortnightly instalment periods. That means it could take five weeks before it is applied. This will allow for penalties to be incurred in the current fortnightly instalment. Job seekers who are not engaging in an adequate job search will also be held to account and will face more timely penalties. Under the current system, a person may not be penalised for up to 14 weeks for ongoing inadequate job search. The compliance measures will see payments suspended immediately. Once they show that they have been putting in the effort and searching for employment, seriously, payments will be restored and they will even receive a full pay-back. It is not trying to make life unliveable, it is trying to do the right thing by the taxpayer—who funds people in this situation—and by themselves and their families, in the short and long term.

The bill will weed out those people who are taking advantage of our system. Genuine job seekers will remain supported and unaffected. Those job seekers who are offered a job and turn it down will also be subject to the eight-week non-payment period. If we expect society to support us, we have to do the right thing by society. In 2013-14, 78 per cent of eight-week non-payment-period penalties for refusing work were waived as job seekers opted to undertake additional activities rather than serve the financial penalty.

Those refusing work will no longer be able to avoid the penalties. People choosing not to work should not be rewarded, and the bill ensures those continuing to rort the system will face real consequences. This government—this parliament—would not be doing the right thing by those people who do work, pay tax and fund social security if we did not take this action. The bill will streamline and simplify the current framework. Redundant provisions will be removed and all short-term penalties will be renamed as no-show no pay.

As we have said, the bill adds to legislation implemented last year to further strengthen job-seeker compliance. There is evidence, so far, that there is a positive impact from introducing these penalties. Last year the changes saw rates of people attending their reconnection appointments jump from 65 per cent in 2013-14 to more than 90 per cent in June 2015. The figures tell the story there.

As I have been saying about community expectations, as community and taxpayers fund all social security payments—which are necessary—individuals who are not genuine job seekers are, at the moment, able to escape any real ramifications. Currently there is very little to deter a job seeker from moving into the workforce and choosing to get off welfare payments. Communities should not be expected to support those who do not want to work or contribute to our society. The bill ensures that community expectations are met and that people being supported by income payments are Australians who are genuinely looking for a job—if indeed they are physically and otherwise able to do so. If they are not and they need help to become that way, that is what this is all about.

We need a system that moves people off income support as quickly as possible. I believe these new compliance measures are reasonable and that they hold people to account. Job seekers most definitely need to be actively participating in changing their future, their family's future and in helping their country. As I said, we are not getting rid of safety nets; indeed in some ways we are strengthening them. But our welfare system is about helping Australians who have come on hard times, not people who are taking advantage of the system. Ramifications must be in place to act as a deterrent to people who are improperly relying on welfare, but at the same time the safety net is being strengthened rather than weakened. This amendment sends a clear message to Australia that those in need will be helped and will continue to be helped, while those taking advantage will face the ramifications.

Ms CHESTERS (Bendigo) (10:31): For a government that claims to want to get away from big government and for a party that likes to preach about being a party that supports small government, those opposite really do like to go after job seekers and stand over them. Just consider the words of the former immigration minister, then social services minister and now Treasurer—the demonising language he uses. He says, 'We have got to stop young job seekers taking the welfare bus from the school gate to the Centrelink office.' This is a government that really likes to stand over job seekers, that really likes to demonise them and say that they are people who are bludging on our system. Quite frankly, that could not be further from the truth. Those people who are not genuinely looking for work quite often have something more complex going on in their lives. The majority of job seekers that I have met in my electorate and throughout regional Australia are genuinely wanting and looking for work. The problem that we have in this country at the moment is that there are just not enough jobs for the job seekers we have. There is more that this government can be doing to help create and secure good jobs in this country.

Labor's position, as some of the previous speakers have spelt out, is that we are supporting some of the measures in this bill but not supporting others—because we believe they will make it harder for vulnerable job seekers. It was Labor that first moved to encourage job seekers to engage with employment service providers, and we did this because we believe it is going to increase the likelihood of job seekers gaining work—keeping them active, keeping them positive. Yes, I acknowledge that there is some work we need to do with employment service providers; there are some good ones and there are some that need to pick up their game. That is something that any government needs to be vigilant about.

For these reasons Labor will support some of the proposals in this legislation. Labor believes that more closely aligning the dates of suspensions and/or penalties with the actual date of noncompliance will ensure that people re-engage more quickly. It will also ensure that any mistakes that are made can be corrected sooner. It does happen—we have all heard of examples of people accidentally being suspended and then not realising that that mistake has been made until they have had the money deducted from their pay. Closely aligning the date of suspension with the actual date of noncompliance will help to clean up those mistakes that occur and will encourage people to re-engage sooner.

We have previously supported similar moves in this regard for missed opportunities—ensuring, however, that the right of job seekers to have the decision reviewed is protected so we can make sure that we pick up those mistakes when they occur. It is about protecting the right of job seekers to show 'reasonable excuse'—so that there can be some compassion and understanding about why somebody has missed an appointment. It can be due to simple things: the bus did not turn up; there was a flat tyre; or, as a previous speaker mentioned, they went to a funeral. There needs to be an opportunity for job seekers to demonstrate reasonable excuse, because this is what happens in people's lives.

If we expect employers to be reasonable about excuses for why employees may be late to work, then Centrelink, job agencies and service providers should do the same. They should have that compassion and that understanding. We will only support the measures in this bill after preventing government attacks on the scope of what is reasonable excuse. We need to make sure that we are supporting people in helping them to work. We should not be slapping them down and standing over them with a big stick. We need to be supporting these people in genuinely finding work—extending the hand as opposed to slapping them down. As a result of the protections that Labor introduced, the average suspension for missing an appointment dropped from 5.2 business days down to 3.1, and the reforms that are before us today will help to reduce that even further.

Labor, however, is going to fight some of the proposals that are in this legislation. We will not support the broad changes that seek to penalise the behaviour of job seekers based upon criteria that are unfair, unclear and potentially will harm unemployed Australians. We do not support the penalties that prevent job seekers from re-engaging in activities that will help them to find work, especially when we know that such penalties will increase hardship. Also, we will not support any attempts to coerce jobseekers and undermine the mutual nature of the formation of a jobs plan. We need to make sure that there is independence within any plan, and that there is not any kind of untoward behaviour going on.

Labor have referred this bill to the Senate Education and Employment Legislation Committee for hearings and look forward to finding out the outcomes, because this is complex policy and we acknowledge that. We want to hear the experience of people seeking jobs.

As I said, we need to be getting on with the job of creating jobs. These measures would not be as important and necessary if we had a government that was genuine about creating jobs and not just more rhetoric. We are talking about people throughout the age spectrum—we are talking about younger workers, older workers, people who are genuinely looking for work, and there are not a lot of jobs available. There is more that the government can do in this space.

Recently, I caught up with Life Essentials in my electorate, and they are one of the early organisations that signed on the Work for the Dole program. What struck me when I went there was not just the professionalism of the participants but that they saw what they did every day—arriving to work on time, running the rosters and doing the work they did—as a job. They did not need to be under the banner of Work for the Dole. They had been volunteers previously. They were now Work for the Dole participants, and they were committed to the work that they were doing. Why? Because there were not jobs available for them. Their stories—they had been to 200 job interviews; they had submitted resumes over and over again, sometimes not even getting the reply, 'We have received your resume.' They said: 'Lisa, it is simple—there just aren't enough jobs for me. They just don't exist. I don't qualify for training anymore. I'm struggling to get out there and to talk to people in retail. There is a bit of a slowdown in retail. That has been my experience, and I just can't get a start.

Younger workers—youth unemployment in my area is up to 18.2 per cent. That is not because young people do not want work—they do. There is not the entry-level jobs available today for them. This is where the government could be really proactive and look at the space of temporary work visas, and the number of people who are in this country at the moment as overseas workers. There are 1.2 million temporary workers in this country, whether they be on 457, 467 or 417 visas, or international students. The government could help free up a lot of jobs that exist here in this country right now by cracking down and getting tough on the temporary workers and on what is going on in the temporary work visa space.

One of the reasons why local people are struggling to compete in this market is that there are temporary workers here who are being exploited. How can a young person from my electorate in Bendigo compete with someone who is here on a 457 visa, or a 417 visa, and getting paid $5 an hour less? How is this happening? At KR Castlemaine in my electorate—the 'big baco' where they produce a lot of 'dons' and KR Castlemaine, which you all buy in the supermarket—there is a collective agreement in place. That collective agreement has been undercut because the company has outsourced to a third party and employed 417 visas, and taken away jobs from local young people. At the moment, that is completely above board. There is clearly a weakness in the Fair Work Act, and there is clearly no will from this government to tackle that. Those young people who have lost their jobs at that place are now looking for work. They are people who are going to be subject to the rules that are before us today. They are quite willing to keep working at the bacon factory. They are quite willing to keep working there. They are keen to keep working there. But they have lost their jobs to people who are here on 417 visas—the backpacker visas. They have lost their jobs. They have been undercut.

This is where the government can do more to help create jobs—secure jobs, in our community. The youth unemployment rate is almost equal to the number of temporary backpackers that we have in this country. There is a problem with the temporary work visa space. Then we go to skilled workers—the 457 visas and all the scandals that we are hearing, almost on a weekly basis, of workers being underpaid in the 457 visa space. Some companies and employers are not even attempting to take on a graduate.

We have a very high rate of engineers coming out of university who cannot get a job within the first 12 months and the first two years. They might still be working in retail or they are looking for work; yet, time and time again, we are seeing those jobs go to people who are here on 457 visas. I challenge business and this government to come up with a plan that will see pathways from education into skilled professions. At the moment there is a gap. There is a gap in the graduate entry-level space, and this government is doing little to help encourage university students make that next step. Employers and government need to work together to ensure that we rebuild entry-level programs.

This bill does talk about job seekers. It does try to take the tough-stick approach to people who are looking for work. As I have said, some of these measures Labor will support, but others we will not because they go after vulnerable job seekers. This government needs to show compassion and understanding when it comes to people who are looking for work. I have mentioned that most people who are looking for work just need a job, and this government needs to do more to create jobs.

For the other group of people who are missing appointments and not getting there on time—quite often there is something more complex going on in their lives. These are people who might come from intergenerational unemployment, and there are pockets of this disadvantage that exist everywhere. In my electorate, we have parts where there is third generation unemployment. This measure, by cutting their payment off, is not going to fix what is going on in their homes. They need support, education for their children and social workers to go into their homes to help rebuild their confidence. The more sticks and slap-downs that you give them do not empower them to step up and take control and go to that job interview.

What we need to do is to be supporting these people to step up from the grassroots, support organisations like our councillors and support our welfare organisations to encourage them to re-engage and get involved in their community. It is more complex than just cutting them off, sending them a text message and saying, 'Go back to your interview.'

That is why some of the organisations in our electorate are engaging with the Work for the Dole program or other programs to strongly encourage that grassroots movement and to rebuild people's confidence. If only this government could get out there on the ground and start talking to people about the importance of creating jobs. You can do all the reform that you want in this place around vulnerable job seekers, making sure that we have got the rules tough enough and making sure people turn up to appointments, but, if you talk to anybody who is working in this space, what they want be able to offer job seekers is options—options in jobs that are available.

One of the previous speakers said that, if somebody refuses to take a job, they should be kicked off payments for that, or words to that effect. In regional areas, sometimes people turn down jobs because they do not have available child care or they cannot afford the car to get to the job on time. We do not always have decent public transport to help people get from A to B. Not every job is suitable to every person, so there needs to be compassion, understanding and flexibility. I strongly urge the government to rethink its approach to job seekers and to do more to help create genuine job opportunities, because without creating genuine job opportunities we are not going to be able to move people genuinely from social security, welfare and job seeker payments into jobs. Jobs are critical and this government needs to come up with a plan that will create good secure jobs that people can count on.

Mr BROAD (Mallee) (10:46): It gives great pleasure to talk about the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015. Having purpose and having a job is very essential. In fact I hark back to a book I have been reading recently, quoting Henry Bolte, the once great 17-year Premier of the state of Victoria. He said, 'If you can ensure that people can get a job and then ultimately buy a house, much of the economy falls into place after that.' This is very true. We have to ensure that we create the economic framework for people to have a job.

The difference between the coalition and the Labor Party on this is how we get to that end. We recognise that governments actually do not employ people very much. It is small business that employs people. It is profitable businesses that employ people, and governments then come along and employ people in those services that surround the economic activity that is driven by business. So if we are going to create jobs then we need to have the economic climate and the opportunity to produce something: either dig it up and sell it, value-add it to make something to provide a service—whether it be an education service, a food service or a marketing service—or grow it. In doing those things we stimulate an economy, and in stimulating an economy we create jobs.

The thing that we have been very instrumental in during a very short time, just two years in the parliament, has been creating the opportunity: the opportunity through a free trade agreement with China, the opportunity through a free trade agreement with Korea, the opportunity through a free trade agreement with Japan and the opportunity through the Trans-Pacific Partnership. It rattled me a little bit when I listened to the previous speaker, the member for Bendigo, who has probably been one of the greatest opponents to the free trade agreement with China, and that disappoints me, because I always want to tell a little story about why extra market opportunities translate to jobs and to wealth in the country.

In 1991, when I was a 16-year-old, we were exporting sheepmeat to 12 countries across the world. We had a bit of a dry time. Sheep were worth 25c, and we dug pits, we lined up with guns and we shot those sheep. On our farm business, we are now exporting sheepmeat to 96 countries across the world. Think about that: 96 countries. Recently, a few weeks ago, we sold for $110 old ewes that 24 years ago we would have shot. That is what comes from opening up trading opportunities. What are the outworkings of that? The outworkings of that are on my property. We are able to employ quite a number of people—that is jobs. Jobs start by creating opportunities, and that is what are doing, and that is really the key focus.

I look across the electorate of Mallee that I represent. Four years ago, we had zero citrus into China. Now we have 10,000 tonnes of citrus annually going into China. Four years ago, we had zero shipping containers of table grapes, and now we have over 1,000 shipping containers of table grapes. All those are hand-picked. All the irrigation systems that are rolled out are ultimately being done by people, and that is jobs. The free trade agreements and those extra market opportunities have meant that, instead of having to take the price that is offered, we have more customers for the things we produce. We get more money in. More money then stimulates people to have more confidence, and they then employ people, and these are some low-skilled jobs.

It is true that, when we think about how we structure an economy, we have to have jobs for people of all different levels, and I am saying something today to the students of Australia who are doing their year 11 and 12 exams: do your best, but don't get worked up about your results, because we want to have a society that has all sorts of skills. Some people will become lawyers—I hope not too many of them do. Some people will become great tradespeople. Some people will be farmers and some people will be teachers. We want to have an economy that allows the diversity of jobs for a whole range of people so they can use their natural God-given gifts to contribute to society. But there also have to be obligations for laziness. We are not saying that there should not be social security, but there have to be obligations for laziness.

I was in the United States in July. We are not like the United States, and I am proud of that. In the United States, if you are unemployed, you get benefits for six months and then they are cut off. In those unemployment benefits you also receive health benefits, but, if you are not working and you are not paying your health insurance, that is also cut off. So you have a six-month period where people have to get a job and, at the end of the six months, they are cut loose. They are cut loose from the health system and they are cut loose from the welfare system. We are not proposing something like that. I do not think any fair-minded Australian would ever support something like that.

What we are saying and what the collective population of Australia is saying to a person who is unemployed is: 'We are going to support you to ensure that you have a roof over your head and that you are fed, but we want an obligation from you. That obligation is that you need to be actively trying to better yourself, either through training or through trying to get a job.' That might not mean you get to pick your dream job. If there is one thing I have learnt through my working career, as someone who did not go to university, is that the best way to get a better job is to be working in a job. When you are working in a job, you are showing to potential or future employers that you are motivated, that you are willing to turn up and that you are willing to get out of bed.

I see that we have children in the gallery. One of the great things about the children in the gallery is that they get to see their House, the people's House. I am going to give a great piece of advice to the children in the gallery up there: the secret to success is to look at what everyone else is doing and do a little more. So, if you work in a supermarket and people are stacking shelves, just do a little bit more. If you are working at McDonald's and you see someone working, just do a little bit more. Even in school, the secret to success is to just do a little bit more. My father always told me, when I was working—and I started by riding a pushbike to clean out horse stables as a kid—to never walk around with my hands in my pockets, because it makes it look like you are not working. It is about perception. If you want to be noticed by the boss and want to be noticed for success, just do a little bit more.

This legislation is really about saying that, for those who do not want to honour the agreement of benefits that are being provided to the Australian people, there will be consequences. So, if you are unemployed and you are in the process of trying to get a job—you are actively seeking and you are working with the bodies that the Commonwealth has funded to help you get a job—and you are trying your best, you have nothing to fear from this legislation at all. But, if you can find lots of excuses to not try to get a job, then I do not think it is unreasonable for the Commonwealth to say that there might be consequences to you not fulfilling your obligation.

In this bill there are financial penalties for failing to enter an Employment Pathway Plan. There are penalties if you fail to behave in an appropriate manner at an appointment, and that is fair and reasonable. If the Commonwealth is going to provide services and can help set you up for a job interview and you turn up at that job interview and actively do not want to try to get the job, then I do not think you are fulfilling your obligations to the people of Australia who are paying your benefits. There are obligations to take the job that is presented to you if it is fair and reasonable. As I said earlier, if you are working within a job, that is the best chance to get a job.

There is a capacity to try to get a more simplified compliance framework. We do not want people to be disadvantaged because they do not understand the system; we want to make sure it is clear that you are getting benefits and, as a result of getting those benefits, this is what we expect of you. Making it more streamlined is fair. We do not want people to be disadvantaged for ignorance. But we do say to job seekers: if you are unemployed, you are not just unemployed; your new purpose is to be a job seeker. It is our obligation as members of parliament to create the economic framework for that take place.

In creating the economic framework for that to take place, we also need to be very mindful that sometimes people find challenges in getting on the first rung of the ladder. People do not always have the greatest start in life. Some people do not always have the greatest role models to follow. We have to break the stereotype and that is the challenge. There are 600,000 Australians living in households where no-one has ever held down a job, which means that a child growing up may not know which role model to follow. That is why I am a strong believer in ensuring that there are also supportive services around to help people get on the first rung of the ladder. I think we are doing it. We are doing it reasonably well, but there is obviously more work to do on this. It can be a multiple approach.

I have a very strong Indigenous community in the electorate of Mallee. We have a program in schools called the Clontarf Football Program. Some might be aware of it. It started with a love of AFL and using AFL football to get people engaged and then help them get job-ready. In that program, quite a few businesses sat down with the Aboriginal kids and said to them, 'These are the jobs we have available.' The guys were so self-confident and had so much ability—they were going on to university or they were going to do this or were going to do that. It really has taken people who may not have got on the first rung of the ladder onto the first rung of the ladder. In Stawell, the community has 20 people in year 10 and, as part of their education, they have to do an interview to be in the program. Then, over a period of 20 days throughout half a year, they get exposure to a different career choice. They might do a day in a bakery and are given a heap of flour and finish by making a product. They might do a day in the council and will realise what human resources are. They may do a day in a law firm. So, over that 20 days they are exposing people to getting job ready. I think there are some real great models that we can roll out across Australia to ensure that people can get on the first rung of the ladder.

To summarise, the federal government's role is of course to create the economic framework. We are doing that. We are very mindful of that. We are doing that through our free trade agreements. We are creating market opportunities. We are trying to instil confidence in small business so that they will employ one extra person. If every small business in Australia employed one extra person we would not have enough people to fill the opportunities that would be available.

We are also providing a welfare system that is fair and is asking some obligations of those who are recipients of it. Then, we are doing a lot of work to try to get people to be able to attain the first rung on the ladder. Ultimately, this multifaceted approach is how we build society. I want to reiterate to young people who are doing their exams and studies at the moment: do your best—there are many jobs and many career pathways out there for you. There are many ways you can contribute to society and many ways you can contribute to making Australia great.

It is not unreasonable for the Commonwealth to ask obligations of those we are providing benefits to. The purpose in doing that is, ultimately, so that people who are receiving benefits can get off these benefits and then contribute to Australian society, stand a little bit taller and be a little bit more proud, because they have a job.

Ms O'NEIL (Hotham) (11:01): One of the biggest policy challenges we face in this parliament is the 800,000 Australians who are today out of work. It has been to my enormous distress and frustration that, even since I was elected to parliament two years ago, this problem has grown significantly worse. We have seen the unemployment rate in this country climb significantly since I was elected to parliament. For certain pockets of this country and for certain people who are living in Australia and have a looser connection to the labour market, such as young Australians, the problem has gotten dramatically worse.

Unemployment is a profoundly important issue. For a Labor member of parliament this is absolutely core to our mission. We know that the best way out of poverty is a job, and the fastest way into poverty is job loss. So I want to start by saying how critical it is that we talk in this parliament about this pivotal issue of unemployment.

It has been with some disappointment that I have seen a real lack of discussion in this chamber about this important topic. The debate today on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 touches on the support we give to people who are out of work. But what I am waiting to see come before this House is a bill about job creation and how it is that we are going to start to get these 800,000 Australians, many of them young people—one in five unemployment Australians today are young people—into work.

The bill today relates to the system we have set in place to help connect people who lose their jobs back into work. This is a critically important social justice issue. One of the things the evidence on job loss is very clear on is that the best indicator of how long someone will be unemployed is how long they have been unemployed for. What this means is that the quicker we can get people who lose their jobs back into work, it is the very best thing we can do for those people, because every extra day on which they are unemployed makes it that bit more challenging. So, the system that we construct to help people who lose their jobs to instantly connect back into work—to get back on their feet and give them the support and skills they need to find a new job—is incredibly important.

Making the system work well is a very worthy goal, and it is something that Labor comes to the table to discuss, with the importance being on evidence in this and not on ideology. We do not want to assess the strength of this system based on what are really unsubstantiated beliefs about what it may be like to be unemployed and what sort of things we can do to help people. Rather, we should look at the studies that have been done and at things we have tried in the system before. We need to look at what really does make a difference to people who are looking for work.

What principles will we use to consider legislation that touches on this really important area of helping people who have fallen out of work? I think the first one is that we should show real concern for these Australians who are struggling to find work. All of us, as members of parliament, talk to people who are struggling to find work. Every time in the last two years that I have done a mobile office or set up at a train station to talk to people I represent about what is worrying them, I will have a person who is struggling to find work. The sense of incredible distress they feel and the enormous impact this has on mental health and self-esteem cannot be overstated. This is intensely important. It does not just affect the person, but their whole family generally is affected by their falling out of work. So I think we need to be frank and be concerned about these people and provide them with support.

The member who preceded me in this discussion talked extensively about the need for mutual obligation. Of course Labor supports the need for mutual obligation. We support it because that is the fair approach. It is fair that people who are getting benefits from government also give back to their community. But we support it because that is what is in the best interests of job seekers. One of the driving principles of all of this area of policy is that we need to help people and support them and also push them a little bit to re-engage, because people who do fall out of work sometimes can start to slip through the cracks, and we cannot allow that to happen. So, when we talk about mutual obligation we need to be clear that this is not a punishment. It is not trying to penalise people who often, through no fault of their own, find themselves without work. But it is an important principle, because it helps that person.

These are some of the principles through which we have looked at the proposals that have been put forward by the government in this bill. Using that approach we support three aspects to the six changes that are being proposed, and there are three that we do not believe are in the best interests of the system and we therefore will not be supporting them.

I will first talk through the aspects of the bill that we are supportive of. Firstly, the bill seeks to allow a job seeker's participation payment to be suspended when a job seeker fails to participate in an activity, without a reasonable excuse, from the instalment period in which the failure is determined, and not the following fortnight—I will decode that into English in a moment. The second aspect is that the bill allows a job seeker's participation payment to be suspended immediately when the job seeker fails to undertake adequate job search efforts, without a reasonable excuse. The final of the three provisions that we will support is that the bill will rename all failures resulting in short-term financial penalties as 'no-show no-pay' failures.

What does all that mean? The central meaning of all of this is that the government is proposing to bring the penalty associated with failing to comply with the job seeker system close to the action itself, which is the failure to comply. It means that, if you are judged not to have turned up to your appointments and this is a consistent failure, the decision of the government to not continue your payments will be brought right back to the point in time that this behaviour occurred. It sounds like a small thing, but it is actually critically important. What we are trying to do is perfectly line up the failure to comply with, essentially, the punishment or the incentive to re-comply. The reason that Labor will support these provisions, again, has nothing to do with anything punitive; but we know that, when we bring those two things together, the job seeker is absolutely clear about the reason that their payments have been ceased, and we can show that this reduces the time that people are without payment. This is very consistent with Labor's approach to this policy space while we were in government. Labor of course have always encouraged job seekers to engage with employment providers, but the evidence, which we worked on while in government, does show that this short period between the reason for suspension and the reduction in income is important and productive, and previous efforts to line them up have reduced the delay in payment for the job seeker.

All of these things are terribly important because we are trying to tighten up this system to, again, ensure that people who are without work are not allowed to fall through the cracks. We cannot in good conscience allow people who fall out of work to disengage completely from the system. We need to encourage people to keep trying to get back on their feet and get back in the game, and the three amendments that I have referred to are really trying to achieve that. For those reasons, Labor will support them and we are happy to continue to improve the system.

But I mentioned earlier that one thing that Labor will not do is confuse the job seeker system, which primarily exists to support people back into work, with some form of punishment. There are 800,000 Australians out of work today and surely no-one in this House believes that all of those people are completely at fault for what has happened to them. These are broader macroeconomic issues that they, in a sense, are the victims of, and it is completely inappropriate to create a system of punishment to bully those people into jobs that, frankly, do not always exist for them.

For those reasons, there are three measures in this bill that we will not be supporting because we believe they are punitive, are unfair and will, frankly, have terrible social justice outcomes, which will push more job seekers into poverty faster. The first measure is that this bill seeks to allow job seekers' participation payments to be immediately suspended if job seekers fail to enter into a jobs plan. Essentially, job seekers are presented by their service provider with a plan for how they are going to get back into work. The bill is essentially seeking to provide that, if the job seeker does not immediately sign this plan, their penalty will be that their payments are stopped, so they will be left without any income. Labor believes this is unfair because it just takes it too far, essentially. It seems incredibly unfair to ask a person who has fallen out of work to instantly, on the spot, sign up to a plan that they have not had the time to take away, consider and discuss with their family. We know that often these plans recommend things that the job seeker is not even meant to be doing. The shadow minister gave a good example of an older person who had fallen out of work who was asked to go into a Work for the Dole program. Under this bill, the person would not have the time to take the document away, consider it, get advice and speak to people.

The other aspect of this that we do not like is that there is simply no evidence that this type of activity is going to encourage more people into work. What it is likely to do instead is take vulnerable people, force them into signing a document that they have not had the time and the space to consider, and threaten them with a failure to comply and not having any income at all. That is patently unfair.

The second aspect of the bill that Labor will not be supporting is the provision that seeks to introduce a new penalty for job seekers who are deemed to act in an inappropriate manner. One of the critical issues—and this actually spans across the three measures that Labor will not support—is the lack of clarity around what exactly this means. I heard the member from the other side who preceded me in the debate talk about what he believed was an inappropriate manner, but it is not defined in the legislation. What the bill suggests is that the secretary of the department will have full power to define 'inappropriate manner'. This will not be a matter subject to parliamentary oversight, and this is a really problematic feature. We also know that the behaviour of the person deemed to be inappropriate will have to come through multiple different sources—perhaps from the person running the Work for the Dole program, to the job services provider, back into the arms of government. We just do not believe that the powers around something that so lacks clarity should be handed over to the secretary.

I remind the House: of course a lot of things that we do in this House allow a lot of latitude on the part of decision makers and public servants, and sometimes that is appropriate, but let's remember that the end point of this is someone's income being taken away from them. Someone without any other income will be literally with no income. These are people who have rent to pay, food to purchase and families to support. So I think we need to set the bar a little higher than just allowing one senior public servant to define inappropriate behaviour and set up a system where we see multiple points at which messages and communications could get mixed up. I think we need to work a little harder than that and be a little clearer about what is and is not acceptable. Perhaps Labor will be willing to have that discussion if there is a bit more clarity.

The final aspect of the bill that Labor will not be supporting is the provision that would not allow job seekers who fail to accept work to be able to have their penalty waived by re-engaging and undertaking additional activities, even if it would cause financial hardship. In a sense, I have left the worst till last here, because I think this is such a good example of what we see so much of on the other side of the House, and that is this appalling treatment of job seekers without any acceptance that there are a lot of vulnerable people who are job seekers in this country, and we should not set up a system which essentially punishes them for being victims of broader economic issues over which they have little or no control.

Essentially, the way the system works at the moment is that there is a discretion about whether someone's payments will be taken away from them, subject to the person agreeing to undertake additional activities. So, if they miss a series of job appointments or they do not show up to their Work for the Dole program, there is the capacity for government to say, 'We're going to allow you to continue to receive your payments if you agree to do the following things.' This bill seeks to take that discretion away. What we are talking about here is that there will be many more job seekers who will be left without income. The specific provision says that it does not even matter if this is going to cause financial hardship to the person. We are talking here about vulnerable job seekers who are definitely going to be put in situations where they may become homeless, because job seekers are the most vulnerable people, and the discretion to decide whether to take that payment away or not is being dealt with.

We are always enthusiastic to engage in discussions about this important system, but unfortunately three of the most significant aspects of this provision are simply unfair, and Labor will not be able to support them.

Mr PITT (Hinkler) (11:16): I rise to speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015. This bill ensures that Australians who are looking for work and receiving financial assistance meet their mutual obligations to taxpayers. It is not unreasonable for taxpayers to expect that those they are assisting financially will do a few simple things to help themselves and to show their appreciation.

I know that many people in my electorate are doing it tough, but my belief is that you can achieve anything if you are willing to work for it, and work hard. From my personal experience, money was incredibly tight in my family as I grew up. Anything I wanted above the essentials, I had to pay for myself. There is only one way to find money to pay for essentials and other things, and that is to go to work. Both my parents worked incredibly hard, and they taught me that persistence and determination will always beat natural talent, because regardless of natural talent, if you do not turn your hand to what needs to be done, you will not be successful.

I note the contribution of my good friend and colleague the member for Mallee. He spoke about what happens when you stand around with your hands in your pockets. In my family, if you stood around with your hands in your pockets, you got a job. Consequently, my mother used to put me and my brothers outside to work. I think—and I did not realise this until much later in life—that may well have been to get us out of the way. However, it was a good upbringing and it certainly taught us a good work ethic.

At the age of 14 I got my first paid job. Work has been a part of my life for as long as I can remember. Basically, being without work meant no food—it was all fairly straightforward. My first paid job was filling bags with ice on a Thursday night for $4.00 an hour or 10c a bag, whichever was less. Consequently, I learnt very quickly what it is that you should be doing when you go to work. I might not have been the best at everything I did, but I was reliable and I kept turning up. To the people in my electorate and to the youth that might be listening to this speech, my advice to you is this: keep showing up, listen, work hard and take advice, certainly do not let things get you down, and be determined.

After graduating from public high school at Kepnock State High, I got my first full-time job as an electrical apprentice at the Fairymead Sugar Mill, which unfortunately is now defunct and has been demolished. I saved enough money from that job to move to Brisbane and go to university. I put myself through a four-year degree in engineering at QUT. So it has been a very long and tortuous path to come to this place. Before being elected to represent the great electorate of Hinkler—from Bundy to the Bay and the Bush—I ran my own consulting business, a retail arm and a few other bits and pieces, as well as acquiring some farming operations consecutively, which certainly taught me the value of hard work and, of course, how to pay people's wages.

I would say to the people in my electorate this: if a Woongarra farm boy like me can get into this place, into the cold rooms in Canberra, then anyone in my electorate can achieve anything if they are willing to do the work. Once again, my advice to them is this: take what job is in front of you, because if you wait for perfect you will wait forever. However, I recognise there are currently several challenges to gaining employment in the Hinkler region, including a lack of job vacancies. Unemployment in my electorate is unacceptably high.

The coalition government has introduced a range of measures to support job seekers and encourage businesses to employ. I will come back to that. Firstly I would like to speak a little more specifically about the measures in this bill. This bill builds on the measures we introduced last year to apply a no-show no-pay rule to attendance at appointments and the payment of welfare. Before we introduced the changes, only 65 per cent of job seekers who missed an initial appointment actually turned up for their second rescheduled appointment. By comparison, in June 2015 over 90 per cent of job seekers are now attending their rescheduled appointments. Between September 2014 and March 2015, the average payment suspension period fell from 5.2 to 3.1 business days. That is quite an achievement. It means more job seekers are doing the right thing and taking advantage of the help that is on offer, which is substantial. It also saves jobactive organisations and other agencies time and money. They can spend more time helping people find work and less time pursuing job seekers and reporting noncompliance. The no-pay rule will be extended to other mutual obligation requirements, such as entering into a job plan. Job plans list the activities that a job seeker must do in return for their income support, such as looking for work and participating in activities like Work for the Dole.

I make the point that job plans take into account personal circumstances, which may impact a person's ability to comply with the requirements. Unfortunately, some job seekers are refusing to enter into job plans—can you believe that? They are, in effect, saying, 'I would like the taxpayer's money, but do not expect anything from me in return.' I would like to see them try that with an employer.

I would like to talk briefly about one of my former employers at the Moreton mill, a chief engineer by the name of Graham 'Sharky' Williams. Graham was an incredible personnel manager who held a lot of respect from everybody that worked there. Every time we hired an apprentice, he opened with the same line: after he introduced himself, he would ask the apprentice if they knew what size shoe he wore. At that stage the poor apprentice, on their first day of work, was nervous and did not know quite what to say, and the boss told him it was a size 10 and if they played up they would find out what he would do with it. It is all figurative, but he got the best out of the people who worked at the plant simply because he encouraged them to persist and to keep showing up.

Under this bill, payment will be suspended until the job seeker accepts the job plan. There are safeguards in the system so that those with a reasonable and genuine excuse for noncompliance will not be penalised. Unfortunately, some job seekers are treating their meetings with jobactive and Work for the Dole with contempt by not behaving appropriately. If a job seeker does not behave appropriately at an appointment, payment may be suspended until the job seeker attends a new appointment and does behave appropriately. In the past, it has taken up to five weeks for a financial penalty to be applied. This is too long, and makes the penalty less effective. Under this bill, those who do the wrong thing will have their penalties deducted from their next fortnightly payment. Job seekers who do not undertake adequate job search efforts without good reason will have their payments immediately suspended until they demonstrate adequate job search efforts.

Australia's income support system is there as a safety net for those people who genuinely cannot find work—we have one of the best social security systems in the world—as opposed to supporting those who simply do not want to go to work. That is why we have introduced measures to ensure job seekers accept the offer of a suitable job when it is made—not jobs that are beyond their skill set but jobs they are capable of doing. An eight-week nonpayment penalty can now be applied to job seekers who refuse work without good reason or fail to start a job as planned. I have had many jobs that I did not like every part of. In fact, I do not recall ever holding a job where I liked everything 100 per cent. But that is the reality of working life. All of these changes are important in helping maintain public confidence and trust in our social security system.

Earlier I mentioned that we had introduced a range of measures to support job seekers and make them stand out in what is a highly competitive jobs market. Through Work for the Dole, the National Work Experience Program and the Green Army, job seekers are learning important skills while contributing to their communities. Young people can also gain new skills through the reinstated Australian Defence Force gap year. The 2015 budget included $330 million for a youth employment strategy to help young people transition from school to work. Young job seekers who find a job and stay off welfare for 12 months will receive a job commitment bonus of $2,500, and a further $4,000 at 24 months. These are substantial incentives. We are providing concessional trade support loans of up to $20,000 and spending $200 million each year to lift apprenticeship completion rates. We are also providing up to $9,000 to help people relocate to take up a job.

Giving genuine job seekers the hand up they deserve is just one piece of the puzzle. We are also taking steps to give businesses the confidence they need to expand, because ultimately it is businesses that create jobs and employ. Businesses that employ young or mature age job seekers can access wage subsidies of up to $10,000. We have reduced the company tax rate to its lowest level in 50 years and are allowing small businesses to claim an immediate tax deduction for each asset they purchase up to $20,000. There are a range of grants to assist businesses to innovate, conduct industry research and expand into new export markets. Off the back of the free trade agreements we have signed, I am sure businesses will be successful. There is the New Enterprise Incentive Scheme for job seekers who have an idea for a new business but need some advice to get it off the ground. As you can see, the coalition government is doing everything it can to ensure our social security system is robust and fair, and to help people into work.

I will continue to work hard to attract the investment into Hinkler that we desperately need—things like the Knauf manufacturing plant, and our proposal for a dive wreck of Hervey Bay, with HMAS Tobruk, which could potentially add $5 million to our local economy. But I cannot do it alone. We all have a role to play in creating local jobs for current and future generations. There are two simple things people in my community can do to boost our local economy—they can shop locally and buy from our local businesses, and they can tell everyone just how good our region is. You should never talk down your local region—our regions are the best thing we have going for us. Going to work is not only good for the individual and their family. When the local employment rate is high, the entire community benefits. There is nothing more substantial for a person than to be able to find their own way through life and to pay their own way. I commend the bill to the House.

Mr WILKIE (Denison) (11:27): I am sure it is self-evident to everyone here that public policy should constantly be checked and improved where it can be. Change in itself is not a bad thing, and reform is often a good thing. When it comes to getting people back into work in this country, we should be constantly looking for ways to improve the situation, to improve their lot and get them back into work. Regrettably the unemployment rate in this country is stubbornly persistent. Seasonally adjusted, the current Australian unemployment rate still sits at 6.2 per cent, and it is somewhat higher than that in Tasmania at 6.4 per cent. As high as those figures are, the real figure is undoubtedly much higher. Because of the way we measure the unemployed rate in this country, in essence if someone works at all, even an hour a week, they are not recorded as being unemployed and they are certainly not recorded as being underemployed. I have heard it said that the real unemployment rate might even be double the reported unemployment rate, and the underemployment rate might be double that again. If you start to add that up, a quarter of the work force could be either effectively unemployed or genuinely underemployed. So we do need good public policy to create more jobs and to get these people into jobs or into more work. This is especially the case in Tasmania, where the unemployment rate is higher and in particular the youth unemployment rate is higher. Nationally the youth unemployment rate sits at about 12.2 per cent, but it is 17 per cent in Tasmania, according to the official figures. According to community organisations in south-east Tasmania, around the Hobart area, it sits at almost 20 per cent—one in five young people in southern Tasmania are unemployed. That is not good enough.

I want to put a human face to those statistics. Too often in this place we talk about grand public policy and big reforms and big money and big dollars. I remind honourable members that we should always be putting a human face to these conversations. Every one of these people is a real human being. Some of them are struggling mightily against the odds and, to their great credit, are often achieving. I will give some cases of people who are not being well served by the current arrangement and will find things much more difficult if this Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 is to become law.

The first example is a 58-year-old female constituent of mine who is on Newstart. She simply does not understand how to apply for jobs online, and the job service provider has not taken the time to explain it to her. Even if the job service provider were to explain it to her, she could not apply for jobs at home anyway because her internet has been cut off because she cannot afford to pay for it. That brings me to the point that, according to ACOSS, Newstart currently is about $280 a fortnight below the poverty line. If we want to help these people, if we want to help this 58-year-old woman from my part of the world, a good way to start would be to increase Newstart to a level that allows her to live a better life and to have the resources to actually get a job—to have the internet on at home. This woman, to her credit, is doing volunteer work at the botanical gardens, but that is only nine hours per week as opposed to the required 15 hours. She has applied for volunteer work with the Salvos, but she simply cannot get the 15 hours a week that she is required to achieve. The very sad footnote to this particular story is that this woman's adult child is disabled and, because of the obligations that are already on her before this bill becomes law, she simply does not have enough time to spend with her disabled child and cannot do the things that her disabled child desperately wants to do, like going camping, because of the requirements that are already on her.

Another human face of the current unemployment situation in this country is a 25-year-old Iranian woman with limited English. She does not understand the changes that were made in July and has been repeatedly cut off from her payments. The issue for this woman is that she keeps reporting late, but no-one has bothered to get a translator to explain this to her. She thinks that her payment rates just vary and that is just the way things are. She has been underpaid and no-one has helped her out. We are talking here about an Iranian woman with limited English. The Multicultural Council of Tasmania has raised with me that they are getting a number of complaints with regard to the new requirements, as people not only do not understand them but also do not have the English or computer skills to comply with them.

Another example, another human face, is a 26-year-old female constituent who is enrolled in a two-year fast-track nursing degree that must be done full time. Because she is doing it as a second degree she is not eligible for youth allowance, so she is on Newstart. She was told, until we remedied it, that she had to drop her full-time degree—the pathway to becoming a nurse and getting a great job—so that she could meet the Work for the Dole requirements. I am pleased to report that in this particular case my office raised the matter with the department and her situation was eventually remedied. But what about the people who do not have the wherewithal to get their situation remedied or to talk to the very good staff that I have? These people fall through the cracks.

Another example, another human face to these figures, is a 63-year-old man who is expected to apply for 10 jobs a week. That is 40 a month, but in the last four years he has only ever had seven replies to his applications. He recently did receive a reply thanking him for his application but saying he was unsuccessful as they had received over 300 applications.

These are the human faces of the current situation, and it is a very sad collection of human faces. Will this bill remedy things? Regrettably, it will not. These are not malingerers or bludgers. These are not people who are trying to rort the system. These human faces, these individuals I have described, do not deserve additional legislation that could, at best, be described as punitive—and that is how I would start to describe this bill—or could even be described as vindictive. The underlying philosophical base or foundation for this bill is an assumption that most job seekers are out there trying to rort the system. The reality, of course, is that most job seekers desperately want a job and will do everything in their power to comply with the government's existing requirements and new requirements, but they cannot always do it.

This bill has a number of problems that will just make things worse. For example, people will be forced to sign up to a job plan without any opportunity to discuss or negotiate it, and if they do not agree with the job plan they will be penalised. That cannot be fair. The penalties for what is described as 'inappropriate behaviour' will disproportionately target people with behavioural problems or mental health problems. If you do not show up for an interview you will not get paid. So if you are asked to attend a meeting but have something in your personal life that prevents you attending that meeting you will not get paid. Genuine reasons—such as being physically or mentally unwell, having childcare issues or other equally valid reasons—would not be deemed as valid reasons.

We need a better approach to unemployment and underemployment in this country. We are not going to solve it by putting in place increasingly punitive and even vindictive legislative requirements—requirements that basically take money off the unemployed at the first excuse, and arrangements that punish people unfairly. Most of these people desperately want a job. Some of them have very difficult lives. Some of them have complex lives. Some of them are looking after other people—looking after a disabled child, in that example I gave. We need a better approach to helping these people.

For a start, we could increase Newstart. I make the point, again, that ACOSS has found that the current rate of Newstart is $280 per fortnight below the poverty line. When you are paying people that little amount of money—those few dollars—they are not being given the circumstances to lift themselves up out of underemployment and unemployment.

We need better help for the young. I have said that youth unemployment in south-east Tasmania is almost 20 per cent. What are we doing to help them? We are doing less and less to help the very young. In fact, we say that if you are under 22 years of age and your parent or parents have a modest wage you cannot even access Centrelink benefits. That is not good enough.

We need better help for the aged, for older unemployed people. There are a whole range of things that the previous government could have done to deal with the ageism that exists. It is next to impossible for someone over the age of 50 to get a job, and I am sure there are many things that we could do in this place to make it easier. For a start, there should be a cabinet-level minister for older Australians, and there are a whole lot of other ideas that could be implemented to improve the circumstances for older unemployed people.

We need to stop job-killing policies. I spoke in this place just yesterday about the Shipping Legislation Amendment Bill 2015 that was debated in the House of Representatives yesterday. It is a so-called reform by this government that will kill 2,000 jobs nationally, including 230 jobs in Tasmania. There are 230 jobs in Tasmania that will go as a direct result of the shipping bill that was debated by this House yesterday. This government and the previous government between them axed 198 workers at the CSIRO in Tasmania. This government has axed dozens of jobs at the Australian Antarctic Division in and around Hobart on account of the so-called efficiency dividends that they have had to implement. The University of Tasmania has lost positions because, like all universities around the country, it has had to deal with $4 billion in underfunding on account of decisions of the previous Labor government. Thank heavens deregulation is not going to go ahead, because that would cost the tertiary sector another $5 billion. The now-famous Cadbury money keeps coming up in this place. There was $16 million that was identified as desperately needed for the City of Glenorchy area because that disadvantaged area needs economic stimulus. That has been pulled by this government—with the support of the Labor Party, I add. In regard to Defence contracts, Hobart has a wonderful Defence manufacturing precinct, but the previous government and this government have sent virtually no work there.

In regard to arts funding, Tasmania has a wonderful arts sector and, in fact, is on the cusp of an arts led economic revival. Yet, in the 2014 budget, the Australia Council nationally lost $28.3 million over four years. In this budget the Australia Council has had to implement an efficiency saving of $7.3 million, not to mention the $105 million that has been cut from the Australia Council budget to set up the slush fund, the National Program for Excellence in the Arts. Tasmania has almost entirely small and middle sized arts bodies. All of them—in fact, every arts body in Tasmania with the exception of the Tasmanian Symphony Orchestra—will bear the brunt of these cuts to the arts sector.

I have already spoken about the shipping bill, which was debated in this place yesterday, shamefully. That will cost another 230 jobs in Tasmania. It will probably cost $100 million of investment by SeaRoad, who have already signalled that they are unlikely to go ahead with the replacement of two vessels because of the bill that was debated in this place yesterday.

We need to stop treating the unemployed as bludgers. We need to understand that most of them, the overwhelming majority of them, desperately want work, and we need to put in place policies that will create that work. We need to stop having policies that are killed jobs, particularly in Tasmania. We have a population of 500,000 people, which is as big as a city on the mainland. When you take a couple of hundred jobs out of a place like Tasmania it hurts, and it is not good enough to then turn around to the newly unemployed and have a vindictive policy against them.

In my last few seconds I will just say that the role of government is to prevent disadvantage and to help the disadvantaged. A vindictive, punitive bill like this does not achieve that. (Time expired)

Mr HUTCHINSON (Lyons) (11:42): It gives me great pleasure to speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015. The member for Denison, with respect, is all complaints and no solution. For those three years he was, of course, pivotal. He had a very significant and influential position in this parliament with the balance of power. To complain now, when he is effectively irrelevant, is just beyond the pale.

Before I get on to the bill before the House, in respect of the Shipping Legislation Amendment Bill 2015, one MUA job that might be saved on a coastal shipping vessel potentially will cost two, three or five jobs, often in other unionised workplaces, whether that be at Nyrstar in the member's own electorate or whether that be at places like Norske Skog in my electorate. As Ray Mostogl from Bell Bay Aluminium has articulated more clearly than anyone in this place has done previously, when we lost our international shipping service by virtue of the Coastal Trading (Revitalising Australian Shipping) Bill 2012—which, I have no doubt, the member the Dennison supported—his costs of shipping went up 63 per cent. Deadweight tonnage on Australian flagged ships has continued to fall under the changes that were made in 2012. I said in my contribution the other day that I will give the benefit of the doubt to the MUA and even to those on the other side that the bill was well intentioned, but they have failed. Tasmania is the island state in the island nation. It depends—blind Freddy could understand—more on shipping than many other parts of the country. I just simply do not understand how a Tasmanian could come into this parliament and say that losing our international shipping service is a benefit.

Everything this government has done since coming to power in 2013 has been about supporting job seekers and supporting the economy to grow more opportunities for more people. At the end of the day, our system of welfare is one of mutual obligation between the taxpayers of Australia and those recipients. That is the basis of our system, and Australian taxpayers understand and appreciate that. We all know—or, at least, some of us know—that the best form of welfare is a job, whether it be for the individual concerned, their family, the community to which they can be a more constructive contributor or the nation more broadly and the finances of the Treasury.

We understand that the issues for those people who are unable to find a job because of mental health are enormous. But, again, everything this government is doing is to support them. That includes the Innovation and Investment Fund. The member for Denison should know about this because his electorate benefited from that $13 million program. With contributions from the private sector, it turned into $40 million. That created 400 jobs as recently as in the last 12 months in our state of Tasmania. It also includes the $60 million contributed to irrigation schemes in the state. It is not about accessing water in those areas of the state that are dry and that with the inclusion of water can create more products; it is about the surrounding towns. It is about the dairy, vegetables, fruit and finishing of red meat products that can occur. It is about the families that have come to those towns in rural and regional Australia. That is what it is all about. It is not about the TFES, for example. That is $204 million to expand the Tasmanian Freight Equalisation Scheme. It is not about that economic infrastructure. At the end of the day, it is about enabling our state to compete on a level playing field and create more jobs.

There are also the coastal shipping reforms I have just mentioned. What makes one job on an Australian flagged coastal vessel worth more than one job in the member's own business, for example? What makes it worth more than farmers in my electorate or a job in, as I mentioned before, Norske Skog or Bell Bay Aluminium? I do not understand.

The small business and jobs growth package was focused, as the name suggests, on creating more opportunities for more young people. It was to encourage small business. As the member for Denison rightly said, we depend so much on small businesses within our state. That was a $5.5 billion package in the last budget. It was well received all around Australia because it was about encouraging small businesses to have a go. It was about encouraging small business through the instant asset write-off program that allowed them to immediately write off assets up to the value of $20,000 and tax concessions of 1.5 per cent for incorporated small businesses. And 70 per cent of them are incorporated. There was a $1,000 tax deduction. That was all designed to make those businesses more profitable and give them more incentive to employ more Australians.

There was the renegotiation, for example, of the job services provider contracts. That is not specifically related to the legislation that we have before the House, but it was about not having an up-front payment when you got people on the books. It was about delivering outcomes. That is something that is starting to change. I went into the MAX Employment office in Bridgewater the other day. It is not far from the member's own electorate. They are seeing within their own processes and procedures the things they need to do. Whether it is a part-time job or a seasonal job, there are benefits to the people there. The structure of payment now is that they will get paid only when they get people into work, not when they get them on the books.

It would be remiss of me not to mention the free trade agreements that we have negotiated with South Korea, Japan and China. I have said to Minister Robb that the China agreement could be redescribed as the 'Tasmania-China free trade agreement'. The member for Denison should know that very well. These have enormous benefits to our state, whether it be to the university in the member's own electorate or whether it be to farms, small businesses, agricultural producers and manufacturing businesses within mine. That is everything that this government has been focused on.

The legislation before us today is another effort to encourage young people to get a job. It builds on the successful reform already implemented within the sector last year. These reforms are already working. They have improved attendance at re-engagement appointments with employment services providers from a 65 per cent attendance rate in 2013-14 to more than 90 per cent in June this year.

These very positive reforms have meant a reduction in the average time a job seeker's payment is suspended before they re-engage with the provider from 5.2 business days in September 2014 to 3.1 business days in March this year. This means that more job seekers are taking advantage of the help on offer and receiving their income support as intended and that providers are spending less time reporting noncompliance and more time actually helping job seekers look for work. To me, that make sense.

This latest amendment will pave the way for a simpler and more effective compliance framework to ensure that job seekers are meeting their mutual obligation requirements at every point throughout the job search process. The planned reforms will not only see faster re-engagement and fewer failures in the first instance; they will provide substantive financial savings to the community because of the decrease in non-compliance work required.

Getting job seekers into jobs is the key focus of employment services, but there have been significant weaknesses identified in compliance arrangements for those same job seekers. Under the current system, it can take up to five weeks from the day a job seeker fails to attend a Work for the Dole activity until the penalty is actually deducted from their income support. It can be longer if the job seeker is difficult to contact. Allowing the penalty to be deducted from the very next fortnightly income support payment, where feasible, will help create a stronger link between the failure and the consequence. This should lead to better participation in Work for the Dole activities.

Work for the Dole is, indeed, another a key part of the government's efforts to improve employment services and job seeker's employment prospects. I think across Australia it is a program that has broad general support. To make sure this is successful we have had to ensure that job seekers are attending the training activities ordered for them. Effective penalties applied in a timely manner have had the most success in achieving that. I mentioned mutual obligation. It is the basis of our system of welfare, in this country, between the recipients of that welfare—in the case of job seekers—and the taxpayers of our country.

This bill will not introduce new penalties. Job seekers who fail to participate in an activity, without a reasonable excuse, will still lose one day's pay for each day they fail to attend. This will mean that the penalty will be deducted straight away, rather than in five weeks or more, if they are difficult to contact. In 2013-14 a total of 4,342 job-search related failures were applied, but none resulted in the application of a financial penalty. This is ridiculous and we are moving to remedy and improve this compliance regime.

In the same way, job seekers who refuse to take up suitable job offers are supposed to incur a serious penalty. Currently, only 22 per cent of these job seekers are subject to the penalty, because of waiver provisions. All people have to do, to avoid the penalty, is to agree to participate in extra activities for the duration of the penalty. These are not vulnerable job seekers but have been identified as eminently employable. They have been offered work and have refused it, without good reason, to incur the penalty in the first instance. As I said, mutual obligation is the basis of our system.

Eight-week penalties for refusing work have existed since 2006 but waivers were only introduced in 2009. And guess what? The member for Denison was involved in that. In 2008-09, the year before waivers were introduced, there were 644 serious failures for refusing work. In 2013-14 1,626 such penalties applied. This increase can only be attributed to the removal of the deterrent effect of an eight-week penalty. If we bring back that penalty, fewer job seekers will be penalised. More job seekers will accept work, when offered, and go off-payment, which is in everyone's interest. All Australians should agree with that.

We need to fix the current system of job-seeker compliance, which is too slow and ineffective in responding to job seekers who are not making sufficient efforts to find work. Australians, Deputy Speaker Broadbent, and you know this very well, are fair minded people, but they reject the notion of bludging off the system, off a mate, off a system of mutual obligation—off the taxpayers of Australia. It is unacceptable that it takes months of inadequate job-search efforts before a job seeker faces any real financial or payment consequence. The bottom line is that we want to get as many Australians into work as possible, particularly young Australians.

Unemployment rates in Tasmania, and in my largely rural electorate of Lyons, are among the worst in the country. They are often the worst, particularly, among the young unemployed. This is bad for the economy but worse for the individual. Young Tasmanians need hope that they can look forward to much more than a life without a job. Aspiration. There are many in my state working hard to improve job prospects for our unemployed, from education-and-training facilities and parents—families are critical to the structure—to the Work for the Dole program, coordinators and other service providers. I had the privilege the other day of attending a wonderful Green Army project in my electorate. The attitude there of some of the young people involved will serve them well for the rest of their lives. They have, at last, hope again. They have hope in the future that this country can offer them.

This Social Security amendment will continue to build the framework around strengthening job-seeker opportunities. Australia's income-support system is there as a safety net for people who genuinely cannot find a job, not as an option for those who simply refuse to work.

Mr PASIN (Barker) (11:57): Before I speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 I want to remark on what a passionate advocate the member for Lyons is for the community he represents and for Tasmania, more generally.

This bill will amend the Social Security (Administration) Act 1999 to support measures announced in the 2015-16 budget to further strengthen the Job Seeker Compliance Framework by providing stronger and more immediate consequences for job seekers who do not meet their mutual obligations. This bill will also simplify compliance provisions in the Social Security (Administration) Act 1999 to assist job seekers better understand their mutual obligations.

This government made a commitment to rein in spending and make more efficient use of taxpayer funds. That is what this bill is about. Australia does not have a revenue problem, it has a spending problem. The budget has forecast that federal government tax revenue will be 22.3 per cent of GDP this financial year. This is well above the 10-year average of 21.7 per cent and just below the 20-year average of 22.5 per cent, equal to the 30-year average and above the 40-year post-Whitlam average of 22 per cent. In fact, the tax-to-GDP ratio is scheduled to increase to levels well above the historical average. The tax-to-GDP ratio is forecast to be 23.4 per cent in 2018-19, a substantial 1.4 percentage points above the long-term 40-year average.

We on this side of the House acknowledge that we cannot tax our way back into surplus. We cannot balance the budget by increasing taxes—we understand that doing this hurts small business and hits families hardest and puts the brakes on our economy. Whilst it is evident that we are going to have to implement changes to our tax system, to address a bracket creep and ensure Australia's global competitiveness, it is equally evident that we have a spending problem. Government is spending too much and not getting the return on its investment that the taxpayer deserves.

According to the Parliamentary Budget Office, in 2002-03 to 2012-13, government spending grew by 45.2 per cent or 3.8 per cent annually compared to GDP growth of some three per cent. Of total expenses of $398-odd billion estimated for 2013-14, over 34 per cent was spent on social security. Since 2002-03 social security and welfare has contributed 15 per cent to the total growth of spending. In May last year the government's National Commission of Audit recommended that social welfare entitlements be better targeted. This is essential to help reduce government spending. The commission warned that the long-term outlook is ominous due to an unsustainable increase in expenditure commitments. This is a warning we take seriously. Edmund Burke, in his Reflections on the Revolution in France, wrote that:

Society is indeed a contract. … It is a partnership … not only between those who are living, but between those who are living, those who are dead, and those who are to be born.

This is a social contract we are obligated to adhere to, and we in the coalition government refuse to renege on that contract. Each and every dollar the government spends must be targeted and must have a tangible impact.

As I have outlined, Australia needs to rein in spending, not to increase taxes, which seems to be the automatic-pilot response of those opposite. It is absolutely critical that we address our spending and tighten accountability across the board. Whilst our comprehensive welfare system is an essential part of our commitment to unlocking the potential of each and every Australian, it is not some sacred cow. Whilst the vast majority of Australians do the right thing when it comes to utilising our social welfare programs, there is a minority who seek to exploit the compassion of the Australian spirit and do not meet their mutual obligations. Current provisions that allow penalties for serious failures to be waived essentially allow job seekers to refuse suitable work with impunity.

The data indicates that job seekers are increasingly taking advantage of the waiver provisions in order to remain on income support rather than accepting a suitable job. In 2009-10, when the waiver provisions were introduced, 45 per cent of penalties for refusing a suitable job were waived and 55 per cent were served. In 2013-14, 78 per cent of penalties were waived and only 22 per cent were served. The availability of the waiver provision is also acting as an incentive for noncompliance. In 2008-09, the year before waivers were introduced, there were 644 serious failures for refusing to accept suitable work and in 2013-14 there were some 1,626 such penalties. It is simply unfair for those on income support to refuse adequate employment in order to maintain their free ride on income support. It is a situation that this government will not abide.

Existing protections such as the reasonable excuse provisions and safeguards for vulnerable job seekers will still apply, and the bill will not change the process used to make decisions as to what constitutes suitable work. A job seeker cannot be penalised for failing to accept a job that they are not capable of doing or for which their employer will not provide training or a job that does not meet the applicable statutory conditions, involves unreasonable commuting or would aggravate a pre-existing medical condition.

The Australian Treasury is not a bottomless pit; there are finite resources when it comes to government funding. For every dollar that is wrongfully taken, a dollar is lost from an area where it is most needed. This is especially true in the social welfare space. There is an old adage which exemplifies the approach the coalition government is taking to this bill: 'That which is freely given has no value.' The bill builds on previous efforts this government has made to ensure recipients of social welfare meet their mutual obligation requirements. Through this bill, this government is putting in place a real framework of accountability and real incentives for job seekers in Australia.

The package of changes in this bill will help to ensure that more effective and consistent compliance arrangements are in place for each stage of a job seeker's pathway back into work. It is important that we elucidate the particular measures in this bill that we are about to enact that will develop a better result for Australian taxpayers and for Australian job seekers. First, the bill simplifies the compliance framework. This government understands that often-complex bureaucratic processes make accessing assistance difficult. Further, this government is not so callous as to enact stricter compliance measures without simplifying the system. The purpose of the bill is not to stop people from accessing assistance but rather to ensure that they are compliant with the system. In order to assist job seekers to better understand their mutual obligation requirements, the bill simplifies the language surrounding failures: it renames all failures resulting in short-term financial penalties as 'no-show no-pay failures'. This change reinforces to job seekers that, across the board, when it comes to participation in the job seeker process—be it interview attendance or turning up to an appointment with a provider or any other organisation—failure to show up and participate will result in penalties. This government is of the mind that if you do not show up you should not expect income support.

The purpose of engaging people in the job seeker process is employment, because this government knows that the best form of welfare is a job. That is why this bill strengthens compliance to an employment pathway plan. When a job seeker fails to enter into an employment pathway plan, that job seeker's participation payment may not be payable until they comply with a further requirement to enter into an employment pathway plan. The employment pathway plan is an essential part of the job seeker's process. It is a process which guides an individual towards employment and off income support, which is the endgame of this process. In order to incentivise compliance, if the job seeker does not have a reasonable excuse for failing to enter into an employment pathway plan, a penalty amount would be able to be deducted from the job seeker's participation payment under provisions made in this bill.

Currently, no financial penalty is imposed for an initial refusal to enter into an employment pathway plan, despite it being a basic qualification requirement for job seekers to receive participation payments. It is ridiculous that, at a preliminary stage of the employment process—entering a plan—there is a complete lack of accountability. With this bill this government is rectifying that situation. This government has nothing but praise for the workers in our social services sector; they do a difficult job, and they do it well. That is why we have taken measures to ensure that, if a job seeker acts in an inappropriate manner during an appointment such that the purpose of the appointment is not achieved, that job seeker's participation payment may not be payable until they attend a new appointment. In addition, if the job seeker does not have a reasonable excuse for acting in an inappropriate manner during the appointment, a penalty amount would be able to be deducted from that job seeker's participation payment. In the coalition we believe in personal responsibility. We understand the importance of imposing consequences for behaving in an inappropriate manner. It is absolutely imperative that there are penalties for behaving inappropriately when engaging in the job seeker process. Failure to impose such penalties simply reinforces such behaviour. Effectively, failing to adequately penalise inappropriate behaviour whilst maintaining income support equates to rewarding such behaviour. That is a situation that had to be rectified, and I am pleased to say that it will be.

This bill also takes steps to increase participation in the job seeker process. Under provisions in this bill, when a job seeker fails to participate in an activity such as training or Work for the Dole, the penalty amount will be able to be deducted from the instalment period in which this type of no-show no-pay failure is determined. This ensures there is appropriate compliance mechanisms when it comes to participation in the job seeker process, which is essential if employment is to be achieved. Crucially, this bill increases the impact of the penalty through more immediate penalties than under the current legislation, which requires that the penalty amount be deducted from a later fortnightly instalment period.

Further, this bill promotes engagement with job searching activities. When a job seeker fails to undertake adequate job searching efforts, a job seeker's payment may not be payable until the job seeker demonstrates adequate effort. Once adequate effort has been demonstrated, a job seeker would receive full back pay. Again, the immediacy of these penalties will have a significant deterrent value and will enhance compliance with mutual obligations. I suspect that it will also have a fairly specific deterrent effect. Currently, it can take at least 14 weeks of ongoing inadequate job search—that is, 14 weeks—before a job seeker's participation payment is impacted in any way. This is simply not good enough.

Whilst the bill takes significant steps to enhance participation with the process of job seeking, it also rectifies significant issues in employment acceptance. The current system simply does not enforce acceptance of employment offers, and it is at this point that many individuals are simply refusing to re-enter the workforce, which perpetuates unemployment and waste of taxpayer funds. Under provisions in this bill, when a job seeker refuses or fails to accept an offer of suitable employment, and has no reasonable excuse for such failure, a job seeker will no longer be able to seek to have the existing eight-week penalty period ended by agreeing to undertake additional activities. This change will affect those job seekers who have shown they can obtain suitable employment but are simply choosing not to work.

This bill delivers a better system of compliance for job seekers. It is part of this government's approach to rein in spending and making government more efficient. This government remains committed to lower taxes and smaller government, and that is why, when it comes to the social welfare space, we advocate effective and accountable processes that will ensure that welfare recipients meet their mutual obligations. This bill is entirely consistent with our values and with the undertakings we announced both prior to our election to office and in this year's budget.

I strongly commend this bill to the House, and I hope it has the support of this place.

Mr WHITELEY (Braddon—Government Whip) (12:10): Today, I rise to speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015. This bill is a testament to the hard work of the member for Cowper, who invested a great deal of time as the Assistant Minister for Employment.

The changes that this bill introduces build on the successful no-show no-pay reforms agreed to by the parliament just last year. The coalition government has taken a responsible position in this bill, and taxpayers expect, I believe, that job seekers meet all of their mutual obligations. Unfortunately, legislation enacted under the previous government has facilitated a dodging of mutual obligation by a minority of job seekers. This bill seeks to address that legislative oversight by Labor and seeks to hold this disengaged minority to account for their mutual obligations as recipients of hard-earned taxpayer dollars. The current state of affairs is not sufficient, and those opposite so often blame the structures of our society and the inequality of outcome. Unlike the coalition, Labor does not believe in personal responsibility, and perhaps that is why the opposition leader can sleep at night.

This government takes a vastly different approach to personal responsibility. We believe in the agency of the individual. We believe in social mobility, and we believe in personal responsibility. This is not a radical position. In fact, it is completely in touch, I believe, with what most—the significant majority—of everyday Australians think and believe. Labor is not ideologically equipped to develop an effective and efficient job seeker compliance framework. The measures taken in this bill are fundamentally consistent with the coalition's longstanding belief in personal responsibility and the innate worth of the individual.

The ALP and the Greens are simply, in my opinion, unable to deliver positive outcomes in this very important public space. I do not doubt the intellectual faculties of the members opposite, but what I do doubt is that the ALP can deliver compliance frameworks that increase accountability for individuals whilst maintaining effective outcomes for job seekers. Hidden under all the spin delivered by those opposite is a fundamental belief that society is the problem—that the structures of society are the cause of the actions of our citizens. I categorically refute this belief. This perverse notion that the individual has no agency in their own affairs is primarily wrong and strikes at the heart of why the ALP and the Greens lack the capacity to deliver accountable and effective compliance measures across the social security space.

This bill seeks to provide better outcomes for all Australians. We, in the coalition, take our obligation to the taxpayer very, very seriously. We understand that our citizens work hard for the money we extract from them in taxes, and that is why we believe in lower, simpler and fairer taxation, something those opposite simply cannot maintain.

Part of our obligation to the Australian taxpayer is to get the most out of each and every dollar we collect. The taxpayers expect nothing less. This bill is utterly consistent with this undertaking. Whilst those opposite did nothing but write blank cheques, cheques they could not pay whilst they were in government, the coalition is committed to ensuring that our expenditure is responsible and delivers better outcomes for the taxpayer and in turn leads to the government providing a surplus for the people of Australia.

We are the party of the hand-up, not the handout, and that is why legislation such as this bill is crucial in delivering better outcomes for Australian workers and job seekers. This bill reflects the deeply held belief in the coalition that Australia's income support system is there as a safety net for people who genuinely cannot find a job. This safety net should be the last resort, not the first option. I repeat: the safety net that the taxpayers of this country provide should be the last resort, not the first option.

Whilst we on this side of the House fundamentally trust in individual enterprise and in smaller government, we also fundamentally believe in accountability. We believe in the responsibility of the individual to their obligations as recipients of the tax dollars of the working public. This bill ensures that the generous social welfare system that we have in place in this country receives due oversight and enacts measures that will preserve the integrity of our social security system.

The legislation that this bill is building on, the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014, saw attendance rates at reconnection appointments for job seekers increase from 65 per cent in 2013 to 90 per cent in June of this year. This is a really important point to note. Another important figure to note is that in 2009-10, when the waiver provision enacted under Labor was first introduced, only 45 per cent of penalties for refusing suitable jobs were waived. We are now faced with waiver rates of 78 per cent in the years of 2013-14.

It is evident that the status quo does not deliver sufficient deterrence to refusing to work. There are currently individuals exploiting the income support system provided to them by hardworking taxpayers, and this bill will hold that disengaged minority to account for their failure to adequately utilise the income support and job seeking program. In a fashion which is utterly consistent with our promises to the Australian people, we are committed to reinvigorating mutual obligation for job seekers in receipt of income support. Importantly, this legislation does not punish those who are doing the right thing by the Australian taxpayer; rather it targets the disengaged minority who choose not to engage with the workplace yet reap the dividend of the endeavour of their fellow citizens. This disengaged minority has for too long been unaccountable. We as legislators, elected by each of our regions across this country, have a duty to the taxpayer to ensure that we are spending their hard-earned money wisely and frugally.

Not only is there a strong economic demand for more accountability in the social welfare space; there is also a strong ethical case for a greater level of mutual obligation for job seekers in receipt of income support. Income support is an essential part of our social welfare system. It should be a hand-up to those who have fallen through the cracks. It is a mechanism which has delivered great outcomes for many Australians over many, many years. But it is not a blank cheque for a disengaged minority hell-bent on exploiting the system. Part of our civic obligation as citizens of Australia is that we contribute to the Commonwealth so that we all may advance together. Whilst it is true that we have an extensive social welfare system which acts as a safety net, it is not an infinite resource that we have at our disposal. In the same way as the government has an obligation to the taxpayer to spend their money wisely, so too do those job seekers on income support. No fair-minded Australian would have a different view to that.

This bill is not, as those opposite continue to suggest, an attack on the socially disadvantaged. No. It is in fact in defence of them. This bill defends the vast majority of Australians on income support. We on this side of the House have the backbone and the courage to make the right decision when it comes to welfare. We strongly believe that whilst we have rights we also, each of us, have responsibilities. We strongly believe that the disengaged minority, who should be proactively seeking employment, are in fact reneging on their responsibility as Australian citizens, and that is a situation that we, the coalition, will not abide. There is an obligation for the government to ensure accountability in the social welfare space. There is no question about that. This is a fundamental responsibility of government.

Let me just address some of the measures in the bill. There are some key measures in this bill that will enable government to deliver on our covenant with the Australian taxpayer. This bill will introduce financial penalties for failing to enter an employment pathway plan. This measure will aid in holding the disengaged minority to account for their actions. The coalition strongly believes in jobs and growth, and this measure will act as an incentive to engage with and utilise an employment pathway plan. The employment pathway plan is a mechanism which delivers better outcomes for job seekers and thus better chances of ultimate employment. This measure delivers accountability for the taxpayers.

This bill introduces financial penalties for failing to behave in an appropriate manner at an appointment—common sense and normal courtesy. We are the party of personal responsibility, and this measure holds the individual to account for their actions. This is targeted not at the majority of our income recipients, who overwhelmingly act in a responsible manner; rather it is an incentive for the disengaged minority to act in accordance with what Australians would call normal, responsible behaviour.

This measure delivers accountability for the individual. This bill delivers more immediate penalties in activities such as Work for the Dole or job interviews. The current arrangements do not facilitate or deliver immediate financial penalties. The lack of immediacy in penalties detracts from the incentive to work and, hence, substantially hampers the efforts of previous legislation. This provision increases more immediate penalties and thus ensures that penalties have the desired effect. Isn't that what legislation should be about—getting results and having the desired effect? Otherwise, it is simply a lot of words on pieces of paper. This provision substantially improves the effect of accountability mechanisms. This bill provides a more streamlined and simplified compliance framework. This bill seeks to make the system easier to navigate. This measure seeks to assist job seekers with understanding the often opaque social services space.

Through removing redundant provisions and through simplifying the language of penalties, job seeker compliance will be far easier to achieve. This is an important measure because it goes hand in hand with the more substantial accountability measures in the bill. This measure will ensure the system is easier to use and delivers the right outcomes for job seekers. It will ensure penalties are delivered to those who are disengaged with the job seeking process, but it will not interfere with those who are seeking it in the right way. A simpler and fairer system will benefit job seekers and taxpayers at the same time, while ensuring better rates of compliance through greater accountability.

This bill delivers on the coalition's undertaking with Australian taxpayers to reinvigorate mutual obligation for job seekers in receipt of income support. It is not an attack on our socially disadvantaged; rather, as I said before, it is a strong defence of them. It strengthens the integrity of our income support system. A more accountable system of income support will remove the unhelpful stigma associated with being a recipient of income support. At the end of the day, we all want more jobs for all Australians. Through preserving the integrity of the income support system, the government is taking steps toward a more sustainable, efficient and effective job seeker scheme. We remain committed to growth and jobs, and that is why this bill is so important. This bill delivers on our commitment to delivering responsible and fair government for all Australians.

We in the coalition strongly believe in giving each and every Australian a hand up, not a hand out, and this bill will deliver better outcomes for all Australians. It is of critical importance that each and every dollar spent in social security delivers greater opportunity. The system should facilitate employment, not promote disengagement with the workforce. This bill goes some way to bringing our job seeker framework back into balance and it is a bill that I firmly and proudly support. I commend the bill to the House.

Mr COULTON (Parkes—The Nationals Chief Whip) (12:25): I too rise this afternoon to speak on the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015. I would like to say right from the outset that I am very proud to be part of the Australian government. I am very proud to be a citizen of Australia. I believe that, as well as anywhere in the world, we care for people who find themselves in difficulties and need assistance from others. At no time would I ever support a scheme where I felt that people who had fallen on hard times were going to be victimised or treated poorly. This legislation further enhances the ability for people to get out of the situation of being unemployed and into work. I believe that this bill offers opportunity rather than punishment.

As someone who represents an electorate that has a large number of people who rely on benefits from the government and has high levels of unemployment in some towns, I believe that these changes are necessary for several reasons. The first is that, in families with intergenerational unemployment and disconnect from the workforce, children do not understand where money comes from. They do not tie the fact that their parents and grandparents go to a job every day with having the resources to live their lives. One of the elders in Moree said to me that she believes many of the children do not understand that money does not just come out of an ATM. They do not know why the money is in the ATM; that is just where the family's money comes from. There is no concept as to how the money gets there.

This is part of a raft of things that we have done since we came to government to get people out of the rut of unemployment—with Work for the Dole and other programs, and the Green Army to a certain degree—and to encourage people to take the first step. More often than not, once that first step is made and people get back into the rhythm and system of having a reason to go to work and they experience the satisfaction that comes from a hard day's work, things progress.

In 2005, I was a mayor in a local government area in northern New South Wales. The Howard government at the time introduced Work for the Dole. They drove around our shire and arrived in a bus that had 'Work for the Dole' in big letters on the side. I feel a bit uncomfortable about that. That seems to be discriminatory. After they employed people for several weeks around our local community, doing work on community infrastructure—painting the CWA hall and the like—as a council we put on a lunch, a barbecue. At the barbecue I was chatting to these people who were part of Work for the Dole. I found something entirely opposite to what I expected. Rather than resentment of the fact that they were in a program called Work for the Dole, they were very pleased for the opportunity. They were saying to me, 'You have no idea what it is like—how demoralising it is—to wake up in the morning and not have a reason to leave the house.' The supervisor of this team told me that the original squad he started with did not look like the one he finished with, because as people became involved in these programs pretty soon local employers—retailers, farmers and others—would enquire as to who might be available for more permanent work. That is what we are talking about: getting these people an opportunity to go to work.

One of the things that really sticks in my neck is the idea that there are some jobs that are beneath a person's dignity. There is no work that is beneath anyone's dignity. Before I came here I spent most of my life undertaking manual labour in various forms. I understand that there is not a lot of dignity in crutching sheep or in digging post holes with a crowbar and shovel. But there is a tremendous amount of satisfaction at the end of the day in having achieved something like that.

Let me give you an example. Going back to Gwydir Shire, over a period of time about 10 years ago we started to see an increase in tourists coming to our town—people who were staying in our town and who were seeking out our caravan park. It was not because the tourist officer had gone to a conference, and it was not because of things the major had done. It was because the lady—I will call her Bev—who was in charge of the public facilities in the town took great pride in the work she did. The washrooms, the bathrooms and the caravan park were the cleanest anywhere in New South Wales. That led to an increase in visits to the town. She took great pride in the fact that she was doing this for her local community. I used to tell this story to year 10 students who were going out for work experience. Don't think the job of cleaning the public toilets in town is beneath your dignity, because there can be great rewards in doing that work and in helping others.

In the Parkes electorate we have an interesting situation at the moment. We have just started the grain harvest, and in some places it is a very promising one. At the moment there are young people from all over the world in my electorate driving harvesters, headers, chaser bins and working in the fields bringing in the crops. There are young people from Ireland, Germany, England and the United States all over. At the same time in the country towns around these paddocks we have young, able-bodied people sitting at home, disengaged and not working. If I do one thing in my time as a member of this place, it will be to change that situation. Those people who are disconnected from the workforce are perfectly capable and, given the right opportunities, the right encouragement and the right training I believe they can progress onwards and take up those roles that rightly should be theirs. I put out the challenge to employers in my electorate that if they want to have a functional, progressive and safe community they should make that extra effort and employ local people and encourage them into the workforce.

But the first step in this, sometimes, is actually breaking that cycle. Sometimes you have to be a hard, mean sort of person to achieve this. I do not step away from this legislation at all. If you are able-bodied and you can contribute, I do not believe that staying at home and not doing something to support your community and you country is acceptable. We see that these stronger measures will take away that opportunity. This is coupled with other things we as a government are doing to support young people. I am a great believer that we should be starting to encourage people to think about work, to prepare them with resumes, to help them with birth certificates, drivers licences, or whatever, at as young an age as possible.

One of the things I am immensely proud to be part of—and I think this parliament should also be proud of—is the part played by the Clontarf Foundation. Right across Australia we now have Clontarf Academies collocated in local schools. I will give you the example of the Clontarf Academy at Coonamble, in western New South Wales, where last year three of the young men from there obtained traineeships with a large road construction company in Sydney. Because of the mentoring and the assistance that was given through the people of Clontarf, these young people had the confidence to step up and take on these roles. After a period of training they are now permanent employees, earning very good money. Their families are very proud of them, as they should be.

I believe the federal government has a responsibility to make sure that we can get people engaged so they become valued members of the community. Some people naturally find themselves in periods of disadvantage, through no fault of their own. I still believe that as a country we need to care for those people. I have some advice for some of the bureaucracy and the network that deal with people who are making the step to come into the workforce after being disengaged. It is not easy and there should be compassion, understanding and some flexibility within the guidelines to acknowledge that work on a regular basis is indeed a foreign concept, as sad as it may seem, for some families. We need a carrot-and-stick approach, if you like—a combination of both—but able-bodied people not engaging in meaningful work should not be an option, and this legislation will help with that.

I support this legislation. I am very hopeful and, indeed, I am starting to see a real change in the communities in my electorate, particularly with the younger people as they seek to be engaged. Young lads from Moree high school are doing traineeships with GrainCorp, working through the wheat harvest, one day a week instead of school and over the weekends and holidays, with a real future in front of them. We are seeing that right around western New South Wales. I support this bill and I hope these strengthening measures will have the desired result to get people back up and working.

Mr JOYCE (New England—Minister for Agriculture and Water Resources) (12:38): The Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 will create a simpler and more effective compliance framework to ensure that job seekers are meeting their mutual obligation requirements at every point throughout the job-seeking process. The bill builds on the successful reforms we made last year, which improved attendance at re-engagement appointments with employment service providers from 65 per cent attendance in the 2013-14 year to over 90 per cent in 2015. Those reforms have resulted in a reduction in the average time a job seeker's payment is suspended before they re-engage with their provider. Between September 2014 and March 2015, the average payment suspension duration fell from 5.2 to 3.1 business days. These outcomes are good news for everyone. More job seekers are doing the right thing and taking advantage of the help on offer and receiving their income support as intended. Providers are spending less time reporting noncompliance and more time actually helping job seekers with practical tasks like looking for work.

This is why the government is seeking to apply the same principles that underpinned those reforms to other mutual obligation requirements. Immediate payment suspension with no back payment for those with no reasonable excuse for their noncompliance will be extended to job seekers who miss appointments with specialist providers or who refuse to enter a job plan. This should see faster re-engagement, as it has for provider appointments. It should also ultimately result in fewer failures in the first place because of the more immediate and stronger deterrent effects. The current safeguards in the system will ensure that no-one is penalised for failing to attend an appointment if they give prior notice of a reasonable excuse; nor will anyone be penalised for refusing to enter a job plan if they have a genuine excuse for their failure to comply or it has unreasonable terms in it. The bill provides that, if a job seeker acts in an inappropriate manner during an appointment, their income support payment may not be payable until they attend a new appointment and participate appropriately. If they do not have a reasonable excuse, a penalty amount would be able to be deducted from their payment. Again, these changes utilise the successful no-show no-pay principles introduced last year and would bring the treatment of inappropriate behaviour at an appointment in line with existing treatment of inappropriate behaviour at an activity. This bill will also allow penalties applied for not attending activities without a reasonable excuse to be deducted from a job seeker's next fortnightly payment instead of the one after. Again, this change is based on the principle that a more immediate link between a non-compliant action and its financial consequences will be more effective in ensuring compliance in the first place. It is also a change the then Labor government made for other short-term penalty types in 2011.

I think everyone would agree that looking for work is the most important part of a job seeker's mutual obligation requirements. It gives job seekers the best chance of getting off income support. For this reason, we need to fix the current system, which is too slow and ineffective in responding to job seekers who are not making sufficient efforts to find work. It is unacceptable that it takes months of inadequate job search efforts before a job seeker faces a real payment consequence. This bill will allow us to take a very simple approach. If you are a job seeker and you make insufficient or inadequate job search efforts without good reason, you will have your payment immediately suspended. Meeting the requirements you have missed will result in immediate and full back payment. This means you will not incur a lasting penalty, but how long your payment is held up is up to you.

Australia's income support system is there as a safety net for people who genuinely cannot find a job, not as an option for those who simply refuse to work. Under current compliance arrangements, an eight-week non-payment penalty can be applied to job seekers who refuse work without good reason. Unfortunately, amendments introduced by the previous government mean that job seekers can have this penalty completely waived just by agreeing to undertake some extra activity. It is clear that these penalties no longer provide an adequate deterrent to refusing work, because job seekers know they are able to return to payment with virtually no consequence. This bill will remove the waiver so that all job seekers who refuse an offer of suitable work without an acceptable reason will serve an eight-week non-payment period. This change will ensure that job seekers face immediate and real consequences for turning down offers of work.

Finally, I would like to reiterate that this bill will retain all the current safeguards that are designed to ensure that vulnerable job seekers do not incur any financial penalties inappropriately. Job seekers with identified vulnerabilities will continue to be flagged on the IT systems used by the Department of Human Services and employment service providers. Penalties will not impact those whose failure to meet a requirement is beyond their control—for instance, where they were taken ill or had an unexpected caring commitment—and, where reasonable, they gave prior notice of this. Employment service providers will still have the discretion not to report a failure to the Department of Human Services. All decisions involving financial penalties will continue to be made by the Department of Human Services and there will be no change to appeal rights.

We have listened to Labor's points in the debate and I note that this bill has been referred to the Senate Education and Employment Legislation Committee. I acknowledge the amendments proposed by the member for Franklin. The government will give them detailed consideration in the Senate.

Question agreed to, Mr Wilkie dissenting.

Bill read a second time.

Ms COLLINS (Franklin) (12:45): I thank those members who contributed to the debate, particularly the members from this side, who, I know, are very passionate about this part of policy. As I said in my contribution on the second reading, there are some aspects of this bill that Labor is prepared to support—those amendments that more closely align the date of noncompliance to penalties and/or suspensions—but we are not prepared to support some of the harsher measures in this bill that could further disadvantage vulnerable job seekers. Labor is looking forward to the report on this bill from the Senate committee in late November and the evidence from stakeholders on how they believe the bill will operate. I am pleased to hear the minister's comments that the government is seriously looking at the amendments that Labor has put forward and will negotiate with Labor on the bill. Given that Labor will not be supporting some of the harsher measures, which we believe will not assist job seekers, I seek leave to move amendments (1) to (19), as circulated in my name, together.

Leave granted.

Ms COLLINS: I move opposition amendments (1) to (19) together:

(1) Schedule 1, items 10 to 16, page 4 (line 25) to page 5 (line 31), omit the items.

(2) Schedule 1, item 18, page 6 (lines 7 to 12), omit the item, substitute:

18 Paragraph 42SA(1)(c)

   Repeal the paragraph.

(3) Schedule 1, item 19, page 6 (line 15), omit "Note 1", substitute "Note".

(4) Schedule 1, item 19, page 6 (line 16), omit note 2.

(5) Schedule 1, item 22, page 7 (table item 1), omit the table item.

(6) Schedule 1, item 22, page 8 (table item 6), omit the table item.

(7) Schedule 1, item 31, page 9 (lines 13 to 15), omit the item.

(8) Schedule 1, item 34, page 9 (line 24) to page 10 (line 10), omit the item.

(9) Schedule 1, item 35, page 10 (lines 14 and 15), omit "or to entry into employment pathway plans".

(10) Schedule 1, item 36, page 10 (lines 18 and 19), omit "or to entry into employment pathway plans".

(11) Schedule 1, items 38 and 39, page 10 (line 22) to page 11 (line 10), omit the items.

(12) Schedule 1, item 40, page 11 (line 11), omit "Subsection42SC(3)", substitute "Subsections42SC(2) and (3)".

(13) Schedule 1, item 50, page 12 (lines 23 to 25), omit paragraph (3C)(a).

(14) Schedule 1, item 50, page 12 (line 26), omit "that table", substitute "the table in subsection 42SA(2)".

(15) Schedule 1, item 50, page 12 (line 30), omit "or 6".

(16) Schedule 1, item 55, page 13 (line 12), omit "42T(3C)(a), (b),", substitute "42T(3C)(b),".

(17) Schedule 1, item 74, page 15 (line 24) to page 16 (line 5), omit subitems (3) and (4).

(18) Schedule 1, item 74, page 16 (lines 9 and 10), omit subitem (6).

(19) Schedule 1, item 74, page 16 (line 17), omit "38, 39,".

The DEPUTY SPEAKER ( Mr Goodenough ): The question is that opposition amendments (1) to (19) be agreed to.

The DEPUTY SPEAKER ( Mr Goodenough ) (13:00): The question now is that this bill be agreed to.

Mr JOYCE (New England—Minister for Agriculture and Water Resources) (13:03): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr STEPHEN JONES (Throsby) (13:06): I move the second reading amendment circulated in my name that:

(1) Clause 2, page 2 (table item 4), omit the table item.

(2) Schedule 2, page 21 (line 1) to page 26 (line 13), omit the Schedule.

The DEPUTY SPEAKER ( Mr Goodenough ) (13:06): Is the amendment seconded?

Mr Marles: I second the amendment.

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

Mr STEPHEN JONES (Throsby) (13:07): This is the second time that the bill has come before the House, albeit in another form, and, we say, a symptom of a government that is in chaos. Our support for much of the bill is straightforward. Labor is generally supportive of most of the technical amendments in the bill. We support the technical components contained within it. We support the clarification of the role of the High Level Health Claims Committee. We support the need for notices to be published online. We support the renaming of the 'ministerial council' to the Forum on Food Regulation, or the forum—a sensible amendment. And we support the clarification of the appointment process for the CEO. And, of course, we support the work of Foods Standards Australia and New Zealand and the men and women who act in the service of public health by appropriately regulating and maintaining a safe food system in Australia. Indeed, Labor is supportive of the vast majority of the bill.

These amendments are largely mechanical in nature. A significant amendment is to remove references to the defunct Australia and New Zealand Food Regulation Ministerial Council and replace them with references to the Australia and New Zealand Forum on Food Regulation, which replaced it during 2011. It makes perfect sense that we bring the legislature up to date with the existing regime. A significant change is to allow Food Standards Australia and New Zealand to inform government agencies that it believes have an interest in its actions rather than every agency, which is currently defined within the act. Currently, each of the following agencies are required to be notified by FSANZ of a range of actions: a department of State of the Commonwealth, the CEO of the National Health and Medical Research Council, the Gene Technology Regulator, the department of state of each state and territory that is primarily responsible for public health in that jurisdiction, all relevant state or territory food and health authorities, a department of state of New Zealand, the New Zealand department of health, and any relevant New Zealand food authorities. It is an exhaustive list.

Labor believes that the change proposed by the government is benign. This change does not preclude any other government agency from requesting FSANZ to inform them of their relevant actions, nor does it preclude FSANZ from continuing to inform them. It will remove the requirement that every notification be sent to each defined agency on every occasion. Further, FSANZ will still be required to publicly report on its website about its consideration of food regulatory measures so that the information will always be accessible to those who have an interest in it, including the public.

Labor has objections to the changes to the composition of the board which are contained within the bill. For the purposes of clarity, I specifically mention Labor's support for item 127 in the bill, which amends section 128(3) and (4) of the act. This corrects an error and clarifies that it is the board and not the minister which appoints the CEO of Foods Standards Australia and New Zealand. We support that provision. Our objections to changes to the board composition do not extend to the government's amendments to section 128(3) and (4). Let us be very clear: we support them.

I will say a little about the role of the board of FSANZ. The board sets the culture and the direction of the agency. It is the key decision-making body in FSANZ charged with developing and implementing the food code. It approves the draft variations to the food code. The board must meet at least five times a year. This year to date it has met six times. It has approved 15 draft variations to the food code, ranging from maximum residue limits to voluntary addition of vitamin D in breakfast cereals to Gluten Claims about Foods containing Alcohol. The board has a key role in the food safety system. Labor, therefore, does not support changes to the composition of it on the basis that the board is currently finely balanced. Labor does not support the bill in its current form.

This bill would make a number of changes, principally to the composition of the board, which Labor seeks to amend. In moving these amendments, Labor seeks the House's agreement that the FSANZ board composition remains unchanged. We are concerned that the minister is given discretion to appoint a bloc of members to the board from a range of expertise criteria. These include science, industry and consumer rights. Our concern is that if the minister were to appoint a bloc of consumer rights members, for instance, the board may lose its focus on public health; or, similarly, if a bloc of food industry members were appointed, we are concerned that the board would become captive to those it regulates. We are concerned that, by omitting the National Health and Medical Research Council nominee from the composition of the board, we may well diminish expertise in relation to the conduct of trials, scientific rigour, the quality of evidence and a level of independence and objectivity. Replacing the NHMRC nominee with a science nomination does not replace the independence of the NHMRC, because an appointee nominated because of their understanding or expertise as a scientist may well be working for a commercial laboratory or perhaps have scientific qualifications but may not be actively engaged in research.

The changes to the board overall are of deep concern to Labor. Labor is concerned that there is a reduction in the minimum number of public health and science based and NHMRC positions on the board. In fact, they are cut in half from four to two. Potentially, however, the new maximum number of appointees from consumer focus rises from one to four, and those from food industry on the board stand to double from two to four, depending on the discretion of the minister of the day. Potentially four members out of seven ministerial appointees could actually come from industry. Combine that with section 116(1)(c) of the new legislation, which gives the New Zealand minister the capacity to appoint two members from industry, and section 116(1)(a), which permits the chair to be from a food industry background, we are concerned that, however unlikely, there is at least a mathematical possibility that seven members of the 12-member board could in fact come from an industry background. This may not, on its own, represent a capture of the regulator by those it regulates, but it does highlight a deeply concerning shift away from science and from public health and a disruption to the finely balanced board as we know it.

In an article in 2012 called The complexity of regulatory capture: Diagnosis, causality and remediation, Sidney Shapiro had this to say:

Deciding whether an agency is captured can be complicated. In some situations, such as the BP oil spill, there is an abject failure to protect the public in circumstances where regulated entities had considerable influence over the agency, suggesting a clear case of capture. In other situations, an agency adopts policies favored by regulated entities, but the regulatory issues are contestable, making it unclear whether the policies constitute regulatory failure.

I raise this to highlight what could very well become a situation where the prescribed balance under the act gives way to disproportionate influence, even without a numerical majority on the board, of industry groups over the agency. There are times when the food industry differs in views from government, consumers and, indeed, FSANZ itself. I make no criticism of this. It is entirely the role of being a strong advocate for the interests of industry. FSANZ and, indeed, all members of this place have a higher purpose—and that is the public interest.

Creating a board with disproportionate influence of this group or any other group is not conducive to an independent board with a scientific and public health capacity to adequately deal with the challenges that we know the FSANZ board must deal with. In saying this, I do not malign any group or any representative on the board. I want to make it clear that the Australian food industry operates with the highest standards, produces some of the world's highest food standards and is regarded as, typically, very cooperative and engaged with government. I highlight the participation of 26 food industry companies in the front-of-pack labelling initiative as a demonstration of their social responsibility and commitment to decent ethical standards. So do not for a moment misinterpret what I have said. My criticism is of the government and the minister, and that this provision in schedule 2 of the bill is unweighted. These changes represent a reduction in the value of science at the heart of health regulation.

Labor believe that the current board composition serves the nation and the organisation well. We do not pretend that the juggling of expertise on the board is not a difficult challenge for the minister, whoever the minister is from time to time. However, we are concerned that, by granting so much flexibility, the board may lose its focus or its independence. Should there have been an argument for a change to the composition to the board, we have not heard it. The government has failed to outline a case why this change should occur. And, so, we cannot support it.

If the minister had a perfect track record in this regard, we might have a different disposition. We might be less concerned. But this is not the case. Indeed, one of the first acts of the newly minted minister was to pull down the Health Star Rating website. The Health Star Rating website had been produced with years of consultation between government, food and health agencies, consumers and industry. Indeed, on 11 February 2014, in a response to a question from Senator Wong in the other place on why the Health Star Rating website had been removed, the minister responsible told the Senate that the website had been 'inadvertently placed' in the first place. Documents obtained by The Australian under freedom of information laws and reported on 16 April 2014 indicated that the minister received advice from her department a week before the website had been launched. So it is hard to reconcile the statements by the minister and the paper trail that followed.

The minister was, of course, censured by 37 votes to 31 in March last year in the Senate for refusing to produce documents that would have demonstrated whether any measures were put in place to manage the conflict of interest in her office and for misleading the Senate. As Senator Wong said during the debate on the censure motion:

… the Senate, the press gallery and the Australian public have been treated with contempt by an Assistant Minister for Health who has an unhealthy tendency to mislead.

It is the very same minister that is now asking the parliament for permission to appoint a large section of the FSANZ board from any prescribed categories. In asking for this permission, the minister gives absolutely no justification why this change to the composition of the board should proceed. We may as well have been asked to accept with a wink and a nod—'Trust me; I'll do the right thing.' I must make the point that it makes no difference who the minister is from time to time. The balances that have been put in place, carefully crafted and placed within the act have served the country and, indeed, all parties to the Food Standards Australia New Zealand arrangements very, very well.

The importance of consumer confidence in the food regulation system is absolutely critical. The perceived change to the independence of the board may undermine confidence in the system. One of the key roles of FSANZ and its board is to give Australians confidence that the food they eat is safe. Food should be safe; sometimes it is not. We know that from the recent food-borne hepatitis A outbreak this year, where 28 people contracted hepatitis A from the Australian food supply chain, it is critically important to maintain food safety. There have been examples where people have tragically died from the food that they have eaten. It is our job as legislators, it is our job as parliamentarians, to give as much confidence to the industry and to the consumers as possible.

One of the key roles that FSANZ—and, critically, the FSANZ board—plays is to give confidence to Australians that, whilst there may have been an incident, the system remained safe, independent and informed by science and a public health agenda. Ensuring that consumers and industry are represented but not dominating this board strengthens it, bringing with them key perspectives. So even if the minister were to give an assurance of 'Trust me, I won't mess with the board, I won't use this discretion that you have given me,' the Australian public will be left with the question: can we trust a board that may have lost its finely-honed balance that is protected within the act itself?

It is the view of Labor that confidence in the food system may well be undermined by these changes. So Labor's proposed amendment deletes the changes to the composition of the board. If accepted, the board will continue in its current composition, finely balanced and independent. We call upon the minister, the government and all members opposite to do the sensible thing and adopt the sensible amendments proposed by Labor. Labor believes that Australians have the right to know that the food they eat is safe. The security of the Australian food supply chain is of critical importance to Australians, and the Australian government must act to ensure that this remains a reality.

The bill does nothing to improve food safety. Indeed, the public need be forgiven for wondering why changes to the composition of the board are needed. Why is the minister, who was responsible for interfering with the health star-rating website, now interfering with the board of the food regulator? There is much within this bill that we can support, but we call upon the government to accept our sensible, modest amendments to the legislation that is before the House. Had this bill proceeded in its original form—when the minister introduced it into the House a few months ago—it would enjoy our full-throated support, but today we cannot support it in its current form. I commend the bill in an amended form to all members of the House.

Mr WILLIAMS (Hindmarsh) (13:24): I rise to speak to the bill in its substantive form rather than the amendment, but I will touch briefly on the amendment. As we all know, the food industry is extremely important for our country on a number of fronts. We take pride in producing food of the highest quality for domestic consumption as well as for export markets. We are internationally recognised for our premium food, and that is why the framework of the food industry is vital to our success.

The Food Standards Australia New Zealand Amendment (Forum on Food Regulation and Other Measures) Bill 2015 is an administrative bill to amend the Food Standards Australia New Zealand Act 1991, the FSANZ Act. The administrative changes include: updates to the FSANZ Act to reflect current operations of Food Standards Australia New Zealand; and a name change to the Australia and New Zealand Ministerial Forum on Food Regulation or the Forum, which was previously known as Legislative and Governance Forum on Food Regulation. Improving the clarity and operation of the legislation is important. It will describe the relationship between the Forum and FSANZ, such as when the Forum can request FSANZ to undertake work and provide information to assist it to make relevant decisions. It can also describe when FSANZ must publicly notify the approval of a draft standard or draft variation.

There are also amendments intended to improve regulatory efficiency and provide greater clarification for businesses and FSANZ by removing uncertainty and improving consistency in the way in which the FSANZ Act outlines procedures for the consideration of food regulatory measures. The current FSANZ Act requires FSANZ to consult with specified government agencies in undertaking its processes, which means that FSANZ must consult with over 20 agencies on issues that may not be relevant to them. So there is definitely broad consultation here and this can delay processes and introduce inefficiencies. We are about removing compliance and red tape obligations where practicable and appropriate.

The current FSANZ Act is also inflexible with the way that nominations for the FSANZ board can be sought. Here I would comment on the member for Throsby's contribution. Broader industry involvement and flexibility is not a bad thing when it is appropriately determined and targeted—bringing expertise and wider benefits to the board are reasonable improvements. Flexibility will help to address FSANZ's future work requirements, and that is one of the key points—looking at what is relevant and important for the work that FSANZ does. It is important that there is flexibility when determining who should be on its board, and here expertise and skills sets are critical.

We all agree that consumers must have confidence in our regulatory frameworks and in our food standards and supply chains. I want to take a few minutes to talk about the future of our food industry, because it is very bright. On the most recent data, Australian agrifood exports reached almost $40 billion, with nine of the top 10 destination markets in Asia. Global food consumption, we know, is expected to grow 75 per cent between 2007 and 2050, with 40 per cent of the increased demand coming from China. Australia's proximity to Asia and its reputation as a safe and secure source of quality produce and premium products ensure the country is well placed to capitalise on this growth.

Moreover, the three free trade agreements with China, South Korea and Japan, as well as the Trans-Pacific Partnership, which includes Malaysia and Singapore, will all provide greater opportunities for our food exporters with tariffs reduced on beef, dairy, seafood, horticultural and many other foods. A look at the growth over recent years is evidence of the strength and future potential of our food industry. Here are a few quick statistics: from 2007-08 to 2012-13, China, grew by close to 20 per cent, Indonesia by 13 per cent, Korea by 10 per cent and Malaysia and Singapore by seven per cent.

What have been the benefits for local companies and jobs? In my electorate, Gaganis Brothers, which is a national wholesaler of quality foods, currently employs 100 people, but it is undertaking multimillion dollar expansion that will create 50 new jobs. Thomas Foods, which is the largest privately owned meat processing facility in Australia, currently employs 3,000 workers and is expanding its Murray Bridge food plant. Soaring demand for almonds has helped AlmondCo increase its turnover by 40 per cent since 2012-13. It is now exporting to India, China and the Middle East. I noted with interest this morning that Qatar Airways will begin daily flights to Adelaide to export lobsters and other seafood. In closing, I congratulate everyone for the work they do in the food industry.

The DEPUTY SPEAKER ( Mr Craig Kelly ): It being almost 1.30, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.

The SPEAKER (15:13): Pursuant to section 65 of the Parliamentary Services Act 1999, I present the annual report of the Parliamentary Budget Office for 2014-15.

Ordered that the report be made a parliamentary paper.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (16:15): I thank members who have contributed to this debate. It has been a fulsome debate. I would have to say that I think it has been a partisan debate, but it is reasonable that people will want to make their contributions to what is really an important area of reform. I would just like to make a few observations about the legislation and some of the comments that have been made.

The government has made it clear that it is committed to safe, secure and efficient transport systems, and this is unambiguously the case for coastal shipping. The current system has clearly failed. Just look at the facts. Under Labor the fleet of major Australian registered ships over 2,000 deadweight tonnes with coastal licences plummeted from 30 vessels, in 2006-07, to just 15, in 2013-14. The number of ships on the Transitional General Licence Register has dropped from 16 to just eight. Between 2000 and 2012, shipping's share of Australia's freight fell from 27 per cent to just under 17 per cent, while the volume of freight across Australia grew by 57 per cent. Over the first two years of Labor's coastal trading act, there was a 63 per cent decline in the carrying capacity of the major Australian coastal trading fleet. Looking forward, at this rate Australia's overall freight task is expected to grow by 80 per cent, come 2030, but coastal shipping will increase by only 15 per cent.

This is not to mention the increase in freight rates reported by some shipping users, or the many instances where the current system has proved inflexible, cumbersome and, frankly, impractical. For instance, Gypsum Resources Australia outlined in their submission to the Senate committee how they are losing business to Thailand under the current system. They said:

In February 2014 GRA applied for, and was subsequently denied, a temporary licence (TL) to enable it to compete for gypsum sales in Brisbane. The dominant factor in the denial was an objection by a GL holder to the granting of a TL to GRA. The denial of the licence rendered GRA's tender for the work uncompetitive. These customers were lost to Thai and WA gypsum which were transported on international vessels. Neither GRA nor the GL holder benefited.

These concerns have been echoed by Cristal Mining, who said in their submission:

The Act, in its current form, puts Australian industry at risk of operational shut downs and possible job losses.

The Australian Institute of Petroleum said:

The current cumbersome and inflexible regulations impede the efficient operation of domestic refineries and petroleum supply chains around Australia, do not facilitate liquid fuel supply security, and do not advance the objectives of the coastal trading legislation or the local shipping industry.

These sentiments have been recounted to me time and time again. The government's aim is to facilitate a greater use of coastal shipping services in Australia. We want coastal shipping to do more, not less, as our freight task continues to grow into the future

As an island nation, with the majority of our population living around the coast, it makes sense to do so, yet under the current legislative arrangements we are failing to capitalise on these opportunities. As Incitec Pivot, Australia's largest fertiliser provider, said in their submission to the Senate:

Deregulation of coastal shipping is needed to lift the competitiveness of the sector, reduce costs on business, increase flexibility and support opportunities for new investment and employment in Australian manufacturing.

What is clear is that Labor's reforms have failed coastal shipping and unless we act now businesses relying on coastal shipping will be sunk, and I fear that the Australian industry would just continue its decline. Without changes to economic and regulatory settings, shipping will not be able to deliver the competitive, efficient services that Australian businesses need.

The amendments to the coastal trading bill are necessary to facilitate the government's objective of supporting the provision of more-competitive and efficient coastal shipping services. The bill replaces the existing licensing framework with a single permit, significantly reducing red tape and regulatory burden.

The reforms will retain key maritime skills and support jobs growth in those parts of Australia where industry relies on competitive shipping to remain viable, such as Tasmania. The bill maintains a framework of entitlements, including part B of the Seagoing Industry Award 2010, and the Fair Work Act 2009, for seafarers on foreign ships predominantly engaged in coastal shipping.

Reducing red tape is the key priority of this government and a central aspect of these policy reforms. Currently, a holder of a temporary licence needs to provide information to the government three times about each voyage. Under the new arrangement the requirement will be removed to apply for a voyage, based on an estimate of what may happen, report before the voyage on what is likely to take place, and then report on what actually took place. Instead, permit holders will need to report on voyages only after the fact.

Importantly, the bill extends coverage of the existing act to allow the carriage of petroleum products from Australia's offshore facilities to the mainland for processing. It also will, for the first time, allow ships to carry out scheduled maintenance in Australia, under a permit. This change will encourage the use of our dry-docking and repair facilities and help to create a sustainable maritime cluster. Changes to the Shipping Registration Act 1981 will make entry to the Australian International Shipping Register easier and will reduce the barriers to ships on this register providing coastal shipping services.

The member for Grayndler in his speech to the second reading debate remarked that ships paying Third World wages will be plying our coast with unseaworthy vessels, having a devastating impact on our marine environment. The claims made by those opposite that the bill before the House will impact on Australia's maritime environment or stringent safety standards are simply wrong. As I mentioned in my earlier remarks in this debate, Australia's strong environmental and safety laws will continue to apply to all ships operating in Australian waters. Australian and foreign-flagged ships operating in Australian waters are subject to Australia's port state control regime, administered by the Australian Maritime Safety Authority. Our port state control regime is second to none in world terms. In fact, AMSA's port state control statistics indicate that, in the 2014 calendar year, the deficiency rate for Australian-flagged ships was 3.9 deficiencies per inspection, compared with a deficiency rate of 2.9 per inspection for foreign-flagged ships. So, again, the sensationalist claims by those opposite are simply not supported by the facts. Indeed, even two of the examples they cite as evidence for their claims, the Sage Sagittarius and the Shen Neng, were not even carrying coastal cargoes but were engaged in international trading.

The facts are: we have the world's best-practice maritime safety and environmental laws, which are rigorously enforced by AMSA, and, when the statistics are analysed, foreign-flagged and Australian-flagged vessels come out basically on par when it comes to reported deficiencies. And the facts are: if you do the wrong thing, regardless of the flag your ship carries, AMSA will detain your ship until it is fixed; and, if you still do not get the message, they can direct you out of Australian ports and not to come back.

As for Third World wages and conditions, I remind the House that wages and conditions for Australian-flagged vessels remain unchanged under this legislation. Additionally, part B of the modern award, introduced while Labor was in government, will apply to all seafarers on foreign-flagged vessels from day one who spend the most of their time trading in Australian waters. Significantly, the government will not issue further permits to a foreign-flagged vessel unless it has complied with past obligations to pay Australian wages. Foreign-flagged vessels trading for a limited time in Australian waters will be governed by international arrangements. This is a condition which is common practice around the globe where foreign vessels carry coastal cargo. Acknowledging that shipping is an interconnected international business that operates, by its inherent characteristics, in many different jurisdictions, it, however, must also be noted that the Maritime Labour Convention, implemented by the former Labor government and supported by the coalition, will provide a safety net to all seafarers in Australian waters. The Maritime Labour Convention provides an international safety net of standards for regulating seafarer employment relationships for the world's seafarers. To date, 64 International Labour Organization member states, representing more than 80 per cent of the world's shipping tonnage, have ratified the convention. These minimum standards cover a wide range of areas, including employment, accommodation, health protection, medical care, welfare and social security protection.

In his second reading speech, then Minister Albanese said:

The MLC is intended to provide decent working conditions for seafarers by setting minimum requirements for seafarers to work on a ship.

He said we need the MLC to be ratified because:

We cannot reasonably expect seafarers who are subject to Third World living and working conditions to provide First World shipping services.

Maritime Union of Australia secretary and former International Transport Workers' Federation president Paddy Crumlin said of the MLC:

By lifting international minimum standards, the MLC promotes fair and decent work …

The coalition supported the passage of this legislation at that time. Let me be clear: this legislation makes no changes to the application of the MLC. The MLC will still apply to provide, in Labor and the MUA's own words, decent conditions for seafarers. As the MUA said when the current legislation was enacted:

The Bills represent over 10 years of work by the MUA, especially National Secretary Paddy Crumlin, and follows the endorsed support from members at the recent Seafarers Conference and National MUA Conference.

Over the last month—

before the legislation was carried—

the core team has been working 24-7 to make sure the legislation was complete and presentable, and that there were sufficient votes [in] the lower house.

And now even the MUA acknowledge that Labor's legislation is flawed. The MUA have said that the operation of the coastal trading act has indicated:

… a need for some streamlining and additional commerciality in its administration.

They went on to note that the act was 'not as effective' as they would like.

I can remind the House of the MUA's record in fostering a competitive employment environment in Australia. As senior Labor figure Martin Ferguson said:

I think the Maritime Union WA branch is a rogue union.

I think they are not only potentially going to kill jobs for their own members, children and grandchildren in the future the way they've conducted themselves.

I think it's about time the rest of the union movement fronted up to the fact that they are now killing jobs in manufacturing.

As the member for Brand noted in relation to unreasonable MUA demands on resource projects:

We do have to be conscious that unreasonable wage demands do place pressures on projects.

So the former Labor government, with its colleagues in the MUA, have created the current regime after a lot of deliberation and, in doing so, created a system that has actually seen the capacity of Australian-flagged vessels drop by 63 per cent. Estimates of seafarer job losses used by many opposition members and provided in the submission to the Senate inquiry by the Australia Institute, a report that was commissioned by the MUA and repeated in their own submissions, are a significant overestimate of the likely job impacts of the reforms and ignore the economy-wide benefits to manufacturing, resources, cement and aluminium, fertiliser, petroleum, sugar, grain and many other products that can or could use coastal shipping if it were more competitive.

If we do not get coastal shipping right, there will be more trucks on the roads. If we do not get coastal shipping right, jobs in the industry, which has declined so much over the years, will continue to drift away. The reality is that we need to be a strong shipping nation. Because we are an island continent, because we are so dependent on international freight, we need to have a shipping industry that works well, employs Australians and creates the skills that are necessary to ensure the effective operation and management of our coastal sea lanes. Because we need those jobs, it is important that we have a strong and healthy shipping industry.

This legislation is a conscientious attempt to try to make the system work better to make sure that the shipping share of the Australian freight task goes up, not down; that opportunities are provided for young Australians to have careers in this important industry; and that we have a regulatory environment that encourages innovation, encourages Australian freight forwarders to use shipping and therefore delivers a significant boost to the Australian economy.

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

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

Mr ALBANESE (Grayndler) (16:46): First, I want to quote from the government official modelling, the cost-benefit analysis, in the explanatory memorandum at page 156. This applies to the preferred option 6. It says:

Many of the operators currently operating under the Australian General Register would likely re-flag their vessels in order to compete with the foreign operators who enjoy the benefit of comparatively lower wage rates. Australian seafarer jobs would be adversely affected as Australian operators re-flag from the Australian General Register.Ship operators are likely to replace Australian seafarers (paid under EA rates) with foreign seafarers (paid under ITF rates).

I say to the Deputy Prime Minister that there was some considerable debate, including in the Senate legislation committee, about the implications of this legislation. In another contribution, I will go to the evidence of Mr Bill Milby and others, which was presented to that committee. Here we have evidence—not from someone else but from the government's own cost-benefit analysis in the explanatory memorandum—making it clear, and I quote again for the benefit of the minister, that operators:

… would likely re-flag their vessels in order to compete with the foreign operators who enjoy the benefit of comparatively lower wage rates.

I say to the minister that there in black and white are the implications of this legislation before this parliament for Australian jobs. It is beyond comprehension that a minister would bring this legislation to this House when it is so clear what the implications are. So I ask the minister: does he agree with this official government analysis in the explanatory memorandum, which says that if this legislation is carried:

Ship operators are likely to replace Australian seafarers (paid under EA rates) with foreign seafarers (paid under ITF rates).

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (16:49): In response to the shadow minister: in assessing what jobs are going to be gained and what jobs are going to be lost, you have to make a whole series of assumptions, and there is a great deal of room for variations in what those assumptions will be. For instance, I have heard members opposite talking about their being only 70 jobs left in Australian shipping as a result of this legislation. Clearly, that is absurd. The reality is that it in some cases there will be Australians on vessels that are not on vessels under the existing regime and that in other places there will be changes, in registration et cetera, that will have some impact.

While we are quoting, can I go to the regulatory impact statement, which I think makes the most telling comment of all in relation to this legislation. It says that the net economic benefit over 20 years from the adoption of this option will be of the order of $667 million. In other words, the gains to the Australian economy are very, very substantial indeed. They will come not just from within the shipping industry itself but because of the jobs that will not be lost on the Australian mainland because our shipping rates are uncompetitive. They will come from industry that is attracted to operate in Australia because we have a more competitive industry. The net employment situation is likely to be beneficial to our country, because we will not be losing as many jobs in this country from manufacturing and from a whole range of key industries that simply cannot compete with imported products, because of the cost of shipping. There are many examples, which were taken to the Senate and which have been reported all over the place, about Australian commodities not being able to compete with imports because of the cost of domestic shipping. We have classic stories, like it being cheaper to bring sugar from Thailand to Melbourne than to bring it from Mackay to Melbourne and it becoming cheaper to bring cement direct from China rather than to move it between one Australian port and another. That is costing jobs on the mainland. It means we cannot make cement and that our sugar producers do not have access to markets that otherwise they would have access to. All of that has to be taken into account in making assessments about what the best thing is for our national economy.

Mr ALBANESE (Grayndler) (16:52): I am somewhat disappointed that the minister chose not to respond to the very specific quote that I used from his own legislation and that he is asking us to vote for. I also refer to the legislation at page 75 and 76 of the explanatory memorandum in the RIS. The government evaluates the savings there of its preferred option. At the bottom of page 75 and the top of page 76, the combined savings are evaluated. What it shows is that some $19 million in the preferred RIS—88 per cent of the savings—are from 'labour cost savings' and $2.4 million—the other 12 per cent—are so-called 'deregulatory savings'. The minister has made a fair bit of so-called red tape issues. What his own legislation shows and what the RIS of the preferred option shows is that 88 per cent of the savings that the government says will come from this legislation are a direct result of the difference between Australian wages and foreign wages. That is what it shows: almost nine in every $10. That includes, of course, taking away workers from their current coverage under the Fair Work Act.

We on this side of the House have used the analogy of the difference between the 'blue highway' and the Hume Highway. If freight is taken from Sydney to Melbourne down the Hume Highway, Australian wage rates apply. The Australian truck industry safety standards of the government apply. But, if it is taken on the 'blue highway'—again, a domestic freight task from Sydney to Melbourne—then foreign wage rates will apply. I wonder where the minister draws a distinction between the 'blue highway' and the Hume Highway. If he accepts the logic that lower wages are lower cost and, therefore, should be allowed to be paid then why is it that we do not allow for Filipino or other truck drivers from Third World nations—the sort of people who are brought in on flags of convenience to work on ships that are registered in flags of convenience—to drive trucks down the Hume Highway and be paid foreign wage rates? The implication for Linfox, for Toll and for other Australian truck operators is that they would go out of business.

The implication for the Australian shipping industry if they have to compete with foreign wages being paid on the domestic freight task is that they will not be able to compete. I go back to my previous contribution. That is why the legislation says very clearly that when you take these two things together ship operators are likely to replace Australian seafarers with foreign seafarers. That is the logic of this government's own legislation. That is the very purpose of this legislation. I would ask the minister to respond very specifically to the savings that are there at page 75 and page 76 of the legislation, which is the explanatory memorandum.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (16:56): Again, my response has to include an element of my previous answer in that the reality is that the current situation is clearly not working. The number of registered ships has halved. Since this legislation has been in, the volume of Australian shipping capacity has reduced by 63 per cent. The current system is not working. It is not working for roads; it is not working for seamen. And it is certainly not working for Australian industry, because the reality has been that our manufacturing has become less competitive rather than more competitive. The number of seamen and, I presume, therefore, the number of members of the Maritime Union—who were obviously key people in drafting this legislation; they took the credit for it at the time and subsequently—must be smaller now than when this legislation was brought in, because there are fewer people employed in their trade. I think that is disappointing and it is something that I want to reverse.

Comparisons between the shipping industry and the rail and road industries do not stack up. Shipping is competing against shipping. But there is a domestic task where the various modes of transport can be involved and can therefore deliver the most economic movement of freight around the country, and they should be encouraged to go towards the most economic element. The obvious facts are that, unless shipping can pull its weight, unless we can have as many ships and, indeed, more ships involved in trade between our major ports then there are going to be more trucks on the road and, hopefully, more trains in the train system. We will have to spend billions of dollars on upgrading the roads and the railway lines so that we are able to effectively meet that task. Currently, what is happening is that business just ceases to exist. It cannot be competitive. We are bringing in, say, cement or sugar from Asia when it could be made and produced in Australia. Therefore, the wage level of the people engaged in transporting it around the country is in fact at an international wage level. They are at that level because we have not been able to maintain an effective Australian shipping industry.

So what we want to do is get rid of some of the red tape that revolves around the system that was legislated a couple of years ago and that has effectively made it so that the permit arrangements are unable to operat We believe in a second register. We supported it at the time that the government introduced it. But there is not a single ship on that register because there is red tape associated with it that is unacceptable to any shipowner. So we want to get away from it. Then it will not be a contest about whether or not we are competing between Australian wages paid in a truck or the part B wages paid on a ship; it will be whether or not there are Australians employed in a task or whether we are instead importing the product from China, Thailand or some other nation. I would prefer to have Australian jobs involved in shipping the product around our shores rather than importing products from overseas, shipped here exclusively by people on international wages.

Mr ALBANESE (Grayndler) (17:00): I note that, in his response, the minister, when he did go to the specific question that I raised, said that the current legislation was not working for roads. He went on to not address at all, in my view, the absolute parallels that are there between the domestic freight task on sea, on rail and on road, and how, if you allow foreign wages to be paid by foreign companies competing against Australian wages and Australian companies, you destroy the level playing field. It is not rocket science here. It is demonstrated by the government's own legislation, indeed.

I hope the minister appreciates the fact that I am being very specific about what I am asking here in referring to the legislation, as is appropriate for the way that consideration in detail should be conducted. I refer the minister to page 152, to the cost-benefit analysis, which is the minister's own official modelling, and to table 5.15. It says that the preferred option, which is option 6, will have the following effect on the Bass Strait non-bulk trade. For the Tasmanians who might be present or listening to this, they might want to think before they vote on this legislation both here and, importantly, in the Senate. The official government modelling now uses a base case expectation of 100 per cent Australian crew. The preferred option, and the basis of the bill, shows 35 per cent Australian crew and 65 per cent mixed crew—that is, a 35 per cent reduction from the circumstance of there being 100 per cent. Given that it is the official modelling, has the government estimated how many actual seafarer jobs in the Bass Strait trade will be lost under the legislation?

The evidence before the Senate inquiry was that there were almost 400 seafarer jobs in the Bass Strait trade now and that most would be lost under the government's modelling. I want to ask whether the minister agrees with the modelling in the legislation that assumes the following with respect to the preferred option as it applies to the existing vessels in the Bass Strait non-bulk trade. The top of page 152 says this:

… we assume 4 vessels will register under a foreign register to reduce operating costs.

So it is very clear what they are suggesting in this legislation. Minister, which vessels does your official modelling assume will reflag from Australian flagged ships to foreign flagged ships? It is there in the assumptions in this legislation. Does the minister agree that the motivation for reflagging is the difference between Australian based wages and foreign wages? I might allow the minister to respond.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:04): My understanding was that the model did actually identify for which vessels there was a likelihood they might change their flag and which ones were less likely to do so. I do not have that information in front of me but I am happy to provide it to the member at some later stage. But, having said that, it is modelling. Modelling is modelling. It relies on certain assumptions. Sometimes the assumptions are fulfilled and sometimes they are not. Indeed, there have been predictions made in some of the modelling that certain vessels in other places may change their flag, and the Australian owners have subsequently said that they would not be doing that. Assumptions have to be made in preparing this kind of modelling. The key assumptions, however, come quite clearly down in the regulation impact statement that this legislation will have benefits of around two-thirds of $1 trillion to the Australian economy over the next 20 years. That is a benefit to the Australian economy that I thought we all should want to grasp.

Mr ALBANESE (Grayndler) (17:05): To assist the minister, my understanding is that the assumptions assume that two SeaRoad vessels and two Toll ships will reflag. Indeed, the evidence from SeaRoad before the legislation committee was that, as a result of the former government's legislation, they were about to invest in further investment in ships, which would have, of course, created jobs in Tasmania.

While we are on job losses—which is the key element here—at page 150 of the part of the cost benefit analysis the modelling in table 5.14 says that the preferred option, option 6, will have the following effect in cruise shipping. The base case now is 40 per cent Australian crewed—that is, 40 per cent of the cruise ships that operate around the Australian coast employ Australians. For option 6, the preferred option and the basis of the bill, the expectation is for zero Australian crew—zero. That is what is there in the legislation.

I refer it back to the minister, because it is quite an extraordinary statement to have in the legislation, particularly in the context of the evidence before the Senate inquiry from Mr Bill Millby of North Star Cruises, which I might take up as the next issue with the minister. But, firstly, I would ask him to respond to table 5.14 and I ask: how can the minister possibly defend bringing in legislation before this chamber that makes such recommendations.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:07): Large cruise vessels are exempt from the requirements under the current legislation, and there is no change proposed in that regard. My personal view is that there is a market for cruises at the top end of the range for wholly Australian run operations. I think there is potential for that kind of niche market to be effectively filled by a skilled and well-managed entrepreneur, and that sort of arrangement can be successful in the market. I think that should be encouraged wherever it can be done. But the reality is that the cruise market in this country will continue to grow—it is very popular at the present time. One of the really important things in this legislation for the cruise industry is that for the first time they will be able to have their vessels dry-docked and serviced in Australia, where previously they would have had to be imported. I see this legislation as creating more Australian jobs in the maintenance and servicing of vessels—and indeed major overhauls and modification and refits of those vessels. There is real potential for Australia, which has good skills in this area, to be able to create extra jobs, and that is part of building a stronger economy.

Mr ALBANESE (Grayndler) (17:09): To respond to the minister's last point: that is the consequence of removing any distinction in real terms between Australian flagged ships and foreign flagged ships in their ability to operate and to be present around the Australian coast. To argue that that is a plus is quite disingenuous. I met with the minister and indicated that, if the minister had practical suggestions to support Australian industry and Australian jobs, the opposition would certainly be willing to consider them.

When it comes to cruise shipping, we have the difference between 40 per cent Australian crews—because the large cruise vessels are exempt and are not part of the regime that applies for other vessels—and an expectation in the government's own modelling of zero per cent Australian crews. That fact indicates that it is the full expectation of the government that the cruise shipping industry with an Australian flag on the back will simply disappear.

That was the evidence given by North Star Cruises, particularly Mr Bill Millby. His submission was very clear. Does the minister accept Mr Millby's statement to the inquiry on 20 May 2015 that the following happened? I will read from Mr Millby submission.

The Executive Director's advice to me during that discussion was that if NSCA wanted to remain competitive with the foreign owned and crewed ships it should—quote "consider taking out a ship 'True North' off the Australian Shipping Register, re register the ship in a suitable foreign country, lay off our Australian crew and hire a cheaper foreign crew". When she suggested this I told her that I could not believe the suggestion she made and she said quote "to remain competitive in the world that is what we should do". At that point I asked for and was granted a meeting with her in her Canberra office to further discuss the issue—prior to the Legislation Amendment Bill being tabled.

Then on 16 June 2015 Mr Millby be met with Judith Zielke and Michael Sutton and the account of that meeting is this:

I asked how they expected Australian expedition ship owners such as NSCA to compete with the foreign crewed ships and remain in business and they suggested the following:-

1. First, take "True North: of the Australian shipping registry

2. Registered "True North" in a foreign country, and Re-flag our ship "True North" with a foreign flag.

3. Then replace the Australian crew (apart from the captain and the chief engineer) with foreign crew who would not be governed under the Australian labour laws and the Australian "Fair work Act"

4. The foreign crew would also be trained in a foreign country—

not Australia, saving more money.

This follows the statement from Tony Briggs, who was the head of the Cairns based Coral Princess group. He said he was selling out to foreign interests in anticipation of this legislation. Mr Briggs said:

There will never be another passenger ship built in Australia if there is no certainty on how we can operate. It is exporting jobs.

He did that with his business.

It is extraordinary that this evidence is not from the Labor Party or the MUA. This is evidence from businesses—the people who actually operate the cruise ship industry—the people who create jobs particularly in north-west Australia and in Far North Queensland. They are simply saying that this legislation anticipates that this would occur. It is not surprising that the bureaucrats told Mr Millby exactly what was in the legislation and that he had a choice of going out of business or reflagging his ship. Mr Millby was the subject of considerable criticism from yourself, Deputy Prime Minister, and the then Prime Minister in a totally inappropriate way. So I ask the Deputy Prime Minister: why is it that the operators, including Mr Milby, have got it wrong? It is very clear from the legislation, from the evidence that was given before the committee and from the FOI material that was tabled in the Senate from Ms Zielke and Mr Sutton, who confirmed that was an option that was put forward to Mr Milby. Of course, he did have another option: to just go out of business. That was the other option that was presented. What other option does Mr Milby have in order to compete with foreign flagged ships, with foreign crews, paying foreign wages in the competitive environment that is the cruise ship industry in the Kimberley?

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:15): Firstly, let me clarify something, because my advisers think I may have said something that I did not intend to say in relation to the large cruise vessels that are exempt, under the previous arrangements, from the requirements of the act. Under our act, of course, they are actually brought into the act, but they will be eligible for their 12-month permits, so it will have no impact on the composition of the cruise.

Moving on to the commentary about North Star cruises, frankly, all the information that anyone could want to see is available on the public record. What was not provided or listened to during the Senate hearings was sought by the member opposite through a freedom of information request, and those documents were all provided. So there is nothing being hidden whatsoever. I can do little more than repeat the comments that I made previously. My department has confirmed to me in writing—and the shadow minister has seen the letter—that at no stage was Mr Milby advised of any course of action. Being apprised of the various options available does not constitute advice of a particular course of action. I confirm again today that at no stage was Mr Milby advised—and I quote from the shadow minister's speech in the second reading debate:

… he should re-register his vessel overseas and sack his 50 Australian staff and replace them with cheap foreign labour.

Departmental officials testified as such before the Senate committee hearings into this bill, and this was reaffirmed by written advice from my department to me, which, for the benefit of the House, I will quote:

Commercial advice was not provided and no particular course of action was recommended to the company.

Ultimately, of course, these are commercial decisions for the owners of Mr Milby's company to make. The company has been competing with international cruise vessels for a long time, and I am sure it will continue to be able to do so into the future.

Additionally, I should note that under the government's proposed reforms it is not an option for someone to put a full foreign crew on a cruise vessel in Australia if they want to operate year-round on Australian shores—that is not permitted under the act. So that casts some doubt on the veracity of the testimony.

Finally, I reject any suggestion that I have been critical of Mr Milby. I admire the work that his company does and I think that it adds a dimension to a cruise in that part of Australia that adds significantly to our tourism reputation. I certainly wish him well for the future. It is true that a number of the state governments, and the Northern Territory in particular, want to open up that business to competition from vessels that may have a foreign flag. They think it is rather silly that someone has to travel up to Timor or Singapore or Indonesia to bring on provisions and load the vessel when they could do that in Darwin and therefore Australian jobs would be created on the land in the Northern Territory.

Those are the competing interests that are brought up in these kinds of debates. What we want to do as a government is provide a fair opportunity for all businesses to prosper in this country and to take advantage of the opportunities of our market, and to ensure that other people around the world as well can enjoy the magnificence of the north-west Australian scenery, and indeed other parts of regional Australia. So having more vessels operating around our shores will certainly create jobs in the tourism industry on land, and that also has to be taken into account in assessing the value of particular options. But, from my perspective, I was not present at the conversations that were allegedly held, but I have been given the word of my respected senior officers and I have no reason to doubt it.

Mr ALBANESE (Grayndler) (17:20): I think the Deputy Prime Minister knows very well the distinction that he is drawing. The letter from Mr Mike Mrdak, the secretary of the department that was subject to the FOI application—which was only granted, it must be said, after a Senate direction was carried by a majority of the Senate—has in it very carefully chosen words. It says:

Commercial advice was not provided.

It says that and I accept that. It is not up to a department to give advice as to the running of a company. What it does confirm, however, are the various options available under the new framework and the option that was available and that was presented very clearly to Mr Milby. I do not know if the Deputy Prime Minister watched Mr Milby give evidence before the Senate. This was not a seasoned political operator; this was a businessman from Western Australia who went out of his way to attend the launch of the policy by the Deputy Prime Minister. He approached the Deputy Prime Minister for advice and was referred by the Deputy Prime Minster himself to Ms Zielke, who was at the launch at the curiously named Shipping Australia

In great Orwellian tradition, Shipping Australia represents the non-Australian shipping industry. This indicates that Australians want a shipping industry—that is why Shipping Australia call themselves Shipping Australia rather than 'Foreign Shippers'.

There is an important role for foreign shipping in this country—we do not argue that. The essential argument here is very clear, and the flaw in this legislation is very clear—the minister exposed it with his last contribution when he said 'we want fair opportunities for Australian business.' But this legislation does not present fair opportunities. It will have businesses operating side-by-side, working the same routes, whether it be in the freight industry around our coast or in the cruise ship industry, one of them paying Australian wages and their competitor paying cheaper foreign wages. In an industry where the margins are not substantial, that means that the Australian ship, to be able to compete, will have to remove the Australian flag and replace it with a foreign flag and replace their Australian workforce—with a couple of exceptions, I accept—with a foreign workforce being paid foreign wages. That is the purpose of the legislation. That is what the modelling says in this legislation.

It did not take Mr Milby to expose this—it is there in the legislation. Mr Milby's evidence made it, if you like, a much more retail discussion—it put a face to the consequences. I congratulate Mr Milby on his courage in standing up for Australian jobs. One of the things Mr Milby said in his evidence was yes you can do that, but he wants Australians to show visitors, whether they be from other parts of Australia or overseas, the great wonders of the Kimberley and the Australian coast—our pristine natural environment. That is why this is important. (Extension of time granted) Page 75 of the RIS of the preferred option says under the heading 'Costs':

The modelling undertaken for the cost-benefit analysis did not include the cost of the potential loss of Australian seafarer jobs.

It is extraordinary, Minister, that you have legislation before this parliament that says that 88 per cent of the savings will be due to labour cost savings, that says clearly what the job losses are estimated to be by sector and region, but which has no analysis of the economic consequences of those Australian job losses. I would have thought it was appropriate to have modelling of the following, at least: firstly, what are the consequences of the fact that you have less money in the economy as a result of Australian seafarers who live and work and have families and spend their income here in Australia being replaced by foreign crews who do not live and spend money here and create jobs in the local supermarket and local retail outlets, or buy services here in Australia; secondly, what are the consequences, therefore, of less GST being paid because of the fact that you are removing the income of those Australian workers; thirdly, what is the cost of less income tax being paid; and, fourthly, what is the cost of higher welfare costs? Northern Tasmania, in particular, has higher unemployment rates than is the average around Australia. The minister has accepted that the evidence in the modelling assumes that two SeaRoad and two Toll ships from Tasmania will re-flag, replacing their Australian workforce, with a couple of exceptions, with foreign workers. That leads to higher unemployment benefits and social security costs. Social costs occur when you have higher unemployment. The other area that does have higher unemployment than other parts of Australia is Northern Australia—Cairns and around the north-west of Australia. What are the social consequences of that loss? It is beyond me why the RIS of the preferred option did not undertake the modelling of the costs of 'the potential loss of Australian seafarer jobs'. I wonder whether the minister can respond to that.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:28): The obvious response is that what has happened as a result of the uncompetitive nature of Australia's shipping industry is that the number of people employed in shipping is now down to just over 1,000 people. Presumably, if you go back far enough, there were tens of thousands involved in domestic shipping. Certainly over recent times, since the legislation introduced by the previous government, the number of ships with coastal licences has dropped from 30 to 15, and the number on the transitional register has dropped from 16 to 8. How many jobs were lost as a result of that? How many jobs were lost as a result of the changes introduced by the previous government?

I move on to the job losses occurring as a result of the fact that our domestic shipping industry has been uncompetitive. That has meant that jobs on the land have been lost because they have been unable to be competitive with imported products. But when you have, for instance, sugar coming from Thailand to Melbourne instead of from Mackay to Melbourne, the jobs that are created in Thailand as a result of producing that sugar for the people of Melbourne are jobs that are not being created in Mackay because there was an alternative source of supply. When the cement industry has to close operations in Australia because it cannot be competitive with Chinese cement that is coming in on internationally-flagged vessels which are paying international wages, those are jobs lost in Australia. So the equation is not simply restricted to who may be on a particular boat. It has to be examined in relation to the whole of the economy, and, when it comes to the RISs, that is the basis upon which they are prepared. The RIS has been prepared with a declaration from the Office of Best Practice Regulation as meeting all of the government's RIS requirements—the same requirements that the previous government had in place and presumably with the same kind of findings that there were in the RIS which was prepared by the previous government when they introduced their legislation in this regard. So examining the impacts of legislation in isolation ignores the flow-on effects that there have been as a result of us having an uncompetitive shipping industry.

I want our industry to be competitive, not just because I want to save jobs on the mainland, although that is very important, but I also want them to be able to be effective in ensuring that we have a more competitive transport system in our country. I would like to see the containers that are currently going on trucks from Melbourne to Brisbane every night travelling on a ship. Many of them are not particularly time sensitive in the length of their journey. Those are the sorts of vessels that should be going on ships, but we do not have ships that are able to undertake that task. I hear reports from time to time about somebody who is going to build a ship or might build one in the future, or that they are all going to flock in and join the second register initiative—an idea which of course I welcomed—but the second register has been a complete flop. There have been a number who have expressed interest, but, when they find out they have to pass everything by the MUA and have to have a whole set of regulations in place, it just becomes too hard and they go away.

I hope that with our new arrangements those people may be encouraged to join the second register and that they may be encouraged to employ Australians, because if we keep going the way we are—with the 30 ships down to 15, down to who knows what it will be in another two years time—then we will have no-one being trained to be a pilot to take vessels through the Great Barrier Reef. We will have no-one being trained with the capabilities to run tugs around our harbours. We will have no-one with the skills that are necessary for us, as an island continent, to be able to maintain effective transport systems around our nation.

We are not in the business of destroying jobs. We are in the business of trying to make a more competitive shipping industry that employs more Australians. I have to say that I sometimes wonder why some of these unionists who have lost their jobs in the sugar industry or in the cement manufacturing industry are not complaining that their jobs have been sacrificed for a guy who is on 26 weeks holiday a year on a ship somewhere or other. One job is being traded for another, and I think the union movement is being disingenuous if it counts the job that they want to try and save on the ship when it is costing jobs—eight, 10, a dozen or who knows how many—in land-based industries.

Mr ALBANESE (Grayndler) (17:34): I refer the Deputy Prime Minister to page 80 of this legislation as part of the RIS. It relates directly to the comments that he has just made, and it says:

Stakeholders called for policy certainty to create greater certainty in business planning and perceived a propensity in Australia to change shipping regulations on a semi-regular basis, which they felt posed a high sovereign risk for coastal shipping operations in Australia.

The thing is that the legislation that this is amending was from 2012. It amended—100 years after the Navigation Act—the most significant reform that was there. The change of government was in 2013. Throughout that period, where it was clear to most observers that there was likely to be a change of government, the now government made it clear that they would not support that legislation and that they would seek to change it. That meant that investment did not occur to the extent that it would have occurred had that not been put forward. You cannot actually make a decision, in the beginning of 2013, to invest in a new ship, have it constructed and have it operating within a few months. And then companies gave evidence before this inquiry. I refer the minister to the evidence of SeaRoad Holdings, who said things very clearly in a submission to the senate committee. SeaRoad's Michael Easy warned that the legislation before the parliament would imperil the $100 million investment that they had made a decision on to build the first of two new cargo vessels, the first of which they expected to be operating in Bass Strait just next year. So it is pretty clear in terms of those issues.

The minister gave up some of his ideological blinkers when he gave his last contribution. He spoke, again, about the unionists—which is really what is driving this. It seems to me that those opposite have a view that members of the MUA are not worthy of employment and the way that you stop them being employed is to stop there being an Australian shipping industry. That is the logic. The minister spoke about 26 weeks leave in a completely disingenuous way. He knows it is just like a whole range of other fly-in fly-out workers—ships that operate tend to have two sets of crews because when they work they are working on a ship for seven days a week 24 hours a day, literally. So you have one crew on and one crew off. That is the way the industry works. It is just like people who work in offshore oil and gas or people who work away from their home. That is the way the industry works, and the minister is using this in such a disingenuous way, because you have two crews, there are 26 weeks off and they are working 183 days.

Mr Truss: It does not work like that. You know that.

Mr ALBANESE: The minister does not contemplate the reality of this industry. He spoke about the considerable decline. Indeed, since the Howard government there has been a decline. We addressed those issues. The government has given up on the industry. I would ask the minister to respond to the following questions. Why is it that the phase 'Revitalising Australian Shipping' has been removed from the title of the act? Why has the government deleted 'facilitates the long term growth of the Australian shipping industry' from the act's objectives? Why is the definition of 'Australian nationality' with respect to a ship being deleted from the act? It is being completely deleted as if there were no distinction between the Australian flag and a foreign flag of convenience on the back of a ship. The government seeks, through this legislation, which is really Work Choices on water, to remove the Australian flag from the back of our ships and replace it with the white flag when it comes to Australian jobs.

In the minister's response to the last question he laid out very clearly that he regards that as acceptable because there will be savings somewhere else. That is his view. But he should be honest and say that the government's view is to get rid of the Australian shipping industry because it will assist other industries. If that is the view, then at least say it. It is there in the legislation, as I have outlined in great detail and which I intend to continue to do. But the government needs to respond to this: why is it that a National Party minister—indeed, the leader of the National Party, a political party that has a proud reputation for being, as the name would imply, a nationalist party that will stand up for Australian interests—is completely removing Australian nationality with respect to a ship from the legislation. It has always been there in one form or another. Since Federation it has been there. But this government seeks to remove it from the act.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:40): It was interesting that the shadow minister chose to quote from page 80. He selectively chose one paragraph. Maybe he should read the paragraph before and the paragraph after, which make it clear why stakeholders were concerned about the cost of Australian shipping:

The current Temporary Licence system was seen as a further disincentive to the participation of foreign vessels, due to high compliance costs and operational uncertainty. Temporary Licences were seen as overly inflexible because foreign vessels are currently required to apply for a minimum of five voyages …

When you selectively take one paragraph out of the whole case you do not accurately reflect the arguments that have been put. In relation to the title of the bill, it is quite clear that when Labor put 'Revitalising Australian Shipping' into the title of the bill it did not have that effect. The reality is that you cannot revitalise an industry just by writing it into the name of a bill. The reality is that since this legislation was implemented the number of ships has dropped from 30 to 15. The number of people employed in the industry has dropped.

Mr Albanese interjecting—

Mr TRUSS: The number of registered vessels has dropped from 30 to 15. The reality is that the name has done nothing to increase the number of ships. It has actually reduced the number of ships. So we are talking about a working title delivering a working result, delivering an outcome that will result in there being a more competitive Australian economy, an economy that is aided by having capacity to move products around our coast at a rate that is competitive with things that are coming in from other parts of the world. If we want to have a strong Australian industry we need to give it the support that it needs to achieve its objectives. Just putting the word in the title of a bill does not do that. You have to have the will and the effective policies to achieve that objective, and that is what our amending legislation is about.

Mr ALBANESE (Grayndler) (17:42): The figures that the Deputy Prime Minister just used are absolute nonsense. To suggest that that decline has occurred between the previous act coming into practice and today is just not true. The minister did not respond. He spoke about page 80. Page 80 makes it very clear. It says:

The primary driver of higher costs was seen to be high Australian wage costs relative to foreign vessel wage costs.

That is just like the 88 per cent save—as shown in the RIS—being about the difference between Australian wages and foreign wages. That is what is actually there at page 80. But I would ask the minister really specifically—and this comes to the crux of the matter, and he must be able to answer—why he has removed any definition of 'Australian nationality' from the act.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:43): I do not wish to respond. The definition of Australian nationality is in legislation about Australian nationality.

Mr ALBANESE (Grayndler) (17:44): Quite frankly, the failure of the minister to respond says it all.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (17:44): Legislation about Australian nationality is in legislation about Australian nationality, not in legislation about shipping. Clearly the legislation about Australian nationality applies across all legislation, and you do not have to write these sorts of things separately into every piece of legislation.

Mr ALBANESE (Grayndler) (17:44): The minister just shows ignorance of the legislation with that response. We are not talking about nationality as in citizenship. We are talking about nationality as in where a company is registered, as in whether there should be a distinction between an Australian flag on the back of a ship and a flag of convenience. It is pretty simple. I referred to the act. I asked about the definition of Australian nationality with respect to a ship that has been deleted from the act. The reason it has been deleted is that previously, under the Howard government, under the Menzies government, under the Bruce government and under every government in power prior to this legislation today this parliament has seen fit to draw a distinction between the Australian flag and conditions and a foreign flag and conditions. Why have we done that? It is because governments have understood that it is in our economic, environmental and, importantly, national security interests to have the presence of an Australian flag and to have a merchant fleet.

For goodness sake, have a look at the role the merchant fleet plays in the defence of our nation. That is why we included the Navy as a direct representative in the consultative group that drew up the legislation that I introduced before this House. This is a government that speaks about stopping boats. We did not think that meant stopping having the Australian flag. But that is what it means here. The merchant fleet play a role in that as well. They play a role in safety. They play a role in security. For an island continent, where 99 per cent of our exports travel by sea, the existence of a maritime sector is critical to our national interest. That has to be the starting point for legislation.

That is why this is not just some semantic debate about words. That is why 'revitalising Australian shipping' was in the title. That is why the objectives of the act included 'facilitates long-term growth of the Australian shipping industry'. That has been removed. That is why you have a definition of Australian nationality. I will provide the answer for the minister. You do not need a definition of Australian nationality with respect to a ship if you do not draw any distinction between an Australian flagged ship travelling from Brisbane down to Sydney and a foreign flagged ship, if it is just a free-for-all with no preference, which is what is in this legislation, and where the Australian ship has to compete on the basis of foreign wages being able to be paid. That is the point, Deputy Prime Minister, that I was making. It is not some academic exercise.

I would ask the minister to indicate if any of the following G20 nations open up their coasts to all comers without making a distinction about nationality of ships and flags, as his government proposes to do. The United States does not. Canada does not. Japan does not. The countries in the European Union bloc do not. India does not. Indonesia does not. China does not. That is why I say this is unilateral economic disarmament. None of our competitors do this. The minister, to his credit, understood this in resisting the absurd proposition of Minister Robb to get rid of cabotage when it came to aviation. But he does not seem to understand that it is the same argument here.

The United States, under the Jones Act, not only does not allow goods to be transported around its coast by anything other than a US flagged vessel with US seafarers; the ship has to be built in the United States as well. That is a proposition that has the support of the Democrats and the Republicans. It was supported by Ronald Reagan. It was supported by George Bush Sr and George Bush Jr. It is supported by Barack Obama, President of the United States. A few of the fruitloops in the Tea Party oppose it, but everyone else in mainstream politics in the United States supports it. That is because of the experience of the US in World War II. They understand how important it is for the national interest. That is why, if the Deputy Prime Minister can indicate any nation comparative to ours, any major economy, that says, 'We will allow a free-for-all and get rid of preference around our coast,' I would like him to please tell me where it is.

We speak a lot in this place about trade, bilateral agreements and multilateralism. We speak about equality of opportunity and arrangements. There is no equality of opportunity here. It is simply not possible for Australian flagged ships to turn up in the US, Canada, Japan, the EU, India, Indonesia or China—any of the G20 nations where we have significant trading relationships—and just start doing business on their coasts. There is a reason for that. It is extraordinary that this is being given up.

If the Deputy Prime Minister has some knowledge that some of these countries are about to do this, I would like him to tell me. But I draw his attention to the United States, the land of the free market. It has a very protectionist system. We do not have a protectionist system here. We have a system that says, 'When an Australian ship is available to do a domestic freight task, it should get that work.' Secondly, it says, 'If an Australian ship is not available and a foreign ship does it that is a good thing, but it has to pay Australian wages.' That is what this argument is about, here, and the uncertainty.

The minister said he is serious about Australian jobs. He said he wants jobs created in the Australian shipping industry. What we know from the legislation is that the Australian shipping industry will decline. Eight-eight per cent of the savings are due to the difference in wage costs. We know four ships in Tasmania will remove their Australian flags. That is the expectation. The expectation of the cruise-ship industry is that it will literally disappear, in terms of the Australian flag. It is there in the legislation. This is not something we needed an inquiry on. I ask the minister: what comparative nations—any at all—is this legislation going to be consistent with, or is it the case that it can be seen as unilateral economic disarmament?

I refer to the regulatory impact statement at pages 74 and 75. The following is the preferred option 4, which is in the RIS and is the basis of the bill. It says this about the exclusion of Australian workplace standards for ships in Australia up to six months. It states:

Some foreign ships would continue to be subject to the Fair Work Act under option 4, however the threshold for coverage will be lifted to ships that engage in more than 183 days of coastal trading in a permit year. This policy change acknowledges the concerns of stakeholders that current Fair Work Act coverage is burdensome, while also requiring adherence to Australian wages and conditions for ships engaged in significant Australian coastal trade.

It is extraordinary that because of the nature of these flags of convenience, that tend to be major operations, it could simply replace one ship around the coast with another one at the six-month mark and the clock starts ticking again, enabling it to pay foreign wages. There is nothing in there, beyond that six months continuous work or 183 days in the year. It is an extraordinarily high figure. Even under its own logic, surely the government—if it were fair dinkum at all—would have a figure in there that was not such a free-for-all. That 183 days exposes the weakness in the government's position.

I do not know if the minister wants to respond to that specific argument. I am more than happy to come back, at a later time, if it suits the minister. I provide him with that offer in good faith. I have been trying to go through, very specifically, problems with this legislation. I might move onto the next one while he is giving consideration to that.

The regulatory impact statement, at page 55, says the following, when evaluating constraints and barriers:

In the current global environment with an oversupply of ships, shippers are unlikely to face difficulty in sourcing transport services; however, in the future an increased exposure to global market forces—

And I ask the minister to respond to this—

could result in a situation where Australian shippers are less able to source cheap and reliable domestic sea freight services. Consultation indicated this is a risk the industry is willing to assume in a globalised economy.

This is a problem for the Australian economy as a whole.

The minister has clearly indicated he is prepared to see the Australian shipping industry decline—or disappear—because he thinks that will produce benefits for other industries. But here we have, in the government's own regulatory impact statement, a statement from the government that there could be circumstances whereby Australian shippers—people who want to carry freight around the coast—simply are not able to engage in that trade, thereby representing an extraordinary risk to the economy. It is one of the reasons we have an Australian industry, why you need the Australian flag, when you are an island continent. The consequences of that are quite extraordinary.

The RIS, in the legislation here, essentially says, 'There's a risk there but industry is prepared to cop that.' I am sure there would be some people—Shipping Australia is clearly supportive of this legislation—who are prepared to accept that. For those people who the minister says rely upon shipping services it is quite extraordinary. It goes to issues such as energy security as well. What happens if there isn't a ship available to supply the energy security that Australian industry requires? It seems to me that the reliability risk is a real issue.

I go now to the issue of assumptions on foreign registration. I go to the cost-benefit analysis, which is at page 128. It operates under the following basis for making its assumptions:

An analysis of the ships that operated under a Temporary Licence between July 2012 and June 2014 using Lloyds data indicates that foreign vessels operating in Australian coastal shipping are registered mostly in open registry countries including Panama, Liberia, the Marshall Islands or the Bahamas, or otherwise registered in low-wage countries or countries offering favourable conditions to foreign ship owners …

There it is in black and white on page 128. They are called flag-of-convenience ships because those nations, quite frankly, are prepared to allow the use of their flag on the back of ships that really have nothing to do with those nations. The ships that fly the Liberian flag are not actually ships that arise from the Liberian shipping industry. They are called flag-of-convenience ships because those nations are prepared to allow what I regard as a misuse of their flag—something that the Australian people would never allow any government in this nation to operate. But it makes it very clear in terms of the circumstances of the RIS when it talks of 'favourable conditions to foreign ship owners'. Exactly what does that mean? What that means is the way that workers are treated. What that means is that less tax is being paid into the Australian economy. And the government makes this assumption in its official modelling that is the basis of this legislation. I hope that those who are sitting in their offices—particularly the National Party members who, historically, have been prepared to stand up for Australia—are listening to this. There, in black and white on page 128, are the assumptions that I regard as quite remarkable.

I refer the minister to page 156 of the explanatory memorandum—the cost-benefit analysis. It says the following of the preferred option:

Many of the operators currently operating under the Australian General Register would likely re-flag their vessels in order to compete with the foreign operators who enjoy the benefit of comparatively lower wage rates. Australian seafarer jobs would be adversely affected as Australian operators re-flag from the Australian General Register.

Ship operators are likely to replace Australian seafarers (paid under EA rates) with foreign seafarers (paid under ITF rates). Nevertheless, a portion of the crew may remain Australian due to the world-wide shortage of high-ranking positions.

Can the minister indicate why his official modelling indicates the loss of Australian seafarers' jobs and their replacement with a foreign workforce? What is the assumed size of the Australian major trading fleet following the passage of this legislation—that is, what is the end point that the government sees? Is it zero Australian ships?

I also ask the minister this. As part of shipping reform we had a maritime workforce development forum that worked with the Australian Maritime College at Launceston, with industry, with the unions, with the navy—all were represented on that task force. I do not believe that the minister or the government have considered the implications for the crossover in skills that a domestic Australian maritime sector provides: the people who run our ports; the people who run our harbours; the people who go from the navy to the merchant fleet. There is a real crossover and, in getting rid of, essentially, an industry in the way that it is envisaged, I believe that the government has not given appropriate consideration to that.

There is another issue I would like a response to. The minister made an assertion in response to my comparative analysis in my second reading speech about the way in which the Australian shipping industry has a very good record and the foreign flag-of-convenience industry has not such a good record; he sought to suggest that that was not the case. I have witnessed, and I refer the minister to, the Pasha Bulker incident off the Newcastle coast—one that created a great deal of damage and one which the reports showed certainly could have been avoided had the ship's captain acted in a responsible way. I also refer him to 2009 as cyclone Hamish approached the Queensland coast, when the Pacific Adventurer lost shipping containers overboard that created a huge hole in the hull of the ship and a 60-kilometre oil slick which hit the beaches of the Sunshine Coast—indeed, very close to the minister's electorate. The clean-up bill there was $34 million and, again, the ship had a foreign flag.

About a year later I was the minister when Shen Neng 1 ran aground off Rockhampton. As you are aware, the Australian Maritime Safety Authority do a fantastic job—that is something we can agree on. I flew over the site in an AMSA Dornier aircraft, and you could literally see the channel where the ship should have gone through off the coast and turned. You could see precisely what happened from the air—the ship just kept going. The consequence of that was a hole in the Great Barrier Reef three kilometres long and 250 metres wide.

Just after that I went to New Zealand and looked, along with the New Zealand minister, at the consequences of the disastrous foreign flagged ship that stopped the trade from the major port on the North Island near Auckland for a period of many weeks. AMSA and Australian experts came and assisted in that process. There is something that all of these incidents have in common—they did not have the Australian flag on the back of the ship; they did not have an Australian captain and seafarers who were actually aware of local conditions; they were circumstances that cost a substantial amount of money. The consequences for our environment of these incidents was to be dire indeed

I repeat my offer to the minister to come back and have further debate—if the minister is going to answer these questions, which are very specific, about his legislation. All of my contributions have gone to the detail of the legislation—detail that has not been considered properly by the government. Paul Neville of the National Party, who was one of the architects of this legislation, would be quite shocked by the way in which this legislation is being dealt with. I have one summing up contribution, but if the minister does want to respond to the questions that have been asked now or at a later time, I would ask him to.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (18:09): I am of the understanding that the shadow minister is only going to make one further contribution. There are a number of issues. Firstly, let me go back to the so-called nationality issue. When he asked the question, I was assuming that he was talking in normal terms about what a person's nationality was. I assume, following his subsequent statement, that he was talking about the nationality of the ship. That is dealt with in section 14 of the Navigation Act 2012. That definition applies in all circumstances, including where references are made to matters of that nature in this legislation.

Regarding the question about national interest and the importance of having Australian shipping, I referred to this issue in my opening remarks some hours ago, and I have referred to it subsequently. I agree very strongly. I said similar words to the shadow minister in relation to the importance of Australia having skilled maritime personnel who are able to act as pilots through the Great Barrier Reef and some of the narrow channels that we have around the country, and to be our tug crews and provide maritime services to our nation into the future. I agree that we want more people who have maritime skills in this country. I recognise that there are crossovers of skills from the Navy to the merchant fleet, but also from the sort of people who become our pilots who have usually been captains on vessels and have had some experience around our sea lanes. For that reason it is important that we have a strong and viable shipping industry. I do not think that there is a philosophical difference between the opposition and ourselves on that point. The difference is how we get there. My concerns are that the current arrangements have not worked, and we need to therefore find a better way of dealing with things.

The second issue which he raised concerned the importance of having Australian ships to supply our markets, and he particularly made reference to fuel. I would remind him of my remarks right at the beginning when I quoted from a number of people who raised this very point, and the point that the current arrangements are not serving that objective. Cristal Mining said in their submission to the Senate committee:

The Act, in its current form, puts Australian industry at risk of operational shut downs and possible job losses.

The shadow minister was referring particularly to the petroleum industry. The Australian Institute of Petroleum, who ought to have some authority in the field, said:

The current cumbersome and inflexible regulations impede the efficient operation of domestic refineries and petroleum supply chains around Australia, do not facilitate liquid fuel supply security, and do not advance the objectives of the coastal trading legislation or the local shipping industry.

Here you have people who are directly involved with the supply of petroleum around the country saying the current system is not working, and therefore we have to do better. Fortunately, our waterfront has been relatively peaceful industrially, but there are people around who can remember when it was not like that, and I am not sure that they would have regarded it as being a particularly desirable option to only have Australian ships being able to bring petroleum to this country. We have sometimes needed to have other vessels because of the fact that local people did not want to do the job at the time.

In my remarks, I also refer to the question of the deficiency rate on ships. The shadow minister misquoted me somewhat. I never suggested that foreign ships were better than Australian ships—some will be good and some will be not so good just as some Australian ships are good and some are not so good. The point that I made—an undeniable statistical fact—was that in 2014 the AMSA Port State Control statistics show that the deficiency rate on Australian ships was higher than the deficiency rate on foreign flagged ships. That is probably a coincidence—I sincerely hope that is the case. If not, we have an issue that we really have to seriously address—if there is a systemic problem. I suspect that it was something of a statistical abnormality, but the point that is made by those statistics is that there is no evidence to suggest that foreign flagged vessels have more deficiencies than Australian flagged vessels.

In relation to the Shen Neng, I referred to that also in my earlier remarks and made the observation that that was on an international voyage, not a coastal voyage, and this legislation is not going to affect the international vessels undertaking a voyage of that nature. So, while the case is interesting and important and demonstrates to us why we need to have a high standard of port state control, it does not of itself prove that foreign vessels operating around the Australian shore are going to make any real difference. That is a matter of how effective our port state control is, and certainly the safety and the proper operation of our shipping industry is a key objective of this legislation.

In relation to the wages that are paid, it was the previous government that introduced the modern award part B into the legislation, and we are picking up that system and therefore using the same conditions, pay and arrangements that the previous government thought were acceptable when they introduced that legislation into the parliament. Of course, underpinning all of this is the Maritime Labour Convention, which puts in place minimum standards. I accept that Australian standards are higher than the minimum standards that are laid down by the International Labour Organization member states, but I would also remind you that Paddy Crumlin has been president of that organisation and seemed to be satisfied that those sorts of standards were reasonable for international mariners at that time. I am not advocating that those would be the wage levels that we would set for the workers in Australia, but the reality is that there are some safeguards in place.

Our regulator has proved itself to be efficient and competent in dealing with any vessel that is deficient. When one is hauled up, the union usually have a story about it in the paper the next day, and so the public are well and truly aware when there are foreign vessels in our waters that do not meet appropriate standards. I for one will not stand for vessels that are a danger to our environment or do not provide appropriate working conditions for those on board.

Let me sum up and make it clear where the government's position is. The reality is that Australia as a country makes its own laws, and what has been effective in some places is not effective in other places. What is absolutely clear is that the current arrangements are not working and we need do something better in the future. The shadow minister did indicate a willingness to consider some amendments and improvements to the bill.

Honourable members interjecting—

Mr TRUSS: Well, I am becoming less persuaded about that as the hours go by, but nonetheless I am aware of the fact that this will be an issue that will be dealt with in the Senate. We believe that the fundamental thrust of the legislation is sound. We want more ships, not fewer ships. We want more Australian mariners, not fewer Australian mariners. We want more profitable Australian industries, not less profitable Australian industries. We do not want industries closing in this country and having their products replaced by imported products because the cost of shipping in this country is uncompetitive. We want an industry that works and works well, and the intention of these amendments to the legislation is to achieve those objectives.

Mr ALBANESE (Grayndler) (18:19): First, in response to the definition of Australian nationality, this is what it actually says on page 8 of the legislation:

Item 5 repeals the definitions of acceptable tolerance limits and Australian nationality in subsection 6(1). The new coastal shipping permit … provides a vessel with unrestricted access to coastal shipping, which means the definition of acceptable tolerance limits is no longer required. The definition of Australian nationality is not required as no provisions in the Act refer to Australian nationality.

It is there. It is a free-for-all. There is no limit. Previously you had to define 'acceptable tolerance limits'. You had to define the access that foreign ships had on the coast, because they were restricted. Now what it says is that it is a free for all. You get a permit, you can do what you like and you can pay foreign wage rates. That is what it says. The minister says, 'We want to see more seafarers or more Australian shipping,' but we have quoted very clearly from his own bill. It says:

Australian seafarer jobs would be adversely affected as Australian operators re-flag from the Australian General Register.

Ship operators are likely to replace Australian seafarers … with foreign seafarers …

So the register changes the flag on the back of the ship and the workers change. That is what the legislation says will be the consequence of it.

So do not come in and say, 'We don't want what the act says will happen, but vote for it.' That is absurd. It defies common sense. That is why we are opposed to this legislation. That is why I have said in good faith—and I do so again publicly to the minister—that, if there are improvements to be made, by all means we are prepared to consider them. We fixed the Qantas act, as Alan Joyce reminded the National Press Club today, by amending the legislation in the Senate, and the government responded practically by agreeing with Labor's position, and we got it done in the national interest. This minister did the right thing by opposing Andrew Robb's absurd attack on aviation cabotage, which would have meant the Australian carriers, Qantas and Virgin, departing northern Australia. That is what they said would happen. That is why this minister opposed it. He stood up to his cabinet colleague, and he should stand up for Australian jobs and industry on this, because the Australian shipping sector is saying what will happen, in terms of Maritime Industry Australia Ltd

The sector is saying what will happen. The cruise ship industry is saying what will happen. The legislation itself says what will happen, in the RIS and in the explanatory memorandum. It says that four ships that currently operate from the Tasmanian coast will disappear as Australian flagged ships. It says that, so do not be surprised when it happens. That is why we are opposed to this legislation.

This is Work Choices on water, because it is ideological. According to the legislation, 88 per cent of the savings is the difference between Australian wages and foreign wages. That is what it says in the legislation. We reject it because it is unilateral economic disarmament. I asked the minister very clearly: 'Which of the G20 nations—the United States, the European Union, Indonesia, China, India, Japan—would allow this sort of policy?' The answer to that is: none of them, because they all understand their national interests, and so we should. That is why this minister should withdraw this legislation. That is why the Senate should vote this legislation down, and they should start again with proper consultation. The change of leadership in the government should provide Prime Minister Turnbull with an opportunity to have a common-sense solution. When you have a policy that is opposed by the entire sector (Extension of time granted) and there has not been proper consultation, the legislation should be opposed.

I have very specifically gone through the problems in the legislation, in the explanatory memorandum, in the RIS and in the bill itself before the parliament. I have very clearly indicated that there is a problem with regard to the consequences, and not just from the evidence of the Senate legislation committee. The consequences were very clear from evidence from people like Mr Bill Milby. I have gone through what the act itself says. I have been in this place a long time—

Mr Robert: You have!

Mr ALBANESE: and I will be here for a long time yet. I notice that the member for Berowra is up there. He has been here for more than double the time I have been here. When Work Choices was carried, we pointed out that it was ideological legislation and that it would cause great damage to the national economy. This legislation is just ideology before common-sense and that is why it should be opposed.

The DEPUTY SPEAKER ( Mr Goodenough ): The question is that the bill be agreed to.

Mr Albanese: Can I just indicate that the Deputy Prime Minister has indicated that he has a meeting and, out of deference to him, rather than any indication that the opposition is anything other than totally opposed to this legislation, we will not call a division at this time.

Bill agreed to.

Mr TRUSS (Wide Bay—Deputy Prime Minister and Minister for Infrastructure and Regional Development) (18:26): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr HUTCHINSON (Lyons) (18:28): I thank the member for Grayndler and the minister in attendance for allowing me to speak now. I rise to support the Food Standards Australia New Zealand Amendment (Forum on Food Regulation and Other Measures) Bill 2015. Amendments have been made to this bill by the member for Throsby. There is a sense of deja vu about the way that they have approached what is typical in terms of an outdated view with respect to governance and government appointed bodies. It relies on boards being filled by people based on their positions as opposed to their skill and expertise. From that point of view, the government will not be supporting the amendment moved by the member for Throsby. The decision to change the nomination process for the FSANZ board was not a decision of the minister. This is a very important point. It was a decision of the Australia and New Zealand Ministerial Forum on Food Regulation, which consists of ministers from Victoria, New South Wales, the Northern Territory, South Australia, ACT, Queensland, Western Australia, my home state of Tasmania, the Commonwealth of Australia, and New Zealand.

The member for Throsby might like to reflect on the fact that his Labor colleagues, South Australian minister Jack Snelling, ACT minister Simon Corbell, and Victorian minister Jill Hennessy agreed—not disagreed, but agreed—with the proposed changes. Rather than playing politics with this bill, maybe he should speak to his state colleagues, because I believe that Australians are simply sick of this sort of behaviour. They have had enough of this petty politicking, where there will be some advantage gained or the perception that some advantage will be gained by such activities.

Any changes to this legislation not agreed to by the forum would breach our international obligations under the agreement between the government of Australia and the government of New Zealand, commonly known as the food treaty, concerning a joint food standards system. To date, throughout the process of drafting this bill New Zealand has been consulted and they have agreed to the changes. Therefore, the actions of those on the other side, and in particular the member for Throsby, are nothing more than grandstanding and playing politics on an issue that is actually very important. I will speak further about why it is important to my state of Tasmania.

In regard to Mr Jones's comments around the Health Star Rating, under the leadership of this government we have so far had 54 companies sign up to the Health Star Rating, and there are over 1,500 products already on the shelves. Just this week we have seen two major companies, Kelloggs and Nestle, reformulate their food because of this government's voluntary scheme. Kelloggs reformulated their recipe for Nutri-Grain—I will not be telling my boys that, because they are keen partakers of it—to go from 2 stars to 4 stars. Nestle reformulated 10 of its snacks and muesli bars, reducing salt by 63 per cent, sugar by 32 per cent and fat by 16 per cent.

Mr Jones also misses the point that phase 2 of the education campaign for the Health Star Rating system ran from June to August and used print, online and out-of-home advertising to continue to raise consumer awareness of the Health Star Rating system and to visually reinforce the campaign message of comparing similarly packaged products. Data suggests that 47 per cent of people are highly likely to use the HSR on a regular basis, which is up from 40 per cent in April 2015. Of those who have seen any of the advertising, almost 40 per cent state that they have used the HSR in-store. Thirty per cent have tried to eat healthier. If there is one thing this was meant to do, it was to change behaviour. On the evidence before us that seems to be occurring.

I am particularly pleased to speak on the Food Standards Australia New Zealand Amendment (Forum on Food Regulation and Other Measures) Bill, and the amendments. The bill amends the Food Standards Australia New Zealand Act 1991, the FSANZ Act, to reflect the change of name of the former Australia and New Zealand Food Regulation Ministerial Council to the Australia and New Zealand Ministerial Forum on Food Regulation, and makes amendments relating to the compositional requirements and the appointment processes of the FSANZ board, to which I have alluded, and responded to the amendments that were made by the member for Throsby. It makes other amendments to improve the clarity and operation of this important legislation.

This debate also gives me an opportunity to examine the history of FSANZ's dealings with the application for approval of industrial hemp to be grown for food in Australia. I particularly want to explore why this approval has still not been granted, nearly a decade after the application was first made. It appears to be a case of bureaucratic bungling, some might say—I am on the record publicly as having said that before—which is holding up development of a much needed viable new crop for farmers, like those in my rural and regional electorate of Lyons, in Tasmania. I first raised the subject of industrial hemp not long after being elected to this place. There has been an unacceptably long delay nationally in deciding whether to legalise its cultivation for human consumption. I have made public statements since that time, and as recently as January/February this year, after the forum had met in New Zealand. At that stage producers in my state, in particular, but also in other Australian states and in New Zealand had been campaigning for the development of this industry for more than a decade.

Industrial hemp is already cultivated in Australia, as opposed to medicinal cannabis, just to make that point clear. Industrial hemp is already cultivated in Australia and New Zealand under strict licensing arrangements. It is used to make fibre, textiles, paper and building materials. Members in this place would understand that Tasmania is also the producer of over 40 per cent of the world's legal opiates. From a regulatory point of view, in terms of the dangers that those two products present, I can assure the House that the opiates that are grown in Tasmania are managed very well and are far more dangerous than industrial hemp, which contains very little, if any, active ingredients. The removal of prohibitions on the production of hemp seed and oil products would provide farmers with a greater range of viable markets for a crop that we have known for years grows exceptionally well in the southern regions of Australia and New Zealand.

It would also provide the necessary encouragement to more farmers, who always on the lookout for new opportunities to help make ends meet, to consider growing industrial hemp commercially. I am told that Australia is one of only two countries in the world now who still prohibit the growing of industrial hemp for food consumption. This is against the national backing of the science community and the best advice from leading hemp growers in countries such as Canada. Canada allows the sale and consumption of hemp foods and has done for many years. A licence is required to possess hemp seed or grain to conduct activities such as cultivating, processing, pressing for oil, rendering hemp seed or grain non-viable, importing, exporting and selling—which I think we regard as perfectly reasonable. Food containing hemp is allowed to be sold and consumed in the Netherlands. Italy allows hemp based foods. Austria, Belgium and Germany permit the sale and consumption of hemp foods, hemp oils and so forth. Hemp is cultivated in Canada, as I mentioned, China, Thailand and a number of European countries, in particular France, Germany, Romania and the UK. The levels of THC are negligible at the very most. Canada has allowed the whole range of hemp production from fibre to seeds, including export and import, since 1998.

Back in Australia, FSANZ itself says, in research carried out on its behalf into low-THC hemp as a food, that it has no safety concerns with regard to the consumption of hemp foods. Its concerns are more with the costs of regulation. As I understand it, they related to the decision that came out of the forum in New Zealand around law and order issues, particularly in relation to roadside drug testing. But I make the point again that this is not cannabis; this is industrial hemp that has nil or very, very low levels of THC. The hold-up in Australia and New Zealand joining the rest of the world and legalising the cultivation of hemp for human consumption needs to be addressed by our state and federal health ministers and their bureaucrats.

Last year, I wrote to all the states' health ministers, the responsible federal minister at the time and the Prime Minister, urging them to push for an earlier resolution to this matter than the scheduled next meeting of FSANZ, which was January this year. That was not possible, but I was surprised and, of course, again disappointed that the scheduled January meeting again refused to allow hemp to be grown as a food in Australia and New Zealand. The regulatory body had previously called for more evidence supporting the legalisation of hemp for food consumption as its reason for delaying a positive decision. Concerns were again raised by several FSANZ members that marketing of hemp as a food might send a confused message to consumers about the acceptability and safety of cannabis. It sounds like bureaucratic bungling to me. I found this astounding. The body has received vast amounts of information over many, many years, including scientific evidence about the make-up of the category of hemp to be grown as food, which absolutely refutes any such suggestion. Mr Phil Reader—it is not the first time I have mentioned him in this place—a Tasmanian farmer at Bishopsbourne in my electorate of Lyons, has answered all these questions over and again in the many years that he and his colleagues, such as Pip and Tim Schmidt from Red Hills, on the western side of Deloraine, have been campaigning on this issue.

As I said earlier, many countries around the world have been growing hemp as a food for years and have had no problems. The tragic irony is that we can buy these imported food products here in Australia but cannot buy Australian grown equivalents. Against all this evidence, I can only conclude that this process has been caught up within the department. I am sure we can find a way through.

That is why I support the amendments proposed in the bill as it was moved. I encourage those on the other side: playing politics on this issue is not the point of this and, as I say, frankly, Australians are sick of this. This bill brings about clarity to the operation of FSANZ regulation. It is intended to improve regulatory efficiency and provide greater clarification for business and FSANZ by removing uncertainty and improving consistency in the way in which the regulatory body outlines procedures for consideration of food regulatory measures. That can only help speed up the decision on growing industrial hemp for food consumption that Phil Reader and others have been campaigning for for over a decade.

Mr WYATT (Hasluck—Assistant Minister for Health) (18:42): The hypocrisy of the Labor Party in moving this amendment to the second reading motion is typical of their outdated view on governance, which relies on boards being filled with people based on their positions as opposed to boards appointed based on skills and expertise. The government will not be supporting this amendment. The decision to change the nomination process for the FSANZ board was not a decision of the minister; it was a decision of the Australia and New Zealand Ministerial Forum on Food Regulation, which consists of ministers from Victoria, New South Wales, the Northern Territory, South Australia, the Australian Capital Territory, Queensland, Western Australia, Tasmania, the Commonwealth and New Zealand. The member for Throsby might like to reflect on the fact that his Labor colleagues South Australian minister Jack Snelling, ACT minister Simon Corbell and the Victorian minister Jill Hennessy agreed with the proposed changes. Rather than playing politics with this bill, maybe he should speak to his Labor colleagues.

Any changes to this legislation not agreed to by the forum would breach our international obligations with the New Zealand government under the Agreement between the Government of Australia and the Government of New Zealand concerning a Joint Food Standards System—the food treaty. To date, New Zealand has been consulted and has agreed to changes throughout the process of the drafting of this bill. Again, we see Labor attempting to block this bill even though their Labor state and territory colleagues agreed that the change needed to happen.

In regard to Mr Jones's comments surrounding the Health Star Rating, under the leadership of this government so far we have 54 companies signed up to HSR and over 1,500 products on the shelves. Just this week we have seen two major companies—Kellogg's and Nestle—reformulating their food because of this government's voluntary scheme. Kellogg's reformulated their recipe for Nutri-Grain to go from two stars to four stars. Nestle reformulated 10 of its snack and muesli bars, reducing salt by 63 per cent, sugar by 32 per cent and fat by 16 per cent.

I also make the point to Mr Jones that phase 2 of the education campaign for the Health Star Rating system ran from June to August and used print, online and out-of-home advertising to continue to raise consumer awareness of the HSR system and visually reinforce the campaign message of comparing similarly packaged products. Data suggests that 47 per cent of people are now highly likely to use the HSR on a regular basis, which is up from 40 per cent in April 2015. Of those who have seen any of the advertising, 37 per cent state they have used the HSR in stores and 30 per cent have tried to eat more healthily. Does this seem like the government is trying to undermine the Health Star Rating system? On the contrary, we are successfully implementing and promoting it.

I thank members for their contribution to the debate.

The DEPUTY SPEAKER ( Mr Goodenough ): The question is that the amendment be agreed to.

Question negatived.

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

Question agreed to.

Bill read a second time.

Mr STEPHEN JONES (Throsby) (18:47): by leave—I move amendments (1) and (2) as circulated in my name:

(1) Clause 2, page 2 (table item 4), omit the table item.

(2) Schedule 2, page 21 (line 1) to page 26 (line 13), omit the Schedule.

Labor's amendments, modest but important, delete the proposed changes within the bill to the composition of the board. If the amendments are accepted, the board will continue in its current composition—finely balanced and independent. If you want a reason why it is necessary to retain the independence of the board, you need look no further than the contribution from the member for Lyons. He was passionate but he was ill informed. He criticised the food standards authority, and the unknown bureaucrats who work within the organisation, for knocking off his passionate support—and that of the people he presumably represents—for cannabis which is produced as a food product. I can inform the member for Lyons and the House that the board of FSANZ, and indeed the expert bodies, have referred to the ministerial council propositions which would authorise the production and sale of cannabis for food products within Australia. It was the ministerial council which knocked off this proposal. And that in a nutshell demonstrates the importance of having a proper tension between experts and elected politicians who sit on the ministerial council as opposed to the scientists, the health experts and the industry experts who sit on the board. That demonstrates in a nutshell why that is necessary, because were it not for the scientific expertise and the health expertise of the people on the board that proposition would never have got to the ministerial council. It would have been killed before it got there. It proves in a nutshell why we need to have independent expertise across a range of areas not subject to the appointment and discretion of the minister, whoever he or she may be from day to day. We argue that the current arrangements are serving us well.

The assistant minister argues that somehow in opposing the amendments before the House we will do some damage to our relations with the states and our friends in New Zealand. Nothing could be further from the truth. I say this: we have worked very cooperatively with the Assistant Minister for Health on most matters that have come before this House, and I hope that we are able to do that into the future as well. As an alternative government and when in government, we have also worked cooperatively with state and territory members to the intergovernmental agreement and with New Zealand and with our counterparts on the ministerial council. But we are a sovereign parliament. For the assistant minister to stand there and somehow threaten us and say that we are not entitled to represent our democratic rights and speak against and vote against a proposition that comes before this House when we believe that it is not in the public interest, frankly, is breathtaking.

I say to those members on that side of the House and I say to all government members: do the simple thing. We support 50 per cent of what you are proposing in his legislation. If you agree to our amendments, it will sail through this place, it will sail through the other place and the changes that you propose and claim you really need will be passed into law. But in no contribution that we have heard in the House—not the contribution from the member for Lyons, not the contribution from the minister in her second reading speech, not the contribution from my good friend the parliamentary secretary—have we seen a justification for the provisions that we object to.

What is the evil that they are attempting to address through this legislation? We are as yet ignorant of the malady that they are attempting to redress. We argue that the current provisions have served us well, they should remain settled, and if the government agree to our amendments the bill will sail through this House and the other place and we can get on with the important business of protecting Australians and the food that they eat.

Mr WYATT (Hasluck—Assistant Minister for Health) (18:53): I find it interesting that the member for Throsby's proposition that where states and territories nominate from within their jurisdictions, including New Zealand and those others that I referred to, it is being seen as an appointment by the minister. The jurisdictions, in putting forward membership, select from their systems people with the expertise and knowledge to fulfil the roles required on the board. The minister approves the names that come forward. Minister Ley neither selects them nor interferes with the process that has been established and agreed to. I find it astounding that the member for Throsby thinks that when you have states and territories, the New Zealand government, the Commonwealth and the ministers who represent each of those jurisdictions putting names forward it is interfering with a sovereign process that he refers to in respect of this chamber. That is far from the fact. His amendments disregard each of the jurisdictions who in their own sovereign right have put forward names that they want considered to represent them in all of the deliberations. The protections that he refers to that are diminished by his supposition in fact do not occur. Having been a senior bureaucrat who participated in the FSANZ process out of New South Wales, I know that all of the appointments came at the directions of the relevant agencies and they were respected and considered for both their knowledge and their capacity to contribute to the debates on food security and their brief in respect of the terms that they operate under.

So I challenge the member for Throsby as to what his true purpose is—why is it that he seeks to challenge his Labor colleagues in the states where there are Labor governments and to refute the selection of those they nominate. I think the member for Throsby should give due consideration to the sovereignty of each of the jurisdictions. Again, in their wisdom, they have provided over the years outstanding members to FSANZ and in all of their deliberations I know that they have considered all of the detail required. If they need expertise or expert advice then they seek it from within their jurisdictions and include that advice in all considerations. There is no way that the government will consider what the member for Throsby and those on the other side are proposing, so the amendments that he is putting forward are not supported and are contrary to his own colleagues in the state and territory jurisdictions.

Mr Stephen Jones: They're not bound by them.

Mr WYATT: Whilst you make the comment that they are not bound by them, we respect the integrity of the process—we respect the integrity of the way in which the body itself has come forward with the advice to the minister as to the changes that are required. I think we should respect that integrity because even in terms of the agreement between Australia and New Zealand there is considerable weight given to that agreement and in respect of consideration to even New Zealand's nominees he again seems to question the integrity of their process of appointing the relevant people. I understand that there are other bodies that he might think should be considered in the context of what he is proposing, but the forum will have the opportunity to call upon expert advice, and they will have the opportunity of linking with the relevant government agencies and seeking from them their input into the process. This also enables streamlining so that our food security and the issues the member for Throsby raises are reflected on and deliberated upon by those who have been selected within their jurisdictions. His amendments do not really meet the expectations of the advice we have been given and nor do they reflect the jurisdictions that are part of this process. I hope that he will reconsider his proposition and come on board and support the third reading of the bill.

The DEPUTY SPEAKER ( Mr Goodenough ): The question is that the amendments be agreed to.

Mr WYATT (Hasluck—Assistant Minister for Health) (19:10): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.