Mr COLEMAN (Banks) (12:01): I am very pleased to have the opportunity to speak on this important legislation, the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, which brings in place some very common-sense measures in the governance of superannuation funds. I think it is useful, before getting into the detail of the proposed legislation, to really reflect on what superannuation funds are all about and what is their goal. It seems to me that it is very clear of what the goal of a superannuation fund is—that is, to maximise the returns of investors. It is not overly complex as a goal. It does not matter really whether I am a fireman, a public servant, a lawyer or whatever job that I have; obviously what people who are members of superannuation funds want is for those funds to perform. So it seems to me that it is obvious that the structure of the governance of funds should be focused on maximising their performance.

In the corporate world, when boards are put together, it is customary for people with independent expertise to be appointed to those boards to bring forward their skills, their experience and indeed often their industry experience. A media company might have a number of independent directors and it would be quite typical for those independent directors to have a strong understanding of the media sector and, indeed, that is the case with many independent directors on listed boards.

But we have this curious situation at present—and I suspect this is something that is not widely understood in the Australian population—where industry super funds and corporate super funds, rather than drawing on the broadest possible range of skills in setting up their trustees, who effectively act as board members, have a different rule. The rule is not about bringing in independent expertise to assist in the management of the fund; the rule is basically about ensuring that the trustees represent particular constituencies that might have some interest in the fund. Generally that will be 50 per cent representatives of the employees and 50 per cent representatives of the employers. You may well ask: how can the fact that someone is representative of a particular group be related to their capacity to actually know what is important in managing a superannuation fund?

These are not small funds. We have about $2 trillion in assets under management in the Australian superannuation industry, many funds with tens of billions and more in them. Taking it back to first principles, what would you do? You would say: okay, how do we find people from the broader community with the best possible experience to assist in the management of these funds? The sort of people you would think would be logical would be people that perhaps have managed investment funds themselves or have worked in the funds management industry or who have other areas of related expertise. But that is in fact not how the system works today.

The way the system works today is someone comes along and says: I will represent the workers or I will represent the employer. Frankly, whether it is the employees or the employer, the inadequacy of that structure is very clear because the fact that somebody can represent employees, whether that is as a union representative or in some other role, has absolutely nothing to do with their capacity to manage a superannuation fund. These are completely unrelated skills. Anyone can put their hand up and say: I understand what employees in this sector are interested in and what their issues are and that is great. But how does that skill actually enable you to maximise the returns of a superannuation fund? It seems to me it is a completely separate skill set. The same applies to corporations as well because you might have representatives who are speaking for that corporation but the fact that someone speaks for a particular corporation does not mean that they have got the appropriate skills to actually manage a fund. Again, we are talking very substantial amounts of money here. It seems to me, as a point of principle, it is self-evident that drawing from the widest possible range of expertise is the way to go.

So what this legislation does is to say: rather than having this half-half system—which, as I said before, bears no relationship to the capacity of people to lead a large investment fund—let us at least ensure that just one-third of the directors—trustees, effectively acting as directors—are independent. That is important because the act of appointing independent trustees means that the narrow interests of the corporation or the industry, or, indeed, the employees, are not so paramount as they are today where in fact the only people who are appointed are people who represent one of those two narrow sectional interests. So what this will require funds to do is to say: 'All right; if we've got, say, nine trustees on our board, at least three of them will need to be independent.' It is very, very hard to understand how, on any objective basis, one could oppose that proposition. It is far from a radical proposal to say that one-third of the trustees should be independent. If they are independent then, presumably, the other trustees will be seeking to find independent trustees who have relevant expertise. That can only be a good thing.

It is also good that the legislation will require that the chair of the board is independent. This is pretty much standard practice in corporate Australia of course. You do not want your chair to be too closely associated with the constituent parts of the entity. And it is absolutely right that the chair should be independent.

Funds will still be able to appoint other directors in the other two-thirds. They might choose to represent employees or employers or whoever, but one-third will be required to be independent. Again, it is very, very difficult to understand why those opposite would seek to oppose such a sensible measure.

The support for this concept of independence is widespread across the community. The Financial Systems Inquiry recommended such a change. A quote that I particularly like from the Murray review is:

… it is more important for directors to be independent, skilled and accountable than representative.

In a sense, as I said before, somebody might represent employees in, say, the construction industry, but how is one's capacity to represent employees in the construction industry in any way related to one's capacity to manage tens of billions of dollars in superannuation assets? They are completely unrelated. Having to find one-third of the members as independents will require these boards to look further afield.

Of course, as the Murray review said, as more fund members exercise choice, directors appointed by employer and employee groups are less likely to represent the broader membership of the funds, and of course a lot of these big industry funds might have started out representing a particular industry but now have hundreds of thousands of members from all over Australia. So why should the composition of their boards be so limited?

It was good to see Paul Howes, the prominent former head of the Australian Workers Union speak out in support of these changes. He said:

It has been disappointing to see a knee-jerk reaction against the call for a more independent governance model …

…   …   …

… the evolution of the super industry is important and I can't see anything negative in having more independents on boards.

That is really the essence of it. What could possibly be negative about requiring more independent representatives to be on boards?

As we look at the range of support for these measures, it is extremely widespread. National Seniors is a group that represents many Australians, and they see this measure as a step towards international best practice which will instil greater confidence in Australia's big institutions. The chair of Qantas Superannuation, Anne Ward, has spoken out in favour of these reforms, as have many other people.

So it is a real question as to why anyone, really, would oppose the concept of increasing the independence of the governance of superannuation funds. It is a self-evident proposition that it should be widely supported in this House.

There is another important provision in this bill. Whilst only one-third of directors are required to be independent, the legislation does in fact require boards of funds to report to APRA if a majority of trustees are not independent and to explain why. So it is not required to have a majority of independent directors, but it is required to explain the rationale for not so having. Again, it would have to be a pretty compelling rationale, when you think about it, because what the advocate of that position would have to say is: 'Despite the fact that here in Australia there are thousands of people with immense experience in managing large amounts of money in superannuation funds, infrastructure funds and all sorts of sophisticated investment vehicles, what we have chosen to do is actually not to use them for a majority of our trustees and we have instead decided to appoint some employee representatives,' say, who typically would be union representatives. So it would be, I think, very interesting to see how those funds would justify doing that, because there is no relationship between someone's capacity to advocate for employees as a union representative and their capacity to manage tens or hundreds of billions of dollars. I think that point is self-evident. You do not say: 'Someone is a strong employee advocate through a trade union so, therefore, let's make them the CEO of the company.' You do not say: 'They're great at advocating in industrial disputes so, therefore, let's appoint them to the board of the Commonwealth Bank.' As a general principle, you will apply skills where they are most useful.

We have a very odd situation in this sector that I suspect is unique in the composition of boards in pretty much any aspect of the Australian economy. Rather than looking at the underlying skills of the individuals involved, we look at their capacity to represent a particular constituency. Of course, company boards are not structured in that way. People are appointed for their capacity to act in the best interests of the company and there is a strong emphasis on independent directors. There is a lot of skill out there. We are fortunate in Australia to have such a strong financial services sector. Our superannuation system is one of the largest in the world. As a nation I think it is fair to say that we punch above our weight in financial services. Indeed, the financial services sector, as we look at the changes in digital disruption, presents immense opportunities for Australia.

This is not an area in which we lack expertise as a nation; this is an area where, along with agriculture, resources and one or two other sectors, we have a disproportionately strong position. We have lots of expertise to draw upon. This legislation says, 'Fund, we're going to require you to draw upon that expertise for at least one third of your trustees and we're also going to require you to have a chair who doesn't represent the narrow sectional interests of one particular group but represents all members who are part of this fund and has the primary overarching goal of maximising the returns of the fund.' It is very simple, straightforward legislation. It is, frankly, overdue and I commend it to the House.

Mr WATTS (Gellibrand) (12:16): I rise to oppose the Superannuation Legislation Amendment (Trustee Governance) Bill 2015. At its core, this bill is proof that nothing has changed amongst those opposite. The Liberals may have overthrown their former Prime Minister, but bills like this show that the underlying fundamentals of the government, the rotten policies that caused the public unrest that triggered the spilling of the Prime Minister, remain. This bill is ideologically driven. I noted the comments of the previous speaker, repeatedly emphasising that what is really important amongst super fund board members is not who they represent or what their background is but their capacity, skills and experience. It is the skills and expertise that board members bring, not their representation or their background. But that is not what this bill is about. This bill does not require specific skillsets or expertise. It prohibits certain classes of people from forming a component of boards.

This bill is really all about dismantling the government's model of the highest performing superannuation funds in Australia: industry funds. So many Australians choose industry funds to save for their retirement. The Superannuation Legislation Amendment (Trustee Governance) Bill makes amendments to the Superannuation Industry (Supervision) Act to require trustees of registrable superannuation entities to have a minimum of one third independent directors and an independent chair on their boards. Schedule 2 amends the Governance of Australian Government Superannuation Schemes Act. It will restructure the trustee board for the Australian government's main civilian and military superannuation schemes, the Commonwealth Superannuation Corporation board, to comply with these new governance requirements. The bill seeks to amend the definition of 'independent' in a way that all but denies employee representation on industry boards within that definition. This is specifically the case with independence of association from trade unions, where a trustee would not be eligible if they had had an association with a trade union within the last three years. Further, the bill proposes a process whereby the Australian Potential Regulation Authority, APRA, can assess whether a person is independent, regardless of the definition and regardless of whether an individual has met that statutory definition.

The small print on what constitutes an 'independent' person muddies the waters even more. The pages of this bill that seek to characterise what it is to be independent make one thing clear: this bill wants to eliminate from their boards officials of trade unions representing people who invest in these funds. From a corporate governance perspective, 'independent' traditionally refers to independence from the management of the company. This bill changes that. For industry funds, third, the common trustee framework is for there to be an equal number of employer and union appointed members. This does not mean that so-called 'independent' trustees are not eligible to join these boards. In fact, a review of industry funds shows that around half of the major industry funds have at least one independent trustee on their boards.

The equal representation between employers and employees is a strong and effective governance arrangement that promotes transparency, accountability and appropriate risk management. This bill would seek to remove this central pillar of industry super governance and replace it with an inferior model. The bill is not proposing the replacement of the fifty-fifty split with a third, a third, a third model—one third of boards being made up of independent trustees; rather, the government is proposing that the boards be made up of at least a third independent appointees and then nothing. There are no mandated levels of employer and employee representatives. We have strongly opposed the repealing of the guarantee of employer and employee representation, a governance structure that has worked well for decades. Contrary to the proposed aim of this bill, removing these employee voices from super boards will weaken accountability and transparency.

Industry super funds are run as not-for-profits, meaning that they are run solely to benefit members. They were created in the 1980s to protect workers' superannuation from the high-fee and commission funds that were originally set up to cater for white-collar workers' retirement. Industry super funds do not pay commissions to their staff or financial advisers or planners. They are designed and structured to benefit members. The boards of representative trustees are generally required to make decisions by a two-thirds majority, making them risk averse. There is a particular regard and reverence for workers' retirement savings that comes strongly through the trade union movement. When you have worked your life as a representative and, indeed, as a trustee of the interests of workers, you learn a very healthy respect for that money. The boards of industry super funds are generally considered to be more focused on long-term growth, investing large amounts in infrastructure and long-term investments and benefiting their members indirectly through sustained economic growth as well.

Their governance structures mandate boards that have both employer and employee representation. This is in contrast to retail funds, which, unlike industry funds, use superannuation funds to create profit, which is then returned to their shareholders, not the fund members. While they regularly make significant profits, that money benefits shareholders and not necessarily the fund members. Indeed, over the last 10 years the average retail super fund has delivered $16,000 less to their members than the average industry super fund, despite their often significant profits. They are able to make significant profits because they are inherently more speculative than industry funds.

The chief economist for Industry Super Australia, Stephen Anthony, argues that the culture of deep and long-term investment in infrastructure, brought on by the representative governance models of industry super funds, has had a positive and lasting impact on the economy. Stephen Anthony cites APRA statistics from March this year saying that industry super funds held an average seven per cent of their investments in infrastructure, and 20 per cent in unlisted equities overall, compared to one per cent in infrastructure and three per cent in unlisted equities overall for retail funds.

In 2014, the McKell Institute released a report titled The success of representative governance on superannuation boards. This report found that the available evidence shows a strong relationship between non-for-profit governance and a higher return for members. A 2012 Productivity Commission report into default superannuation funds found:

… there is a lack of compelling evidence to suggest that any one model of board structure should be viewed as clearly preferable in all cases.

Contrary to what the government is suggesting, and contrary to what those opposite are suggesting in their contributions in this chamber, there is already stringent governance oversight of all superannuation funds. In 2013, under the then Labor government, governance obligations were introduced requiring all funds to regularly evaluate, through a third party, the effectiveness of their board and directors. This includes disclosures of conflicts of interest, and ensuring directors are fit and able to adequately make the decisions that are expected of them.

The prudential regulator, APRA, has significant enforcement powers to ensure these governance practices are enforced. APRA also has the power to set and supervise the funds to ensure they meet the financial promises they keep. To ensure directors meet the skills and have the experience to make informed decisions, APRA funds are required to report on the makeup of their boards. This is the nub of what the previous speaker was talking about. But this bill does not go to that. It fixes a non-existent problem.

Currently, boards are also required to conduct ongoing performance reviews. These requirements, many set or updated in 2013, should be given further time to be fully bedded down and implemented. They should also be reviewed to assess their effectiveness, before we introduce another change in legislation.

The bill wants to give further, unprecedented powers to APRA, including the ability to determine whether or not a person is sufficiently independent, even after they have met the statutory definition. In short, this bill is about ideology, not evidence. It is huge government overreach and it is aimed at reducing employee and union voices in super funds. That is the only objective of this legislation.

In Australia, at June 2015, superannuation assets totalled just over $2 trillion. It is a staggering amount of money, which must be carefully managed. However, this bill does nothing to enforce stricter standards amongst directors, only to mandate quotas that will see qualified and capable people prevented from joining super funds because of their background. If the government were serious about implementing stricter standards for trustees, this would be a very different conversation. However, removing employee and employer representation on boards does not constitute a change in behaviour, only an attempt to weaken representation.

Independence is a method of achieving good governance, not an end in itself. Currently, the ends are higher returns and trustees who act in the interests of fund members. These objectives clearly are being met at present. This government cannot be trusted to make decisions about superannuation, because deep down the Liberals simply do not believe in it and do not value it. The last two Liberal prime ministers distained superannuation. John Howard infamously called it a 'job killer'. Tony Abbott called it 'one of the biggest con jobs ever foisted by government on the Australian people'. Last year, the now former Treasurer announced that the scheduled increase of the compulsory superannuation contribution from nine to 12 per cent would have to be postponed, blaming Labor for failing to allow them to keep their election commitments. They also scrapped the low-income superannuation contribution, a policy targeted at helping the lowest earners in Australia save for their retirement. A similar story can be told about the Howard government, which, after less than six months in office, scrapped the proposed increase in compulsory superannuation from nine to 12 per cent, after running on it as an election promise.

The bill also goes against the mantra of those opposite about red tape reduction. We know this government talks a good game on red tape reduction—we have all seen the cuttingredtape.gov.au marketing site set up by the member for Kooyong. It is a bizarre site—now much neglected and little updated—where the little red line of efficiency savings continues to rise every time the government changes the word 'facsimile' to 'fax' in the next round of legislation, but never seems to move backwards every time this government implements regulations that imposes direct costs on industries and businesses.

The bill will add more regulatory burden to industry super funds. The government has already admitted that this added regulatory burden will cost $8.5 million in start-up costs and a further $12.3 million in ongoing costs annually. There will be increased remuneration costs associated with the new governance requirements, as well as other significant costs, including search and engagement costs and legal costs. These costs will have to be absorbed by fund members.

Industry super is a low-cost, low-fee super option. Enforcing costly regulations will have a direct impact of less money for people when they retire. The bill does not come close to meeting its proposed objectives. It is inappropriately heavy handed, forcing a 'one size fits all' approach, regardless of a respective fund's business model or membership. Our super system intentionally provides for alternative governance models, which has delivered undeniable benefits for competition since their implementation.

Industry super funds are popular because they have both employer and employee representation on their boards. It is a system that has worked for decades. It does not make sense to abandon the industry fund model of equal representation when it has worked so well for so long. The bill does not try to implement an additional quota of so-called 'independent' positions on boards, but plans to replace equal representation with a third 'independent', and then leave the rest to open slather. It could have disastrous consequences for industry funds, and for competition in general.

APRA cannot interfere in a bank like the government is proposing it can interfere in industry super funds. Giving power to an authority to decide whether a person is independent even if they comply under the statutory definitions really reveals the government's true intent here. Superannuation trustees are already regulated by corporations law, financial services law, state and territory trustee laws and superannuation industry statutes.

The new Prime Minister told the Australian people that things would be different, but this legislation was proposed, written and prosecuted by the former Prime Minister. It has the former Prime Minister's ideological obsessions written all over it, and its continuation in this parliament gives us a glimpse into the real member for Wentworth—someone who is just as keen to prosecute similar ideological attacks on the union movement as his predecessor.

This is bad legislation—plain and simple. The bill calls for the arbitrary application of government intervention, the removal of employee and employer representation, and illogical quotas. It will do nothing to influence the behaviour or competence of board members; it will only weaken employee representation. People who hoped that a change in leadership would see an end to the government's agenda will be saddened by the Prime Minister's decision to continue with the policies of his predecessor and the prioritisation of short-term ideological objectives over long-term gain for everyday Australian workers. Of the top 50 performing super funds, 19 are industry super funds and only two are retail funds. Of the bottom 50, seven are industry funds and 40 are retail funds.

The facts are there for everyone to see. This is just another coalition attack on not only the trade union movement but the retirement savings of all Australians. That is why Labor will oppose it.

Mr BROUGH (Fisher—Minister for Defence Materiel and Science and Special Minister of State) (12:31): It is always interesting when you have debates on superannuation, because people—both sides, I guess—like to take ownership. It was a Labor government that introduced compulsory superannuation, and former Prime Minister Keating has a lot to be proud of there. But, when it comes to industry funds and retail funds, it always bemuses me that it is a 'them and us' argument when it should not be. We all get the right to choose—or most of us. There are some small sections of society who still do not have the right to choose because of some legacy issues in their particular industries, but, by and large, the Australian community gets to decide who is best to meet their long-term retirement needs by looking after their nest egg in the form of superannuation. It is a very serious issue because, over time, it is the largest investment that we will all make. It will determine the sort of retirement that our families can enjoy and, in doing so, determine whether we will or will not be a burden on the public purse. Of course, our period of retirement is, happily, growing longer. As I get closer and closer to it, it is something that I pay a lot more attention to. As, on average, Australians now live to 80 or 80-plus, people should be looking forward to a post-pensionable age of at least 15 years. Now, with the preservation age being approximately 55 or 56, depending on your date of birth, it could be a considerable period longer.

That brings me to the point and the purpose of the Superannuation Legislation Amendment (Trustee Governance) Bill 2015. It is about the people you entrust—that is the word here. Trustees are entrusted with the care, the management and the investment of your retirement income. For many of us, we almost do it with blind faith; therefore, we expect legislators, people sitting in this place, to make sure that there are safeguards and provisions that are going to protect our nest egg and ensure that it is there when we need it. This is not about one form of fund—retail versus industry—it is about the qualities, the experience, the qualifications and the diversity of the people whom we would seek to have look after our nest egg. That is why this bill is being enacted. It is here to give further assurance that we have that independence—that third-party look-through to ensure that nothing untoward occurs and that the best intellect and experience are brought to bear, along with all of the investment advice that is gathered independently and professionally by the superannuation funds.

When we are talking about a $2 trillion asset, that is a heck of a lot of zeros. We need to say to ourselves, 'Isn't it prudent for the parliament to continue to review the legislation that protects people's assets and retirement income to ensure that we meet community expectations and do everything in our power to give those mums and dads, the workers of Australia, whose superannuation is going into these funds the confidence that their interests are being protected?' Having the existing boards of these organisations look outside for qualified, independent, experienced personnel to add the grunt that they need to their boards to protect that investment is something that we should all applaud.

So you have to ask yourself: why is it that only one side of this House has an issue with genuine independence and agrees that this is strong? I know from personal experience of speaking to industry funds that at least one that I am aware of has independently already taken this step. It has got ahead of the curve and said, 'This is the right and proper thing to do on behalf of our members.' It has reached out to the corporate world, given that diversity to its board and, in doing so, made it a board that can provide more holistic, rounded advice and can protect people's interests.

There is no downside to this. There is no ideological bent on the part of this government. This is about good governance that should underpin the superannuation system, because $2 trillion is a lot of money and it is a big interest that we should all be ensuring that we protect for the long term. I commend the bill to the House. I know that there are other speakers who will add their voices to the debate, but I ask those who come after me to reflect: do we really want independence? What is there to be afraid of with independence? Perhaps you could reach across the aisle and embrace something that is actually good for everyone in Australia who needs their superannuation for their retirement.

Mr HUSIC (Chifley) (12:36): I am keen to take up the invitation from my esteemed colleague opposite, the member for Fisher, to look at some of the issues around, in particular, independent directors on superannuation boards. I do want to make some other remarks in this debate on the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, but, given that the member has extended the invitation to talk about this, I will. When you look at this issue of the value of having independents, you have to put it in the context of the broader reform process, as you call it, that has been launched in this space by this government about the way in which super funds are governed.

If for a moment we had evidence that by changing the ratio of representation on the boards of superannuation funds there would be a distinct lift in return rates or an improvement in the performance of these funds, then I would be all ears to receive that evidence. If there was proof that the post-retirement incomes of those superannuants would be improved by this reform, I would be very keen to see it. But the fact is that there has not been much evidence of that. I have no issue with us having independents on superannuation boards. My issue is that this reform process is not evidence based, that the evidence itself is very light on and that this is more reflective of an ideological determination to not have a particular group of people sit on superannuation boards at the same representation level that they currently do, and that group of people is union officials. That is basically the argument. What is driving this is not evidence; it is ideology. That is a problem for me and it is a problem for others on our side. This is not about improving governance in a way that will reflect in the rate at which the investments held in superannuation funds for the benefit of members will be improved.

This is all about ideology. If you look at it on the evidence, on the basis of facts, the numbers do not lie: industry super is much stronger in performing its job than are retail funds. That is not seeking in any way to besmirch or undermine the value of retail funds or self-managed superannuation funds by any stretch. But, as the saying goes, if something ain't broke, then don't fix it. And the fix here is claiming to improve the way in which these funds are run by putting more independents on. The existence of more independent directors will not of itself improve the running of those funds. There is nothing there to say that. That relies purely on a numerical reflection of the number of independents on a board. There is nothing in this that will improve the quality of decision making by the independents on that board or in fact by the entire board. There is nothing to say that when you put these people on they will, by virtue of their very existence, change the way in which decisions are made on those funds and therefore lift the return rates. There is none of that here.

It will not achieve its stated goal of improving super fund governance. Rather than focusing on the behaviour or the skills of those directors, it will just basically focus, as I said, on the issue of quotas. It will not address any of the governance challenges in superannuation. In fact, if it does change the governance of the most successful super funds—the representative model—it will fail to address the governance issues associated with consumer losses in, for example, the bank and wealth management industry. What does it do, for example—as we have raised questions about in times past—about the way in which banks that might offer superannuation products in a retail capacity might offer a subsidiary product to lure people in, quite separate to super? Maybe they would give them a discount on some of the other products the business uses in the superannuation offering to its employees. It is that type of questionable practice where you sign up to a bank to provide superannuation products to a business's employees but also get a discount on some of the other banking services you use. This is not a decision based on the best interests of the member; this is a decision based on the best interests of the business that is contracting a financial institution or a bank to provide superannuation.

This is simply wrong. You will not hear anyone on that side of the House raise that issue, but it is a serious one. And we are here talking about this bill, which is supposed to improve governance, while these other practices that we know about out there are occurring. But there is no movement whatsoever to look at that. At the moment we have a supervisory system in place through APRA, which is recognised internationally as being very solid and very robust. There have been very few instances of breakdowns in that system around governance within the superannuation space. If they are there, then put forward a regime that will actually deal with it in an evidentiary way, or rely on the evidence itself, to lead to a series of mechanisms that would improve governance.

Again, I come back to the point that this legislation is not based on evidence; it is based on an ideological obsession driven by some of those opposite. I have seen it at play within the House of Representatives Economics Committee when we have had APRA before us and there has been question after question after question about union involvement on the boards of superannuation bodies—trying to pick one little thread here and one bit of string there to see whether it brings down the entire framework and superstructure of superannuation in this country and the way the governance is managed within it. And there is very little evidence to support it. But the evidence is clear: when you look at the returns received by members of industry super funds compared with others, industry super fund members have a reason to have a big smile on their face, because they are getting stronger returns.

We are also being invited to embrace a proposition whereby we will see a massive turnover in director numbers. The cost of changing those directors on superannuation boards is estimated to be fairly significant—and a push for red tape at the desire of the coalition to see this change through, not because of evidence or demonstrated problems in the system; rather, they cannot stand unions and they do not want to see unions involved in superannuation. When it comes superannuation, those opposite see superannuation as the preserve of those on stronger incomes and are working out how to have a post-retirement income scheme that benefits higher income earners.

From my perspective, I am happy with that for higher income earners who have had to manage risk in their lifetime, been involved in senior positions, been involved in companies where their jobs can go at a moment's notice if they make the wrong call or started up their own businesses and have been managing them—I totally get it. But, from my point of view, if we are particularly focused on making sure we have a post-retirement income system that is not heavily dependent on the pension, we need to have a system in place that delivers returns for the bulk of Australian employees not just for one end.

One of the best commitments we have been able to see to the superannuation system is to have the people who represent working Australians—unions—sitting on those boards. It is also broadening their view. This is the other thing too. When union officials sit in a director's role, they are very conscious of the fact they have to make decisions in the best interest of members. Unless there is evidence to demonstrate otherwise, that decisions have been made and a vote taken on those boards that runs counter to the interests of fund members, which there is very little evidence of, those directors put themselves in a serious position. They would be making decisions against members' interests.

For those union officials who sit on boards—in full disclosure, and I have been one of those directors—it certainly does open the breadth of vision about the way business operates in this country. I would have thought that it would be far better to involve people to get a much more holistic view about the nature of our economy and the investment decisions made within it, rather than having a bunch of independent directors—and I can just imagine it will be the same small group of people doing the rounds. It is not like we are creating an industry that will pump out independent directors and it will be easy to make selections to these boards to help in governance arrangements. That will not be the case whatsoever. We are requiring a wholesale change that will require greater costs to be embraced by superannuation funds to change the representational arrangements that exist at the moment—all for ideology, not because evidence dictates that this should be the case. This is a big problem.

So we have had the issue of no evidence. We have had the issue that super funds perform much stronger. We have had the issue that related party arrangements will not deal with this in any shape or form—something left unsaid, unspoken and undealt with by those opposite. We have the issue that this will require a lot more cost to be borne by superannuation funds. When we look overseas, there is no like movement to embrace the type of change that is being foisted on us by this legislation—none whatsoever. In fact, when you look overseas and see, for example, research on American public pensions funds, the proportion of outside trustees has no significant relationship with the excess performance of the funds.

As the member for Rankin and shadow minister has observed, this government have basically said that independent directors are better. Based on international experience, there is absolutely no evidence that that will be the case. If no-one overseas is doing this, if the local funds are performing stronger with a balanced representation between employers, employees or their representatives and independents, if there is no evidence to suggest that they are underperforming relative to retail funds and there is no evidence that this government are serious about tackling some of the other issues that we have concerns about in terms of related party transactions, then you have to ask the question again: why are we doing this, other than for ideology? We should be a lot more responsive and a lot more responsible about how we set policy in this space than what is currently being forced upon this House and ultimately the other place in accepting this legislation.

If we are expecting directors to make decisions that represent the best interests of members, that is certainly not the type of behaviour that is being reflected right here, right now by this government. They are not asking us to make decisions in the best interests of the members of those superannuation funds. They are not asking us to make decisions that will improve the rates of return and therefore the post-retirement incomes of those people being represented. This government are asking us to do something that we would not allow existing board members of funds to do—that is, to make decisions on things other than fact or evidence. They are asking us to make decisions quite contrary to the way that existing directors have to made decisions. They are asking us to make decisions based on their ideology, not on evidence, not on proof, not on the wellbeing of the people being represented. That is the biggest hypocrisy. At its heart, the great hypocrisy of what we are doing here, we are being asked to support legislation that runs counter to a decision-making process that we would require of independent board directors. That is what sticks out in this and it is wrong. For that reason, we raise a series of objections about this bill. It is not about proof; it is about ideology and that is simply wrong.

Mr PERRETT (Moreton) (12:51): I rise to speak on the Superannuation Legislation Amendment (Trustee Governance) Bill 2015—surely a perfect example of the Abbott-Turnbull focus on the past. We can see by the number of speakers opposite lining up to talk about this legislation that it is a dog. The advisers in the adviser's box outnumber government speakers by five to one. This is not a good piece of legislation.

Any time a piece of legislation comes before the chamber we need to ask, 'Why is it here?' Why would you want to change the governance arrangements for industry super funds? I should just explain what industry super funds are for those listening. Industry super funds are where the employer and employee representative groups, mainly unions, of an industry such as the childcare sector, building sector or education sector have come together and said, 'Let's look after our members' financial interests when it comes to retirement.' Industry super funds have a mix of 50 per cent union—that is, employee—representatives and 50 per cent employer representatives. The chair of that board can come from either of those groups.

You might well think that the government has brought on this bill to make governance changes to industry super funds because they have not been performing as well as retail funds. That would be the logical presumption as to why you would bring in this horrible, short-sighted, ideologically motivated and not practical piece of legislation. You might perhaps assume that there have been some issues around the governance of these funds because you have employer groups and employee groups. They are two groups that often have industrial action; you might think they do not get together when it comes to the retirement funds for their members. You would be wrong on both counts.

Do not just listen to me. You can even go and listen to that well-known rabid unionist John Brogden! He represents the peak body for these union funds. Who is John Brogden? He is a former leader of the Liberal Party in New South Wales. So he is not some former union member. He is actually a representative of the right. Industry super funds, as John Brogden will tell you, have consistently outperformed retail funds. Nineteen of the top 50 performing super funds over 10 years are industry super funds. Only two of the top 50 are retail funds. There is no evidence of any governance problems or even performance problems with industry super funds.

I will declare that I am in an industry super fund. I am in QIEC because of my time spent in private school education. At the moment QIEC is chaired by Terry Burke. I should declare that Terry Burke gave me a job many years ago. He is the chair of QIEC who has been outperforming the previous chair of QIEC. Terry Burke works for the Independent Education Union, the union I used to work for. It is a union that looks after private schools around Queensland. They are not usually a hotbed of unionism. Before Terry Burke, who is an employee representative, QIEC was cheered for 20 years by Allan Fazldeen. How does the board make decisions? The chair of the board, Terry Burke or Allan Fazldeen, would look at the majority of views. They always, like any sensible organisation, were able to make decisions in the best interests of their members.

Industry is aware of this, so this bill is a misguided attempt to fix something that is not broken. It could do damage. Industry super funds have had longstanding governance arrangements where 50 per cent of representation is employers and 50 per cent is employees. That is perfectly balanced. And now the government is trying to bring something into the mix that sounds good—'independent'. We all like independence, even on the floor of this chamber. We respect the concept of independence. However, the problem with an independent person on such boards is that they will not be committed to the members. We want our umpires to be independent. We want them to be disinterested and not have an interest either way. They can then make a fair decision. But when you are talking about decisions for your members, be they an employee or an employer, you want someone who is committed to those members and their long-term interests. That is what industry super funds are. This bill is attempting to change that longstanding arrangement and replace it with a bizarre requirement that one-third of the representation on these boards be independent. But, bizarrely, there are no requirements for the remaining two-thirds of these boards. There will be no guarantee that employers or employees will have any representation. This is in a situation where, as I said, 19 out of the top 50 performing super funds have been industry super funds.

There is obviously at play here an agenda of this government. This is another example of the Abbott-Turnbull government where the Prime Minister is not really leading his team; he is following the government's short-sighted agenda. I find it quite incredulous that this government would impose a requirement on industry super funds that would tear down a system of governance that has been the most successful governance model.

Industry superannuation funds enjoy a reputation as having a 'members first' culture. Good employers are passionate about the best returns for their employees. That culture flows from having equal representation. That equal representation model of governance makes industry superannuation funds different to retail funds. There is no doubt about that. But there is also no doubt that industry superannuation funds have been more successful than retail funds. That is the motivation for this legislation, I would suggest.

There is no evidence that any one type of governance is better than others. Justice Owens in his HIH royal commission report—we all remember HIH and how good they were; I think they had balanced governance arrangements—released in 2003 said about governance structures that:

I am not so much concerned with the content of a corporate governance model as with the culture of the organisation to which it attaches … the key to good corporate governance lies in substance, not form.

The financial system inquiry report, when discussing the governance of superannuation funds, said:

… there is little empirical evidence about the relationship between quality of governance in Australian superannuation funds and their performance …

The government is trying to fix something that clearly is not broken.

This bill was introduced to the House on 16 September this year. In the explanatory memorandum it says that the measures in this bill are consistent with the financial system inquiry report's recommendations. That report was released on 7 December 2014. Until this morning there had been no response from the government to that inquiry report. There are 44 recommendations in the report. It is curious that, without having responded to the report, the government thought it was urgent to bring a bill before the parliament to address this one recommendation.

The government make plenty of noise about getting rid of red tape. Because they are starved of a legislative agenda, they have these red tape repeal days where they celebrate hunting down commas and jumping on semicolons and stamping out a couple of brackets or parentheses. This bill is a sneaky attack on unions. That is what this piece of legislation is all about, and it costs money. This bill is actually nothing but red tape. It is setting up the over-regulation of an industry that is already performing well and is well regulated, an industry that has no allegations of scandal or impropriety. There is no rational reason for imposing this mandatory change to governance on industry superannuation funds when they are performing well ahead of retail funds.

The members of industry super funds—like me—are in a much better position to fund their retirements because of the performance of their industry super funds. There is real reform that the government could implement in the superannuation sphere, but the government have no reform agenda and no ticker for reform. They have no ideas about real reform. Yet our retirement income system is badly in need of sensible reform. It is unsustainable under the current arrangements.

Australians deserve to have a comfortable standard of living in retirement. By design, tax concessions are an integral part of the superannuation system. But this great Labor initiative—because, remember, superannuation was an initiative of Labor, working with the unions—was not designed to be a tax haven for wealthy Australians. The financial system inquiry found that 10 percent of Australians receive 38 per cent of Australia's superannuation tax concessions. There are 475 people in Australia with superannuation balances of more than $10 million each. Those people earn tax-free income of $1.5 million each year. That is not a sensible set of arrangements. How can this government continue to hit those who can least afford it—the pensioners, our youth, our schools, our families—when we have our most wealthy earning $1.5 million each year tax free. It is unsustainable and unfair.

Unlike the Abbott-Turnbull government, Labor has a superannuation reform plan. Labor would target superannuation tax concessions to those that need them the most. This is how the superannuation system was designed to be used. It is about providing retirement income for all Australians. Labor's reforms would affect approximately 60,000 superannuation account holders with superannuation balances in excess of $1.5 million. Earnings above $75,000 from those accounts would not be tax free but, instead, would attract the same concessional rate of 15 per cent that applies to earnings in the accumulation phase. Those people would still be very comfortable in their retirement, and good luck to them. However, such a change would make a huge difference to the retirement income system as a whole.

It is estimated that the revenue from Labor's proposed reform would collect $9.2 billion in the first 10 years. I know the Treasurer has been prevaricating in question time, but the reality is that the government does have some revenue challenges. This is sensible reform. It is not unnecessary red tape. It is not motivated by a union-busting agenda. This is the type of reform a good government would deliver. Labor is passionate about the superannuation system. It was a creation of the labour movement. Labor wants it to be sustainable and to deliver the outcome it was designed to deliver: to allow all Australians to fund their comfortable retirement.

This bill does not assist people with their retirement income. In fact, it could do the opposite, as I said in my opening remarks. This bill does not make the superannuation system more sustainable. What this bill does is single out industry superannuation funds—the ones that are working well; the ones that are outperforming retail funds—and tie them in knots with red tape. It is compelling them to change the governance structures that they have had in place for decades and that have been operating with no problems. As I said, with 50-50 employer-employee representation there is balance. These are funds that have members that benefit from the performance.

There is no need for this unnecessary red tape and regulatory burden. There is no need for it and, obviously, like any red tape, it comes with added financial burden. The explanatory memorandum to the bill confirms that this amending legislation will result in $8.5 million in start-up costs and a further $12.3 million annually in ongoing costs. That is $20 million that will be thrown away. That is the sort of excess that would make Kathy Jackson blush. This is a financial cost that will be imposed on industry superannuation funds and will impact on the returns that their members receive. The regulatory burden on the funds will include an obligation to report annually on whether they have a majority of independent directors and, if not, to explain their lack of compliance.

This bill gives unprecedented powers to the Australian Prudential Regulation Authority at a time when industry funds are outperforming their retail equivalents. APRA will have power to determine if a person does not qualify as independent for the purposes of the governance of a fund, even if that person meets the statutory definition. Isn't that a great use of members' money—to pay for someone to investigate whether or not this person is committed to the industry! This power goes further than APRA's powers with respect to banks and insurers.

These measures are unwarranted. They will create unnecessary regulatory burdens on industry super funds. They will create added regulatory costs for industry super funds. They will impact on the returns received by members of the industry superannuation funds. For those reasons and for every sensible reason, I would ask the government representatives opposite to look at this agenda. This is an outdated political agenda linked to the Prime Minister who was knocked off a few weeks back. This is not a sensible, forward thinking government. I think what we have opposite is a Prime Minister who has shackled and welded himself to the Abbott agenda but likes to talk about the future. Here is an opportunity for the new Prime Minister to actually do something positive. Why would any sensible business person look at the empirical data and say, 'We need to bring in extra red tape. We need to slam a $20 million cost on the retail funds'? As I said, 19 of the 50 highest performing super funds over the last 10 years are industry super funds. They have the balance right now. It is 50-50. But every single board member in an industry super fund is committed to that industry. That is the difference. By bringing in this independence they will sabotage that strategic focus. That is why Labor will not be supporting this legislation.

Dr LEIGH (Fraser) (13:06): Labor's position is to oppose the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, as previous opposition speakers have noted. The government is proposing to end more than two decades of successful joint governance by employer and employee nominated fund directors and instead force boards to take on both an independent chair and one-third independent directors. It is passing strange that a so-called liberal party is seeking to mandate how independent investment funds structure their activity, and it is clear, as I will outline in my speech, that the effect of the government's proposals would be to increase administrative costs for funds and thereby drive down member returns. Perhaps we should not be surprised that a so-called liberal party that opposes the use of markets in tackling climate change is again wanting additional red tape when it comes to Australia's superannuation funds. The Mckell Institute has nicely summarised the government's bizarre motivations on the issue by asking: 'When a system is working better than the alternative, why tamper with it?' Alas, I am concerned that this is being driven by ideology and not by evidence.

The superannuation industry now has assets valued at $1.6 trillion, set to increase over the coming decades. The 2010 Super System Review, the Cooper review, estimated that Australian superannuation savings will exceed $6 trillion by 2035. The number of Australians 65 and over seeking to access their retirement savings is expected to double by mid-century. That pool of savings has been important. We have compulsory superannuation because of two benefits that superannuation savings bring to the rest of the community. One is reduced reliance on the age pension. The second is that having a large pool of domestic savings can have benefits for the national economy at times when access to overseas funds is limited. We saw this in the global financial crisis, when Australia's pool of superannuation funds was important for ensuring that certain loan markets did not dry up.

So it is appropriate that we provide some tax concessions to the superannuation sector, although, as Labor has argued, those superannuation tax concessions, in our view, are neither fair nor sustainable. But it is absolutely important that we get our superannuation governance settings right, and it is vital that we are guided in this by evidence and not by ideology. The evidence is clear. The studies show that having more independent directors on boards does not automatically lead to better results.

Mr Laming: It sure helps!

Dr LEIGH: I am afraid it does not, Member for Bowman, and I am happy to go to those studies in a moment for you. Studies show that Australians get higher returns from superannuation funds that are governed by employer and employee nominated fund directors. SuperRatings shows industry funds with employer-employee boards have outperformed retail funds by 1.66 per cent over the past decade. That means, if you are in the average industry fund rather than the average retail fund, your retirement savings are $16,000 higher than if you had been in the average retail equivalent. Multiply that over the course of a working life and you can see someone in an industry fund ending up with retirement earnings which are equivalent to what they would have gotten if they had spent an additional year in the labour market. Put another way, the typical retail fund investor has to work another year to get the retirement savings that the typical industry fund investor gets. And yet we see those opposite, as so often, going into bat for the worst-performing part of the sector.

McKell Institute research found that not-for-profit superannuation funds generate 1.8 per cent higher returns for their members. The institute concludes that not-for-profit superannuation funds allow investors to retire eight years earlier than if they had invested in a for-profit fund—even higher than the one year that I mentioned a moment ago. The McKell Institute concludes:

With superannuation funds, the not-forprofit representative trustee model has outperformed its for-profit appointed trustee competitors on virtually every important criteria of superannuation performance over a long period.

The representative governance model in superannuation has promoted higher levels of diversity amongst trustees, more effectively minimises conflicts and interest and generates higher net returns for fund members.

According to Industry Super Australia, had all superannuation funds had the same returns as these not-for-profit funds, Australian retirement savings would be $88 billion higher than they are today. Over the past financial year, we can look at the top 10 best-performing super funds, and in that list we find eight industry funds and just two retail funds. But, if we push out the time horizon further and we look at the past decade, we find 10 industry funds and no retail funds. This is not just in Australia. Internationally, research on 296 financial firms in 30 countries found that those with more independent directors experienced the worst returns in the global financial crisis. Given the strong performance of the industry superannuation funds, it is not surprising that the former Assistant Treasurer—sorry; we need to clarify that, don't we; we have had three Assistant Treasurers under this government; I meant the member for Kooyong—recently switched his work superannuation from a retail fund to an industry fund.

These changes are going to mean lower returns for members and higher fees and expenses. A research paper by Monica Tan and Marie-Anne Cam from the University of New South Wales found management fees and operating expenses rise with the number of independent trustees sitting on a fund's board. They found that larger boards are linked to higher investment management fees and expenses, operating expenses and trustee and audit fees. In short, a larger number of independent trustees do not benefit superannuation fund members. Studies in the US have found similar results. Tufano and Sevick studied the US mutual fund industry and found that larger boards are linked to higher fees for shareholders due to higher bureaucracy costs. A 2006 review of research on the relationship between chair or board independence in the US mutual fund industry, undertaken by the Office of Economic Analysis of the Securities and Exchange Commission, found:

… no consistent evidence that chair or board independence is associated with lower fees and/or higher returns for fund shareholders …

Importantly, the higher fees and expenses that will result from the government's proposals will be paid for out of members' savings. That means that more independent directors will translate to lower after-fee returns.

The importance of fees has been highlighted by a superannuation report, carried out by the Grattan Institute, that finds no correlation between fees and returns. They argue that the policy and rationale in superannuation governance should be to get fees as low as possible. That was the goal of the former Labor government's MySuper reforms, which targeted getting fees down, because we understood that higher fees eroded post-fee returns.

In order to meet the government's proposed rules, industry funds will have to find and appoint 64 new chairs and bring in 295 new directors. Industry Super estimates this would cost up to $168 million and those higher fees and expenses will be paid for out of members' savings. So much for cutting red tape. If having more independent directors on super-fund boards does not improve returns—and may actually reduce them—why is the Turnbull government so fixed on making this change?

Former New South Wales Liberal Treasurer Peter Collins has referred to these changes as 'designed to damage the current industry super fund model, for no good reason' and 'There is no evidence to support that having a majority of independent directors will give rise to better performance or better governance.' He notes these measures 'totally change the game' and 'The current legislation was never flagged in the previous term of the parliament and represents a very significant departure from what they did propose.' Industry Super Australia CEO David Whiteley criticised the bill for 'dismantling the governance structure of the successful non-profit super sector while not addressing the scandals and underperformance of the bank owned sector'.

What these studies have found is that the most important characteristic of corporate governance is not independence, it is representation. Representative governance is seen, widely, as an important way that corporate governance structures attempt to resolve the collective-action problem of ensuring corporations act in the interests of members and shareholders.

The government's motivation is—as always, in superannuation—purely ideological. The coalition opposed universal superannuation in 1992. In 1996 they came to office promising not to touch the pace of the increases and, then, went ahead and froze them. In 2013 they came to office promising not to slow the rate at which universal superannuation increased but, in 2014, they froze it again. In fact, I cannot recall a single occasion in which coalition members, in this House, have ever cast a vote in favour of superannuation that benefits ordinary Australians.

This ideology does not just apply to their opposition to superannuation. This government has a pathological dislike of unions and wants to weaken the role of unions in every aspect of public life. They do not care that unions play an important role in mitigating wage inequality, in keeping Australians safe at work, ensuring that workers in tough sectors, such as construction and mining, can go home to their families at the end of the day. They are studiously avoiding the very facts that have been outlined in careful academic research, that combined governance of funds by employer and employee representatives delivers the best outcomes for Australia's super savers.

The proposed superannuation governance changes are being driven entirely by prejudice, rather than by evidence. They will cost Australian households thousands of dollars in retirement incomes. Australia's industry super funds do not need drastic governance changes. What they need is a government that is less focused on vendettas and more focused on making sure that all Australians can enjoy a dignified retirement. Our superannuation system is too important to be left to dogma and ideology.

Ms CHESTERS (Bendigo) (13:18): Let us be frank about what this Superannuation Legislation Amendment (Trustee Governance) Bill 2015 is aiming to do. It is about knocking off union representations on industry super boards. It is another attempt by this government to drive through its anti-union anti-worker legislation. This is a government that is a little jealous of how well our industry super funds have performed.

They have performed really well, as we have heard from previous speakers on this side of the House, compared to retail bank owned super funds. Why? People on industry boards are there for one purpose: to ensure that their members get the best possible returns. They are not driven by commissions. They are not driven by shareholders. They are driven by outcomes for their members. That is why industry super funds continue to outperform retail super funds and continue to do so every single year.

Industry super funds was first established in the eighties to protect Australian workers' superannuation from the high fees and commissioned products that were common in the retail superannuation market. There is a reason they were established. It was to ensure that hardworking people got decent super returns when they retired. Industry super funds have never paid commissions or incentives to their own staff or any financial planners. People who work for them do so—like union officials—to ensure that their members get the best outcomes. Industry super funds are run only for the profit of members. They are governed by a trustee board made up of both employers and employer organisations, including representatives from the trade union movement.

Industry super funds aim to provide above-average investment returns to its members while keeping fees as low as possible. They continue to have lower fees than retail funds. Industry super funds are committed to quality long-term infrastructure and building investments, in Australia, because they benefit their members throughout the broader economic growth as well as in healthy investment returns.

Industry super funds have a proven track record of delivering for their members. Why, then, is this government bringing on this reform? If the industry super funds, with their current board make-up, are performing so well, why on earth is this government driving this legislation and trying to force it through the House? Government ministers and backbenchers cannot hide the fact that it is purely for ideological reasons. Perhaps it is jealousy, because their mates in business and big banks cannot match the profits and the amount of returns that industry super funds are making for working people. Perhaps it is the fact that they have a couple of mates who would like one of these cushy board positions. But we know through what other speakers have said and through the facts and the figures that industry super funds continue to deliver for working people.

And we are talking about the people who are our cleaners—the cleaners who clean here at Parliament House and who have a Australian super fund account. We are talking about the people who work as security guards or as early childhood educators, who many years ago through their union fought to establish industry compulsory super. Let us just remember who created compulsory super in this country—it was a Labor government. Workers were asked to give up a pay rise to create the first compulsory super scheme. And they did so. They saw that it was important that they as Australian workers started to put aside for their retirement. That is why today in 2015 we have more and more people able to retire on a part-pension and industry super—the super that they have. That is why in the future we will have more and more people doing that until we get to the stage where super accounts are large enough for the majority of people to retire on that income.

That is, of course, if we keep the current model, where we trust the industry super funds to keep doing what they are doing. But this government wants to take a wrecking ball to that. This government, through these changes, is trying to impose that one-third of directors are independent of employer and employee groups and of union representation. This government, through these reforms, is going to create more red tape and burden on business. These amendments will result in an increase of $8.5 million in start-up costs and a further $12.3 million in ongoing costs. This is annually.

This government likes to talk about abolishing red tape, but when it comes to industry super funds, when it comes to unions and when it comes to Australian workplaces then time and time again in this place we see this government proposing more red tape—more red tape to increase the cost and the burden on Australian workers, Australian workplaces and their employees.

Just take for a moment what those in this government have done in previous years when it comes to super. They tried to introduce choice. They said that employees could have a choice between an industry super fund or another super fund. It did not result in a big uptake by workers switching to a non-industry super fund. That was one of the previous reforms they brought out. I can remember it coming up in workplaces—the choice form. Nine out of 10 still stuck with their industry super fund. Why? It gave a better return.

Time and time again industry super funds deliver a better return, because the people on those boards care. They are the representatives of the low-paid workers—Australian workers. They are the people who have been elected or appointed in their organisations to care about retirement income. That is what superannuation is: it is a worker's wages that have been deferred—compulsory savings for when they retire. But rather than trusting the people who have the best interests of those workers at heart, this government wants to take a wrecking ball to that and impose that one-third of the board be independent. Furthermore, the proposed changes are really vague and fraught with danger. As Justice Owen said, speaking in his capacity as the HIH royal commissioner:

… any attempt to impose governance systems or structures that are overly prescriptive or specific is fraught with danger.

The experts out there are saying that these proposals are fraught with danger and that this extra red tape will create more problems and cost in this sector.

Furthermore, the government's proposed changes to the criteria to meet the definition of 'independence' are very broad and are likely to exclude considerable numbers of qualified and expert people from being independent directors. So who do they have in mind to take up these positions? If the definition of 'independence' is so broad, then how on earth are they going to get the expertise and the qualified people to take up this compulsory one-third of independent directors?

These reforms are about one thing. They are not about independence and they are not about delivering better returns for the people who are members. They are purely and simply about smashing a model that works, a model that was created by previous Labor governments with regard to industry super. This was a model that was driven from the workplace—from employees who said, 'I want to take responsibility. I want to be involved in saving money for my retirement, and I want my union and my industry super fund, through my union rep, to make sure that I have a good retirement income.' That is why we consistently see industry super funds outperforming retail super funds.

Retail super funds—I will just spend a few moments on what is going on in our retail super funds. Unlike industry super funds, banks and insurance companies use their funds to generate corporate profits which return a dividend to shareholders, not to the superannuation policy holders. Big banks are behind the big four retail super funds. These include BT super, which is owned by Westpac; MLC, which is owned by NAB; Colonial First State, which is owned by the Commonwealth Bank; and OnePath which is owned by the ANZ bank.

Whilst the banks which are behind the retail super funds regularly make enormous profits for themselves, over the last 10 years the average retail fund has delivered around $16,000 less to their members than the average industry super fund—$16,000 a year less! That just means one thing: if those superannuants do not have that money—that $16,000 annually—it means that eventually the government might have to pick up the tab through pensions. So rather than empowering these workers to have the kind of financial security that we want them to have, they may rely on a government pension. Or it could mean that there is less money that they are able to spend as disposable income in our economy.

This reform before us today is about red tape—increasing red tape and taking a wrecking ball to what is so critical to retirement incomes. It is not about ensuring that we have independence and transparency. That is just a smokescreen. This is about the government's ideological agenda to smash up unions, to smash up industry super and to tear down a system that is working. Industry super is critical. It is about delivering returns, and the current model is working.

The DEPUTY SPEAKER ( Mr Craig Kelly ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.

Mr CHESTER (Gippsland—Assistant Minister for Defence) (16:11): I ask leave of the House to move a motion to discharge a member from certain committees.

Leave granted.

Mr CHESTER: I move:

That Mr Taylor be discharged from the Standing Committee on Tax and Revenue and the Joint Select Committee on Trade and Investment Growth.

Question agreed to.

Ms CHESTERS (Bendigo) (16:12): As I was saying before debate was adjourned earlier, the Superannuation Legislation Amendment (Trustee Governance) Bill has nothing to do with growing superannuation funds. It has nothing to do with ensuring that hard-working Australians will have increased superannuation. The bill is about red tape. It is about taking a wrecking ball to an industry that is already working well.

Industry super funds in this country already outperform retail funds, and they have done so since their creation. I note, however, that it did not stop the government in question time trying to go after the current leader of the Labor Party. It did not stop them trying to allude to something that happened when Bill Shorten, the current Leader of the Opposition, was involved in industry super. Let us set the record straight about what did happen with the Leader of the Opposition was a director of AustralianSuper, before entering parliament. This is relevant, because, two million Australians, like me, have AustralianSuper funds.

AustralianSuper featured in the 10 top-performing funds every year for a decade, including when Bill Shorten was a director. Overall, AustralianSuper fund is ranked 5th of the 10 top-performing funds for the last 10 years. This is what is relevant to this debate. Industry super funds are already doing a great job ensuring that the working people of Australia have decent retirement incomes. Yet what the government is proposing is to take a wrecking ball to a model that is working—to take away the 50-50 per cent representation and impose this new model of one-third independent directors. That is so loosely defined and gives absolute power to a body to decide what independent is.

AustralianSuper, however, is not the only industry super fund that is performing well. They are in good company. Of the 10 top-performing growth funds for the last 10 years, we also have CareSuper, AustralianSuper, which I have already mentioned, Cbus, QSuper, UniSuper and Hostplus. These are all industry super funds that are doing well for their members. The government's agenda is clear. They want to take a wrecking ball to everything that is associated with the words 'trade unions'. They are not interested in standing up for Australian workers, whether in the workplace or when it comes to their retirement incomes.

The amendments before us are also bad policy because they will impose more red tape in this space. This red tape will result in an extra $8.5 million being imposed on these funds for start-up costs and a further $12.3 million in ongoing costs. The government admits this in its own explanatory memorandum that accompanies this bill. If the government was serious about supporting working people and making sure they had healthy, decent retirement incomes, it would back down on this proposal. It would not proceed with breaking a model that is working. Who are the people at the centre of this? They are who the government has forgotten. They are our cleaners and our security guards—people like John, a security guard from New South Wales, who simply says:

When I get older and reach retirement, I worry if I will … have enough money to support myself and my wife.

He supports industry super funds. He is on track to a good return. The government's plan is just going to smash that dream.

Mr CONROY (Charlton) (16:16): It is a pleasure to follow the member for Bendigo's passionate contribution to this debate in defence of industry super funds and their ability to pick their own boards. I rise to speak on the Superannuation Legislation Amendment (Trustee Governance) Bill 2015. This bill is important because it is an acknowledgement that the superannuation system needs reform. Both sides of politics agree that the system needs reform and is unsustainable in its current format, but the great issue is: what is that reform? The great issue is that the different approaches of the two sides of politics demonstrate the focus, the values and the real core beliefs of those political parties.

There is a clear choice here about how we reform a system that is clearly unsustainable. It is unsustainable because the cost of superannuation tax concessions in this country exceeds $40 billion a year. In a couple of years time, it will exceed the cost of the pension. Currently, 40 per cent of that massive tax concession goes to the 10 per cent of wealthiest Australians in this country. The system is clearly in need of reform. There are two choices here for reform which I will go to in a minute, but I want to talk about why the system is in need of reform. It is in need of reform because of one of the worst decisions that the Howard-Costello government ever made—a decision that, at the time, was pointed to as something that would haunt future governments. Not only is it haunting future governments; it is haunting future generations. It is the decision to make income from superannuation funds tax free for everyone once they reach the age of 60. It was a decision made at the height of a mining boom that was flushed away by Peter Costello in tax cuts. It was a decision that has built a massive structural imbalance into our budget that now the government are trying to confront. They are failing to confront it properly, but they are trying to confront it. It is a burden that a future Labor government will also need to address. That one decision has completely skewed the budget. It is disproportionately skewed, with benefits going to the wealthiest Australians. The current system is something that I know will no longer be there when I retire, because it is clearly unsustainable. It has set generation against generation. It has set baby boomers and the generation preceding baby boomers against gen X and gen Y and whatever we call the next generation after that.

It needs change, and that is why I am proud of Labor's policies in this area. The choice here is between Labor's policy and the coalition's policy. Labor's policy is that, for those over the age of 60, once you earn more than $75,000 in a year from your superannuation, you pay 15 per cent tax on additional income. This is designed to address the issue that, for example, we have 475 Australians in this country who have over $10 million in superannuation and earn, on average, $1½ million a year tax free. The objection from the coalition government is, 'They've earned that superannuation. That has been built up by them selling a business or earning income. That's their own money and they should be able to spend that freely.' No-one is touching their superannuation—I agree with that premise. The issue is that they do not own those concessions. Concessions are tax expenditures. Concessions are a choice by a federal government to give them a tax break. Effectively, the government are robbing taxpayers of that money to award it to those superannuants. It is an area in need of reform.

Why should a retail worker in my electorate—a checkout operator at Cardiff Woolies—pay 19c tax once they have earned their first $18,000 but someone over the age of 60 not pay a single cent in tax on, for example, $1½ million of superannuation income? I submit that it is unsustainable and, more importantly, inequitable. It is saying that that income is different from other incomes and it repudiates a fundamental value of our taxation system that income should be taxed the same regardless of its source. That is the choice of the Labor Party. That is our plan.

Those on the other side, the coalition government, have chosen to go on another path. They have chosen to terminate the low-income superannuation contribution, effectively cutting a superannuation concession to 3.6 million Australians—increasing the tax on super for 3.6 million of our lowest paid workers. That really shows the choices of the coalition government: giving a tax break to our wealthiest Australians while cutting superannuation concessions for 3.6 million Australians. In the area of superannuation, there is a clear choice between the true social justice, egalitarian values of the Labor Party versus the class warfare being practised by the coalition government.

This bill goes further to that choice. This bill goes to how we govern superannuation and what, effectively, is the model for superannuation in this country. The proponents of this change say it is sector blind—it is not attacking one subsector of the industry; it is sector blind, merely providing that a minimum of one-third of the directors on boards of superannuation funds should be independent. But that is not what is happening. This is a clear ideological attack on industry superannuation funds, for a variety of reasons. One is ideology, in that they have always been suspicious of superannuation funds that are owned by the industry itself and that have an employee-employer representation model. So they attack it from an ideological point of view that they do not want employee representatives to have a true say in these bodies. Secondly, it is an attack on the purported links between trade unions and superannuation funds. Thirdly, it is my heartfelt belief that it also reflects trying to do the bidding of people in the retail finance industry who are threatened by industry super funds that constantly outperform them in any sort of measurement in this area.

Let's go to some of the facts of the performance of retail superannuation funds against industry superannuation funds. On the matter of fees, retail superannuation funds, in the past year of data collection, which is the APRA Annual superannuation bulletin of 2013, collected $449 million in fees. Compare that with industry super funds, which collected $88 million. The share of fees collected by retail super funds compared with total fees collected was 82 per cent, yet the share of assets held in retail super funds was only 26 per cent. So, they have 26 per cent of assets under their administration, but they collect 82 per cent of the fees. That is grossly disproportionate, and that is reflected in the fees per member: $7 fees per member in superannuation and industry super funds versus $31 per member in retail funds.

You just have to ask: is this massive fee difference reflected in performance? Well, it is reflected in performance, but not in the way you would expect. In terms of 10-year average annual returns—the return on investment over a 10-year span at an annualised figure—retail superannuation has performed at 4.9 per cent per annum and industry super funds have averaged 6.7 per cent, an almost two per cent difference in performance of superannuation funds going to the low-fee provider. Retail funds charge much higher fees, they manage far fewer assets and they constantly underperform industry super funds and other not-for-profits.

This is not to say that there are not good retail super funds; there are. And it is not to say that every industry super fund sets the world on fire in terms of performance but merely that retail super funds should not be held up as the paragon of governance and performance in this country. In fact, industry super funds should. Not one of the top 47 individual super funds that are in the top league table in terms of performance are retail funds. If you look at payments to related service providers, which goes to conflict of interest, where you have accusations of directors on one super fund directing payments or purchasing services on behalf of their members with a related entity—whether it is insurance, legal advice, financial advice, broking or asset management—with retail super funds the average payment per member to a related service provider is $485; with not-for-profits, of which industry super funds are a subsector, it is $185.

If you are really worried about governance of superannuation funds in this country, you should be looking at the sector that charges more fees, that underperforms the rest of the sector and that charges triple the amount for related service providers, not the other model. But that is not what this bill is about. This bill is about ideology. This bill is about an attack on a coalition government on a bastion of our superannuation system, a bastion of providing decent retirement incomes to low-paid Australian workers, and that is the industry super funds model.

There is a requirement for all superannuation boards to have the right skills mix. They must satisfy APRA that their board, as constituted, has the appropriate skills mix to act in the best interests of their members. There is already a requirement around skills mix that does not need to look at independent directors. APRA already has a responsibility to make sure the boards have that mix. If the government was truly serious about improving superannuation governance it would be encouraging APRA to make sure that boards have the right skills mix, rather than embarking on this ideological crusade around independent directors.

I should note at this point that having independent directors on the boards is not a bad thing. It is to be encouraged. But ultimately it should be up to the boards to decide. Mandating that at least one third of board members must be independent is a silly way of going to this issue. It should be left up to the boards themselves. Many industry super funds have independent directors, and most super funds—and I think all of them in terms of chairs—have independent board members as well. Hostplus, for example, has a third independent directors. But that does not mean you mandate that model for every board. There are significant benefits to having an equal representation model between employers and employees. They bring wisdom. They bring a deep commitment to their members' interests that goes beyond just simple performance of the super fund. And that attitude has informed choices of investment asset allocations that has rewarded those funds in the long term.

For example, typically with industry super funds the board members are very committed to long-term returns. They are not worried about short-term fluctuations in share markets, because their bonuses are not dependent on it. They are not coming out of the banking industry with that short-term mindset. So they have invested more than average on long-term assets, like infrastructure assets, which provide good, stable, long-term returns and can deal with the fluctuations in the share market. That is one of the reasons—besides low fees—that industry superannuation funds consistently outperform retail super funds that chase the quick buck on the share market.

So, the equal representation model works. It provides stability for boards. It provides stability for investment choices. It reflects the outlook of their members. And I would submit that it is actually a much more sustainable model for guarding the trillions of dollars of retirement savings in Australians' superannuation accounts. This is where we really need to focus: what is in the interests of members, what is in the interests of sustainability of a trillion-dollar industry—a trillion-dollar industry started by visionary Labor governments, led by Hawke and Keating and continued in policy announcements of other Labor governments and Labor oppositions. That is what we should be focused on—not narrow ideological attacks, not attacks on union bogeymen, not attacks on the performance of super funds that are doing a good job.

On superannuation, there is a clear policy choice. The coalition government are intent on rewarding high-wealth individuals who have millions of dollars in their superannuation accounts. As recently as yesterday, the coalition rejected our attempts to get a bipartisan approach on reforming taxation concessions that are not sustainable, taxation concessions that are grossly inequitable because they accrue to the top 10 per cent of the wealthiest Australians, that are grossly inequitable and will soon outweigh the pension in terms of cost, that are grossly inequitable that say to a Cardiff Woolies checkout operator, 'We're going to take your income once you have earned 19 grand but someone can have 1½ million in superannuation and we're not going to tax them at all.'

On the Labor side, we stand up for a sustainable superannuation system that is based on treating everyone equally, that is based on giving a dignified retirement to all Australians, that is based on saying that the wealthiest Australians should pay their fair share and that industry super funds have a clear future in this country. The coalition's approach is class warfare, saying that the wealthiest Australians should get a tax break but the 3.6 million low-paid Australian workers deserve to get their tax concessions cut. I proudly reject this bill. I proudly reject what is yet another attack on industry super funds and another attack on the millions of Australians who depend on industry super funds to deliver their retirement incomes.

Ms BRODTMANN (Canberra) (16:30): With all due respect to those proud servants of democracy who are sitting in the advisers' boxes and the hard work they have put in to create and draft this bill, in my view, it is a complete farce. That is why I rise today to join my Labor colleagues in opposing the Superannuation Legislation Amendment (Trustee Governance) Bill 2015. This legislation makes amendments to the SI(S) Act 1993 to enforce super funds to ensure that one-third of directors, including the chairperson, are independent.

Regarding the lack of women on boards, I think we recently received the figures from the ASX on the representation of women, and it is still underdone. I note my colleague did a review of the recent reports of representation on Commonwealth governance boards. Even though there is a target of 40 per cent on those boards, unfortunately, under this government that has slipped. I want to underscore the need for representation of women and diversity more generally on boards.

Labor have a number of concerns with this legislation. First and foremost, it is not needed. It is redundant. It is, in many ways, farcical. There are no issues with super fund governance. I speak from experience here. I do have a strong interest in governance. I am a member of the Joint Committee of Public Accounts and Audit. I used to be deputy chair of that committee. I am a former director of a number of boards in Canberra and I was also a former audit committee member on those boards. I do have a very strong interest in governance and I am always looking at ways to improve governance of private boards, governments boards and not-for-profit boards. I do have a strong interest in governance and I want it to be as best as it can be.

At this stage, there are no issues with super fund governance. The notion that this legislation has been created to address that issue is completely nonsensical. As my colleague the member for Charlton has just mentioned and other colleagues have mentioned, this legislation is purely ideological. On this side of the House, we do not support it for that very reason. It will not achieve its stated goal to improve super fund governance. Rather than focus on the behaviour or skills required of directors, the bill introduces a quota of so-called independent directors based upon the relationships a director may have with the fund or its sponsoring employers and unions. There is no evidence whatsoever to support that having a majority of independent directors will give rise to better performance or better governance. That said, as the member for Charlton has mentioned, if people choose to have independent directors, well and good. If the board chooses to have a mix of independent directors and they deem that that is worthwhile for the board in terms of the culture and behaviour of the board and if they think it is going to end up with a better bottom line, then bring it on. But that should be the decision of the board. It should not be mandated.

Secondly, this bill creates unnecessary red tape for super funds and it is heavy-handed in that process. To those opposite, what happened to reducing red tape? We have had much fanfare from the other side on that. From memory, it is usually in the Autumn sitting that the government come into this place and outline how they are reducing red tape in so many different ways, when quite often it is just about changing a few semicolons and dot points in legislation. If this government are deeply committed to reducing red tape then what are they doing introducing this piece of legislation?

This legislation adopts a heavy-handed, one-size-fits-all approach regardless of the super fund size or the circumstances of its membership. Corporate governance, as we know, is not something where one-size-fits-all. Yes, we do have corporate law that governs that. We have codes of ethics and codes of behaviours through the AICD that help guide directors. In terms of one-size-fits-all, there is broader legislation that does provide some degree of governance, but it really is up to the boards to guide what is best for the organisation. That is especially true in our super system, which has intentionally provided for alternative governance models. This has delivered undeniable benefits for competition over the past two years, and I will speak more on that later.

Labor are also concerned that a considerable number of people who are qualified and experienced to be independent directors will be excluded due to the criteria in this legislation. As I said, the member for Charlton highlighted the fact that a number of boards do decide to bring on independent directors; they do see merit in that. That is a good thing and bring it on. Surely, representative trustee boards and their shareholders are capable of making decisions in the best interests of beneficiaries and it should not be mandated. It should be up to those boards to work out the appropriate decision for the mix on the board in accordance with good governance outcomes, good investment outcomes for superannuation funds and good bottom-line outcomes, should it be a business.

Our final concern with this legislation is that, as I said, it is simply not needed. It is redundant. The existing legislation is only two years old and it provides significant rigor around governance. There is already significant regulatory oversight of superannuation funds. The Australian Prudential Regulation Authority, APRA, has the power to set and supervise compliance with and enforce prudential standards so that funds meet the financial promises they make to beneficiaries. APRA funds are required to continuously report on the composition of their boards and whether boards and individual directors have the required mix of skills and expertise. Boards are also required to conduct ongoing performance reviews, manage conflicts of interest and make sure that directors are fit and proper. This is already happening.

As I said, many of these requirements are new. They were only introduced in July 2013, so they are just over two years old. Further time should be allowed to assess their effectiveness before changing legislation. These are very, very new laws. They are still in many ways, I imagine, being bedded down. So, as I said, this legislation is not needed. It is redundant. There are already enough checks and balances in place to ensure that there is good governance.

The relevant APRA prudential standards are making sure that funds are well governed. This is already out there. This is already in existence. Some of the requirements of SPS 510 require an RSE licensee: to ensure that the chairperson of each board committee that has responsibility for activities related to prudential matters is a director of the RSE licensee; develop and implement a policy on board renewal to ensure that there are succession plans and that they are refreshing constantly; and have procedures for regular assessment of board performance to ensure that the board is achieving what you want it to achieve—that is, the best bottom line or the best investments.

As I said, this is already in existence. The standard requires a remuneration policy that aligns remuneration and risk management and covers all responsible persons of the RSE licensee, excluding approved auditors and actuaries. It requires a board remuneration committee and a board audit committee, each of which is comprised of only non-executive directors. Also required is an internal audit function that can be either operated in-house or provided by an outsourced service provider.

It is also already in existence that you have to make sure that directors are fit and proper. SPS 520 requires the RSE licensee to have a fit and proper policy with certain minimum features, including a process for assessing the fitness and propriety of each responsible person of the licensee and a process for dealing with any responsible persons who are found to be not fit and proper.

Another point is on managing conflicts of interest. This is dealt with in SPS 521. This requires a licensee to develop and implement a conflict management policy that is approved by the board and to develop and maintain up-to-date registers of relevant interests and duties.

Aside from these standards, super funds are also required: to maintain adequate financial resources to address losses from operational risks; to have systems for identifying, assessing, managing, mitigating and monitoring material risks to ensure that all outsourcing arrangements involving material business activities entered into by an RSE licensee be subject to appropriate due diligence, approval and ongoing monitoring; and to implement a whole-of-business approach to business continuity management that is appropriate to the size of the business. It acknowledges that there are businesses with different business models. Super funds are also required to implement a sound investment governance framework and to manage investments in a manner consistent with the interests of beneficiaries. The governance and business operations of super funds are already extensively supervised and extensively governed by that list of requirements I have just outlined.

We, Labor, have proud track record on superannuation. We introduced universal superannuation and we also introduced the compulsory superannuation guarantee. Superannuation is part of Labor's DNA. We created it. We are always looking for ways to improve it and to ensure that Australians enjoy a comfortable retirement. I am particularly concerned about women, because they are way behind the eight ball with where they are at with their super when they retire. Super has been part of our DNA. We introduced superannuation. We introduced the compulsory superannuation guarantee. We are the party that wants to ensure that Australians retire comfortably.

That is in contrast to those opposite. Those opposite never believed in a universal superannuation scheme. They opposed the creation of superannuation. They opposed every increase to the compulsory superannuation guarantee, and they are opposed to industry superannuation. That is where we arrive. That is the nub of this issue—industry superannuation. Their opposition to industry super is purely ideological.

This legislation attacks a model that is clearly working. It seeks to change the representative model of governance of industry super funds which can only be called successful. Every single year, industry super funds are the most successful and highest performing funds in the sector. The numbers prove it. The average performance of industry funds for the year was 10.2 per cent compared to 9.6 per cent for retail funds. As the member for Bendigo said earlier, nine out of 10 industry super fund members have expressed satisfaction with their super fund.

I want to go to Money magazine. It is something I subscribed to when I set up my own small business. When you set up your own business you have to make your own contributions. There is no-one making a co-contribution. I went to my financial adviser and she told me how much I needed to put in to reach my superannuation target for my retirement. Then I had to go about the business of working out the best super fund to invest in. I turned to Money magazine. The beauty of Money magazine is that at the back of every edition is this thing called 'databank'. It has your guide to super data. I will go to the October edition. It lists the best super funds and balanced options, which is what most people default to. I will go through the top 10. No 1. is Telstra Super, which is a corporate fund. Then we have UniSuper, which is an industry fund. Then there is AustralianSuper, which is an industry fund. Then there is CareSuper, which is an industry fund, Hostplus, which is an industry fund, REST, which is an industry fund, Equip, which is an industry fund, Kinetic Super, which is an industry fund, Cbus, which is an industry fund, HESTA, which is an industry fund, and AustSafe, which is an industry fund. Of the top 11 balanced super funds nominated by Money magazine, 10 of them are industry funds.

Then, if you want to look at diversified funds, which are also another option for people who want to take a bit more of a risk with their super, we have the top seven here. Hostplus, which is an industry fund, is No. 1. Then we have AustralianSuper industry fund at No. 2 and Statewide Super, an industry fund, at No. 4. We have CareSuper industry fund at No. 5, AustSafe Super industry fund at No. 6 and REST super, which is also an industry fund, whose bond option is No. 7.

In concluding, I again call out this legislation for what it is, which is nothing more than ideology. I have just listed where Money magazine rates industry super funds. In the case of balanced funds, 10 out of the top 11 are all industry super funds. In the case of diversified funds, six out of the top seven are all industry super funds. So, I think that the jury has spoken in terms of their performance. This legislation is nothing more than ideological. The bottom line is that the representative super model is working and does not need to be changed. It is an attack on industry super and I completely oppose it. (Time expired)

Mr BANDT (Melbourne) (16:46): There is a fair bit that we need to discuss in this place and elsewhere about superannuation. We are getting to the point where the cost to the public purse of maintaining the super system is about to overtake the cost of the age pension itself. Given that super was there in the beginning to be a supplement to the age pension system and to take the burden off the public purse, it now turns out that we are on the verge of potentially spending more in tax concessions that we know are going to those who already have a lot of money. It is going to cost us more to keep the super system alive as it currently is framed than it will to keep the age pension alive. So there is a very good argument for saying let's go back to basics and work out whether the super system is doing what it was intended to do, which is to top up the age pension, or whether we need to be looking at some other broader reforms.

The Greens have certainly put some proposals on the table about how super might be reformed with respect to perhaps amending some of the concessional marginal tax rates that exist. There would also be some sense in having a discussion about how the savings in superannuation funds that we have in Australia at the moment, currently worth between $1½ trillion and $2 trillion, could be put to better use. Given that we have such a huge need to invest in key public infrastructure in Australia, we have to ask the question: why aren't we getting more investment in some of that from our super funds and what could we do to open that up? I am not a fan of the measure that some super funds have taken of advocating for asset recycling—that is, flogging off some state assets and letting us and the super funds own them—but there is so much greenfield investment and infrastructure that needs to be built. Surely, that is something that we could turn our minds to. Not being exposed to having to borrow from overseas quite so much would also assist Australia. We could use some of the money that we have here already—that is, people savings—to invest in infrastructure here in Australia. Those measures are not on the table from this government. What is on the table from this government is a bill about governance, and so we have to deal with that.

As the Treasury spokesperson for the Greens, which has a number of members in the Senate, I have not exactly been subject to a sustained lobbying campaign from people saying this bill is very important and must be passed. In that context, we have decided to have a look at the problem ourselves to see whether, in fact, this is a problem that is worthy of this parliament spending its time on and, if so, whether this is the solution. This is something that I and the Greens come to with an inquisitive, open mind, looking at the evidence to see whether it is a problem.

As anyone who looks at the parliamentary register of interest would know, I have money not only in an industry super fund but also in a fossil-fuel-free private fund, Future Super. That is done for varying reasons, including ethical reasons. So we are not coming to this with a particular point of view about the best of setting up funds. But what you see when you look at the evidence is that, first of all, from the point of view of returns, the industry super funds are consistently good and have been so for many, many years. They have been returning funds to members on a not-for-profit basis but with good returns.

But, more importantly, given that this is a bill about governance, when you look at the history of the governance of industry super funds, in particular, but also some across the board, it is difficult to find a big, glaring problem in the governance that somehow requires this parliament's attention. Some have said, 'If it ain't broke, don't fix it.' Perhaps that might be a little bit too glib. In this parliament we should always be vigilant about making sure that when so much money is at stake the governance arrangements for that money are the best ones. We should not necessarily wait for a problem to arise before going and fixing it. But are there any warning signs going off? No-one has come and put any before us.

Are there any reasons to think that the current strong regulation from APRA is somehow inadequate? That really ought to be the question, and I think the government ought to be demonstrating that somehow what APRA is doing at the moment is not good enough and that some structural change to the way superannuation boards are governed is required. It is difficult to see what it is that APRA is supposedly doing wrong at the moment. Indeed, one might say that part of the reason why industry funds and other funds have been able to perform so well over many years is that APRA has been doing its job. That is a conclusion that is available to be drawn on the evidence in front of us at the moment. So I do not think this is a bill where the government has made out a case, nor is there a big public clamour for us to take action.

What makes me sceptical also about why we are spending time on this and whether governance really is a question of concern for the government is that, if you look at what they are doing here and you compare it with what the government did with financial advisers and financial planners, with financial advisers and financial planners they ran the other way. When it came to the private sector and financial planners, the government said: 'In the last parliament, you worked together to put in some protections for consumers that regulated how financial planners behaved. That is a great imposition. People should be able to decide things for themselves. We should let the market rule.' This was despite the scandals—where there was a massive case, with strong evidence, made out that people had lost a lot and that many people had been fleeced and had lost their life savings—despite a crying need there for regulation and despite some very, very basic conflicts of interest that do not exist when you have member-led super funds. There are some very basic conflicts of interest that exist when financial planners get money for selling products to people—from the banks who benefit from the products—whether or not it is in the person's best interest. When I look at what the government has done in the financial planning sector, there is a dissonance with that and what it is trying to do here, which again makes one sceptical about the government's motives and wonder whether the government is really trying to just break open a model that is working so that there is more custom available to the blanks—to be blunt. That seems to be what the government is doing.

As I say, this question of superannuation is something that we as the Greens come to with an open mind and without perhaps the same kinds of vested interests or allegiances that others in this place might have, and yet there has not been a strong case made to us to seek our votes to support this legislation. So, for the reasons that I have just outlined, it is not a bill that we will be able to support here or in the Senate.

There is ample opportunity in this place for us to have a sensible debate about superannuation and to go back to basics and say, as I said at the start, 'Is this system doing what it was designed to do?' I am hopeful that perhaps a change of leadership in the government will open up space for some more sensible debate about that, because I think it is a debate that people are prepared to have. I know the last leadership said that superannuation tax concessions were off the table. They said: 'We're not going to touch them. We're happy to talk about making you pay more to go and see the doctor, but we're not happy to talk about getting rid of super tax breaks for the very wealthy. We're quite happy for those still to be used by some very rich people at the end of their life as, essentially, a tax haven and a way of washing money through it. But we won't talk about that.' Well, I hope that the government does talk about that, because, if the governments puts those things back on the table, then maybe there will not be the suspicion about motivation.

But, at the moment, in the absence of any case being made out, and when you compare what the government is doing here with the complete lack of action about financial planners and the response today to the financial systems inquiry—where, again, the big banks and their financial-planning model are just being given a small pat on the head and being told, 'Look, you might have done something wrong in the past, but, as long as you do a bit more education, it will all be all right'—you do wonder whether this government has at its core the interests of consumers and people who are trying to save or simply the interests of the banks. On the available evidence, you would have to think it is the latter, and, for that reason, we will not be supporting the bill.

Mr BRENDAN O'CONNOR (Gorton) (16:55): I too rise to oppose the Superannuation Legislation Amendment (Trustee Governance) Bill 2015. This bill has, I think, a dishonest motive. The ostensible purpose of the bill as it is drafted is to somehow provide better regulation for superannuation funds—in particular, not-for-profit funds—and supposedly to ensure better regulation and more independent advice, which would lead to better outcomes for members of superannuation funds. Unfortunately for the government, the evidence belies the presumptions that motivate this bill, because, if you look at all the evidence in relation to this matter, you will find that, generally speaking, over the last 20 or more years, the facts are that the not-for-profit industry funds have had better outcomes for members, they have been cheaper and there have been fewer, if any, scandals in relation to those funds when compared with some of the for-profit funds. So it is quite a remarkable proposed piece of legislation, when we are looking to change the governance arrangements for better funds rather than look at and examine more closely some of the deficiencies of other parts of the super industry.

That is of great concern to the opposition. But it comes as no surprise to us, because we know that the government has an ideological predisposition in relation to industry super. It has never supported industry super. The Liberal Party in this place has never, ever voted for, for example, employer contributions to super. It has always, when elected to government, reneged on its earlier commitments to increase the contribution. We had that most recently with the recently disposed of Prime Minister, Tony Abbott, who made a commitment to increase superannuation prior to the election, and, upon election, reneged upon it. Prime Minister Howard had made, before the 1996 election, a commitment to increase the employer contribution, and he reneged upon that when coming into government. So there is a long, long history of enmity towards compulsory super but also, in particular, a keenness by Liberal governments to attack the arrangements for not-for-profit superannuation funds. As I say, this is hard to countenance, given the history. The history is that, over the last many years, the dividends have been better; the scandals, if any, have been fewer—certainly less scandalous than in the for-profit area; and the fees have been lower.

This bill does not achieve its stated goal. The changes will not improve super-fund governance. Rather than focus on the behaviour or skills required of directors, the bill will introduce a quota of so-called independent directors, based upon relationships a director may have with the fund or its sponsoring employers and unions. Drafting has proven problematic and has resulted in a large number of unintended outcomes.

The bill is unnecessary. Two years ago new governance obligations were enacted. These require all funds to regularly evaluate—by using an independent third party—the effectiveness of their board and directors, to manage and disclose conflicts of interest, to ensure all directors are fit, proper and capable of making decisions expected of them, and to regularly review their board-renewal policies. APRA has robust enforcement powers and has admitted that these new requirements are still being bedded down within funds.

The bill is inappropriately heavy-handed. Unlike the regulation of company boards, the bill adopts a heavy-handed one-size-fits-all approach, regardless of the super fund's business model or the circumstances of its membership. The bill does not address the governance challenges of super funds. If enacted, it will change the governance of the most successful super funds, the representative model that applies across the not-for-profit sector, while failing to address the governance issues associated with consumer losses in the scandal-ridden bank and wealth management industry. That is why you have to be sceptical of the government's intentions, in relation to this matter. It seeks to punish the most successful funds and leave alone the funds that have left many of their members worse off. It is unjustifiable for the government to contemplate that.

When you are advocating change to public policy, particularly in a sensitive area like superannuation, there needs to be confidence that the government is doing it in the interest of the beneficiaries—in this case, superannuation funds. There is no evidence to suggest that these policies will, in any way, improve the lot for members of industry funds. If you look internationally, the representative model has been more successful than having a board full of independent directors. If you look at domestic arrangements, the same is true. If you look at the level and degree of regulation of current super funds, there is no reason for the government to be going down this path.

Is this about diminishing the role of employer bodies and unions in industry funds? The answer to that is: unequivocally, yes. This is about diminishing the representative model and, in particular—happy to sacrifice employer bodies, along the way—diminishing the role of unions in superannuation. That in itself is a remarkable thing. In this country, even in the pre-accord years, many of the ideas for the existing super industry emanated from the union movement. In fact, the ideas for striking the accord and intention to deliver on employer contributions to super commenced in about 1986. It did not take effect, by way of parliament, until six years later, but it was driven by the Labor movement to make sure that people who were seeking some security in their retirement would have decent savings.

If you go back to the mid-eighties, the only people who could say they had any adequate superannuation savings were public servants—I would not suggest their conditions were as good as they are now, but they had some security when it came to retirement savings—and managerial staff in the private sector. I know that many blue-collar workers in the private sector had no superannuation, whatsoever, 25 years ago.

The efforts of Labor to make sure we provided access to savings beyond the pension for people retiring has been a 30-year journey. It emanated in the mid-eighties. The federal Labor government joined the ACTU to make submissions, before the Industrial Relations Commission, to have employer contributions inserted into awards. This culminated in 1992 with the first parliamentary enactment providing minimum contributions by employers. Often, these were in lieu of wages. This was to not only build national savings but also to ensure that people who were not making a great deal of money were able to have a reasonable nest egg upon retirement. That has been a 30-year journey.

Throughout that entire journey, there is not one point where the Liberal Party, whether in government or opposition, has supported the advancement of those contributions to millions upon millions of Australian workers. Not one. They did not vote for the 1992 enactment. They did not vote for the increases to employer contributions. Indeed, they attacked the intentions of the then government and, upon election, reneged upon any commitment they had made about increasing that contribution, even though they were quite happy to use it as a commitment—it ended up being a broken promise—in, at least, two elections.

So there is a history of neglect and disregard for universal super retirement savings for Australian workers. And, of course what we see now is that their most interested focus is allowing it to be one which provides enormous concessions for the very well-paid and very high-income superannuants in this country. That seems to be where they focus their intentions. They have abandoned the co-contribution for 3½ million low-paid workers. They have resisted the opposition's efforts to find some bipartisanship on reducing some of these remarkably high concessions to the most fortunate and very high-paid superannuants. It is unfortunate that there has been that divide between the two major parties.

But despite that divide, because it is so popular and because the Australian people warmed so readily to this policy, the government today and the Liberal Party generally have not been able to dismantle it—as they would like to have done. They would like to take a wrecking ball to superannuation generally. They do not like the idea of it; they have never liked the idea of it. That is manifest in every decision they have made with respect to it. But it is so popular that they just have to find another way to affect the benefits that flow on to many millions of workers.

One of the ways they have considered affecting it was to bring in this legislation that will diminish the role of employer bodies and unions sitting on those funds and representing the beneficiaries of those funds. Of course, that is one of the reasons why we cannot support it. And the other, as I have outlined already, is that if we compare the not-for-profit super funds with the for-profit super funds, when it comes to outcomes the evidence shows that the not-for-profit funds have been superior. In some cases, that is by at least a full year's salary more than the for-profit funds.

When it comes down to the fees, we have seen them to be generally lower than those of the for-profit funds. And, of course, when you look at some of the scandals that have happened in our financial sector, they have not involved industry super funds. Unfortunately, they have involved other types of funds. And yet the government has tended to focus its energies and its red tape on industry super funds.

This piece of legislation as proposed is targeting unions and employer bodies ideologically. It wants to smash up what has been the most successful arrangement in so far as representation on boards goes. And, of course, the Assistant Treasurer is very much motivated to take on unions. Like her old boss, Peter Costello, she is from the Dollar Sweets clan. They are really into this sort of stuff!

But the reality is that everyone knows what they are doing. They are trying to attack hardworking people. And they are willing to attack unions to do it because they do not believe in unions or, indeed in this case, in employer bodies governing super funds. This is despite the fact that they have been more beneficial than any other fund that we have seen in this country.

Ms O'DWYER (Higgins—Minister for Small Business and Assistant Treasurer) (17:11): Firstly, I would like to thank those members who have contributed to this debate. The Superannuation Legislation Amendment (Trustee Governance) Bill 2015 will amend the Superannuation Industry (Supervision) Act 1993 to align governance and superannuation more closely with the corporate governance principles applicable to ASX-listed companies.

This will increase the level of independence in the management of superannuation funds and ensure that directors with the best experience and expertise are represented on superannuation trustee boards, enhancing decision making and producing better outcomes for members, whilst minimising the costs to the superannuation industry.

The bill fulfils an election commitment of this government. As a result of this bill, the governance of super fund boards will move from an outdated model that has applied since 1993 to an international-best-practice model whereby at least one-third of directors are independent. Our key objective is to have the best people governing the retirement savings of Australians.

Superannuation balances at over $2 trillion now represent, after the family home, the biggest part of Australian households' net assets, accounting for around 27 per cent of Australian household net wealth. This amount is only going to increase, and by 2040 the size of Australian household superannuation overall balances is estimated to reach around $9 trillion.

Superannuation is a key pillar supporting the retirement incomes of Australian workers. Superannuation represents a long-term investment and, in general, employees cannot access their funds until retirement. Apart from self-managed super funds, Australians rely on others to manage these balances. Only governance arrangements that are international best practice can be appropriate for the management of monies that are paid in a compulsory manner, concessionally taxed, greatly depended upon and invested for long periods of time.

There has been some suggestion from those opposite that there is no reason to change. However, international-best-practice governance involves the presence of independent directors on boards. Independent board members bring different skills and experience, and different expertise. They hold other directors accountable for their conduct, particularly in relation to conflicts of interest. APRA, the prudential regulator of the Australian financial services industry, has a mandate to mitigate systemic risk to the financial sector. One way it does this is by requiring the boards of banking and insurance companies to have a majority of independent directors, as independence helps to ensure that decisions are made in the best interests of the depositors or policyholders.

In APRA's words—in fact, from a speech given just this morning—there is more on the reasons for change:

APRA's long-held view is that independent directors play a very important, positive role on boards … APRA's experience, over many years and across all our industries, is that having at least some independent directors on boards supports sound governance outcomes. Independent directors broaden the skills and capabilities that can be brought to the board table, and improve decision-making by bringing an objective perspective to issues the board considers. They are also well placed to hold other directors accountable for their conduct, particularly in relation to conflicts of interest.

Under ASX corporate governance principles, shareholders of listed companies benefit from governance arrangements with independent directors. For those opposite who are still looking for a reason to change, I remind them that both the Cooper Review into Superannuation in 2010, which was commissioned by the previous Labor government, and the more recent Financial System Inquiry into the financial system in 2014, which was released today with the government's response to the recommendations, concluded that superannuation fund members would benefit from having a greater number of independent directors on fund boards.

This bill will protect the interests of all members of APRA regulated superannuation funds including members of corporate, industry, public sector and retail funds. It will bring the governance arrangements in line with international best practice and require independent directors on their boards. The bill will help ensure that decisions are made in the best interests of members and not in the best interests of others. While the bill will require super fund boards to have a minimum of one-third independent directors and an independent chair on their board, boards will be able to choose to have the remaining two-thirds of their directors split between member and employer representatives if they consider it appropriate.

Despite what those opposite say, the government is in no way preventing funds from enshrining equal representation in their constitutions. Beyond a minimum of one-third independent directors, it is appropriate to leave it to boards to structure themselves in a manner they believe will best serve their members' interests. The existing definition of 'independent' is being replaced because it currently relates only to whether a person is independent of the members and the employers of the fund and does not cover any other relationship. The new definition will look at ownership or structural arrangements relating to the RSE licence as well as the relationship an RSE licencee might have in determining independence. In addition, APRA will be able to determine whether someone is independent or not based on whether they have the ability to exercise independent judgement. This will allow APRA to respond to situations where a person's circumstances and his or her capacity to exercise independent judgement are not clear; for example, where somebody does not meet the technical definition of independence but they have the ability to act independently.

APRA'S determinations are reviewable so someone affected by the decision will be able to ask APRA to reconsider as well as seek a review by the Administrative Appeals Tribunal. This type of power is consistent with other regulators' powers; for example, ASIC can make a declaration that something is not a financial product. There will be a three-year transition period for existing trustees commencing when the legislation receives royal assent.

In addition, the bill will amend the governance of Australian government superannuation schemes at 2011 to restructure the trustee board for the Australian government's main civilian and military superannuation schemes, the Commonwealth Superannuation Corporation, to comply with the new governance requirements by the end of the transition period. The CFC board will comprise a majority of independent directors and the board will be reduced from 11 to nine directors to better align with the principles of governance best practice.

I thank all of those people who have been involved in the various exhaustive consultation processes of these reforms and I commend the bill to the House.

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

Bill read a second time.

Ms O'DWYER (Higgins—Minister for Small Business and Assistant Treasurer) (17:29): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms O'DWYER (Higgins—Minister for Small Business and Assistant Treasurer) (17:30): I move:

That the amendments be agreed to.

Ms ROWLAND (Greenway) (17:30): I rise to support the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 and the amendments that have come back. I note that this has arisen today, whereas the minister issued a media release on the government supporting these provisions a week ago. I am glad we have come here today, a week after the media release was issued, and we are actually dealing with this legislation.

I point out a couple of provisions that are relevant to this matter. Firstly, I note the minister's statement on 13 October included:

The Government has worked with crossbenchers and stakeholders to secure the support of this change to enable protections for small businesses throughout Australia.

The reality is that the government voted against these amendments in the Senate. I am very happy that they have accepted the amendments and they are going to be put through, but it is imperative to recognise that, on some of the key provisions relating to matters such as the threshold levels to which the protections apply, the government voted against them.

I note that the minister liked to point out, in her answer to a question last week, the comments by COSBOA, for example, heralding this bill. I will point out an alternative point of view on that matter. It is a very intelligent one put by Robert Gottliebsen on 14 September in his column. It relates to exactly this issue and is the exact opposite analysis to that provided by the minister on this point. It is instructive to note that Mr Gottliebsen said:

Today in the Senate—

that is, on 14 September—

the ALP and the Greens signalled they would target a big section of small business at the next election. They gave the signal, with the support of most of the independents, by making a significant amendment to the government’s fair contracts legislation.

The government via Senator Mathias Cormann has signalled the Coalition will not support the amendment. In effect, Cormann has turned the government's back on a million people in the small business community.

The history of the Coalition’s betrayal of small business in Australia is very sorry one.

They are not my words, but I will happily echo them; they are the words of Robert Gottliebsen. He talks about the 'promise to extend the fair contracts protections available to consumers into the arena for small businesses'. He says:

In theory, it kept the promise by introducing fair contracts legislation.

But under pressure from the public service, big corporations and franchisers ... it capped the limit to contracts involving less than $100,000. That $100,000 meant almost no small or independent contractors will be covered by the legislation. It was a total breach of promise under the guise of honouring the undertaking.

The ALP, the Greens and most independents amended legislation in the Senate today, lifting the cap to $300,000. A cap at that level will cover most IT, engineering and other independent contractors, including those in the public service. It will also cover small owner-drivers.

I end with this quote from Mr Gottliebsen:

Tony Abbott might have the China free-trade agreement to batter the ALP with but, in the end, the Government’s complete small business betrayal at the behest of its big supporters will be a very valuable weapon in the election.

I raise these matters because they are indeed relevant to some of the issues that have been raised in the financial services inquiry response that has come out today. I note, for example, the amendments that were put forward by the Greens—I give credit where it is due—to increase the threshold from $100,000 to $300,000 for contracts up to 12 months long and from $300,000 to $1 million for contracts greater than 12 months.

I will quote Peter Strong, who is the person whom the minister quoted the other day. Peter Strong, the chief executive of the Council of Small Business Australia, said the government's support for increased thresholds is 'very encouraging'. I quote from him again. He said:

It was a surprise given it was an amendment from the Greens supported by Labor ...

It is important to recognise that, while we have these provisions—which the ALP will support here, just as we supported them in the other place—the issues were pointed out when they originally came up for discussion in the Senate.

I look to the comments of Senator Kim Carr on 14 September. He rightly points out:

Labor senators have received many representations from the business community who have noted their strong concerns about these costs—

he talks about particular costs involved—

along with other substantive issues ... They include ... the $100,000 up-front price threshold for a small business contract ...

He ends by saying:

These are matters that we believe the government has an obligation to take on board.

(Time expired)

Ms O'DWYER (Higgins—Minister for Small Business and Assistant Treasurer) (17:35): While I was listening to the contribution by the member for Greenway, it must be the longest agreement with the government going. We have stood in this place and said that we were not only prepared to legislate unfair contract provisions for small business, extending the consumer protection laws to small businesses, but were also prepared, very happily, to listen to the crossbenchers and to listen and discuss the thresholds with those in other parties. This is a government that is committed to listening but also doing, which is why we are bringing forward this legislation and passing it here today.

The member opposite is part of an opposition that had six years in government to do something for small business and actually put forward the legislation that we will be passing in this place today. Unfortunately, they did not do that, but we have. I am happy to stand here on this side of the table to commend the legislation and commend the amendments to ensure that the more than two million small businesses in this country will be able to take advantage of the provisions that we are making available to them today.

Ms ROWLAND (Greenway) (17:37): The minister might like to talk about these unfair contract provisions and try to assert that Labor did nothing when in government, when in fact it was Labor that introduced a national law to regulate unfair contract terms between individuals, consumers and businesses. This was introduced in 2010 under the reforms underpinning the Australian Consumer Law. While the government might like to conveniently forget that, they also might like to conveniently forget some of the words of Senator Cormann in this very debate. These are his words:

We have said that a certain category of transactions—transactions of up to $100,000 in value for contracts of 12 months or less or up to $250,000 in value for a period of more than 12 months—will come within the scope of this extended protection, which historically has been available only to consumers. We are making that available to small business, consistent with the commitments we made in the lead-up to the last election.

…   …   …

In the end, when you put in this additional regulatory mechanism, you have to draw the line somewhere. We have made judgement, based on consultation, having considered all of the outcomes of that consultation very carefully. … All I would say is that the government is very confident that we have got this right.

Then they ended up voting against these provisions. They come in here today and say that they will support the very things they voted against in the other place.

I am very happy that these provisions are going ahead. They cannot figure out what they are doing. They are still divided over myriad issues to do with big business versus small business and franchises versus employers. Bring back Bruce to give some certainty to this portfolio!

I will point out that we have a government that does not quite know what it is doing here. We know they are having an internal argument about some very key issues that are a very significant concern to the sector, including matters such as reform of competition law. We will let them have all those bun fights internally. But, since the minister rose to speak on this issue and stated they have gotten this right, it is a sorry timeline that has led to this over the last couple of months. I look, for example, at some of the comments of the independent contractors and their peak group, the ICA. It points to the hypocrisy of this government, which likes to talk big on small business but, when it comes to actually making decisions that are in the interest of small businesses, but they have to be dragged kicking and screaming by Labor, the Greens and a number of crossbenchers. I am happy for them to be dragged to this point, but we need to get some facts on the table. Have a look at the views of the independent contractors on 26 August. The ICA said:

Since 2010 ICA has campaigned hard for the unfair contract protections available to consumers to be extended to small business people. The Abbott Coalition promised to do this when in opposition and again repeated the promise on winning government.

The Bill is now in Parliament. Yet we’re opposing it! It’s been sent to a Senate Committee for review. Here’s our detailed submission to the Committee.

Our grounds for opposition?

This part is important:

There’s been a simple ‘trick’ inserted into the Bill: the protections against unfair contracts are limited to contracts under $100,000.

This theme of sneaky behaviour and trickery is one that permeates these comments by the independent contractors. On 2 September they stated:

Politics works like this. You make big election promises. Then, once in government, appear to deliver the promises. But in the detail kill off the promise. The suckers in the electorate won’t notice!

That’s the situation with the Coalition’s key promise to small business people to extend consumer unfair contract protections to them. We expressed our shock last week.

They quote a commentator who is not usually kind to our ilk of politics, Grace Collier. These are Grace Collier's words in TheWeekend Australian:

This bill was supposed to extend some basic rules about commercial contracts (for small businesses) … the government put an exemption in, which pretty much exempts everyone and makes the bill meaningless.

Where has the minister gone? Speaking of trickery, she has left the chamber.

Mr Mitchell: We lost Bruce, too.

Ms ROWLAND: We lost two of them. I hope the member for Mitchell can step up. The ICA website quotes:

A lynch pin of Tony Abbott’s 2013 election campaign was that he would introduce legislation to make standard, non-negotiated contracts fair to the small business person. But his government … is putting through legislation that protects absolutely no one.

It goes on— (Time expired)

Mr CRAIG KELLY (Hughes) (17:42): It was very interesting listening to the member for Greenway, with her new-found enthusiasm for small business. I would ask the member for Greenway: where were you during the last six years of the Labor government when no less than 500,000 jobs were lost in the small business sector? Where was the member for Greenway then? And where was the member for Greenway's new-found enthusiasm for the unfair contracts legislation applying to small business?

Member for Greenway, I can well remember that that was actually a promise of the Labor Party, back in 2007. I remember what happened in the chamber here. Although I was not here I was following it very closely from home. I can remember that the now member for McMahon was rolled by one Craig Emerson. They deceived small business. They promised that they would introduce the unfair contracts legislation and extend it to small business, but when they got into office they rolled back on that promise and never did it.

This government has achieved a lot. I would rate the achievement of this unfair contracts legislation as perhaps the third most important achievement of this coalition government, behind stopping the boats and repealing the carbon tax. The genesis of this goes back to 1997—to the 'finding a balance' inquiry held under the Howard government, where it was recommended that unfair contracts legislation be brought in. For all the great things the Howard government did, unfortunately the recommendation from that committee was watered down and, instead, they extended it only to unconscionable conduct. Over those 17 long years we have seen the unconscionable conduct provision in our Trade Practices Act prove inadequate.

It is important that we give small business in this country, the entrepreneurs of this country, the job creators of this country and the innovators of this country protection if they know they are going to put their own capital on the line, as small businesses normally do. If they go into a market and are exposed to a larger company that is misusing its market power against them and is trying to extort them for unfair rebates, unfair discounts, unfair trading terms, unfair common-law penalties or changing contract terms, we will now have legislation in this country that prohibits that. To those people in small business, this is one of the greatest achievements of this coalition government, something we should be very proud of.

Often we criticise the process of this government, but, in this case, we have to give credit where credit is due. We should give credit to the Senate for raising the threshold to which these contracts apply to $300,000. Personally, I believe that there should have been no threshold limit because this is not about the value of the contract; it is about the imbalance of market power that enables those unfair terms to be put into a contract where that small business, because of the market power, does not have the ability to negotiate fully. Our contract common law has long recognised this. For over a century, we have had provisions against unfair penalties. Where a contract term implies a liquidated damages term and that liquidated damages term is greater than the genuine pre-estimate of the loss, our common law allows our courts to rule that term out and deem it unfair. That common-law provision has no threshold of $300,000.

I welcome the amendments from the Senate. I welcome what it has done. I welcome the way the parliamentary processes have worked. I thank the crossbenchers, who went forward and enabled the raising of that threshold from $100,000 to $300,000. Those crossbenchers should be congratulated on their efforts. Ultimately, it is about the imbalance of power. In our country, we have so many markets that are overly concentrated, where one or two large players have immense bargaining power. This is exactly the type of legislation that we need for our small-business community.

Mr BANDT (Melbourne) (17:47): The Greens secured amendments in the Senate to give the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 some teeth. It is very easy to talk big on business, but then what we find most of the time with the government is that they talk big on small business and then they vote for big business. We have seen it happen time and time again. In the same way that the Nationals come in here and talk up the country and then vote with their city counterparts, the Liberals come in here and talk up small business and then vote for big business.

The bill before the Senate was trying to sneak an election promise under the radar and turn it into a Clayton's election promise. The government was called on it by people like Senator Peter Whish-Wilson, who is a small-business owner and understands what this bill would have meant. He moved amendments in the Senate on behalf of the Greens and we managed to give this bill some teeth and put a meaningful threshold into this bill. What the government wanted to do was be seen to be delivering on an election commitment but do it in a way that would have meant not that many businesses would get the protections from these unfair contract terms. So we moved amendments to lift the threshold and we are very pleased for the Greens to have delivered a win for small business in this bill.

I hope that this House accepts the amendments and gives this bill some teeth so that the unfair contract provisions apply to a greater range of small businesses who need them. Everyone knows that, when it comes to small businesses dealing with big businesses, there is very often an imbalance—an imbalance that, in many ways, is similar to that which workers face when they try to deal with their employers. Small businesses often need some protection when dealing with those larger businesses. We have been able here to deliver some of that protection. Thanks to the Greens, we managed to give this bill the improvements that it needed so that protections will now be available to a range of small businesses across this country.

There is much more that needs to be done because, as I said, the government often talk big on small business but then vote with big business. We have seen it with this bill, which they tried to get through until we called them on it in the Senate and the Greens managed to improve the bill. We saw it when they ran away from the effects test. You talk to many small businesses around this country and they will tell you about the significant power that the supermarkets have. The government have made some noises to people to say, 'We might do something in that area,' but then, when they get the opportunity to do it, they squib on it.

I hope that these amendments are accepted. I hope the government say, 'We are prepared to work with those in the Senate,' who do a bit more than just talk rhetorically about small business but know what it would mean to have some meaningful protections for small business. I hope that this is the beginning of the government saying, 'Maybe there are a range of other protections that we can extend to small businesses as well. Maybe we need to take off the veil of always just supporting big business and actually support small business as well.' This is a set of amendments that the Greens are very proud of and I urge the House in the strongest possible terms to agree to the Senate amendments.

Ms ROWLAND (Greenway) (17:50): In summing up, I note the comments from the member for Melbourne. Labor will be supporting these amendments—and, as I said, I give credit where it is due. I also give credit where it is due to the member for Hughes, who is at least in the chamber for the debate, although I disagree with him on matters such as the effect on unemployment in this country—we have never seen higher levels of unemployment than we do today in Australia—and his arguments about the unfair contract terms in the Australian Consumer Law. Let's remember that these were provisions that Labor brought in. Labor brought in the definition of where contract terms become unfair. It is exactly as he was saying about a significant imbalance in parties' rights and obligations, where provisions were not reasonably necessary to protect the legitimate interests of the party who would be advantaged by that provision and where it would cause detriment, whether financial or not, to a party who applied or relied on these provisions. These were all Labor amendments that were brought in for the reason of protecting small businesses.

As I said, I will give credit to the member for Hughes. I went through his speech in this place from 17 August. I note that he talks about the threshold—firstly, the business can only have fewer than 20 persons by headcount, and the consideration that the contract has disclosed must not exceed $100,000, or $250,000 if it is more than one year in duration. He did make the point that these are debatable provisions, and he repeated some of the words he said just then. I also would concur with him on the relative ineffectiveness compared with the promise of the provisions in relation to unconscionable conduct in small business that arose out of the Bruce Baird review, which went on for some time. The provisions that were enacted then, under the Howard government, were touted as having the ability to solve many of the problems that this very bill is seeking to address now.

It is quite clear that those provisions either were not adequate or, as I have argued previously, have not had the opportunity to be litigated to a significant extent to determine whether they are effective in practice. So, I will give the member for Hughes credit where it is due. What I will not give credit for is some of the misinformation that has been coming out—and, again, the independent contractors have used words such as 'trickery'. In this quote from 11 September, in relation to this very issue, Independent Contractors Australia noted:

The Abbott government is engaging in the worst of political double-dealing against the interests of Australians—

with their refusal to budge on the issue of the thresholds and the amendments. ICA said further, on 17 September, in terms of the contract protection threshold limits being increased to $300,000:

In fact, its (Senate) amendment to move the contract protection limit to $300,000 was based on a pragmatic assessment (by the Senate) of what the government might accept. We wanted no limit, so we didn’t get what we wanted, but the Senate outcome is a big improvement.

Amazingly, the government rejected this outright.

As I said, Labor supports these provisions. It is a bit rich for the small business minister to come in here and talk—and also put out a media release a week ago—about how this government had delivered for small business. They did have to come here, after voting against these provisions in the Senate. We are pleased that these amendments are coming back here and will be supported—it looks like they will be supported unanimously—because ultimately this is about addressing not only the asymmetry of information but also the power imbalance that inherently exists between big interests and small interests. We know that a majority of Australian small businesses are sole traders. They do not have any employees. These are people who rely on their own judgements, on their own assessments, and in many cases cannot afford the complex legal advice that is so readily available to big business. So, I endorse the amendments that have come before us here, and Labor will, as I said, be voting in support.

Mr CRAIG KELLY (Hughes) (17:55): This is a very, very rare day, because I actually find myself in agreement with the member for Melbourne that the threshold should be increased. Who knows: the member for Melbourne and I might find a piece of artwork somewhere in Parliament House that we agree is something we both enjoy!

But to return to some of the points I raised before—that the genesis of the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 goes back to the Finding a balance inquiry back in 1997—I would like to read some of the notes of that report. It said:

Unfair conduct by big business towards small business is one such major concern. Indeed, it has been a matter of grave concern for many years. Not only has such conduct the potential to impact heavily on the economic health of the small business sector, and on the allocation of resources generally, it can also involve heavy social costs. Consequently, the Minister for Small Business, the Hon. Geoff Prosser MP, asked the House of Representatives Standing Committee on Industry, Science and Technology to investigate and report on business conduct on 26 June 1996.

—almost 20 years ago—

After a detailed investigation the Committee has concluded that concerns about unfair business conduct towards small business are justified, and should be addressed urgently.

In fact, the very first recommendation of that inquiry—recommendation 1.1—back in 1997 was:

The Committee recommends that the Australian Competition and Consumer Commission be proactive in promoting compliance with the proposed new unfair conduct provisions of the Trade Practices Act 1974.

That was 18 years ago. Today, this coalition government delivers on that promise and has achieved that goal for small business—something that was 18 years in the making.

Robert Gottliebsen, the business commentator, has said of this provision:

It was probably the best employment generating measure that we have seen out of Canberra in a decade or so.

And he is correct, because it is small business that creates the new jobs in this economy. It always has and it always will. If we are going to encourage entrepreneurial activity in this country, we have to say that we are going to stand behind those small business people and not allow them to be exposed to the misuse of market power and the imposition of unfair contract terms by large companies. And that is what we are doing in this parliament today.

It has been refreshing to hear the new Labor small business shadow minister talk about her support for small business, although I am looking to see what the Labor Party proposes to do about section 46 of the Trade Practices Act. Will they further stand with the small business community? Will they work with the government and introduce provisions on anticompetitive price discrimination, to strengthen those provisions we have on predatory pricing, to give the ACCC the resources and encouragement to go after them? I would hope that the new shadow small business minister does so, but I do have a concern that this may not happen.

There was a book written a few years ago called The Latham Diaries, in which former Labor leader Mark Latham sets out why we could never expect the Labor Party to join hands with us and work on section 46. Here is a quote from The Latham Diaries:

Monday, 3 November (2003)

My submission to Shadow Ministry this morning on competition policy – to beef up the Trade Practices Act—

This is Mark Latham speaking about himself—

met with surprising resistance from Tanner—

Lindsay Tanner.

How’s this from the intellectual spearhead of the Labor left? He says we shouldn’t touch the supermarket duopoly between Coles and Woolworths because they have an agreement with the SDA, the Shoppies. This is the bloke who made his name in the 1980s by winning control of the Clerk’s Union of Victoria from the Groupers. Now he’s defending their sweetheart deal with the bosses.”

Latham goes on in his notes in his book:

… The SDA had an agreement with Coles and Woolworths to maintain unionised workplaces. Inside the ALP the Shoppies have lobbied to protect the market share of Coles and Woolworths against competition from independent grocers and retailers.

This is an extract from page 241 from The Latham Diaries. (Time expired)

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

Question agreed to.

Ms MACKLIN (Jagajaga) (18:00): I rise to support the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015. This bill introduces a 2015 budget measure that will ensure children fully meet immunisation requirements before their families can access childcare benefit, childcare rebate or the family tax benefit part A supplement. The commencement date for this measure is 1 January 2016. This builds on important changes to family payments that were made by Labor in government that were designed to lift immunisation rates. We linked the family tax benefit end-of-year supplements to immunisations. Ahead of the 2013 election, Labor committed to further tighten immunisation requirements within the family payments system.

Let me say very clearly, Labor strongly believe in vaccinations. And we are pleased that the government is now taking this initiative. Labor are committed to strengthening immunisation rates so all Australian children have the best chance of growing up strong and healthy. Vaccines are arguably one of the most successful public health policies in human history. The mere fact that we can talk about terrible diseases like polio and smallpox as if they are some artefact of history is a testament to the success of vaccines.

According to the World Health Organization, immunisation averts an estimated 2.5 million child deaths a year. The Centers for Disease Control and Prevention estimate that vaccinations will prevent more than 21 million hospitalisations and more than 730,000 deaths among children born in the last 20 years in the United States alone. Of course, there are risks of side effects in some instances, but the science is very clear. The benefits far outweigh the risks. Vaccines work. It means less disease. It means healthier people in our communities. It means longer life expectancy for our citizens.

Higher rates of immunisations are vital for infant children who are too young to be vaccinated as well as for the elderly and sick who may be too frail to be vaccinated. High rates of immunisations are also vital to people for whom a vaccine may not produce a strong immune response. These vulnerable people in our community are generally protected from preventable diseases by what is called 'herd immunity'. This is where a large vaccinated population protect those who are weak or susceptible to disease. That is why it is so important that we maintain and encourage high rates of immunisation across the country. Just to give one example.

In December 2014, some 117 people caught measles in an outbreak that was traced back to Disney theme parks in Orange County in California. Fortunately, no-one died in the outbreak. But it could have been much worse. Measles is a dangerous and highly contagious disease. According to the World Health Organization in 1980, before widespread vaccination, measles caused an estimated 2.6 million deaths each year. In 2013, the number of deaths from measles had fallen to around 145,000. The evidence is compelling. Vaccines save lives. Falling immunisations rates increase the risk of outbreaks of preventable diseases and threaten the health of the most vulnerable members of our communities. Our responsibility as policymakers is to support policies that are designed to lift immunisation rates in the community.

There are some important exceptions to the No Jab, No Pay policy that I think are worth mentioning and that I hope allay concerns held by some members of the community. I know that many MPs and senators have been contacted by people in the community on this bill. Some people have raised legitimate questions around side effects and for those people I want to detail some of the exceptions that people may be interested in. Exceptions to the policy will apply for valid medial reasons, such as when a general practitioner has certified that vaccinating the child would be medically contra-indicated or that vaccination is unnecessary because the child has natural immunity from having contracted the disease in question.

Families with children participating in an approved vaccine study will be taken to meet the immunisation requirements for the duration of the study and similar rules will apply where a vaccine is temporarily unavailable. The requirements will also be met if a recognised immunisation provider certifies that the child has an equivalent level of immunisation through an overseas vaccination program.

Lastly, the secretary of the department will be able to determine that a child meets the immunisation requirements after considering any decision-making principles set out in a legislative instrument made by the minister. Importantly, immunisation requirements will also be extended to include children of all ages. At present, a child's vaccination status is only checked at ages one, two and five for the family tax benefit part A supplement, and up to age seven for the childcare payments.

Labor welcomes the commitment from religious leaders and organisations to support parents to ensure that children are vaccinated. Labor does think that parents should have the final say in making health decisions about their child but, when it comes to immunisation, Labor believes there is a strong public interest in ensuring children are immunised.

We note that the percentage of children under seven years of age with a conscientious objection recorded on the Australian Childhood Immunisation Register rose from 0.23 per cent in December 1999 to 1.77 per cent in December 2014. Removing non-medical exemptions will make clear the importance of immunisation and protecting public health. I want to emphasise that the choice made by families not to immunise their children is not supported by public policy or medical research. We want to see these changes implemented in a way that increases immunisation rates among vulnerable children and we ask that the government work with the childcare sector to ensure that children are not inadvertently excluded from early education and care.

Labor recognises the important work that Medicare Locals were doing to increase immunisation rates in local communities and welcomes the support to ensure the new Primary Health Network will continue this work. We also know that in many cases missed vaccinations are due to oversight rather than a specific objection. The establishment of a national immunisation register of school based vaccinations will assist all parents to do the right thing by their children. We ask the government work with the childcare sector to ensure children, as I said, are not inadvertently excluded.

We would also like to see a greater emphasis on public awareness campaigns. As our collective memory of disease outbreaks recedes in this country, it is important we remind people of the vital link between immunisations and disease prevention. In particular, we would like to see public awareness campaigns targeted at communities that we know have lower rates of immunisation—so-called refusal clusters. Labor also supports moves to explore a national immunisation register to enable adults to keep their vaccinations up to date.

This policy has been proposed by the family of Riley Hughes, the Perth baby tragically killed by whooping cough in March this year at just 32 days old. Riley's parents, Greg and Catherine Hughes, have urged others to get their children vaccinated. Greg and Catherine have also raised more than $71,000 for the Princess Margaret Hospital Foundation, which is far more than the $32,000 they had hoped to raise. Funds raised will go towards fighting terrible childhood diseases, such as whooping cough. I want to acknowledge tonight Greg and Catherine's brave advocacy.

This bill is not aimed at punishing people or denying people choice. It is all about increasing immunisation rates, preventing disease and, above all, saving lives. I commend the bill to the House.

Mr WHITELEY (Braddon—Government Whip) (18:11): I am not used to the member for Jagajaga finishing up early, but I thank her for her contribution. I rise this afternoon to speak on the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015. It is a bill which delivers on our undertaking in the budget to enact measures to ensure our nation's children receive necessary immunisation against disease. From 1 January 2016, this bill will ensure children fully meet immunisation requirements before their families can access the childcare benefit, the childcare rebate or the family tax benefit part A supplement. This government believes in rights, but it also believes in responsibilities. This government makes no apologies for enacting a policy that will deliver better outcomes for our children, especially when it comes to ensuring their health.

Australian childhood vaccination rates are over 90 per cent across the ages of one, two and five. This is an excellent rate of vaccination and is part of the reason the health of our children is so good compared to countries across the world. While vaccination rates in Australia have increased since the Childhood Immunisation Register was established back in 1996, vaccine objection rates for children under the age of seven have also steadily increased. There has been a marked increase with the rise of social media and the impact of unfounded claims around vaccination of children. It is estimated that there are 39,000 children under seven years of age—1.7 per cent—who are not vaccinated because their parents are vaccine objectors. It is simply not right that these children are put at risk due to misinformation in this space.

This government are very concerned at the rate of vaccine objection and the risk it poses to the broader community. In the budget earlier this year we made the commitment to take steps to rectify this situation and we are delivering on that commitment today in this bill. The coalition government are strengthening immunisation requirements for children. From 1 January 2016, 'conscientious objection' will be removed as an exemption category for childcare payments—both the childcare benefit and the childcare rebate—and the FTB part A end-of-year supplement. Immunisation requirements for payment of the FTB part A end-of-year supplement will be extended to include children over 12 months old. From next year, no vaccination objections will be accepted in order to receive the FTB part A end-of-year supplement and childcare subsidies.

Exceptions to the policy will apply only for valid medical reasons, such as when a general practitioner has certified that vaccinating a child would be medically contraindicated or that vaccination is unnecessary because a child has natural immunity from having contracted the disease in question. Families with children participating in an approved vaccine study will be taken to have met the immunisation requirements for the duration of the study, and similar rules will apply where a vaccine is temporarily unavailable. The requirements will also be met if a recognised immunisation provider certifies that the child has an equivalent level of immunisation through an overseas vaccination program.

The coalition government takes the health of our children seriously. There are 39,000 Australian children under the age of seven who are not vaccinated at this very moment, because their parents are vaccination objectors. That is twice the population of the city of Burnie in my electorate of Braddon. Twice the population are, at this moment, at risk of contracting a serious disease. This government does not accept this state of affairs and is taking steps to rectify this situation.

The No Jab, No Pay policy that this bill seeks to implement will secure the health of our nation's children. The choice made by families not to immunise their children is not supported by public policy or medical research. It is simply fanciful to suggest that vaccination of our youngest Australians harms them in the way that many say it does. Australian children receive some of the best medical care in the world, and this government treats the health of our children as a priority. This is a public health issue. The government has determined that parents still have the right to be vaccination objectors, but their decision will not be endorsed by the provision of taxpayer funds in the form of child care benefit, child care rebate or the family tax benefit part A end-of-year supplement.

This government makes no apologies for enacting incentives to immunise our children, and that is what it is doing in this bill. I am proud to be part of a government which has the intestinal fortitude to take a hard stance against vaccination objectors who are risking the health and wellbeing of not only their own children but all children. I stand behind the No Jab, No Pay bill and I urge all members to stand with me. I would just like to reiterate that 39,000 Australian children are currently at risk of contracting disease due to vaccination objection. I think this is an absolute shame and I think this is something that this bill is long overdue to address.

Under the current system, eligibility for child care benefit and family tax benefit is linked to immunisation requirements, where children aged under seven must be fully immunised or have a valid exemption. To oppose the No Jab, No Pay policy is to endorse the position of the vaccination objectors, and that is something that the government are unwilling to do. The government will maintain exemptions, which, as I said earlier, include on medical grounds and for approved religions. Through this bill, the coalition government are delivering better health outcomes for our nation's children. We are taking a hard stance and we are strongly resisting the baseless proposition that vaccines are causing harm in our society. The government stand with our doctors and our medical professionals. We stand for a better future for all Australians, and that is why we stand for a No Jab, No Pay policy.

I think it is appropriate to acknowledge the small number of my constituents who made representation to my office in objection to this proposed bill. I say to those people that I respect that they have a different view in relation to this matter and I do respect that they have an entitlement not only to voice that view but to actually live it out, if that is their choice. But as I explained to each of them, the government, on behalf of all Australians, is also responsible for good public policy and good public health policy that, in this case, means that you can, if you are an objector, maintain your objection, but you will no longer be entitled to taxpayer benefits.

I will say though that, as a part of those discussions, one particular suggestion that came to me from a constituent is, I think, very worthy of consideration. It is that it would not be unhelpful for us, as a country, across all our state jurisdictions, to have a national register of children who have a radical reaction to immunisation and to have GPs' or specialist paediatricians' documentation attached to such a register. I do not think that is an unreasonable request for those that still see that this policy as something that they cannot support. They have made the case that there are examples—they would suggest many examples—of children negatively reacting to the immunisation programs of this country. I am not a medical expert, and I am certainly was not in a position to argue the toss one way or another with my constituents, but I did feel that it was a reasonable and sensible suggestion that we, as a country, through our health professionals, should be able to track such negative reactions to any of the immunisation programs.

Once again, I commend this bill to the House and I thank those opposite for the support that they are also providing.

Mr THISTLETHWAITE (Kingsford Smith) (18:20): I speak in support of the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015, which introduces a 2015 budget measure that necessitates that children fully meet immunisation requirements before their families can access child care benefit, child care rebate or the family tax benefit part A supplement under the provisions of this new legislation. Labor support the public health purpose behind this bill. In government, we made changes to family payments to lift immunisation rates, including linking the family tax benefit end-of-year supplement to immunisation. Before the 2013 election, we made the commitment to make further changes that would continue the push to increase immunisation rates across Australia, and we are pleased the coalition government has responded to that push with this bill.

I understand that there is some controversy and a small number of parents who do object to immunisation and choose not to immunise their children because of fears surrounding the potential for adverse reactions. The best science that we have access to asserts that vaccination is the safest and most effective way to protect children from harmful diseases. If there is medical evidence of a child's adverse reaction to vaccination, then this bill, importantly, provides the opportunity for some exemption to these provisions based on that medical evidence and a propensity for allergy to immunisations into the future.

It is important that, despite those objections, the Australian government is committed to ensuring that every Australian child grows up healthy, happy and strong. We believe that parents have an obligation to provide support to ensure that that aim is met. A child is probably at their most vulnerable in those early years. They completely rely on their parents for their health and wellbeing. Vaccination is proven to be the most effective way to reduce the possibility of a child contracting an infectious disease, including a deadly infectious disease. So, from a public health perspective, there is strong interest in ensuring that every child is immunised.

In June of this year, the office of the Chief Scientist to the Australian government released a report detailing the benefits of vaccination. The report detailed that severe side effects from vaccinations are quite rare. The data collected suggested that there is a one in 100,000 to one in one million per cent chance of a child experiencing any harmful side effects as a result of a vaccination.

Through immunisation and the elimination of carriers to spread diseases, it is even possible to completely eradicate some diseases. This is how smallpox was eradicated, and we are almost there with the eradication of polio worldwide. I was at a breakfast this morning hosted by a number of NGOs that work in this space. The name of the campaign that is being undertaken to completely eradicate polio throughout the world is One Last Push. But the threat remains in respect of other communicable diseases, most notably measles and whooping cough, which continue to be relatively common and highly contagious. There is still a threat of measles returning to Australia, as was recently seen in the United States, with 644 cases recorded in 2014, despite the disease being declared eliminated from the USA 15 years ago.

There is a far greater risk that a child may contract a serious disease as a result of nonvaccination than there is of a child experiencing side effects due to vaccinations. Indeed, the World Health Organization estimates that vaccines prevent two million to three million deaths every year. Those figures are indisputable and too hard for any government to ignore.

I am assured of the safety and effectiveness of any vaccine used in Australia, as all vaccinations undergo a series of rigorous testing procedures before they become available. Moreover, scientists continue to develop easier and more effective vaccines to be administered. I have also done some consultations with local doctors in my community, and every single one of them assures me of the safety of vaccination and, more importantly, that vaccination is the most effective, the cheapest and, from a public health perspective, the easiest way to ensure that we are reducing and, hopefully, eliminating the potential of children picking up communicable diseases, so that we can avoid severe injury and illness into the future.

I was pleased recently to speak in this chamber regarding a bill which was introduced last week, the Australian Immunisation Register Bill 2015. With the increasing number of vaccines now recommended for adolescents and adults in Australia—such as influenza, whooping cough for pregnant mothers, shingles for older Australians and HPV for adolescents and young adults—the National Immunisation Register is an idea whose time has come also.

I wish to congratulate and thank all of those people who have been campaigning for improvements in the rates of immunisation throughout the country and, importantly, for government to take a more active role in encouraging greater immunisation amongst children throughout the country. I think particularly of those parents who have lost dear children to communicable diseases that could be avoided if there were greater rates of immunisation and there were not as much spread of particular diseases. I am thinking of course of Catherine and Greg Hughes, the parents of baby Riley Hughes, who died of whooping cough in March this year before he could be vaccinated. They have been very strong and powerful advocates for the cause of vaccination. To have the harrowing experience of the death of your child and then to be able to come out and campaign for a particular cause is admirable, and I take my hat off to Catherine and Greg and their families and others like them who have been great advocates for this cause. It is quite admirable.

Labor also recognises the important work that Medicare Locals across the nation were doing to increase immunisation rates, achieving a rise from 70 to 72 per cent from 2012 to 2013 for girls aged 15, and I welcome the support that Primary Health Networks are giving to this task into the future.

Labor is generally supportive of this bill, largely because of the importance of the task of increasing immunisation rates in Australia. We also urge the government to go one step further and include in the yet-to-be-released framework for the Primary Health Networks the goal to continue the push to increase immunisation rates across Australia. Immunisation has been proved effective. The medical science, the medical expert advice, is that this is the most effective and efficient way to reduce the spread of communicable diseases across the country. Quite simply, immunisation saves lives, and any program in which the government encourages more Australians to be immunised, and particularly more parents to immunise their children, deserves our support, and that is why I am supporting this bill.

Mrs GRIGGS (Solomon) (18:29): It is not very often the member for Kingsford Smith and I agree on things, but we do agree that immunisation saves lives, and any program that saves lives is important. When my son and his wife had a baby, 16 months ago, we were not allowed to spend a lot of time with our new granddaughter until we had had our whooping-cough vaccinations topped up.

There has been a lot of discussion about this particular legislation, this Social Services Legislation Amendment (No Jab, No Pay) Bill 2015, in my electorate. A minority of people are against it. I am pro-vaccination. The member for Kingsford Smith and I were involved in an immunisation program when we went to Laos. We saw the benefits of that; it was interesting how the country has embraced immunisation and is really seeing its benefits.

The purpose of this legislation is not to save money, it is to save lives and stop the spread of preventable communicable diseases. If this bill passes—and it looks like it may, because Labor are supporting it—it will make an amendment to the requirements for recipients of family tax benefit part A and the child care rebate. These changes will come into effect from 1 January 2016, meaning that family tax benefit part A and the child care rebate will not be paid to the families of any child who has not been fully immunised.

The purpose of this legislation is not to save money by restricting the payment of the family tax benefit and the child care benefit, it is to encourage parents to keep up the immunisations for their children. I sincerely hope the savings do not come to pass, because the much preferred outcome is for all those families who would otherwise be cut off from payments to get their children immunised.

This legislation will remove the 'conscientious objector' exemption to immunisation schedules and extend requirements to meet these schedules to all children under seven years of age on any day the benefit is claimed. In this place, when we discuss immunisation, it is very important that anyone taking part in or following the discussion remembers this parliament should be making decisions based, solely, on evidence—and, as far as the evidence goes, the public-health case for immunisations is an open-and-shut one.

Mass immunisation is, perhaps, the single most effective public-health policy that has ever been in place. To all those with concerns or objections, be they based on philosophical or religious ideals, I would respectfully remind them that this is a public-health debate. It is about preventing the spread of debilitating and sometimes fatal diseases, and we heard the member for Kingsford Smith give the example of a child dying from whooping cough.

When the stakes are this high, we should only be considering an evidence based approach. All the evidence—the hundreds of papers of peer reviewed science journal articles, the clinical trials and the decades of data—points to immunisation of children being incredibly beneficial. The number of children under seven years of age not immunised, because of a conscientious objection, was around 0.23 per cent of the population in December 1999. By 2014 it was more than 7½ times that number. Even with that exponential increase, the children of registered conscientious objectors are a minority—amounting to only about 20 per cent of the total number of children who are not up-to-date with vaccinations. If a child is not immunised and it is not a choice that can be supported by evidence, it is not a choice to be supported by taxpayers.

I had some people, from my electorate, approach me with concerns over what they called 'government mandated vaccinations'. There are two key points to raise to address this argument. The first is that no government is forcing anyone to have immunisations. This legislation proposes that for those parents who choose, for whatever reason, not to have immunisations they will not have that choice supported by government payments. The second is that the right of a child not to get a disease, like polio or whooping cough, is a far more important right than the freedom of someone to exercise a philosophical objection.

There will always be children who cannot—perhaps for medical reasons—be protected by vaccination. There will also be a minority of children who are vaccinated for whom the vaccination is not effective. For those children, every unvaccinated child they come into contact with is a risk. As the number of unvaccinated people in the society they live in increases, the risk of transmission of disease increases exponentially as the group's 'herd immunity' is lost. The protection of these children from polio, diphtheria and whooping cough is a higher ideal than financially supporting an anti-immunisation choice.

The government's policy in this area is not all stick with no carrot. There is $161.8 million, over five years, for improvements to the National Immunisation Program's schedule of free vaccines. There is also $26.4 million to improve immunisation in adolescence—including incentives for health-care providers to identify children overdue for vaccines—public awareness campaigns and expansion of the HPV register to include all adolescents.

The legislation here today will reinforce the importance of immunisation, it will restrict access to conscientious objections and make family tax benefit part A and the child care rebate conditional on a child being up-to-date with their immunisations. As it stands, there are 39,000 Australian children under the age of seven who are not vaccinated because their parents object. There are many tens of thousands more who are not vaccinated for other reasons.

But the evidence is clear, and that is that vaccination is a safe and effective public health measure. Every child who is not vaccinated is at risk of preventable communicable diseases and is at risk of spreading preventable diseases to those who are too young to be vaccinated. I draw the House back to the example that was given by the member for Kingsford Smith of the child who was too young to be vaccinated against whooping cough and who died. That is one of the reasons why my son and his wife did not want us to see our granddaughter until we had our whooping cough vaccinations topped up.

This legislation will provide a significant incentive for parents of those children to get vaccinated and to keep that vaccination up-to-date. Where it is not possible for medical reasons to provide that vaccination, we will continue to offer an exemption clause. The government will not, however, continue to provide government payments to those parents who choose not to have their children protected.

As I mentioned earlier, this legislation is calculated to have a $508 million saving over forward estimates. Let me say it one more time: I hope that this legislation serves its purpose and that not one cent of the saving is made, because I want as many as parents out there as possible to ensure that their children are vaccinated. We need to make sure that we can keep our kids safe from these terrible diseases. No-one wants to see a child dying of whooping cough. Nothing can be more terrible than seeing that.

I commend the bill to the House.

Ms BRODTMANN: I rise today to join with my colleagues and those opposite to speak on the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015. That was a very powerful speech from the member for Solomon there. Obviously, she is a bit upset because she must know of someone who has lost their child to whooping cough. As she said, nothing could be more shocking, horrifying and terrible than watching your child die of whooping cough.

So I join with my colleagues right across the chamber to support this legislation. This legislation will ensure that children fully meet immunisation requirements before their families can access childcare benefits, the child care rebate or the family tax benefit A supplement. It builds on the work that Labor did in 2013 to further tighten immunisation requirements within the family payments scheme.

When we were in government we made important changes to family payments, to lift immunisation rates—including linking the family tax benefit end-of-year supplement to immunisation. This is what this is all about. This bill builds on those reforms. The Leader of the Opposition also wrote to the then Prime Minister in April of this year, offering bipartisan support to increase immunisation rates across Australia. We also announced our support for this measure shortly after it was announced in this year's budget.

Labor is committed to strengthening immunisation rates so that all Australian children have the best chance to grow up strong and healthy. The importance of immunising our children cannot be underestimated. It is estimated that vaccinations currently save up to three million lives worldwide each year—three million lives worldwide each year! Immunisation is the safest and most effective way for parents to protect their children from disease, and one of the most important public health measures we have at our disposal. The Australian Medical Association, the National Centre for Immunisation Research & Surveillance and countless other experts all agree that immunisation is the safest and most effective way for parents to protect their children from disease.

Immunisation remains the safest and most effective way to stop the spread of many of the world's most infectious diseases. When a person is vaccinated their body produces an immune response in the same way their body would after exposure to a disease, but without the person actually suffering the symptoms of the disease. When that person comes in contact with that disease in the future, their immune system will respond fast enough to prevent the person actually developing the disease.

When levels of immunisation in a community are sufficiently high, the risk of specific diseases can fall so low that even those who are too young or too sick to be given a vaccine will not be exposed to it. It is this communal, or 'herd' immunity that can save countless lives. Likewise, those who choose not to immunise their children are exposing other children to potentially fatal diseases—diseases that can be avoided through immunisation. This is what is quite often overlooked by these people.

I would just ask everyone in the chamber to cast their minds back to the 1960s and 1970s, before the major vaccination campaigns. Diseases like tetanus, diphtheria and whooping cough killed thousands of young children each year. Today, deaths from these diseases are extremely rare in Australia—although there is a worrying trend that whooping cough is now coming back again—and in the rest of the developed world. This is because of immunisation. We want to get to a situation where enough people in the community have been immunised so that infections can no longer spread from person to person and a disease can die out altogether.

We have seen this happen with smallpox, which was declared eradicated in 1980 after a concerted campaign of surveillance and vaccination led by the World Health Organisation. Or measles, which last year the World Health Organisation declared had been eliminated in Australia. These are extraordinary achievements! Extraordinary—eliminating these evil diseases that have killed so many people over many years. Or polio—the Global Polio Eradication Initiative has been successful in reducing polio cases, with only a few isolated cases remaining in the developing world.

Just on polio, I just want to touch on what was etched in my brain when I was a young girl. My mum, who is now in her 70s, went through the polio epidemic that was around in the 30s, 40s and 50s in Australia. She told us when we were little of stories of the baths in Melbourne being closed down, of theatres being closed down and you could not go to the movies because of the polio epidemic. Schools were closed down and when she went back to school once it had been reopened she found that a number of students were no longer there because they had been paralysed by polio. I know that my husband's uncle contracted polio around that era when he was a child and has lived with the crippling legacy that is polio ever since.

If the anti-jab campaigners met with the people who actually have to live with the consequences of no immunisation, who have to live with the consequences of contracting polio, particularly as a young child, they would see the challenges and the battles that they have to face. I remember reading books about young children having to be in bed for months and months as a result of the disease and the fact that they could not have a normal childhood. They could not run and play because they had been crippled by the disease. Their education was stunted in many ways and their opportunities were limited as a result. This is something that can be avoided through immunisation. As I said, since I was a child my mother told me those stories of the baths being closed down, of the school being closed down and of those children returning who were crippled, it has been etched in my brain that immunisation is absolutely vital to keep Australians safe, to keep our young people safe, to keep our older people safe and to keep the world safe. Those stories were incredibly powerful. Seeing Chris's uncle every time with that crippled, stunted leg as a result of the fact that he contracted the disease is horrifying.

As mum said, when she used to take us as babies to the little infant welfare centre and get us immunised, it used to be very distressing to her as a young mother. Babies cry because it hurts and sometimes they get a bit fevery afterwards. Despite the distress that it was causing to us as children and babies and to her as a new young mum, she knew that the benefit not just for ourselves but also for our community and our nation was significant. I did not hear my colleague the member for Kingsford Smith's story but I did hear the member for Solomon and it is incredibly concerning when you hear cases of children falling ill or in some cases dying due to diseases that could have been avoided if their parents had got them immunised.

For example, low domestic immunisation rates for measles in some parts of the United States saw the disease re-emerge last year, prompting officials to actually issue a warning. According to the Centre for Disease Control and Prevention, there was a record 668 US measles cases from 27 states last year, mostly in unvaccinated travellers travelling to endemic regions or to areas experiencing a large ongoing measles outbreak. This was the largest number of cases since eradication was declared in 2000. We are seeing this resurgence as a result of people not being vaccinated. It was the largest outbreak to occur in unvaccinated Amish communities in Ohio and totalled more than 383 cases. There has been similarly a re-emergence of other preventable diseases like rubella, mumps, whooping cough and polio. It is so important that we immunise our kids and protect them against these preventable diseases. By immunising your child, you are protecting more than just their health; you are reducing the opportunity for that child to pass that disease onto another, especially to young babies who may not yet be fully immunised.

I was discussing this legislation with a dear friend of mine, who, unfortunately, is undergoing a battle with cervical cancer, and she recounted the story of her dear friend, Gay Davidson, who was a well-known Canberra journalist here and her husband, Ken, who lost their daughter Kiri after she contracted measles. Kiri had not been immunised because, according to my dear friend, Gay was an anti-vaxxer; she opposed immunisation. Kiri died at the age of 13 from complications after getting the disease. After her daughter's death, Gay became a prominent public campaigner for immunisation against measles. She worked with successive Commonwealth health ministers in promoting what became the national Bicentennial Measles Campaign.

Any death of any child for any parent is just devastating and it took a significant toll on Gay. Her health suffered significantly. She continued to work for some time but her health suffered and she did die, I regard, prematurely as a result of the guilt, the knowledge and the trauma of losing their child, particularly when she had been such a strong, as I understand, anti-immunisation advocate and the fact that she in a way felt that it was her fault that that her daughter had died from a disease that could have been prevented through immunisation.

Measles does take its toll in so many ways and I think that Gay Davidson's experience and response highlights how devastating it can be for families to lose a child to a disease that could have been entirely prevented through immunisation. Imagine if you had a child or little baby who died as a result of someone not immunising their child. Imagine the trauma and the horror of living with that.

All I can say to those anti-vaxxers out there is: homeopathic preparations do not provide natural immunity; nor does being fit and healthy. Only conventional vaccinations produce a measurable immune response. So all I can say is: vaccinate your children.

Modern vaccines are extremely safe, and serious reactions to them are rare. In development, vaccines are rigorously tested on thousands of people in progressively larger clinical trials, and they are not included in the National Immunisation Program until they have been approved for use by the Therapeutic Goods Administration to ensure they meet strict safety guidelines and are evaluated to ensure that they are effective, comply with strict manufacturing and production standards and have a good safety record.

Once a vaccine is in use, its efficacy and safety are continually monitored by the TGA—so it is not just a set-and-forget environment; the TGA is continually monitoring these vaccines—and by vaccine sponsors through further clinical trials and detailed surveillance of disease and vaccine adverse events. They are constantly looking at the effectiveness of these vaccinations and they are doing that through these clinical trials and also the surveillance of the disease, as I said.

So I reiterate to those who are against immunisation: the vaccines for the 16 infectious diseases that are currently included on the National Immunisation Program are subjected to some of the most rigorous vaccine testing and registration processes in the world. They are safe.

Labor believes that the only exemption to the community expectation that children are immunised should be on medical grounds, and this legislation includes room for those exceptions, such as when a general practitioner has certified that vaccinating the child would be medically contraindicated, or that vaccination is unnecessary because the child has natural immunity from having contracted the disease in question.

In conclusion, I offer Labor's support to this legislation, which requires children to meet their immunisation requirements in order for their families to access family benefits. It is sensible legislation that will increase the immunisation rates of Australian children—something that will have an overwhelmingly positive impact on our society. Immunisation is the safest and most effective way for parents to protect their children from disease, and I encourage all parents to do the research, and I encourage all parents to immunise your kids.

Ms GAMBARO (Brisbane) (18:54): It is an honour to be following the member for Canberra, and I thank her for her wonderful contribution, as I thank the member for Braddon, the member for Solomon and the member for Kingsford Smith. It is not often in this place that we can come together on legislation that is agreeable to both sides of the House, but the No Jab, No Pay measure reinforces the Australian government's position that immunisation is a very important public health measure for children, their families and their community. The coalition is absolutely committed to making sure that every child in every home has a safe environment and has a safe educational environment as well.

As the member for Brisbane, I have a huge number of schools that I represent in my electorate as well as many child care centres, preschools and kindies. This policy will bring clarity to the rules, and it highlights the very importance of immunisation and of protecting public health, especially for those who are the most vulnerable in our community, children.

The measure aims to further increase the immunisation rates in the Australian community, because we know that the more that people are immunised, the safer that everyone is going to be. From 1 January 2016, the No Jab, No Pay measure amends the immunisation requirements for the family assistance payments, including the Child Care Benefit, the Child Care Rebate and the Family Tax Benefit Part A end-of-year supplement.

Currently, immunisation requirements only apply to children up to the age of seven for the Child Care Benefit and Child Care Rebate, and at ages one, two and five for the Family Tax Benefit Part A end-of-year supplement. This is simply not enough to encourage higher rates of immunisation.

From 1 January 2016, in order for an individual to be entitled to the Child Care Rebate and Child Care Benefit payments, their child will need to meet immunisation requirements up to the age of 20. This is very much a common-sense approach that not only will make sure we do not witness the return of some of those debilitating diseases, but also will reduce the burden on our healthcare system by keeping kids out of hospital.

Immunisation stops the spread of many harrowing and life-threatening diseases like diphtheria. The release of the diphtheria toxin in the blood can cause nerve paralysis and heart failure. In the early 1900s, diphtheria caused more deaths in Australia than any other infectious disease. I was hearing about that when I visited a historical photographic exhibition at the Royal Brisbane Hospital recently to mark the Anzac Centenary. It is absolutely incredible when you think about this—that the increasing use of vaccines has led to diphtheria's virtual disappearance. No vaccinated person has died from diphtheria in Australia in the last 20 years, and we must ensure that that statistic remains unchanged.

Measles is another very highly infectious, acute viral disease which can cause serious complications, particularly in very young children. Complications of measles include middle-ear infections and laryngitis, as well as more serious infections such as pneumonia and encephalitis, which can lead to brain damage and death. I know that today we have heard many stories of members having personal experiences. My personal experience was of a friend of the family who was not vaccinated when she was a child and who contracted measles. She had a lovely baby boy and unfortunately he suffered from deafness, and it was a terrible, terrible thing to go through. He is now contributing to society. But this could have been avoided if she had been able to have a vaccination and unfortunately she was unable to do that as a young child.

There is also meningococcal disease, one in 10 of the sufferers of which dies in Australia. Of those who survive, one in 30 has severe skin scarring or loss of limbs, and one in 30 has severe brain damage.

Finally, members have spoken today about whooping cough. It is an extremely contagious respiratory infection. The disease causes uncontrolled coughing and vomiting, which can last for several months and can be particularly dangerous for little babies under the age of 12 months. Patients have described the experience as if they were actually coughing up their lungs for months on end. It is clear, then, that we must act now to ensure that these diseases cannot spread any further.

In order for an individual to be entitled to the Family Tax Benefit Part A end-of-year supplement, their child will need to meet immunisation requirements from age one up to the end of the calendar year they turn 19. The changes do not impact fortnightly instalments of Family Tax Benefit Part A. The changes only impact the end-of-year supplement, which is currently $726.35 per year per child, as long as those conditions are met. Critically, this measure will remove vaccine objection, previously known as 'conscientious objection', as an exemption category. That measure is simply not good enough to protect the health of the broader community. Currently, if an individual makes a declaration that they have an objection based on personal, philosophical, religious or medical belief to being vaccinated, they meet the immunisation requirements.

According to the Australian Childhood Immunisation Register, more than 39,000 Australian children under the age of seven are not vaccinated because their parents object to vaccinations, which is an increase of more than 24,000 children over 10 years. This is a very dangerous trend that we must reverse. For every child who misses out on the chance to be vaccinated, the chance of infection increases. No child should be afraid to get the education they deserve simply because some parents decide to object to potentially life-saving vaccines.

This is a public health issue. The government has determined that, whilst parents have the right to decide not to vaccinate their children, if they are doing so as a vaccine objector their decision will mean that they will no longer be eligible for some government financial assistance. We have to take a tough stance for the good of public safety and the health of our youth. Children will meet the immunisation requirements if they are fully immunised, engaged in an approved catch-up schedule or have a valid exemption. We will allow for children who cannot be vaccinated for health reasons to be exempt so that they may not slip through the cracks financially.

Children with medical contraindications or natural immunity certified by a general practitioner will continue to meet immunisation requirements. Children are considered fully immunised when they have received the appropriate vaccines for their age cohort under the National Immunisation Program's early childhood schedule. A child will also meet immunisation requirements if they are a participant in a vaccine study approved by a Human Research Ethics Committee registered with the National Health and Medical Research Council. Additionally, the secretary will be given new legislative powers to exempt a child from immunisation requirements in a very limited range of circumstances—for example, where a non-parent carer does not have the legal authority to vaccinate a child in their care. Where a child cannot be vaccinated as required and the Commonwealth Chief Medical Officer has declared that the relevant vaccines or all vaccines are temporarily unavailable, the child is considered to meet the immunisation requirements. This measure is compatible with human rights because it advances the protection of the right to physical health and, to the extent that it may also limit human rights, those limitations are reasonable, necessary and proportionate.

The bill for this measure is accompanied by a statement of compatibility with human rights, in accordance with the government's normal processes. In conjunction with these changes, the Minister of Health has introduced legislation to extend the Australian Childhood Immunisation Register to record immunisation information for children aged between seven and 20 years. This measure is expected to produce savings of roughly $508 million over four years.

This has been a very hotly discussed topic that is important to me and the community that I represent. Often the balance on this debate has been conflated and misconstrued. Hopefully this bill will bring clarity to people as well as piece of mind. Tough choices have to be made for the safety of the greater community. I support the bill.

Ms PLIBERSEK (Sydney—Deputy Leader of the Opposition) (19:04): When I was first elected to the parliament, the Leader of the Labor Party was Kim Beazley. Kim is very well known to my friend sitting here, Gary Gray, and he is very well known to members of this parliament as an erudite man, a compassionate man and a great lover of American history, and for his great and good humour. But there is another thing about Kim Beazley: he had polio as a child. That is how recently this disease, which is now unknown in Australia and is on its way to being eliminated worldwide, stalked the Australian community. Our current Ambassador to the United States was one of its victims

Kim said that he never forgot the day he woke up, at just five years old, unable to move. He said:

I don't think contemporary Australians can comprehend the fear that ran through our community at the thought of polio.

That is what he said in an interview in 2004. I cannot imagine the fear that the little boy felt, but I can certainly imagine the fear of his mother. I think any parent can. I can imagine it, but neither I nor any parent in Australia today will ever need to feel it, because we have eradicated polio in Australia and will eradicate it within coming years around the world.

Polio was beaten in Australia by vaccination—in Australia, in North America, in Europe and soon in the rest of the world. We see resistant pockets in Pakistan and Afghanistan, but I am confident that the huge steps that those countries have made, even in the last year, will see us tackle this disease fully. Vaccination is one of the most effective and cheapest ways we have of keeping a community healthy. The examples of polio and smallpox before it show that, with proper eradication campaigns, we can eliminate many of these diseases and we can certainly save many lives. Vaccination is the reason that the number of measles deaths around the world has declined from 2.6 million in 1980—which to us sounds like just yesterday, and it was mostly young children who died from measles—to under just over 145,000 in 2012.

If you put measles with diphtheria, rubella, polio, whooping cough and all of the rest of these diseases, between 2000 and 2013 vaccinations saved an estimated 15.6 million lives. Smallpox has been eradicated, as I have said. Polio cases have dropped from the hundreds of thousands in the late 1980s to a few dozen. Around the world, around three million lives a year are saved by vaccination. And for each of those lives saved, there are others who are spared lifelong disability from the complications of these diseases.

Labor has a very strong record on immunisation policy. Raising the rates of immunisation was a priority for me when I was the health minister. It was a priority for Nicola Roxon before me, and I know it is a priority for the current health minister and for our next health minister, Catherine King. In her capacity as shadow minister for health she spoke very movingly last week about meeting two sets of parents, Toni and David McCaffery, and Catherine and Greg Hughes, who had tragically lost their children to the easily preventable disease of whooping cough. Having worked as a director in the Commonwealth Department of Health and Aged Care, Catherine really understands the policy issues around health and community health. More important that just this systemic understanding, I could tell from her conversations with these parents, who have lost so much and have given so much to the campaign in favour of immunisation—and have become such targets in some cases of horrible internet trolls—she was moved not just as a health administrator, but as a parent, and I am sure she will take up this case as health minister.

In 1993, our National Immunisation Strategy brought consistency to vaccine schedules and vaccine pricing. We introduced the Australian Childhood Immunisation Register (ACIR), announced in the 1995-96 Keating budget. We support the expansion of the ACIR to become the Australian Immunisation Register and the expansion of the National Human Papillomavirus Vaccination Program Register to the Australian School Vaccination Register, capturing a greater range of vaccinations.

While I was health minister we added several new vaccines to the schedule, including the combination measles, mumps, rubella and varicella vaccine—called the MMRV vaccine, a combined meningococcal C-Hib vaccine, and, of course, we also did Gardasil for boys. Just as we were the first nation internationally to do Gardasil for girls, we were the first to do Gardasil for boys, because boys are also vulnerable to HPV and to the cancers that can result.

We made important changes to family payments to lift immunisation rates, including linking the family tax benefit end-of-year supplement to immunisation. We worked with the states to raise vaccine awareness, and on successful strategies, like requiring a child's ACIR record for school enrolment, to identify children who had slipped through the immunisation net or had not yet fully met the immunisation milestones. This, accompanied by the very innovative work of our Medicare Locals, helped increase the coverage rate amongst five year olds from 83 per cent to 90 per cent during our time in office.

In fact, in just one year, from 2011-12 to 2012-13, the percentage of five year olds fully immunised rose in the Lower Murray region from 86.2 per cent to 93.9 per cent. In Broken Hill and the far west it rose from 89.1 per cent to 95.6 per cent, which is a stunning result. In Kempsey-Nambucca it rose from 84.6 per cent to 91.1 per cent. All three are marvellous results.

But we know that in some communities kids are still at risk. In the same year, 2012-13, 13 out of 61 Medicare Local catchments had less than 90 per cent of five year olds fully immunised. The lowest rate—and I am really quite ashamed to say this—was in Eastern Sydney, an area that is home for me, where it was 86.2 per cent. For last year, in my own state of New South Wales, the Northern New South Wales Local Health District, at the other end of my state, recorded only 87.4 per cent of children fully vaccinated.

Some children miss vaccination because their parents have forgotten, or do not know fully about the childhood illnesses their children should be immunised against, or they have lost track. There are a number of different reasons parents have missed out on the information communicated to them. Perhaps it is even in a language they do not understand. So it is important to invest in reminders, in education programs, in community awareness raising, and in making the point through reminders to individual parents and to our broader community about the benefits of vaccination.

But there are cases, of course, where parents deliberately refuse to vaccinate their children. They prefer to rely on the rumour-mill of the internet rather than take medical advice. I say to those parents: talk to your GP. As a parent, I took the advice of my doctor and all of my children are fully immunized. As a health minister, I took the advice of the medical professionals and I prioritised raising immunisation rates as one of the best and most effective health interventions we can make as a nation.

The number of children whose parents or guardians lodged what some people call a 'conscientious objection' to vaccination has risen from 0.23 per cent in 1999 to 1.77 per cent at the end of last year. I have said many times—and it disappoints me that I still see this language used sometimes—that the term 'conscientious objector' is completely inappropriate for people who refuse to vaccinate their children. They are not Quakers carrying stretchers under fire from the battlefield back to the trenches during World War I. These are people who are deliberately refusing to vaccinate their children, to protect their own children and our community against these illnesses.

I think it is important to note that no major religion has a prohibition on immunisation. This is a decision that parents are making based on dangerous misinformation from the internet. They are vaccine refusers. Vaccine refusers think they know better than doctors and scientists and, in doing so, they put the health of their own children at risk and they put at risk the health of other kids, of babies who are too young to be fully immunised, of older people whose natural immunity has broken down with age and of people who are sick with immunodeficient type illnesses and cannot be vaccinated. For the protection of our whole community, we need the majority of people to be vaccinated where they can be.

It is very important to say that we are supporting the No Jab, No Pay policy introduced in this legislation. We certainly said before the 2013 election that we would move further in this direction, and we are pleased to see our policy reflected in this bill. It ends the vaccine refuser exemption and it makes sure that only those with legitimate medical reasons to not vaccinate their children can access child care benefit, child care rebate or the family tax benefit part A supplement.

One of the most important things that we learn in managing our vast and vastly successful health system is that prevention is better than cure, and that certainly is the case when it comes to vaccines.

Ms MacTIERNAN (Perth) (19:16): The medical practitioners and medical scientists that I talk to about this bill and about vaccines are very clear that the two things that have really done the most to improve health in our community over the last couple of hundred years have been the availability of clean water and vaccination. So there is absolutely no doubt that there are very solid public health arguments behind the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015.

Like many members, I have personal experience here. I remember the enthusiasm with which my mother dragged me down to get I think the Sabin polio vaccination when I was around three or four. It is one of my first and clearest memories. With her recollection, and having lived through the risk of my older brother and sisters contracting polio, it was such a frightening thing for my mother. As I think I mentioned when we were debating an allied piece of legislation last week, a great book, The Golden Age, by Joan London was released this year. It really captured the social impacts as well as the health impacts of the polio epidemic. Also in last week's debate, I related my very personal experience with my daughter who, at the age of three weeks, contracted whooping cough from an unvaccinated child. So I completely and utterly support the principle of vaccination.

But now I am going to make what I judge to be a career-limiting move, because I am going to step outside, a little, that box of orthodoxy that I followed right up until last week, when I was contacted by some people who, having seen my speech, suggested that I might want to look at some of the other science. I have done so. I do not want to depart from the standard script, because I do support vaccination and I do support us requiring an element of incentive to be placed into the system to ensure that we have proper coverage. I am not contesting in any way that what we have done with polio, with diphtheria, with whooping cough—even though it is becoming a little more complex—and with measles is anything other than judged to be a good thing.

I have sat in this place and listened to speeches about this being a black-and-white issue—that you have to be totally and utterly one way, otherwise you are an anti-vaxxer—and saying that the science is unequivocal. I have some quotes—and these are all from people who support vaccination. I just want us to start being a little less condemning of those people who have their concerns; let us in fact be little bit more scientific. Let us not always, when contradictory evidence comes in, presume that we have to amend the hypothesis and have an auxiliary hypothesis that will help us patch up and bolster the principal hypothesis. From time to time, we have to be prepared to think that this data may have to be seriously considered and cause us to look at the paradigm.

I am going to quote people who are not crazy, unscientific trolls and anti-vaxxers. I do want to endorse comments by some of the previous speakers who have reprimanded in the severest terms those who have been trolling people like the Hughes family, who, quite rightly, have a very real concern about vaccination. Everyone should have the ability to do this without being vilified. I want to quote Natasha Crowcroft, the Chief of Infectious Diseases at Public Health Ontario, and her two colleagues from the University of Toronto in an article that appeared in The BMJ, formerly the British Medical Journal, earlier this year. I am going to quote this at length because I think it really sums up some of the issues that we need to face:

We are on a steep trajectory away from an era of inexpensive vaccines for diseases that are widespread in the absence of immunisation. Vaccines are increasingly being produced for diseases that are devastating at an individual level but have less impact on population health. Moreover, the costs of developing and getting a vaccine to market are rising because of increasingly complex technologies and the public intolerance of adverse events. For these reasons new vaccines are likely to be less cost effective than older vaccines and are unlikely to be cost saving.

Technologies such as searching genetic codes for possible antigens and the development of new adjuvants to stimulate immune responses also bring considerable uncertainty about safety and effectiveness. It may take many years for adverse events caused by vaccines to be identified and confirmed, as was the case for the link between a pandemic H1N1 influenza vaccine (plus adjuvant) and narcolepsy.

These challenges come at a time when some sections of society are less likely to vaccinate themselves or their children. Those who hesitate to vaccinate are often highly educated, well resourced, and demand respect for their perspectives. How best to reassure the public is unclear. But all the components of decision making about vaccination programmes must be high quality and transparent and should stand up to external scrutiny to sustain the confidence of both the public and healthcare providers.

I think there is a very clear message here. To lump anyone who has an objection or a concern about a particular vaccine or a particular adjuvant into the anti-vaxxer box is, I think, a very deleterious thing for the confidence that we need to have within our system.

Professor Collignon, professor of microbiology at the Australian National University and director of infectious diseases at Canberra Hospital, is a great supporter of the principle of vaccination and one of those who is very clear that vaccination has absolutely turned around public health outcomes in our community. In talking about flu vaccines for children, he made a couple of statements. He said:

To stop two or three children going to intensive care we had to immunise 600,000 people … We need to be very careful before we recommend universal vaccination against influenza every year until we have better data. Otherwise we’re talking about faith-based medicine, instead of evidence-based medicine.

When Professor Collignon made these reflections after seeing healthy children post-vaccine coming into his hospital, he was very surprised at the amount of negativity that he received from other health professionals. But his fundamental point is that we need a better system than voluntary notification to the TGA, because whenever you do that you really underestimate how much of a problem there is. If the notification process is purely voluntary you get an under-notification. He said:

When I interviewed families who claimed to have experienced an adverse reaction there was a common thread—medical professionals were unwilling to countenance the possibility, even when the symptoms were extreme and immediate, and their cases were never referred to the TGA.

I think that one of the things we could take out of the anti-vaxxer argument is that we do need a better system of notification. My friend and colleague at the table, the member for Brand, would no doubt be aware of Professor Bryant Stokes, a very eminent medical bureaucrat and medical specialist in Perth. He was chief medical officer and head of the health department, but I understand that he has recently stood down. He was commissioned by the state government to report on what happened during that ill-fated fluvax in 2009 when there were so many adverse reactions in Perth and across Australia in children who had the fluvax that year. His report that was tabled in the state parliament focused on just how poor and chaotic the reporting processes were. There was a lack of any real systemised process of collecting that data.

If we want the public to have confidence in this system, we have to be prepared to set in place a rigorous reporting system. We cannot continue to say to people, 'You've made it all up' or 'You're wrong and it's something else.' We do want people to have confidence in the vaccination system. It is a great benefit for our public health system. But we have an obligation to make sure that we are being scientific and that we are not falling into the same trap that we are accusing the anti-vaxxers of. We need to ensure that we are not engaging in faith-based medicine rather than evidence-based medicine.

Allan Cunningham, a retired paediatrician from the USA, said in an article in the British Medical Journal:

Vaccines are among the greatest medical advances of modern times, but public health officials have become intoxicated by success and have lost their sense of perspective. A case can be made for mandating vaccination against measles, which used to infect 3-4 million US children a year, but it is over-reach to mandate vaccination against hepatitis B, which was reported to infect only 300 children aged 1-9 years annually in the US.

One of the concerns that has been raised is what is happening with the adjuvants—those things that are added to the vaccine to enhance the immune response. I asked our library to find me the latest research on the impact of these adjuvants. I do not want to reflect negatively on the person, but the piece of research they found had been conducted by a researcher from Flinders University in Adelaide, who also just happened to be a director of a biotech firm producing adjuvants and vaccines. That certainly does not mean that he should be precluded from contributing to the academic and scientific debate but I think this is an endemic problem that we have in the pharmaceutical industry—there is not enough independence in the system; there are not enough people researching and providing this information who are free from the taint of preferment and funding by the pharmaceutical industry.

As I say, we need to get the science right here. Those who are advocating for vaccinations, like me, believe in science—but believing in science does not mean that you do not allow any contrary evidence to come within your field of operation and that you demean and belittle those people who are raising those concerns. I really do urge members to research some of these people who are raising an alarm about exactly what we are doing and whether or not employing all of these I think now 16 vaccinations—including for hepatitis B, rotavirus and the human papilloma virus—is really in the best interests of everyone and can be justified in terms of a mandated public health outcome.

Ms HALL (Shortland—Opposition Whip) (19:31): The contribution by the member for Perth was an interesting one. I am a strong supporter of science and science-based evidence for any sort of medical procedure. I also put on the record that I do question the fact that many drug companies fund research in Australia. Unfortunately, government does not fund research to a level that would enable research to be undertaken independently. When it comes to immunisation, for every one paper that condemns vaccination there are 10 or 100 or maybe even 1,000 that support it. Some research asserted that immunisation led to autism, although I did not come into this place ready to talk about the scientific research in that area.

The Social Services Legislation Amendment (No Jab, No Pay) Bill in no way makes it mandatory for parents to immunise their children. This legislation makes it essential that parents immunise their children if they want to receive family tax benefit. I have thought about this very seriously. When my daughter was having her children immunised she researched the issue and talked to many people. As I said in a speech last week, I have a niece who has done leading research in the area of autism and she has worked with many people. We asked her what she thought about the connection between autism and immunisation, and she said to us that the risk from not immunising is much, much greater than the risk from immunising.

Vaccination has been one of the most effective interventions to prevent disease worldwide. I had a grandfather who had polio, and now polio has been eradicated in Australia. It has almost been eradicated worldwide, except for countries like Pakistan and a couple of other places. It is a preventable disease—if you are immunised against polio you do not get it. You do not have the epidemic that existed when my grandfather contracted polio; you do not have the epidemic that raged here in Australia postwar, in the late forties and fifties, when so many people had their lives changed. We do not have epidemics that see survivors of polio coming into this parliament with the late effects of that disease. Polio sufferers survived and led normal lives; in some cases they may have had a level of disability but as they aged the effects of the polio might have become much greater. It is estimated that immunisation prevents approximately 2.5 million deaths a year. How can we argue against immunisation? This legislation, as I have already said, does not prevent parents from choosing not to immunise their children, but I would encourage them to immunise their children. It not only gives their children protection but also gives protection to the whole community. It is a major public health issue and immunisation is a practice that we as a nation should be embracing.

Labor members who have spoken in this debate have made it quite clear that we will be supporting this legislation. It was part of the 2015 budget measures and it is one of a number of measures being put in place to ensure that children are fully immunised. It will commence from the beginning of next year, 1 January 2016.

However, included in this legislation is a clause that says that, where there are valid medical reasons for not vaccinating a child—where a general practitioner has certified that vaccinating a child would be medically contraindicated or it is unnecessary because the child has a natural immunity, having already contracted the disease in question—such children will be exempt. Australia has one of the best immunisation records in the world. Nationwide, around 92 per cent of children are immunised, and we should do anything we can to encourage an increase in that number. Other children who will be exempt are those in approved vaccine studies or for whom the vaccination is temporarily unavailable. I think that is a common-sense approach. A family should not be penalised because the vaccine is unavailable, but that would be on very rare occasions.

Immunisation requirements will also be extended to include children of all ages. Once again, that is very important. Just because you are an older child, it does not mean that you do not need to ensure that your vaccinations are up to date and that your immunity to such diseases is still in place. Last year, I think it was, there was an outbreak of measles within the community; even in Canberra, there were cases of measles. Measles, whilst it may have been considered a common childhood illness when I was younger, can lead to a very significant level of disability or even death. Now that children are immunised against measles, they no longer face this potentially disabling and life-threatening illness.

In the lead-up to the 2013 election, Labor supported tightening up requirements around immunisation. As such, we were very supportive of these measures when the government announced them in the budget. There is one point that worries me, though, and that is that the budget projects that this will lead to savings of $508.3 million. I see this as a good public health initiative. It is not a budget savings measure; it is a measure that should be put in place to ensure that children are immunised. I think that there should be a backup as well, to make sure that it is not just a cost-saving measure and that it really is a sound public health initiative. Those are the grounds on which I support it—as a sound public health initiative, not a cost-saving measure.

Professor Brian Owler from the AMA said he was concerned that such large savings were expected from these measures:

… it indicates that a number of people aren't going to vaccinate their children. What we should be saying is we need to make sure that we do get all those children vaccinated and we should be aiming to actually continue to spend the same amount on those sorts of Family Tax Benefits.

So, along with No Jab, No Pay, there should be initiatives put in place that will educate and encourage people to have their children vaccinated, and make them aware that their children may be due for immunisation but they may not have followed through.

Quite often, it is the people whose lives may be little more chaotic, who have a lot of things on their plate, who may not have access to a GP or to medical services at the same level as most Australians, who will fall through the cracks. They may not even pick up on the fact that they are not being paid their family tax benefit. I put on the table that I am very concerned about that group of people. So I think that, rather than looking at this from a cost-saving perspective, we should be looking at it from the perspective of using No Jab, No Pay as an incentive to parents to ensure their children are immunised, while at the same time making those parents aware of the fact that the reason they are not receiving their family tax benefit is that their child did not have the jab.

We on this side agree and, I think, every member of the House would agree that parents should have the final say on this. We live in a free society, and whether or not to immunise a child is a decision that ultimately rests with the parents—but there have to be incentives in place to encourage parents to ensure that their children are properly immunised. Also, we need to make sure that the registers are up to date. We need to make sure that the information going to parents is adequate. We need to make sure that those parents who may have missed their child's immunisation because of some sort of oversight are made aware of the facts which I referred to a moment ago. We need and do support a national immunisation register to enable adults to keep up to date with their vaccinations. I do not know how many members of this House keep track of their vaccinations, but as a group we probably do so more than others. Many Australians believe that once they have been through their childhood immunisation that is where it ends; it is not the case. There needs to be more information and more education around immunisation.

The case for vaccinations, the case for immunisation, is very strong. There are a small number of people for whom it is contraindicated, and this legislation covers that. There needs to be ongoing scientific research. I do not think any member of this House would approach the issue of immunisation and health with a closed mind. We are here to ensure the common good of all Australians. We are here to ensure good health outcomes. If research shows that one form of immunisation should be abandoned then we should seriously look at it.

I support this legislation. My only concern is that the $508.3 million worth of savings should be put towards education and ensuring that parents do not miss immunising their children simply because of an oversight.

Mr ZAPPIA (Makin): The Social Services Legislation Amendment (No Jab, No Pay) Bill 2015 adds to previous reforms which have linked immunisation to the family tax benefit end-of-year supplement payments. This legislation takes that measure even further and ties immunisation to child-care benefits, child-care rebates and the family tax benefit part A supplement, which I referred to a moment ago. I understand that the changes will commence on 1 January 2016.

Before I get into my general comments about the legislation and for the benefit of anyone listening, I want to say, as other speakers have made clear, there are exemptions to this legislation where it ties receiving government assistance to having children immunised to what we call Australian standards. The exemptions tying immunisation to those payments—whether they are child-care benefits, child care rebates or family tax benefits—are based on the child or the family having a valid medical reason for why the child should be exempt from being vaccinated. That valid medical reason might be that it will have ill effects on the child or it is contraindicated by the doctor. Clearly, it has to be a decision made by the family doctor. There is also an exemption if the child has a natural immunity to the particular disease. The child might have contracted the disease at an earlier stage in life and developed a natural immunity to it. Alternatively, if the child has come from overseas and has had an equivalent vaccination in an overseas country then, again, that child would be exempt from the measures in this legislation. I also note that there is a temporary exemption for a child who might be part of a medical study of some sort—it has to be an approved study—or if the vaccination is temporarily unavailable. Those exemptions are also only temporary.

I also note, as the previous speaker, the member for Shortland, did a moment ago, that in future the vaccination requirements will apply to children of all ages, whereas currently my understanding is that a vaccination status is only checked at ages one, two or five years with respect to its application to the family tax benefit part A supplement, which I referred to at the beginning of my comments, and up to age seven for children receiving child-care payments. I believe that applying the age extension right through does have some merit. If you are going to apply policy then I am not quite sure why it would be limited to those age groups in the first place.

Australia has a long and strong record of publicly funding immunisation programs. Indeed, almost for as long as I can remember there have been government funded immunisation programs available. In my own state of South Australia, in addition to the family doctor being able to provide the immunisation required, there were also what we referred to as mothers and babies centres where a nurse would come along and similarly provide the service. Local councils also provided immunisation services in many parts of South Australia. Indeed, there was a debate between local government and the federal government some years ago about the amount of money that was being reimbursed to the local councils for providing that very service. However, it was generally accepted that immunisation was part and parcel of Australian life. Just about all families immunised their children and very few people ever questioned it. In more recent years, I understand that Medicare Locals assumed much of the responsibility for ensuring that immunisation programs were carried out throughout the community. Since the closure of Medicare Locals, I understand that responsibility has been passed on to the Primary Health Networks.

The value of immunisation has and will continue to raise questions and lead to differences of opinion in the community. I suspect that has become the case more so in recent years than it was in years gone by. I have been contacted by several people in my electorate about this legislation. These people oppose the legislation and they wanted to speak to me about it. I have met with some of them. I have also read all of the material that has been sent to me on i I make it clear that I do not dismiss the concerns that those people have raised with me. Similarly, I do not dismiss the concerns, which I consider to be very often valid, with respect to the health effects that occur from a whole range of prescription drugs and agricultural chemicals that are used throughout our country. I accept that all drugs and chemicals will have adverse consequences and that there will be individual examples which provide living proof of the risks and the consequences.

I suspect that, for a whole range of reasons—more people in the world, more drugs being used, perhaps more pollution everywhere, and changes in our diet and air quality—there are all sorts of ailments and illnesses that are occurring and that are perhaps compounded by some of the chemicals and drugs that are already on the market. Indeed, I have a constituent who has become a tireless campaigner against drug companies not disclosing all of the information that they have about drugs before releasing them and putting them onto the market. I believe that her campaign has a lot of merit, particularly given that she has been permanently affected by a drug that was prescribed to her several years ago. She will most likely never entirely overcome the effects of that drug. Her claim is that the manufacturers of that drug were aware of the particular side effect that she suffered but yet did not make that information available to the public at the time. I suspect that with all drugs trials there is information that is not necessarily released at the time it should be. So, again, I do not dispute what people are saying to me about the risks when it comes to any form of medication. This is in respect of real people that I talk to and affects their lives in ways that are clearly apparent to me. I, therefore, do not deny or dispute what it is that they are saying.

I am sure that other MPs have had similar representations made to them about this legislation. Again, it is a matter that, quite rightly, ought to be debated in this place. Can I say to those people that make the representations to me: it seems to me that the real argument and the real debate should be taking place within the medical industry and that the real convincing needs to take place within that sector and the pharmaceutical sector, because that is where the real experts are, that is where all the testing is done, and that is where the people with the most experience do their work each and every day.

Governments also have a responsibility to make decisions for the greater good of society. In fact, I struggle to identify any legislation—be it medical or otherwise—that serves everyone's needs and does not create an unfair or unnecessary burden on some people somewhere in the community. I am equally conscious of the rights of children to participate in all forms of community activities and community events—such as kindergartens, schools, sports activities, childcare centres or wherever—in the knowledge that they will feel absolutely safe and be at no risk of being infected by someone else that participates in the same activity. It is noteworthy that the parties who are most affected by this legislation—that is, the children—do not get a say in it. There might be good reason for that, but the reality is that they do not get a say in it. They rely on the good judgement of their parents and of governments to do the right thing by them. They, too, have a right to grow and live healthily and be able to fully participate in society. We, as parliamentarians, have a responsibility to ensure that we protect them in the best way that we can. I am sure that governments—with respect to this kind of legislation—rely on the advice provided by the medical fraternity when it comes to what is in the best interest of a child's health. I am sure that—in respect of the immunisation programs that we have conducted in this country for decades, as well as those that are being conducted around the world—that is the underlying premise on which that immunisation is carried out.

This morning I attended a briefing on the global fight against polio. I notice that the member for Shortland and the member for Sydney both referred to polio. The briefing, in my view, brings context to this very legislation. If I can just quote some of the statistics that were provided to us this morning: in 1988, when the global polio eradication initiative commenced, some 350,000 people a year were affected by polio; by 2013, the number of cases had reduced to 416; by 2015, it had reduced to 359; and to the end of September of this year, there were just 44 cases, and only in two countries. There were only two countries this year where polio was detected. I commend all of the people who were involved in the global polio initiative, because quite frankly to see its effects on a young person really is disheartening, I also take this opportunity to commend Rotary International for the work that they have done for years and years as part of the polio eradication program and for the support that they have provided to that program.

Along with polio, other diseases or illnesses like smallpox, yellow fever, measles, diphtheria, mumps, rubella, tetanus and so on have also been either entirely eradicated or nearly eradicated. Certainly, the world has changed markedly from the years when those diseases were feared by community members around the world. I have no doubt that that is because of the vaccination programs and the vaccines that have been developed over those years. Yes, there might be other factors—and better education also helps in eliminating many diseases, as does having better water and food supplies—but I have no doubt that vaccination was at the heart of eliminating or reducing those diseases around the world.

My understanding is that presently over 90 per cent of all Australian children are immunised in accordance with Australian government recommendations and that only about two per cent of the parents do not comply, because of concerns that they have about immunisation or, perhaps, because of their religious beliefs.

The remaining four or five per cent of parents—and, again, I noticed that the member for Shortland touched on this point, and I commend her for doing so—do not have their children fully immunised because, primarily, they do not have access to immunisation programs. I can think of many reasons why that could be the case, and so I accept that that is a reality. It would, therefore, seem that, if we want to make an even greater difference to the health of our children, the focus should be on that four or five per cent rather than on the two per cent and that the emphasis of our efforts and government efforts should be on trying to overcome the barriers that are stopping that four or five per cent I refer to from having their children immunised. Nevertheless, even with the two per cent, I go back to the comments that I made earlier: in my view, every child has the right to be protected in the way that the government thinks it is providing the best possible protection and, quite frankly, in the way the parents think they are providing the best possible protection for their children.

This legislation imposes a financial penalty on parents who choose not to have their children vaccinated. That is the bottom line to it. Parents can of course still choose not to have their children vaccinated and wear the penalty. That is a choice the parents can still make. It might be an unfair choice, but it is still a choice they can make. Time will tell whether this legislation will have the desired outcomes or not. I will certainly watch with interest what happens in the years ahead.

Mr PORTER (Pearce—Minister for Social Services) (20:01): The Social Services Legislation Amendment (No Jab, No Pay) Bill 2015 will ensure children fully meet immunisation requirements before their families can access childcare benefit, childcare rebate or the family tax benefit part A supplement. I would like to take the opportunity to thank all of the members for their contributions, particularly the member for Jagajaga and the member for Solomon, and in a moment I might also touch on the contribution of the member for Makin. All members have touched on some of the very important issues that arise in the context of this bill and have also, I think, offered some very good statistical and historical information about why this bill is important to the parliament and to the nation.

It was interesting, Member for Makin, hearing you speak about the polio epidemics that occurred in Australia. I must say, it is a matter of great personal pleasure to be able to provide this summing up speech at the second reading point in this debate. I grew up with an older cousin, my eldest cousin, and he was one of the last handful of children in Australia who contracted polio. He was a lovely boy, is a fine man and has had an extremely successful career, but it is a life made very much more difficult than it would otherwise have been. The two vaccinations, the injected and oral vaccinations, are the Salk vaccination, which I think came to Australia in 1956, and the Sabin vaccination, which came to Australia in 1966. My cousin would have been one of the very last in the cohort around the time of the Sabin oral vaccination who was unlucky enough to contract polio. I think that the generation of Australians, of which I am very much at the tail end, who lived through those episodes bring to their experience a very different mindset to a modern generation who have not experienced what it must have been like. The reason why Jonas Salk's wonderful contribution to medicine that he pioneered at the University of Pittsburgh was so welcome in Australia and why that man was, frankly, such a hero to many Australians is that, between 1946 and 1955, there were several catastrophic polio epidemics in Australia which caused 1,000 deaths. In the context of Australia between 1946 and 1955, that was an enormous number of people to die, in a particularly unpleasant way, from a disease which we later found was completely preventable. Of course, not merely did those deaths occur in that decade but the disease itself left thousands of survivors handicapped, in many cases very seriously, including many who became ventilator dependent for the rest of their lives.

So, having grown up with a cousin who suffered at the very tail end of that time, the notion that we have a range of people in Australia who have formed the view on vaccinations that they have is a very strange thing, I think. The extent that this legislation can offer some ongoing educative component, both historically and by raising the issue in the minds and consciousness of the Australian people, is a very important aspect of what we are doing this evening.

Immunisation is, of course, an important health measure for children and their families. That it is the safest and most effective way of providing protection against disease has been verified statistically and historically for many decades now. From 1 January 2016, the government will extend current immunisation requirements to include all children of all ages. At present, a child's immunisation status is only checked at ages one, two and five for the family tax benefit part A supplement, and up to age seven for childcare payments. Parents of course have the right to decide to not vaccinate their children. However, the government considers that, if they are making such a decision as a vaccine objector, this decision can no longer be supported with government financial assistance provided through the effort of the taxpayer. Much has been said in very valuable and decent contributions this evening. Perhaps those contributions can be fairly summarised by noting that it is the view of the House that the choice made by some families not to vaccinate their children is their own choice, but it can no longer be supported, indirectly or directly, or tacitly, by public policy decisions of this House. Public policy, medical research and all other best available information does not support a decision to fail to vaccinate children, and that action, if it is taken by parents in question, can no longer be supported by taxpayers in the form of family assistance and childcare payments.

Critical for the government is that ending vaccine objections through this bill will have an ongoing positive effect for the nation's health and that of, particularly, the nation's children. This means that families who do object to vaccination will no longer be able to access the relevant family assistance payments. As has been noted, there are appropriate exceptions to the policy, which have been carefully designed. They will apply as exceptions for valid medical reasons such as when a general practitioner certifies that a child has a medical contraindication or vaccination is not required as the child has a natural immunity to any particular disease in question. Families with children participating in an approved vaccine study will be taken to meet the immunisation requirements for the duration of the study. Similar rules will apply where a vaccine is temporarily unavailable. The requirements will also be met if a recognised immunisation provider certifies that the child has an equivalent level of immunisation through an overseas vaccination program.

Finally, the secretary of the department will be able to determine that a child meets the immunisation requirements, in very limited circumstances, after considering decision making principles set out in a legislative instrument made by the minister. Such decisions of the secretary will be made on a case-by-case basis, and they are strictly to address unusual situations—for example, where a grandparent or non-parent carer does not have the requisite legal authority to require or compel the vaccination of a child or effect the vaccination of a child in their care. In those circumstances, it cannot be used to give effect to exemptions on the ground of vaccine objection. The example we are giving is a circumstance in which a parent who has the legal authority to prevent vaccination does so but the child is nevertheless in the care of another person.

This policy, as it has been presented and articulated in the bill before the parliament tonight, will tighten up the rules and reinforce the importance of vaccination in protecting public health, especially for children, and perhaps it will do something to bring to the forefront of the Australian consciousness issues that in the 1940s, 1950s and, very sadly, still in the 1960s left physical scars across the nation that were eventually cured by widespread use of relevant vaccinations. I commend the bill to the House.

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

Question agreed to.

Bill read a second time.

Mr PORTER (Pearce—Minister for Social Services) (20:08): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms MACKLIN (Jagajaga) (20:09): I am pleased to speak on the Social Services Amendment (More Generous Means Testing for Youth Payments) Bill 2015 and to offer Labor's support for this bill. I have to say, it is a very rare day that we see this government seeking to make income support payments more generous or to provide extra support to ordinary Australians. Indeed, in the two years of this Abbott-Turnbull government, this may well be the first time a bill has come before the House that seeks to make life easier for Australian families. Such is the legacy of this government.

So, before I go into the details of the bill, I want to spend just a moment or two reflecting on the legacy of this government and the impact they would want to have on pensioners, families and young people in our community. It is a legacy of cuts to income support the likes of which this country has never seen before—unfortunately a legacy that in some cases is likely to continue, because, despite what could only be described as a brutal change in leadership, there does not seem to have been much of a change in direction. And I guess you could ask, why would we expect there to be? The new Prime Minister has been just as much of a player in the decisions of the government as when Mr Abbott was the Prime Minister. The new Prime Minister was at the cabinet table when the 2014 budget was drawn up. He would have supported, around that cabinet table—in fact, he said so publicly—all the cuts in the 2014 budget, including the cuts to indexation of the pension, cuts that we now know would have seen every single one of Australia's four million pensioners left with $80 less pension a week over the next 10 years. The new Prime Minister also supported and voted in this place for the second round of pension cuts in this year's budget—cuts that will leave 330,000 pensioners worse off in 2017.

Dr Stone: Madam Deputy Speaker, a point of order on relevance: I ask that you draw the member's attention to the topic that is currently under debate, which is the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015.

The DEPUTY SPEAKER ( Ms Henderson ): There is no point of order.

Dr Stone: Well, I argue that the member is not visiting this bill at all but rather the budget.

The DEPUTY SPEAKER: I ask the member for Murray to resume her seat. There is no point of order. But, before I give the call to the member for Jagajaga, I will just say that you would expect some ranging, but I do remind the member to stay within the subject matter of the bill. Thank you.

Ms MACKLIN: As I indicated at the start of my remarks, the Labor opposition will be supporting this more generous indexation of youth payments. But what is important to families is of course to know the whole context of what this government is doing to family budgets. I was just talking about the impact of the government's cuts on pensioners. Some single pensioners will lose $8,000 a year as a result of the government's pension cuts, and some couples will lose up to $14,000 a year.

We also know that there are very significant cuts in the 2014 budget to family tax benefits. Today we have seen some signs that the government is considering retreating from these very unfair cuts, at least in part, and I think we can expect to see the detail of that. The government has insisted for the past two years that Australian families should just accept these cuts to family tax benefits, should accept that families should, apparently, pay the price of fiscal repair. But Labor does not see it that way. We have argued long and hard for the past 18 months that the cuts from this government have unfairly targeted low- and middle-income earners. It now seems that families will be protected from some of these cuts and Labor are very, very pleased to have fought the hard fight for those families. We will continue to fight this Liberal government's cuts to paid parental leave—another cut to families, cuts that 80,000 new parents each and every year will feel. These cuts are just as savage today as they were when they were introduced.

As this legislation specifically focuses on young people, I will draw the parliament's attention to two attempted cuts to young job seekers. This Prime Minister sat around the cabinet table as every single Liberal-National Party member in this parliament agreed to what I consider to be the toughest cuts of all, the cruellest cuts of all, which would have left young people under the age of 30 with absolutely nothing to live on for six months. I am pleased to say that that got defeated with Labor's hard campaigning. But we are now seeing the next iteration of this cruel cut. Now, young people will face a one-month wait for any income support, and that is for young job seekers under the age of 25.

If this new Prime Minister gets his way, young people on income support will be left with nothing to live on for a month, and we should not forget that. Even as we consider this bill, we have to remember that there is another group of young people who are going to be harshly impacted by this government's cruel measures.

Another very harsh measure for young people on income support between the ages of 22 and 24 would see a cut to their income support of around $46 a week. That is around $2,400 a year. We saw just a few weeks ago that this government has reintroduced this bill that would see these cuts implemented. That was one of the first acts of the new Prime Minister—to reintroduce the same unfair cuts to young Australians as Mr Abbott had attempted to do. These measures have already been defeated in the Senate and, of course, Labor will do everything in its power to try to defeat them again. It does seem that the new Prime Minister is still going to pursue these very, very harsh measures.

You would have to wonder what liberalism actually means in the face of these very harsh cuts. I do not think any of us here today should pretend that we have a government that have the interests of our young people at heart. These cuts that are currently before this parliament are very harsh indeed and the government have relentlessly pursued them. They have tried to demonise young people, calling them the leaners of Australian society. The argument from the government was that all of this was to be done to improve the budget. In fact, the government have achieved the remarkable, simultaneously cutting into the incomes of pensioners, families and young people while, at the same time, doubling the deficit. Unemployment is up, growth has slowed and, at the same time, they have this legacy of cuts—all supposedly geared to improving the state of the economy, all of that demonstrably false. None of us should ever forget any of that. All of this pain would have been on pensioners, families and young people yet, at the same time, amazingly, the government have doubled the deficit.

Tonight like every single night, we should never forget this government's attitude to the most needy members of our society and we should also, at the same time, never forget that these cuts have failed to achieve the stated objective of budget repair. The sum total of this government's record on social policy is to demonise the vulnerable for absolutely no gain. This is why the bill before the chamber tonight is a surprise.

There are four main components to the bill. The first, commencing from 1 January next year, will see a removal of the family assets test and the family actual means test from the youth allowance parental means test arrangements. Removal of the family assets test will see around 4,100 additional dependent youth allowance claimants qualify for the first time, accessing average annual payments of $7,000 a year. Removing the family actual means test will see around 1,200 more people receiving youth allowance for the first time, as well as increasing payments for around 4,860 existing students by approximately $2,000 a year.

The bill also aligns the parental income test exemptions for youth allowance with existing arrangements for family tax benefit part A; removes the maintenance income from the youth allowance parental income test assessment; and applies a separate maintenance income test for the treatment of child support like that currently applying to family tax benefit part A. Also, where a family has a dependent child who receives an individual youth payment that is parentally income-tested and younger siblings who qualify for family tax benefit, the family pool for the youth parental income test will include all FTB children. They are all positive measures.

According to the minister's second-reading speech, including all FTB children in the family pool for the youth parental income test will allow around 13,700 families with dependent children in both the family tax benefit A and youth streams to become eligible for an average increase in payment of around $1,100 a year. Around 5,800 families who currently miss out on payments due to the combined high-taper rates will also become eligible for an average payment of around $1,300 per year. According to that same material, the changes will reduce the regulatory burden on around 30,000 families subject to the family actual means test and around 200,000 families subjected to the family assets test.

For these reasons, Labor will support the bill.

Mr WILSON (O'Connor) (20:22): I rise today in support of the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015. I welcome the support from the member for Jagajaga and the Labor Party for this bill. It does go part way to rectifying the damage done to youth allowance by the Rudd government in 2010.

I first want to thank the Hon. Scott Morrison, the former Minister for Social Services, for introducing this amendment bill after listening to the pleas from regional backbenchers such as myself and my colleague the member for Murray and also from Senator Bridget McKenzie, Chair of the Senate Education and Employment Legislation Committee, when we appealed for more equitable access to higher education opportunities for the youth of regional, rural and remote Australia.

I thank Senator McKenzie and her panel of representatives from the education and social services departments who recently conducted over 14 regional education forums across the country, including one in Albany in my electorate of O'Connor. These forums were an opportunity to hear firsthand the experience of families and students when trying to access higher education in regional, rural and remote Australia. The information collected at these forums will be collated into a final report to be presented to the new ministers, my dear friend the Hon. Christian Porter, the new Minister for Social Services, and Senator the Hon. Simon Birmingham, the Minister for Education and Training, for their consideration in November to help shape further changes to accessibility for youth payments going forward.

In Albany, over 65 people attended our forum, including parents and grandparents, university, high school and gap year students, educational professionals and others concerned by the barriers country kids are experiencing in obtaining tertiary education. I commend the attendees for sharing their personal and often heart-rending stories and I acknowledge their well-considered recommendations on how the federal government can address the obstacles they have encountered. Together we heard of the emotional as well as financial cost for regional students having to leave home and the security of family, friends and mentors to set up a life in the city, taking full responsibility for the daily necessities of feeding, clothing and transporting themselves as well as securing a job while maintaining their studies. Many are ineligible for any form of government financial assistance.

Youth allowance is the main benefit these students seek to access to allow them to live guilt-free of the financial burden incurred by their parents, many of whom are supporting other siblings at school and university. I myself was once one such student. I was the youngest of six children. My mother was a widow working as a nursing sister to support my four older sisters as they pursued their university studies. My brother, Allan, and I remained at home, working on the farm after graduation from high school. I worked for two years to attain independent status for youth allowance and was able to move away to the Muresk campus of Curtin University and pursue my agribusiness degree. I am eternally grateful for the support that allowed me the opportunity to be the person I am today.

Now, some 30 years later, I see country kids just like me struggling with a system that is complicated to negotiate and, for some, impossible to gain any benefit through. Attendees at the recent higher education forum described the onerous application process for youth allowance, with one highly educated parent clocking up 80 hours helping their child fill out the necessary documentation.

Those from farms spoke of issues regarding the family asset test, where, even with the substantial discount applied, they still exceeded the threshold for youth allowance eligibility. In addition, farmers made the point that in this current economic climate you cannot just liquidate a farm asset overnight and, even if it were possible to do so, you would simultaneously lose your main income source. With respect to the family actual means test, I have met constituents who found the whole process so onerous they simply gave up.

This amendment to remove the family assets test and family actual means test from the parental income test will base the assessment of a young person's eligibility for youth allowance on a much fairer measure of their family income than the current system. I believe removing the family assets test will see around 4,100 additional dependent students qualify for the first time, accessing payments of more than $7,000 a year. The passage of this bill will significantly reduce the regulatory burden on around 200,000 families subject to the family assets test. Removing the family actual means test will see an additional 1,200 students receive youth allowance for the first time, and some 4,800 existing students will see their payments rise by approximately $2,000 a year. The passage of this bill will reduce the regulatory burden on around 30,000 families subject to the family actual means test. I therefore heartily welcome the plan to scrap the family assets test and family actual means test from the youth allowance eligibility and calculation criteria. I foresee this leading to tremendous improvements in access to youth allowance payments for the farming families of O'Connor.

This brings me to another issue raised at the forum by those with large families and multiple children studying. These parents find their children are ineligible for youth allowance due to them exceeding the parental income thresholds, yet they say there is inadequate consideration of the immense financial burden of supporting each of these children's individual education and accommodation needs. Many parents at our forum described paying living expenses of $17,000 to $25,000 per year per child attending university and only marginally less for children boarding for secondary school. One parent at the forum had put four children through higher education and another had spent $250,000 on higher education over the past 10 years.

It is for this reason that I welcome the amendments to change the youth allowance parental income testing arrangements to include all family tax benefit children in the family pool. Currently only children over 16 years of age are included in this test. These changes to the family pool for the youth parental income test will allow around 13,700 families with dependent children in both the family tax benefit part A and the youth systems to become eligible for an average increase in payment of around $1,100 per annum. Around 5,800 families who currently miss out on payments due to the combined high taper rates will become eligible for payments of around $1,300 per year. The changes in this amendment bill will soften the reductions in the dependent child's youth allowance payment as the family's income increases. I look forward to the changes this bill will introduce as a first step in a process that requires a major revamp. These changes to the current legislation will facilitate fairer access to dependent youth allowance for rural, regional and remote students.

But how many of these kids are truly dependent? Most cannot remain living at home to complete their studies. In Western Australia, unlike in our eastern neighbour states, we do not have regional universities. In some large regional centres, such as Albany, we are blessed to have satellite campuses of metropolitan universities such as the University of Western Australia. In Kalgoorlie we have the Western Australian School of Mines campus of Curtin University. Albany's Great Southern Institute of Technology hopes to soon offer degree programs in nursing and other in-demand qualifications through university partnerships so local students can be educated in situ and, hopefully, graduate to contribute to our much needed regional professional workforce. The City of Albany is actively trying to grow Albany as a tertiary education destination, and I strongly endorse the efforts of Mayor Dennis Wellington and his deputy, Greg Stocks.

Most of all, I acknowledge the quality of our country students. They are distinguished by excellent academic achievement, qualifying for university places only to be hampered in their aspirations for their desired courses by the tyranny of distance and the inherent financial barriers to obtaining self-sufficiency. Secondary school principals who attended the think tank I convened after the regional higher education forum confirmed up to 80 per cent of their graduates in 2014 qualified for university entrance, yet some 97 per cent of those would take a gap year, driven largely by financial considerations. It is important to note at this point that deferral from university only holds a place for 12 months, yet students have to take 12 to 24 months to qualify for youth allowance under various different criteria. Those who take time out are often lost to the temptations of a regular disposable income and peer group pressure. One principal stated over 33 per cent of their students taking a gap year would not proceed to university.

Although there are concerted attempts to offer educational opportunities in the regions so students have the opportunity to study in situ with the support of their friends, family and greater community, the undeniable fact is that most of our country kids have no choice but to move to the city for all of their studies. These kids leave home, often relocating many hundreds of kilometres, to set themselves up in halls of residence or rental digs where they have to largely fend for themselves. Although they have access to various support networks, there is nothing like the comfort of coming home to a warm hug or a home-cooked meal. I applaud the young people of my electorate who successfully make this transition to university life and work hard at their studies whilst also holding down jobs to support themselves.

At this juncture, I digress to congratulate three innovative Albany siblings, twins Caitlin and Damien and big brother Joshua Boccamazzo, all of whom are living away from home to complete degrees in Perth. Together they have drawn on their collective experience to create a website for country students, called City & Beyond, which aims to help country students like themselves in the transition to city and university life. Their website details the pitfalls and perils associated with accessing rental accommodation, negotiating the job market and applying for scholarships and benefits like youth allowance. I met with the Boccamazzo twins recently and was gobsmacked to hear that despite their identical education and employment histories they had both failed eligibility for youth allowance on different criteria. I think this anomaly is symptomatic of the broken vehicle this vital benefit had become under the previous government, and I challenge Minister Porter to fix this trusty old wreck one piece at a time.

For my electorate, the biggest constituent issue is actually eligibility for youth allowance under the independence criteria. For general independence eligibility, any student anywhere in Australia must prove they have supported themselves by working full-time for 18 months in a two-year period. This is not an easy feat in regional and rural areas where jobs may be seasonal, inconsistent or non-existent. I have met many students who have failed to meet these criteria due to situations beyond their control, such as illness, the seasonal nature of farm labour force requirements and competition from younger, cheaper labour during school holidays. A failure to meet these eligibility requirements often means abandoning their plans to study. For the special regional and remote criteria, a country student can be assessed as independent if they have received at least 75 per cent of wage level A of the National Training Wage Schedule in an 18-month period or have worked part-time for at least 15 hours a week for at least two years.

In addition, their parents must also have earned less than $150,000 in the most recent tax year. I have encountered countless constituents whose children have worked hard for the requisite period to prove their independence only to find they fail eligibility under the parental income criterion. Many parents cited the parental threshold of $150,000 as inadequately low when taking into account double-income families and those supporting other truly dependent children. I have also heard of cases where changes in parental circumstances have resulted in previously eligible kids losing their benefits part-way through their degrees and having to drop out. I therefore hope there is scope for reviewing youth allowance independence criteria in the near future.

All in all, I anticipate Ministers Porter and Birmingham will take the information gleaned from these Australia-wide regional higher education forums, together with the thoughtfully penned individual submissions of parents and students, teachers and mentors—all reflecting on the barriers to accessing higher education for country kids—and consider their constructive suggestions moving forward. It is my sincere hope that together they can shape a great youth allowance of the future, one that is equitable for all students—remote, rural, regional and metropolitan—and is based on their individual needs, so that we can nurture and encourage our youth to pursue a higher education.

I thank the former Minister for Social Services, the Hon. Scott Morrison, for the well-constructed amendment bill before us for debate today. It fulfils a budget promise to provide more generous and consistent support for families with dependent students who qualify for certain youth income support payments. I thank the government for their commitment of over $262 million over the forward estimates to bring extra support to some 30,000 families. In particular, I reiterate that this bill will benefit the many families in my electorate of O'Connor who have children wishing to pursue studies beyond year 12. These children are our future community leaders. They deserve access to the same education as their metropolitan cousins so they can become the best they can possibly be, irrespective of their postcode. I commend the bill to the House.

Ms CHESTERS (Bendigo) (20:35): This bill is not opposed by Labor, but I did want to put on the record the experience of regional students when it comes to this government. As the previous contributors to the debate on this side of the House have said, we do not oppose this bill. We do support it because we do believe we need to support students when they are at university. But this government's track record of support for students is shocking, and through this debate I do want to highlight some of the examples of how shocking it is when it comes to supporting regional university students and regional families.

It is interesting that the previous contributor to the debate brought up the regional forums that they have been holding. When they were talking about this issue, I hope that they had more people attending the regional forum organised by the government in the member's electorate than attended the regional forum that they held at the La Trobe University at Bendigo. Not one student turned up. I should take that back. Not one student who was not involved in the Labor Party turned up to their forum. The student who did turn up was a member of the Labor Party, and he turned up to challenge the government about why they were introducing $100,000 degrees.

So, even when it comes to talking about a bill that should be positive, that should be about saying to families in regional areas, 'We're actually going to help more students come to university,' this government fails to get out and articulate and engage people. If it did, it would learn very quickly how upset regional students are about this government's plan for higher education, its proposal to introduce $100,000 degrees. The deregulation of university degrees has gone down like a lead balloon. It is not popular in the regions because it will be a barrier to so many people in regional Australia being able to attend university.

What the regions also do not like about what this government is doing to universities is the massive funding cuts that it introduced in its first budget, including for La Trobe University and the campus in my electorate. It was $40 million that this government cut. That meant that students, to obtain the same qualifications, have the same experience, would either have to pay more for their course materials or they would have less time at university. As a result of this government's cuts to higher education, university students at La Trobe—whom this government claims to support in this bill before us—have less time with their tutors, less time with their lecturers, less time on campus. The bill before us, whilst it will help a few, will not help the majority of university students. It is a piece of window-dressing by this government to distract people by saying, 'We'll help some of you,' and meanwhile trashing the rest of them when it comes to higher education.

This bill makes changes to the means-testing for youth payments. It will mean extra support for young people living in families with higher levels of assets, by removing certain means-testing provisions, including the family assets test, for youth allowance. So, as other people have mentioned, it does help regional families, particularly, whether they work in small businesses, whether they be farmers or whether they be, as we say, asset rich but cash poor. It does help some families in that way to support their young people when they go to university. It means that more young people living in families with higher assets will now have access to youth allowance.

Of course Labor wants to see extra support for young people from youth allowance, because we understand how expensive life has become for students—and not just students. Life in general has become expensive. I was looking just today at reports released by Domain.com.au and Realestate.com.au on average rents and how rents have increased in places like Melbourne, Sydney and even regional centres like Bendigo. Rents are going up by a ridiculous percentage, so any support from youth allowance will help keep young people at university. Of course Labor wants to see the support come for young people, but we need to acknowledge that it is only a small number of young people who will receive support. This is not the silver bullet to ensure that young people stay at university.

In relation to this bill, we want to point out the hypocrisy at the heart of the government's agenda. Whilst it supports some people going to university, these are the same families that it is going after with changes to other areas, whether it be the family tax benefit or the Medicare system. This government takes with one hand and gives with the other. This is a simple move that does not really help many, and it tries to disguise what is actually going on in many of our regional communities when it comes to the cost of study and the cost of living.

Just last week the government voted to put through legislation which would see young people left with nothing to live on for a month. To young people who finish university, they are saying, 'Too bad; we're not going to help you.' If you don't get a job within the first two days of your graduation, you are not going to get help. If you have been made redundant, if you have lost your job, you are not going to get help for the first four weeks. But this is after their proposal to leave young people without any support for six months.

The government are so selective about which young people they will help. This bill is a demonstration that they are being selective in the young people that they will help. If you are a young farming kid who wants go to university: 'Sure, we'll lend a hand, change the means-testing and help you.' But, if you are a young farming kid who wants to start working and moves to a city like Bendigo and starts seeking help: 'We're not going to help you; we're going to keep you on nothing to live on for six months'—and these days they are saying that it is nothing to live on for four weeks. If you are a young person going to TAFE, the same applies. If you are a young person who finishes university and struggles to get that job interview, struggles to get that first job opportunity—because there is a lack of entry-level jobs today—then: 'We're not going to help you.'

This is another attempt by this government at window-dressing—to pretend to constituents in the bush, in the regions: 'We really do care about you.' Quite frankly, the regions are not buying it. They do not believe that this bill is enough to support and encourage more young people to go to university. As I have said, one of the major barriers to going to university is upheaval that the government have introduced to the higher education sector. Will there be $100,000 degrees? Will there be fee deregulation? Will we actually see the cost of education go so high that a number of people in the regions say, 'I just can't afford it; I'm not going to try'?

I thought it was important just to mention a few local examples—people I spoke to about what their experience of getting some youth allowance has been. These are students from La Trobe University who did not attend the forum that was put on by the government but who spoke to me, when I was at the campus, about their experience when it came to youth allowance. Jack Cullen, who is an outdoor education student, gets some youth allowance, and these are his comments on what it is like to study at the moment: 'It costs me about $110 for food, not including rent, which is huge'—about $280 a week. 'I only get $170 in youth allowance, so I have to budget everything to make sure I get through.' He attends any event on campus that involves food—that sounds like a few staffers we have here, in this place! Any event there is food, he will pop along. That is one less meal he has to pay for.

Youth allowance simply does not stretch as far today as it did when people in this place went to university. Jessica Hill, an event management and business student, gets no youth allowance. She said, 'University life is definitely not like breezing through. If your parents don't support you and you don't work, you won't be able to stay at university; no way.' Jemma, an education student, gets no youth allowance: 'You really have to think hard about where you shop. One of the firsts things you learn at uni is to survive on a budget, eat less and definitely not buy big-brand stuff.' These are people we want to excel in their studies. They currently live in poverty.

These are people who—because of other things this government has failed to tackle—are struggling. Rents are going up because we have not tackled housing affordability. Despite the government's rhetoric about lowering energy bills, they are higher today than they have ever been under any Labor government. If the government pretend they are not, they have their heads in the sand. Energy bills are up. Water bills are up. These are some of the cost pressures on students today—not just on university students but on everybody in our community.

Jack is studying arts. He gets some youth allowance. He said, 'It's not enough to cover expenses. I live at home, at the moment. If I moved out, I wouldn't be able to afford rent or food not to mention bills and text books. The price of food has gone up. It's very hard if you want to eat a balanced diet, which is what I need to do in order to be a healthy human being.' It means the idea of students eating two-minute noodles is a cold, hard reality. I know that some people like to joke about their days as a student when they tried to survive on two-minute noodles. But is it something we should be aiming for, for our young people?

Tim is an arts student too and gets some youth allowance. He has moved to live on campus, at the university, in my electorate. He said, 'I've already had tonsillitis three times this year because of the stress and have no sleep from having to manage working in fast food while getting study done.' He works at McDonald's and studies full time. There are lots of pressures in trying to keep up full-time work and full-time study. He continued: 'Youth allowance helps but it definitely isn't enough. When you get to the checkout at the supermarket there is always a tense moment waiting to see if the transaction is approved. It's like living on a tightrope.'

What this government fails to realise is that students are already doing it tough. The measures in this bill will help some access youth allowance, but they do not go to tackling the broader issues we have facing higher education. It is an attempt by this government to pretend they are helping students. It is only some students they are helping. That is why Labor supports this bill before the House—any support for young people in this space should be given.

The government is kidding itself if it thinks this is a silver bullet that will help all students. For all the speakers on this list—and I note there is a long list of speakers compared to the other debates today—they were not speaking about the fact they want to see them have less in their superannuation. They were not speaking on other bills that would have helped young people. Very few of them spoke about the fact they are going to introduce changes to Newstart, which would see them on no income.

This government and its backbenchers are selective about what they will stand up and speak about in this House. They are in hiding from the truth. They are not standing up and saying, 'Whilst we will give some the opportunity to youth allowance, we have cut funding to universities. We will introduce up-front fees. We will regulate universities that see, in some places, a quadrupling of fees, which will become a barrier. We are doing very little to tackle the cost-of-living pressures. Once these people leave university, we will do very little to help them enter meaningful employment.' This government has no jobs plan for young people. For all their rhetoric, they do very little to help them after they get their education. A clear example of their failure to help people with graduate entry-level jobs is the lack of graduate jobs this government offered to university students finishing last year and this year.

If this government were serious about supporting young people and those who want a higher education, they would do more than what is in this bill. They would stop cutting funding to university; in fact, they would restore it. They would make sure our university campuses were strong and the centre of the university's focus. They would also drop their ridiculous package of $100,000 degrees, which are a real barrier for university students. And they would more than just 'help' some students who do not have access to youth allowance—they would do more. They would ensure they had decent university support services on campus so that students' experiences I shared with you today are in the past and not the future.

Mr PASIN (Barker) (20:51): I rise to speak on the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015. I commend to you the contribution made prior to the member for Bendigo's contribution—which I will get to—that is, the one by the member for O'Connor. It was both considered and positive.

With respect, I think I had better run out and get some Prozac after listening to the member for Bendigo, because that was one of the most depressing presentations I have heard. If anyone wants to know why, perhaps, the fortunes of this government have turned for the good, it is because we are focusing on hope and not despair. Maybe the member for Bendigo could reflect on that while she returns to her room and considers what she does just before we adjourn.

This bill will implement the government's 2015 budget measures to provide more consistent and more targeted support for families with dependent young people who qualify for certain youth income support payments. In doing so, it honours the original policy intent of youth allowance. I am especially supportive of this bill, as it offers better support for rural, regional and remote families in transitioning their children from school to further study.

A significant proportion of the families in my electorate are engaged in agriculture, forestry or the fishing sector. Some 20,000 of my constituents are employed directly in these sectors, and whilst there are significant employment opportunities for young people within Barker, and whilst Barker now proudly provides tertiary opportunities to constituents through UniSA in Mount Gambier and the Flinders University Rural Clinical School in Renmark and Mount Gambier, a significant number of young people wishing to pursue further study are often challenged by the costs associated with moving to undertake that study.

I have reflected on this challenge previously in this chamber. Many of the constituents I have spoken to who are facing this cost challenge also face significant and arbitrary regulatory provisions which exclude their children from receiving assistance. In the coalition we understand the requirements of Australia's rural, regional and remote families.

During the debate on our university reforms, those opposite were fixated on absurd claims regarding $100,000 degrees. I remind those opposite that for many people out there, especially rural families, getting to university is the real challenge—perhaps that is something that the member for Bendigo can reflect on as well. That is because the Higher Education Loan Program meets the tertiary costs associated with tuition but does not meet the costs associated with living away from home. That is why we proposed reforms to the tertiary sector which would meet this shortfall. But, sadly, those opposite and those on the crossbench in the other place rejected those considered reforms.

That is why we have taken these steps to enable those families to send their children to tertiary education. I am proud to say that this bill will have a positive impact on rural, remote and regional families. The measures taken in this bill are a direct response to the government's understanding of these challenges and those challenges faced by these constituents. This bill recognises the need for a simpler, fairer youth income support system. This government has consistently removed unnecessary regulation, and this is true of the social security sector also.

In this bill we are squarely focused on better targeting youth income support. This government is delivering a more efficient use of taxpayer funds across the social services sector. We have taken steps to deliver stronger compliance frameworks and we have taken steps to curb unnecessary costs in the area of administration of social services. The myGov one-stop shop is an example of this simplification. And yet whilst it too often falls to coalition governments to tighten loose spending by Labor governments, this bill is an opportunity for the government to deliver our resources more effectively and in a more thoughtful and targeted way.

This government does not engage in generosity for generosity's sake. Government should approach each spending commitment with 20/20 vision, focused on policy integrity. This bill is not a ploy to gain some hollow popularity. It is a bill which delivers better outcomes by recalibrating youth income support, with a focus, as I have said, on the original policy intent.

While those opposite remove accountability mechanisms and weaken job seeker compliance frameworks, we have tightened our requirements. Having done so, we have the capacity to deliver more support where it is needed in a way that will provide a significant return on investment to the Commonwealth. This government understands that there is a finite pool of government revenue. We understand that each and every measure must be accurately costed and ultimately paid for by the taxpayer. We take our obligation to the taxpayer seriously, and understand that Australians provide tax revenue to us on trust, to expend in a cautious and effective manner.

Whilst this bill involves a cost to the taxpayer, I believe deeply that it is an investment that will yield handsome dividends into the future. In many cases, the measures in this bill will enable families who would otherwise not be able to send their children to further education to pursue that transformative opportunity. Could there be a better example of a hand up?

Importantly, this is delivered not through manipulating the means test but through bringing that means test back to reality. The coalition believes that we should take a broader focus on families when it comes to assessing youth income support. We are focusing on families who need assistance, particularly those in rural, regional and remote areas who face the higher costs of supporting their children to pursue post-secondary study because of the need to move away from home.

This bill simplifies the rules by more closely aligning parental means test assessments for youth payments with family tax benefit part A. Family tax benefit A is subject only to an income test based on adjusted taxable income, and has no family asset test or family actual means test. Many farming families, as you know well, Madam Deputy Speaker Landy, are asset rich but income poor. With drought now taking hold in much of my electorate, I fear that this may become increasingly the case. It is absolutely critical that we give our young rural, regional and remote Australians the widest scope of opportunities possible. This bill maximises that spectrum of opportunity.

The current arrangement is simply inadequate in this space. It highlights a misperception of agriculture and agribusiness within our social services legislation. Around 1,200 families from rural, remote and regional areas will be eligible for an increase in payment from the removal of the family actual means test, and they are also expected to benefit from the removal of the family asset test.

The changes also mean that farming families will not have farm assets included when assessing eligibility for the youth allowance.

Debate interrupted.