The SPEAKER (09:31): I present report No. 23 of the Selection Committee, relating to the consideration of committee and delegation business and private members' business on Monday, 26 March 2018. The committee's determinations will appear on tomorrow's Notice Paper. Copies of the report have been placed on the table.

The report read as follows—

Report relating to the consideration of committee and delegation business and of private Members' business

1. The committee met in private session on Tuesday, 27 February 2018.

2. The Committee deliberated on items of committee and delegation business that had been notified, private Members' business items listed on the Notice Paper and notices lodged on Tuesday, 27 February 2018, and determined the order of precedence and times on Monday, 26 March 2018, as follows:

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

COMMITTEE AND DELEGATION BUSINESS

Presentation and statements

1 AUSTRALIAN PARLIAMENTARY DELEGATION

Report on Parliamentary Delegation to Greece and Turkey, September-October 2017.

The Committee determined that statements on the report may be made — all statements to conclude by 10.20 am.

Speech time limits —

Mr R. G. Mitchell — 5minutes.

Next Member speaking — 5 minutes.

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

PRIVATE MEMBERS' BUSINESS

Notices

1 MS MCGOWAN: To present a Bill for an Act to amend the Higher Education Support Act 2003, and for related purposes. (Higher Education Support Amendment (National Regional Higher Education Strategy) Bill 2018)

(Notice given 27 February 2018.)

Presenter may speak to the second reading for a period not exceeding 10 minutes — pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.

2 MR BANDT: To present a Bill for an Act to amend the Fair Work Act2009, and for related purposes. (Fair Work Amendment (Making Australia More Equal) Bill 2018)

(Notice given 6 February 2018.)

Presenter may speak to the second reading for a period not exceeding 10 minutes — pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.

3 MR BANDT: To present a Bill for an Act to amend the Fair Work Act 2009, and for related purposes. (Fair Work Amendment (Better Work/Life Balance) Bill 2018)

(Notice given 15 February 2018.)

Presenter may speak to the second reading for a period not exceeding 10 minutes — pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.

4 MR BANDT: To present a Bill for an Act to amend the Fair Work Act 2009, and for related purposes. (Fair Work Amendment (Tackling Job Insecurity) Bill 2018)

(Notice given 15 February 2018.)

Presenter may speak to the second reading for a period not exceeding 10 minutes — pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.

5 MS HUSAR: To move:

That this House:

(1) acknowledges that the XXI Commonwealth Games will commence on the Gold Coast with the opening ceremony on Wednesday, 4 April 2018 and the closing ceremony on Sunday, 15 April 2018;

(2) notes that:

(a) more than 6,600 athletes and team officials from 70 Commonwealth Nations and Territories will be competing;

(b) the athletes will compete in 275 events in 18 different sports and seven para-sports; and

(c) beach volleyball, para triathlon and women's Rugby Sevens will make their Commonwealth Games debuts and for the first time at a Commonwealth Games, an equal number of men's and women's medal events will be contested;

(3) acknowledges that this year the Commonwealth motto will be 'Share the Dream'; and

(4) encourages all Members of Parliament to support the 2018 Gold Coast Commonwealth Games and the Australian sports people representing Australia at the Commonwealth Games.

(Notice given 26 February 2018.)

Time allotted — 30minutes.

Speech time limits —

Ms Husar — 5minutes.

Other Members — 5 minutes each.

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

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

6 MR ROBERT: To move:

That this House:

(1) notes that:

(a) 14 May 2018 is the 70th anniversary of the creation of the modern state of Israel, a seminal event that occurred in 1948; and

(b) congratulates Israel on an amazing seventy years of democracy, growth and prosperity;

(2) recognises that 15 July 2018 marks the 80th anniversary of the end of the fateful Évian Conference, convened by President Roosevelt in 1938 in Évian-Jes-Bains France, with 31 countries, to discuss the issue of the plight of Jewish refugees fleeing the horror of Nazi persecution;

(3) notes that:

(a) the Australian Minister for Trade and Customs in 1938, Lieutenant Colonel T.W. White, declined to further assist the Jewish people, stating 'Australia has her own particular difficulties ... migration has naturally been predominantly British, and it (is not) desired that this be largely departed from while British settlers are forthcoming. Under the circumstances Australia cannot do more, for it will be appreciated that in a young country manpower from the source from which most of its citizens have sprung is preferred, while undue privileges cannot be given to one particular class of non-British subjects without injustices to others. It will no doubt be appreciated also that as we have no real racial problem, we are not desirous of importing one by encouraging any scheme of large-scale foreign migration…I hope that the conference will find a solution of this tragic world problem';

(b) post Kristallnacht, when the Nazis burned Jewish synagogues, businesses and books, Australia did reassess its policy to admit 15,000 refugees over three years, compared to the previous quota of 1,800 per year;

(c) an estimated 6 million Jews and millions of others died during the Holocaust, exacerbated by the failure of Australia and other nations of the world to more fully protect the Jewish people; and

(d) Lieutenant-Colonel White's statement on behalf of the Government of Australia is still visible at the Yad Vashem Holocaust Memorial in Jerusalem, as a representative response for all other nations' responses of indifference at the Évian Conference;

(4) states that this Parliament, as representative of all political parties and the people of Australia, issues a profound apology and says 'sorry' to the Jewish people for the indifference shown by the Parliament in 1938 that worsened the impact of the Holocaust; and

(5) notes that:

(a) in doing so, we seek to honour the memory of all those who lost their lives in the Holocaust and make right, a great wrong, perpetuated by Australia on the Jewish people;

(b) a request will be made for this motion to be presented to Yad Vashem this 70th year asking that the parliamentary apology be displayed beside Lieutenant-Colonel White's statement of 1938 that he issued on behalf of the Government of Australia; and

(c) this motion will be provided to the Knesset this 70th year, one parliament to another.

(Notice given on 26 February 2018.)

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

Speech time limits —

Mr Robert — 10minutes.

Next Member speaking — 10 minutes.

Other Members — 5 minutes each.

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

The Committee determined that consideration

of this matter should continue on a future day.

Items for Federation Chamber (11 am to 1.30 pm)

PRIVATE MEMBERS' BUSINESS

Notices

1 MS CLAYDON: To move:

That this House:

(1) notes that:

(a) International Women's Day is celebrated on 8 March;

(b) the theme for 2018 is 'Press for Progress', recognising the strong and growing global momentum striving for gender equity; and

(c) now more than ever, governments must recommit to addressing entrenched gender inequities including:

   (i) high rates of family and domestic violence, sexual violence and harassment;

   (ii) pay inequity and the undervaluation of work in traditionally female industries; and

   (iii) the under-representation of women in Australian public life and leadership; and

(2) calls on the Government to:

(a) end its complacency and ensure gender equality is a central priority for government; and

(b) commit to urgent action to improve Australian women's:

   (i) safety and physical security;

   (ii) economic security and retirement incomes;

   (iii) health and reproductive rights; and

   (iv) representation in Australian parliaments.

(Notice given 13 February 2018.)

Time allotted — 50minutes.

Speech time limits —

Ms Claydon — 5minutes.

Other Members — 5 minutes each.

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

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

2 MR ENTSCH: To move:

That this House:

(1) notes that:

(a) 24 March is World Tuberculosis Day, and marks the anniversary of German Nobel laureate Dr Robert Koch's 1882 discovery of the bacterium that causes tuberculosis;

(b) tuberculosis is contagious and airborne, ranking as the world's leading cause of death from a single infectious agent;

(c) in 2016, 1.7 million people died from tuberculosis worldwide and 10.4 million people became sick with the disease, with over 60 per cent of cases occurring in countries in our region;

(d) large gaps in tuberculosis detection and treatment remain with 4.1 million cases of active tuberculosis that were not diagnosed and treated in 2016, including 600,000 children;

(e) Papua New Guinea (PNG) had one of the highest rates of tuberculosis infection in the Pacific in 2016, with an estimated 35,000 total cases including 2,000 drug-resistant cases, not taking into consideration the large number of cases that go unreported in many regions; and

(f) tuberculosis is:

   (i) the leading cause of death among HIV positive people globally—HIV weakens the immune system and is lethal in combination with tuberculosis, each contributing to the other's progress;

   (ii) now linked to non-communicable diseases like diabetes; and

   (iii) considered a preventable and treatable disease, however many current treatment tools—drugs, diagnostics and vaccines—are outdated and ineffective;

(2) recognises:

(a) the funding that Australia is providing to support the testing and treatment of tuberculosis in PNG, including the joint program with the World Bank, is already leading to an initiative to achieve universal testing for tuberculosis in Daru;

(b) the commitment of up to $75 million over five years for Product Development Partnerships in the Indo-Pacific Health Security Initiative to accelerate access to new therapeutics and diagnostics for drug resistant tuberculosis, and malaria and mosquito vector control—an increase in funding to build on the successes of Australia's previous investments;

(c) Australia's three year $220 million pledge to the Global Fund to Fight AIDS, Tuberculosis and Malaria (2017-2019)—a fund that has supported tuberculosis testing and treatment to 17.4 million people since 2002, including over 8.2 million people in the Indo-Pacific region;

(d) that through our endorsement of the Sustainable Development Goals in September 2015, we made a bold commitment to end the tuberculosis epidemic by 2030; and

(e) the scheduling of the first United Nations High-Level Meeting on Tuberculosis in September 2018, which will set out commitments to accelerate action towards ending tuberculosis as an epidemic and provide Australia with an opportunity to showcase the success of our investment in tuberculosis in our region; and

(3) calls on the Australian Government to attend the United Nations High-Level Meeting this year, and commit to increased Australian action and leadership on research and development, prevention, testing and treatment as part of the global effort to eradicate tuberculosis.

(Notice given 26 February 2018.)

Time allotted — 40minutes.

Speech time limits —

Mr Entsch — 10minutes.

Next Member speaking — 10 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]

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

3 MS SHARKIE: To move:

That this House:

(1) notes that the:

(a) OECD:

   (i) calculates that the average old age dependency ratio in Australia was 25 in 2017, and is projected to increase to 41 by 2050;

   (ii) calculates that Australia's expenditure on age pensions is currently 4 per cent of public spending, and is projected to be 4 per cent in 2050—this compares with 9 per cent and 10 per cent respectively for the OECD;

   (iii) stated that 'The old age income poverty rate in Australia is high at 26% compared to 13% across the OECD in 2015'; and

   (iv) further stated that 'While taking out lump sums create flexibility in retirement it can also increase the risk of falling into poverty in case retirees outlive their assets'; and

(b) Benevolent Society:

   (i) released 'The Adequacy of the Age Pension in Australia' report in September 2016, concluding from its research that 'The Aged Pension in Australia is inadequate'; and

   (ii) concluded that 'Home ownership constitutes the single biggest factor contributing to financial hardship among pensioners. Age pensioners who are renting, in particular those who are single, are the worst off'; and

(2) calls on the Government to:

(a) establish an independent tribunal to assess the base rate of the pension and determine the best mechanism for annual review;

(b) increase the maximum rate of Commonwealth Rent Assistance to reduce the gap between aged pensioners who are home owners and those who are renters; and

(c) establish a roundtable to review services provided to age pensioners.

(Notice given 13 February 2018.)

Time allotted — 30minutes.

Speech time limits —

Ms Sharkie — 5minutes.

Other Members — 5 minutes each.

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

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

Orders of the day

SMALL BUSINESSES AND GOVERNMENT DEFENCE CONTRACTS: Resumption of debate (from11September2017) on the motion of Mr Wallace:

That this House:

(1) notes that:

(a) the Government's record $200 billion investment in the Australian Defence Force (ADF) capabilities represents a unique opportunity for Australian businesses;

(b) many Australian businesses who first supplied defence materials to the Australian Government go on to export these products overseas; and

(c) Australia ranks thirteenth in the world for defence expenditure, but is only the twentieth largest exporter;

(2) congratulates the Government on its activities to date to encourage local small businesses to bid for Government defence contracts, including the 2016 Defence White Paper, and Integrated Investment Program, the Defence Industry Policy Statement and the Centre for Defence Industry Capability (CDIC);

(3) welcomes the Government's efforts to develop a Defence Export Strategy to plan, guide and measure defence export outcomes that will support our foreign and trade policies, defence industry, defence capability and national security objectives; and

(4) encourages small and medium enterprises all over Australia to explore the opportunity to supply products and services for the ADF, and to contact the CDIC to learn more.

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

Speech time limits —

All Members — 5 minutes each.

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

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

Items for Federation Chamber (4.45 pm to 7.30 pm)

PRIVATE MEMBERS' BUSINESS

Orders of the day – continued

2 National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2018 (Mr Hammond): Second reading—Resumption of debate (from26February2018).

Time allotted — 40minutes.

Speech time limits —

All Members — 5 minutes each.

[Minimum number of proposed Members speaking = 8 x 5 mins]

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

CREATION OF THE MODERN STATE OF ISRAEL: Debate to be resumed on the motion of Mr Robert—That this House:

(1) notes that:

(a) 14 May 2018 is the 70th anniversary of the creation of the modern state of Israel, a seminal event that occurred in 1948; and

(b) congratulates Israel on an amazing seventy years of democracy, growth and prosperity;

(2) recognises that 15 July 2018 marks the 80th anniversary of the end of the fateful Évian Conference, convened by President Roosevelt in 1938 in Évian-Jes-Bains France, with 31 countries, to discuss the issue of the plight of Jewish refugees fleeing the horror of Nazi persecution;

(3) notes that:

(a) the Australian Minister for Trade and Customs in 1938, Lieutenant Colonel T.W. White, declined to further assist the Jewish people, stating 'Australia has her own particular difficulties ... migration has naturally been predominantly British, and it (is not) desired that this be largely departed from while British settlers are forthcoming. Under the circumstances Australia cannot do more, for it will be appreciated that in a young country manpower from the source from which most of its citizens have sprung is preferred, while undue privileges cannot be given to one particular class of non-British subjects without injustices to others. It will no doubt be appreciated also that as we have no real racial problem, we are not desirous of importing one by encouraging any scheme of large-scale foreign migration…I hope that the conference will find a solution of this tragic world problem';

(b) post Kristallnacht, when the Nazis burned Jewish synagogues, businesses and books, Australia did reassess its policy to admit 15,000 refugees over three years, compared to the previous quota of 1,800 per year;

(c) an estimated 6 million Jews and millions of others died during the Holocaust, exacerbated by the failure of Australia and other nations of the world to more fully protect the Jewish people; and

(d) Lieutenant-Colonel White's statement on behalf of the Government of Australia is still visible at the Yad Vashem Holocaust Memorial in Jerusalem, as a representative response for all other nations' responses of indifference at the Évian Conference;

(4) states that this Parliament, as representative of all political parties and the people of Australia, issues a profound apology and says 'sorry' to the Jewish people for the indifference shown by the Parliament in 1938 that worsened the impact of the Holocaust; and

(5) notes that:

(a) in doing so, we seek to honour the memory of all those who lost their lives in the Holocaust and make right, a great wrong, perpetuated by Australia on the Jewish people;

(b) a request will be made for this motion to be presented to Yad Vashem this 70th year asking that the parliamentary apology be displayed beside Lieutenant-Colonel White's statement of 1938 that he issued on behalf of the Government of Australia; and

(c) this motion will be provided to the Knesset this 70th year, one parliament to another.

Time allotted — 30minutes.

Speech time limits —

All Members — 5 minutes each.

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

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

Notices – continued

4 MS BURNEY: To move:

That this House:

(1) observes:

(a) the National Partnership on Remote Housing (NPRH) is an agreement between the Australian Government and state/territory governments to deliver new and refurbished housing for remote and Indigenous communities; and

(b) that the NPRH agreement is due to expire on 30 June 2018;

(2) recognises that:

(a) over the last ten years, the NPRH has delivered in Queensland almost 1,150 new homes and 1,500 refurbished homes;

(b) the Australian Government's independent review into the partnership has highlighted the achievements of the Queensland Government;

(c) this program has built upon the capacity of Aboriginal and Torres Strait Islander councils who, along with Indigenous businesses now deliver 80 per cent of housing construction and repairs; and

(d) nationally, an additional 5,500 homes are required by 2028 to account for population growth and to continue to reduce overcrowding;

(3) acknowledges that:

(a) without continued funding, loss of hundreds of local jobs and apprenticeships will occur;

(b) without funding, significant levels of violence—domestic and otherwise—will arise from overcrowded living conditions in some of the communities; and

(c) secure housing is a key element of the Australian Government's priority of 'Closing the Gap' responsibilities; and

(4) calls on the Australian Government to:

(a) urgently restore commitment to this program, in order to reduce overcrowding in discrete and remote Aboriginal and Torres Strait Islander communities, through building new dwellings and continuing to maintain and refurbish existing dwellings; and

(b) commit to a ten-year continuation of Commonwealth funding in real terms, matching the same level as provided over the last ten years.

(Notice given 7 February 2018.)

Time allotted — 45minutes.

Speech time limits —

Ms Burney — 10minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 1 x 10 mins + 7 x 5 mins]

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

Orders of the day – continued

3 ThinkUKnow program: Resumption of debate (from5February2018) on the motion of Mrs Marino:

That this House:

(1) recognises the:

(a) importance of educating and protecting our children in the online space; and

(b) work of the Australian Federal Police through the ThinkUKnow program, a free, evidence based cyber safety program, to provide educational presentations to parents, carers and teachers, and students across Australia;

(2) congratulates the Australian Government on passing the Criminal Code Amendment (Protecting Minors Online) Act 2017, also known as Carly's Law, which targets online predators preparing or planning to cause harm to, procure or engage in sexual activity with a child; and

(3) recognises the new law is a testament to Sonya Ryan, who has advocated for this since her 15 year old daughter Carly was murdered a decade ago by an online predator posing as a teenage boy.

Time allotted — 20minutes.

Speech time limits —

All Members — 5 minutes each.

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

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

XXI COMMONWEALTH GAMES: Debate to be resumed on the motion of Ms Husar—That this House:

(1) acknowledges that the XXI Commonwealth Games will commence on the Gold Coast with the opening ceremony on Wednesday, 4 April 2018 and the closing ceremony on Sunday, 15 April 2018;

(2) notes that:

(a) more than 6,600 athletes and team officials from 70 Commonwealth Nations and Territories will be competing;

(b) the athletes will compete in 275 events in 18 different sports and seven para-sports; and

(c) beach volleyball, para triathlon and women's Rugby Sevens will make their Commonwealth Games debuts and for the first time at a Commonwealth Games, an equal number of men's and women's medal events will be contested;

(3) acknowledges that this year the Commonwealth motto will be 'Share the Dream'; and

(4) encourages all Members of Parliament to support the 2018 Gold Coast Commonwealth Games and the Australian sports people representing Australia at the Commonwealth Games.

Time allotted — remaining private Members ' business time prior to 7.30 pm

Speech time limits —

All Members — 5 minutes each.

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

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

Mr TEHAN (Wannon—Minister for Social Services) (09:32): I move:

That this bill be now read a second time.

This bill will establish a two-year trial of drug testing for 5,000 new recipients of Newstart allowance and youth allowance (other) from 1 July 2018.

This is another component of a suite of measures announced in the 2017 budget to strengthen and simplify the welfare system. These changes will help people with drug abuse issues to get treatment, rehabilitate and get a job.

Research shows us that substance abuse is directly impacting the ability of some jobseekers to undertake job search or other activities to get them into work.

The community has a right to expect that taxpayer-funded welfare payments are not being used to fund drug addiction and that jobseekers do all they can to find a job. We don't want our welfare system subsiding drug dealers.

The welfare system is designed to provide a safety net for those who find themselves out of work or unable to participate in the workforce—not to help perpetuate people's drug habits.

The Australian Institute of Health and Welfare's 2016 National Drug Strategy Household Survey shows that those who were unemployed were three times more likely to have recently used drugs such as ice and other amphetamines than those who were employed.

For too long, not enough has been done to try and deal with the real connection between drug abuse and unemployment.

While there are some existing mechanisms in place for identifying jobseekers with substance abuse issues and assisting them to seek treatment, the data clearly shows that more needs to be done to help these people.

The trial established by this bill will assess the use of drug testing as a means of identifying jobseekers with substance abuse issues that may be preventing them from finding a job, and supporting them to get treatment.

Importantly, the drug testing trial is complemented by the government's other substance abuse measures.

This includes, for the first time, ensuring that all jobseekers are able to undertake drug or alcohol treatment as an approved activity in their job plan.

Since the commencement of that measure on 1 January 2018, 259 Stream A and B jobseekers have had drug or alcohol treatment included in their Job Plan.

Other measures to ensure jobseekers with drug or alcohol abuse issues remain connected to their employment services provider are contained in the Social Services Legislation Amendment (Welfare Reform) Bill 2017 currently before the Senate.

Measures include removing exemptions from mutual obligations due to drug and alcohol use, and tightening the use of drug and alcohol issues as a reasonable excuse for not meeting obligations.

These measures are scheduled to commence on 1 April 2018, subject to the passage of the bill.

Together, these measures recognise that supporting jobseekers to address their substance abuse issues through appropriate treatment is a crucial first step to getting a job.

Supporting jobseekers to take action to overcome their substance abuse will improve their chances of finding a job. This will benefit not just the jobseekers themselves but also their families, the wider community and the economy.

The trial will operate in three locations: Canterbury-Bankstown in New South Wales, Logan in Queensland and Mandurah in Western Australia.

Trial sites were chosen based on careful consideration of the available evidence and data, including: the Australian Criminal Intelligence Commission's National Wastewater Drug Monitoring Program Report; the AIHW's 2013 National Drug Strategy Household Survey; state and territory government crime statistics in relation to drug use and possession; state and territory government hospitalisation data; and administrative data from the Department of Human Services.

For the trial to be robust and successful, the government identified locations with varying profiles and sufficient support services.

To complement this, the government has announced a dedicated treatment fund of up to $10 million to support jobseekers in the drug testing trial across all three locations.

The government will establish this fund to provide for additional treatment support in the trial locations where the existing state or Commonwealth services and supports are not sufficient to meet additional demand as a result of the trial.

This is in addition to the almost $685 million the Commonwealth government has already committed over four years to reduce the impact of drug and alcohol abuse on individuals, families and communities.

This includes an investment of almost $300 million over four years as a part of the National Ice Action Strategy to improve treatment, after-care, education, prevention, support and community engagement to tackle ice.

Comprehensive rules will be set out in a legislative instrument relating to any additional illicit drugs tested for and the protocols for conducting the drug tests, including safeguards to ensure that testing is conducted appropriately and in accordance with relevant standards.

This legislative instrument will provide the flexibility to ensure that expert advice from the contracted testing provider and the drug and alcohol sector can be taken into account in developing these protocols and safeguards.

An exposure draft of the Drug Test Rules was tabled at the Senate Community Affairs and Legislation Committee's public hearing into the welfare reform bill on 30 August 2017, and feedback has been gathered for input into further development of the rules.

There will be appropriate consequences for people who deliberately miss an appointment without a reasonable excuse or refuse a drug test in order to avoid a possible positive result.

If a jobseeker refuses to take a drug test, having acknowledged that they may be required to do so as part of their condition of payment, their payment will be cancelled and they will not be able to re-apply for a four-week period.

Jobseekers who test positive to a drug test will have their payments placed on income management. This is designed to restrict their access to cash and limit their ability to use their payments to fund further harmful drug use, while not reducing the amount of payment they receive.

Jobseekers who test positive will also be subject to a second drug test within 25 working days and may also be subject to further subsequent tests. This will help to identify those for whom drug abuse is an ongoing problem that may require treatment.

Jobseekers who test positive to more than one drug test during the trial will be referred to a Department of Human Services contracted medical professional with experience in drug and alcohol treatment, who will assess their particular circumstances and identify appropriate treatment or support options.

If the report from the medical professional recommends treatment, the jobseeker will be required to participate in one or more treatment activities to address their substance abuse as part of their job plan.

This could include activities such as rehabilitation, counselling or case management.

This trial is not about penalising jobseekers with drug abuse issues. It is about finding new and better ways of identifying these jobseekers and ensuring they are referred to the support and treatment they need.

This measure has been specifically designed as a trial so we can assess the value of drug testing jobseekers as a way of identifying those for whom drug abuse might be a barrier to work and supporting them to undertake treatment.

There will be a comprehensive evaluation of the trial to determine which aspects have been successful in addressing welfare recipients' substance abuse and barriers to employment.

The drug testing trial will test an innovative method of assisting people with drug abuse issues.

I ask the opposition and the crossbench to support this trial, as it will find ways to support and treat people with substance abuse.

It is imperative that we help these people so that they can find work and not live their lives on welfare.

Be brave enough to change your mind, because if we always do what we've always done then we will always get what we've always got, and that is simply unacceptable.

The government wants to ensure that the welfare system provides strong incentives for people with substance abuse issues to get treatment, rehabilitate and find a job.

Debate adjourned.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (09:43): I move:

That this bill be now read a second time.

Australia's domestic commercial vessels are significant employers, especially in our regional and coastal communities.

There are over 66,000 seafarers employed on 27,000 domestic commercial vessels around Australia. The operation of these vessels is vital not only to sustain the 66,000 seafarers that are employed on these vessels but also to the ongoing viability of onshore support jobs and supply chains.

Australia's domestic commercial vessels are, on average, medium-sized vessels, which undertake commercial, government or research activities. They include:

passenger vessels, such as ferries and scuba diving tour operators,

research and emergency response vessels, including tugs and barges,

fishing vessels, and

vessels that are commercially hired out for recreational use, such as houseboats, sailboats, jet skis and kayaks.

It is our duty as a government to ensure that all of these vessels operate as safely as possible so that they do not risk the lives of those onboard, while being efficient and productive to allow the owners and operators to get on with the job.

In 2009, the Council of Australian Governments decided on a range of national productivity reforms. One such reform was to establish a national regulator for maritime safety—specifically focused on the safety of domestic commercial vessels. As a result the Australian Maritime Safety Authority was appointed as the national regulator. This was enabled through the Marine Safety (Domestic Commercial Vessel) National Law Act 2012which made the states and the Northern Territory responsible for service delivery as delegates of the Australian Maritime Safety Authority.

Under this law, the national system for domestic commercial vessel safety was designed to provide a single national regulatory framework to ensure the safe operation, design, construction and equipping of domestic commercial vessels, and to ensure operators, seafarers and vessels could move seamlessly between jurisdictions.

Following an independent review of the national system in 2014, it was evident that there were inefficiencies and inconsistencies in the way it was being delivered. Inconsistent approaches between the state-based service delivery arrangements were identified as the key cause of the full benefits of the national system not being realised.

Consequently, the Council of Australian Governments' Transport and Infrastructure Council agreed the Australian Maritime Safety Authority would take over service delivery and, over time, achieve full cost recovery through the introduction of a levy for the national system.

The levy is consistent with the Australian government's cost-recovery framework and will only recover costs for activities that are directly related to the safety of domestic commercial vessels. Safety regulation activities will include the:

administration and maintenance of the regulatory framework,

initiatives to streamline the regulatory framework,

safety education and customer support services,

standards and policy development,

compliance and enforcement.

Due to the economic importance of these domestic commercial vessels and the safety of the crew and passengers onboard, the Commonwealth has committed $55 million to support industry to transition to charges under this levy. This is part of a $102.4 million joint transition funding package from the Commonwealth, the states and the Northern Territory over 10 years from 1 July 2018. This transition package will help industry adjust to the change to national delivery of maritime safety regulation and ultimately achieve full cost recovery.

From 1 July 2018, the Australian Maritime Safety Authority will deliver a truly national system of domestic commercial vessel safety in accordance with the original vision of the Council of Australian Governments.

Importantly, no levy will be charged to industry in the first year of the Australian Maritime Safety Authority's service delivery to ensure fair and equitable treatment of all operators as charging arrangements are standardised and services transition across Australia. Levy charges will then increase gradually to ensure industry has time to plan and adjust.

Industry organisations such as the Tasmanian Seafood Industry Council, the Western Australia Fishing Industry Council, the Boating Industry Association and the Northern Territory Seafood Council are supportive of this transition package which will help to ensure a smooth transition to a national regulator.

The national system for domestic commercial vessel safety will allow every domestic commercial vessel owner, operator or crew member in Australia to operate under one set of safety standards and charges, and experience a nationally consistent level of service. It will also reduce barriers for industry, improve labour force mobility, and simplify vessel transfers across Australia.

One of the benefits of a national system for domestic commercial vessel safety is that operators now only have to meet one set of requirements nationally, instead of in every state or territory they work across. Take Mr Bruce Davey, a commercial fisherman, for example, who runs a fishing operation and a charter operation during different times in the year across Queensland and the Northern Territory.

He says that in the past he had to have two different certificates of survey, log books, and management plans. There was a time when he even flew Northern Territory surveyors across to Queensland to have his vessel surveyed because it was a lot cheaper than getting a surveyor in Queensland, but then Queensland no longer recognised the survey done by the surveyor from the Northern Territory.

But now he says that 'having a national body with one set of rules has made an amazing difference'.

His Australian Maritime Safety Authority accredited surveyor surveys his vessel by the book, and his certificate of survey is recognised in both Queensland and the Northern Territory.

The Australian Maritime Safety Authority will deliver these services for around 30 per cent less than it currently costs to deliver the system. The Australian Maritime Safety Authority is working hard to reduce the cost of the system without compromising safety.

This will further improve Australia's economic growth, productivity and competitiveness.

Today, I present a package of three bills to introduce the cost-recovery levy for the national system for domestic commercial vessel safety.

The first bill is the Marine Safety (Domestic Commercial Vessel) Levy Bill 2018, which will create an act to impose a levy on domestic commercial vessels, define the persons liable to pay this levy in respect of a leviable vessel, and allow the amount of levy to be set in rules.

The charges shown in the legislative rules demonstrate how the levy will be introduced gradually as a result of the $102.4 million transition funding package announced by the Transport and Infrastructure Council in December 2017.

I am proud the Australian government is contributing $55 million of this funding to support our vital tourism, transport and fishing industries in regional and coastal communities.

This bill will allow the Australian Maritime Safety Authority to deliver better safety outcomes by introducing a simpler, more accessible system with risk-based inspection and education regimes targeting unsafe operations.

Once the Australian Maritime Safety Authority has assumed service delivery, I expect it will continually engage with industry to identify further opportunities to streamline services and requirements.

This will ensure our truly national system continues to provide industry with the safety support needed while letting industry get on with driving this nation forward by delivering world-class tourism, transport and fishing.

I commend this bill to the House.

Debate adjourned.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (09:54): I move:

That this bill be now read a second time.

The second bill in this package is the Marine Safety (Domestic Commercial Vessel) Levy Collection Bill 2018, which will create an act to define when and how the levy on domestic commercial vessels is payable.

This bill defines when the levy is due and payable for both full-year and pro-rata circumstances, provides that the levy may be paid by instalment and creates a late payment penalty.

Additionally, the bill addresses administrative matters, including that the levy may be paid in advance and that overpayments of the levy, instalments of the levy or penalties must be refunded.

Finally, the bill empowers the minister to make rules about matters prescribed or required by the act, as well as about matters necessary or convenient to carry out or give effect to this act.

I commend the bill to the House.

Debate adjourned.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (09:56): I move:

That this bill be now read a second time.

The third and final bill is the Marine Safety (Domestic Commercial Vessel) Levy (Consequential Amendments) Bill 2018, which will amend three existing pieces of legislation to give effect to the levy.

Amendments to the Australian Maritime Safety Authority Act 1990 will expand existing provisions addressing payment of levies to AMSA to include payments under the new domestic commercial vessel levy to AMSA.

Amendments to the Marine Navigation (Regulatory Functions) Levy Collection Act 1991 will clarify that leviable domestic commercial vessels are exempt from the Marine Navigation (Regulatory Functions) Levy.

Amendments to the Marine Safety (Domestic Commercial Vessel) National Law Act 2012will expand AMSA's existing powers to suspend or revoke certificates of survey or detain a domestic commercial vessel to allow AMSA to exercise these powers in response to nonpayment of an amount or instalment of the new domestic commercial vessel levy.

I commend the bill to the House.

Debate adjourned.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (09:58): I move:

That this bill be now read a second time.

In 1987, the Australian government introduced the Federal Interstate Registration Scheme (FIRS) as a voluntary, alternative national registration scheme for heavy vehicles weighing more than 4.5 tonnes solely involved in interstate trade or commerce.

FIRS was a response to industry concerns about state and territory registration schemes that, at the time, deterred and restricted interstate road transport.

It was also designed to promote safer interstate trade and greater use of high-productivity vehicles through an exemption for FIRS registered vehicles from standard state and territory stamp duties for newly purchased vehicles.

At the time, it provided a mechanism that made sure long-haul heavy vehicles made an appropriate contribution to road maintenance through their registration.

FIRS represented the first comprehensive land transport strategy for this nation—a tangible, collective commitment to improve the transportation of freight across the country by addressing challenges arising from a lack of uniformity in state and territory registration schemes.

In the thirty years since FIRS' introduction, a lot has changed. Heavy vehicles have grown in size, and the national road freight task has nearly tripled in that time.

Articulated trucks now take on nearly 80 per cent of the freight task, with the use of B-double trucks, and with a notable shift by operators toward other higher productivity vehicles, such as road trains.

The lack of coordination between states and territories that resulted in a haphazard regulatory environment no longer exists, through ongoing efforts by jurisdictions to harmonise heavy vehicle arrangements.

Initiatives such as uniform registration charging agreements and increased ongoing communication between states and territories have made FIRS redundant.

The numbers bear this out. The numbers of FIRS-registered vehicles have declined steadily for nearly a decade after peaking at nearly 22,000 vehicles.

As at 30 June 2017, there were 13,927 FIRS-registered vehicles (including trailers) in Australia, representing only 1.6 per cent of the Australian fleet.

Independent modelling suggests that the size of the FIRS fleet will continue to fall, reducing to approximately one per cent of the total fleet by 2022.

An independent program evaluation (known as the evaluation) in 2016 revealed the stamp duty exemption afforded by FIRS had not improved safety outcomes nor reduced fleet age, with industry figures showing the average fleet age to be around 14 years—a figure that has not reduced since the introduction of FIRS.

Continuation of FIRS perpetuates an unfair situation where relatively few operators can access a financial benefit that around 98 per cent of heavy vehicle operators cannot.

The decline of FIRS registrations, combined with the evaluation report finding no evidence of FIRS achieving its policy objectives, supports the Australian government's conclusion that a tax exemption for a minority of operators is not sufficient reason to retain an ineffective regulatory program.

Transport companies today require the flexibility to adjust their operations to suit changing customer requirements and market opportunities. Consistent feedback from industry has highlighted that flexibility is essential to being competitive and responsive to market changes.

It's not possible for many small businesses in the road transport industry, where around 70 per cent of operators have only one vehicle, to take advantage of FIRS.

It is imperative that we protect Australian small businesses and remove policies that may impede the growth of a sector so crucial to preserving our standard of living.

FIRS was established as one mechanism to provide funding for road maintenance, but this remains a challenge. The Australian government is pursuing reforms with states and territories through the Heavy Vehicle Road Reform mechanism, independent from FIRS, as this approach will be far more effective than the current reliance on FIRS' shrinking base.

This bill is the first step in the delivery of a new system that better serves the needs of today's transport industry.

Consistent with the stance of Australian governments since 2009 and affirmed by the COAG Transport and Infrastructure Council in May 2017, this bill will progressively close FIRS and make way for the progress of national heavy vehicle reforms, beginning with a modern national registration system for heavy vehicles.

The national registration system will be open to all operators in states and territories participating in the Heavy Vehicle National Law reforms, and is scheduled to commence on 1 July 2018. This bill seeks to facilitate this transition.

From 1 July 2018, existing FIRS operators will seamlessly move to the new registration system once their current FIRS registration period concludes, and will immediately be able to access benefits associated with the new system.

Full closure will take place on 30 June 2019. Existing FIRS operators moving to the national registration system by this date will be eligible for a one-off stamp duty exemption, as well as immediate access to the benefits of the new system.

Australia has changed in the last 30 years. Our needs are different, our priorities have changed and our collective regulatory capabilities have also improved.

The closure of FIRS is the next logical step in moving Australia towards a more productive and effective heavy vehicle registration policy. I commend this bill to the House.

Debate adjourned.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (10:05): I move:

That this bill be now read a second time.

Australia is heavily reliant on international shipping. Ninety-nine per cent of our imports and exports by weight are carried by ships. Therefore, as a government, it is our duty to ensure that our laws for the prevention of marine pollution are adequate, up to date and consistent with international law.

The bill I present today, the Protection of the Sea Legislation Amendment Bill 2018, will ensure that the framework for preventing marine pollution is in line with international requirements. It will also allow for consistency between key pieces of legislation that implement our obligations domestically, and provide for the continued application of the protection of the sea levy legislation without unnecessary regulation.

The bill primarily amends the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, known as the POTS Act. The POTS Act, together with the Navigation Act 2012, implement domestically our international obligations stemming from the International Convention for the Prevention of Pollution from Ships(known as MARPOL) adopted at the International Maritime Organization, or IMO.

The amendments to the POTS Act set out in this bill will implement Australia's international obligations to ensure that the master of a ship has vital information relating to relevant cargoes on board before discharging the residues of these cargoes. This will allow the master to discharge these residues appropriately, and only into the sea where it has been determined, and declared, that the cargo residues are not harmful to the marine environment.

Australia's implementation of these amendments to MARPOL is consistent with our long­standing support for protection of the marine environment, and our active backing of, and participation in, the IMO.

The bill also makes a machinery change to the Protection of the Sea (Shipping Levy Collection) Act 1981. The amendment will remove the need for regulations to prescribe the manner in which a protection of the sea levy notice may be served in particular circumstances. This minor change will allow the Protection of the Sea (Shipping Levy Collection) Regulations to be repealed, removing a dated and now unnecessary piece of regulation.

Together, these amendments will ensure consistent and efficient legislation and that Australia continues to meet its international obligations.

I commend this bill to the House.

Debate adjourned.

Mr THISTLETHWAITE (Kingsford Smith) (10:08): The purpose of this bill is to introduce a new regulatory regime for administrators of financial benchmarks. This input includes providing ASIC, the regulator, with new supervisory powers, introducing a licensing regime for financial benchmark administrators and making manipulation of financial benchmarks and offence subject to civil penalties. It is something that labour has been committed to for many, many years—strengthening our regulators and the laws and powers that they have to combat financial benchmark manipulation.

Over recent years, in particular the last decade, it's been an issue of significance in international financial markets. There have been a number of scandals and allegations in recent years around the manipulation of financial benchmarks by financial institutions. The most prominent and widespread of those was the case of the LIBOR, the London Interbank Offer Rate, the reference rate for about $300 billion of loans worldwide, which implicated a number of major international banks.

In Australia, we haven't been immune to this phenomenon, with cases actually going on at the moment. They have been taken by ASIC predominantly against the big four banks in respect of manipulation of the bank bill swap rate. There were actions taken against the NAB and ANZ; those actions have been settled by the parties. Westpac chose to fight the litigation, and the litigation has recently proceeded in the Federal Court, and we're awaiting a decision on that. Now the Commonwealth Bank, CBA, has been dragged into this as well, with allegations of bank bill swap rate manipulation against its traders now being made by ASIC, and no doubt that will potentially lead to further litigation against the CBA into the future.

ASIC's noted that manipulation of the bank bill swap rate is not a victimless act. There are implications for Australian businesses by affecting financial products that they use to manage their financial affairs, and the losses to those victims are potentially in the hundreds of millions of dollars. That's why it's important that the regulations are strong enough to combat and deter these activities and, indeed, that our regulators, most notably ASIC, have the powers to investigate, prosecute and deal with people alleged to have undertaken manipulation of financial derivatives.

Schedule 1 of this bill makes amendments to the Corporations Act to strengthen protections against manipulation of financial benchmarks. Currently, rules against manipulation of financial benchmarks are enforced using existing laws relating to market manipulation, false trading and market rigging. Schedule 1 will make manipulation of financial products used in an Australian context a specific criminal offence and subject to civil penalties. It will also establish a new licensing regime requiring administrators of certain designated financial benchmarks to obtain a new benchmark administrator licence from ASIC.

If you give the regulator these new powers, you must supply it with the resources to police them. It's no secret that this government has been woefully incompetent when it comes to ensuring that ASIC has the necessary powers and resources to do its job and to police such activity in financial markets. This government slashed ASIC's funding by $120 million in the 2014 budget, and of course that resulted in job losses. ASIC admitted as much to inquiries of the House and Senate economics committees—that there were job losses associated with this cut to its funding. Given the problems that we've had in Australia in financial regulation and in financial services, particularly in wealth management and insurance and predominantly around the big four banks, you'd think it would be completely the wrong approach for a government to be cutting the resources of the body that's tasked with policing what's been going on in this area.

When those cuts were made, the Labor Party opposed them strongly. Despite the depth of the cuts and the massive impact that the government took to unwind those cuts, it unfortunately took all of the scandals being uncovered in the banking industry—the scandals uncovered through a number of Senate inquiries, as well as the wealth management scandal at the Commonwealth Bank and the CommInsure scandal, again with the Commonwealth Bank—for all of the big four banks to have to review their wealth management practices and back-pay hundreds of millions of dollars to clients who'd been wronged in the scandals. In recent times, the Commonwealth Bank has been prosecuted by AUSTRAC for potential or alleged breaches of Australia's anti-money-laundering and terrorism financing laws. You need to arm the regulator, the body responsible for making sure that bad decisions aren't made and that people don't lose money in the financial markets in Australia. You need to give them the resources to do that, and those cuts have had an effect. It was only when these issues were highlighted and Labor started calling for a royal commission into banking and financial services that the government backed down and returned some of that money to ASIC, but, in many respects, the damage had been done.

On broader financial management issues, it's well known that Labor has led the way when it comes to ensuring that our laws are up to date with some of the challenges and risks associated with consumer credit, financial market regulation, and ensuring that financial planners and banking industry and insurance industry representatives are operating in the best interests of their customers. It was Labor that introduced reforms such as the National Consumer Credit Protection Act, which introduced the first single standard and nationally consistent regime for consumer credit regulation and oversight in this country.

It should be noted that the government also opposed Labor's future of financial advice reforms when they were initially proposed by the previous Labor government. These, of course, were the reforms that introduced a best interest test for the giving of financial advice by financial planners in Australia. The reforms introduced a licensing regime, ensured that a staged test had to be undertaken by financial planners before they could offer advice and removed a lot of the trailing commissions that had existed in some of these products and how they were sold. These reforms came on the back of scandals like Trio Capital and Storm Financial, where hundreds of Australians lost millions and millions of dollars, their life savings, because of financial scams.

When Labor introduced those reforms, the coalition members, kicking and screaming, said that they were intrusive, that it was overregulation and that they weren't necessary. Then, of course, we got the scandals, we got the rip-offs in the banking sector and we got the calls for a royal commission—which, by the way, came out of a bipartisan committee report from the Senate where members of the National Party initially supported the call for a royal commission into banking and financial services. What did the Abbott and Turnbull governments do? They resisted it. They resisted that call for 600 days. For 600 days, the Prime Minister, Malcolm Turnbull, said there was no need for a royal commission into banking and financial services, despite the evidence from numerous inquiries and committees. I think at one stage there were 21 inquiries into banking and financial services in this country, in a parliamentary sense, in a regulator sense and in an industry sense. They were all uncovering all the problems that existed in wealth management, in insurance and in banking generally, but the government chose to do nothing about it.

Then the CEOs of big four banks got together and wrote a letter to the Prime Minister that said: 'Look, we're getting reputational damage from the calls for a royal commission to look at all these scandals that keep coming up. We'll now agree to a royal commission.' What did the Prime Minister do the next day? He did a massive backflip, and suddenly the coalition were offering a royal commission. The royal commission, thankfully, has begun proceedings this week. We support what's going on there and we eagerly await the outcomes of their interim report in September and their final report later on. Labor listened to the victims, the customers, the clients and, importantly, the workers who work in these industries, about the shortcomings and had been calling for a royal commission for two years.

This bill will also give ASIC the power to compel market participants to make submissions to ensure the continued generation of financial benchmarks during times of financial market stress. This is known as the power of last resort. The ASIC Supervisory Cost Recovery Levy Amendment Bill supports this regime by adding benchmark administrator licences to the list of entities from which ASIC may recover its regulatory costs under the ASIC supervisory cost recovery levy.

The related bill, the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017, also facilitates the Productivity Commission appointing an additional commissioner with extensive experience in dealing with Indigenous policy areas and Indigenous communities to oversee the PC's work in evaluating Indigenous policies and programs.

Labor remains concerned about the definition that this government is adopting of an Indigenous person, which is based on race and descent, rather than on the standard definition based on a three-part definition of descent, identification and acceptance in a community. Labor has argued for some time now and in the Senate multiculturalism report that it is necessary to move away from a race based terminology in legislation and policy. That is something that we hope to see the government adopt. Labor stands with Aboriginal and Torres Strait Islander peoples to recommit to delivering them a greater say in issues affecting their lives. This is a big issue that has been identified in this report coming on the back of that Productivity Commission, and it's something that Labor says is very, very serious. We'll work with Aboriginal communities to adjust, and we call on the government to do a similar thing. Based on those comments, I commend the bill to the House.

Mr KEOGH (Burt) (10:20): The Treasury Laws Amendment (2017 Measures No. 5) Bill 2017 and the related bill will strengthen protections against manipulation of financial benchmarks and provide for the appointment of a Productivity Commissioner with extensive skills and experience in dealing with policies and programs that will have an impact on Indigenous persons. Labor largely supports these changes.

While some benchmarks are calculated by the administrator using regulated and publicly available data, others rely on submissions from banks and other market participants. Examples of these include the London interbank offered rate—commonly known as LIBOR—and Australia's bank bill swap rate, the Standard & Poor's ASX 200 index, the ASX bond features settlement price, the cash rate and the consumer price index. If we look at these sorts of benchmarks, globally there have been many cases of market misconduct regarding their determination. As of August last year, penalties paid by financial institutions in relation to such manipulation had reached around A$25 billion. In Australia, ASIC commenced formal court proceedings in 2016 against the ANZ, NAB and Westpac for alleged market manipulation and unconscionable conduct in relation to the bank bill swap rate. Later, ASIC expanded the rate-rigging case to also include the Commonwealth Bank. These cases continue to proceed now.

The purpose of the bank bill swap rate is to provide an independent and transparent reference rate for the pricing and revaluation of Australian dollar derivatives and securities. It's an important benchmark because it impacts financial products used by many Australian businesses to manage their financial affairs, in particular their borrowings. Artificially moving the bank bill swap rate can have some very clear winners—often the banks—and plenty of victims, the Australian business community. So rate-rigging is a serious crime—well at least it should be. In fact, it already is. The Corporations Act already criminalises market manipulation and misleading or deceptive conduct. But, as I can tell you, as a former prosecutor that specialised in corporate crime, the existing provisions are very difficult to prosecute. They are complex. So new and, in particular, clearer laws in this area are well overdue. Indeed, given how long ago the manipulations of the LIBOR and the BBSW were, it is concerning that it has taken the government so long to get around to fixing these things.

In government, the coalition made massive cuts to ASIC's capability as the corporate regulator—a massive free pass for corporate misconduct. The government only moved to restore that funding when Labor called for a banking royal commission. So I'm glad that ASIC is finally getting some positive attention from this government, a government that appeared to play favourites with its financial regulators, favouring APRA in many cases even where ASIC would be the more appropriate regulator.

But what will these laws specifically do? Schedule 1 will establish a new licensing regime, requiring administrators of designated significant financial benchmarks to obtain a new benchmark administrator licence from ASIC. ASIC will have the power to designate significant financial benchmarks, subject to one or more specified criteria being met. It will also give ASIC power to make rules imposing a regulatory framework for licensed benchmark administrators and related matters. This framework will reflect a set of principles released by the International Organization of Securities Commissions, IOSCO. And it will make manipulation of these financial benchmarks a criminal offence and subject to civil penalties with appropriate penalties attached. In addition, the ASIC Supervisory Cost Recovery Levy Amendment Bill adds benchmark administrator licensees to the list of entities from which ASIC may recover its regulatory costs.

While we welcome these bills, we are not blind to the Turnbull government's poor record on consumer protection in financial services. In the face of growing misconduct by the big banks and mounting consumer discontent, this government refused to establish a banking royal commission. While the banks eventually saw the writing on the wall and had to come and ask the government for a royal commission, it just goes to show where the loyalties of this government lie—with the banks and not the Australian people. The banks, indeed, wrote the terms of reference almost entirely themselves. This is, I think one can admit, a Clayton's banking royal commission. It's the sort of royal commission you have when you're not having a royal commission. And, as we have seen, the timing allowed for this royal commission is woefully inadequate. The scope is broad but specifically excluding dealing with the regulatory regime in which banks operate.

What this can be contrasted against of course is Labor's record in managing financial services and, in particular, protecting consumers. It was the previous Labor government that made landmark reforms like the introduction of the National Consumer Credit Protection Act in 2009. This was the first single, standard and nationally consistent regime for consumer credit regulation and oversight. It gave oversight to consumer credit including home loans and credit cards to the national regulator, ASIC. It included what are proving to be some very important and responsible lending obligations. We should also not forget Labor's enactment of the Future of Financial Advice reforms, the FOFA reforms, which the coalition indeed voted against. ASIC's Fees for no service report recently revealed that the big four banks and AMP had spent years taking fees from customers for financial advice services that in fact they never provided. A number of financial advisors engaged by the big banks were also charged for giving dodgy financial advice to consumers. The coalition's opposition to FOFA now looks incredibly embarrassing, and they should indeed be embarrassed by it. ASIC has stated that FOFA requirements that were passionately opposed by those opposite helped to bring to light the massive fees-for-no-service scandal.

Turning to schedule 2 of the legislation, it provides for the appointment of a productivity commissioner with experience and expertise working in Indigenous communities and with Indigenous people to oversee the work of the Productivity Commission in relation to the evaluation of policies and programs that have an impact on Indigenous persons. Labor stands with Aboriginal and Torres Strait Islander peoples to recommit to delivering a greater say in issues that affect their lives, such as this. However, there are factors in this bill that we have concern with. The definition of 'Indigenous person' is based on race and descent rather than the more standard definition, which is based on a three-part test of descent, identification and acceptance in the community. Labor has argued in the Senate multiculturalism report that it was necessary to move away from a race based terminology in legislation and policy. Labor will conduct further consultation in respect of schedule 2 in relation to this language and the definition in the bill and the issue of the new Productivity Commissioner being a non-identified person.

The use of the term 'race' has the capacity to reinforce negative perceptions of others from different cultures. The descent, identification, acceptance definition has been adopted by all Commonwealth agencies, which raises the question: why hasn't it been used in this legislation? In a multicultural society such as ours, terms like 'race' serve only to divide. I can think of another document where the term 'race' is also used quite liberally, the Australian Constitution. The Joint Select Committee on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples actually proposed the removal of sections 51(xxvi) and 25 of the Constitution because of their reliance upon race as an 18th century concept and the embedded racist thinking that governs their construction.

So why is the term being used here? This government likes the Constitution just the way it is, which is why, of course, it also rejected the Uluru statement. The voice to parliament, constitutional or legislated, was widely regarded as a modest change. Instead of a judicially enforced mere prohibition on racial discrimination, the body would be designed to provide active participation in the democratic life of the state. Although Indigenous people enjoy full equality in the electoral arena, their position as an extreme numerical minority makes it difficult for them to be heard by government, all the while holding a unique place in our society and history as this land's first inhabitants and its custodians.

In a media statement, the government said a referendum on a voice to parliament would have 'absolutely zero chance of success'. How do they know this? The Minister for Indigenous Affairs' explanation was:

I don't need evidence ... we have done a lot of polling, not on this particular … matter, but on other matters.

Well, that makes complete sense, apparently. I am glad that the government are proposing to have an Indigenous voice within the Productivity Commission, but they do need to get it right.

Finally, I would like to make some notes to the drafters. What is with these opaque and misleading legislative titles? Firstly, there is not one but two measures in this bill. At the very least, it would have made far more sense to have called this bill 'Treasury Laws Amendment (2017 Measures No. 5 and No. 6)'. But really, and I say this on behalf of every law student in the country, if not for others who struggle to understand our legal system: could you not have had two amendment bills: the 'Corporations Amendment Benchmark Regulation Bill' and the 'Productivity Commission Indigenous Commissioner Bill'? That would have made much more sense. We talk often about transparency and accountability in government. Maybe we could take just one small step in that direction in the way that we label our legislation.

Ms BUTLER (Griffith) (10:31 ): It is really a pleasure to be here to speak in respect of the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017 and the ASIC Supervisory Cost Recovery Levy Amendment Bill 2017. I do note the member for Burt's criticisms of the naming of the bills, and I agree with him that it is important to be transparent about exactly what we're debating.

Having made those remarks, I would like to talk about the contents of the bills and to specifically go to just a few issues in respect of each of the substantive parts of the legislation. Mr Deputy Speaker, as you well know, the Australian Securities and Investments Commission plays an incredibly important role in the context of our economy, as Australia's markets corporate and financial services regulator. I have to say that there is a lot of scepticism out there about whether or not it's even possible in our system, given the power that banks have, for a regulator to do anything to affect their conduct or to hold them to account. We certainly would say on our side that it is important that there be a banking royal commission and that it be a genuine banking royal commission that will look at holding these industry participants to account. I note that the government has instituted its own royal commission, after being dragged kicking and screaming to doing so. It took a long time for the government to acknowledge even the possibility of having a royal commission. Labor has made some criticisms of the conditions under which the royal commission has been established, and I won't repeat them here. But suffice it to say, our nation is in need of some good, strong scrutiny into the practices of Australia's banks. It is taking a royal commission to do that. At the same time, there needs to be an ongoing strong regulator that can be Australia's financial services regulator, that can hold the banks to account and, most importantly, that can enforce Australia's laws.

So you would be aware, Mr Deputy Speaker Mitchell, because of the interest that you take in financial services matters, that there has been some recent litigation brought by the Australian Securities and Investments Commission in respect of manipulation of the bank bill swap rate against Australia's four big banks. Two of those proceedings have settled, with each of the two settling banks paying tens of millions of dollars in fines as a consequence of their conduct in respect of the bank bill swap rate. One did not settle, but it has concluded in terms of hearings and a decision is awaited. The fourth, in relation to the Commonwealth, has really only just kicked off. We've only just this week seen the detailed allegations being made against the Commonwealth Bank in that case. I'm sure we will all be following it with great interest.

It is important to reflect on what we expect of a regulator like ASIC when it comes to litigation. This is a point that I raised with the new chair, James Shipton, and I might use this opportunity to welcome him to the chairmanship of the Australian Securities and Investments Commission. He is filling big shoes. I do hope he will take a very, very robust approach to enforcement of the law and to consumer protection and making sure that ASIC's responsibilities in respect of consumer protection are discharged. I put to him quite recently in a committee hearing that there are some thorny issues for ASIC in terms of how they go when they prosecute companies, particularly banks, or bring civil proceedings against them. That is this: if they win all their cases, does that show they are successful and invincible as a regulator? The concept of apparent regulatory invincibility is an important one. Market participants need to feel that if there are proceedings pursued against them they are likely to cause real difficulty in the event that the participant has engaged in unlawful conduct. Or does a high success rate mean that the regulator is pursuing only the easy cases and not the hard cases? In other words, a high success rate can be interpreted in very different ways when it comes to litigation.

In this case, I think we can be confident that these cases that ASIC is bringing in respect of the manipulation of the bank bill swap rate would not be considered to be easy cases. We will wait and see what outcomes arise once the courts hand down their decisions, particularly in respect of the matter that has concluded its hearings but hasn't yet been finalised and in respect of the new Commonwealth Bank matter, the other two having settled. But we should be wary and cautious, whatever the outcome, that we do not inadvertently, by our responses, put pressure on the regulator to stop bringing hard cases and to stop taking on issues that are complex and involve breaches of different aspects of the law.

Having said that, the existing provisions that ASIC is using to pursue these particular cases in respect of financial benchmarks manipulation are important but clearly insufficient in terms of future work in this area. So it's quite pleasing that this bill is bringing forward additional regulation and the establishment of criminal offences in respect of financial benchmarks manipulation. The bill will make manipulation of all financial benchmarks used in Australia a specific criminal offence as well as being subject to civil penalties. Individuals will be liable to fines of up to the greater of three times the benefit they gain or $945,000, which is 4,500 penalty units. Of course penalty units continue to grow as they are adjusted. A body corporate, on the other hand, will be liable to fines of up to the greater of $9.45 million—which is 45,000 penalty units—three times any benefits from the manipulation, or 10 per cent of the entity's turnover in the previous year.

These are meaningful penalties. That's what we need in this country. We do need there to be a big stick in the wings so that there are incentives for industry participants to conduct themselves according to the law. Often the existence of these provisions is enough to deter unlawful conduct. I'm certainly not saying that ASIC should be doing nothing but bringing legal proceedings. Of course they need to have a multidimensional and multifaceted approach to encouraging willing compliance, seeking undertakings, seeking civil remedies where appropriate and ultimately being able to seek criminal penalties as well. That's a hierarchy of different approaches to the regulation of industry, and it's a judgement call as to which part of that hierarchy should be used at any one time. I certainly don't mean to suggest that there should be nothing but criminal prosecutions. Having said that, the availability of criminal prosecutions is crucial to ensure that there are incentives in both senses—both positive and adverse incentives—for the industry participants to comply with the law.

The manipulation of financial benchmarks has real life consequences for people—for people sitting around the household table, for people in their businesses trying to work out what to invest. If there's manipulation of benchmarks then that can put up the cost of borrowing and that can damage the confidence that our society has in our financial markets and in financial services provision. Of course, anything that damages confidence makes investment more difficult, makes loan decisions more difficult and makes economic activity more difficult. So it is important that, in seeking to maintain confidence and regulation of our financial services sector, these criminal offences are introduced and there are strong laws incentivising good behaviour in the financial services sector.

Secondly, this bill will establish a new licensing regime requiring administrators of certain designated significant financial benchmarks to obtain a new benchmark administrator licence from ASIC. Again this regulation will assist in promoting confidence in the financial services sector, so I welcome it. These bills also go to the supervisory cost recovery levy. Deputy Speaker, you'll recall that the new supervisory cost recovery levy was introduced last year and started taking effect from 1 July 2017. The government introduced a user-pays model, where those being regulated make a contribution to the cost of regulating them. The formulae that have been set up are aimed at allocating the costs to those who require the most regulation, so it's a complex set of formulae.

When we spoke about this move to having the industry pay for the operations of ASIC we noted that that might give some opportunities in respect of some of ASIC's other work. I specifically want to mention the shadow minister's speech of 15 June 2017. She did note the complexity in the way that the industry cost model has been created and indicated that we would be watching that closely, which remains the case. We also accept that it's important that ASIC be properly resourced so that it can be a good, strong law enforcement focused regulator. Of course, the government's own conduct hasn't always been consistent in sending that message to ASIC. You'll recall the $120 million cut to ASIC in the 2014 budget. I spoke against that particular component of the 2014 budget at the time. I thought it was reckless to take away funding from one of our important white-collar crime regulators.

Anyone who's read the 2014 statement of expectations of the government towards ASIC would find it fairly light on when it comes to consumer protection. There's a lot of quite warm language in there about encouraging compliance, but you don't see from this government a really full-voiced robust demand that the regulator really focus on consumer protection. I hope that will be taken into account when the government drafts the next statement of expectations for ASIC, in the event that there is another one coming down the pipeline now that there is a new chair.

The shadow minister also in her speech on the original ASIC industry cost-recovery legislation noted that, as part of the government's process of developing that bill, there had been submissions calling for additional funding for financial counselling services, including from Financial Counselling Australia and the consumer group CHOICE. The shadow minister said:

Given the importance of financial counsellors to those in financial trouble, and their importance to the functioning of the financial sector, we think that these issues warrant further consideration from the Government.

I do hope that the government has taken that on board.

My interest in financial counselling, apart from the general interest that anyone in this place would have, arises from my role as the shadow assistant minister for preventing family violence. That is because there is an important need for financial counselling for women leaving violent relationships. It's a time of great risk of poverty and, accordingly, it is important to note that the shadow minister, in addressing the previous bill, talked about the arguments that had been made in the context of the industry funding model that there should be consideration given as to how that might support further or better resourcing for financial counselling in this country. I make no further comment on that other than to draw the attention of the House to those remarks that the shadow minister made at the time.

The other part of this bill that can't really go without comment is the Productivity Commission reform. This reform will, or is at least intended to, set up a regime with a view to ensuring that Indigenous perspectives are included in the Productivity Commission's consideration of policy measures. There has been, I think, a lot of concern raised about the definition of Indigeneity contained in this legislation. I hope that the government will take on board the criticisms that have been made. We do not need to go backwards in the way that we recognise Indigeneity in this nation. We don't need, in something that's purportedly designed to improve outcomes for Indigenous people, to inflict upon them old-fashioned and outdated thinking in respect of definitions of Indigeneity, and I certainly hope that this is a matter that will be able to resolved by consent, once this legislation heads to the Senate. I'm sure that the member for Lingiari, who will be speaking in respect of this legislation soon, will have many more things to say about the definition of Indigeneity in the legislation.

It is important to say in the context of this that I acknowledge that the Turnbull government is seeking to create in the Productivity Commission a specific focus on the impact of policies that are created purportedly for the benefit of Indigenous people. But it's another thing altogether to actually listen to Indigenous people themselves through a mechanism that provides them with a real voice to parliament as was anticipated by the Uluru Statement from the Heart. I call on the Prime Minister to rethink his opposition to supporting the Uluru Statement from the Heart. I hope that he will listen to Indigenous people and make good on his commitment to do things with people, not to them.

Mr SNOWDON (Lingiari) (10:47): I thank the member for Griffith for her outstanding contribution, as usual, and her demeanour, especially in this chamber, given—sometimes—the atmosphere in the place.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Lovingly peaceful, Warren!

Mr SNOWDON: Lovingly peaceful, as we all are! I just want to remind the House that this bill, the Treasury Laws Amendment (2017 Measures No. 5) Bill, contains two schedules. Schedule 1 amends the Corporations Act 2001 to introduce a new regulatory regime for administrators of financial benchmarks, and schedule 2 amends the Productivity Commission Act to enable the appointment of an additional commissioner with Indigenous policy responsibility. Schedule 1 of the Treasury laws amendment bill contains three parts. I won't go through them, and I won't comment in detail on the bill. That's been done with a great deal of aplomb by the member for Griffith previously and by the shadow minister sitting at the table, the member for Fenner, who knows far more about these matters than I do, I have to say.

But I did want to just in passing make the comment, given that we're talking about Treasury here, that yesterday we saw in the Northern Territory an announcement by the Territory government that it was unveiling a response to a wide-ranging alcohol review commissioned by the former NT Supreme Court Chief Justice Trevor Riley. It announced very courageously in my view, and, very importantly, that it would introduce a floor price on alcohol. It will be $1.30. It won't affect the price of beer, but it will make a great deal of difference to cheap wine and see wine cost less than a bottle of water, effectively making it no longer available and certainly not available at $3 or $4, or $4 or $5; that bottle of wine will now be $9 or $10.

It's very important that we understand what motivated this. This is to deal with the problem drinking of alcohol by some residents of the Northern Territory, and it's in concert with the demands of the Public Health Association of Australia for us to address broadly, across this country, issues to do with alcohol consumption.

One of the issues often raised is the strength of the argument for the Commonwealth government to take action in this regard as well and introduce a volumetric tax on alcohol. I'm a great advocate for that. I know that I'm at odds with some in my own party but I think it's extremely important as a public health measure that this government—or the next Labor government if this government doesn't do it—has the guts, courage, strength and commitment to the Australian community to introduce a volumetric tax on alcohol. This is an issue that has been at the front of my mind for almost two decades. I have not stopped arguing for it, and I will not stop arguing for it until it is in place.

I want to commend the Northern Territory government. They often wear brickbats, but they deserve a giant bouquet for the measures they announced yesterday to deal with the abuse of alcohol in the Northern Territory. Last week and the week before, we saw tragic episodes around Tennant Creek publicised for the nation to see. I hope the nation understands that the measures announced yesterday by the Northern Territory government will have a significant impact upon the amount of alcohol consumed by those people identified in the press over recent weeks. I commend the Northern Territory government for its courage. In particular, I commend the Northern Territory minister responsible for this, Natasha Fyles, for the work that she has been doing.

I say to the government that we do have an opportunity in this place to address issues without interventions of the type we have seen previously in the Northern Territory but by considered and coherent policy development in partnership with the Northern Territory government. In this case, in the context of alcohol, with the broader Australian community in mind, we need to understand that public health experts in this country have for a long time been advocating a volumetric tax on alcohol. We should understand the importance of that argument. We hear the alcohol industry say it is 'death by a thousand cuts' and 'the end of the world'. The problem is that we have a huge public health problem in this country around alcohol consumption and we need to address it.

Over recent years, we have seen the emergence of arguments about FASD. If the broader Australian community doesn't appreciate the impact of alcohol abuse on the fetus and on the development of young children then it needs to. We need to ensure that all measures are properly taken to address alcohol education, the abuse of alcohol and the consumption of alcohol. In the context of FASD, we need to get pregnant women not to drink; that would be a great start, because that is how it happens.

Having dealt with the first aspect of the legislation, I will now go to the second aspect, which is the Productivity Commission. We support the inclusion of a Productivity Commission with expertise and a remit to policy matters relating to Aboriginal and Torres Strait Islander people but it raises an issue which is worth discussing. We have heard the Prime Minister lambasting the idea of an Indigenous voice in this parliament. He says he would not support under any circumstances the idea of an Indigenous voice being legislated, let alone being considered as part of constitutional reform. He wants to make it an issue at the forthcoming federal election, whenever that might be—this year or next year. You might ask: what dimwit would have that view, and why would he have it? Well, he has it because he sees it as a point of division, and the dog whistling that he's doing around it does him and his government no credit. Australians across this country deserve better than we're getting from this Prime Minister in relation to advancing the cause of discussion around the developments from the Uluru Statement of the Heart, including proper consideration of a voice and what a voice might look like.

It's in that context that we're considering this legislation about the Productivity Commission. I want to make this observation. The Prime Minister's not here, but let's imagine he is. Prime Minister, do you recall ATSIC? The Prime Minister presumably will say, 'Yes, I recall ATSIC.' Do you recall that it was an elected body elected by only Aboriginal and Torres Strait Islander people? 'Yes, I do.' Do you recall that it was set up by legislation by this federal parliament? 'Yes, I do.' Did you see it as anathema then? 'No, I didn't.' So why is it anathema now? Absurd!

Let's just take the Prime Minister's mind a bit away from the dog whistling and talk about the potential for such a structure and what it may or may not look like. Again, you might say it could be a regional structure that might have regional representatives elected to a central body, which would elect the chair of something, whatever it's called—the ATSI Voice, for the purpose of this discussion. Why would you not give it functions like those that we're giving the Productivity Commission today? Why would you not? Would there be a difficulty with that? No. I would think not. You're setting up a body that would report to the parliament, and you give it powers. One of the powers you could give it would be the role you're giving the Productivity Commission today through this legislation. Why wouldn't you? Well, you should. You should contemplate it at least.

So, imagining the Prime Minister sitting opposite me, I say: Prime Minister, will you recant and understand the opportunity and the possibilities that present themselves from setting up a voice of that description, a body which is an advisory body to parliament and which may have some deliberative functions, legislated for by this parliament—a body whose purposes are decided by this parliament? Mr Deputy Speaker, I'm sure even you can contemplate that—no, I beg your pardon. I know you can contemplate that.

An honourable member: Reflecting on the Speaker!

Mr SNOWDON: I don't want to reflect badly upon you. But it appears that the Prime Minister is incapable of doing it. That is simply sad. It is sad. Why wouldn't you come to the party and say, 'Let's have a proper discussion around the community without the dog-whistling and see what might emerge as a result of discussion, whether it's a body of the type I've described or something different'? Why wouldn't you do it?

We're setting up a joint parliamentary committee which has terms of reference which, I understand, include the possibility of the consideration of a voice. Imagining the Prime Minister sitting opposite me, I say: can you and have you put aside your inane description of a voice and your dog-whistling, and will you consider in a temperate way the recommendations that might come from a joint parliamentary committee without prejudging the outcomes? I can imagine him sitting there thinking to himself: 'Oh, what do I do here? We're setting up a parliamentary committee which I've agreed to. I've already said that I don't want an outcome that says there'll be a voice, but the terms of reference for this joint parliamentary committee will have the voice in them. What am I to do?' Well, Prime Minister, get off your bloody high horse and accept the proposition that it's a valid thing to do to go and consult with the people of Australia around a voice and what a voice might look like, to come back and make recommendations to the parliament, and to endorse the recommendations made to the parliament by a properly constituted committee of the parliament. I think that should be something even this Prime Minister should be able to understand. I know that he referred to my friend Joel Fitzgibbon, the member for Hunter, as a bush lawyer. I'm not sure how to describe the Prime Minister. He's not even a bush lawyer, really, even though he's a QC. I suspect he thinks he's very good, but he's not that flash.

That brings me to the issue which is of importance to us here in the Labor Party around the way this legislation seeks to define an Indigenous person. We've heard the shadow minister give a very good speech in this regard, relaying why it's important that we deal with this question. We are very much of the view that we should not be using a race based definition. We are very much of the view that we should be using the administrative definition that has so long been used across this country, even by government agencies today. That is: an Aboriginal or Torres Strait Islander is a person of Aboriginal or Torres Strait Islander descent who identifies as being of Aboriginal and Torres Strait Islander origin and who is accepted as such by the community with which that person associates. It's very simple. It should not be an issue. It should not be a question which is exercising the minds of the government. They should see the merits of what has been proposed by the Labor Party. They should agree to these propositions. They should understand that it's within their province to be able amend the legislation. We will be proposing an amendment in the Senate. We will look forward to the government accepting that amendment and saying to the Australian people, 'We think we should be following the administrative definition and not a definition based on race.'

Ms BURNEY (Barton) (11:01): I rise to join with my colleagues in making comments about the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017 and ASIC Supervisory Cost Recovery Levy Amendment Bill 2017. I completely endorse the comment made by the shadow minister and by my colleagues who have spoken in the debate so far. I've listened carefully to what they have had to say and I completely endorse their comments. In particular, I have just listened at length to the member for Lingiari and his comments around the actions of the Prime Minister and the importance of a first-nation voice in this parliament and the reasons why it should happen. I completely endorse what he has said.

The shadow minister has outlined clearly what Labor's position is on this piece of legislation. As we have said, we will support this bill in the House but reserve our right to put forward amendments in the other place. We do not have any issue with schedule 1 of the Treasury laws amendment bill. I think that that has been outlined clearly. But, as Labor speakers have clearly outlined, our issue is with schedule 2 of the bill. Schedule 2 goes to some extremely important, straightforward issues that I thought had been resolved. For some reason I understand that the Prime Minister's office has decided to take issue with what has been, as the member for Lingiari said, the administrative definition of aboriginality that has existed since the 1980s within the Commonwealth, in state instrumentalities, in Aboriginal organisations and also in many instrumentalities, including universities, across this country. I know this because I have been involved in these discussions, particularly with land councils in New South Wales that have the responsibility of providing certificates of aboriginality. I can assure the advisers in the box and I can assure the government that those certificates of aboriginality, which are often required by government, are based on the administrative definition—that is, the three-part definition that my colleagues have spoken about. That three-part definition is: (a) that you are of Aboriginal descent; (b) that you identify as an Aboriginal person—in a sense, self identification; and (c) most importantly—and what's been left out of this, incredulously, and, I understand, accepted by the Treasurer's office and not by the Prime Minister's office—that you're accepted as an Indigenous person by the Aboriginal community. In a moment, I will explain why that third part is so important.

By way of background, schedule 2 provides for the appointment to the Productivity Commission of a commission who possesses extensive skills and experience in assessing policies and programs that have a particular impact on first nations people. This proposed commissioner would review the decisions and actions of government, non-government and private sector policies and programs. So it is an incredibly important position. It will review and evaluate not only initiatives or measures that specifically target first nations Australians but would also assess those which while not necessarily designed to affect first nation Australians affect first nation Australians nevertheless.

We should be asking what is working and what isn't. Moreover, this proposed commissioner would have experience in dealing with one or more communities of first nation peoples. The schedule will increase the maximum number of commissioners, not including the commission chair, from 11 to 12. That's all by way of background, but let me go to the heart of why the definition that's being used is race based, which is one of the arguments why there should be changes to the Australian Constitution—which, in this day and age, has race based definitions in it. But I will leave that aside for a discussion for another day.

Labor does support the inclusion of a Productivity Commissioner with the expertise and role that I have already outlined. As the explanatory memorandum to this bill and this schedule acknowledges, there is a clear and established need for greater evaluation of the impact that policies, programs and initiatives have on first nations people. I have served in other parliaments, I have been the director-general of a government agency and I've run non-government organisations I have followed very intimately the reports of the Productivity Commission and I understand very clearly the impacts those reports have in terms of describing what the situation is for first nations people and others, but also, of course, the way in which those issues are used for governments to set agendas, to set targets and set policies. So we understand the importance of that position, and I'm sure the member for Fenner would agree with me.

Dr Leigh: Yes.

Ms BURNEY: But the remarkably stupid thing—if I can pick up on the comments from other speakers—is that the definition being used is a race based definition. Schedule 2 defines an Indigenous person as a member of the Aboriginal race of Australia or a descendant of an Indigenous inhabitant of the Torres Strait Islands. This is so far removed from the accepted definition that has been around, as I said, from the 1980s and which is used by universities, government agencies, the Commonwealth, the Aboriginal community and, in particular, land councils to provide certificates of aboriginality. So there is quite a serious edge to this, and I want to make sure that people understand.

Another problem that we have with this definition is its preoccupation with race and descent. Labor notes that the most widely accepted definition is about descent, identification and acceptance. This is also internationally accepted. I have participated, as other members have as well, in forums within the United Nations specifically to do with first nations people, and this is the definition that is used. That makes this one of the most ridiculous arguments I think I've heard in this place. There should be no issue at all with the government accepting its own definition. Why it's digging its heels in about this suggests to me nothing other than wedge politics and a waste of people's time. Maybe there is nothing else the government has time to spend time on. Oh, that's right—drug testing! We'll talk about that down the track.

The definition defines an Aboriginal and Torres Strait Islander as a person of Aboriginal and Torres Strait Islander descent who identifies as being from Aboriginal or Torres Strait Islander origin and who is accepted by the community. The member for Jagajaga's in the chamber. If there's anyone in this place, along with the member for Lingiari, who understands the importance of this it's the member for Jagajaga. One of the things that very much engages the discussion is people who claim Aboriginality but are not accepted by the community and, in fact, in some cases, are not Aboriginal people. That is why that third part of this definition is so important—that the person is recognised by the community as someone of first nations descent.

We're not trying to make problems here. We're trying to fix up a potential problem that the government is making for itself that it actually doesn't have to have. There's absolutely no controversy about this. I think the wise thing for the government to do would be to take a breath and, particularly for the men and women sitting in the advisers' box, to listen to what we're saying. I don't want to have a fight about this. It shouldn't be a fight. It is the accepted definition. So just go back and fix it up—it's really easy—and you'll have no problem from the Labor Party in relation to that.

The focus on and preoccupation with race and biology is particularly backwards, and I think other people have outlined that. The old view of how we thought about multiculturalism and social inclusion is reflected in this race based definition. It is not reflected in what everyone in this chamber who has an interest in this believes. If I said to most people in this chamber, 'Tell me what the definition of Aboriginality is,' they would tell me the three-part definition. They wouldn't tell me the two parts that are part of this legislation.

The race powers featured in sections 51(xxvi) and 25 of the Constitution are reflected here, and the so-called race powers are underpinned by strong racial connotations. That is another consideration that I would like people to think about. This is taking us backwards 40 years, and there is just absolutely no need for it. I really urge the government to reconsider its definition and to consider what the conventional definition is when we proceed with our detailed amendments to the Senate. I cannot see what the problem with that is. There would be no fallout at all if the government has a look at that and redefines what it's actually putting forward.

Other members have talked about the Indigenous space, the first nations space, that we seem to be moving into policy-wise in relation to the Commonwealth. I hear other members reiterating in this debate the principles of self-determination and the principles of first nations people choosing for ourselves and also, in relation to working with this parliament, having a voice to the parliament. The idea of bipartisanship and trying to preserve that notion of bipartisanship is being sorely tested by the government, and that is a dangerous space for us to be getting into in 2018. It is not something I have ever contemplated in the 40 years that I have been involved in Aboriginal affairs—that there would not be a bipartisan approach to looking at the issues facing the most disadvantaged group of people within our community. Aboriginal people are saying: 'Come walk with us. We want to share what is an amazing story, and it is everyone's inheritance of 60,000 years. It is something we should be celebrating.' If we don't have bipartisanship, if we don't have an agreed way forward, then they are the things that are at stake.

The losers will not be people in this chamber. The losers will be people out in the broader community, and, more specifically, in the Indigenous community. So, in light of schedule 2, we ask the government to take the step towards giving bipartisan support to the voice in the parliament, but also bipartisan support to what is the conventional, administrative and accepted definition of Aboriginality. It just seems remarkable to me that we're even having this particular discussion.

I will finish up by saying to the government that we welcome, in principle, the purpose and function of schedule 2, but the way it is drafted now is not acceptable. We are simply saying: let's be sensible about it and redraft it. I finish up by saying, once again, that Labor is committed to bipartisanship, but it has to be a two-way process and it is not a race to the bottom.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (11:16): Firstly, I would like to take this opportunity to thank those members who have contributed to this debate. In summing up, schedule 1 to this bill delivers on the government's commitment to strengthen financial regulation and better protect Australians from the possible abuse and manipulation of financial markets by sophisticated financial institutions at their expense. Financial benchmarks are used to help value trillions of dollars of financial products and have proven to be a weak spot in the international system of financial regulation. There have been many cases of market misconduct regarding the determination of the financial benchmarks, such as Libor and all around the world. As of August 2017, penalties paid by financial institutions globally had reached around 25 billion in Australian dollar terms.

We're seeing this play out in Australia as well. ASIC has commenced formal court proceedings against all four major banks for alleged market manipulation and unconscionable conduct in relation to the bank bill swap rate, Australia's most important interest rate benchmark. This case is ongoing. In 2015, in response to these issues and regulatory developments, the Treasurer directed the Council of Financial Regulators to consult on options for reform. Following a lengthy and detailed policy development process, the CFR broadly recommended that: administrators of benchmarks that are critically important to the operation of Australia's financial system be required to hold a benchmark administrator licence and comply with ASIC rules; that ASIC be empowered to compel submissions to significant benchmarks in the case that other calculation mechanisms fail, ensuring that, even in times of financial stress, this critical part of the financial system's plumbing continues to function; and, finally, that the manipulation of any financial benchmark or any product used to determine a financial benchmark in Australia be made a specific criminal and civil offence with hefty penalties of up to 10 years imprisonment for an individual, to effectively deter misconduct.

These reforms, which are embraced by the government, will enhance the robustness of these critical components of our market architecture and improve the integrity, resilience and fairness of Australia's financial systems. They will also align our regulatory regime with international best practice, including with regimes in the UK, the EU, Japan, Singapore and Canada. This is not only necessary to reduce the risk of regulatory arbitrage that could arise for the gaps in the implementation of global standards ; without change, Australian businesses and individuals would likely lose the ability to fully participate in global markets. It's the view of the government that this would be an unacceptable outcome and would run contrary to our goals for the continued growth of the financial sector.

Schedule 2 to this bill makes minor amendments to the Productivity Commission Act to appoint an additional commissioner, with experience in dealing with policies and programs affecting Indigenous Australians and involvement with Indigenous communities, to the Productivity Commission. This will ensure that the commission has a specialist commissioner with the necessary skills and experience to oversee the commission's important work in Indigenous policy evaluation and will allow us to better understand which policies and programs are effective in improving outcomes for Indigenous Australians. It's therefore been disappointing to see this bill delayed as a result of Labor's insistence to change the definition of an Indigenous person contained in the act. This definition has been contained in numerous acts enacted by the parliament, including under the previous Labor government. So, if the opposition's interested in changing the standard definition of an Indigenous person, a parliamentary amendment to this bill is clearly not the appropriate way to do it. Adopting an administrative definition, of which there is currently no common form, could set a precedent for future legislation and have significant legal implications. Consideration of how to define 'Indigenous' is a significant matter which we believe is well above politics, and it should be considered in a separate and far more thorough process. The opposition's approach to this matter is only delaying the passage of this legislation and, sadly, preventing the Productivity Commission from commencing its important new functions in the area of Indigenous affairs. Therefore, I commend this bill to the House.

Question agreed to.

Bill read a second time.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (11:22): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (11:23): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms MACKLIN (Jagajaga) (11:23): I'm speaking today on the Social Services Legislation Amendment (14-month Regional Independence Criteria) Bill 2018. In 2017 the parliament passed the Social Services Legislation Amendment (Simplifying Student Payments) Bill with the support of Labor. The simplifying student payments bill included an amendment which made it easier for young people from regional and remote areas to qualify as independent for youth allowance purposes. Recipients of youth allowance are paid at either a dependent or an independent rate. The rate of youth allowance received by someone who's assessed as dependent is affected by their parents' income, whereas the rate for a recipient classed as independent is not.

There are a number of ways an applicant can qualify as independent for the purposes of youth allowance, including where they have supported themselves through paid work over an 18-month period since finishing secondary school. The Simplifying Student Payments Act reduced the existing 18-month period to 14 months for students from regional and remote Australia. As a result of the change, from 1 January 2018, full-time students from regional or remote areas who need to move from their parental home to study can qualify as independent if, since leaving secondary school, they have, firstly, over a 14-month period earned 75 per cent or more of wage level A of the national training wage schedule included in a modern award—and in the 2017-18 financial year this was equal to $24,836—or, secondly, for at least two years worked at least 15 hours each week. Their parents must also have earned less than $150,000 in the previous tax year.

It was intended that the new 14-month period be applied to existing and new youth allowance applicants; however, a drafting error meant that this has only been applied to youth allowance applicants from 1 January 2018. The bill corrects this by applying the 14-month period to young people who were receiving youth allowance prior to 1 January 2018. It is anticipated that the bill would allow around 300 young Australians to claim independence for youth allowance purposes, using the reduced 14-month period, not the original 18-month period.

Labor will support this bill because, as with the previous act, we do believe that young Australians should have the right to a tertiary education, if they wish. Although this bill will help a small number of students, and that's a good thing, this government is making other changes that will have a significant negative impact on students. This conservative government has frozen Commonwealth grants for universities, effectively ending the demand-driven system and locking some students out of education. We've also seen this government propose a lowering of the threshold for the repayment of HECS-HELP loans to $45,000, meaning that more young Australians will have to repay their HECS-HELP debt sooner.

It was of course the former Labor government that lifted the caps on the number of university places, and this has led to significant increases in the number of students able to attend university. So, since places were uncapped in 2009, there has been a 55 per cent growth in university enrolments from the poorest fifth of Australian households, and a 48 per cent growth in regional and rural students at university. In addition, we've seen an 89 per cent growth in Aboriginal and Torres Strait Islander students attending university and a 106 per cent increase in students with disabilities. That's been a wonderful change.

The lesson, sadly, seems to be that Labor opens the door to learning and opportunity but this conservative government, in large measure, shuts it. This Prime Minister's $2.2 billion cuts to universities are hitting home. Just today, Universities Australia chair, Professor Margaret Gardner, has urged the government not to 'slam the door of opportunity shut on young Australians who aspire to a tertiary education'. Make no mistake, these cuts will hurt regional and rural Australian students. We know that the Central Queensland University, the University of the Sunshine Coast and other smaller Queensland institutions have been holding emergency meetings on whether they could continue to offer some courses or services. There are reports that some universities are turning away students. It's estimated that around 10,000 students will miss out on a place at university this year as a result of this Prime Minister's harsh cuts.

We on this side of the House want to make sure that Australians, particularly young Australians, have access to the best post-secondary opportunities in the world. Sadly, this Prime Minister wants to make it harder for young people to access post-secondary opportunities. I thank the House.

Mr RAMSEY (Grey—Government Whip) (11:29): I rise to speak on the Social Services Legislation Amendment (14-month Regional Independence Criteria) Bill 2018. I thank the member for Jagajaga for those comments. The first half of her speech I thought was pretty to the point and on the money. The second half, I must say, I thought was a heap of political claptrap with very little truth in it. It has been a long haul addressing the injustices that rural, regional and remote students face in accessing tertiary education. Today we take another small step, but we still have a long way to go. Regional students make up just 18.8 per cent of entry level university students, despite comprising more than 25 per cent of the population. That's something we need to fix. This parliament dealt with the issue of the implications of the 18-month period a student must face before they could access independent youth allowance last year. It was an overhang and an overreach from the first Rudd government. A group of us have been fighting ever since to undo some of the reforms that the Rudd government brought in under Julia Gillard as the education minister at the time. There were some good things in it, but there were others that greatly disadvantaged regional students, and it's been a long battle putting some of those measures back in place and trying to fix up some other injustices that sit within the system.

The system does not sufficiently recognise the cost of getting students from regional areas to university. The current estimate is around about $25,000 extra per year that country students face to access university, which city students, who can live with their families, do not face. For country students, living away from home is not an option; it's a necessity. The cost of emotional separation, the cost of accommodation, catering for oneself as opposed to being catered for by the family—I mean in the sense of food—and for most, the need to have a car of reasonable quality capable of the journey home, to go and visit family and recharge the batteries, if you like.

The education cost itself is not such an issue. The majority of tertiary education funding for students in Australia is met by the taxpayer with the contribution of the fully subsidised HECS-HELP loans. That side of the equation can be managed by the families. For some students, though, just knowing that parents don't have the ability to finance their tertiary education is enough to steer them away. They don't necessarily tell their parents. They don't want to put extra pressure on their family. They don't want their parents to be in a position of denying them access to tertiary education. So they say, 'Well, actually I don't really want to go to university. I would be happy doing A, B, and C.' They leave school and go off and get a job instead.

For many youth allowance is the only way that they can get to university. It's a big help, but it still leaves a significant gap. However, once parental income reaches $57,000 a year or thereabouts, the rate of youth allowance begins to decline, until it disappears completely at around $108,000 with one child away from home. Remember, though, that these are before-tax earnings and not what parents have available as disposable income. However, regional students have been able to access independent youth allowance by showing they have been supporting themselves for a certain period of time.

There's been a major area of contest since the first Rudd government changed the arrangements for access to independent youth allowance, when fair, reasonable access was made that much more difficult. And since that time, I and a number of my like-minded colleagues—one has just jointed me to my left, the member for Forrest—have worked together as a group. I call us the rural education rump. We have worked very hard to try and undo some of the damage, and we've had some success. In some areas we have done even better than the pre-existing situation. For instance, we've managed to negotiate different treatment for regional students for the assessment of the independent youth allowance, being for outer regional, remote and very remote students, recognising at least that there is some difference and extra challenges that these students face. We've also had the parental assets test removed, relying instead quite rightly on a parental means test, which has addressed the great problem of asset-rich and income-poor businesses, particularly, but not only, in the farming industry.

The member for Jagajaga said independent youth allowance is not affected by parental income. Well, of course it's not—until you reach the point where the combined parental income is $150,000. It raises a very interesting question: what has the parents' income got to do with a student's independence? The student is either self-sufficient or not. I find that an anomaly in the system. I understand why it's there—because the $150,000 lines up with a whole lot of other cut-off areas in government assistance—but it's worth reflecting on that figure. Let's take, for example, a couple who might be a teacher and a council worker or a teacher and a policeman. With that $150,000, which is pre-tax, when you add another $25,000 per student that you are trying to get into tertiary education, it is quite a gap.

So we've also had an issue with the length of time a student is subject to justifying the independence criteria, which was 18 months. Last year we made that change. If they completed year 12 in November of the school year, the student would take a gap year to accumulate the required amount of minimum income, which at this stage is 75 per cent of the training wage level A, which is currently almost $25,000. This is a reasonable challenge but it is certainly not insurmountable. For instance, an income of $15 an hour from a retail outlet, for 35 hours a week, will accumulate that amount in 12 months. But the problem was that, even though the student might accumulate that target amount of earnings in 12 or 14 months, they couldn't qualify until the 18 months expired—about May in the second year after the student left school—pushing some to a two-year gap.

Most would concur that that was far less than ideal and students needed to be very motivated to actually get through a two-year gap without being distracted and going off and finding another job and actually finding they are making progress there and perhaps never returning to their first true love or the thing that they really wanted to do. I certainly appreciated the opposition's support when that legislation went through this House last year and brought that qualification period back to 14 months. But today's legislation addresses that one-year group who were caught up in the change of the legislation and had already started on the qualification path when the goalposts changed. This fairly simple legislation today deals with this issue in a timely manner so, hopefully, those eligible students can begin to collect their support before university resumes in March—I think it is tomorrow. So we need to get onto this to get it through not only this chamber but the other place as well.

But it's not the end. We have achieved so much, but there is still some distance to go. I spoke about the council and the retail worker and how their combined pay might be over $150,000 but it's still an enormous challenge. They can also be devilled by distance. Some of the people who earn money like this live in places like Roxby Downs or Karratha, where the cost of living can be substantially higher than in the city. I don't think we are fully recognising those extra challenges. The coalition education rump, might I say, has kept up its job. And the government has commissioned a report from Emeritus Professor John Halsey, from Flinders University, into rural, regional and remote education. Professor Halsey has a long background in rural education. His career includes significant stints as a country teacher and a principal. He is eminently qualified, with his later positions covering senior departmental and political appointments including executive officer of Rural Education Forum Australia and, most recently, Sidney Myer Chair of Rural Education and Communities at Flinders University.

Professor Halsey will not only look at the subject of this legislation—namely, youth allowance and the funding of rural students to get into tertiary institutions in the city—he will look at a whole raft of other issues facing students from the country. In particular, I know he has a long interest in teacher and principal quality. There's also leadership. Leadership is so important in regional facilities, and I expect his report to have a significant input on this issue.

Only last week the Minister for Education and Training, Simon Birmingham, was in my electorate, and we visited John Pieri Secondary School in Port Pirie. The principal there—I will name him, because it's all good—is Roger Nottage. He's been there six years. I've been a visitor to John Pieri Secondary School over that period and before, and, without any reflection on those who preceded Roger Nottage, the school is a completely different place to where it was five or six years ago. As the minister and I walked around the grounds with Roger Nottage, he knew every student; he knew every teacher. He was having a personal conversation as he moved around the ground. As someone from The Castle might have said: it's the vibe of the place. It's the vibe of the place, and it has completely changed. I would have thought, when I was walking around, that I was at a top-quality private school in the city. Kids were in uniform, and they were really applying themselves to their tasks.

This illustrates the very important point of what leadership can do. I have seen the opposite in schools in my electorate where we've had really good standards and a new leader has come in who didn't know much about leadership. They were unskilled, and the school has gone into a spiral of decline. I'm expecting Professor Halsey's report to focus on leadership and teacher quality because he has a long history of advocating in these areas. I would be very surprised if they were not in the report.

I think—because he has flagged this issue when I and others have spoken to him—he will also look at the expectation that some schools have of students and of how they are considered a failure if they don't access university education. This is something that we need to face up to. As Australia is expanding into a services based economy, we are going to need workers with services based skills, whether they be in nursing and aged care or manufacturing and engineering. Tertiary or university education is not for every student, and many will find their way in the world in the very highly respected trades, which I think increasingly will be well rewarded.

I'm looking forward to the Halsey report, I'm looking forward to reading it carefully, and I'm looking forward to working with my rural rump, if you like, to make sure that we, on this side of the parliament, keep pushing for a better deal for rural students. We have a little way to go. We've come a long way, but we are going to keep at it.

Ms MARINO (Forrest—Chief Government Whip) (11:43): Like the member for Grey, I am very pleased to be speaking on the Social Services Legislation Amendment (14-month Regional Independence Criteria) Bill 2018, particularly as it's to do with independent youth allowance. The member for Grey and I and a number of our colleagues have worked tirelessly on this issue, virtually since we were elected to this place. This bill is directly aimed at assisting more rural and regional students—the young people who live in my and the member for Grey's electorates—to achieve their higher education.

Ever since I was elected, I've pursued equity of access to higher education for rural and regional students, who have no choice but to leave home to study. These young people have no choice. So I was absolutely horrified when the then Labor government changed the independence criteria and physically excluded students from areas defined as 'inner regional'. These were my students. Labor was diverting funds from disadvantaged regional Australian families and students and delivering the funds to outer-metropolitan seats, which were Labor-held seats. This change meant that the majority of young people in my electorate were ineligible to even apply for independent youth allowance. These are the young people who live three to four hours from Perth, where they had to go to pursue their higher education studies. I remember only too well the numbers of families and young people who came to me in absolute desperation—and it was desperation. For many, this meant they had no choice but to give up their dreams, their goals and their plans to attend university. It was just dreadful to see. It changed some of those young people's lives forever, because they took a different path at that time—different to what they would have taken had they gone on to university.

I submitted a private members' motion in 2010. It called on the then Labor government to reverse this decision that discriminated against inner-regional students. The motion was supported by the majority of members in this House at the time, and was the first defeat on the floor for an incumbent government for a long time, and well it should have been. It was a disgraceful, discriminatory decision. But, unfortunately for our rural and regional students, the process of removing the funding from them and their families and redirecting it to Labor-held seats is actually Labor's standard operating procedure. It's what Labor governments do.

We're seeing a very similar approach to education from the WA state Labor government, with announcements of $64 million of education cuts, mostly in regional and rural areas. There were cuts to the five Schools of the Air and to the gifted and talented programs in Northam Residential College. It took concerted public pressure for these particular cuts to be reversed.

More recently, the CWA actually marched on state parliament to protest against the remaining $41 million of sweeping cuts to regional education. The closure of the Moora Residential College demonstrates that regional students and regional families do not matter to Labor. However, one of the most blatant and ill conceived cash grabs is taking 20 per cent of the funds from the Agricultural Education Provisions Trust. This takes money from our agricultural colleges and the Esperance Farm Training Centre in WA. These AEPT funds are earned and generated by the colleges themselves from selling their own produce. The Harvey ag school in my electorate will lose at least $50,000 a year. These are the funds the ag school uses for farm machinery, for developing their farms, for repairing and replacing fences and for the constant recurrent costs they have to meet. Labor is cutting hundreds of thousands of dollars from these regional ag schools.

There is no doubt that agricultural is critical to the WA and Australian economies. It is worth $8.2 million to the WA economy alone. I'm unashamedly a farmer. Our future farmers—our young people—need the best possible education with the most current innovations and training technologies: the machinery, the tools and the trades equipment. The Harvey ag school's trades training centre is exceptional. The students currently have access to very well-equipped workshops. They are training on the machinery and tools currently being used in the relevant industries: automotive, construction, furnishing, metals and engineering. They also offer ATAR and general academic pathways for students. The ag school is an economic contributor to our local economy, providing employment and sourcing inputs from local businesses. Over 600 students attend these colleges.

Unfortunately, this is a pattern of behaviour from Labor governments, whether federal or state. We saw it at the federal level with the changes to youth allowance. It was devastating—directly and deliberately removing funding from rural and regional students and redistributing it into the cities. In contrast, the Turnbull government has made a number of improvements and changes to youth allowance to assist more of our students in rural and regional areas.

We know how important the changes have been. We know that students from regional areas are significantly underrepresented in tertiary education. A far greater percentage of metro students go on with their tertiary education, compared to our young people from rural and regional areas. One of the major barriers is the extra cost, which is around $25,000 a year. Accommodation is one of those costs. Regional students can't just go home to mum and dad for the night. They also need to have a car to get to the city from where they live in the country. They need to fund their daily living expenses while they're away from home. There are far greater costs for tertiary education for our kids and families.

Some students I've met, as the member for Grey rightly said, have made conscious decisions to not aspire to attend university in Perth or elsewhere, because they know their families simply can't afford it. What a tragedy this is! And it was a tragedy back in 2010 as well when Labor changed the rules and excluded those great young people. Some parents in my area have two jobs to support their children's higher education. These are the reasons I and my colleagues will continue to do everything we can to help our great young people get the education and training they need to pursue their talents, their ambitions and their dreams.

Another barrier for some students has been the requirement to wait for 18 months after leaving school to qualify for independent youth allowance. We, on this side, have worked consistently to change this requirement. In practical terms it has meant that students have had to take two years away from their study, working to earn the amount required to demonstrate their independence so they can qualify for youth allowance. Parents and students have repeatedly sought this change. I've heard about it over and over. Effectively, it will mean that students finishing high school at the end of 2018 will be able to qualify for youth allowance and start uni in 2020 instead of having to wait till 2021, as they would have previously. So, instead of taking two gap years, they will only have to take one. This bill actually helps 300 students who have not been able to take advantage of the reduced 14-month period: those that remained in the transition under the old 18-month rule. This reduction in time was an election commitment that we made and that we're very proud of, member for Grey. You called us—

Mr Ramsey: The rural education rump.

Ms MARINO: the rural education rump. It is a very appropriate description of us, because we have been absolutely committed to this and we have been absolutely persistent. We have made several changes to improve the access for rural and regional students, but as I, the member for Grey and my colleagues know there is more work to be done.

I have worked consistently and persistently—I think they're the two words we would use, member for Grey—with my regional colleagues on this issue. The Minister for Education and Training, Senator Simon Birmingham, responded to what we knew needed to be done by asking Professor John Halsey to conduct an independent review into regional, rural and remote education. These are the fresh eyes that we've believed for some time were needed to look at what is the appropriate way to assist our young people in their education challenges. The review considered key ideas in the challenges and the barriers that affect students' learning outcomes. I've been pushing for and am very keen to see a fresh approach. It's what we've been seeking, and it's what the minister has responded to, through Professor Halsey. It would be a fresh approach that actually supports better access and better achievement for rural, regional and remote students. We want to see the transition to further study, training and work. These are all issues we've been working on for some time.

The review is actually going to investigate the gap in educational achievement between rural, regional and remote students and metropolitan students; the key barriers and challenges that I've talked about; the appropriateness and effectiveness of current modes of education delivered to regional, rural and remote students, including the use of information and communication technology; and the effectiveness of public policies and programs. This is where, I think, we're looking for that fresh approach to bridge the gaps and opportunities to help students successfully move from school to further study, training and employment. It will also critically look at new approaches—something we've sought for some time. It will look at a new approach that actually supports regional, rural and remote students to succeed in school and in their transition to further study, training and employment.

There have been a lot of consultations. As members on my side will know, I certainly insisted that Professor Halsey come to my electorate to hear firsthand the issues facing students, parents and educators in my electorate. As the member for Grey has said, Professor Halsey came to Bunbury. His focus on leadership and teacher quality is a key part of what we will see out of the Halsey report, in my view. Again, leadership in rural and regional areas is critically important. We have some amazing leaders in our schools, and they face additional challenges in rural, regional and even remote areas. As we on this side have said repeatedly, we understand directly how, unfortunately, the changes made by a Labor government many years ago have created an ongoing problem. We have made a number of changes that have improved the access for rural, regional and remote students. But there is more work to be done. With the persistence and the focus that my colleagues and I have on this matter, along with the support of the minister, I'm very sure there will be much we can use from what Professor Halsey delivers to make sure our students get fairer access, access that they need, to be able to pursue their higher education.

I deal with a number of families on a regular basis who find it incredibly challenging to meet the additional costs of sending students away to university. It is significant. It is very difficult for a couple who may be on an income just above the parental income test of $150,000. During the time that Labor had made the changes, I remember a woman came to see me and said, 'I've had to make a dreadful choice.' I said, 'What was your choice?' She said: 'I have five wonderful kids. They are all capable and are achieving wonderful ATAR scores, and all five want to train to be GPs.' We have a shortage of GPs in regional areas. She said, 'I have to make a choice as to which one of those is able to go to university.' That concerns me greatly. These families live and work and contribute so significantly to the economics and the prosperity that comes out of our region, which supports much of Australia, especially when you look at our exports. I am very pleased to support this bill and every measure ahead that we will take to improve access for rural and regional students. I thank and commend all of my colleagues who stayed with us in this whole process to make sure we reverse some of those changes made by Labor and look at new opportunities ahead for our rural and regional students.

Mr KEENAN (Stirling—Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation) (11:58): The Social Services Legislation Amendment (14-month Regional Independence Criteria) Bill 2018 makes a minor technical amendment to the Social Services Legislation Amendment (Simplifying Student Payments) Act 2017. The act supported regional and remote students by amending the rules governing when a person will be regarded as independent for the purposes of youth allowance. It intended to reduce from 18 months to 14 months the period young people from regional and remote areas of Australia have to earn the amount required to satisfy the workforce independence provisions. This measure commenced from 1 January this year.

The reduction to 14 months was an election commitment and part of a package to support regional students' access to education. Students whose family home is in a regional or remote location can access youth allowance on the basis of being independent under concessional workforce participation arrangements. One way in which students can demonstrate they have supported themselves is through a period or periods of employment over 14 months since leaving secondary school, with earnings totalling at least 75 per cent of the wage level A of the national training wage. This is $24,836 for the 2017-18 financial year. In addition, to access these arrangements, students' parental income must be below $150,000, they must be undertaking full-time study and they must be required to live away from home to study.

This measure recognised that regional and remote students face additional costs in pursuing tertiary education and have much lower participation rates in higher education than students from major cities. The reduced period from 18 months to 14 months allows students to qualify for youth allowance four months sooner than under previous arrangements. Students are now able to take a gap year at the end of secondary school and, subject to them satisfying the other qualification requirements for youth allowance, receive payment as independent the following year. Students who are considered independent for youth allowance purposes do not have their rate of payment affected by parental income, as is the case for dependent recipients. Previously, students who qualified for youth allowance under these arrangements may have commenced study prior to qualifying for student payments or have taken two gap years in order to satisfy the 18-month criteria before commencing study and qualifying for payment.

The longer students are disengaged from study after completing secondary school, such as for more than a year, the less likely they will be to commence or complete tertiary study. It is estimated that, over the forward estimates, approximately 3,700 regional and remote students will qualify for youth allowance as independent under the 14-month period. Approximately 2½ thousand would become eligible for payment as independent four months earlier than under the previous 18-month period. Approximately 1,200 would become eligible for payment as independent who otherwise would not have met the independence criteria. This includes students who choose to take a gap year, who may have not undertaken a gap year otherwise. These young people are expected to change their employment and study patterns in order to earn the required amount in 14 months.

Despite this measure commencing on 1 January this year, an unintended consequence of the act has meant that a small group of approximately 300 students has not been able to take advantage of the reduced 14-month period. Young people who were receiving youth allowance prior to 1 January this year were unintentionally left behind. This group remained under the old 18-month rule. For example, a young person who finished school in 2016 and worked throughout 2017, hoping to qualify as independent and went on youth allowance as a dependent recipient, would have the 18-month period apply to them. For a young person from a regional area who requires the full rate of youth allowance in order to move away from home to study, having the 18-month period apply to them could mean that they have to delay university for an extra year. This bill will correct the unintended consequence of the act and will mean that the 14-month period is available to all students seeking independence for youth allowance under the workforce independence provisions for regional and remote tertiary students. This bill will insure that the 14-month period is applied consistently to all tertiary students from regional areas. I therefore commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Mr KEENAN (Stirling—Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation) (12:03): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr DREYFUS (Isaacs—Deputy Manager of Opposition Business) (12:04): Labor supports the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018 which provides further regulation of the industry administering debt agreements. The bill amends the Bankruptcy Act 1966 by limiting the class of persons who can offer services as registered debt agreement administrators, trustees or official trustees. Limiting who can be a debt agreement administrator by reference to skills and capabilities will provide an additional safeguard against sharp practice, which disproportionately affects disadvantaged, marginalised and vulnerable people who are at higher risk of being damaged if exposed to unscrupulous or iniquitous practices. The nascent debt agreement administration industry as well as any individuals who are administering their own agreement are given six months following the royal assent to this bill to gain the necessary skills and effect transitional requirements. This provides creditors and debtors with the certainty they require to transition any existing arrangements.

Labor support, subject to any necessary amendments arising as recommendations from the ongoing Senate inquiry, the insertion of a provision which requires debt agreement administrators to specify expressly in any debt agreement the expenses which may be charged by the administrator. The repayment of debt, often by disadvantaged people with limited financial literacy, should not be an exercise in profit gouging by debt agreement administrators. We support giving access to both debtors and creditors to the debt agreement administrator's proposed expenses so they can assess the reasonableness of the expenses and, if necessary, seek independent financial or legal advice.

Labor supports the setting of a cap on the percentage of a debtor's after-tax income that can be agreed to be repaid in the repayment schedule of the debt agreement. However, Labor is concerned that the bill, as it currently stands, leaves the setting of the percentage to ministerial discretion. Labor would prefer for the percentage to be given a statutory footing to ensure that debtors are easily able to ascertain the maximum amount that can be set out in the debt repayment schedule. We will await the recommendations of the Senate inquiry in respect of the proper setting of the percentage cap.

Similarly, the bill has inserted a new provision that requires the debt agreement repayment schedule to be time limited to three years. This is a significant issue and Labor reserves its right to seek an amendment in the Senate. The policy basis, as asserted in the explanatory memorandum, is that the provision of three years enables the responsible minister to set a capped percentage rate which will be uniform across all debt agreements. There is no substantive issue with the policy of setting a percentage rate which operates in parallel to an agreed time frame. However, the nominated time of three years may place undue and unnecessary pressure on vulnerable people who are already struggling to get out from underneath debts which have led them to into a debt agreement. Extending the possible repayment time frame to, for example, five years does not unduly burden the rights of creditors to repayment, particularly in circumstances where the great majority of creditors are large credit providers. It does, however, appropriately balance the rights of creditors with those of debtors who should not be placed under undue strain to repay debt. Moreover, it achieves the stated policy aim of giving a temporal framework against which the calculation of the percentage cap can be made.

Labor welcomes the measures in schedule 1 that seek to limit the possibility of conflicts of interest and increase transparency of the corporate arrangements of companies and persons who offer services as registered debt agreement administrators, including the disclosure requirements for related entities. Labor supports, in principle, the amendment set out in schedule 2 of the bill. But, consistent with my comments on the need to provide for a longer time for repayment in debt agreements, Labor will await the Senate inquiry recommendations before considering whether or not to seek an amendment providing for an extension of the repayment schedule time frame. This would allow for vulnerable debtors who enter into overambitious debt repayment schedules to seek a variation of their debt agreement to provide more time for repayment.

Labor supports the measures in schedule 3 of the bill which provide for more rigorous registration requirements, including that the Inspector-General interview applicants after processing their paper applications and that the trustee or registered debt agreement administrator has taken out professional indemnity and fidelity insurance. Labor also supports the further measures in schedule 3 which empower the Inspector-General to obtain information from banks and financial institutions confirming whether or not a separate bank account is being maintained for the purpose of managing the debtor's repayments under the debt agreement. Labor will always support measures that require the proper discharge of statutory duties and safeguard vulnerable people. This is a good measure. It is aimed at preventing the misuse or misappropriation of money held on trust to pay down the debt by registered debt agreement administrators or official trustees. I commend the bill to the House.

Mr HAMMOND (Perth) (12:09): Like the member for Isaacs, the most excellent shadow Attorney-General, I rise to support the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018. In relation to the Bankruptcy Act, as we know, these amendments reform the Commonwealth debt agreement system. The debt agreement system is a good thing in that it provides an alternative to bankruptcy, and it is increasingly being used in that way. The bill contains a number of measures that the government claims will improve the existing debt agreement system.

The reason why this is very important at this point in time is the unprecedented level of financial stress that we see in Australian communities and families today. Further analysis released as recently as earlier this month confirmed what we hear and see in our electorates every day—that many households' financial situation is getting worse, with the culprit being living expenses. Forty per cent reported this as a key reason their situation is worsening. It is cited that almost 46 per cent of households surveyed also claimed the cost of necessities, such as fuel, utilities and groceries, is their biggest worry in relation to financial stress.

The reason why these reforms are clearly required as an alternative to bankruptcy is apparent when we see the increased level of bankruptcies prevalent in our community. More than 32,000 Australians went bankrupt in 2017, which is a 6.1 per cent year-on-year increase, according to an analysis of bankruptcy figures by illion, who were recently recognised as the Dun & Bradstreet credit reporting agency. Now that has increased in itself, with a 4.7 per cent year-on-year hike recorded in 2016. When we look at the causes for that it is very apposite to hear illion's Chief Executive Simon Bligh saying:

Consumer debt levels are rising steadily in Australia as a result of record mortgages and a surge in everyday essentials such as utilities, petrol and healthcare.

As we know, those factors, combined with the very poor wage growth that we are seeing under this government, are putting pressure on the wallets of Australians.

There is no coincidence here that the illion credit reporting agency is also seeing strong growth in the payday loans sector, which Mr Bligh says is often an early indicator of people getting in trouble in terms of paying their utility bills. That assessment is certainly confirmed when one reviews the data from the Credit and Investments Ombudsman. They released information to confirm systemic problems in the consumer leases and payday loans sectors. The CIOs recent annual report on operations reported that small- and medium-amount lenders accounted for 12.2 per cent of total complaints—the second highest, following debt collectors. Most of the complaints around small- and medium-amount lenders related to inappropriate finance, including irresponsible lending which made up over 56 per cent of those complaints.

Just in case one is thinking that these are isolated incidents—and they are certainly not—according to the industry data released by the payday loans sector itself, in 2015-16 there were over 619,000 new payday loans, with a book of over $476 million advanced. Just in case you need any further evidence as to whether these credit arrangements are being taken up by those most vulnerable in society, let's look at those who are applying for small-amount credit contract loans. We know that two in five of those who entered a SACC loan in this period were unemployed, that one in four—26 per cent—of these loans were given to people receiving more than 50 per cent of their income from Centrelink and that one in six of these loans were entered into with a customer with an existing loan.

In the second quarter of 2015, 75 per cent of lenders admitted to providing small amount credit contract loans to customers who have had two or more small amount credit contract loans in the previous 90 days. We also know that most people apply for these loans online—over 78 per cent in the second quarter of 2016. What it means is that these loans are quicker and easier to get than ever before. The average amount of a payday loan was $770. What we see is an effective interest rate on these loans of over 170 per cent on average. There are outlying cases that are truly horrendous in terms of the total repayment rates that are required. But if we average it all out we see an interest rate of over 190 per cent.

This is in a landscape of unprecedented levels of financial stress. There are over 8.47 million households that are financially stressed—those with mortgage stress, behind in lower-end payments, declined some form of credit or constantly borrowing to repay existing loans. There is an extraordinary number of financially distressed households that have gone even further in relation to financial stress—those who are repeat borrowers with limited options and unable to find $2,000 in an emergency within seven days. We are dealing with 1.8 million households—over 20 per cent of all households are financially distressed.

It means that reform in this area is absolutely imperative. But it also means that reform before vulnerable consumers get to this point in time is even more imperative. That is why it has been the Labor Party who has taken the steps that this government will not take to introduce reforms into this place by way of a private member's bill in the small amount credit contract space. The tailored bipartisanship, which is increasingly difficult to find under this government, started in a positive manner in relation to payday loans and the rent-to-buy arena. The mandated review, the small amount credit contract review, was undertaken and concluded in March 2016. To the credit of the Minister for Finance at that time, the review was considered very carefully. There is no criticism whatsoever of that process.

In November 2016, the government did the right thing and published its response to the small amount credit contract review. The response was effectively an unconditional approval of the recommendations on the payday loan and rent-to-buy space—again, a positive step. That was in November 2016. Again, the reforms do not seek to shut down this industry and will not mean that financially vulnerable consumers do not have recourse. Parents with already stretched budgets, managing every dollar, faced with the fact that a washing machine has blown up and having five kids to get to school, need ready recourse to small amounts of funding in a circumstance where they can't otherwise obtain it. But it has to be on a playing field that is level and fair. And that is all these reforms sought to do.

Again, to the government's credit, it took them 12 months but they went so far as actually committing these reforms to proposed legislation which simply seeks to do two substantive things in addition to providing regulatory safety in this area. Firstly, quite reasonably, they will look at insuring that the amount that can be borrowed to be repaid is ring-fenced at 10 per cent of a consumer's net income. That was agreed to by the government. Tick. Secondly, they seek to ring-fence the time it takes to repay the loan and the way in which one applies interest over that time period. Again, that was ticked off by the government. Tick. Despite some bumps along the road in the form of inaccuracies from the Minister for Finance as to how far down the legislative path these reforms were actually being pursued, the minister for consumer affairs, as he then was—now the Deputy Prime Minister—published in October last year that legislation which had been approved by cabinet—tick.

That press release made it very clear that two things were going to occur. The first was that the legislation would only be out in the wild for consultation for two weeks—quite right, because none of this was new and it all had bipartisan support. The second promise by the now Deputy Prime Minister—who, again, to his credit has demonstrated a track record of keeping his word—was that the legislation would be introduced last year, in 2017, after a long, long wait for vulnerable consumers, who shouldn't have to wait any longer. The legislation, again, was substantively endorsed by the peak body representing vulnerable consumers, which is again understandable because it represented a reasonable compromise in relation to the regulatory protections. But then it sank like a stone. In circumstances where the community is crying out for a demonstration of bipartisanship in this place, we got so close and this government squibbed it. They shirked it at the last moment. Having gone so far down the road, having got the tick-off from cabinet, nothing more was heard.

We have a change of ministerial responsibilities, and we know the payday lending sector is on the march. We know that there is a furious level of activity going on behind the scenes from this government, convening the now famous, or infamous, parliamentary friends of payday lending, to try to bury what was otherwise a sensible piece of legislation. It won't do. It is something which should be stopped, which should be discouraged and which we are surely all better than in this place.

This government, instead of pushing off responsible legislation to the long grass, now has a choice, because the legislation is in this place. It has been introduced as a private member's bill by the Labor Party, which has not a single sentence, comma or full stop changed from the government's legislation that went through their cabinet process. It's now here, whether they like it or not. If the government were really interested and substantively concerned about protecting vulnerable consumers, as they purport to be with the introduction of this legislation, they would actually do the right thing here. They would actually be honest and say that the small-amount credit contract legislation is the right thing to put into place for the protection of all of those millions of households facing crippling financial distress.

So the government have a choice. If they want to be responsible, grown up and honest, they can actually do what they always said they were going to do, which is back their own legislation, which is now in this place and which should not wait for its implementation in order to ensure that the increasing number of financially stressed and vulnerable consumers in this country have at least some level of protection to ensure that they are not in a situation where they stare down the barrel of another debt agreement arrangement as an alternative to bankruptcy in the way that this legislation otherwise provides.

Mr PORTER (Pearce—Attorney-General) (12:24): I would like to thank all the honourable members for their contributions. I thank the shadow Attorney-General for his contribution on this bill and the member for Perth for his contribution on a bill completely unrelated to this bill. In any event, this is the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018. The debt agreement system is an important part of Australia's consumer finance framework. It provides debtors with an opportunity to avoid bankruptcy and manage their personal debts while giving creditors a return on what they are owed.

With respect to consumer protection safeguards, it is notable that statistics from the Australian Financial Security Authority confirm that debt agreements are on the rise. As debt agreements continue to grow in popularity, it's obviously important to ensure that the system works as it was intended. Debt agreements should not be used to exploit vulnerable people or to short-change creditors. Instances of misuse can disproportionately impact the integrity of the system and undermine the positive function it serves. This bill ensures that necessary consumer protection safeguards are in place so that the debt agreement system provides a fair and effective outcome for debtors and creditors.

There has been a concerning trend in recent years of debt agreements lasting significantly longer than five years. That trend, it was observed, threatens to prevent those in financial difficulty from getting back on their feet. This bill will prevent people spending an excessive amount of time in a debt agreement and will ensure that debtors can only propose a debt agreement of a three-year period or less. In reducing the length of a debt agreement proposal, the Turnbull government is making sure that debt agreements are an avenue for debtors to achieve a fresh start.

Debt agreement administrators play a crucial role in the effective operation of the debt agreement system, and administrators must possess the skills and knowledge to properly perform their functions. Administrators must also have the character and integrity to gain the confidence of creditors and financial counsellors. This bill raises the required standards of administrators to ensure that the industry is capable and professional.

By way of conclusion, it should be noted that this is the first comprehensive overhaul of Australia's debt agreement system in more than a decade, and these reforms will ensure that debt agreements are administered by only those persons with the appropriate skill set and knowledge base. Following the reforms, new debt agreement proposals will only be able to be three years in duration, enabling people to get back on their financial feet sooner. The reforms are designed to ensure that the integrity of the industry is improved overall.

With the number of new debt agreements almost doubling in the last decade, debt agreements are proving to be an important, effective and popular alternative to bankruptcy for many individuals who are facing financial difficulties. These reforms will introduce necessary safeguards, bolster community confidence in the industry and ensure that the system allows people to achieve a fresh start. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Mr PORTER (Pearce—Attorney-General) (12:27): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fenner) (12:28): I move:

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

'whilst not declining to give the bill a second reading, the House notes the Coalition’s failure to close multinational loopholes and its failure to improve tax haven transparency'.

Labor supports the Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018, which implements a number of sensible amendments to improve the integrity and operation of the consolidation regime. The measures, with the exception of the deferred tax liabilities measure and the securitised assets measure, were originally announced by the former Labor government in 2013-14. The bill implements recommendations made by the Board of Taxation in 2012 and 2013 and reflects consultation carried out by Treasury and the Board of Taxation.

As the second reading amendment makes clear, Labor believes that we need to go further in cracking down on multinational tax avoidance. One in five of Australia's biggest companies paid no tax for at least the past three years. We heard in Senate estimates last night that despite the besmirching of the careful work on the issue of corporate tax paying carried out by Emma Alberici, the ABC's economics correspondent, ABC executives were unable to identify any specific errors in that work.

It is of deep concern to many Australians that the government's biggest economic priority is a budget-busting corporate tax cut that will increase household income, on their own numbers, by 0.1 per cent in the 2030s. 0.1 per cent in the 2030s reflects another month's growth in household income. That is, according to the government's best estimates, the one-off benefit of their budget-busting big business tax cut.

Why does it deliver such small gains? It reflects in part the fact that Australia's corporate tax rate places us in the middle of the G20 pack, according to Congressional Budget Office analysis published in March last year. Our statutory rate places us 10th in the G20. Following the United States' recent tax cut we would be the ninth highest in the G20. But our effective rate places us in the bottom half of the G20 for corporate tax. We, unlike other countries, don't have state corporate income taxes. Unlike most other countries in the G20 or the OECD, we have dividend imputation, a system which gives back about a third of the corporate tax revenue. So from a fiscal perspective, the perspective that the government used to say that they cared about, a corporate tax rate of 30 per cent with dividend imputation raises about as much for the budget as a corporate tax rate of 20 per cent without imputation. Anyone who talks about corporate rate cuts and fails to mention imputation is being deeply disingenuous.

The Liberals said that they cared about the deficit when they were in opposition. Not only did they say it, the now Prime Minister was photographed in front of debt trucks with terrifyingly large numbers—terrifying for him back them, but about half of what he's produced right now. The fact is that the Prime Minister and the Treasurer really don't care about deficits any longer. The attacks on the deficit were all a smokescreen for the cuts to social services in the 2014 budget. They care deeply about the deficit if it's an excuse to take money away from the poorest Australians, but they don't care at all about the deficit when it comes to the debate over corporate tax. When it comes to a big business tax give away of $65 billion, they're not at all worried about the deficit. At least they're not worried now, but of course we know what will happen, because we've seen this playbook before. We know that as the deficit and debt continues to blow out as a result of these corporate income tax cuts, were they to get them through, they would be back in this parliament saying that the real problem with the Australian budget is that social services are 'unaffordable'. 'That's why we have to cut the pension, cut supports to people with disabilities and take money away from sole parents and students.' That's what they would be coming back and saying.

It is the 'starve the beast' strategy that we've seen under the US Republicans for so long. The Republicans in the United States have spoken so often about caring about debt and deficits. But if you look under Ronald Reagan or George W. Bush you see an increase in the deficit. The US Republicans care about debt and deficits as an excuse, a fig leaf, to take money out of the social safety net, but when they're talking about their own tax cuts suddenly they're not worried about debt and deficits at all. We've seen it with President Trump at the moment putting in place a corporate income tax cut which is going to massively add to that country's deficit. And we see it back here in Australia: a Prime Minister getting off the plane from the United States and saying that we need a corporate tax giveaway, we need to bust the budget—

The DEPUTY SPEAKER ( Mr Vasta ): The member for Gilmore, on a point of order?

Mrs Sudmalis: Does American politics and finances have something to do with this? I don't think so. If he could stick to the point, that would be great.

Dr LEIGH: I think that might have been a sledge rather than a point of order, Mr Deputy Speaker. I am speaking directly to the second reading amendment that I moved.

The DEPUTY SPEAKER: The member for Fenner is in order.

Dr LEIGH: Thank you, Deputy Speaker. The corporate tax debate we're having in Australia does echo the United States' debate and does go directly to the question of the sustainability of the Australian budget. Labor believes that we need to crack down on multinational tax avoidance. We have announced a series of measures that would add directly to the bottom line of the budget. For the benefit of the House—indeed, for the benefit of the member for Gilmore—I will go through some of those measures. Labor would tighten debt deduction loopholes used by multinational companies, improving the budget by more than $4 billion over the medium term. We would introduce public reporting of country-by-country reports, which are high-level information about where and how much tax is paid by large corporations. We would provide protection for whistleblowers who report on entities evading tax to the Australian Tax Office and, where whistleblower information results in more tax being paid, we would allow them to collect a share of the tax penalty—being a reward of up to $250,000—as occurs in the United States and the United Kingdom.

We would introduce a publicly accessible register of beneficial ownership of Australian listed companies and trusts, allowing everyone to find out who really owns our firms and ensuring that shareholders can't use complex structures and sham ownership to avoid complying with corporate tax rules. We would introduce mandatory shareholding reporting of tax haven exposure. If a company is doing business in a tax haven, we believe that shareholders should know about it. There is a mood across the OECD to crack down on tax havens. Shareholders need to know if their corporate boards are making a decision to do business in a tax haven. The member for Gilmore might think it's alright to do business in a tax haven, but my guess is that the people of Gilmore would be deeply concerned about firms that were doing business in a tax haven and not informing their shareholders of that.

We would appoint a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes. We would introduce public reporting of AUSTRAC data and require the annual public release of international cashflow data. We would require government tenderers to disclose their country-of-tax domicile. If they are tendering for contracts worth more than $200,000, the Australian public have a right to know where their country-of-tax domicile is. We would develop guidelines on tax haven investment by superannuation funds, working with the Australian Taxation Office, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority. We would require that the Australian Tax Office in its annual report provide information on the number and size of tax settlements. We would deliver more tax transparency by restoring Labor's $100 million threshold for public reporting of tax data for private firms—a threshold raised from $100 million to $200 million by the Liberals and the Greens, effectively taking two-thirds of private firms out of the tax transparency net.

We need to make sure that we have a multinational tax system with integrity, a multinational tax system which ensures that firms pay their fair share of tax. This is a worthy bill in itself, but it doesn't go far enough. We can add to the budget bottom line in a fair and responsible way. Labor urges the government to do the right thing on closing multinational tax loopholes.

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

Mr Thistlethwaite: I second the amendment.

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

Mr THISTLETHWAITE (Kingsford Smith) (12:39): I speak in support of the amendment moved by the member for Fenner. The purpose of this bill, the Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018, is quite complicated, and it comes about as a result of consultation that was undertaken by Treasury with interested participants from industry and tax experts that work in this area. They published a paper that looked at the advantages that multi-entry consolidated groups have over domestic Australian resident-owned head companies that consolidate to form a group for taxation purposes. They did find that there were a number of advantages that the multi-entry consolidated groups had over the domestically based companies, and this bill seeks to amend and remove some of those taxation advantages that exist in the current law.

In the Australian law, the consolidation regime applies mainly to a wholly-owned group of Australian resident entities that choose to form a consolidated group for income tax purposes. A consolidated group generally consists of an Australian resident head company and all of its wholly-owned resident subsidiaries. Specific rules allow for certain resident wholly-owned subsidiaries of a foreign holding company to consolidate by forming a multiple entry consolidated group. Of course, these measures, except for the deferred tax liability measures and the securitised assets measures, were originally announced by Labor in the 2013-14 budget. So, it's good to see that the government finally has adopted the recommendations of this working party and Labor's proposal and brought this legislation to the parliament.

I'm not going into the details of this, because it's quite a complicated piece of legislation, but I want to point out that this is an element of a policy that Labor has been pushing for some years in order to clean up the tax system, to close loopholes, particularly for foreign multinationals to avoid paying their fair share of tax in Australia, and ultimately to raise more revenue for the budget to fund education, health and infrastructure services. We've had a clear plan on integrity for tax measures for some time. When you consider that one in five of Australia's biggest companies has paid no company tax for the past three years—that's no tax from those who can most afford it—it's not a fair contribution to key areas of public spending such as hospitals, schools, universities and infrastructure.

Indeed, health is one area where most Australians can least afford the imposition of ill health and bad luck. I recently received a letter from a constituent who has been on the waiting list for a double-hip replacement for some months now. He was meant to be operated on in June last year, and when he contacted me earlier this year he hadn't heard anything from the doctor or the hospital, the Prince of Wales in Randwick, where he was supposed to have the surgery. It was only as a result of my intervention and writing a letter to the Minister for Health in New South Wales that he finally did get some action, and he is hopeful that that surgery will now take place. I raise this as an example of the fact that this government has cut funding to hospitals. It has continued the freeze on Medicare, which has forced some doctors to push up the rebate, and it is having an effect on our health system. It is having an effect on our health system in terms of elective waiting surgery times and, of course, hospital emergency departments. In the context of this government now wanting to provide a $65 billion tax cut over the next decade to the largest Australian corporations, to the big companies, when people can't get the adequate health services that they need, when schools during the summer don't have air-conditioning so the students are sitting there in sweltering heat, when infrastructure that's vital to unclog our cities isn't being developed, you can understand why Australians are frustrated that this government is offering a big tax cut to the wealthiest multinational corporations, most of the advantage of which will go overseas.

Cost of living is a huge issue for Australian families and pensioners. Over recent years, they have been facing the rising cost of electricity. The cost of insurance has gone up. The cost of child care has gone through the roof. Housing, in my area, is just ever increasing. On this notion that the housing market is coming off the boil, I urge people to come and have a look at the area that I live in. They would fail to see that that evidence is actually taking place at the moment. Pensioners can't afford to switch on air-conditioners during summer, because they can't afford their electricity bills. Cost of living is a huge issue at the moment for Australians who are struggling to make ends meet. Yet this government is proposing to cut taxes for the largest companies and corporations and give them a tax break, but at the same time it is increasing taxes for hardworking Australians by increasing the Medicare levy by 0.5 per cent.

Well, Labor's not buying it. We've said that we're opposed to this proposed company tax cut. We want to keep that money in the federal budget to properly fund health, education and infrastructure. We've said we'll consider cutting company taxes, as we have in the past, once the budget is back in surplus, which is the fiscally responsible and sensible thing for a government to do. But this government, on its ideological crusade, won't have a bar of that and is persisting with this notion, which is opposed by the majority of Australians, that it should cut company tax and that that benefit will trickle down to workers. Of course, we don't know that.

They're using the US as an example. They're saying, on the back of their lovey-dovey tour last week to the US, that Australia is going to be uncompetitive when it comes to corporate taxes and will fall behind. But, interestingly, the Congressional Budget Office in the United States recently published a paper where they looked at what they call the effective rates of company tax throughout the world, and they gave countries international rankings. An effective rate of tax is one where the whole nature of a taxation system is considered in terms of the eventual rate of tax that a corporation might pay, and it includes things like dividend imputation in Australia, the tax credit that shareholders will get for tax that's already been paid by the corporation at a company level; depreciation and the fact that certain assets can be depreciated at a faster pace in Australia than in other nations; instant asset write-offs, which are related to depreciation, of course, but provide an opportunity to write that asset off over the course of one year; and, of course, the deductions that exist in a particular nation. We all know that Australia has a very generous system of deductions for income spent in generating a profit for a business, most notably in the resources sector, where it's basically the case that companies don't begin paying any tax until they make substantial profits. They're some of the most generous deduction systems in the world.

Based on those characteristics, the Congressional Budget Office ranked the effective tax rates of nations, and they found that Australia's effective tax rate is around 11 per cent, but that of the United States is around 16 per cent. So, when you look at effective rates of tax for corporations, we're actually lower than the United States, based on this study by the Congressional Budget Office. But this government seeks to ignore those facts and will push on with a policy that is deeply unpopular in the Australian community, who would rather see people hold that money in the budget to spend on education, health and infrastructure.

We've also got a plan to tighten up some of the tax loopholes that exist and crack down on tax havens. That clear plan to tighten debt deduction loopholes used by multinational corporations will improve the budget bottom line by $4 billion over the medium term. Labor will also introduce public reporting of country-by-country reports, high-level taxation, and information about where tax was paid, and how much tax was paid, by large corporations, those with over a billion dollars in global revenue. Providing protection for whistleblowers who report those entities evading their taxation obligations to the Australian Taxation Office is also very important. Where whistleblower information results in more tax being paid, Labor have said that we'll allow them to collect a share of the tax penalty, with a reward of up to $250,000.

So you can see that Labor's got a fair-dinkum system and a fair-dinkum policy when it comes to closing some of these tax loopholes, but it relies a lot on some of the measures that have been recommended at an international level through the international organisations that Australia is a member of. It's something that has broad support and that many other nations are now adopting, and it's based on some of those BEPS measures and some of those other international movements that are associated with improving tax transparency and ensuring that there's no leakage from domestic taxation systems and that you maximise the funds and revenue raised to fund services within a budget.

As I mentioned earlier, this bill has been on the table for many, many years. It's something that Labor has supported for many years. It was in our policy that we took to the last election. It does raise close to a billion dollars over the forward estimates, and it does clear up that discrepancy that exists between foreign-based holding companies and Australian holding companies. We do congratulate the government for finally bringing this on and adopting one of the policies that were put forward by the Labor government in 2013-14. They say imitation is the greatest form of flattery; I thank the minister for imitating Labor's policy.

Mr CRAIG KELLY (Hughes) (12:50): I would like to add a few comments to follow up comments made by the members for Fenner and Kingsford Smith. Firstly, the member for Fenner made the allegation that the coalition's plans to reduce the corporate rate of tax in this nation are budget busting. The member of Fenner should know that every cent of that is already in the budget, and we will have that budget back into balance and then into surplus very soon.

Secondly, the other point that I think needs to be made is that it appears that we have members of the Labor Party that are living in a fool's paradise if they think that we do not have to respond to the US reduction in the rate of corporate tax. The US are reducing their rate of corporate tax to 21 per cent—in the world's largest economy. But they are not the only nation that are reducing their rate of corporate tax. It is also the UK and France. In fact, over the last decade, we have seen almost every major OECD nation reduce their rate of corporate tax. We understand that we as a nation need to be competitive to attract investment and drive jobs growth to drive the prosperity of this nation. Anyone that thinks that we can just sit on our hands and watch our global competitors reduce their corporate rate of tax while we do nothing is living in a fool's paradise.

But there are other risks to our nation's competitiveness. It is not only that the Labor Party does not understand the importance of our corporate rate of tax being internationally competitive. The other threat we have seen in the last 24 hours is the real sovereign risk that comes with the conduct of the Leader of the Opposition. Today's papers are reporting a duplicitous stance by the Leader of the Opposition on the Carmichael coalmine, telling one group of CFMEU workers and those in Northern Queensland that he's in favour of the mine but telling others that he's against it.

The DEPUTY SPEAKER ( Mr Vasta ): The member for Lingiari, on a point of order?

Mr Snowdon: This contribution is ranging far further than this legislation. I ask you to bring the member to order on the matter of relevance.

Mr CRAIG KELLY: The issues raised by members in this debate clearly go to the competitiveness of the Australian economy.

The DEPUTY SPEAKER: The member for Hughes is in order. He will continue.

Mr CRAIG KELLY: Thank you, Deputy Speaker. It is clear, as I was saying, that it is important that our nation stays internationally competitive to attract investment. One of the risks to that is the corporate rate of tax, and the opposition are burying their heads in the sand about that. But the other danger is the sovereign risk that has been raised in the last 24 hours, where we have the Leader of the Opposition being duplicitous, saying one thing to one group of people about the Carmichael coalmine up in Northern Queensland—that he's in favour of it—but saying another thing to green, environmental activists—that he will block it; he will revoke their licence. What message does that send to foreign investors who are thinking about bringing their capital to Australia that will help create jobs and wealth and raise revenue for the government to pay for all those things that we want to pay for—for pensions, for aged care, for hospitals, for schools and for kids with disability? We've got to create that wealth and we need to attract that foreign capital.

But what would people sitting around a boardroom table overseas think when they pick up the paper today and read that the alternative leader of the Australian nation is so duplicitous that, if he comes to office, he will revoke a licence given out. Who is going to put their capital up, to take the risks, to go through the environmental approvals that take years in this nation, knowing that, if they do everything correctly and by the book, the alternative leader of the government will revoke their licence simply to appease extreme environmentalists and to win green votes in marginal electorates. We are in a competitive race against nations in the rest of the world. This is why the corporate tax rate is important for our nation. This is why everything this government does is to make sure that our nation stays competitive—because we realise that is the only way we can continue to finance our first-rate hospitals, the National Disability Insurance Scheme, our pensions and our aged care. Those things are so important to this nation and we all want to be able to afford to do that. The only way we can continue to do that is to ensure our nation is internationally competitive in attracting investment—and the greatest threat to that are those members who sit on the opposite side of the chamber.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (12:56): Firstly, I would like to thank those members who have contributed to this debate. This bill amends the Income Tax Assessment Act 1997 to improve the integrity and operation of the tax consolidation regime. There are around 12,000 consolidated taxpayers in Australia, including the majority of Australia's largest businesses. The consolidation regime allows a wholly owned corporate group to be treated as a single entity for income tax purposes. This not only improves the integrity of the tax system but also reduces compliance costs for businesses and removes impediments to group restructuring and efficient business practices.

While the consolidation regime works well in general, the government is making changes to remove loopholes and improve the fairness and operation of the business tax system. The government is introducing changes to prevent a double tax benefit from arising when an entity holing a deductible liability joins a consolidated group. The bill will also prevent a double tax benefit from arising when an entity joins or leaves a consolidated group where the entity has securitised an asset.

To reduce the circumstances in which tax outcomes differ from commercial outcomes, this bill will simplify the operation of the entry and exit tax cost setting rules by ensuring that deferred tax liabilities are disregarded. This bill closes a loophole that allows consolidated groups to access double deductions by shifting value across entities in a consolidated group. Nonresidents will also be prevented from churning assets within related corporation groups to access double deductions.

Finally, the bill will ensure that the tax treatment of certain intragroup liabilities and assets between a continuing member of a consolidated group and an existing member of a consolidated group is consistent with the economic substance of the relevant transaction. This will clarify the interaction between the consolidation regime and the taxation of financial arrangements regime.

We have consulted widely over a number of years to ensure that these changes operate as intended, and fairly balance the need for additional integrity without unduly burdening business with compliance costs. These changes demonstrate the government's commitment to improving the fairness, integrity and effectiveness of the business tax system. I commend the bill to the House.

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

Question negatived.

Original question agreed to.

Bill read a second time.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (13:00): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms BRODTMANN (Canberra) (13:00): Reveal their secrets, protect our own: that's the mission of our Australian Signals Directorate. And given the nature of the agency, not many people know its mission or the work it has done for the Australian community. So today as I speak to this bill I want to share with Australians who are listening the history of our Australian Signals Directorate. It was formerly the Defence Signals Directorate but changed its name a number of years go. Prior to the Second World War the Navy, Army and Air Force had independent wireless units and intercept stations that operated and mainly conducted direction-finding activities. There was no central coordination point for those activities. But during the Second World War these independent units were brought together to support the campaign in the Pacific by intercepting and decoding Japanese radio signals. From there the ASD was born. But it took a while before the ASD became the ASD we know today. After the war, the war-time signals intelligence units were wound down, but government approval was given for a peace-time signals intelligence organisation in 1946. Its role was to exploit foreign communications and be responsible for communications security in the armed services and government departments. This is a role that ASD has maintained to this day, and it's an enduring history.

While ASD operated out of Melbourne after the Second World War, its functions only moved to Canberra in the late 1990s. From memory I think the ASD, or DSD as it was then, was the last Commonwealth government department to move to Canberra as part of the Menzies vision to have federal government agencies serving the federal government here in the nation's capital. I remind those opposite that this was the Menzies vision, the Menzies legacy: to consolidate federal government agencies here in the nation's capital to serve the government of the day. That was the whole idea about Canberra. It took a very long time for all those government agencies to arrive here. ASD, DSD as it was at that point, didn't move here until the 1990s. I remember when I was working in the Department of Foreign Affairs and Trade, working on the Iran and Middle East desk and working on Iran and Iraq. I met a number of those DSDers who had moved up here from Melbourne in the 1990s. It was quite a shock for them to move to our nation's capital, but I'm sure, because the nation's capital is just so wonderful, that they now embrace the Canberra way of life. They embrace those beautiful big skies. They embrace the fact that we have the most altruistic community in the country. They embrace the fact that we have the most highly educated community in the country. They embrace all that is wonderful about our wonderful nation's capital.

ASD has seen a dramatic expansion of its information security role as a result of the growth of the internet and online activities undertaken by individuals, groups and the government. This saw the creation of one of the first cybersecurity operations centres in 2010. It was an attempt to understand ICT security threats to Australian systems and to coordinate a response to those threats across government and industry. From there the Australian Cyber Security Centre evolved, bringing together a number of government agencies and cybersecurity functions and capabilities under the one roof in 2014.

In 2017, the Independent Intelligence Review made a number of recommendations for ASD, including establishing ASD as a statutory authority within the Defence portfolio and bringing the ACSC into ASD. I had a read of the independent review today, and again I just want to share these facts about the intelligence community with all Australians listening. As the report points out, with an annual budget approaching $2 billion and about 7,000 staff spread across 10 agencies, it's clear to us that, on size alone, the Australian government's intelligence activities supporting national security are now a major enterprise—and they are, just from those figures—and would benefit from being managed as such. The report, as I said, talks about the ASD. It talks about the fact that, if these recommendations are followed, the ASD will ensure that its capabilities are strengthened in new legislation. The report also recommends that ASD's legislative mandate be amended to explicitly recognise its national responsibilities for cybersecurity, including the provision of advice to the private sector, and that it take formal responsibility for the Australian Cyber Security Centre. This bill is the beginning of the significant reform for ASD based on that review.

As the shadow assistant minister for cybersecurity and defence, I welcome the reform and the progress being made on the outcomes of the intelligence review as outlined in the bill. The review recognised that the ASD is now a genuinely national asset. As I said before, it plays a much broader role than that defined by its previously exclusive defence focus. This is highlighted in its current additional responsibilities as a national source of information, assurance and cybersecurity. Cybersecurity has become one of the major security issues facing Australia at this time. Throughout the world, this is a significant issue. It comes up as the No. 1 or No. 2 challenge for nations throughout the world, in economic forums, security discussions and intelligence discussions. Between 2015 and 2016, five cyber incidents were reported every hour in Australia, at all levels of society from government to business, large and small, and individual citizens are affected.

So this review recommended new functions for the ASD to help combat cybercrime. These new functions are aimed at preventing and disrupting cybercrime by people and organisations outside Australia, and that in itself is the key point. The new function to proactively identify, disrupt and/or prevent cybercrime is limited to those criminal activities committed by people or organisations outside Australia. It's anticipated that the types of crimes that would be disrupted or prevented could include child exploitation and illicit narcotics.

For example, late last year, I met with a group who brought to my attention an issue that sickens me to my core, and that is cyber sex trafficking. It's a form of cyberabuse which involves offenders commissioning the abuse of children in developing countries on a pay-per-view basis. Just talking about it is quite sickening, really, and I'm warning anyone who's listening. For example, somebody jumps on a social media platform like Skype and pays a trafficker, via a wire transfer, to view, via webcam footage transmitted over the internet, a child engaging in sexually explicit acts or posing for sexually explicit photos or videos. The cost of the show to the viewer increases with the level of abuse directed by the viewer. It's just sickening, and most of the victims in this type of cyberabuse are under the age of 12. This is absolutely appalling. It's sickening to talk about it and to hear of the horror faced every day by these children who are under 12 in developing countries as a result of these sickos—and that's all you can call them—getting on these social media platforms and paying per view to watch a child engaging in sexually explicit acts or posing for sexually explicit photos or videos.

This is not something happening in a faraway land that we can put to the back of our minds and forget about. Australians are making the wire transfers. This is happening in our community today, every day. These are the types of child exploitation activities ASD's new functions will be able to detect, disrupt and prevent—and hooray! Providing the ASD with functions to prevent and disrupt cybercrime beyond Australia's borders will help bolster efforts to reduce the impact of what is currently called a wild west. Cybercriminals repeatedly go unpunished for their crimes, and prosecution statistics for cybercrime remain dismally low. The new functions given to the ASD under this bill will help lay the groundwork for a more active approach to protecting the Australian cybersphere and for going after those sickos who engage in that disgusting behaviour.

At a more local level, bringing the Australian Cyber Security Centre into ASD will mean it is able to communicate more widely with stakeholders at all levels, from small business to critical infrastructure to government agencies. Since gaining the cybersecurity portfolio at the last election, I've had extensive consultation with industry, with think tanks and with academics here and overseas. One of the major issues that keep coming up, particularly for industry here in Australia, is the fact that we need to better connect the engagement between industry and government and, through that, we need to better share information and intelligence gained by the private sector with the government sector. At the moment, industry is telling me that it is sharing some highly sensitive information with the government sector, but unfortunately that isn't being reciprocated by the government sector. It's either too classified or too sensitive, despite the fact that industry is sharing highly classified and highly sensitive information with government agencies. So I'm looking forward to this new arrangement. The ACSC moved from ASIO to a site that is more penetrable, more accessible, for the private sector, at Brindabella Park. I'm looking forward to seeing the new location and I'm looking forward to seeing the ACSC, in its new guise under this new legislative arrangement, actually fulfil its mission to actively engage in an open, transparent, constructive and trusting way with the private sector, small business, medium business, large business—critical infrastructure.

This bill also provides for ASD to regularly brief the Leader of the Opposition on Australia's cybersecurity posture, which is a welcome initiative. It enhances transparency and provides an opportunity for clear communication around what is a rapidly changing environment. This bill is currently before a committee, which is due to report back on 21 March, and I'm looking forward to hearing what the committee has to say in terms of the transparency arrangements contained in the bill. I'll also be taking a close look at annual reporting and other arrangements through which we can get a greater understanding of what's actually happening in ASD. ASIO releases an annual report, so it will be interesting to see what transparency mechanisms we have to get an understanding of what's happening in ASD without in any way breaching issues of national security. This is an issue we grapple with in Defence in gaining an understanding of what's happening on the acquisition front and also on the sustainment front without breaching national security. It's a fine balance, but one to which we should aspire. We need greater accountability and greater transparency around government in general, and I think that applies equally to Defence and ASD.

One thing this bill does not immediately address, although it goes some way towards it, is what I call the spaghetti junction of overlapping and poorly defined cybersecurity responsibilities. Instead of taking a holistic view of cybersecurity and drawing a thread through all the various government agencies, removing duplication where possible, this government continues the trend of having various agencies responsible for different bits of cybersecurity and operations. We've got the ACMA, the eSafety Commissioner, the Department of Communications and the Arts, the Attorney-General's Department, the Australian Signals Directorate, the Department of Defence, the Australian Federal Police, the Cyber Security Centre, the Department of Finance. This gives you an idea of the spaghetti junction of responsibilities when it comes to cybersecurity.

The transfer of the computer emergency response team, CERT, and its functions relating to cyberpolicy and cybersecurity from the Attorney-General's Department to the ASD will help improve capability and information sharing, and I welcome that initiative. But this consolidation is greatly overshadowed by the continued separation of cybersecurity operations and policy following the formation of the Department of Home Affairs. I remind those listening that CERT develops policy—that is acknowledged—but for some reason the government has put cybersecurity policy in Home Affairs, and it's got the operational and the interface elements in ASD, Defence or the ACSC.

Then you have the Special Adviser to the Prime Minister on Cybersecurity, Alastair Macgibbon. Poor Alastair! He seems to be responsible to multiple masters. At estimates this week, he said he is now wearing three hats: he is a special adviser to the Prime Minister, so he reports to the Prime Minister on cybersecurity matters; he's also responsible for cybersecurity policy, so he reports to the Minister for Home Affairs on cybersecurity policies; and he's also responsible for the ACSC, so he's involved there. From what I can gather, Alastair Macgibbon spends half his time in the ACSC and half his time in Home Affairs, reporting to the Minister for Defence, reporting to the Minister for Home Affairs and also reporting to the Prime Minister. He's a busy man. I hope he's not expecting to get any sleep for the duration of his contract, because, with those sorts of responsibilities and being pushed and pulled in all those different directions, it's going to be quite exhausting. I don't think the man is going to get any sleep.

What we need is as much streamlining as possible for cybersecurity, communication and also governance, along the lines of the UK. The view amongst some in the intelligence community is that we can't have operations and policy in the same location. For some reason there seems to be this view, which seems to have been around for 30, 40 years in the intelligence community, that we can't have them all under the one roof. I don't know where that view comes from. I don't know from what experience that comes from. But what I have been hearing from others in the intelligence community is that that is oldthink. It is oldthink to separate policy and operations in the intelligence environment.

I think the government should be considering putting policy into the ACSC, ensuring that Alastair Macgibbon will at least get some sleep as a result of this position rather than being torn between the two agencies and the Prime Minister as well. Who is Alastair Macgibbon reporting to, and who provides the ultimate tick off on cybersecurity policy? Is it the Minister for Law Enforcement and Cybersecurity? Is it the Minister for Home Affairs? Is it Alastair Macgibbon? Is it the director-general of ASD? There are so many cooks in this area, particularly in cybersecurity policy, that it's going to be a real challenge.

I encourage the government to take a close look at the arrangement we've got now. They still have not eliminated the spaghetti junction when it comes to cybersecurity policy, operations, engagement with the community, communication and coordination. There are still way too many players in this space—and just think about poor Alastair, being torn in all those different directions! That said, Labor welcomes the consolidation presented in this bill and hopes it will not stop here. I commend the bill to the House.

Mr MARLES (Corio) (13:19): I rise to speak in support of the Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018, and, in doing so, want to make a brief contribution to support the contribution made by member for Canberra.

Mr Snowdon: It was fine, wasn't it?

Mr MARLES: It was a fine contribution—indeed it was. I rise to speak in favour of this bill. The realm of cyber has been a transformative realm in respect of both the way in which military operations are conducted and also the way in which we live our lives in the civilian world. The Australian Signals Directorate, which began its life as the Defence Signals Directorate, came out of the time of the Second World War. Cyberspace has grown into the Australian Signals Directorate's domain, and ASD is now responsible for this most transformative part of military operations and also civilian operations. The world in which military conflict is conceived and planned is now dramatically different, by virtue of cyberspace. The area of cyberspace is changing the thinking in military affairs as much as any area that is around.

The Australian Signals Directorate, therefore, has had to grow as much as any agency: in its scope, in what it seeks to be, and in how it seeks to perform its role. The Australian Signals Directorate is a huge national asset. The work it performs and the people who are working for it do our nation an enormous credit. These are some of the smartest and brightest minds that exist in Australia. And it is an asset that needs to be nurtured, protected and grown in the context of Australian public policy.

Part of the challenge in doing that is that the role that is being played by the Australian Signals Directorate, whilst it is fundamentally a role based in defence, is now broader than simply defence. That is a function of the way in which the cyber realm has changed the world in which we live. As a result of that, the Australian intelligence review recommended that the Australian Signals Directorate be moved from the Department of Defence and be established as a separate statutory agency. That is a proposition with which Labor agrees, and that is at the heart of the bill before the House right now. That is why we, very much, support this bill as it goes through the House today.

That it should become an independent statutory authority is a recognition of a much wider remit in terms of the work that the Australian Signals Directorate is now asked to perform. Crime, for example, is a space in which the Australian Signals Directorate needs to focus its attention, and that goes beyond simply matters of dealing with the defence of our nation. Because it deals with issues of crime, ASD has to be given, in a legislative sense, a wider remit.

It also means that the clients of ASD are broader than those simply those within the defence space, such as the Defence Force or the Department of Defence. The clients of ASD, those to whom it gives advice and provides services, now stretch across the entire public service, but beyond that as well and into the private sector. ASD provides really useful advice to companies, for example, about how they can protect themselves in the cyber realm. Again, establishing ASD as an independent statutory authority gives it a proper legislative base to perform that work.

Finally, given that ASD is in that space, attracting the kinds of people that it needs to in order to perform all that work requires ASD to be given a degree of flexibility for employment practices. Having ASD taken out of Department of Defence and made an independent statutory authority will give it greater flexibility with the employment of staff. All of that makes sense, and that is what this bill provides. In doing so, it will lift the ASD, if I can put it that way, to the same status as ASIO and other agencies within our intelligence community. That's appropriate as well. It would mean that the Director-General of the Australian Signals Directorate would be at the same level as the directors-general of ASIO and other intelligence agencies.

The oversight arrangements and the reporting arrangements which go with being an independent statutory authority, in our view, also reflect what is appropriate as oversight arrangements and reporting arrangements for a body like this, the Australian Signals Directorate. We welcome the fact that in this bill there will be greater reporting requirements—for example, an obligation to brief the Leader of the Opposition, which has been occurring but would now be a statutory obligation as a result of this bill.

The bill has been referred to a Senate inquiry. I think that's important in terms of just getting into the detail of exactly how that reporting and oversight regime ought to apply to the Australian Signals Directorate. It's possible that as a result of that inquiry there might be amendments that come forth out of that process. If they do, we'd consider them in the Senate in the usual way. But, as a matter of principle, this is a bill which deserves support. This is enacting the recommendations of the intelligence review. This is a sensible path forward, and Labor very much supports it.

Dr MIKE KELLY (Eden-Monaro) (13:26): I'm pleased to be able to continue the contributions of my colleagues the shadow defence minister and the member for Canberra, who is obviously passionate about the presence of ASD in Canberra. Labor was proud to have been an active participant in the consideration of this legislation, the Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018, through the Parliamentary Joint Committee on Intelligence and Security. That committee is a wonderfully bipartisan committee with very fine members of this House participating, as well as members of the Senate. It is guided by our interests in national security and the national interest. Certainly there's no room for politics in our deliberation, and this was a good step forward.

I'm well aware of some of the issues that were occurring at the time—internal issues with ASD and the relationship with some aspects of how that organisation worked within Defence and without. This solution has actually resolved those matters, so I'm very pleased about that. I'm pleased for the personnel within ASD, who are breathing big sighs of relief now that this reform has taken place. It provides some administrative tidying up as well; I won't go into the details of that.

One of the remaining issues, of course, relates to the challenge that's being presented to Australia by the technological threats that we face in general and the breadth of those, including in our domestic counterterrorism spaces, where this overlaps with other areas of criminality. One of the things that struck home to me in getting briefings from the AFP was the correlation of paedophilia and some really horrendous aspects of criminality that conflate with terrorist activity and terrorist targets.

So there is a huge demand for analysing and sifting through vast amounts of data these days, and there is a really big challenge for us to share the skills and talents that are out there—those people who are great at writing algorithms and managing this data—with private industry. That is going to be the challenge for this nation in the future as our security demands increasingly require those skills in the defence workforce: how we share that with private industry. This was brought home to me by the briefing that we received at the ADF facility at Majura, where there was a PhD student from Data61, who was assisting AFP to sift through what they described as petabytes of material in meeting their challenges.

So it's pleasing to see that the ADF are working on their own challenges to create the cyberwarriors, the keyboard warriors of the future, and managing how they support these changes to ASD and the broader changes that they are engaged in, such as the creation of the Information Warfare Division. I'm very pleased to see that division has been placed under Major General Thompson, who has a PhD in cybersecurity and a special forces background himself. That brings together not only information warfare capability and C4 issues—command, control, communications and coordination—but also battle management capability.

The DEPUTY SPEAKER ( Mr Coulton ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the member for Eden Monaro will be given an opportunity at that time to conclude his contribution.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (16:15): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (16:16): I move:

That Mr LS O'Brien be appointed a member of the Joint Standing Committee on Migration.

Question agreed to.

Mr BOWEN (McMahon) (16:17): These bills give effect to the government's announcement in their 2017-18 budget of the establishment of the National Housing Finance and Investment Corporation. The corporation would operate an affordable housing bond aggregator and administer the National Housing Infrastructure Facility. The bond aggregator is intended to bring together the lending requirements of multiple community housing providers and finance those requirements by issuing bonds to institutional investors. Let me make it clear that the Labor Party supports the bond aggregator. In fact, this announcement came after Labor's housing affordability announcement in April last year, in which we announced that we would establish the bond aggregator to increase investment in affordable housing. So, we are very glad that this idea has been taken up by the government. We welcome it and support it.

We announced that the bond aggregator would help community housing providers access cheaper finance for new affordable rental housing. The housing bond aggregator would directly source cumulative funds from wholesale markets on behalf of community housing providers by issuing bonds to private investors. Funds raised by bonds issued could then be loaned to providers. The National Housing Infrastructure Facility is intended to provide financial assistance of up to $1 billion in the form of concessional loans, grants and other financial instruments. The facility comprises $600 million for concessional loans, $225 million in equity investment and $175 million in grants.

The bill sets out the corporation's functions, which are, primarily: to make loans, investments and grants to improve, directly or indirectly, housing outcomes; to determine terms and conditions for these loans, investments and grants; and to provide to registered community housing providers business advisory services and other assistance in capacity building. The bills state that the Treasurer may give the board of the corporation directions about the performance of the NHFIC's functions, which constitute the investment mandate. The investment mandate may include directions about the strategies and policies to be followed for the corporation to function effectively; decision-making criteria for making loans, investments and grants; granting financial assistance to the states and territories; providing services and assistance to community housing providers; and risks and returns relating to the corporation's investments. The bill also establishes the corporation's board, whose members must have appropriate qualifications, skills and experience in one or more of the following fields: banking and finance; law; housing, including social or affordable housing; infrastructure planning and financing; local government; or public policy.

When the infrastructure facility was first announced last year, we did raise concerns that this was a $1 billion slush fund for the coalition. Treasury officials at Senate estimates said nothing had been set in stone and there would be flexibility in how the allocation of these funds would take place. Now we have received some degree of comfort from the investment mandate direction exposure draft, which suggests this is less likely to be the case. Concerns do remain over the extent to which the facility will actually contribute to increasing the housing stock, particularly affordable housing, as opposed to facilitating greenfield development of new private-market owner-occupied housing or new private-market investment or rental housing. We will suggest in the other place that there be a short Senate inquiry, which will in part go to this issue.

Given that we don't have any major issues with these bills, we won't be opposing them in this place. To be very clear, though, any housing affordability package or strategy which the government claims to have is simply a grab bag of ill-thought-out measures. Just last week the International Monetary Fund released the latest Article IV consultation with Australia. The Treasurer liked some of it, but he was not quick to point out a press release which said that the IMF had endorsed the Labor Party's policy, in effect, of changes to negative gearing and capital gains tax. The IMF surmises that the Commonwealth's housing tax settings favour leveraged housing investments in upswings that might encourage excess demand for housing—a point that we have been making for years. The Treasurer also failed millions of young Australians when it comes to adequately dealing with housing affordability. He has seen an Australian economy and housing market which is locking out young people from the housing market.

The IMF report expressly states:

On the investment side, the combination of high capital gains discount rates and unlimited negative gearing can encourage leveraged real estate investment in market upswings. While similar tax incentives are also present in other countries, they tend to be more limited …

This adds to the long list of bodies which have supported negative gearing or capital gains tax reforms. The IMF goes on to say that the capital gains tax discount on housing should be reduced and other tax incentives limited. It is a very clear position from the IMF. The other tax incentives are, of course, negative gearing, and our policy is, of course, to limit it to new housing only.

The IMF also adds that the government budget position is predicated on a rapid rebound of nominal growth at the time when the government's unfunded company tax cut will deliver a structural hit to revenue over the medium term. I also make the point, as I said before, that the IMF is one of a long list of organisations, experts and individuals who've called for negative gearing reform. This list includes, but is not limited to, the OECD, the Committee for Economic Development of Australia, the Grattan Institute, the Reserve Bank, former Reserve Bank governor Glenn Stevens and, indeed, former Treasurer Joe Hockey, who stood opposite during his farewell speech, before Labor had announced its policy, and called for exactly this policy to be introduced. The only people who don't seem to get it are the cabinet, who just simply refuse to deal with negative gearing, despite reports that the Prime Minister and Treasurer went to cabinet with a proposal to reform negative gearing—and they got rolled in the cabinet.

Any housing affordability package which doesn't include negative gearing reform is a damp squib, and it gives false hope for young people. We have the most generous property tax concessions in the world, and they should be reformed. You should not get more support from the taxpayer to buy your fifth, sixth or seventh home than you do to buy your first. It is warped. It provides warped incentives in the market. It distorts the market and provides an encouragement to overleverage. We have one of the highest household debt rates in the world—certainly in the OECD. If we wonder why that's the case, it's in part because we have the most generous property tax concessions in the world.

We provide more support to property investors through the tax system than any other country does, and that encourages leverage. It encourages people to buy more houses and to borrow more money for investment purposes, and that leads to the risk of financial instability. It leads to concerns that, should there be a change in the market, should there be a downturn, should there be an increase in unemployment, should there be increases in interest rates of some substantial proportion, that would lead to instability, which is in part due to the very high household debt in Australia. So there are multiple reasons to reform negative gearing and there are multiple reasons to reform the capital gains tax discount.

We believe in budget repair which actually has a positive social outcome. The government believes in budget repair which does not deliver a positive social outcome—quite the contrary. They believe in cutting the age pension by changing indexation. They believe in scaling back support for families on low and middle incomes. They believe in all those things. But, where you have a proposal which would put first home buyers on a more level playing field, which would help with financial stability but which would provide a very strong return to the budget, particularly over the medium term, over the decade, the government reject it. They say: 'That's not good enough. It might improve the budget, it might improve housing affordability, it might actually deal with some elements of financial instability, but we don't like it.' That is because they are not prepared to take political risks.

We've got a Prime Minister and a Treasurer who lack ticker when it comes to reform. They will not do negative gearing reform, and they should. Instead, they search around for measures like this, which are not objectionable in and of themselves, like most of the measures the government embraces, but they simply don't add up to much. They are not a reform package. They are not changes which will see people on low and middle incomes find it easier, young people in particular, to get into the housing market. They are simply not. What they are is a grab bag of measures cobbled together as an attempt to look like the government's doing something. Remember our old friend the assistant minister who said in the lead-up to the budget that the housing package reform would be amazing in its scope, breathtaking in its reform, unbelievable in its achievement? Expectations management was never his strong point. But this was the point he was making—he was suggesting that we would have a massive reform program. Of course, none of that happened. Instead we had the grab bag of measures, the minor matters involved in the budget, which amount to not very much at all. The Treasurer is casting around—

Mr Husic interjecting—

Mr BOWEN: As my friend the member for Chifley reminds the House—and I'm in his debt for doing so—the government instead attempted a scare campaign on negative gearing, said it would crash the housing market. The Minister for Home Affairs said it would crash the stock market. And all the time they were sitting on that Treasury advice which said, 'Actually, Treasurer, that's not true. That's not the case.' Treasury made it very clear in their briefing to the Treasurer that they weren't entirely opposed to Labor's package. They could see the strong points in Labor's package. They didn't see that it was going to crash the stock market.

Mr Husic: Any sledgehammers?

Mr BOWEN: They didn't see a sledgehammer. The Treasurer is very quick to trot out Treasury advice when it suits him. He's very quick to trot out advice which is actually from his own office when it suits him, but where he's got Treasury advice which contradicts him, he sits on it. Not only does he not release it; the government resists ferociously the FOI requirement and sits on it. It took two years to get that out of FOI. I give credit to the ABC for getting an FOI from the Treasury, eventually, released in January. The Treasurer still hasn't dealt with it, still hasn't provided commentary on it, still hasn't answered the questions about why he misled the Australian people, contrary to the advice he had. He knew what he was doing. He knew what he was saying was not true. Instead, he engaged in the scare campaign.

The Australian people can look at both sides of politics and say, 'Well, maybe we don't endorse every single policy element of the Australian Labor Party,' and they're entitled to make that judgement, 'but the Labor Party has a very comprehensive housing affordability plan and the Liberal and National parties do not.' They do not care about housing affordability. They believe in a scare campaign. Their believe that their priority is to scare people about the impact of Labor's policies. We believe our priority is to put first home buyers on a more level playing field. On that basis, we do not oppose this legislation in the House, but we call on the government to do so much more.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (16:30): by leave—I move:

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

Question agreed to.

Dr MIKE KELLY (Eden-Monaro) (16:31): I will come back to where I was before I was rudely interrupted. The Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018, as I said, has been given full Labor cooperation. As you are well aware, Mr Deputy Speaker, the Parliamentary Joint Committee on Intelligence and Security was the beneficiary of great advice from Mr Michael L'Estrange, who conducted an extensive review of the intelligence community and services. I want to commend Mr L'Estrange for his work because he also very effectively drilled down beyond the superficial levels of issues that may have been presented by only senior levels of services and came to appreciate very well the issues that also occupied some subterranean levels of the intelligence community and services and the issues that were playing on and perhaps hampering the best delivery of those services.

As I said, the effect of the reforms has been wonderful for the morale of ASD and its staff. I also want to emphasise, however, that out of that there is no change to the role of ASD in supporting the Defence Force. ASD will report directly to the defence minister. An MOU has been entered into between the CDF and the head of ASD. While I'm on that subject, I'd like to commend Paul Taloni for his service within ASD. Some suggested he would've been a great head for ASD, but that wasn't to be. Paul has been a fantastic servant to this nation in the security area. I've had many wonderful dealings with Paul and really appreciate the service that he has rendered, particularly the service he rendered in his time at ASD.

Before we broke this debate I was also talking about the workforce issues. I know this is an issue that my colleague the member for Chifley is very keen to also pursue. I was talking before the break about the fact that the Australian Defence Force has now gone into the approach of establishing an Information Warfare Division and a cyberwarfare capability within Defence that is more creative and imaginative than simply trying to shoehorn uniform members or shoehorn civilians into the regime within which members are recruited and trained within the Defence Force. They may not need any of that training or need that elaborate framework that supports our uniform personnel to work in this space.

I mentioned we were very pleased with the appointment of Major General Thompson, who is eminently qualified to head up this group and some of the areas that are under his wing. He also works in that role to the Commander of Joint Capabilities Group, so it has been given the appropriate emphasis within Defence. He, as I mentioned, has a PhD in cybersecurity and a special forces background.

That division is starting with about 100 personnel. That was the goal to kick it off, but it is planned that it will grow to about 900 by the end of the decade. In order to support a workforce of 900 you probably need a supply pool of around 3,000 personnel, as we usually work through these things and as a rule of thumb for support for capabilities, taking into account leave, reassignment, turnover and mobilisation issues. That level of work force to sustain just this unit is extremely significant. It poses a real issue for our country about how we supply and support all of our security agencies. I was talking about what the AFP had brought to us. I think you were there with me, Mr Deputy Speaker Vasta, the day they talked about those petabytes of data they had to wade through. We met with the PhD student from Data61 who was on loan to hem, helping them design and build the algorithms to penetrate that deep well of data that's so important in the mission they have for tracking terrorists.

This poses issues to us more deeply as to how we manage that workforce issue and how we share these demands with industry. There are examples of how that's been done. My colleague, the member for Chifley, is aware of what is done in Singapore in relation to their service people that are based on their national service requirements. We don't have that available to us. Israel also has a very creative way of approaching this, taking the best and brightest from their high school graduates in the STEM areas and taking them into a program called Talpiot, where they enhance their skills and education over a long period of time, a number of years, without putting them in uniform. When they've finished and completed that refinement, they are then deployed into these security areas right across the security establishments with the specific mission of finding ways to improve what they do, to refine, innovate and develop the capabilities. That has led them to be able to use some really creative and innovative methods of dealing with, for example, terrorist financing. A really instructive work that's come out recently, called Operation Harpoon, describes the journey they've been on in tackling the matrix of counter-terrorism financing that needs to be put in place across the spectrum and across the globe and how you bring down those networks of financing. That Talpiot system is working extremely well for them. Those graduates then go out when they've finished their security time to help build their innovation economy and the innovation state, as we know.

We don't have national service available to us to draw on those Singaporean or Israeli models. We need to look at a creative way of managing and sharing that workforce. The workforce of the future in the defence force may not even be largely made up of the classic warriors we've had in the past. There'll always be a need for boots on the ground in many circumstances, but in the complex technological battlefield of the future a lot of our systems will be automated. You'll be seeing a lot of warriors sitting with bottles of coke and pizzas in shipping containers, steering automated systems. They don't need to be people who can do run, jump, dodge courses and these sorts of requirements.

Mr Husic: Unless you can do it on an Xbox!

Dr MIKE KELLY: Kids who are good at Xbox and those sorts of videos games are actually well prepared for the new digital environment that we will see in the future. The JSF and our new future submarines may well be the last crewed platforms of their type. We're already seeing Israel experimenting with automated land vehicles as well, resupply vehicles in the Gaza conflict. There'll be more and more of this automation, more and more emphasis on these technological skills, and certainly in the battles of cybersecurity that we will see in the future, which overlays so much into the industrial space. We've been hearing a lot about industrial espionage and foreign interference on the intelligence committee. There is such a need and demand for us to tackle that more effectively. In this industrial space, the back door approaches that a lot of the cyberassailants use really require industries, subcontractors and other industries that are involved in supplying our security capabilities to be reinforced and secured as well. So I think the government has taken a very good approach in establishing these regional cybersecurity hubs where business can engage in that respect. That needs to be built upon and expanded.

In terms of the workforce, what I believe we need to look at—this is just a personal view—is some form of civil defence corps in the future whereby we don't necessarily take full-time people for whom we can't compete with industry on a race to the top with wages but who can do national service duty, reserve duty, with our security organisations for whatever periods of time and then go back to their home business or company. We know that workers who work in the field at the moment are attracted to the motivation of serving their country and that the areas of work that they do in this space are unique. You will not find this experience in private industry. Some workers are obviously attracted to being able to do that work, which they won't find anywhere else. So I think we could set up some mechanism or regime by which we share these skills, these talents, with private industry. The private companies involved in supporting this could be given appropriate consideration, kudos, for doing that—gold star companies who provide us with those kinds of workers. I do think we need to come up with some creative solutions for that in the future. It will need a rethink of how we structure these workforces in Defence, the Reserves and private industry.

I also think in the future, for ASD, we've got challenges in terms of the other organisations that we're going to have to monitor. We've been dealing with the issues of how we tackle this challenge of foreign interference, civil society and politicians and how all that conflates. The complexity of the legislation that's currently before the committee points to the challenge of how that is addressed in legal terms, in legislation. We've seen some serious challenges in the drafting, in making that coherent and effective. In that space, we're going to need good consultation and take on board the advice, particularly of those whose job it is to oversight our security agencies. We've heard some very important evidence from people like Margaret Stone and Bret Walker. At the end of the day, we will not be winning this fight against those who seek to do us harm by surrendering all of the unique features that make up our democracy and the unique features that create the level of freedom and civil society that we enjoy in this country. It's about getting that balance right. We're looking forward in the committee to working through that process with the Attorney-General's Department, our colleagues on the committee and our security agencies to get that balance right.

Mr HUSIC (Chifley) (16:42): Mr Deputy Speaker Vasta, I acknowledge at the outset your deep interest in these matters, as well as that of the member for Eden-Monaro. He and I have spoken on this issue. I was very pleased to be able to have the opportunity to follow him in this debate on the bill that's before us now, the Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018. It has come about as a result of previous thought that has been contained within reviews in this area, specifically the 2017 Independent Intelligence Review. A specific recommendation within that review, recommendation 6, called upon the very things that this bill is trying to establish today—that is, the Australian Signals Directorate be set up independently as a statutory agency within Defence. The review examined the history of ASD, looked at likely direction but reflected specifically on its current value within Defence and the types of things that needed to happen, specifically that greater independence needed to be granted to the ASD.

I note two paragraphs from that review that are worth reflecting on in this debate, chiefly, that ASD has evolved from a primarily defence signals collection agency after World War II to become Australia's national signals intelligence authority, conducting intelligence, military, cybersecurity and effects operations through the application of advanced technologies. It also added this paragraph:

… ASD is now a genuinely national asset—

absolutely true—

playing a much broader role than that defined by its previously exclusive Defence focus. This is highlighted in its current additional responsibilities as a—

emphasis on this—

national source of information assurance and cyber security. There are also strong and growing interdependencies between ASD and other intelligence agencies.

The reason I highlight these points is that, while ASD is absolutely providing critical support within our defence and intelligence communities, it must be recognised that ASD is also providing broader support within government circles against the growing cybersecurity threats confronting both government and business. On an almost minute-by-minute basis there will be either an agent or an actor, somewhere on the world stage, always testing the defence mechanisms of government and business through cybersecurity attacks.

This is a growing problem. In fact, when I do talk with businesses, particularly those engaged in the digital economy, whenever I just make reference to cyberskills there is an almost instantaneous reaction. Businesses are very much engaged in this issue. They are thinking a lot about it and deeply concerned about the impact of cybersecurity on their operations. There are two things. One is obviously the tech knowhow and having the equipment that can help you deal with those threats. But, ultimately, the tech is only as good as your people, your processes, adherence to those processes and ensuring that your organisation will be able to defend itself against some of these acts.

In saying that, I want to recognise that ASD has been heavily relied upon within the public sector to help guide public sector agencies, departments and the like on how to withstand the cybersecurity attacks and threats that we're seeing on a much more regular basis. It has done an exceptional job in that way. But the reality is that the ASD has become a victim of its own popularity. With so many people depending on ASD, it is putting a lot of pressure on their operations. It's also potentially accelerating the need for this next phase of its evolution, as has been prompted by this legislation, and, thankfully, has been given added impetus by the intelligence review that I referenced earlier. But not only is ASD under pressure to change because of the increasing demand and call on its services; on this whole issue of cybersecurity, while a lot of major businesses are thinking a lot about it, there's probably a greater need in particular for small and medium enterprises to start thinking more and more about what can be done in this space.

The other element that was touched upon by my colleague the member for Eden-Monaro a few moments ago is the whole issue of workforce development. I've spoken strongly about the fact that the biggest thing affecting the digital economy is skills shortages. It's been estimated, by people in the know, that we probably need in the order of 100,000 new people—skills—to help in our broader economy and, in particular, in terms of our digital capabilities. When you look at cybersecurity, there is an absolutely acute need for greater cybersecurity skills. From ASD to the public sector and to the private sector, this will affect our ability to withstand some of those increasingly sophisticated attacks that we're seeing.

Australian Cyber Security Growth Network CEO Craig Davies said that the demand for skills in this sector has outstripped anyone's ability to produce skilled candidates. He said: 'It's such a rocket ship this industry; we have zero unemployment and the demand is massive.' As has been observed, he's been given the responsibility to work out how to respond to that shortage. He says: 'Education and growing the skill set is an important part of our program of work.' There have been recent government estimates that we need at least another 11,000 cybersecurity specialists over the next decade.

I humbly commend Craig Davies on his observation that TAFE will play a very important role in vocational education. I imagine and believe in the broader digital skills capability development in this nation that vocational education will play a bigger role in being able to move a lot more quickly and be a lot more agile in meeting skills, and we do need to ensure that it's provided support in this area. If we are relying upon it to help train up cyberexperts in this nation then it will require an investment by governments in relation to that. I think that is something we need to look at in the longer term.

Other nations, as the previous speaker noted, have taken a lot more novel approaches, if I may characterise it in that way, to the way they respond to cyberskills shortages. In November I was in Singapore visiting, in particular, Singaporean cybersecurity experts who'd reflected upon other initiatives that have been embarked upon by the Singaporean government—for example, modifying their national service program to ensure that, as is the case over there, where young people are required to embark upon national service they can nominate to basically conduct themselves or participate in a cybersecurity training pathway. Off the top of my head—and I'm happy to be corrected if I'm wrong—they're expecting in the short term 200 young people to participate in that and, over the longer term, 2,000 young people. They are building skills in that way. Then they will not just deploy them within the defence establishment of Singapore but also look to ensure within the private sector that young people go on and recognise that there is a pathway for them to be able to apply their skills in a cybersecurity sense. They obviously—and, again, the previous speaker reflected on this—have a pathway that's not necessarily open to us but are thinking very carefully about the fact that Singapore is being used as a route where agents will try to channel some of their attacks. They witnessed this in the course of the last 12 months and they are deeply concerned about it. I was very grateful for the briefings that I received from them. As has been recognised by this government and by many of us in the opposition, they are a partner we should work with on these matters. Particularly in terms of skills development and developing longer term strategies in relation to preparing for these threats, they're a very valuable partner. I suspect that our friends in Malaysia and Indonesia, too, think very deeply about these issues.

I mention this because of the fact that we will probably need to think laterally about how we meet that skills shortage. Some have suggested, for example, including cybersecurity options in the national curriculum. Certainly that is an idea worth pursuing, but I do note that every time there's an issue that's confronting us in either the economy or the community the first port of call as a solution is the national curriculum. There may be some things we need to pursue. I do note, as I said earlier, that vocational education may offer us a pathway, but some of the things put on the table earlier about working within our own reserve system and some of the things that are being considered there to encourage young people to use that as an avenue to develop their cyberskills are absolutely worthy of further consideration.

Again, this is not simply a business threat or a business risk that needs to be managed. What is happening is our businesses, large and small, are being used as a mechanism or entry point to cause problems on a much broader scale from a cybersecurity perspective. We need a much broader approach to cybersecurity, not just depending on the ASD, although they will play a critical part, but recognising we all have a responsibility in this space. We should be ensuring that either from the business sector or from government we are addressing this very serious issue in terms of: (1) capability with respect to having the skills available to help us out; and (2) putting in place the processes and mechanisms to take this very seriously and not pushing it off to a specialist or someone we believe is in the know and can always sort this out. As I said earlier in my remarks, you can have the best tech in the world but, if your people don't follow the processes, you will find yourself in a world of grief. We've found that in some of the cybersecurity and data breach episodes that have been experienced. It has been something as simple as leaving a password on a Post-it note that has allowed someone to get access to someone's account and open up a whole raft of data that should not have been exposed more broadly. It does need to be taken very seriously.

As I said earlier, the ASD has been empowered under this legislation to become an independent statutory authority. It's being heavily relied upon by both government and business to provide guidance on cybersecurity. I've asked within the opposition about resourcing of the ASD longer term, and, given the increased pressures and expectations that are being placed on them, how we'll do that, but I'm conscious that you can't continually ask for resourcing of the ASD in an environment where we are facing these skill shortages. So this is something that needs to be addressed more broadly.

Again, from the opposition's perspective, we welcome what has been put forward. I think it is important that we on both sides of the House use this as an opportunity to emphasise the need for us to take this issue of cybersecurity seriously, to prepare for attacks and, certainly, if we do put those mechanisms in place, to adhere to the mechanisms because it is in our longer term interests that we do so. I thank you for the opportunity to be able to contribute to this debate.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (16:56): I thank honourable members for their contributions to the debate and the support for this bill across the chamber.

The Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018 implements the recommendations of the 2017 Independent Intelligence Review to establish the Australian Signals Directorate as an independent statutory agency within the Defence portfolio, reporting directly to the Minister for Defence, as endorsed by the government.

The bill will amend ASD's functions to allow the Australian Cyber Security Centre, or the ACSC, to cooperate with industry and to operate within ASD, in accordance with recommendation 3(b) of the review. In broad terms, the bill will separate ASD from the Department of Defence and establish it as an independent statutory agency within the Defence portfolio, under the control of the director-general of the ASD from 1 July 2018. The agency will from this date report directly to the Minister for Defence.

Establishing the ASD as an independent statutory agency outside of the Department of Defence will provide the agency with greater independence in how it recruits and retains its specialist workforce. The report by the review was very clear in its views on ensuring ASD is best structured into the future to meet its responsibilities and the requirements of government. In this context, the report of the review noted:

… ASD will be better placed if it remains in the Defence portfolio but if it is in a position to operate with greater independence from the Department's requirements, especially those in relation to its capacity to recruit, retain, train, develop and remunerate its specialist staff.

For ASD, the option of continuing to operate within the Department of Defence's employment framework, even with some specific exemptions, is not the most effective way forward. It would increase the risk of losing additional critical talent, skills and capabilities. ASD needs to be more in control of its own destiny.

In relation to the employment of staff, ASD would operate outside of the Public Service Act framework. This will provide ASD with greater flexibility to recognise the skills of its specialist workforce. This structure will reflect the need to retain those individuals with highly sought after skills, such as those with science, technology, engineering and maths qualifications. ASD will be required under the bill to adopt the principles of the Public Service Act in relation to employees of the ASD to the extent that the director-general of ASD considers they are consistent with the effective performance of the functions of ASD.

In addition to changes to how ASD will engage and remunerate its specialist staff, the bill implements the recommendations of the review by amending ASD's functions to include providing material, advice and other assistance to any person or body listed in the act—rather than Commonwealth and state authorities only—on matters relating to the security and integrity of information that is processed, stored or communicated by electronic or similar means, which will allow the ACSC to liaise with industry. The bill also amends ASD's functions to include preventing and disrupting cybercrime. This section will provide ASD with a function to prevent and disrupt by electronic or similar means the use of information and communication technologies to commit or facilitate serious crime by people or organisations outside Australia. Serious crimes, such as child exploitation, will be captured by this new function.

The bill provides for the establishment of ASD on a statutory basis and the appointment of the Director-General of ASD to control ASD and its staff. It provides that the Director-General of ASD must brief the Leader of the Opposition about matters relating to ASD. It gives the Director-General of ASD powers to employ persons or employees of ASD outside the framework of the Public Service Act 1999. And it amends other legislation as appropriate to replace references to 'director of ASD' with 'Director-General of ASD' and to remove references to the Department of Defence.

The bill also includes an additional function for ASD to protect the specialised technologies and capabilities acquired in the performance of its other functions. ASD cannot perform its important functions without being able to protect its tools to ensure that ongoing utility and protect Australia's national interests.

The bill also has a number of transitional provisions to ensure that good governance of ASD continues during the implementation of the new arrangements. The establishment of ASD as a statutory authority puts the ASD on a similar footing to ASIS and ASIO as a national security and intelligence asset. Given ASD's increased national responsibilities in relation to cybersecurity, and also the critical operational support it provides the Australian Defence Force, ASD will now have the appropriate statutory functions to ensure it is well placed to support ADF operations and its national responsibility for combatting cybercrime, including the provision of advice to the private sector into the future. Also, to correct the record, the bill will not be making consequential amendments to the Crimes Act that were outlined in the second reading speech relating to assumed identities, as those matters will be addressed in a later bill. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Mr DRUM (Murray—Assistant Minister to the Deputy Prime Minister) (17:02): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms MACKLIN (Jagajaga) (17:03): I move:

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

"whilst not declining to give the bill a second reading, the House:

(1) notes the recommendation of the Senate Community Affairs Committee in November 2015 that there be a royal commission established following its inquiry into violence, abuse and neglect of people with disability in institutional care, and the calls for such a royal commission from the disability sector;

(2) notes that children with disability are three times more likely to experience abuse than children who do not have disability and that 90 per cent of women with intellectual disability have been sexually abused; and

(3) condemns this conservative government’s continued refusal to establish a royal commission to bring about justice for Australians with disability".

The Crimes Amendment (National Disability Insurance Scheme—Worker Screening) Bill facilitates access to criminal history data held by the Commonwealth for the purposes of conducting an NDIS worker screening check clearance. It's a bill that Labor welcomes and supports. The change proposed in this bill enacts part of the Council of Australian Governments' decision of December 2016 to implement a new quality and safeguards framework for the NDIS, which includes a commitment to work with the states and territories to deliver nationally consistent worker screening for the NDIS. Labor of course supported the establishment of the new quality and safeguards framework in the parliament last year.

The aim of the NDIS worker screening policy is to protect people with disability from harm and abuse. This bill will permit criminal history information to be disclosed and taken into account in assessing whether a person who works or seeks to work with a person with disability poses a risk to such a person. The Commonwealth Crimes Act 1914 states that people who have been convicted of a crime and subsequently pardoned, had their conviction quashed or their conviction spent, are not required to disclose their criminal history. Currently a small number of exceptions to this rule exist—for example, for those applying for a working-with-children check or applying for employment with a law enforcement agency or an intelligence or security agency. This bill amends the Crimes Act to extend this exception to people who work or seek to work with people with disability to require them to disclose criminal history. It's a sensible reform that will go some way to improving the safety of some of the most vulnerable members of our community: people with disability.

As the National Disability Insurance Scheme continues to roll out across Australia in the coming years, the number of disability service providers will increase. Indeed the latest quarterly report on the NDIS shows that the number of approved service providers increased by 17 per cent between September 2017 and December 2017. The report showed that in New South Wales alone, where the rollout of the scheme is most advanced, there are now more than 6,000 registered service providers. As we continue to see this growth in the scheme, we need to make sure that the people taking the new jobs that are part of the NDIS are properly screened. It's anticipated that the NDIS worker screening check will become available in New South Wales and South Australia from July 2018, in Victoria, Queensland, Tasmania, the ACT and the Northern Territory from July 2019 and in Western Australia from July 2020.

The NDIS worker screening policy is being developed in consultation with the states and territories, taking into account the recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse. It's envisaged that worker screening units will be established in each state and territory in order to undertake employment screening in relation to work with a person with disability. The term 'work' is defined broadly to include those working directly with people with disability in a paid or voluntary capacity as well as leadership roles of institutions or, for example, people holding roles on boards or committees. The information may only be disclosed for the purposes of undertaking the NDIS worker screening check. The bill also requires that the minister undertake two reviews of the changes to be completed no later than 31 December 2019 and 31 December 2022 respectively and to report on the effectiveness of the scheme to parliament. The responsibility for the overall design and broad policy of NDIS worker screening will be held by the NDIS Quality and Safeguards Commission, which will commence operation on 1 July this year.

I want to go to the broader questions about the abuse of people with disability. Last week in the media we saw details of the tragic death of Sarah Hammoud. Sarah was 22. She died in hospital in March 2016 from septicaemia about two months after a visit to her care home had raised alarm bells. Sarah had lived in care since the age of 13. She could not communicate, having been born with severe intellectual disability caused by having three X chromosomes instead of two. According to evidence given to a coronial inquest, Sarah was, 'half dragged and half carried from a taxi in a shocking incident witnessed by community workers.' The evidence was that, 'when Sarah got to where she lived, her elbows were very discoloured and one was very swollen'. Just months later, Sarah was dead.

Sarah's tragic case, sadly, is not unique. These shocking and harrowing cases of violence and abuse are far too often experienced by people with disability, and they just cannot be ignored. We know that people with disability experience much higher rates of violence than the rest of the community, and in many cases this violence occurs in places where they're meant to be receiving support. We know that children with disability are at least three times more likely than other children to experience abuse. We know that 90 per cent of women with an intellectual disability have been sexually abused.

This parliament cannot let this abuse be swept under the carpet. A royal commission is needed so that people with disability, their families and carers can tell their stories to the highest level of judicial inquiry and seek justice. Only a royal commission has the weight, authority and investigative powers to examine these horrific accounts of violence and abuse against people with disability. We have seen how effective the Royal Commission into Institutional Responses to Child Sexual Abuse has been over the last five years, how important it's been particularly for survivors who, for many years, weren't believed and how important its recommendations are. So now we need a royal commission into violence and abuse against people with disability so that we can bring about systemic change to make sure that this horrific abuse doesn't happen again. That's why, in May last year, we announced that a Shorten Labor government would establish a royal commission into violence and abuse against people with disability. The disability sector continues to call on the Turnbull government to establish a royal commission into violence and abuse of people with disability. I must say, I think we would all be pleased on this side of the House if the Turnbull government would begin the work to establish a royal commission as soon as possible.

As I said at the start, Labor supports this bill because we support action to protect people with disability from abuse, violence and neglect, and facilitating access to criminal history data held by the Commonwealth for the purposes of conducting an NDIS worker screening check is an important safeguard in protecting people with disability. A nationally consistent worker screening check will make it more difficult for people with poor records in one jurisdiction to move to another, continuing to place people with disability at risk of harm. This is appropriate, because we do know that people with disability are at greater risk of abuse than others in our community. That said, it is nevertheless very, very important—and I call on the government again—to establish a royal commission into violence and abuse against people with disability. It is the right thing to do, and a royal commission should be established as soon as possible.

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

Ms Chesters: I second the amendment and reserve my right to speak.

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

Ms HUSAR (Lindsay) (17:14): I note that this legislation, the Crimes Amendment (National Disability Insurance Scheme—Worker Screening) Bill 2018 has been a long time coming. People with a disability are some of the most vulnerable in our communities. They have been, and sadly will continue to be, exploited. We must not negate our duty of care to those who are vulnerable in our communities. Let's be very clear. Labor has supported and will continue to support a quality and safeguards commission for the NDIS. We must absolutely ensure we do everything that is possible to protect all our citizens, especially those who are marginalised by disability. The worker screening clearance is well overdue.

We know this government is bungling the rollout of the NDIS every single day. You only need to go into any of our local federal MPs' offices and ask to see their list of constituents who have had issues. My office is fielding about three complaints a day. I accept, though, that a massive social reform like this won't happen overnight and there will be many, many creases that need to be ironed out. But how can you legitimately claim to care when the government neglected this advice that was given to them in 2016, only to implement it and make it mandatory from 2018?

Screening workers for suitability against their criminal history when working with vulnerable groups should be a standard practice in a civilised society—that's if we are to learn anything at all from the royal commission that Labor fought so hard to establish. We fought hard to establish it under the Gillard government because we knew there were people who were preyed on. We listened to their stories and we actually acted. If we are to learn anything from that royal commission and not repeat the mistakes into the future, criminal checks for those people who are working with vulnerable groups is a common-sense approach to ensuring that we do something to prevent this from occurring ever again.

This is why Labor has supported industry, stakeholders and carers who have called for a royal commission into abuse against people with a disability. Frankly, I wish it wasn't something that we had to do. Clearly, though, it will be until this government gets serious about protecting all Australians, not just protecting its own shady behaviour. Sadly, though, transparency and owning up to injustice isn't something this government is really keen on or good at, even though their minister said: 'Recent inquiries and reports make it clear that far too many people with a disability have experienced abuse.' If the Prime Minister's minister can admit to that then where is the care, where is the compassion and where is the justice for these people? Simply put, it doesn't exist under this government. Someone who had a hand in bringing the NDIS to life, the Leader of the Opposition, Bill Shorten, knows what it takes.

Shame on the Prime Minister for being too busy launching royal commissions and personal vendettas against Bill Shorten—who actually did come in here and stand up for people. The government are too busy launching a royal commission into allowing unions to stick up for workers' wages and conditions and they are too busy sending the AFP in to raid union offices and collect a piece of paper that was already on the public record. It is an outrage that they deny people with a disability the option to have a royal commission into injustices that have already occurred. The government are too distracted about their own inadequate performance and would rather deal in this low-rent, tit-for-tat schoolyard garbage than tackle some of the things that are wrong in our community and are hurting vulnerable people right now. It would be incredibly painful for families who receive services through the NDIS to know that these criminal history checks are not in place, that worker screening has not been mandated in the rollout and that there would be people who have been exposed to risk because of this abject failure. It is a basic duty of care.

Labor have gone further in our support for people with disability than this say everything, do nothing Prime Minister ever will. If he was serious about protecting the rights of people with a disability, he would take action to prevent injustices and correct injustices done in the past. Let's do the numbers. And, no, Prime Minister, these aren't the numbers on whose support you have—which, concerningly, are the only numbers he is concerned about. I will give you a few numbers to get obsessed about. I hope these ones keep you up late at night just as much as the other numbers do. Ninety-two per cent of women with an intellectual disability have been sexually assaulted in their lives. Sixty per cent of those assaults occurred before the girl's 18th birthday. Children who have a disability are three times more likely to experience abuse than children their same age without a disability.

Has no-one in this government ventured into the real world lately? You only need to talk to the parents of children who have a disability to understand the anxieties and the fears they have about the abuse of their special needs kids—to the point where some parents have such little faith in the system that they deny their children services because they cannot be assured that their special needs child will not be preyed upon and they don't let them out of their sight. This has a terrible impact on that parent and carer's health and their wellbeing. It also has an impact on that child who misses out on services out of fear.

It would be a great shame if one day, just one day, the bloke who is supposedly in charge of running this country came in here and stuck up for the vulnerable instead of his rich, big business mates, offering them a $65 billion tax cut that he tells us every day we can afford and then uses the NDIS as a battering ram! It would be so refreshing if one day he rolled out of bed in Point Piper and said, 'Today I'll use my position—

The DEPUTY SPEAKER ( Mr Hastie ): Order! I remind the member to keep her remarks relevant to the bill at hand.

Ms HUSAR: I'm not sure how 'If he rolled out of bed and used his position of privilege and power to help a group of vulnerable Australians and not just roll out for a photo shoot of vulnerable people, like he did on Christmas Day' is off the topic, Mr Deputy Speaker. They're still vulnerable people. This wilful ignorance perpetuates the pain and suffering of already vulnerable people. You need no further proof that this Prime Minister ignores all the evidence than his rejection of the Victorian parliamentary inquiry into abuse in disability services, which recommended that the state lobby for a royal commission into this matter. You also need look no further than his ignoring of the Senate Community Affairs Committee recommendation that a royal commission be established following on from its inquiry into violence, abuse and neglect against people with a disability in institutional care. The government did not provide a response on this matter until 16 months after it had been tabled, and they rejected it, even though the minister admitted that there were reports of instances abuse. Yes, Mr Deputy Speaker, I would really like the Prime Minister to roll out of his bed, come in here and use his position of power and privilege to stick up for these people.

We say it all the time: the Prime Minister and the government are out of touch and they're out of ideas. We are happy to work with them on this in the interests of protecting vulnerable people. This legislation deals with workers in the future, and it has taken almost two years to implement. It is so inadequate, yet this Prime Minister thinks it'll do. What about the people who have been wronged in the past? Why do they get ignored? Where is their justice? When you know better, you do better. This is one step towards doing better in the future. It won't be enough, it will never, ever be enough, but it is something.

I want to do one thing while I'm here on my feet today. I want to thank all those people who are working in disability services, supporting vulnerable people, and who are doing the right thing, because I'm sure there are more of them that do than don't. There are more people doing the right thing, and we need to ensure that, if they witness something, if they have concerns, if they hear something, they are protected in saying something. Bad things happen when good people do nothing. We must ensure that good people are protected in workplaces and that their representation by unions—who have always looked after workers' rights, including people who speak up and act as whistleblowers—is maintained. Instead of the government's dog whistling, let's listen to those from the trade union movement and those with the gumption to stand up and speak out against injustice wherever it occurs. Unlike those opposite, we don't throw those people under a bus. We need to encourage confidence in the people with a disability and the workers in that sector who protect them to speak out.

Ms TEMPLEMAN (Macquarie) (17:23): When people with complex and serious disabilities come to see me at my mobile office or at my Windsor office, it's often easy to see the warm relationship that exists between them and their carer. I'm also regularly reminded of the trust that's put in the carer's hands. Whether the person is in a wheelchair, whether they have an ongoing mental health condition or whether they have an intellectual disability, it is clear that the character of the carer is vital. But it's also, sadly, not unusual or unheard of to have a family whose experience has been difficult and challenging in finding carers whom they can trust to deliver the level of care that they or their loved one deserves. But the tools to be able to ensure that individuals are the sort of person who should be given responsibility of caring for a person with a disability simply haven't been there.

I support this bill, the Crimes Amendment (National Disability Insurance Scheme—Worker Screening) Bill 2018, which makes it possible for criminal history data held by the Commonwealth to be accessed for the purposes of conducting an NDIS worker screening check and clearance. The Crimes Act prevents disclosure of spent, pardoned or quashed convictions, except in limited circumstances. While exceptions already exist, they haven't applied to the disability sector. I always thought it was strange that there was an exemption in the Crimes Act for checks on people who were working with children or applying for a job, even as a consultant, or with a law enforcement agency or an intelligence agency. When you were working for someone with a disability, it didn't qualify.

History has shown us—in fact, I think the ABC's 7.30 revealed some of the dreadful details late last year—that people with a disability experience higher rates of violence against them than the rest of the community, often at the hands of the people who are supposed to be caring for them. So I was pleased to see it was agreed at a COAG meeting in December 2016 to deliver a nationally consistent worker screening program. This bill certainly extends the exception to the rule so information held by the Commonwealth about a person's criminal history can be taken into account when deciding whether it's appropriate for someone to work closely with a person who has a disability. A nationally consistent worker screening check is going to make it more difficult for people with poor records in one state or territory to move to another and to continue to put people with a disability at risk of harm. It's appropriate that the state and territory based worker screening units get that full history. We are certainly satisfied with the safeguards in this bill to protect rights to privacy by ensuring the information can only be disclosed for the purposes of undertaking the NDIS worker screening check and will be overseen by the NDIS Quality and Safeguards Commissioner from 1 July this year.

We welcome these changes because we are serious about the safety and wellbeing of Australians who have a disability. They and their families deserve peace of mind about the people caring for them. But, of course, these changes only apply to people covered by the National Disability Insurance Scheme. The protections for people with disabilities in a whole range of other environments outside the NDIS remain a problem. For example, the ABC's 7.30 program showed there had been more than 200 allegations of abuse against children with a disability in New South Wales schools alone in the previous two years. I know, and I hope, that these instances are the exception rather than the rule.

My mum was a teacher in a school for profoundly disabled students in Sydney's western suburbs for many, many years. I saw firsthand the wonderful care and the quality environment that those children had. It was a place full of music and laughter. Sadly, the ABC report tells us that that isn't the experience for every student with a disability. That's one of the reasons I'm disappointed that this legislation doesn't establish a royal commission into violence and abuse against people with a disability. According to Disabled People's Organisation Australia, 92 per cent of women with an intellectual disability have been sexually assaulted at some time in their life. Sixty per cent of those assaults have occurred before they turn 18. Children with a disability are at least three times more likely to experience abuse than other children. Those statistics are chilling.

The individual stories are harrowing. I have had distressed medical professionals walk me through the process that they've been forced to take to try and get police to take action to investigate allegations of sexual assault of people with disabilities, and I've spoken to those same police to try and get action taken. The Prime Minister says investigating assaults is a state issue. But it is clear to me that the reasons and circumstances of assaults and violence against people with disabilities go beyond state boundaries. I'm not alone in believing that this is an important issue. Only last year, 163 community groups and 380 individuals got together calling for a commission to investigate these types of assaults and neglect. We're talking about people like St Vincent de Paul, Anglicare, Amnesty and the National Congress of Australia's First Peoples—organisations that really understand what is happening in our communities and are privy to some of the dreadful stories.

Carolyn Frohmader, from Disabled People's Organisation Australia, said that, as an advocate for more than 20 years, she had heard repeated, horrific stories across all settings. She described it as an issue of critical, urgent national significance. She said assaults were at epidemic proportions and a royal commission was needed to unify a mishmash of regulatory bodies in the states and territories. It is awful that she thinks things are getting worse, not better.

If the Prime Minister was really serious about protecting the rights of all Australians with disability, he would not only take the action this bill does to prevent these sorts of things but take action to prevent harm being done in the future and he would correct the injustices of the past. Only a royal commission can do that. That is why, last year, we announced that a Shorten Labor government would establish a royal commission into violence and abuse against people with disabilities.

I note that, in 2006, a Victorian parliamentary inquiry into abuse in disability services recommended that the state lobby for this sort of royal commission. In 2005—we're going back three years—the Senate Community Affairs References Committee recommended that a royal commission be established following their inquiry into violence, abuse and neglect against people with disability in institutional care. The government didn't respond to that recommendation until 16 months after the report was released. What was their response? It was to reject a royal commission.

I wish I could share the view the Prime Minister has that the quality and safeguarding framework will be enough to protect people with disability, but all the evidence tells us that it won't be and that we need to have out in the open what the dangers are and what the experiences are so that we can come up with ways to prevent them in the future. It is actually cruel not to take action and to ignore the crimes committed against people with disability in the past. It is unforgivable not to be finding ways to prevent these things occurring in the future. The voices of people who have been abused must be heard. If the Prime Minister were serious about protecting people with a disability, he would join with Labor and commit to a royal commission.

Mr LITTLEPROUD (Maranoa—Minister for Agriculture and Water Resources) (17:32): The National Disability Insurance Scheme is one of the largest social and economic policy reforms in Australia's history. At full scheme, it is estimated that the NDIS will be supporting around 460,000 Australians with a disability. The NDIS is a transformational social policy which is being delivered by this government. This will require a new, nationally consistent approach to quality and safe guards. In December 2016 the Council of Australian Governments endorsed the NDIS quality and safeguarding framework, setting out a new approach to regulation for NDIS to protect NDIS participants. The framework was developed in consultation with a range of key stakeholders, including people with disability, their families, carers, providers and peak bodies.

Nationally consistent NDIS worker screening is an important element of this framework that will minimise the risk of harm to people with disability from the people who work closely with them. It will reduce the potential for providers to employ workers who pose a high risk of harm to people with a disability and deter individuals who pose an unacceptable risk of harm from seeking work in the sector. Worker clearances will be portable across jurisdictions and employers, reducing duplication and complexity for workers and providers living or operating in multiple states and territories. Workers who hold an NDIS worker screening check clearance will be subject to ongoing monitoring at a national level for relevant criminal history or commission records.

A national NDIS worker screening check is a major step forward from the variable arrangements operating in each state and territory. This bill is an important step towards nationally consistent NDIS worker screening, which will help to protect people with disability from experiencing harm. This bill creates exceptions to the provisions that prevent disclosure of spent, quashed or pardoned convictions for persons who work or seek to work with people with disability in the NDIS. Reports of abuse and neglect perpetrated against people with disability may not be pursued for a variety of reasons. The difficulties experienced in securing a conviction where the victim is a person with disability and the challenges faced by people with disability who are victims of crime are now well documented. For these reasons, Commonwealth, state and territory governments have agreed that it is appropriate to consider a person's full criminal history, including spent, quashed and pardoned conviction information, to assess the risk they may pose in working with a person with a disability in the NDIS. This bill will allow relevant Commonwealth criminal history records information about workers to be shared with state and territory worker screening units so they can make a more accurate and informed assessment of the risk that a person may pose to people with disability in the NDIS. This bill has been informed by arrangements already in place for working-with-children checks and the recommendations from the Royal Commission into Institutional Responses to Child Sexual Abuse.

This bill ensures the right balance is struck between safeguarding the rights of people with disability and the rights of individual workers to privacy and employment. The exchange of information permitted by this bill is subject to the same stringent safeguards in place for working-with-children checks. Information will only be disclosed to prescribed worker-screening units for the purposes of worker screening. The bill requires the Attorney-General to be satisfied that certain criteria are met before a person or body can be prescribed. A person or body will not be able to be prescribed unless the Attorney-General is satisfied that the screening unit has the legislative basis for doing so and complies with applicable privacy, human rights and record management legislation. The person or body must also comply with principles of natural justice and must have risk assessment frameworks and appropriately skilled staff to assess risks to the safety of a person with a disability. The bill also contains staged reviews of its operation. The department will also conduct a privacy impact assessment of the measures proposed in the bill. These are important safeguards against the misuse of criminal history information.

The paramount consideration must be the right of people with disability to live lives free from abuse, violence, neglect and exploitation. The provisions in the bill are a reasonable and necessary measure to ensure people with disability have access to quality and safe supports and services under the NDIS. The NDIS worker-screening check will not replace the responsibility of employers to recruit suitable employees and provide a safe environment for people with disability, but it does represent a very significant reform designed to strengthen the national standards to address abuse and neglect for the most vulnerable in our society.

We will continue to consult the stakeholders to establish nationally consistent expectations for the conduct of providers, the training and screening of their workers and the quality of supports and services that they deliver under the NDIS. I extend the government's thanks for the commitment and contributions made by so many people across the community as we work together to implement quality and safeguard arrangements, including this bill, that support the right of people with disability to access safe services and supports in pursuit of their goals and the effective implementation of NDIS. I commend this bill to the House.

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

Question negatived.

Original question agreed to.

Bill read a second time.

Mr LITTLEPROUD (Maranoa—Minister for Agriculture and Water Resources) (17:37): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fenner) (17:38): We have before the House today another set of bills that talk about reducing pressure on housing affordability but don't tackle the real issue. It's another example of the government's inadequate response to tackling housing affordability in Australia. With the homeownership rate as low as it's been in 60 years, Australians need more than the half-baked measures contained in the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018. Labor won't be opposing the bill in the House, but we need to be clear that these measures, along with everything else the government has announced on housing affordability, are simply insufficient.

The International Monetary Fund last week released its latest article IV consultation with Australia. It is a useful exercise, and the Treasurer was very quick to jump on the release. He put out a media alert saying 'IMF endorses Australia's economic performance'. There was one notable exception from the Treasurer's media announcement, and it's not surprising to have an omission, given that the government had been caught out misleading the House on the impact of Labor's policies on negative gearing and the capital gains tax discount. What was that omission? The IMF endorsed changes to negative gearing and the capital gains tax discount. The IMF surmises that the Commonwealth's housing tax settings favour leveraged housing investments in upswings that might encourage excess demand for housing. It's a point that federal Labor has been making for years. Reforming negative gearing and the capital gains tax is good for housing affordability, but it's also good for the budget and good for financial stability.

The Treasurer hasn't only failed millions of young Australians when it comes to dealing with housing affordability; he's also presiding over an economy and a housing market that is more vulnerable to future economic shocks. We have household debt to income ratios at record highs. The system is suffering a degree of instability that is unnecessary as well as unfair. The IMF report explicitly states:

On the investment side, the combination of high capital gains tax discount rates and unlimited negative gearing can encourage leveraged real estate investment in market upswings. While similar tax incentives are also present in other countries, they tend to be more limited.

The IMF goes on to say:

The capital gains discounts on housing should be reduced and other tax incentives limited.

That's not Labor saying that; it's the IMF. The IMF also notes the government's budget position is 'predicated on a rapid rebound of nominal growth'. This is at a time when the government's unfunded company tax cut will deliver a structural hit to revenue over the medium term.

We have the Treasurer out there talking about tax relief for low- and middle-income households, but in fact his company tax cut is paid for by raising income taxes on low- and middle-income Australians. Under the coalition, seven million Australians with earnings between $21,000 and $87,000 will see their income tax rates go up. Under Labor that will not happen. The Parliamentary Budget Office has analysed the extent to which the return to surplus is built on the backs of middle-income Australians paying more income tax. It found that it's the middle quintile that is paying the lion's share in order to get the budget back into surplus.

As I mentioned before, we're also dealing with an issue of financial stability. The Treasurer's recently declared 'mission accomplished' on housing affordability, after arguing that, after the introduction of APRA's macroprudential measures, there's no need to scale back the most generous set of tax concessions for property investors in the world. But macroprudential measures have their limits. The Customer Owned Banking Association noted that, for banks with a relatively small share of the investment market, placing caps on their loan book stymies competition and has led to some of those smaller providers pulling out of the market. The consequence of these macroprudential measures is less competition in the market to provide investment loans. Indeed, it is a point which is even made by some of the smaller of the big banks.

The IMF specifically goes to the interaction of APRA's macroprudential measures with housing tax reform. It concluded:

Housing-related policies have begun to address housing-related imbalances and should be complemented by tax reform.

But these bills don't provide the sort of tax reform that Labor has been advocating. Instead they give effect to three of the government's measures from last year's budget. Here we are just a handful of sitting weeks away from the 2018 budget, and the coalition is still bringing into the House measures from the 2017 budget. The measures in the bills remove the entitlement to the capital gains tax main residence exemption for foreign residents, enable a reconciliation payment for near-new dwelling certificates and provide a capital gains tax incentive for investment in affordable housing.

On the CGT main residence exemption, these bills—in conjunction with the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Act 2017, which passed the parliament with Labor's support—remove the entitlement to the capital gains tax main residence exemption for foreign residents. There has been a concern that this would affect certain New Zealand constituencies. A clarification to specifically state that Australian tax residents can access this exemption appears to mean these constituencies are not impacted, but there will be a short Senate inquiry specifically to confirm this issue.

As to the reconciliation payment, the Near-New Dwelling Exemption Certificate was introduced in June 2017 to allow developers the flexibility to sell near-new dwellings—that is, dwellings previously subject to a failed settlement to foreign persons. Consistent with the process for payment under the new dwelling certificate, the bills introduce a reconciliation payment for the New-Near Dwelling Exemption Certificate, by which developers pay additional fees for each near-new dwelling that was sold to a foreign person by the developer under the exemption certificate. This ensures equivalent treatment to that given under the New Dwelling Exemption Certificate, which allows property developers to sell new dwelling to foreign persons, paying a reconciliation fee for each dwelling under the exemption certificate.

On the CGT incentive, from 1 January 2018 an additional 10 percentage points capital gains tax discount will be provided—increasing the discount from 50 to 60 per cent—if a CGT event occurs to an ownership interest in residential premises used to provide affordable housing. The additional capital gains tax discount applies to investments by individuals directly in affordable housing or investments in affordable housing by individuals through trusts, other than public unit trusts and superannuation funds, including managed investment trusts, to the extent the distribution or attribution is to the individual and incurs a capital gain. The dwellings must have been used to provide affordable housing for a period or periods totalling at least three years. Similarly, a trust or managed investment trust must have used the dwellings to provide affordable housing for a period or periods totalling at least three years.

I would note the interaction of this last measure with build-to-rent developments. We are more than used to this government lecturing us repeatedly on the notion that housing affordable is all about supply. It's why they tell us they care about rental affordability and why they won't deal with negative gearing and the capital gains tax discount. But this does make it all the more perplexing that the Treasurer chose, without any consultation, to kill off an emerging sector of Australia that could have played a role in increasing the supply of rental accommodation. Build to rent isn't yet a big thing in Australia, but it has potential—according to CBRE, up to $300 billion of residential assets. Or, at least, that was the potential before the Treasurer decided to kill it off. Build to rent, as honourable members would be aware, is simply corporate investment in large-scale rental accommodation. It is quite a big thing in Britain and the United States. In the United Kingdom, as of the middle of last year, 17,000 build-to-rent units were completed with another 24,000 with under construction and nearly 55,000 granted planning permission. In the United States, the build-to-rent market is valued at US$163 billion a year. Many residents in cities such as New York will be renters in buildings which are owned by a single owner.

Build to rent doesn't simply add to supply. Large scale rental accommodation provides economies of scale in terms of building maintenance and it provides benefits in terms of lower construction costs leading to potentially lower rents. It also solves a potential market failure. When the builder is the owner, then the incentive for the builder to cut corners in ways that might increase subsequent maintenance costs is reduced. Just as an owner-builder is pretty careful about the quality of their build, because they know they're going to have to live in the place, build-to-rent developers will be especially careful about the quality of their apartment buildings knowing that they will own the entire apartment building and rent it out. Leaky balconies are less likely to be prevalent in a build-to-rent environment. An experience in Britain has pointed to some high-quality offerings with well-developed communal facilities, attractive to segments of the rental market which aren't searching for standalone houses.

There are relatively light tenants' rights in Australia, and I refer anyone interested in this to the Grattan Institute's terrific report that looks at the rights that tenants have in various countries compared to Australia. The ability of an Australian tenant to have a dog on the premises or to hammer a nail into the wall is far less than it is in many other advanced countries. Given this, it's worth noting that corporate or superannuation fund landlords would be highly unlikely to evict tenants to move into the property themselves or because the landlord has decided to sell. Build to rent therefore gives good tenants peace of mind. It gives enhanced security of tenure and it creates an opportunity for those long-term leases that are so absent from the Australian market.

Another factor makes build to rent attractive in the Australian context, and that is our large pool of superannuation savings. That means that institutional investors could find a build-to-rent investment highly attractive. Experts, participants in the housing industry, have told Labor about the potential for the development of a build-to-rent sector. It's not a silver bullet, but it is potentially part of the answer, and the shadow Treasurer, the member for McMahon; and the shadow housing minister, Senator Cameron, have engaged actively with the sector and have heard back from the sector about the benefits of build-to-rent developments. There are issues to be dealt with, the interaction of the GST system with build-to-rent being one, but genuine consultation could well deal with this.

But that was before 14 September last year, when the Treasurer announced he was banning managed investment trusts from investing in housing, apart from narrowly defined 'affordable housing'. The announcement took immediate effect. There wasn't any warning. There wasn't a skerrick of consultation. When the government handed down what they told us was a comprehensive housing affordability plan, in the 2017 budget, the crackdown wasn't mentioned. If there were a compelling and urgent case for the announcement the Treasurer made on 14 September last year, why wouldn't it have been part of the government's housing affordability package? The Treasurer said that this announcement was part of the fairness of the tax system. Goodness knows Australians prick up their ears when they hear that the Treasurer actually has an interest in fairness. This is, after all, the Treasurer that says that we don't need to care about inequality because it's falling in Australia—contrary to the words of every expert. But, of all the elements of the managed trust regime which could be the subject of legitimate scrutiny and debate, he chooses to close down the one area that was showing the potential to contribute to alleviating Australia's housing affordability crisis.

The Treasurer wants to initiate a debate on or a review of concessions that managed investment trusts receive. Labor will work with him on that. But what we'll oppose is clunky policy on the run that harms housing affordability. It is not just federal Labor that has concerns here. New South Wales Liberal Treasurer Dominic Perrottet has been pushing for this, and the federal Treasurer simply says no. As the Financial Review reported:

In a blow, Mr Perrottet's push for federal government tax breaks for developers in the build to rent sector was swiftly slapped down by Treasurer Scott Morrison.

'He wants to give a tax cut to foreign investors in high-end, high-rent housing,' Mr Morrison told the Financial Review in the US on Friday. 'We haven't been in favour of foreign tax breaks for housing.'

I've canvassed the limitations of these measures today—the fact they don't tackle the core challenges of housing affordability in Australia, such as the reforms that are necessary to capital gains tax and negative gearing, the importance of reinstating a housing minister and the importance of a national housing supply measure. But Labor won't oppose the passage of this bill through the House. It will go to a short Senate inquiry to ensure that our concerns, particularly the effect of the GST main residence exemption, are addressed.

Debate adjourned.

Mr LITTLEPROUD (Maranoa—Minister for Agriculture and Water Resources) (17:55): by leave—I move:

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

Question agreed to.

Mr LITTLEPROUD (Maranoa—Minister for Agriculture and Water Resources) (17:56): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fenner) (17:57): I move:

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

"Whilst not declining to give the bill a second reading, the House notes that the Coalition continues to accept donations from tobacco companies".

The coalition is yet to kick the habit. The coalition continues to accept donations from big tobacco. Australian Electoral Commission returns from 2015-16 show the sum of $14,940 given from big tobacco to the National Party of Australia. The returns from 2016-17 show the sum of $15,700 received by the National Party of Australia. I seek leave to table the Australian Electoral Commission returns showing these tobacco donations to the Nationals.

The DEPUTY SPEAKER ( Mr S Georganas ): Is leaved granted? Leave is not granted.

Dr LEIGH: Well, there you go. That says it all, doesn't it? They're willing to take money from big tobacco, but they're not even willing to allow me to put on the record the electoral returns that show very clearly the amount of money that the coalition received from big tobacco. The Prime Minister needs to explain why he thinks it's acceptable for his coalition partners to fill their coffers with donations from an industry that profits from a product that, if used according to directions, will kill more than half its users.

While these donations continue, Senator McKenzie's position as Minister for Rural Health is completely untenable. Smoking is the single highest preventable cause of ill health and death in Australia, accounting for more than 15,000 deaths each year. The likelihood of being a daily smoker is up to twice as high in rural and remote Australia as it is in metropolitan areas. And yet the National Party continues to accept money from big tobacco, despite the additional harm that smoking-related deaths do in rural and regional Australia. We see by contrast Labor's longstanding policy not to accept donations from tobacco companies—a position that is reflected in our national platform.

We introduced and we fought for world-leading plain-packaging legislation, which, combined with other policies, has seen the adolescent smoking rate drop to a record low. I was here in this place watching how the coalition behaved as that plain-packaging legislation made its way through. You could see early on that they wanted to vote against it. They were doing their level best to square up to vote down plain packaging. In the end they finally did the right thing, but they had to be dragged kicking and screaming to a point of supporting plain-packaging laws, which are now being looked at by countries around the world, who are asking themselves the question, 'How do we reduce smoking rates in our country too?' This is a government that lacks credibility on tackling big tobacco.

These measures today are uncontroversial. The amendments made in this bill create a new tobacco offence regime, providing a comprehensive set of offences that apply to illicit tobacco that has been domestically manufactured or produced or for which the origin of production or manufacturing is unknown or uncertain. They create new offences for possession of equipment for producing or manufacturing illicit tobacco. They set penalties at a level that will deter illegal activity. They confirm that illicit tobacco for which the origin of production or manufacturing is unknown or uncertain can be seized and forfeited. They define 'tobacco' to align the meaning for excise and excise-equivalent customs duty purposes so the amount of duty on dutiable products is determined in a consistent manner. These measures are simply integrity measures that put beyond any doubt that it is possible to crack down on illicit tobacco, whether domestically manufactured, manufactured overseas or for which the origins are unclear.

It is Labor that has been leading on this issue. In the 2016-17 budget the Abbott-Turnbull government accepted Labor's policies to increase excise and excise-equivalent duties on tobacco. We see those measures continue to improve the health of Australians and continue to improve the health of the budget. If the coalition are to show that they are utterly serious on this, they need to stop the donations from big tobacco. They need to be willing to put their hand out and say: 'We're not taking your money anymore. We are serious about cracking down on smoking-related deaths.' The day that the coalition cease to accept money from big tobacco is the day they can come in here with their heads held a little higher and the day on which they can say that they are finally taking a serious stand against a product which, if used as intended, kills more than half of its users. This bill will receive Labor's support, but we urge the coalition to do the right thing and stop accepting tobacco donations.

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

Mr NEUMANN (Blair) (18:03): I second the member for Fenner's second reading amendment and support the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018. I reaffirm my support and Labor's support for improving health outcomes for all Australians. The proposed amendments provide a comprehensive set of offences relating to domestic manufacture or production of illicit tobacco and the possession of equipment for the purpose of producing or manufacturing illicit tobacco. They set higher penalties to deter illegal activity and allow enforcement agencies to seize and forfeit illicit tobacco with no known origin of production or manufacture.

Labor will always strive towards eliminating smoking related illness and death. We have a proud record in government. We increased the rate of tax on tobacco by 25 per cent and we introduced the world's first and far-reaching plain packaging on cigarettes. The latter has been lauded by health agencies around the world. That is in contrast to those opposite, who continue to take donations from the tobacco lobbyists and industry. While the Prime Minister seems distracted by his National Party colleagues' dysfunction and disillusionment, he remains silent on the tens of thousands of dollars in donations the National Party receives from big tobacco annually. I represent a regional and rural electorate in South-East Queensland. I was discouraged as a local member to learn that the rate of smoking in regional and rural areas, particularly in remote parts of Blair, is almost double the rate of the urban part of my electorate in Ipswich. The National Party, particularly in my home state of Queensland, claim to represent people in regional and rural areas, but they fail regional Australia by taking donations from an industry which profits from a higher rate of tobacco related illness and death in regional and remote areas.

Smoking accounts for more than 15,000 premature deaths of Australians annually. These deaths are preventable. Labor in office have made significant advancements towards reducing that number. We continue to reject donations from the tobacco lobby, a position reflected in our policy and platform. Labor stood up to big tobacco in 2011 and introduced the Tobacco Plain Packaging Act, making Australia the first country in the world to mandate plain packaging for tobacco products. It wasn't always popular locally in my electorate or around the country, but many countries have since followed our example, including France, the United Kingdom, New Zealand, Norway, Ireland and Hungary. The impact of the changes Labor introduced is being noticed and will continue to be evident, I think, for generations to come.

There is a wealth of evidence available which shows that plain packaging discourages the take-up of smoking, particularly amongst young people. The Australian Institute of Health and Welfare's National Drug Strategy Household Survey of 2016, released mid last year, found that the proportion of Australians who have never smoked continues to rise from 60 per cent in 2013 to 62 per cent in 2016. I count that as one of the most important decisions I have personally made in my life. As a father, I'm thankful that my daughter's generation is less likely to suffer from the devastating effects of tobacco related illness and disease. I'm proud that a Labor government I was part of played a tremendous role in that outcome. The Turnbull government need to ensure they are taking every available measure to reduce the rate of smoking amongst older people. The survey referred to found that, since 2001, the rate of smoking amongst 18- to 24-year-olds has reduced by half. However, for 60- to 69-year-olds, the reduction in the number of smokers was less than 10 per cent.

The greatest opponents of our plain packaging legislation were the tobacco lobbyists and companies. We were criticised by Philip Morris International. We were criticised by British American Tobacco. We were criticised by Imperial Tobacco. But we were applauded and lauded by the World Health Organization and the Cancer Council of Australia and similarly by governments around the world who followed us and set about implementing similar laws. Meanwhile, those opposite continue to take donations from those people who profit from tobacco related illness and disease, particularly in rural and regional Australia. I think this is another example of Liberal Party and National Party members saying one thing back home and another here.

As the shadow minister for immigration and border protection, I'm delighted the government's adopted Labor's policy to increase excise and excise-equivalent customs duty on tobacco in the 2016-17 budget. Last year, Labor supported the Excise Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017 and the Customs Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017. These amendments ensured that roll-your-own tobacco attracts the same rate of excise per kilogram of tobacco as cigarettes. Labor has consistently acknowledged a strong stance on the importation of tobacco related products discourages consumption at home and reduces people's exposure to tobacco products. This significantly improves the overall health of all Australians.

Our attention now needs to be turned to decreasing the rate of production and manufacture of illicit tobacco for domestic sale. The British American Tobacco company, in its submission to the Joint Standing Committee on Law Enforcement inquiry into illicit tobacco stated: 'The excise lost due to illicit tobacco is estimated at $1.49 billion annually.' They imply that, based on the current rate of illicit tobacco consumption of 2.4 million kilograms, an increase in excise could increase revenue from tobacco products to over $3 billion per annum by 2020. This amounts to almost one full per cent of total government revenue. Of course, the best health survey result is always for people to quit for good. The now Department of Home Affairs in evidence to the inquiry into illicit tobacco stated:

The strike team has … built stronger ties with key international law enforcement partners involved in combating tobacco smuggling at various points along the supply chain.

The Australian Border Force has been working to strengthen offences to allow officers to address offenders within the full spectrum of the illicit tobacco trade. I have spoken to ABF people on the front line and across a whole range of areas and been constantly impressed by their competence, diligence and commitment to duty. I welcome the moves for the ABF to be more investigative and more disrupting of illicit tobacco trade, providing a greater deterrence. While they're at the front line doing the work, that clearly provides a deterrence for those people involved in criminal activities in the space.

This issue really isn't about loss of revenue or public health; it's more than that. The Australian Border Force has strong evidence providing links between the illicit tobacco trade and serious organised criminal groups. The illicit tobacco trade undermines the Australian government's strategies in terms of prevention and control of tobacco products. At Monday's Senate estimates hearings into the now Department of Home Affairs, the Acting Commissioner of Australian Border Force, Michael Outram, revealed that the tobacco strike team had seized in excess of 104 tonnes of smuggled tobacco and 233 million smuggled cigarettes since it was established. It is the equivalent of $232 million in revenue and immeasurable savings, can I put it that way, to the public health of Australians. This is clearly a vital measure in cracking down on the scourge of illicit tobacco in Australia. I thank them for the work they're doing.

Those opposite claim they're committed to cracking down on illicit tobacco but evidence at the Senate estimates revealed otherwise. The Acting Commissioner of the ABF revealed the tobacco strike team is 'a lapsing measure that lapses at the end of this financial year'. Rather than continuing what the Acting Commissioner described as an incredibly successful program, the Turnbull government has not funded the tobacco strike team beyond July 2018. I would urge them to have a rethink in this space and to fund the tobacco strike team of the ABF, which have clearly been successful in the work they do. I urge the government to have a rethink in this space. They need to act. They need to start acting in the Australian people's best interests. If they want to see immeasurable improvements in public health, illicit tobacco must be stopped at our borders. They must fund this strike team. In the same budget which handed tax cuts to big business and multinational companies, the Turnbull government has failed to commit to fund a program which is aimed at stamping out illicit tobacco imports and preventing tobacco-related illness and disease.

The health of all Australians depends on a common-sense policy when it comes to the sale and excise of tobacco products. The Australian Institute of Health and Welfare National Drug Strategy Household Survey 2016 found that 25 per cent of smokers would be motivated to give up smoking if the cost of tobacco products were to rise—the law of supply and demand. If the price rises, people have a disincentive to take up smoking. Fifty-two per cent of smokers who attempted to quit or change their smoking behaviour identified the cost of tobacco products as the predominant motivating factor.

Leading the world in introducing plain packaging for cigarettes was only the beginning of Labor's achievements in targeting tobacco related illness and disease. In government, Labor previously introduced other key measures. I'm going to go on the record because I think it's very important to note. We increased the excise rate applying to tobacco products by 25 per cent as early as the 2010-11 budget. We introduced legislation restricting internet advertising on tobacco products, consistent with advertising restrictions in other media—another important reform. We put $61 million towards the national tobacco campaign 'Every cigarette brings cancer closer'—a successful campaign. We provided $27.8 million, over four years, for social marketing campaigns targeted at high-risk and hard-to-reach groups. We provided $14.5 million, over the three years from 2008, and a further $10.7 million from 2010, towards the Indigenous Tobacco Control Initiative, which funded 18 pilot projects in Indigenous communities around Australia. Tragically, the rate of tobacco consumption remains frustratingly high, but it is certainly on a downward trajectory with respect to Indigenous groups across the country. We put $100.6 million towards the COAG National Partnership Agreement on Closing the Gap in Indigenous Health Outcomes 'Tackling Indigenous Smoking' measures. There was 'Break the chain', the first ever Aboriginal and Torres Strait Islander specific national anti-smoking television campaign, $5 million in one-off funding for Quitline in 2009-10, and $102.4 million to support nicotine replacement therapies and other quit smoking supports through the Pharmaceutical Benefits Scheme.

We have consistently shown our commitment to policies which reduce the incidence of tobacco related illness and disease in this country. I'm pleased to see that our excise increases when we were in government have been adopted by the Abbott and Turnbull governments when they came to power. However, this is also a government that has sadly and tragically discarded the 'Every cigarette is doing you damage' campaign, which has existed in this country since 1997 and has received global praise for its effectiveness. That's a very bad decision by this government. In the first three years of the Turnbull government, the AIHW survey found that smoking levels had dropped only marginally compared with the significant differences recorded in the preceding two decades—under both sides of government.

Those opposite are simply not doing enough to reduce the devastating impact of tobacco related illnesses and disease in Australia, particularly among lower socio-economic and regional Australians. We remain committed to ensure the current government is held accountable for any underhanded and underdone treatment of tobacco companies. We're supporting the passage of this bill through the House. We believe it will deliver a high standard of health outcomes to Australians. But it's not enough. Much more needs to be done. This government must give greater emphasis to preventive health. Reducing tobacco consumption in this country for older and younger Australians and for regional and rural Australians in my electorate and elsewhere is an important goal.

Mr CRAIG KELLY (Hughes) (18:18): I'm pleased to rise to speak on the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018. I start my contribution to this debate by admitting that I am a fanatical nonsmoker—with the greatest respect to some of the other members currently in the chamber. My nose is extraordinarily sensitive to cigarettes. If someone lights up a cigarette 100 yards away from me, my nose can actually sense it. It causes me discomfort and irritation. So I would be very glad to see the smoking rate in this country driven down to zero and for all those involved in the tobacco industry to put their productive and entrepreneurial works and skills into other efforts. However, the policies that have been adopted by this parliament, and they were bipartisan policies, were to go down the track of trying to reduce the rate of smoking—something that, as I said, I'm all in favour of—by effectively introducing a prohibition by price.

I can remember standing in this chamber a couple of years ago when we had a similar debate on this, and there were members of the Labor Party who refused to acknowledge that, if we were going to increase the retail price of cigarettes by increasing the excise on them, this would lead to a surge in black market activity. There were members of the Labor Party that simply refused to accept that fact. What have we seen since? We've seen that this actually has done exactly that. There must be an acknowledgement by this parliament that, if we are going to go down the track of introducing what is effectively a prohibition by price, that will result in a lot more black market activity. It will create a profit motive for those involved in smuggling activities, attracting them to cigarettes, and we will have to respond by putting a substantial portion of the increased revenue that the Commonwealth is going to receive into law enforcement activities. That's why this bill should be commended, because that's the problem that it tackles.

I had the fortune to go on a delegation overseas last year. I went through Dubai airport. I had a look at the cigarettes to see what the prices were. I could have bought a packet—or several packets; it was three cartons packed together, and it was on special—of Benson & Hedges for A$1.67 in Dubai airport. Yet the bipartisan policies of this parliament are going to increase the price of a packet of Benson & Hedges up to $40 with the excise increases. Already—some may be able to inform me a little bit better—I understand a packet of Benson & Hedges at the moment is around $25 in Australia, the highest price of cigarettes in the world. That, of course, can only attract black market activity, with such massive discrepancies in the manufacturing costs of a packet of cigarettes. You can buy them lawfully in an overseas country, which is a big difference from illegal drug smuggling, where illegal drugs are produced unlawfully in the country of origin, sold on the black market unlawfully and shipped unlawfully to Australia. The whole process is illegal, but, when it comes to cigarette smuggling and importation, the manufacture and sale of those cigarettes in the country of origin is a lawful activity. It only becomes unlawful when those cigarettes are shipped to Australia and a fraudulent customs declaration is made.

We can see how this has fuelled the illegal activities of the black market from the work of the Tobacco Strike Team. In their first two years of operation, they seized more than 400 tonnes of illegal tobacco, worth more than $300 million in lost duty. The coalition were the ones that put forward the money to fund that Tobacco Strike Team, so it's very pleasing to hear members of the opposition suggesting that we should increase or continue the funding for that when it was the coalition government that actually put that funding initially. The Labor Party were the ones that introduced the original excise increases but did nothing to crack down on the increase of illegal activity, which anyone with common sense would have understood would be the natural consequence of such a policy.

That's why this bill deserves support. We are increasing the penalties for illegal activity. We know that the illegal activities are going to ramp up every time we ratchet up the duties and the excises. Every time lawful cigarettes become more and more expensive, there'll be greater and greater black market activity. So, if we are going to go down that track, which is the bipartisan position of this parliament, we have to respond and put the appropriate resources into law enforcement to make sure they have the resources they need and also to make sure that the penalties are appropriate. That's what this bill does—it increases those penalties, and they do need increasing. I know in my electorate that you can drive to almost any suburb and go into a tobacconist and purchase an illegal packet of cigarettes for around $10—less than half the price of a lawful product. What will happen when we make the price of those lawful cigarettes $40? It will only, again, further incentivise the black market.

The question is: is this having a great effect on the reduction in the rate of smoking? An article in The Australian on 14 August last year noted:

The number of smokers in Australia has increased for the first time since anti-smoking campaigns ramped up a generation ago, casting doubt on the effectiveness of further taxes on cigarettes.

It continues:

An unexpected standstill in the national smoking rate since 2013, combined with rapid population growth, has pushed up the number of regular smokers by more than 21,000 to 2.4 million according to Colin Mendelsohn, an expert in public health at the University of New South Wales, who says Australia’s "punitive and coercive" policies to curb smoking have "run out of steam".

So, if we are going to continue to drive down that rate of smoking that all of us, whichever side of this chamber we sit on, want to see, this bill goes a long way to going down the track of increasing penalties, but we also have to acknowledge that a lot more needs to be done in this space. We need to look at what resources our Australian Border Force need. We need to continue the work of the Tobacco Strike Team to ensure that they are appropriately resourced. That is the only way we are going to continue to drive down the rates of smoking in this country. I commend the bill to the House.

Mr WOOD (La Trobe) (18:28): I would also like to congratulate the member for Hughes for being chair of the inquiry which looked into the need to investigate illicit tobacco. I rise today to speak on the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018, which delivers on the 2016-17 budget commitment to combat illicit tobacco and criminal activity which the Australian Taxation Office has identified as a major resource for organised crime. In talking about organised crime, I go back to my time at the organised crime squad in Victoria. Just prior to my arrival, there had been a major investigation into the selling of illicit tobacco. Back in those days, it was basically a 12-month operation. Victoria Police spent so much money on it but never had the legislative power to actually have a successful prosecution. So, at the state level over 15 years ago, law enforcement made the decision that it was not worth going after those involved in the movement of illicit tobacco, because the penalties simply weren't there. Why do people get involved in this? As the member for Hughes said, it's simply to save on tax or avoid paying tax.

On another inquiry I was on, the serious and organised crime inquiry, the committee visited a Customs office location in New South Wales. The Customs office had done a great service and seized pretty much a container load of counterfeit cigarettes. I asked, 'Do you let these run and pick up the guys involved?' They said, 'No; the AFP won't get involved and the Customs officers didn't want to get involved.' So, basically, they just forfeited the container. The organised crime groups were very much focused on the movement of illicit tobacco simply because, when it came to the courts, it wasn't viewed in the same terms as, say, trafficking heroin, and the money they made was quite incredible. They bring in a container load of cheap counterfeit cigarettes worth maybe $200,000 or $300,000, but, by the time they sell them on the black market, they make $3 million. The organised crime syndicates accept that maybe one of four containers would be seized by Customs but, even with the loss of $300,000, they can make in the vicinity of $10 million with the others containers.

The great news is that the Australian Border Force has, in the last two years, seized 400 tonnes of illegal tobacco and prosecuted 45 smugglers. I very much congratulate them on that. There is a focus on this because law enforcement realised that there's money to be made here by organised crime syndicates and that's the only reason they're involved. Yet, even though we've had this amazing success, organised crime syndicates are very much involved in this. Australia's current high tobacco costs are especially noticeable when compared to Asia, where cigarettes can retail for less than $2 a packet. I believe this poses a serious challenge to our law enforcement processes.

There are reports that the illicit tobacco market is increasingly linked to, and in some cases is even more profitable than, the narcotics trade—and this is true. I go back to a point I made before: if a container load of cigarettes comes in, the public view is that that poses a lot less danger than those who are trying to bring in, say, heroin or cocaine. The illegal trade involves a range of products, including loose-leaf tobacco, known as chop-chop, shisha tobacco, smoked in the Middle East, contraband in the form of stolen legally imported cigarettes, illegally imported foreign brands without Australian health warnings or any duty paid and counterfeit products with fake Australian packaging.

A report by KPMG revealed that 13.9 per cent of Australian total tobacco consumption, or 2.3 million kilos of tobacco, was estimated to be illicit. The same report found that the Australian government is losing $1.6 billion a year to the illegal tobacco industry. That money could be spent on hospitals and looking after the Australian people rather than going into the pockets of organised criminals. The former head of the government's illicit tobacco task force, and now-retired former Australian Federal Police officer, Rohan Pike estimates that the lost tax revenue figure is more like $4 billion.

We now have the situation where a huge range of brands and counterfeit imitations are being sold illegally by small grocery stores and individuals across the country. Recently, Jeff Rogut, from the Australasian Association of Convenience Stores, noted that criminals were taking advantage of cigarette legislation and said:

For too long, criminals have taken advantage of the gaps that exist around regulation of illegal tobacco, and have literally been driving trucks laden with contraband through those gaps. The trade is booming—and cigarettes have become the most valuable commodity for crime gangs. Our stores and our staff are victims of terrifying smash and grab robberies on a daily basis.

And we have seen that in Melbourne.

The bill will provide officers with access to tiered offences. By introducing tiered offences, prosecutors have more flexibility to bring charges against persons who have committed an illicit tobacco offence. The tiering of offences is based on the quantity of tobacco and is aimed directly at the commercial illicit tobacco market, rather than individuals buying small quantities for personal use. Strengthened penalties will provide a stronger disincentive for criminal behaviour. That is very true. Criminals realise that if legislation and penalties are weak they will go for the easy option, especially if it's going to give them great financial return. A person caught with five kilograms of illicit tobacco will now face a fine of up to $42,000. A person caught with 100 kilograms of illicit tobacco can face a penalty of up to $450,000 or five years imprisonment. I like the imprisonment, because obviously selling that amount they still make a fair whack of money from it. A person caught with 500 kilograms of illicit can face a penalty of over $2 million or 10 years in prison. So the penalties take into account the seriousness of the offence and provide a deterrent to illegal activities.

The bill also confirms that tobacco offences apply when the origin of the illicit tobacco cannot be established. From a law enforcement perspective, this addresses the current obstacle that where uncertainty arises it is very hard to know whether it is domestically grown or imported. It is a point of proof which prosecutions find very difficult to establish.

I also believe the bill will have further benefit in that it will improve the health of Australia. Smoking is one of the country's most preventable causes of death. There are an estimated 2.6 million smokers in Australia and the habit kills about 15,000 people every year. That's 15,000 reasons to reduce Australians' exposure to tobacco products. I was listening on the radio the other night where they had a cardiologist talking about the main way of preventing heart attack. He said, 'Give up smoking.'

This bill is clearly an important component of our government's suite of measures to discourage smoking. In the recent government submission to the tobacco inquiry, Cancer Council Australia referred to the high cost of tobacco as being 'the single most effective method available for reducing tobacco consumption, increasing attempts to quit and reducing smoking prevalence, thereby reducing death and disease caused by smoking.' If we look at this from the point of view of the cost to the taxpayer, more than $30 billion is estimated to be spent each year on health, social and economic costs related to smoking.

Illicit tobacco also creates a different picture around Australia's smoking rates. According to the most recent Australian Bureau of Statistics national health survey, adult smoking rates fell from 16.1 per cent in 2011-12 to 14.5 per cent in 2014-2015. The National Drug Strategy household survey shows a similar decline. But the Australian Criminal Intelligence Commission's annual national wastewater survey, in which households' waste is tested for the presence of various drugs, tells a different story. Law enforcement agencies consider it more reliable because it's hard to hide what's in your urine. The commission's report issued in July last year from testing conducted over a six month period shows tobacco use nationally going up, not down. So obviously we're talking about illegal tobacco now. That means there's no room for complacency and greater urgency to implement this bill as further measures to discourage smoking.

The amendments in this bill as a whole will ensure there is a comprehensive set of offences aimed at stopping the importation, possession, purchase, sale and production of illicit tobacco. In addition, the bill makes it an offence to possess equipment used in the production of illicit tobacco—again, a very important tool for law enforcement. Police may not actually come up with the illegal tobacco, but if they get the equipment they can then seize that and charge people.

These changes are supported by the Minister for Home Affairs, who is doing a fantastic job. He will later introduce legislation to amend the Customs Act to strengthen illicit tobacco offences, which will complement the amendments contained within this bill. I therefore commend this bill to the House.

Ms FLINT (Boothby) (18:39): I am speaking on the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018 today because I support reforms to the penalty and offence framework for illicit tobacco and our government's commitment to stopping the importation, possession, purchase, sale and production of illicit tobacco. This bill delivers on our 2016-17 budget commitment, and it will have a significant positive financial impact on revenue over the forward estimates.

The estimate just provided by my colleague the member for La Trobe, who gave an excellent speech on this issue—he is a former law enforcement officer himself, so he really understands the issues involved—of the impact on our budget bottom line was something in the order of $1.6 billion. So that's a very significant amount of money. Without the measures this bill introduces to stop the supply of illicit and illegal tobacco, the tobacco black market will continue to operate and potentially expand. Without this bill, the Australian Taxation Office and the Department of Home Affairs will continue to find it difficult to prosecute suppliers of illicit and illegal tobacco. The Black Economy Taskforce has recommended that measures be introduced to deal with this problem. Otherwise, people dealing in the trade will have an unfair advantage over businesses that legally sell tobacco, such as our supermarkets, service stations, corner stores and hotels.

When we have a large illicit tobacco trade, we are also far less able to ascertain how many people are smoking, in what amounts and at what rates in our community. When we don't know this, how can we help people to quit? How can we identify where to target assistance and resources and which factors to look at that might be encouraging people to smoke cigarettes?

I support this bill for all the reasons I have just mentioned but also because we need to stand up for businesses that are obeying the law and selling tobacco products according to the law. We need to ensure that we do not continue to allow the illegal sale of tobacco to threaten our small, medium and even larger businesses that are losing revenue and downsizing their workforces, sometimes because of this.

I am a member of the Standing Committee on Tax and Revenue. The committee recently heard evidence from a range of business organisations on this very issue. We heard from Master Grocers Australia. Master Grocers Australia represents more than 2,500 independent supermarket and liquor retailers of all sizes employing more than 115,000 hardworking Australians. These businesses have a turnover of around $14.8 billion, so they are obviously very important to our economy. The chief executive officer of Master Grocers Australia, Mr Jos de Bruin, told our committee:

… we have had great concerns about the illicit and illegal tobacco market. At first we did not think much of it or hear much about it but over a period of time we started to get a lot of feedback, as an industry organisation, from various states that it was becoming an issue and it was having an effect on the sales of tobacco in our member stores. Like it or not, it is a legal product. We spend a lot of money to comply. We spend a lot of money to train people to serve tobacco and so the rigor is just endless.

We have had some of our members quote figures of losing 20 to 25 per cent of their measured weekly sales, not knowing where those sales have been lost, only to discover that it seems to be illicit tobacco, tobacco that was found to be sold on Facebook or some other social media form that they discovered was affecting their sales.

The committee also heard alarming evidence about the rate of successful and attempted break-ins targeting tobacco products. The Australian Retailers Association estimated that their membership owned around 50,000 shopfronts and, of those shopfronts, around half stocked cigarettes and tobacco products. The Australian Retailers Association told the committee that, of the 25,000 or so shopfronts that stock tobacco products, almost all of them had had an attempted break-in. In fact, break-ins are now reported to be so common amongst businesses that stock tobacco they can no longer get insurance or are forced to hire security at their own cost. For a lot of small businesses obviously this just isn't an option. This tells us that something has gone quite wrong with the sale of tobacco in Australia. Thanks to the work of the Black Economy Taskforce and the Standing Committee on Tax and Revenue, and thanks to the evidence provided by the peak industry associations and bodies who represent our retailers and businesses, and thanks to the information provided to them by hardworking Australians who are the owners and the staff who own and work in these businesses—and a lot of these businesses are small and medium retailers; they're often family owned businesses—we know that customers and consumers are turning to the black market, where cigarettes are so much cheaper that normally law-abiding citizens are willing to take the risk to purchase tobacco illegally.

We know that there should be, and there must be, a tax on cigarettes and on tobacco. The tax is designed to address the very well documented negative health impacts of tobacco. We know that we, as a government, must do everything to support people who use tobacco products, who smoke cigarettes and who want to quit. We know this is important for their health and for the health of our health system. Unfortunately, however, with the tax on this product it seems we have reached a tipping point where the rise in illegal and illicit tobacco sales is the unintended consequence of taxing tobacco at a rate that is now too high. I understand that in Australia now approximately 70 per cent of the cost of a packet of cigarettes is made up of tax. According to the Australian Taxation Office, cigarettes are subject to the twice-yearly excise increases on tobacco products. The increase is applied in March and September and is based on average weekly ordinary-time earnings. In addition, excise rates for tobacco will increase by 12½ per cent on 1 September this year and for a further two years until September 2020.

While this bill does obviously address the illicit and illegal tobacco market, we must also have a very careful look at the cause of this market. The current tax regime on tobacco products is not only making our campaign to address the very real health concerns and impacts less effective than it could be; it's hurting law-abiding Australian businesses and increasing costs that are ultimately borne by consumers. Mr de Bruin, the CEO of Masters Grocers, told the tax and revenue committee:

We have an issue in regards to the fact that we are losing sales, and sales are what keep our doors open. It is a very low-margin items for us. It is high turnover and low margin. Grocery is a razor thin margin so to lose any percentage of sale on any product will affect our profitability and our ability to employ and to be sustainable.

It's not just businesses that are suffering; it's also government. When people buy illegal or illicit tobacco, the federal government loses tax revenue, and, as I outlined earlier, the tax revenue that we are losing is significant. I believe that we all accept that tobacco products should be taxed and that this tax revenue helps to fund general revenue for spending on services, some of which include specific services related to tobacco and tobacco products, such as education and prevention campaigns. It also funds our health system for tobacco related health treatments. We are losing out on a very significant amount of tax revenue because we have reached the stage, as I said earlier, where the level of tax on tobacco has reached a tipping point. We've reached the point where a large illicit and illegal tobacco market has been the unintended consequence of the level of taxation applied in this area.

In closing, I would like to congratulate the minister on this bill. I support reforms to the penalty and offence framework for illicit tobacco and our government's commitment to stopping the importation, possession, purchase, sale and production of illicit tobacco. This bill delivers on our budget commitments and will have a significant positive financial impact on revenue over the forwards estimates. Without the measures this bill introduces to stem the supply of illicit and illegal tobacco, the tobacco black market will continue to operate and potentially expand. We do not want this outcome. We want to know how many people are using tobacco so we can do everything that we, as a government, can to support people who want to quit. This bill will improve the health of Australians by reducing their exposure to tobacco products. It also helps to ensure that tobacco products consumed domestically are fully taxed and comply with Australian regulations. This bill is important for the health of Australians and for the health of our health system.

Mr GEORGANAS (Hindmarsh) (18:49): I start off by saying that, as a reformed smoker of nearly 30 years, I have a keen interest in this area. I gave up back in 2004. I look back at how addictive tobacco is. Doctors, clinicians and people tell me that tobacco is one of the most addictive drugs available to mankind. We know that tobacco causes illness, death, amputations and a whole range of things, yet the tobacco companies still spruik to try to sell to the public. They use every marketing trick in the book to attract new smokers to this dreadful drug, which has killed so many people over the years in this world. We know some of the tactics and tricks they do use. For example, because of the advertising cut down and the push to ban tobacco not just here in Australia but around the world, they continually get high-profile movie stars to pull out and show a packet of cigarettes and light up in movies. In the early 1990s Sylvester Stallone was paid $50,000 just to pull out and show a packet of cigarettes in a movie. I will not name the brand, because I will never allow myself to name a tobacco product and give them a profile, but these are some of the tactics they use.

I was very proud to be the chair of the Standing Committee on Health and Ageing back in the 2010-13 parliament. I chaired the plain-packaging tobacco inquiry. During that inquiry we saw some of the tactics that are used on packaging. For example, some of the slimline cigarettes were obviously marketed to attract young females. Cigarettes in tins and other marketing products were to attract young males. We know that inhaling tobacco is a dying art either way—you will die from it one day or you will give up—so they are always looking at new tactics and how to get across to our youth especially.

Even though we are supporting the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018—I think it's a good way to go, and I have heard the arguments on both sides—one point we want to make clear in this debate is the coalition's continued acceptance of donations from big tobacco. It's an absolute disgrace that they are accepting money from a tobacco company. Members of parliament have to set the standard. These companies produce a drug that addicts people and will kill them in the long run if they continue smoking it. I sometimes ask friends of mine and others who still smoke: 'Who do you see smoking? Do you see anyone over 70?' It is very rare that you do because they have passed away at an early age because of the addiction to tobacco.

We need to make sure that we don't accept from tobacco companies money that is given for public elections. It's really sad and unfortunate that the coalition continues to accept donations from the big tobacco companies. As I said, that is a disgrace. As members of parliament we should be setting the standard. After I had chaired the plain-packaging report, I've got to say that I went hard on the tobacco companies in all of my media interviews and everything I did because I had been a victim of the tobacco companies. Over the years I've developed very slight asthma from smoking. It's my own fault, but I don't want to see that harm being done to other people. During the 2013 campaign a whole range of money was donated. In 2012-13 Philip Morris donated in total $107,000 to the Liberal and National parties. The donations included $45,000 to the Liberal Party's federal branch, $25,000 to the National Party's federal arm and $6,100 to the Liberal Party division in the seat of Hindmarsh, to my opponent. I wonder why they did that. They didn't donate to any other seats; just to the seat of Hindmarsh. Maybe it had something to do with me making statements, claims and speeches in this place and the very antitobacco views that I have. Maybe that was it. This just shows you how the big tobacco companies operate. I think the plain packaging legislation that was brought in was a great measure. It was a great measure in terms of ensuring that our young people, who the packaging was marketed at, wouldn't take up smoking. I seek leave to table the media report about Philip Morris tossing $100,000 into the coalition coffers, which was printed on 4 February 2014.

The DEPUTY SPEAKER (Mr Goodenough):   Is leave granted?

Leave not granted.

Mr GEORGANAS:   That would be right. Leave wouldn't be granted, because you wouldn't want the Australian public to see, individually, where they donated money and how much money was donated. It's about time the coalition—the Liberal Party and The Nationals—stop ped putting money into their war chest from tobacco companies. This is an area that must be stopped as soon as possible. I would like to see the Prime Minister come out with a statement saying that he will ban all his party members and his political party arms from accepting donations from tobacco companies.

Mr HAMMOND (Perth) ( 18:55 ):   I rise to speak on the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018 in order to perhaps take the debate in a slightly different direction, albeit directly related to the curse of tobacco. It must be said from the outset that one of the perennially bizarre things about the tobacco industry is t hat now that it is demonstrated beyon d any real measure of doubt that there is no known level upon which inhalation of tobacco smoke is safe, we're stuck in this strange vortex where a company can lawfully produce a product in which its intended benefit includes potentially killing you. In the knowledge that lung cancer can be caused by the inhalation of tobacco smoke, we have a situation where there is a direct causal connection between excessive inhalation of tobacco smoke, lung cancer and, inevitably, death.

There are many reasons why I am very proud to stand with my Labor colleagues in refusing to accept in any way, shape or form financial assistance or any other form of assistance from tobacco companies. The reason I have come to this view might be slightly different from others in this place, but it is a deeply personal reason shaped by some incredibly brave men and women I have been proud to represent in the course of my previous life, working as a solicitor and then later as a barrister in the legal profession.

It's appropriate at this point, talking on this bill, to acknowledge those incredibly brave plaintiffs, those brave men and women who had the courage to take on the unparalleled might of the tobacco companies in the courts. Whilst there are dozens of cases, I would like to take this opportunity to single out two. The first is a case of epic proportions, and there is no doubt it was a war. It was a litigation war waged by one woman, an incredibly brave woman struck down by terminal lung cancer and in the end stages of her life in the late 1990s and early 2000s. Her name was Rolah McCabe. I had the privilege to meet Rolah McCabe a number of times when I was a solicitor, and she was hopelessly addicted to tobacco. Rolah McCabe developed lung cancer as a consequence of her hopeless addiction, which she had tried to kick any number of times, but, sadly and tragically, failed to. She had the great strength to instruct solicitors to bring proceedings against British American Tobacco for negligence for continuing to market a product that they knew to be potentially deadly in a manner which made the reasonable person think anything but that. This was back in the days when it was put upon consumers that smoking cigarettes was sexy or smoking cigarettes made you cool or smoking cigarettes could make you successful or more popular. Just like with the asbestos wars, the tobacco companies knew that was wrong and they knew that excessive inhalation of tobacco smoke—and, as I have already said, no-one has actually declared that there is a safe level—and excessive exposure to tobacco smoke could potentially kill you. Hundreds of thousands—if not millions—of people like Rolah McCabe all around the world succumbed to that disease.

Rolah had the intestinal fortitude to fight British American Tobacco in the courts—and fight them she did. I will never forget working as a solicitor at the time, waging other litigation battles, where I had the privilege of working alongside fierce litigators like Peter Gordon, John Gordon, Andrew Grech, Ben Fee, and Andrew Higgins, who I still remember as a young 20-something spending hours and hours in a tiny little office pouring through the discoverable documents of British American Tobacco in order to establish the case that British American Tobacco knew or ought to have known of the risks to health as a result of their various advertising campaigns. It was Andrew Higgins, Peter Gordon, John Gordon and Jack Rush QC, as he then was, who came across a discovery. The discovery was that, notwithstanding the many, many years that preceded Rolah McCabe's case—of which her time was running short—the documents which they knew to exist which demonstrated on the plaintiff's submission that the tobacco companies knew or ought to have known of the risks of injury or death had disappeared. The documents had disappeared.

Again, Rolah McCabe and her legal team, as they then were, rushed to court given her very limited life expectancy and took British American Tobacco to court to have the defence that they had lodged struck out on the basis that a so-called document retention policy was put in place with either the intent or had the result of destroying documents which would otherwise assist the plaintiff in her case. That resulted in McCabe versus British American Tobacco Australia (2002) VSC 73. I still remember the day the ruling was handed down on this case—a case in which Rolah McCabe was successful, in which she took on the tobacco companies and won, and on which the judge, the honourable Justice Eames, made the following finding at paragraph 263:

There can be no doubt, however, that within the defence camp the truth must have been known, that all 15 of the Cremona documents which the plaintiff sought, and many more, had been destroyed in 1998 …

In relation to the intention behind the so-called document retention policy, there is a self-serving policy document setting out that the purpose of the document retention is:

… not a way of ensuring destruction of 'damaging' records or retention of 'helpful' records. Records will be treated as series, in large blocks. It is not the intention to 'spring clean' the files to remove or retain records on a selective basis. Any such action would prevent the Program from passing judicial scrutiny.

As the judge found:

The paragraph constitutes a clumsy and self-serving attempt to declare innocence but at the same time, in my opinion—

the judge's opinion—

demonstrates the clear purpose behind the program.

The judge continued:

The determination to destroy all possible damaging material was so great that notwithstanding legal advice that an adverse inference could be drawn from the process of destruction, the programme proceeded anyway.

The judge concluded that the 'destruction of records and the failure to keep a record of what documents were held, and when and when they were destroyed' caused significant difficulties to the plaintiff's case. On that basis, along with many others, the case against British American Tobacco was upheld, their defence was struck out, and Rolah McCabe became one of the first Australians ever to be entitled to an award of damages for her terminal lung cancer.

In the interests of full disclosure it's appropriate to also say that Rolah McCabe's case was later overturned on appeal, but nothing will ever take away from her and her family those initial findings of the trial judge, in which it was very clear that tobacco companies went to great lengths to destroy documents based on self-serving advice upon which to further their case. That gives you a flavour of why, in my view, it is entirely appropriate to have the position, as ought be taken by everyone in this place—I'm sad that it is not the case—that we should be not having a bar of taking a single cent from a tobacco company in order to further one's ambitions to make a contribution in this place.

That case preceded another landmark case. Again, it is an enormous privilege and honour to be able to stand in this place and place on record the fight and tenacity demonstrated by these brave plaintiffs who died as a result of their addiction. The other case was Ellis as the executor of the state of Paul Cotton against the State of South Australia and others. This was a case in which a lovely, hardworking, knockabout bloke called Paul Cotton, who had a couple of kids and a partner, Teresa Ellis, was exposed to asbestos, but he was also hopelessly addicted to tobacco. He contracted lung cancer. He died very quickly, leaving behind a very young family of three children and a loving and devoted partner, Teresa Ellis, who I had the privilege of representing myself. The case was brought against the asbestos companies and also against his former workplace, on the basis that his exposure to asbestos was sufficient to have caused or played a role in him contracting his lung cancer. It was an enormously complicated epidemiological argument about the multiplicative or synergistic effect of exposure to asbestos and tobacco. In this case the asbestos companies and the state fought tooth and nail against a widow who had barely a cent to her name, that I had the great privilege of representing on a pro bono basis. I will never forget this case for as long as I live. It took five weeks for the trial against three defendants. One of the defences that was waged against her, in terms of her quest for compensation, was that Paul Cotton contributed to his own death as a result of his tobacco smoking or voluntarily assumed the risk of doing so. That case was important in relation to the insidious effects of addiction and the role that that plays so that it isn't necessarily appropriate to simply say that, in all cases, people can just have the strength and willpower to kick the habit. Sure, that happens in some cases, but it doesn't happen in all. This case demonstrated, for the first time, that the addictive nature of smoking tobacco places the risk levels of those who want to give up but just can't into a very different category than one of simply an objective test.

I'm very pleased to say that in that case the claim by the defendants that Mr Cotton voluntarily assumed the risk of smoking, and therefore he shouldn't be compensated for the asbestos-related lung cancer, failed. However, I'm also pleased to say, in terms of a reasonable approach, that the trial judge in that case did find that at the point in time in which Mr Cotton received medical advice from his doctor that he should start giving up smoking, in the point of time where he failed to do so, and from that point onwards, his addiction did play a role. At paragraph 739 of his reasons the trial judge said:

I therefore accept that the issue of whether or not Mr Cotton's smoking may amount to contributory negligence must be answered on an objective basis without regard to any actual addiction or dependence upon nicotine, however real that may be in fact, as it appears to be in his case.

That's important. It's important, again, because the courts recognise that the insidious nature by which these tobacco companies prey upon these individuals who get hooked on cigarettes and have a devil of a time getting off them flies in the face of any pretence to be an upstanding or good corporate citizen.

It is entirely appropriate that we maintain a firm view and do not tolerate in any way, shape or form any appearance or perception that this place should be tainted by the same stain that these tobacco companies inflicted upon hundreds of thousands, if not millions, of Australians and those around the world who, as a result of their hopeless addiction, are heading perilously towards tragic illness or death. On that basis, I am very proud that we have maintained the rage in terms of refusing those donations.

Ms PRICE (Durack—Assistant Minister for the Environment) (19:11): Firstly, I would like to thank those members who have contributed to this debate and acknowledge my Western Australian colleague the member for Perth for an excellent speech.

This bill tackles illicit tobacco. It reforms the penalty and offence framework in the Excise Act 1901 to provide enforcement officers with access to tiered offences and strengthened penalties for offences related to illicit tobacco. These measures deliver on the government's 2016-17 budget commitment to better combat the illicit tobacco market and improve the health of Australians by reducing smoking rates. Full details of the measure is contained in the explanatory memorandum, and I commend this bill to the House.

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

Question negatived.

Original question agreed to.

Bill read a second time.

Ms PRICE (Durack—Assistant Minister for the Environment) (19:12): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fenner) (19:13): The Treasury Laws Amendment (National Housing and Homelessness Agreement) Bill 2017 seeks to legislate aspects of the proposed new National Housing and Homelessness Agreement which was announced in the 2017 budget. It provides a total of $4.6 billion over three years from 2018-19. That is all to the good, but the way in which this bill has been managed is yet another example of the chaotic and dysfunctional way in which this government operates. Just when you thought it couldn't get any worse, they have a day like today. For such an important subject as a national agreement on housing and homelessness, you'd think this government could get it right. We are, after all, at a point at which the home ownership rate in Australia is at a 60-year low, a point at which, this Saturday, potential first home buyers will be beaten out by investors at auctions across the country. But, sadly, the government wasn't even able to get such an agreement as this right.