The SPEAKER (09:31): I present report No. 25 of the Selection Committee relating to the consideration of committee and delegation business and private members' business on Monday, 18 June 2018. The report will be printed in the Hansard for today, and the committee's determinations will appear on tomorrow's Notice Paper. Copies of the report have been placed on the table.

The report read as follows—

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

1. The committee met in private session on Tuesday, 29 May 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, 29 May 2018, and determined the order of precedence and times on Monday, 18 June 2018, as follows:

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

COMMITTEE AND DELEGATION BUSINESS

Presentation and statements

1 Joint Standing Committee on the National Capital and External Territories:

Maintaining Australia ' s national interests in Antarctica.

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

Speech time limits—

Mr Morton—5 minutes.

Next Member speaking—5 minutes.

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

PRIVATE MEMBERS' BUSINESS

Notices

1 MR FITZGIBBON: To present a Bill for an Act to provide for the appointment of an Inspector-General of Animal Welfare and Live Animal Exports, and for related purposes. (Inspector-General of Animal Welfare and Live Animal Exports Bill 2018)

(Notice given 29 May 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 WILKIE : To present a Bill for an Act to provide a legislative response to all people seeking asylum in Australia, and for related purposes. (Refugee Protection Bill 2018)

(Notice given 29 May 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 MS COLLINS : To move:

That this House:

(1) notes that:

(a) there are almost 300 older Australians who have waited more than two years for their approved home care package, without any care;

(b) a further 636 older Australians have waited more than a year for care and they currently have no care at all and there are thousands more getting less care than they need;

(c) the latest waiting list for home care packages indicates that more than 100,000 older Australians are waiting for the package they have been approved for; and

(d) the latest figures show that the waiting list grew by more than 20,000 between 1 July and December 2017 and it is likely to continue growing without funding for the release of more packages;

(2) recognises the Government's response in its budget of 14,000 home care packages is woefully inadequate;

(3) condemns the Government for the aged care crisis it has made on its watch; and

(4) calls on the Government to immediately invest in fixing the home care package waiting list and properly address this growing crisis.

(Notice given 21 May 2018)

Time allotted—40 minutes.

Speech time limits—

Ms Collins—5 minutes.

Other Members—5 minutes. each.

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

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

4 MRS MARINO : To move:

That this House:

(1) recognises that endometriosis is a terrible condition that afflicts 1 in 10 women globally and notes that there is:

(a) delay in diagnosis of between 7 and 10 years; and

(b) a huge need for further research on ways to treat this terrible condition;

(2) notes that the Government is committing funding to researching this dreadful disease;

(3) congratulates the Minister for Health for working with the Australian Coalition for Endometriosis to establish the first National Action Plan for Endometriosis; and

(4) further congratulates the Government for also committing funding of $160,000, through the National Health and Medical Research Council, for Professor Grant Montgomery to use genomics to investigate better treatments for women with endometriosis.

(Notice given 29 May 2018)

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

Speech time limits—

Mrs Marino—5 minutes.

Other Members—5 minutes. each.

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

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

Items for Federation Chamber (11 am to 1.30 pm)

PRIVATE MEMBERS' BUSINESS

Orders of the day

1 Live Sheep Long Haul Export Prohibition Bill 2018 ( Ms Ley ) : Second reading—Resumption of debate ( from 21 May 2018 ).:

Time allotted—20 minutes.

Speech time limits—

All Members—5 minutes.

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

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

Notices

1 MS M. L. LANDRY: To move:

That this House:

(1) notes that the World Heritage-listed Great Barrier Reef is the planet's greatest living wonder;

(2) further notes that it supports 64,000 jobs and contributes an estimated $6.4 billion to our economy; and

(3) welcomes the Government's record $500 million boost for Reef protection which will:

(a) invest in a $444 million partnership with the Great Barrier Reef Foundation;

(b) spark new and innovative investment in Reef protection measures;

(c) deliver on projects which are proven to boost the health of the Reef;

(d) improve water quality;

(e) tackle the crown-of-thorns starfish; and

(f) work with traditional owners on this vital project.

(Notice given 29 May 2018)

Time allotted—50 minutes.

Speech time limits—

Ms M. L. Landry—5 minutes.

Other Members—5 minutes. each.

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

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

2 MR GOSLING : To move:

That this House:

(1) notes that:

(a) 2018 marks the 50th anniversary of the battles of Fire Support Bases Coral and Balmoral during the Vietnam War;

(b) on 12 May 1968 two battalions, 1st Battalion Royal Australian Regiment (RAR) and 3rd Battalion RAR with Attachments, were deployed as the 1st Australian Task Force (Forward) to Fire Support Bases Coral and Balmoral, approximately 20 kilometres north of Bien Hoa City, and were involved in a series of actions until 6 June 1968; and

(c) the series of battles were incredibly fierce and costly, claiming the lives of 26 Anzacs, with up to 100 wounded and an estimated 300 North Vietnamese combatants killed during the almost one month of fighting;

(2) acknowledges all of the units and elements that comprised the 1st Australian Task Force (Forward) that deployed to Fire Support Bases Coral and Balmoral;

(3) notes that:

(a) the Defence Honours and Awards Appeals Tribunal recently wrote to the Minister for Defence Personnel recommending: 'That the 1st Australian Task Force (Forward) be awarded the “Unit Citation for Gallantry” for extraordinary gallantry in action at the Battles of Fire Support Bases Coral and Balmoral, between 12 May and 6 June 1968.';

(b) on 13 May 2018 the Minister for Veterans' Affairs announced that the Governor-General had approved the awarding of the Unit Citation for Gallantry to the 1st Australian Task Force (Forward) group and all those associated units who participated in that battle;

(c) this announcement had been long awaited and much anticipated;

(d) on this day, the 50th anniversary of the commencement of fighting, the Commanding Officer of the 3rd RAR during the battle, Brigadier Jeffrey James 'JJ' Shelton DSO MC passed away while watching the ceremony from his hospital bed;

(e) 'Jim' Shelton, who had been unwell for some time, closed his eyes and passed away peacefully at 92 years of age; and

(f) the RAR Association noted that Brigadier Shelton will be remembered by those who knew him and those who served with him as a true gentleman and a soldier's soldier;

(4) remembers those who lost their lives serving our country and all who came home wounded, or bearing the hidden scars of war; and

(5) recognises those who returned to life in Australia, that their journey from battlefield to towns and suburbs can be a difficult one and we must continue to support those who served and the people who love and care for them.

(Notice given 24 May 2018)

Time allotted—20 minutes.

Speech time limits—

Mr Gosling—5 minutes.

Other Members—5 minutes. each.

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

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

3 MR IRONS: To move:

That this House:

(1) notes the recent decision of the Western Australia Government to grant approval for a third runway at Perth Airport;

(2) notes that:

(a) this decision will trigger a flight path review in metropolitan Perth;

(b) the last time flight paths were altered in Western Australia was 2008 by the then Minister for Infrastructure, Transport, Regional Development and Local Government as part of the Western Australian Route Review Project; and

(c) in 2010 a Senate inquiry into the effectiveness of Airservices Australia's management of aircraft noise found that community consultation was inadequate; and

(3) calls on the current Minister for Infrastructure and Transport to instruct Airservices Australia to commence a review as soon as possible, which includes adequate community consultation.

(Notice given 29 May 2018)

Time allotted—30 minutes.

Speech time limits—

Mr Irons—5 minutes.

Other Members—5 minutes each.

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

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

4 MS MCGOWAN : To move:

That this House:

(1) notes that:

(a) the Commonwealth's Financial Assistance Grants are a key source of revenue for local governments, especially for regional and rural councils;

(b) the impact of the indexation freeze in the 2014-15 budget meant that local councils missed out on $925 million in funding to provide better infrastructure and better services for our local communities—in Victoria this equated to $200 million in cuts to funding for local roads and community services;

(c) the impact of the indexation freeze was magnified in rural and regional areas where local governments have small ratepayer bases and ageing infrastructure and these councils cannot afford a repeat of the indexation freeze;

(d) cost shifting onto local governments places them under increasing pressure to deliver services and maintain assets previously provided by other tiers of government and for rural and regional councils the impact is magnified due to their limited ability to increase revenue;

(e) the two main sources of funding for councils are rates and grants and as grant income declines, councils have had to fill the revenue gap by increasing rates or reducing services;

(f) the ability of rural and regional councils to increase revenue via rates is limited due to a high proportion of 'non-rateable' land and a smaller population, and revenue raising via user charges for facilities, parking fees and development applications adopted by metropolitan councils is not an option for regional councils; and

(g) rural and regional councils often have higher costs per capita than metropolitan councils, with:

(I) older, more disadvantaged or more vulnerable populations, who require more services from councils;

(ii) larger asset bases relative to the population;

(iii) an environmental stewardship role, including responsibility for weed and pest animal management and flood mitigation infrastructure;

(iv) more dispersed populations, which increase the amount of travel needed to deliver services or which require duplicate facilities to be provided in multiple locations to meet local needs; and

(v) reduced competition among service providers and suppliers, which can increase costs for councils when purchasing goods and services; and

(2) calls on the Government to:

(a) commit to the sustainability of rural and regional councils by guaranteeing the Financial Assistance Grants will not be subject to another indexation freeze;

(b) work with the states and territories and local governments to review the funding methodology of Financial Assistance Grants so that distribution of funds supports the sustainability of rural and regional councils; and

(c) support the development of regional strategic plans with the states and territories and local governments to guide investment and avoid cost shifting and duplication.

(Notice given 13 February 2018.)

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

Speech time limits—

Ms McGowan—5 minutes.

Other Members—5 minutes. each.

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

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

3. Pursuant to the resolution of the House of 21 May 2018, the committee determined the order of precedence and times to be allotted for consideration of committee and delegation business and private Members' business in the Federation Chamber, as follows:

Items for Federation Chamber (6.30 pm to 7.30 pm)

PRIVATE MEMBERS' BUSINESS

Notices—continued

5 MS CLAYDON: To move:

That this House:

(1) acknowledges that for nearly two decades a 10 per cent GST has been applied to women's sanitary products;

(2) notes that:

(a) this is an unfair and discriminatory tax on women;

(b) tampons and pads are not luxury items but rather essential items;

(c) Australian women are fed up with paying extra for items that they need to live and work;

(d) Labor has announced a concrete plan to scrap the GST on sanitary products; and

(e) Labor's plan:

(I) would restore equity but also save a woman up to $1,000 over her lifetime; and

(ii) has already attracted the support of a number of state and territories, putting progress within reach; and

(3) calls on the Government to:

(a) immediately adopt Labor's plan to abolish the tax on women's sanitary products; and

(b) work with the states and territories to end this tax once and for all.

(Notice given 22 May 2018)

Time allotted—30 minutes.

Speech time limits—

Ms Claydon—5 minutes.

Other Members—5 minutes. each.

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

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

6 MR C. KELLY : To move:

That this House:

(1) recognises the need for households and small businesses to access affordable, reliable energy;

(2) notes that the Government's National Energy Guarantee is recommended by the independent Energy Security Board and that it:

(a) involves no taxes, subsidies or trading schemes;

(b) creates a level playing field that ensures all types of energy are part of Australia's mix;

(c) provides certainty for investors in new and existing power plants; and

(d) reduces price volatility; and

(3) condemns the Opposition's plan to replicate South Australia's 50 per cent renewable energy target, which will mean more subsidies and therefore higher prices.

(Notice given 29 May 2018.)

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

Speech time limits—

Mr C. Kelly—5 minutes.

Other Members—5 minutes. each.

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

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

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

That this bill be now read a second time.

This bill will extend the Cashless Debit Card trial to the Bundaberg and Hervey Bay area and outlines the conditions for this trial.

In line with this government's announcement on 21 September 2017, the Bundaberg and Hervey Bay area will be the fourth cashless debit card site nationally.

The government is committed to reducing the social harm caused by alcohol, drug abuse and gambling in areas with high levels of welfare dependency.

The cashless debit card operates like an ordinary debit card but aims to reduce the effects of alcohol, drug and gambling abuse by both limiting the availability of cash and limiting the items that can be purchased.

The card is already operating in three sites;

Ceduna, South Australia;

East Kimberley, Western Australia; and

The Goldfields, Western Australia;

In Ceduna and East Kimberley the card has been in operation for over two years. In the Goldfields, the card is still being rolled out.

The independent evaluation into the effectiveness of the card has shown 'considerable positive impact' in communities, including:

48% of drug-takers using fewer drugs.

41% of drinkers drinking less

48% of gamblers gambling less

This is in addition to the anecdotal evidence provided in each site that has seen a direct impact on the communities.

The bill will allow the cashless debit card to be rolled out to a fourth site, the Bundaberg and Hervey Bay area in Queensland, from later this year. The cashless debit card will operate in Bundaberg and Hervey Bay until 30 June 2020. This will allow time to rollout the program in this area, and allow it to operate for a minimum of 12 months.

The bill updates the current limitations on the number of participants from 10,000 to 15,000, recognising the increase that would come from implementing the cashless debit card to this area. Like the current trial sites, the bill introduces provisions that allow merchants to block restricted goods at the point of sale.

For the purposes of the bill, the Bundaberg and Hervey Bay area has been defined as the federal electoral division of Hinkler, in line with the electoral boundaries as at 31 May 2018.

The bill seeks to have the criteria for trial participants in the Bundaberg and Hervey Bay site outlined in the legislation. Those persons living in this area aged under 36 years of age, and receiving Newstart allowance, youth allowance (jobseeker), parenting payment (single) or parenting payment (partnered) would be transitioned onto the cashless debit card.

It will not be rolled out to any individual on the age pension.

This would impact around 6,700 people, and represents a more targeted approach to the one taken in Ceduna in South Australia and the East Kimberley and Goldfields in Western Australia. If passed, it will be the largest of all the card trial sites.

Expansion of the cashless debit card under these criteria will allow the effectiveness of the program to be further tested and understood in the context of a larger urban population. It is also an opportunity to test the technology in a more diverse community. This area has a significantly different demographic than other sites currently operating.

The bill also specifies that for the Bundaberg and Hervey Bay trial site welfare recipients that are not included as trial participants may not volunteer for the cashless debit card.

This will allow the government to test the impacts of the cashless debit card trial exclusively for the selected group, as has been asked for by the community.

The criteria for trial participants also sets out some exceptions where a person would not be transitioned onto the card, drawing on policy parameters used in existing sites.

This includes a provision for the secretary to exempt a person where inclusion in the trial would pose a serious risk to the person's mental, physical or emotional wellbeing.

These exemptions and discretionary powers will be used to ensure vulnerable people are not adversely affected by the trial.

The selection of the cohort in this area has occurred as a result of significant consultation with the community. This is designed to help address key social problems that local people have identified during meetings, in particular high youth unemployment, intergenerational welfare dependence and local children whose needs are not being met.

According to regional youth unemployment data from March 2018, these communities have a youth unemployment rate of 28.7 per cent, an increase of four per cent since last year. This compares to the state average of 13.4 per cent.

Bundaberg and Hervey Bay has a high level of long-term and intergenerational welfare dependency. Children born to parents who are welfare dependent are more likely to become welfare dependent themselves.

Ninety per cent of the people in Bundaberg and Hervey Bay under 30 and on Newstart or youth allowance had a parent or guardian who received income support at some point in the last 15 years.

Of that cohort, around 13 per cent had a parent or guardian who received income support at least once each year for the past 15 years.

Findings by the Australian Research Council indicate that risk factors such as attitudes to work and welfare, attitudes towards alcohol and drug consumption and family influences contribute to intergenerational welfare dependency.

The council also found evidence that young people from welfare dependent families are more likely to smoke, drink alcohol or consume illegal drugs, highlighting the relationship that welfare dependence has on a young person's outcomes in life.

On average across Australia, 46 per cent of people attending government-funded financial counselling for their problem gambling were also receiving a taxpayer-funded benefit. In the Bundaberg and Hervey Bay area, it is 73 per cent.

Additionally, people attending financial counselling for their problem gambling in the Bundaberg and Hervey Bay area are more likely to have been on their current benefit for longer than 5 years, compared to other people in Australia attending problem gambling counselling.

The cashless debit card could help to stabilise the lives of young people in the area by limiting spending on alcohol, drugs and gambling, thus improving their chances of finding employment or successfully completing education or training.

By targeting a younger cohort, we can influence positive behaviour change before welfare dependency becomes entrenched in a person's lifestyle.

We have seen that a 'spillover' benefit of the card is that it can increase motivation to find work. As part of the final evaluation report of the cashless debit card trial, we received feedback from some card participants in September 2017 that almost a quarter of people on the card are spending several hours a week looking for work. This is an increase from 11 per cent in February 2017.

As I have previously stated, the Department of Social Services has undertaken significant consultations with key stakeholders and community members. Specifically, between May and December 2017, over 188 meetings, including three community information sessions, were held across the Bundaberg and Hervey Bay area.

A Community Reference Group was established in late 2017 to work through local policy and implementation issues to ensure the cashless debit card is implemented effectively in their community.

Additionally, a local shopfront will be established with staff who could link people with existing services.

Through the Community Reference Group, the department will monitor service demand to ensure the cashless debit card is complemented by appropriate supports for people as they adjust to this change.

Complementing the card will be a further investment in community services of $1 million. There are already a significant number of services in place, including 70 federally funded services across the area, which includes drug and alcohol services, financial capability services, employment and families' and children's programs.

The bill will allow the program to respond to unforeseeable circumstances, such as wide-scale power outages and natural disasters, allowing trial participants in Bundaberg and Hervey Bay to access their full payment as cash.

This measure will ensure participants and their families remain supported in the event of wide-scale emergencies.

The Bill will also allow the option of establishing a community panel in the Bundaberg and Hervey Bay area to allow participants in the area to apply to have access to a higher portion of unrestricted funds.

Consultations with community leaders in the area have indicated that a panel will be useful to make the trial flexible to the needs of their community.

The government has also announced a second evaluation of the cashless debit card across all three current trial sites, to assess the ongoing effectiveness of the program.

The second evaluation will use research methodologies developed independently by the University of Queensland, and draw on the baseline measurements of social conditions in the Goldfields, developed by the University of Adelaide. Findings from the second evaluation will be published in late 2019.

Should this bill pass, the government will also evaluate the card's operation in Hervey Bay and Bundaberg.

To support the cashless debit card trial, this bill will strengthen the provisions that enable merchants to block the sale of restricted goods to trial participants at the point of sale.

Merchants in trial sites will more readily be able to service participants of the program, through the option to implement product level blocking solutions, automatically blocking transactions where a participant is attempting to purchase restricted goods with the card.

In doing so, the bill also clarifies the restriction on 'cash-like' products, such as gift cards, vouchers, money orders, or digital currency, where these could be used to purchase alcohol and gambling products.

These products are included as restricted goods, as has always been the intention of the program. Clarifying this provision to include 'cash-like' products will support product-level blocking amendments, and help prevent participants from circumventing the program and spending their welfare payments on alcohol, gambling and drugs.

The cashless debit card is a world first in how it operates. The evaluation has been conducted and it has been shown to work. Consultation in the Bundaberg and Hervey Bay area demonstrates it needs a way to break the cycle of welfare dependency, and help people manage their income and stabilise their lives.

I ask the parliament to back this trial for Hervey Bay and Bundaberg, to provide the community a trial that they have asked for.

Debate adjourned.

Mr TEHAN (Wannon—Minister for Social Services) (09:44): I move:

That this bill be now read a second time.

On 24 October 2015, the Turnbull government announced that we would review the Space Activities Act 1998.

The aim of the review was to ensure that Australia's space regulation accommodates technological advancements and does not unnecessarily inhibit innovation in Australia's space capabilities.

The review concluded in November 2016.

It found that the Space Activities Act should have additional flexibility to accommodate the changing operating environment for space activities and support innovation and investment in the sector.

The Space Activities Amendment (Launches and Returns) Bill does just that.

It reduces red tape for businesses undertaking space-related activities in Australia.

The Turnbull government is committed to ensuring businesses are able to grow and create more jobs without the burden of unnecessary red tape.

The bill will support innovation and investment and provide additional flexibility to adjust to the changing operational environment of the space industry, while balancing safety and risk of potential damage with the national interest.

The global space sector is worth over US$345 billion, and growing at 10 per cent annually.

Australian businesses represent just 0.8 per cent of this industry internationally: a disproportionately small share considering our immense capability in space-related sectors, including our immense advanced manufacturing capability, and our world-leading work in fields such as automated mining and precision agriculture.

Combined with our expertise, the extraordinary growth of this global industry makes it vital for Australian businesses to be able to participate with minimal regulatory burden, while maintaining Australia's international obligations.

I would like to thank all stakeholders who have participated in the review's consultation processes, as well as the subsequent consultations on an appropriate legislative framework.

Today's introduction of the Space Activities Amendment (Launches and Returns) Bill 2018is the culmination of these processes.

The bill broadens the regulatory framework to unlock potential further opportunities for space sector growth in Australia and reduce barriers to participation in the space industry.

It will bring us in line with agreed international practice and standards by streamlining the approvals process and insurance requirements for launches and returns.

The bill will encourage our businesses to innovate, invest and create jobs.

The global space sector is a major source of technological advancement that provides broader applications and benefits across industry and society—not just in space exploration, but in sectors spanning communications, defence, mining, transportation and agriculture, to name but a few.

This bill will allow our emerging space industry to keep pace with international and technological developments, while updating and streamlining regulation to encourage private investment.

It will create a more flexible regulatory environment to make it easier for these businesses to tap into global supply chains and access the benefits on offer for all Australians.

To reflect the changing nature of launch facilities, the bill includes licensing arrangements for launches from Australian aircraft in flight, in addition to more traditional ground launches.

The bill also provides appropriate safeguards to mitigate the risk of damage from the launch or return of a space object, or from the launch of a high power rocket.

This bill will enable Australian business to engage more fully with the global space industry, supporting extraordinary opportunities to create jobs right across the economy.

I commend the bill to the chamber.

Debate adjourned.

Mr TEHAN (Wannon—Minister for Social Services) (09:49): On behalf of the Leader of the House, I move:

That the resolution of appointment of the House Select Committee on Regional Development and Decentralisation be amended to replace 'final report no later than 31 May 2018' in paragraph 13 with 'final report no later than 28 June 2018'.

Question agreed to.

Mr LAMING (Bowman) (09:50): On behalf of the Standing Committee on Employment, Education and Training, I present the report entitled Unique individuals, broad skills: inquiry into school to work transition, together with the minutes of proceedings.

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

Mr LAMING: by leave—Few things attract the attention of Australia, its workers and the economy in general as does our preparation of the next generation of this great nation to lead our way as a growing economy, preserving a uniquely high standard of living, and ensuring that that's achieved through education. Plenty of lip service is given to the importance of education, but direct comparisons with other countries are notoriously difficult. We can only really notice what stands out, unique within Australia's system—and that is a high-quality, well-funded education system, from zero all the way through to lifetime education—and then do our best in those important transitions from zero to five into formal primary schooling, from primary to high, from high to tertiary and vocational, and obviously then into a working career, where Australians will continually return to the education system to update their skills in an increasingly mobile and fast-changing future.

To do that, we've, in our committee, taken a real focus on the areas that we can improve, in an education system that, at school level, is well known for having a high number of formal contact hours, relatively high per-student levels of funding, relatively similar vocational and tertiary wage outcomes for the two major sectors compared to OECD comparators, but a fairly flat teaching promotional structure where, in Australia, the average teacher arrives at their highest salary increment after just nine years in the job, and that is less than half of the OECD average. It sets us a real challenge to find areas where we can improve both the quality of education and, more importantly, the outcomes.

What this committee found is that we still, predominantly, focus on inputs to the system. There is a great reluctance to report on outcomes because we're not confident that they fully measure what education seeks to achieve. What we've found in this committee is that we need to start that process with the evidence that we have. If there is a need to improve those metrics then let the reporting of current data be the driving force for even better metrics. But to have no reporting of metrics leaves us very much in the dark.

An important step in the direction of the reporting, obviously, is NAPLAN. Speaker, you'll be familiar with ATAR, with Queensland becoming the last state to switch to ATAR in 2019. This gives us a unique opportunity, as we've mentioned in recommendation 10, to start to measure gain through the education system while that's possible, and it's predominantly in the core skills. Over time, as we noted in the report, there'll be increased emphasis on identifying soft-skill progression and the ability to measure that in our students—identifying how important that is, going into the next century. We also made important recommendations, 17 and 18, towards better career advice. It concerns me greatly that the exit polls from various educational institutions vary not by the students that are within them but by the preferences of the institutions very much driving whether someone takes a vocational or a tertiary path. Often we can't find any other explanation for why students are being funnelled in particular directions. We certainly repeat many previous reports that we need to raise the status of vocational education and training, mindful that there have been significant university reforms around funding that have led to inequities and a risk that students are drawn towards the preferential funding arrangements we see in tertiary education.

Last, but not least, in addition to better initial teacher education, recommendation 7 talks about the working conditions of teachers—something that I've been obviously vocal about, unrelated as to my role as chair. We really do find that there are very good grounds for better support for teachers in their work by decluttering their careers, by allowing promotional structures and more opportunities for research—something we do see in the health sector but not necessarily in teaching—and by taking on these lignified historic structures that teachers often work within that may be impeding their ability to engage in high levels of research and more detailed levels of formative assessment of their students. We were encouraged that, at around the same time we were reporting, Gonski 2 reflected many of these recommendations as well.

I recommend the report to every person who is passionate about education. I thank the deputy chair and the entire committee for their enormous support in preparing this document. I'm delighted that there was almost universal agreement within the committee on the content of this report. I thank the secretariat as well.

Ms BUTLER (Griffith) (09:55): by leave—This Standing Committee on Employment, Education and Training report is important because it focuses on how to best prepare young people as they transition out of school and towards work, whether that be directly into the workforce or into postsecondary education. As the chair has said, this inquiry covered a significant amount of ground. I can't do that justice in making this brief statement today, but I do want to touch on a few issues that I think are really important in understanding where the committee was coming from in this report, the submissions that were made to us and the general views that we heard.

It is very important when you consider people's preparedness for the workplace to think about the quality of teaching and schooling as they were being prepared. That means looking at a number of things. Of course, it means looking at funding, as the chair has said, but we were very interested in what might be done to make sure that teachers could, one, continue to improve the quality of their skills as they practise their profession and, two, be given the freedom to actually practise their profession. One recommendation we made that I want to mention is that the government look at what can be done to free up teachers to teach. They're doing a lot of non-teaching work as teachers—work that might be better described as social work or youth work. We need a situation in Australia where teachers are free to teach, to be educators. That, of course, means continuing to update their knowledge and skills. In a profession you don't finish your formal education and have your skills set in stone forever. Of course, in all the professions we do see continuing professional development. In teaching the workload and pressures are such within teaching hours that often teachers find it quite difficult to just have the capacity, time and ability to undertake ongoing professional development in an organised way. So one of the recommendations we made was that the government look at providing more non-teaching support for kids in school, whether that be social work, youth work or others forms of support, to allow teachers to be given that time and opportunity to teach and to engage in continuing professional development.

I also want to mention the importance of raising the status of the profession of teaching. It's something the chair has spoken about as well. It is important that we continue to raise the status of teaching as a profession. There can't be really too many more important professions than that of teacher when you think about the fact that we are relying on teachers really—and, of course, parents as the child's first and most important teachers—to make sure that future generations are able to be not just wonderful workers with great skills and knowledge but also very good citizens and participants in our democracy. It is an incredibly important job, and the more that we can do to raise the status of the profession of teaching the better. That's certainly mentioned in this report, including, as the chair said, in relation to the question of remuneration for teachers, which, of course, remains a significant marker of the esteem in which the profession is held by the community, the Commonwealth and state governments as well.

I also want to mention very briefly an issue that the committee touched on but felt were not in a position to really do justice to. That's the question: how do we make sure that there is adequate support for students with a disability and for students who are themselves carers for people with a disability as they transition from education into postsecondary education or into work? There are some recommendations in relation to students with a disability and in relation to students who themselves are carers, but we also acknowledged in the report that we did receive significant evidence and submissions in respect of these very complex issues and that it's a matter that would benefit from further investigation and inquiry.

The other couple of things I wanted to just briefly mention in respect of this report go to a couple of other important cohorts. One is First Nations children, or Indigenous children. We have a situation where the outcomes are not as they should be for kids from Aboriginal backgrounds or from Torres Strait Islander backgrounds. The committee made some recommendations in respect of improving support and outcomes for those kids. Similarly, for children from cultural and linguistically diverse backgrounds, we've made some recommendations as to what might be able to be done to improve their ability to transition out of education and into postsecondary education or work.

The only other thing I wanted to briefly mention is the importance of work-integrated learning in schools. It's a topic that, as you know, the previous Chief Scientist has had a lot to say about, and the current Chief Scientist as well. We are very interested in what can be done to make sure that work experience continues and also, as the chair said, to make sure that there is good career advice. It was a consistent theme throughout the inquiry that career advisory services in schools need improvement. I hope that the government takes that issue on board very seriously so that kids and their parents can be given some confidence in making the decisions that will affect their future.

So I commend the report to the House. I thank the chair for his collaborative approach to this inquiry. The chair and I were able to engage in very constructive conversations and to incorporate each other's views into this report, so I thank the chair, and, of course, I thank all of the members of the committee, all of the submitters, all of the people who gave evidence and all of the staff who assisted.

Mr STEPHEN JONES (Whitlam) (10:02): Labor does not oppose the Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017. However, the circumstances which gave rise to it coming before the parliament do require further scrutiny.

I would say by way of commencement that there is something very ominous about the fact that a bill which is about communications legislation, which is about providing a fund to assist regional and small publishers, which has the title Regional and Small Publishers Innovation Fund and which is brought into this House by the government cannot attract a single member from the government to speak in favour of it. Not one single government member, apart from the minister who introduced this bill in the House, has thought that this bill was important enough for them to come into the parliament and speak in favour of it. Perhaps what I'll go through, which explains some of the circumstances which brought this bill before the House, explains why there is not one government MP, and particularly not one government MP from a regional electorate, who's willing to speak in favour of the establishment of a Regional and Small Publishers Innovation Fund.

The context is everything. In October last year, the government was determined to remove the two out-of-three rule, which prohibited a person owning all three licences—television, radio and newspaper—in a single radio broadcasting area or in a single market. Labor opposed this proposition. The government had been pushing it for many years. The industry, particularly the television industry, had been advocating very strenuously in favour of it. Labor opposed it on public interest grounds. Quite simply, we were concerned that giving three green lights to media companies to merge would lead to fewer voices, less diversity and certainly fewer jobs in the television broadcasting industry, in the print publishing industry and in radio broadcasting. In fact, if, as many tried to argue, these mergers were going to create more jobs, it would be the first time in the history of the industry that two companies merging into one actually created more jobs. We know that this has never occurred.

The government was determined to do it, but they did not have the numbers. They didn't have the numbers to get the legislation through the Senate. So what we saw over the course of several months were more deals being done than at a blackjack table at Star Casino on a Saturday night. There was One Nation, that was willing to dust off its culture wars against the ABC—and there are always many members in the coalition parties who are willing to jump in on this one—and the result of that was the competitive neutrality review, which is nothing more than an attempt to continue the culture wars against the ABC. Why, I do not know, because if you cripple the ABC, you'll cripple the capacity of regional storytelling in this country. There is not a publisher or broadcaster in the country that has a greater commitment to rural and regional reporting than the ABC. But that is the wisdom of One Nation, and many of those opposite.

Of course, there were plans to give special tax exemptions. They were floated and sunk almost as quickly as they were raised. But then there was the Nick Xenophon Team, once a member of the other place, spectacularly imploding after the recent South Australian elections. They managed to strike a deal with the government which enabled the last bulwark against the merger of these large television entities with radio and print entities being removed. The deal that they did concluded in a fund being established, which is now the subject of this legislation, with some $50 million worth of funds to be set aside—and I'll go to the details of this in a moment—together with $8 million being set aside to create 200 short-term cadetships and another $2.4 million over three years to facilitate the establishment of 60 regional journalism scholarships.

Now, of course, Labor supports small publishers; of course, Labor supports more regional journalists; and, of course, Labor supports initiatives which will see more cadets entering the industry. But we are not convinced about the measures that are a part of what many are calling—and I happen to agree—a dirty deal with the Nick Xenophon Team to enable the largest media deregulation initiative to pass through this parliament in decades to occur. We do not think they were worth the price.

There's another important point about the context of the bills before the House, and that goes to what can only be described as the collapse of the traditional business model that has supported what we now refer to as 'traditional' media and the traditional media outlets in this country—and, in fact, right around the world. The first onset of the collapse of this business model occurred with the print media. Print media has operated in this country for close to 200 years under a pretty unsophisticated business model. You bolt a series of news stories onto the back of a big book of advertising and you sell that to your consumers. You would remember the times, Madam Deputy Speaker Claydon: on a Saturday there would be three thuds on your front lawn, which were the Saturday edition of The Sydney Morning Herald being delivered. Two of those thuds were classified advertising. It now arrives with more of a pat than a thud, in one roll. The reason for that is the collapse of the classified advertising business as it once was. That has come through online classifieds. Quite frankly, most of the print media either didn't see this happening or were not nimble enough in their response to it.

Of course, TV was second. What we are seeing is a drift of eyeballs from big screens to small screens. Quite simply, people's viewing habits are changing. It is now more the case that, if you are under the age of 20, it's more likely that you are going to be doing your media consumption on an iPhone, an iPad or an Android device than on the big box in the corner of your lounge room. And with eyeballs goes the advertising. Of course, this didn't happen alone. You saw a recycling or a pinching of content by other online players, whether that be Facebook, YouTube, Google, Twitter and others, but this has put enormous pressure on the traditional revenues of the traditional TV businesses in this country.

Radio, I have to say, which many were predicting was going to collapse, has seen itself being much more resilient. Perhaps that's because it's always on. You're able to listen to the radio while doing several other things, and it has been more local and more nimble, which has enabled it to persevere and succeed when many of its traditional rivals were collapsing.

Of course, we have seen jobs being lost and journalists' jobs being lost in great numbers. Over the last five years alone, over 3,000 full-time, paid journalist jobs have been lost from the industry. The Media, Entertainment and Arts Alliance estimates that nearly one-quarter of all working journalists have lost their jobs, as we've seen these changes—technological, economic and business model changes—work their way through the industry.

So, these three things—the determination of the government to agree to remove the protections against further media mergers within the TV, radio and print media market; the fact that they didn't have the numbers, and they had to do a dirty deal with the Nick Xenophon Team and the crossbenchers; and the fact that we are seeing what many describe as a collapse in the traditional business models which have supported media in this country—are the context which brings this bill before the House.

The bill itself, as I've described in outline form, will establish a regional and small business innovation fund. It's part of a package, which also includes the establishment of a one-off funding arrangement for the establishment of cadets, and a one-off funding arrangement which will support scholarships. The fund will enable three tranches of grants, of $16.7 million each, over the period from 2018-19 to 2019-20 and 2020-21. The grants will be administered at arms-length from government. However, government has set the rules about who is and who isn't eligible for this, and the other aspects of the deal that was done. The Australian Communications and Media Authority, ACMA, will be the independent statutory body which administers the distribution of the grants. They'll be contestable. Presumably the instruments which will be necessary to advertise the commencement of this fund will be made public soon after the passage of these bills through both houses.

We support the legislation. We are sceptical about its origins, and we are also sceptical about its capacity to make a demonstrable difference to the crisis which media is facing around the country. You would have thought, at a time where media outlets around the country, many of whom, particularly in the print media, are closing down or consolidating or reducing staff within newsrooms, that the government would take a view about the one media outlet that it, in and of itself, funds: that it would be doing more to support that media outlet to ensure that that media outlet, particularly in rural and regional Australia, was able to continue to tell stories about rural and regional Australia, and to ensure that those people are represented in the national narrative.

But, sadly, in the budget that was introduced not three weeks ago we see the very opposite of that. We see the government taking up the cudgels in the cultural war against the ABC, with $84 million worth of cuts to the ABC's triennial funding. This is nothing more than the government attacking the institution because it disagrees with some of the stories that the ABC runs. Well, I disagree with many of the stories that the ABC runs as well. I don't like it when I'm interviewed by the ABC and they give me a hard time and they put the blowtorch on the soles of my feet and take me to places that I may not necessarily like. But I understand that that's their job. I understand it is the job of a fiercely independent national broadcaster, with first-class journalists, to put the people who come to this place to the test, and people who are in government or aspire to form government to the test, to ensure that the Fourth Estate actually does its job—that it does its job of keeping the government and the elected representatives to account. For a government to punish a national broadcaster because it disagrees with its editorial content is nothing more than antidemocratic.

On budget night the cheers were audible throughout the chamber when the Treasurer announced his $84 million worth of budget cuts to the ABC. But I guarantee you this: if there are job cuts from the ABC in those very same members' electorates, they will be the first to complain. You don't have to take my word for it. There's a by-election going on in Braddon in Tasmania as we speak. And what was the first commitment that the Liberal candidate in that by-election, one Brett Whiteley—not the oil painter—gave to his putative voters? It was, 'My government's $84 million worth of budget cuts will not fall on the ABC's studio in Burnie.' There is a brave tiger; there is somebody out there championing the government's budget. Yes, 'Let those budget cuts fall on every other electorate in the country, but not on mine.' (Time expired)

Mr PERRETT (Moreton—Opposition Whip) (10:17): I thank the member for Whitlam for his great contribution and for the great work that he does in this area. Like the member for Whitlam, I rise to put Labor's position with regard to the Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017 on the record today in light of the many deals that were done—in fact, so many dirty deals, I think the preceding speaker, the member for Whitlam, mentioned—by this coalition government. Just this week, we saw Senator Hanson's secret deal to secure her support to give $80 billion to big business, multinationals and the big banks. I think we've got the fourth iteration of that deal at the moment. They do say that sausages are like sausage making: it's horrible when you actually see the process. But when we examine the input of the 'supreme president for life', Senator Hanson, the details are truly 'offal'.

However, this particular deal, the Regional and Small Publishers Innovation Fund, exists only because of a shoddy, last-minute backroom deal between the Turnbull LNP government and the Nick Xenophon political party, who now refer to themselves as Centre Alliance—an optimistic moniker at best. I don't think they're yet to earn either of those titles. So this fund is the result of a heavily compromised trade-off. The fund didn't come about because the Turnbull LNP government is genuinely committed to promoting public interest journalism—far from it. It came about to grease the path for the government's repeal of the two-out-of-three media control rule.

Labor will not oppose this bill, but we maintain that it does precious little to fill the void left by the repeal of the two-out-of-three cross-media control rule. This rule acted as a public interest safeguard by stopping any one voice in the media landscape from becoming too dominant. It promoted diversity and competition between different voices. A 'bulwalk against authoritarianism' is how I've always seen this media rule operating. The two-our-of-three rule ensured that no individual or company controlled more than two out of three regulated media platforms—commercial television, commercial radio or associated newspapers—in the same licence area. In essence, it was to preserve a diversity of opinion on our airwaves, and it stimulated alternative viewpoints.

Over the six months that have passed since the Turnbull government abolished the two-out-of-three cross-media control rule, cross-media merges have begun as a result. How many have actually come through? Zero. The milestone makes a mockery of communication minister Senator Fifield's alarmist urgings that parliament must act on media reforms to protect Australian jobs and to give industry a fighting chance and of his dire predictions of the failure of Australian media organisations. Senator Fifield even went so far as to suggest that Labor's opposition to the repeal was crippling the industry and limiting the options for organisations like Channel Ten. How wrong he was. Just on a sidenote, I commend Channel Ten for their stance on axing the TV show Roseanne in light of her offensive comments. They were out of the blocks quickly. Well done, Channel Ten.

Back to this legislation: development since that time clearly demonstrates just how captured by the top end of the sector the Turnbull government was, and how out of touch it clearly remains. The CBS acquisition of Channel Ten occurred thanks to the two-out-of-three rule. So, as it was actually working as designed and benefitting the sector, the geniuses in the coalition decided that they'd best get rid of the rule. So, well done! It is so dangerous without it. The repeal of this rule is a threat to informed democratic debate, as it allows a single person or organisation to control how local news is reported. This potentially gives one person a lot of power in a market where big media players are already wielding a great deal of power.

The Australian media landscape is one of the most concentrated in the world, with an extremely small number of firms producing content that reaches the vast majority of Australians. According to market research from IBISWorld from June 2016, the industry's four largest players were estimated to have accounted for over 90 per cent of industry revenue since 2015-16. These players included News Corp Australia, Fairfax Media, Seven West Media and APN News & Media. Obviously, we all know the role of our national broadcaster, the long-trusted, ever-professional ABC. In the budget, the ABC is suffering yet another cut of $84 million. That's on top of the $254 million cut in that horror 2014 budget, after the then Liberal Leader of the Opposition had said before the election that there will be no cuts to the ABC. As anyone who understands the ABC would know, there was no fat to be cut in 2014. But, after those two big cuts of $84 million and $254 million, we're not slicing off any fat; we're now slicing off muscle and making our national broadcaster less affective.

Anyway, back to this fund: this one-off fund will dispense $50 million of taxpayer funds over three years before it runs out. What then? The Media, Entertainment and Arts Alliance, or MEAA, has expressed concern that these short-term programs, without adequate follow-up, may serve only to temporarily boost the numbers and scope of journalism and journalists. MEAA argues that the benefits of the program will be exhausted shortly after the 2020-21 financial year, unless consideration is given to sustaining these programs during their rollout.

Labor believes it is imperative that taxpayer support for journalism be ideology-free. However, there is considerable scope for government to influence the way the funding is distributed. The government already appears to be influencing the recipients of this funding through the inclusion of the foreign parent company veto. The foreign parent company veto was likely included with the aim of preventing The GuardianAustraliafrom receiving funding from this grant, given they have selectively waived the veto for other media groups. TheGuardian is a little progressive, but any progressive outfit that provides high-quality journalism on the digital platforms should be cultivated, surely.

ACMA will also have considerable leeway to decide the purposes for which funding will be allocated. The legislation does not require that an advisory committee be set up to advise ACMA. This is all subject to the minister's discretion. The whims and whimsies of the minister are supreme, as there are no checks and balances on his decision. How is the foreign parent company veto being used? A range of publishers like The Guardian, BuzzFeed and The New Daily have been excluded from the fund due to having a foreign parent company. Publishers affiliated with a superannuation fund are also excluded from accessing the fund. So, while The Guardian Australia has a foreign parent company, its local business, supporting Australian journalism and publishing jobs, depends on maintaining a viable Australian revenue model. The Guardian Australia has created 80 jobs for Australians over the last few years. The Guardian argues that is every dollar of revenue it earns in Australia is invested in Australian journalism, given they have no shareholders or proprietors to pay. If the package were really intended to boost Australian journalism, why was The Guardian excluded? The Guardian argues that this legislation disadvantages a fast-growing source of Australian news and jobs for Australian journalists, when the whole purpose of the fund is to encourage both these things—a pretty fair point, if you ask me.

How does the Turnbull government justify giving $30 million to Fox Sports but cutting Australian content creators like The Guardian Australia out of the fund? Let's just think: both are Australian companies with a foreign based parent company. It sounds a bit fishy to me; in fact it stinks. They say that a fish rots from the head first. Fox Sports, owned by News Corporation, another company with a foreign parent, was granted $30 million in the 2017 federal budget with the vague purpose of covering women's sports and niche sports. This grant was dodgy. It was provided without conditions or any transparent process. I love sport. I love netball. I love all the sorts of sports they're talking about, but last time I checked we had a public broadcaster or two funded to perform exactly this role. Don't get me wrong: broadcasting and supporting women's sport is a good use of money. Young girls can't be what they can't see—perhaps an important message for all the people on that side of the House that talk about quotas! If that were the endeavour, surely our trusted public broadcasters ABC or SBS would have been better placed to host that content. $30 million given to them to bring in those niche sports and transmit them would have gone a long way with people that know how to do it.

Like The Guardian and other outlets, publicly owned media are ineligible for funding under this measure despite the government funding cuts they have been subjected to in recent years. As I said, the budget handed down by Treasurer Morrison and Prime Minister Turnbull cuts $84 million from the ABC on top of the $254 million the LNP have already cut since the 2013 election. The sneaky way the government cut funding from the ABC, hidden in the fine print of the budget papers, was to freeze the indexation of ABC's operational funding, amounting to a cut of $83.7 million. When the ABC's core content costs are rising faster than inflation, that is an cut in absolute terms. You can't argue otherwise. They articulated that it's to ensure the ABC continues to find back-office efficiencies. I think One Nation is pursuing the fact that they might drink coffee sometimes on budget mornings out in front of Parliament House, but I'm sure there's not $83.7 million worth of coffee being consumed at the ABC. The government should know that they can't squeeze blood from a stone.

The ABC itself says it's out of fat to cut, and that it's cutting into muscle. I fear the ABC will suffer most where? In the bush. The old Nationals are signing off on cutting bush broadcasting services. Estimates last week heard that the ABC have shed 1,012 jobs since 2014, cut under the watch of Prime Minister Turnbull and Prime Minister Abbott. They know full well that this cut they are inflicting on the ABC means cuts to jobs, content and services at the ABC, particularly in the bush. The Liberals and Nationals complain that the ABC isn't doing enough news coverage, yet these hypocritical politicians have left a $43 million hole in funding for ABC news and current affairs. The ABC said the impact of the cuts cannot be absorbed by efficiency measures alone, because the ABC has already achieved significant productivity gains in response to past budget cuts.

The Liberal Party claims their budget is about investing to create more jobs every day and to support essential services, yet these cuts to the ABC will inevitably lead to job losses and a reduction in the quality or breadth of service, especially damaging for those in the bush, the rural and remote parts of Australia that are too sparsely populated to sustain commercial media. Redundancies at the ABC are on the horizon as a result of the government's cuts to the ABC in the recent budget, and the reduction in ABC services that Australians value will be the consequence of the budget delivered by the Treasurer a few weeks ago. We'll have less news and fewer jobs as a result of these attacks on the ABC.

Labor will fight these fresh cuts, just as we did last year. In government, Labor gave additional funding to set up the ABC children's channel, ABC News 24 and ABC online. Now, how's that for promoting local public interest journalism? Publicly funded broadcasters like the ABC and SBS provide an important source of public interest journalism, which is critical for a robust democracy. It is why the top floor of this building, on the Senate side, is devoted to the fourth estate. I don't think any other parliament in the world has the fourth estate inside the building, sitting alongside the lawmakers, because they serve such a crucial role. They are critical. However, government funding cuts mean the capacity of publicly funded broadcasters to produce high-quality investigative content has been smashed. The Indigenous Remote Communications Association objects to the exclusion of Indigenous licenced community broadcasters from eligibility for funding from the Regional and Small Publishers Innovation Fund. The IRCA argued that Aboriginal and Torres Strait Islander audiences utilised broadcasting services more than print or online services for their news. Why? It's because many of them are in rural and remote areas.

How is it fair that large companies like News Corp can the $10.4 million set aside for scholarships and cadetships? Why are taxpayers' funds being used for cadetship and scholarship programs at large commercial media organisations? I'm a strong believer in training and skills development, but I have to ask: what's the point of cadetship and scholarship programs in a declining market for journalism jobs? Does the industry need to train more journalists when there are not enough jobs for existing journalists? These are just a couple of questions when we look at the repeal of two-out-of-three rule and what the impacts are. Job prospects for Australian journalists are growing fewer by the day. At least 2,500 journalism jobs have disappeared in Australia over the past six years, according to MEAA. Wouldn't funds be better spent creating long-term employment opportunities in journalism? Instead, the government has slashed $84 million in funding to the ABC.

Another question is: do regional media companies have the reliable and affordable broadband they need to enable them to grow their businesses and create more jobs in the digital age? What also would be of great help in rural and regional areas would be lobbying for decent broadband. Unfortunately, the deal with Centre Alliance was not the only dirty deal done by this government to secure support for its broadcasting bill last year. Even worse than their deal with Centre Alliance was their deal with One Nation to change the ABC's charter. It is a deal clearly that is aimed at undermining the integrity of the ABC. As one of the One Nation senators has admitted publicly, this deal is absolutely a platform for fringe groups such as anti-vaxxers, flat-earthers and even more dangerous right-wing groups.

Mr KEENAN (Stirling—Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation) (10:32): I thank colleagues who have contributed to the debate on the Communications Legislation Amendment (Regional and Small Publishers Innovation Fund) Bill 2017. The bill will implement an important component of the government's media reform package. The government is committed to assisting small and regional publishers through a time when the media landscape is in a state of flux. Traditional revenue models have been fractured, and media organisations must adapt to move with their audiences. For smaller and regional publications, this is even more challenging. In this disrupted environment, access to locally relevant, factual journalism remains vital to develop and maintain strong communities. The government's Regional and Small Publishers Innovation Fund recognises this need. The $50 million will provide grants over three years to eligible media organisations for projects that enable new business models and practices. By doing so the government will assist these publishers to put themselves on a sustainable commercial footing.

I note that industry is supportive of this bill and that submissions received during the inquiry recognised the merit of developing measures to support Australian civic journalism as well as the particular need to support civic journalism in regional areas. The bill will establish the legislative framework to establish the operation of the Regional and Small Publishers Innovation Fund. The government looks forward to proceeding with a call for applications so that ACMA can begin assessing applications and distributing these much-needed funds to regional and small publishers. I therefore commend the bill to the chamber.

Question agreed to.

Bill read a second time.

Mr KEENAN (Stirling—Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation) (10:34): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr ALBANESE (Grayndler) (10:35): There is no more important job for this parliament than making and maintaining laws relating to the safety of Australians. That's why issues to do with national security, terrorism and law enforcement are taken seriously in this parliament and usually dealt with in a bipartisan way. This is as it should be. Labor takes the same constructive approach when it comes to the critical issue of motor vehicle safety standards in this country. Nearly 1.2 million new cars are sold in this country each year. Sadly, thanks to the very conscious policy and actions of this current government, Australia no longer builds cars. We must rely upon imports.

It is critical that this parliament keeps the standards applying to motor vehicle imports up to date and fit for purpose. This legislation is timely. It is 17 years since the Motor Vehicle Standards Act and its regulations were last reviewed. The package before us seeks to bring the regulatory regime forward and make it more streamlined. Indeed, the government argues these reforms will reduce compliance costs for industry by $68 million. The legislation creates an online register which will provide consumers with an easy way to check that vehicles they are considering buying comply with Australian design standards. Labor has some concerns about the fine detail of the bills, based upon stakeholder feedback, but we will support this package. We believe that the stakeholder concerns, which I will address shortly, should be taken into account in the rules and subsequent technical and administrative arrangements provided by these bills.

The road vehicle safety package will replace the old Motor Vehicle Standards Act, which regulates imported vehicles. It includes five piece of legislation: the Road Vehicle Standards Bill 2018, the Road Vehicle Standards (Consequential and Transitional Provisions) Bill 2018, the Road Vehicle Standards Charges (Imposition—General) Bill 2018, the Road Vehicle Standards Charges (Imposition—Customs) Bill 2018, and the Road Vehicle Standards Charges (Imposition—Excise) Bill 2018. Under existing rules, people demonstrate that a vehicle complies with safety standards using the physical attachment of a compliance plate, but this legislation replaces that system by creating a register of approved vehicles that comply with Australian standards. There'll be two ways for a vehicle to make its way onto this register. The first, known as the type approval pathway, is for new vehicles being imported into this nation for sale. The vast majority of vehicles will enter the list via this route.

The second pathway, known as the concessional pathway, is aimed at a limited range of new and used vehicles which can be granted concessions on a vehicle-by-vehicle basis. This pathway will apply to specialist enthusiast vehicles, classic and vintage vehicles, and vehicles that have a special purpose that could not be fulfilled if they had to comply with Australian standards. This latter category might apply, for example, to emergency vehicles and cranes. The legislation creates a specialist and enthusiasts vehicles register to ensure that motor enthusiasts, seeking to import unusual vehicles, can do so without breaching Australian vehicle standards. That is a sensible way forward.

There are, indeed, motor enthusiasts who do import vehicles. Some, such as Lindsay Fox, have imported a large number of quite unique vehicles into Australia, not for driving but for public display in his museum in Melbourne as part of his contribution to philanthropy. Lindsay Fox is certainly a contributor to the nation, and that is just one of the ways in which he uses his private wealth for public good. Hence, this register will really assist that process in the future.

It establishes Road Vehicle Standard Rules to define vehicles:

… that better capture vehicles that are of a genuine specialist and enthusiast nature through needing to meet one of six criteria:

1. Performance – high-performance vehicles with specifications significantly superior to mainstream vehicles in Australia;

2. Environmental – vehicles that offer environmental performance significantly superior to mainstream vehicles in Australia;

3. Mobility – vehicles manufactured with special features to assist people with a disability;

4. Rarity – vehicles of which only small quantities have been produced;

5. Left-hand drive – vehicles originally manufactured as left-hand-drive, of which right-have – drive versions are not available in any other country; and

6. Campervans and motor homes – vehicles that have been originally manufactured as a campervan or motorhome.

The legislation also includes provisions allowing for the importation of vehicles other than for road use, such as for testing or racing. These vehicles will not be listed on the register. Relevant states and territories will decide whether such vehicles may be driven on the roads within their borders.

The proposed changes will serve the interests of consumers. Consumers will be able to search the online Register of Approved Vehicles using their vehicle identification number to confirm that vehicles they want to buy comply with these rules. The new legislation will also require manufacturers to introduce a secure identification marking requirement for all new vehicles. This provision is designed to provide a deterrent to vehicle theft and rebirthing. This is a sensible move.

The package also gives the minister for transport the ability to issue a recall notice on any road vehicle or road vehicle component, and lays out the framework for voluntary recalls. This is another important measure. When manufacturers discover faults in motor vehicles, it is critical that there is a process by which they can be recalled quickly if they represent a risk to public safety. There have been some major safety recalls in recent years involving major manufacturers. We need a simple system that allows for efficient handling of such issues. Administration of these new standards will be funded by industry participants on a cost-recovery basis. However, these bills do not outline the amounts to be charged. These will be prescribed in accompanying rules and regulations that will be subject to disallowance by this parliament.

Various industry groups have expressed concern over elements of the package. For example, the legislation allows some vehicles to be imported through a revised Registered Automotive Workshop Scheme which allows for the import of used specialist and enthusiast vehicles. It also creates a new, low-volume scheme which applies to new vehicles where fewer than 100 vehicles are to be imported. The Australian Automobile Aftermarket Association raised concerns about the inclusion of the NLVS under the so-called RAWS scheme. The AAAA argued that, under the existing system, vehicles imported under the new low-volume scheme do not need to be individually inspected. Its concern is that, under the new system, low-volume imports will have to be individually inspected and that this will add cost to the industry. The Registered Automotive Workshop Scheme Association suggested the new arrangements would therefore disadvantage small workshops and benefit big manufacturers. Concerns were also expressed regarding the effect of these legislation on companies that import vehicles from overseas and then convert them into campervans or motorhomes. Specifically, this legislation closes a loophole in the existing system that allowed some registered automotive workshops to import thousands of cars which they did not convert but simply on-sold at a profit. This legislation's closure of that loophole has created concerns about the prospects of companies that do legitimately convert vehicles into campervans and motorhomes. Having considered these concerns, Labor has formed the view that the legislation as it stands serves the public interest, on balance. However, we do take these industry concerns seriously and we undertake to monitor the operation of the legislation and the operations of accompanying rules and subsequent technical and administrative arrangements, and if any adjustment is required then Labor will support that.

In conclusion, can I say that the administration of vehicle standards is a complex task. We do need a system that is simple but also allows people who want to import unusual and specialist vehicles an opportunity to do so. This legislation seeks to find that balance, and it also includes some important improvements in the cause of public safety and security, and I commend the package of legislation to the House.

Mr CRAIG KELLY (Hughes) (10:46): I am pleased to rise to speak this morning on the Road Vehicle Standards Bill 2018 and related bills. I'm a bit disappointed, having come in specially to listen to the member for Grayndler, because I thought that this bill was a wonderful opportunity for those in the Labor Party to set out how they were going to get a 45 per cent reduction in the CO2 equivalent emissions from the transport sector—because that is their policy. They say the targets that we have, from Paris, of reducing CO2 emissions by 26 to 28 per cent from 2005, are not enough. The Labor Party's policy is to up those—to target a 45 per cent reduction. If they are going to have that policy, they need to come into this chamber and set out, in chapter and verse, not only what they plan for the electricity sector—and we know the plan is to copy the failed experiment of South Australia—but also exactly what their plans are to reduce the CO2 emissions in the transport sector by 45 per cent. How are they going do that? Are they going to put a new tax on petrol? Are they going to ban a whole lot of types of motor vehicles from being imported into this country? Are they going to try and take cars off people? Are they going to increase road tolls? Those in the Labor Party need to explain to the Australian public how they are going to achieve a 45 per cent reduction in the transport sector.

So often the debate about reduction in emissions of CO2 is around the electricity sector. We talk about a renewable energy target, but it is effectively a renewable electricity target. The electricity sector makes up only about a third of our CO2 emissions; our transport sector makes up about 15 per cent. So, yes, the transport sector is not as big as the electricity sector; it's about half. But there has been no debate whatsoever in this House, when it comes to the road vehicle standards which this bill relates to, on what the Labor Party are going to do to make those emissions reductions. Here we had a perfect opportunity, and yet we had nothing at all from the shadow minister. I would hope that, before the next election is called, the members of the Labor Party will set out in exact detail what their plans are for the transport sector and for motor vehicles, and how they plan to get that 45 per cent reduction in emissions. Otherwise, they are simply running a con on Australian consumers.

Last year, 2017, 1.2 million vehicles entered the Australian market—passenger vehicles; heavy, medium and light commercial vehicles; motorcycles; trailers. Most of those complied with Australian design rules. When we ask ourselves why government needs to regulate in this space and why we can't just leave it to the market, we have to be able to answer that question very clearly. The reason is: for a market to work, consumers need information. When it comes to buying a road vehicle, there are many features that you need to know when you are making that purchase decision that are not transparent or that you can't see. That is why we need to set road designs for vehicles.

There were also some interesting figures that I noted from the minister's speech. He noted that, when the Motor Vehicle Standards Amendment Act 1989 was first introduced—it was last reviewed 17 years ago—there were 9.4 million vehicles registered on the road and we had 2,500 Australians killed in road accidents. Yes, we've been very successful in getting that down. Even now, we've got almost double the number of vehicles on the roads—almost 19 million—compared to only a little over nine million in 1989. We've been able to bring that road toll down from 2,500 to 1,300—1,300 Australians died on our roads last year. If we put that in any other context, we would need to do more. We need to make sure that the policies of this government are to do everything that we possibly can, to get every dollar that we humanly can into improving the quality of our roads, and to ensure that our design standards give us the safest cars. When it comes to a clash over whether we should go down some track of trying to achieve a 45 per cent reduction in our CO2 emissions from motor vehicles or whether we should try to make our motor vehicles and our roads safer, when we have over a thousand Australians that die every year on our roads, that is a no-brainer. It's not only the road deaths that we have. Road trauma is estimated to cost our community $27 billion per annum, yet the terrible human impact is something you cannot put an economic number or a dollar value on. So I would hope that, when we sit down and debate what we are going to do in the space of road transportation, we give absolute first priority to making our roads safer, to upgrading them and to making vehicles safer first. That should be the priority of this government.

With that, I commend the minister for his good work on this bill. It makes some important changes which are needed, as we have seen substantial improvements and upgrades in technology, and we need to all work together in this House to make our roads and to make our vehicles safer. I commend this bill to the House.

Mr STEPHEN JONES (Whitlam) (10:52): It's a pleasure to be speaking on the Road Vehicle Standards Bill 2018 and related bills. I've got to say I thought this bill was going to be non-controversial, and then I walked in on the member for Hughes's contribution. He always finds the capacity to introduce one of his wars into whatever legislation is before the parliament.

Let's talk about vehicles. The bill before the House is about road vehicle standards and updating our system of national regulation. Of course, a whole bunch of this regulation occurs at the state level. The Commonwealth does have a key area of responsibility as well. In response to some of the comments made by the member for Hughes, we have one of the most open vehicle markets in the world. You can buy more brands of automobile in Australia than in just about any other advanced country in the world. In fact, it was one of the things that many of the automotive manufacturers who have now left the country and closed down their operations under this mob here used to complain about: our market is so open that it is difficult, in such a small market, for them to compete with imported vehicles, because you're able to buy just about every brand that is available in any other advanced country around the world.

This package of bills—there are five of them—is designed to replace the Motor Vehicle Standards Act 1989. It regulates the importation of vehicles into Australia. It's been about 17 years since the legislation was last reviewed. The intent of this regulation is to put in place a more modern and updated framework to ensure that all of our road vehicles and certain road vehicle components provided in Australia meet our safety, antitheft and environmental standards. I think that's something that all Australians would think is a good thing. Nobody wants to buy a lemon. Everyone wants to ensure that there is the minimum legislation necessary that is going to ensure that you have a vehicle that is safe, that is hard to break into and steal, that is easy to trace if it is stolen, and that meets modern environmental standards.

The bills are necessary because a lot of advances have occurred in car manufacturing and technologies over the last two decades. There is also a whole range of new vehicles being imported into the country that weren't even heard of two decades ago—specialty vehicles such as environmental vehicles, mobility vehicles, campervans, cars that are manufactured in only left-hand drive and other sorts of vehicles. In my own electorate there are several car enthusiast groups. Many of them are importing rare vehicles and vintage vehicles from around the world. In fact, one of the best-kept secrets is the best automobile museum in the country—the Motorlife Museum located in West Dapto in my electorate. I encourage all members of this place to take an hour's drive south of Sydney and head to West Dapto and enjoy the Motorlife Museum. It's got some great collections. The Brabham family were very kind in donating a whole bunch of the bequeathed vehicles they had to the Motorlife Museum. In that museum you can find, and can climb all over, some of the first cars that were ever built and distributed in this country.

I turn back to the bills before the House. The existing regime has become cumbersome for businesses and consumers alike. It's why there's bipartisan support for these bills. We understand that it makes good sense for us to update it. It has been adding to the compliance costs for the importers, the wholesalers and the distributors, and, of course, those costs are passed on to consumers. It is estimated that these costs total about $68 million a year. When these bills pass through the House, as I'm certain they will, and through the other place, we'll have a more flexible regulatory regime.

The new road vehicle standards that are part of the legislation replace the physical compliance plates as the marker of the vehicle's suitability for supply in Australia with online publicly searchable databases—the Register of Approved Vehicles and the Specialist and Enthusiast Vehicles Register. The legislative package includes three bills that deal with the funding of the new scheme. It's paid for on a cost-recovery basis by the final importer or the consumer, if the cost is passed on. The actual charges themselves aren't part of the legislation, but they will be in a disallowable instrument and tabled in the other place.

The bills also strengthen the regulatory compliance and enforcement regimes. They introduce a new range of enforcement arrangements, including infringement notices, enforceable undertakings and criminal sanctions. They will aid Australia's road safety regime by giving the minister the power to issue a notice for compulsory recalls of road vehicles and road vehicle components where necessary. We have seen this week alone the existing recall on components—passenger and driver airbags have had to be recalled—so this is something which is of keen interest to consumers in my electorate and I understand right throughout the country.

Given the bills deal with legislation around the sale, importation and regulation of motor vehicles in this country, this is an important opportunity for us to talk about a policy that should be the subject of the legislation that is before the House today. We would invite the government to take up this policy, because it's good policy which will save consumers. It's about the way that service contracts and service arrangements exist at the moment. The modern car is incredibly sophisticated, with a lot of computerised components, and the datasets that are required for maintenance and repair on these vehicles have not been shared with all of the independent mechanics who would otherwise have the skills and ability to maintain those vehicles. Labor's policy, which will require car manufacturers to share the technical information with independent mechanics on a commercially fair and reasonable term, will overcome this issue. If we were to have legislation before the House which dealt with motor vehicle safety and standards, it should deal with these sorts of issues as well. A fully rounded package which is dealing with road vehicle standards should also enable us to deal with these sorts of issues. It will save money for the consumer. And, of course, that is one of the stated aims of this bill—to save money for consumers.

So, with those points, we simply say that the legislation is a lot more bipartisan than the member for Hughes led the House to believe. We think it's common sense. It enjoys the support of the House. If the government were to get on board with Labor's announcements to ensure that the datasets and the technical information which are attached to the vehicles being regulated by this legislation, consumers would save even more money than they would under the legislation which we are currently debating. With these comments, I commend the legislation to the House.

Mr FLETCHER (Bradfield—Minister for Urban Infrastructure and Cities) (11:02): I thank all members for their contributions to this debate on the Road Vehicle Standards Bill 2018 and its four companion bills. The regulation of road vehicles is an important responsibility of the Australian government. In 2017, over 1.2 million vehicles entered the Australian market for the first time, including passenger vehicles; heavy, medium and light commercial vehicles; motorcycles; and trailers. By the end of this year, there will be almost 19 million vehicles registered for use on Australian roads.

What cars and other motor vehicles look like, how they operate and the technology they use is changing very quickly, and the way we regulate vehicles needs to allow for and adapt to this change. We are already seeing these changes in the global market, and increasingly in the Australian market, through the growing presence of electric vehicles, semiautonomous vehicles and even fully autonomous vehicles. The Australian community naturally expects that, in the face of such rapid change, these vehicles will be safe, secure and have greater fuel efficiency, with fewer harmful emissions.

The Road Vehicle Standards Bill 2018 and the four companion bills—the Road Vehicle Standards (Consequential and Transitional Provisions) Bill 2018, the Road Vehicle Standards Charges (Imposition—General) Bill 2018, the Road Vehicle Standards Charges (Imposition—Customs) Bill 2018 and the Road Vehicle Standards Charges (Imposition—Excise) Bill 2018—will provide a modern framework for regulating road vehicles for the future. These bills deliver that modern and flexible framework, which is vital for ensuring that road vehicles delivered or used in transport in Australia for the first time continue to meet community expectations on such matters as safety, as environmental protection, and other matters, such as anti-theft measures and energy conservation.

The reforms contained in these bills will save industry an estimated $20 million in regulatory costs. The government has applied five key principles in developing this legislative package, which is designed to improve the regulation of road vehicle standards for the benefit of the Australian community. The first principle is flexibility and responsiveness, given how fast the motor vehicle is already changing and how fast it is expected to continue to change. The second principle is clarity, reflecting modern legal drafting standards to strengthen the regulatory framework whilst improving transparency and decision-making. The third principle is the choice of road vehicles for Australians. The fourth principle is the use of modern compliance and enforcement powers to improve safety and emissions outcomes. The fifth principle is the continued harmonisation of Australian standards with international standards and the long-standing policy of Australian governments to reduce the regulatory impost on Australian industry and consumers.

The first major change embodied in these bills is to establish the Register of Approved Vehicles as the record of a vehicle being approved for first supply to the Australian market. For the consumer, the register will be an online, publicly searchable database, a new resource that will provide easily accessible information—the birth certificate, if you will, for a vehicle that a consumer is interested in purchasing. From a regulatory perspective, the register will provide an accurate date stamp for when a vehicle's conformance to our national standards must be declared. This approach will save money for the manufacturer, and thus the consumer, by removing the need for a physical compliance plate. The saving is estimated at around $14 million a year.

Road vehicle safety is the paramount consideration in developing these bills. To advance safety now and in the future, the Road Vehicle Standards Bill has been drafted in a way that allows it to maintain flexibility to cater for emerging and future technologies in safety standards, something that has proved to be a significant challenge under the current regulatory framework. Through the powers contained in the Regulatory Powers (Standard Provisions) Act 2014, the bill establishes a comprehensive toolkit to monitor and enforce compliance with vehicle standards.

Additionally, the bill gives the minister responsible for vehicle standards the ability to issue compulsory recalls of all road vehicles. These recall provisions, modelled on those in the Australian Consumer Law, have been welcomed by the motoring and general community. The government has consulted extensively with stakeholders on these bills for the past five years. This consultation has revealed broad support for the bills. While a number of issues have been raised, they are being addressed in the rules that will be made under this legislation or in the technical and administrative details. Small automotive businesses in particular have drawn the government's attention to some instances where there is a genuine need for consumer access to specialist and enthusiast vehicles. The government intends to respond to these instances through amending the proposed rules, the rules to be made under the legislation, so as to allow suitable used vehicles to be imported for the purpose of genuinely converting that vehicle to a campervan or motorhome; the government intends to amend the rules to adjust the power-to-weight performance threshold for specialist and enthusiast vehicles; and the government intends to amend the rules to allow for the continued importation of enthusiast left-hand-drive heavy vehicles. Further, the government has commenced work with the heavy vehicle industry to arrive at expanded circumstances in which a truck can be modified before being provided to the market for specific uses. Similarly, we are refining the arrangements that apply to suspension upgrades for light commercial vehicles. These ongoing detailed improvements are technical in nature and are supported by provisions contained in these bills.

For Australian manufacturers and importers of full-volume vehicles, these bills mean reduced red tape and streamlined certification processes. For Australian motoring enthusiasts, these bills mean an increased range of specialist and enthusiast vehicles will become available, and the costs of regulatory compliance will be reduced. For the Australian community, these bills mean a better regulatory system, capable of responding to the challenges of the future. They also mean improved compliance with safety and environmental standards. Ultimately, what these bills will mean is safer, cleaner and more secure vehicles for Australia.

The Senate Standing Committee for the Scrutiny of Bills has considered this package of bills. The committee recommended that further information be included in the explanatory memoranda to the bills. As such, I present these addenda to the explanatory memoranda to the Clerk. I thank the Senate Standing Committee for the Scrutiny of Bills for its consideration of this package of bills, and I commend these bills to the House.

Question agreed to.

Bill read a second time.

Mr FLETCHER (Bradfield—Minister for Urban Infrastructure and Cities) (11:11): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr FLETCHER (Bradfield—Minister for Urban Infrastructure and Cities) (11:12): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr FLETCHER (Bradfield—Minister for Urban Infrastructure and Cities) (11:13): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr FLETCHER (Bradfield—Minister for Urban Infrastructure and Cities) (11:14): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr FLETCHER (Bradfield—Minister for Urban Infrastructure and Cities) (11:16): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr ZAPPIA (Makin) (11:17): This legislation arises because of the Turnbull government's incompetence and lack of commitment to the Murray-Darling Basin water plan. Coalition members have never been enthusiastic supporters of the Murray-Darling Basin Plan, and it was only ever achieved because of the leadership and hard work of the member for Watson in 2012. It has always been my concern that a future coalition government would gradually scale back the plan, or drag out the implementation of it, particularly the environmental returns and the additional 450 gigalitres of water that was to be allocated at the request of South Australia. My concerns have proven to be justified. That was particularly the case when former Leader of The Nationals and member for New England was given ministerial responsibility for water and for the Murray-Darling Basin Plan. He had no interest in delivering the Basin Plan, and that became abundantly clear from the outset.

South Australian Labor MPs and senators flagged our concerns at the time that the member for New England was appointed the relevant minister. We anticipated that he would not support the plan as it was proposed by the member for Watson when it was implemented. South Australians never expected a fair Murray-Darling Basin deal from the coalition government, but nor did South Australians expect the level of mismanagement and incompetence that has brought us to this legislation. The only reason this legislation is before parliament is the Turnbull government's incompetence, and, quite frankly, the Turnbull government's indifference to the plan.

When the Four Corners program alleged water theft in New South Wales, the Turnbull government refused to back a judicial inquiry. That would have been the only inquiry that would have got to the bottom of what was really going on with respect to water theft across the basin. It seems the government didn't want the truth about the water theft to be revealed. The Four Corners program claims proved to be correct and subsequently, I understand, charges have been laid against several irrigators. Even worse, however, the New South Wales Ombudsman issued a damning report against Water New South Wales. How water theft could occur without being noticed by Water New South Wales is beyond comprehension. But, even worse, Water New South Wales wrongly claimed to have issued 105 penalty infringement notices and to have initiated 12 prosecutions between July 2017 and November 2017, when in fact, I understand, no such actions had ever been taken. Whatever water theft has taken place, we will very likely never know the full extent of it.

The mismanagement is not limited to water theft alone. There are also allegations that, under the watch of the former minister, water purchases were made by the Commonwealth at above-market prices or for water that can never be delivered or even measured. These are serious allegations that involve tens of millions of dollars. An article written by Anne Davies and published in The Guardian on 2 March 2018 reports on those allegations:

One of Australia's largest cotton companies, Eastern Australia Agriculture (EAA), sold water rights to the federal government in July last year for $79m and then booked a $52m gain on the sale.

The deal, which was done without tender, will raise questions about whether the government paid over the odds for the water in southern Queensland.

Details of the water buyback were released to the Senate … The documents included valuations by Colliers International, which were used by the Department of Agriculture to price the water from EAA. But unlike an earlier release of documents, the valuations were heavily redacted.

In one unredacted comment, Colliers warned "there is no true market" for overland flows—the type of water rights the federal government was proposing to purchase—and that "trading was limited to sales only to the commonwealth". It warned valuing this sort of water was "very complex" because sellers were likely to seek compensation for associated structures used to harvest the water.

…   …   …

The documents also raise the question about whether Colliers, the valuer, had a potential conflict of interest. Twelve months before, in September 2015, it had been retained to sell EAA's two huge properties in Queensland—Kia-ora and Clyde.

EAA is a private company, which is controlled by a number of investment funds including a large Hong Kong fund, Pacific Alliance, via a Cayman Islands registered company.

…   …   …

The deal for $79m was signed in July last year, allowing EAA to report a large uplift in the value of its water rights. It booked a $52m gain on the water rights sold and a $40m uplift in the value of its water licences.

…   …   …

A senior water researcher at the Australia Institute, Maryanne Slattery, said the average price paid for water licences in the Lower Balonne between 2011/12 and 2016/17 was $1,500 per megalitre and the maximum paid in that period was $2,200 for two trades.

The government paid $2,745 per megalitre.

…   …   …

The Guardian reported last year on the sale of water by Tandou … There are questions about the reliability of the water rights purchased for $78m because of extractions further upstream. The Guardian also revealed the government relied on a valuation provided by the NSW government and ignored its own valuation.

Last week the Australia Institute raised questions about another buyback in Queensland, which involved a $17m purchase of 10,611 megalitres of water in the Warrego valley in March 2017.

Joyce paid more than twice that paid by Labor when in government, a purchase he had criticised because little of the Warrego—just 6%—flows through to the Darling.

These are murky deals, overseen by the member for New England when he was the water minister, which I believe the Australian National Audit Office should investigate.

It appears that the New South Wales government is now attempting to legitimise the capture, storage and ownership of overland water by issuing new licences to landowners who have been taking overland water from the basin for free. Two immediate concerns arise from that proposition. Firstly, any water taken out of the basin ultimately diminishes the amount of water that flows downstream. I know that those who support the New South Wales proposition will argue that this water was never really accounted for and that it makes no difference to the amount of water that flows into the river system. Environmentalists dispute that, and so do I. Whatever water falls in the basin to some extent ultimately flows back into the river system, whether it be underground or above ground, and in any event, acts as important environmental water for the wetlands and other environmental assets already within the basin. To simply say that this water is not relevant, shouldn't be counted and therefore does not matter to the health of the basin system is absolute nonsense. The fact that it already happens with apparently no control adds to my concerns. The issuing of licences, which in turn will have a monetary value, will trigger a rush of landowners to claim additional overland water rights.

Secondly, unlike other licences, where the amount of water taken is easier to manage, the measuring and regulation of overland water is near impossible to do. When a system becomes too complicated, regulatory measures are inevitably ineffective. In the future we will see further disputes about how much water was taken, whether the person or landowner who took it had the right to do so, and what impact it has on downstream farmers. I understand that, as a result of those propositions, downstream farmers are already expressing concerns about what water may ultimately flow to them.

Parliament should not waver from its commitment to delivery of the basin plan in full as proposed in 2012. The livelihood and security of over two million Australians depend on that basin plan. I understand that around 35 separate projects have been identified that can deliver the water savings that in turn can then be returned to the river to achieve the ultimate 2,750 litres we'll be looking at and subsequently the additional 450 gigalitres. I accept and understand that it will take some time to implement those projects, because they require the expenditure of funds and the carrying out of considerable works, but there is a proposition that those works will deliver the plan as it was intended. Labor supports that pathway, but if the water savings cannot be made then other alternatives will have to be considered. No Murray-Darling Basin community will ever be spared if the basin is not sustainable. What is required with respect to management of the basin is common sense and fairness to all, regardless of which part of the basin they live in.

For South Australia, being at the end of the river system, delivery of a sustainable basin plan is absolutely critical. Since Federation, South Australia has been negotiating with upstream states for a basin plan that provides some water security. In 1969, then South Australian Premier Steele Hall publicly debated with then opposition leader Don Dunstan the merits of establishing the Chowilla Dam just north of Renmark in South Australia for the purpose of securing South Australia's water supplies. That was almost half a century ago. Premier Hall's preference was the construction of the Dartmouth Dam in eastern Victoria. The Dartmouth Dam was subsequently constructed but didn't secure South Australia's water supplies. South Australia today still faces uncertainty because, being at the end of the stream, it relies on water flowing across the border, and that water will flow across the border only if the plan is implemented in full. If it's not then we will be in the situation where we were a decade ago, where no water whatsoever was flowing out of the mouth of the river system into the sea.

The basin plan was agreed to in 2012 after a gruelling process—a process which included a committee of this parliament, which worked for six months. Indeed, I was a member of that committee. We travelled around the basin and met with communities right throughout it in order to try to reach some consensus. Finally, that report came back to parliament and the minister acted on it with the legislation that was ultimately agreed to by this parliament.

It was a gruesome process, but we achieved a plan. That plan must now be implemented, and it should not be undermined in any way, because it is the plan that remains our best hope of long-term sustainability for all basin communities. We accept that the basin communities are an important part of the nation's economy. We accept that so many communities depend on a sustainable plan. We accept that so many families rely on a sustainable basin plan, but we also accept that we have national environmental assets that also rely on a sustainable basin plan. That's why it's important that we remain committed to the plan, and why Labor has agreed to support this legislation.

Mr DRUM (Murray) (11:31): I rise to speak on the Water Amendment Bill 2018. I'm pleased to hear that the Labor Party are moving to support this legislation, because that wasn't the case as little as a month ago. Prior to the South Australian state election and the Batman by-election, the Labor Party took the view that it wanted to oppose this legislation, purely for political reasons.

We understand that—we understand that they wanted to change their mind when they were battling the Greens in Batman. We understand that when there was a state election the Labor Party wanted to take a different view, irrespective of what that does to the more than two million people who live along the Murray-Darling Basin. For Labor to be chopping and changing their view on water policy, irrespective of that, we now arrive at the situation where this bill, based around the correction in the Northern Basin Review, is going to be put through the parliament, supposedly with the support of Labor.

What we have with the Northern Basin Review is a plan that was implemented as part of the Murray-Darling Basin Plan in 2012. Here we are now, six years later, where we have had the review handed in, looking at the damage that was caused to some of those southern Queensland and northern New South Wales communities, very clearly acknowledging that we have taken too much water out of productive agriculture and that we have caused too much damage to those communities. In doing the research, it was acknowledged that there needs to be a correction from the environment back towards productive agriculture to the tune of 70 gigalitres. Instead of taking 390 gigalitres out, it was recommended independently that we take 320 gigalitres out and that there be a 70 gigalitre correction towards productive agriculture.

That's the report that the Labor Party let hang for 12 months without one word of criticism. Then the Greens political party started playing politics with a disallowance and, all of a sudden, the Labor Party started supporting that. Now that it's been corrected and it looks like it's going to be passed through the parliament, at least that's a positive.

The next thing we have to work through are the 605 SDLs, effectively looking at the 2,750 gigalitres—the amount of water that has been set aside for the environment; taken out of active agriculture and put toward environmental outcomes. Again, it has been scientifically and independently observed that we can actually save 605 gigalitres out of that 2,750 because we can find smarter and better ways of reaching these environmental outcomes. We can use science and technology to create exactly the same outcomes, if not better outcomes, and actually use 605 gigalitres less to achieve the same outcome. We hope that in the next short while it will also be passed through the parliament here.

It then leads us to where the previous member, the member Makin in outer Adelaide, again stands up in this House and puts the view of the South Australians in relation to water. 450 gigalitres was the amount that was the so-called 'up water'. We hear Labor saying that they want to have the plan delivered in full. I agree with them: let's deliver the plan in full. But when you want to deliver the plan in full you have to apply a social and economic test—a social and economic benefit or neutrality test—to the 450 gigalitres. We have to make sure that the social and economic test actually has the first part of that test in it—that is, the social side of things. When you read what's in the actual Murray-Darling Basin Plan, when it talks about neutral or improved social economic outcomes, the filter that they have on this is impossible to read. It talks about what fits within the neutral or improved socioeconomic outcomes, and it states in 7.17 (2) (b):

The efficiency contributions to the proposed adjustments achieve neutral or improved socio-economic outcomes compared with the outcomes under benchmark conditions of development as evidenced by:

(i) the participation of consumptive water users in projects that recover water through works to improve irrigation water use efficiency on their farms …

So that is talking about water efficiency projects. In (ia) it states:

… the participation of consumptive water users in projects that recover water through works to improve water use efficiency off-farm …

So we are talking about on-farm and off-farm water efficiency projects, and:

(ii) alternative arrangements proposed by a Basin State, assessed by that State as achieving water recovery with neutral or improved socio-economic outcomes.

But, in all of that, it is totally ambiguous at to was to what is socio-economic neutrality or benefit. And yet, this is the actual point that will come down to deciding how this 450 gigalitres of up water is somehow miraculously delivered to the environment.

What nobody is prepared to do at the moment is actually say, 'What is the socio-economic cost of having communities go without water so that water can become an environmental flow?' Recent studies on the Murray-Darling Basin, in the southern Basin, look at the job losses associated with the loss of water. We can talk about the Mildura region to start with. Since the start of the Basin Plan, Mildura has had a loss in irrigated production of 38 per cent of its employment; in the Merbein region, irrigated production employment figures are down by 50 per cent; in the Swan Hill region, irrigated production decreased by 53 per cent; in the Kerang-Cohuna region, irrigated agricultural production employment figures have decreased 43 per cent; in the Pyramid Hill-Boort region, employment in irrigated production has decreased by 66 per cent; in Hay, employment in irrigated production has decreased by 41.4 per cent; in the Shepparton region, employment in irrigated production has decreased by 41.6 per cent; and in the Kyabram-Tatura area employment in irrigated production has decreased by 41.6 per cent.

So, when you have a plan that has taken water away from communities and you can see very clearly the amount of job losses associated with taking that water away from productive irrigation and the flow-on jobs associated with those losses in employment, it becomes a sad state of affairs—when you have one side of politics, the Greens and Labor, who refuse to acknowledge the social cost of losing that amount of water and who refuse to acknowledge the cost of having those job losses—unless somebody is able to rewrite the social and economic detriment and the social and economic neutrality clauses in a way that means we actually have to go in there and look at the socio-economic costs. We actually have to go in there and look at the social and economic costs, because, when you read the plan in the way that I just read the plan, what it says is: 'We've got this social and economic benefit or neutrality test,' but in the definition it's just an economic test. They're more or less saying that if you wish to have a million dollars' worth of water and you sell it for a million dollars and run away and go and do something else with that million dollars then everybody's happy. But what we have seen, with previous Labor policies, are indiscriminate buybacks, where they simply go into the market and buy water at the cheapest rate possible. People are always going to find willing sellers—especially in industries like the dairy industry at the moment, which is under severe pressure. The governments of Australia are always going to be able to find willing sellers.

To think that you can have no community pain, loss, or detriment is absolutely farcical. It's incredibly disrespectful to the irrigation communities—the two million Australians who live up and down the Murray-Darling Basin—because those irrigation communities rely on agriculture. They rely on the farmers making their revenue, so that those farmers can then come into the cities, towns and community centres and buy the services and goods that they need, so that that money can swim around in the communities in the way that we all know it does.

However, what we have at the moment is uncertainty, because nobody is prepared to acknowledge that there is this filter, this rider, associated with another. What we've just read out are the job losses, already, in the respective regions, and the hurt and pain associated with those job losses. What we're looking at now is actually inflicting further pain and further job losses because we don't want to understand that there is so much hurt and detriment to communities when we take water out of those communities.

We need, as a collective, to start putting people ahead of politics. We need to start putting people's opportunity to make a living ahead of this out-and-out push for a quantity of water. When is the environmental movement—when is the Labor Party—going to start talking about environmental outcomes instead of talking about an amount of water? We have to go to the environmental movement and say, 'We're happy to sit down and talk to you about environmental outcomes. What are the major environmental outcomes that you want to achieve, not just for South Australia but for the entire Murray-Darling Basin?'

The environmental movement have been poisoning all irrigators because of a Four Corners show that suggested that there were people in the north of the Murray-Darling Basin who were stealing water. Well, they've been charged, and they'll get their opportunity to defend themselves in court. But let's not tar all of the irrigators along the Murray-Darling Basin with the same brush, because the vast majority—99.99 per cent—have never been charged, and never will be charged, because they're totally law-abiding irrigators who simply follow one of the most honourable professions ever invented: they grow food and fibre from nothing and they sell that food and fibre, hopefully, for a profit. But at the moment, it seems as though all irrigators are potentially being poisoned by an argument that wants to see all irrigators through the lens of: 'They are people who just steal water and effectively ruin the environment in the process.'

As I've said many times in this House, water policy is the most important issue for my electorate. We need to put a proper social and economic filter across the remaining 450 gigalitres of up water. We heard the previous speaker speak in disparaging tones about the former Leader of the National Party, Barnaby Joyce. Barnaby Joyce wrote to the then minister in South Australia asking him: 'If you know how we can deliver these 450 gigalitres without causing social and economic hurt and detriment, even to your people in South Australia, then you tell me how you can do it. If you think there's a way that we can get another 450 gigalitres without hurting all of these irrigation communities, you tell me.' That's why he knew that the then minister of South Australia—and thank goodness he's gone—was absolutely holding the progress of this plan up simply by being obstinate and pig-headed, swearing at people with profanities in front of all types of people in the main street of Adelaide when he didn't get his way. That was because he thought that South Australia was being poorly handled.

When are the environmental movements in South Australia going to start talking about environmental outcomes instead of talking about this quantity of water. At the moment, we have environmental outcomes like that they want to keep the Lower Lakes fresh. Well, the Lower Lakes were never fresh naturally. They were only fresh when men put the barrages in back in the thirties. That is not a natural outcome. They want to keep the Murray's mouth open. Again, it is not a natural outcome. If you leave the river to nature, the mouth closes over in most dry stretches and then it reforms or reopens itself again at the next flood. Flushing the lower reaches of the Murray River is a fantastic objective. If we can have environmental water assist with that, then we should do that. But we can't just go down this path where we want to talk about a quantity of water that causes so much pain to communities without having environmental outcomes that can be achieved.

Mr BURKE (Watson) (11:46): I rise to indicate the opposition's support for the Water Amendment Bill 2018, which has been moved by the government. The purpose of this bill is to allow the government to bring forward again an instrument that was previously disallowed. When that instrument was disallowed, and Labor had supported the disallowance, I immediately came into the chamber and said that we were seeking to negotiate a series of issues with the government. I gave an immediate indication that if that negotiation ended up being successful then we were happy to revisit that disallowance motion.

In the normal course, the government would not be able to simply reissue that instrument. The Water Act 2007 doesn't allow it without going through a full, fresh process of consultation. Given that the negotiations ultimately were concluded in a positive way, Labor now stands ready to support this bill without amendment and to facilitate its passage through both houses. To that end, I'm not even moving a second reading amendment. This is something that is the product of a direct negotiation with the government and something that we therefore support in full, without compromise and without question.

I was listening to the speech from the member for Murray just before me. I do believe he has faithfully put forward views from his electorate. They are views that I certainly heard in a series of community meetings during the time that I was water minister, which were put with equal passion by members of his community and sometimes with language that was somewhat more forceful and, occasionally, using a series of adjectives that he referred to a previous water minister from a different state as having offered at different times. There's a reason why there's real passion on this issue. It's because the situation that Australia has found itself in, after 100 years of the Murray-Darling Basin being managed as though it were not connected, has meant there is no ideal solution for anyone or any interest up and down the basin. Every step forward has meant compromise. That is a reality of what is in front of us.

I've come in today with a copy of the Basin Plan. It was being quoted in the previous speech, and I said, 'Quick! Grab me a copy. I want to walk in with it.' If I were to write down my ideal solution for the Murray-Darling Basin, this would be not be it. If I put forward my ideal solution for how to deal with the Murray-Darling Basin, the simple answer is that we would have ended up without a plan, and we would have ended up without any national system to be able to get specific targets that we would work towards. This was not a document that I started with or that my department started with or even that the authority started with. We all remember the document that the authority started with. I'd been water minister for a couple of minutes, and the guide to the plan appeared, and I discovered that instantly I was being burnt in effigy all around the basin by different communities that had an understandably strong—

Mr Keenan: Sounds very sensible!

Mr BURKE: You used to be responsible for my safety! I'll remember that interjection. But the Basin Plan meant that, when we got there, it ended up quite different as a result of a series of community meetings, small meetings and consultation, where I don't think anyone would argue that the consultation was anything but real. People saw the document change as it went through and saw, effectively, the architecture of a critical compromise. Two parts of that compromise were, in fact, the subject of the different disallowance votes in the Senate.

There were three major moving parts. The first was the Northern Basin Review. I ordered that there be a Northern Basin Review, and I'll be honest: what the authority came back with were numbers that surprised me on the extent to which they changed what the earlier advice from the Murray-Darling Basin Authority had been. It didn't surprise me, though, that the numbers had changed. When Craig Knowles headed up the Murray-Darling Basin Authority, we talked about it at some length. The south of the basin—and those members here in the chamber who are from basin seats all know this backwards, but I'll explain it for the benefit of the House—is highly regulated. For water to flow, it's being released from dams and weirs. There'll be an extent of flow, but largely we have in the southern basin a river system that is now, in many ways, a set of interconnected dams and weirs. That's largely how the water works. In the northern basin you have a much flatter system and a system where, when there's heavy rainfall, it flows and, when it flows, every time much of the water will flow in a slightly different fashion to how it did previous time. That is something that's seen in the southern basin when you get an overbank flow, but largely in the southern basin the water is far more predictable. That meant that, when we and the authority were determining for the purposes of the plan what the northern basin numbers should be, there was a high degree of uncertainty because, as the years of data build up, those numbers will always be subjected to new information and the water will continue to flow differently in the north. Therefore, when some people say, 'How could Labor ever support reduced numbers?' the concept of the original numbers in the north always relied on the best available data, but we wanted it reviewed because there were always going to be more questions in the north than there were in the south. That's the reason for the Northern Basin Review.

But, when I say the numbers came out differently to what I'd anticipated, why is Labor then supporting them? There is a really simple principle here: I believe having an independent authority is essential. We will never resolve anything in the basin unless we accept that the independent authority, when it makes a call, must not then be litigated gigalitre by gigalitre by this parliament. We've established an independent authority and, once we start litigating each gigalitre of the recommendations they come down with, it's effectively all over in terms of whether or not we'll ever have a plan for the basin and whether or not we'll be able to deliver those sorts of outcomes.

For that reason, it was important to accept that whether the numbers were what I thought they would be or not wasn't actually the point. We need to have an independent authority. They were the numbers the authority came back with, and my view was, and I made it clear, that in any negotiation with the government—I acknowledge the minister responsible, the Minister for Agriculture and Water Resources, is now at the table—at no point were we trying to alter what the authority had recommended.

Mr Drum: Why did you disallow it?

Mr BURKE: Without turning it into question time, although I'd love a world where I was in a position at the dispatch box to answer questions from the backbench—if you want to bring that on, I'm there for it. Why did we disallow it? As I explained earlier—you might have been reading, but you were here in the chamber, Member for Murray—because at that point the negotiation had not been concluded with the government and I came into the chamber, immediately after the disallowance vote, and reported to the chamber our willingness to deal with it again. It is only possible to deal with it again in the exact same terms by pushing this legislation through both Houses. We are here for that, with no amendment, not even a second reading amendment. Any further questions, I'll be here at two o'clock.

The next part is about the compromises, effectively, within the plan—you've got the Northern Basin Review, and then there were two other areas where the numbers that were put forward in the Murray-Darling Basin Plan were seen to have to possibly change in the future. One was the 450 up; the other was the 650 down. I'll deal with the 650 down first, because we had the disallowance on that not long ago. The plan specifically allowed for there to be an alteration of the numbers in the plan by up to 650 gigalitres if—if—states could put forward projects which, on completion, were viewed to deliver the same environmental outcome with less water. So when people have said, 'Well, where's the Labor Party on issues of getting the same environmental outcome with less water,' the entire 650-gigalitre flexibility within the plan was exactly that. It was put in that for that purpose. And when some from the environmental side said, 'How on earth could Labor not vote to disallow that regulation,' it was foreseen. We would not have had a plan if we hadn't put that in. I want to pay credit to Peter Walsh, who was the Victorian water minister at the time. His coming forward with this part of the plan was an essential part of brokering the entire agreement.

But make no mistake: you don't get identical environmental outcomes with these projects. You get equivalent outcomes, taking into account some very specific and limited definitions within the plan. The simplest example I can give is something like Hattah Lakes. It's a beautiful environment site—I've gone kayaking there; you kayak when the water is there, through the river red gums—and it's quite a spectacular place. It naturally would have got its water from overbank flows, overbank flows that occur much less regularly because we have irrigation districts and dams. That's why the overbank flows occur much less regularly. There are two ways of getting the water there: either you release Commonwealth environmental water from dams, a large amount all at once, and get the overbank flow on its way to Hattah Lakes—it floods every farm in the way and takes out whatever they might have had in the ground so that by the time it arrives at Hattah Lakes it's picked up whatever chemicals and nutrients were in the farmland and deposited that at the environmental site—or you use a much lower amount of water, still environmental water, and you pump it there directly. You get a similar environmental outcome—not identical; there will be small environmental sites along the way that get no water because it was piped—using a fraction of the water that would have been required through an overbank flow. They were the sorts of projects that were envisaged in the 650 gigalitres.

Only today, the Nimmie-Caira project has been reported. I have shared some articles. It was reported on the ABC last night, and I saw it in The Guardian today as well. The Nimmie-Caira project was advanced by New South Wales. A series of property owners wanted to get out, and they were happy for their land to be managed for environmental purposes. As a result, in the irrigation districts, particularly in areas like Griffith, it's made a significant difference. The water for the environment that is required will be much lower as a result of what looks like the particular success of the Nimmie-Caira project.

I will give credit to the former water minister for New South Wales Katrina Hodgkinson. She brought this project forward. When she first brought it forward, there was some hostility from within the Commonwealth about it. I went through some extensive briefings with New South Wales. I thought there might be a way of making it stack up. I asked Commonwealth officials to look at it more closely. They went through it, and we've ended up with a significant project that has now been welcomed by environmental groups as well, regardless of all the hostility at the beginning. Also, I might add, the Nari Nari Tribal Council will now play a major role in the management of the property.

Within the basin, this will become an iconic environmental site, I suspect. It needs active management. I understand that there's been a significant problem with wild pigs in the interim while the management arrangements are being sorted out. These are the sorts of projects where the plan, through its entire structure and through that availability of 650 gigalitres being made through other measures, is allowing environmental outcomes in ways where you obviously still need some water but less water than you would otherwise need if you were only relying on overbank flows. So when people argue—and it's representative of what comes out in different communities—'Why is it only water that's being demanded?' it's not. That flexibility was in the plan. I might add that the plan allowed flexibility of up to 650. The regulation that has come back from the authority and signed off by the minister only took that to 605.

As to whether all these projects ultimately stack up, there's a reconciliation process that happens, from memory, in 2024 or thereabouts to determine whether or not the projects have delivered the outcomes that were envisaged. A lot of these are major engineering works, and all projects of this type vary during the time. Some of them may turn out with better outcomes and some of them may turn out with worse, but that verification will happen. If they end up falling short, I will be clear for the sake of transparency, and I've said it publicly before—and this is not a shared view across the chamber, but the plan allows this sort of flexibility anyway. If there is a gap—and there might not be—Labor would bridge that gap through buyback. The government would have, as I understand it, a different approach in bridging that gap. I think I've represented everyone's positions accurately on that.

The other area of flexibility is the 450 gigalitres up. I previously described the 650 down. We would not have got the agreement from the irrigation communities or the upstream states were it not for Peter Walsh advancing that. In the same way, we would not have got the agreement from South Australia were it not for the additional 450 gigalitres of what's often referred to as up water. Even though we disagree on the simplicity of the clause, I was pleased earlier that the member who preceded me, the member for Murray, read out the full clause, because often the Basin Plan has been misrepresented in this place and people have said that the only test is that, if you want to get this extra 450 gig, you need to do it in ways where there are no social or economic downsides, whereas the plan is quite specific in adding that if you do it through the voluntary participation of irrigators in improving their on-farm infrastructure—if that's the method of acquiring the water—then that will be taken as evidence that there were no social or economic downsides.

That was put there for the 450. The 450 has been in doubt for some time. In dealing with Australia's minister for water, I made clear that we did need to be able to see progress on the 450, because, just as there would have been no plan without the 650 down, there would have been no plan without the 450 up. And a sensible way through on this always involves that challenge—which this building historically hasn't been great at and probably over the last decade has been worse at than it used to be—which is finding an outcome where everybody accepts some compromise, because we know that's better than having no outcome.

I want to pay full credit—I won't overdo it, because it won't help him—to the minister for water. There have been compromises for each of us in working this through. But what has happened is that we have now faced the moment where the Murray-Darling Basin Plan was ready to fall apart and we have made sure that it didn't. That is a critical thing and something that will be a lasting legacy for the work that he does as a minister.

I should take the House through some of the elements of that agreement and I should let the minister know that, before he got here, I said, 'We're not going to move any amendments, and I'm not even moving a second reading amendment—not the normal sledge that we put in; there is that much cooperation. But a lot of the elements of the agreement won't otherwise come before the parliament unless they're explained, and I think a lot of this happened in the minister's second reading speech as well. Six areas are covered: strengthening of protection of environmental flows, strengthening compliance with basin water laws, improving confidence in northern basin review data, strengthening the SDL adjustment mechanism, improving outcomes for First Nations Indigenous people, and addressing the social and economic impacts of the Murray-Darling Basin Plan.

Firstly, on strengthening the protection of environmental flows, this wasn't really questioned in a big way until the Four Corners revelations last year. These were revelations that alarmed pretty much everybody except those who were responsible for them, because water theft isn't just doing the wrong thing by the environment; it's doing the wrong thing by your neighbour. It's doing the wrong thing by all the irrigators up and down the system who keep to the rules. The allegations we saw were serious allegations of water theft. The Australian taxpayer has spent an extraordinary amount of money on environmental water. It now stands as a very significant Commonwealth asset—a very significant asset. The concept that what was designated environmental water to be flowing down the system was being pumped back up into someone's dam alarmed everybody who believes in keeping to the rules. And I include the vast, vast majority of irrigators in that. But it did put forward a demand, as these negotiations went through, that we needed to be able to provide that confidence.

The whole plan is underpinned by what came before it. I wouldn't want this speech to presume in any way or for people to think that all of this began somehow with the Murray-Darling Basin Plan being put in place. The Murray-Darling Basin Plan wouldn't have been possible were it not for the Water Act. The Water Act was brought through by a water minister who's now Prime Minister of Australia, during the time of the Howard government. That wouldn't have been possible had there not been years of negotiation with the states through a ministerial council that was established under the Keating government. This issue was raised in the Federation debates. Only then, the South Australian issue, when they were raising it, wasn't for the purposes of the environment; it was actually a navigation issue, because they could no longer get the vessels upstream. All of this work has a very long history to it, but it's all now underpinned by the concept of there being a water market—a market where you can trade back and forth and you know what you have purchased. When the Commonwealth purchases environmental water, it knows that it will be used for environmental purposes, not be pumped back into somebody's dam.

The agreement includes mechanisms to protect those environmental flows, and I've had good meetings with the New South Wales government and their minister, Minister Blair, in seeing progress there. There is still more work there, but there is significant progress in goodwill, which I want to acknowledge. There is also the establishment of a Northern Basin Commissioner, which I know the minister has been continuing to work on and which will allow there to be an independent person. Why do we need this in the north and not in the south? For the reasons I referred to previously: the extent of regulation in the south means that what we saw in the north—well, I certainly can't imagine how somebody would be able to do something like that in the southern basin, but a Northern Basin Commissioner makes sense.

Strengthening compliance with basin water laws: the government will implement the key outcomes of the Murray-Darling Basin Authority's review of compliance and enforcement. New South Wales has committed to the implementation of the Water Reform Action Plan and we've got the development and delivery of a Basin Compliance Compact. The new Northern Basin Commissioner will also monitor and advise on implementation and compliance commitments. The government is also committing an additional $20 million, which will help with monitoring, metering and measurement. I think a lot of people in the southern basin were astonished at how many things that had just been part of living in the southern basin were yet to be there in the north because of the hydrology, because it's so flat and because it's not a regulated system in the same way.

If I were to point to anything being a key weakness that I would have liked to have secured in the original Murray-Darling Basin Plan and that I failed to secure—that I wasn't able to deliver on—and which I've got to say will be to the credit of this minister and this government in securing, as a principle, it is about First Nations people in both the northern and southern basin. For a long time they have been arguing that they didn't only want to have a right to land in different sites but the land didn't have its full meaning unless there were also some rights to flow—some rights to water. The government has done this for the first time. I'm not sure about the extent to which other countries have done this yet internationally—I don't know the answer to that. But this is certainly groundbreaking in our history, and I suspect, globally, that it's not something that a lot has happened with.

The concept of cultural water will now exist, and money has been put forward for various groups to be able to have their own entitlement to water. It won't be owned by the Commonwealth Environmental Water Holder, it will be owned by them and used by them, and they'll make decisions about how annual allocations are used. I won't know how; I'll find out after the event. They'll make their own decisions on that, as they should. But it is a fundamental shift for those groups. Some groups, even with this, are reporting it as though it were trying to buy them off and sign them up to the agreement. It was never conditional—never conditional from the government and never conditional from us. It does mean that a step has now been taken in a direction which is groundbreaking, and I give full credit to everyone involved, including those opposite.

If I read out this whole thing, I won't give anything else to the speech, so I will mention, then, point 4:

Improving confidence in the Northern Basin Review data.

Where I said earlier that the numbers surprised me, part of the agreement is allowing much more penetration of that data, which is important and which I think will only benefit the authority as well—that sort of transparency and sunlight.

The SDL adjustment mechanism is being strengthened in different ways, and, in particular, the government is now commencing the work on accumulating that 450. People needed that show of good faith that it was starting, and it will start. Exactly how it's got to what the projects are I don't think will ever stop being an issue of contention in different directions. But, given it had been put into doubt about a year and a half ago, having that back on the table and starting is critical.

In saying this, I've spent more on the negotiation than I have on the outcomes. I want to make clear that it is understood—and I don't want to be accused of brushing over any of this—that none of this is easy for anyone. Even though a whole lot is being done to try to make the adjustment have as little impact as possible, none of this delivers a zero-impact outcome. For many communities that has already meant significant hardship and different challenges which communities have responded to in different ways. The alternative is unthinkable, because eventually the river turns up at the negotiating table. We might all think we're uncompromising, but it wins when it starts negotiating back. We need to have a healthy working basin. It will never be a 100 per cent natural system again. I think anyone who wants to argue that it should be a completely natural system at the lakes at the end has to argue for a natural system the whole way up, and I've never met anyone who then wants to go to that next stage of the argument. It will be a regulated system, but it can be a healthy system. It will be a system that works for the environment and for the communities that depend on it. We've now got to the moment where that was in jeopardy, and parliament is showing its capacity to deal with it, so I thank the minister.

Mr COULTON (Parkes—Assistant Minister for Trade, Tourism and Investment) (12:16): I'm very pleased to rise today to speak in the debate on this legislation, the Water Amendment Bill 2018, that has been introduced to get the Murray-Darling Basin Plan back on track. Before the member for Watson leaves, I will recognise that he is one of the few people in this place that understands water. We might not always agree on how we use it, but he does understand the process. One of the frustrations in this place is I've heard a lot of speeches made by people who don't understand water but understand the politics of water. The challenge in this place is to have science and common sense win, and not be trumped by politics. We nearly saw that happen, and I'm glad that we're back on track. I want to have that on record.

There are others in this building who haven't covered themselves in glory. I can point to Greens Senator Sarah Hanson-Young, who has made some absolutely ridiculous contributions during this entire time. Senator Penny Wong and Senator Cory Bernardi have also not covered themselves in glory through this whole process. The big challenge we have in here is when politics trumps science. The Northern Basin Review, which I'm probably more familiar with than the rest of the basin, due to the fact that my electorate is pretty well encompassed by that northern basin, came from several years of study, science, negotiations and inquiry by an independent committee that was set up to do that. To get to a point where it was to be implemented, and then to be trumped by the South Australian election, was deeply frustrating to me.

As someone who represents a third of the Murray-Darling Basin—I believe I would probably have the largest section of the basin in my electorate, from the Lower Darling to the reaches on the Queensland border where the Dumaresq meets the Macintyre; it's a very complex issue, and different communities in my electorate see this issue differently—it's very frustrating to come to a position on this where truth goes out the window. I have seen some absolute nonsense being portrayed on social media and even reported in the media. For example, a couple of months ago, just after the Four Corners program, the local paper in Broken Hill, the Barrier Daily Truth,ran a front-page story that said that in 2012, the water minister, Barnaby Joyce, changed the regulations in the Murray-Darling Basin system and allowed irrigators to take whatever they want. Well, in 2012, the water minister was the member for Watson, Tony Burke. Barnaby Joyce was a senator from Queensland who had no responsibility for water. I pointed this out to the editor of the Barrier Daily Truth and on page six the next day there was a small retraction. But the seed was sown that there was somehow large-scale government corruption in managing the river system. Quite frankly, I think the member for Watson's contribution may have put some of that to rest.

To get to this point has required an enormous amount of goodwill and hard work by the states and the territories within the basin, as well as the Commonwealth, as well as the communities, as well as the individuals and the environmentalists and the irrigators right across the basin. They have put an enormous amount of work into this. For the northern review to be portrayed as a fresh grab by irrigators to get more water is a long, long way from the truth. Water reforms started in this country long before the basin plan came into action. In New South Wales, the reforms back probably 25 or 30 years ago saw a lot of water removed from the irrigation industry, with no compensation to irrigators. In some of the early stages of the basin plan, and when Senator Wong was the minister, the buying of large licences willy-nilly devastated towns. In the north-west of my electorate, the town of Collarenebri lost its major and probably only serious employer. Over a hundred jobs went with the stroke of a pen when Senator Wong purchased the water from Twynam Pastoral Company's Collymongle Station. Purchases made without taking into account the interests of the local communities are still impacting on those communities. Collarenebri, quite frankly, will struggle to recover to any form at all. It certainly won't recover to its former glory.

Water is the lifeblood for everyone. The Murray-Darling Basin, particularly the Northern Basin, is not a fixed piece of plumbing. It is not something where there is a set amount of water every year and it's just a simple matter of allocating a certain percentage for production, a certain percentage for the environment and a certain percentage for residential communities. It's an ephemeral stream. The electorate of the minister sitting here next to me is a large catchment for the Darling River. From memory, it hasn't had run-off from 2012. That was the last run-off that came out of western Queensland. The water from the cyclone we had earlier this year, which is now reaching Lake Eyre, goes down through the Channel Country in western Queensland and into South Australia and is not part of the Murray-Darling Basin. A small part—one river—got a catchment and got water from that cyclone. As a result, the Culgoa River is running through into New South Wales, into the Barwon and into the Darling, and that water just last week reached Wilcannia.

In conjunction with the state government of New South Wales and the Commonwealth Environmental Water Holder, a series of environmental flows have been let go from various dams in the upper catchment to hop onto the tail of that flow to continue it for a longer period of time. To allow this to happen, irrigators in the electorate of the member sitting next to me, and in my electorate, forewent the entitlement they could have had. What frustrates me is that there is no credit or recognition from the environmental lobby that that's actually happened—that there's water now heading to Menindee from Wilcannia. Cooperation between state and federal governments, the Commonwealth Environmental Water Holder and irrigators is enabling that water to flow down to the river. I believe that deserves some form of recognition.

The deal that has been done by the member for Maranoa and the member for Watson is, I believe, a good compromise. Part of the compromise that is going to be of great benefit to my communities is the Indigenous water—the water for Aboriginal communities. Unless you go to those places, you will not understand the importance that the river has for those communities. If you go to the communities in Bourke, Brewarrina, Wilcannia and Menindee when there's water in the river, they are different places from when the river is dry. Those communities exist because of the river. I think that allocation of water will be helpful. We have now got over this speed hump in the process, which has stopped a lot of other things happening from the state governments as well. The environmentalists, in their great charge to try and blow this up, have actually stopped some projects that are of great benefit to the communities that they are supposed to be helping. I'm very hopeful that we're getting to a point where we'll see an allocation of funding for a weir at Wilcannia, which is long overdue; the re-engineering of the Menindee Lakes so that it has the ability to hold more water; the cutting off of Lake Cawndilla from the system; and the purchase of water from Tandou, which will mean that Lake Cawndilla will only fill when there is a flood. With the re-engineering, more water will be held in Menindee to provide for the communities who live in that area.

The other part of this legislation is about compliance. If there has been theft, then it needs to be dealt with in the appropriate manner. But I want to point out that Four Corners is not a court. Four Corners is a program that provides entertainment for people. It can present facts in a way that it wants but that is not necessarily balanced. I believe this is part of a larger scheme to actually attack the cotton industry in Australia, and irrigation in general. There are court proceedings in place, and I won't comment on them because it would be inappropriate. Until those findings are dealt with through the proper judicial manner, I think we have in this country a presumption of innocence until proven guilty.

In defence of the irrigators and the cotton industry in my electorate, we have just seen a very, very good harvest grown on less water per kilogram of cotton than anywhere in the world—certainly much less than we would have used in that area. Part of the whole process that the member for Watson was talking about with the re-engineering of the Trangie-Nevertire scheme and the Narromine and other schemes in the Macquarie valley is that we are seeing huge yields of cotton grown, with much, much less water. The lining of the channels has reduced the wastage by up around 90 per cent. We are seeing efficient use of that water. Quite frankly, with the season we're having, the only income of those towns is coming from the water generated by the irrigation industry. There is this idea that we need to get rid of cotton in Australia. We grow cotton in Australia because we have an ephemeral system. When you've got water in the dam, you can grow the crop. We've tried permanent plantings at Bourke, and that ended up very badly because in a dry season those trees ultimately died.

Congratulations to the minister, the member for Maranoa, on pulling this off. I have acknowledged the member for Watson for this process getting back on track. The communities in the Murray-Darling Basin have absolutely had it up to their back teeth with water reform. They have been going through this process for three decades now, and for it to be derailed by pure base political pointscoring from South Australia is one of the lowest, most appalling acts I've seen in my 10 years in this place. I thank the minister for getting it back on track, and I know the communities right across the basin want to get this reform done and dusted so that they can get on with their lives. Thank you.

Mr GEORGANAS (Hindmarsh) (12:30): I rise to speak on the Water Amendment Bill 2018, and I do so as a passionate South Australian. South Australians have held the River Murray and the river environment very close to our hearts, because we live in one of the driest states in one of the driest continents on this earth. We're at the bottom of the Murray, where the mouth is, so basically it is really important for us in South Australia, and we are passionate about environmental flows in the River Murray and the sustainability of it. As I said, we are totally dependent on the River Murray.

It's not that long ago that we faced one of the worst droughts that we've ever seen in this nation—and it won't be the last time either. We know, if you look at the history of Australia, that droughts occur and recur continually in this country. We in South Australia all remember the Lower Lakes, where you could basically walk across this wonderful water landscape that used to exist down at Gawler, Meningie and other places. It was devastating to go down there, to see the boats, the jetties et cetera just sitting on sand, and basically to be able to walk across from Gawler to Hindmarsh Island, a place that normally has ferries going to it, boats and all sorts of water activity. You may say that we're talking about water activities, sports et cetera, but the reality is that, if you have a good flow, you know that the river is environmentally sustainable. You know that things are working upstream. It's not just us down at the bottom end that worry about the river. We need an environmentally sustainable river that can go on to do the things that it's done for us for 200 years, for our growers and other people that make a living off the river. But we have to do it in a sustainable way.

We've been arguing for many years, as we heard the member for Parkes talk about earlier—since Federation—about getting a system in place that will ensure that we get those environmental flows and we get the sustainability of the environment, and at the same time looking after communities that are dependent on the river from up top right down to the bottom. To do that, you need a national plan. To do that, you need to be on the same page with every single state and with the users of the river—the growers, the irrigators, the environmentalists and the whole lot. For a hundred years, we haven't been able to find that balance. Since Federation, the River Murray has been the focus of a lot of debate. If you go through the Hansards in this House, you will see debates that date back to Federation. That shows that it is a concern not just for South Australians but for all of Australia, because without an environmentally sustainable river we'd never be able to sustain the irrigators and the growers, the people who make the food that feeds us. So it is very important.

That's why we had the agreement in 2012—and we heard the member for Watson talk about it—where we resolved a hundred years of conflict, a hundred years of states playing off on other states with their own interests. When Labor put the plan in place, it was to deliver a healthy river, a sustainable river, a river that would sustain us for many years and sustain the environment for many years, which is so important. We on this side of the House delivered a plan for the recovery of 2,750 gigalitres for the environment and an additional 450 gigalitres of water for the environment from on-farm infrastructure. The plan includes a mechanism to allow that 450 gigalitres of water to be added, as well as a reduction of up to 650 gigalitres if the health of the environment isn't jeopardised. So you'd have to make sure that the health of the environment isn't jeopardised before that happens. And you need to test the plan, that it's got environmental targets that need to be delivered. You don't just pull that water out; you test the plan as well. So the 450 gigalitres came with a funding package of $1.77 billion that Labor delivered in 2012. That was part of the plan and the agreement. The funding is for on-farm water projects that provide the Commonwealth with the water and the money to remove constraints in the basin to allow the water to get to where it's required.

What we saw was the former Deputy Prime Minister put that 450 gigalitres of water for the environment in doubt, and that was a big thing for South Australians. We heard a lot of debates around that area at the time, because that was part of the agreement. That was part of the handshake agreement that had been put in place through all the negotiations that we heard the member for Watson talk about earlier. For South Australia, taking out that 450 gigalitres was a big issue. I'll go through that again: because we're at the bottom of that river, we're at the bottom of the river system, it is so important to ensure that we had those environmental flows, that we were able to do the things that we needed to do to get that sustainable river.

The package of measures agreed with the government overcomes that problem by locking in that 450 gigalitres, and it's locked in again. What we had was that it was originally locked in, then it was taken out, and now we've gone back to that through the negotiations. But, through this, we've lost another five years while we've tried to get to a better place. We made it clear in our negotiations with the government that we sought the following: assurances around the government's commit to deliver that extra 450 gigalitres of environmental water, those efficiency measures; assurances that the concerns regarding the quality of projects to deliver the 605 gigalitres of environmental equivalent outcomes should be resolved; and the need for taxpayer-funded environmental water to be used for environmental purposes.

We also had a comprehensive response to allegations of corruption. We all saw the Four Corners program not that long ago about allegations of water theft in the northern basin. When you're using taxpayers' money to put all these things into place to ensure that the environmental sustainability of the river takes place for the benefit of all Australians, for the benefit of everyone who is doing the right thing, then to see this was very sad. After all the work and the negotiations that had taken place, to see these allegations of corruption and water theft was one of the low points in our history. We had so many committed people on both sides of this House working to have a sustainable plan, as well as people involved in environmental groups, growers and irrigators, so to then see this happen was very sad. One of the other things was Indigenous consultation and engagement in water planning and governance.

If the outcomes aren't delivered then the plan itself says this will be resolved to deliver for a better environment. The plan is designed to deliver a healthy river. That's what we're all aiming for. A healthy river ensures that we are able to continue to grow our food products, continue to do what we do along the river that sustains us as a nation. That is No. 1. Without a healthy river, all that will finish and we'll have nothing to benefit—not our industries, not our food producers. Absolutely nothing, which will be devastating for the environment.

We've heard representations from all sides. I've heard some really good debates here today, including by the member for Parkes and the member for Watson, with some similar arguments happening on both sides. We know that some irrigators want the plan to go forward to access the funding for infrastructure projects under the programs to help deliver that 450 gigalitres of water. Other irrigators want to see the 605 gigalitres of projects to happen. And then you have others who don't want the plan at all. The debate took place across the extremities of all sides, and we saw it while this debate was going on. Some just want the 605 gigalitres for projects and not the 450 gigalitres for projects, so it's very complex, depending on what your interests are. But what we need, as I said, is a national plan that looks after the interests of the river so that we can continue in the best possible form and the best way to keep on using it for our sustainability. The Murray is just so important to the health of this country and to the nation's food security.

The deal that we have today will help to reverse some of the damage that has been caused, but we need measures in place so that when the next person comes along and wants to cause a bit of a ruckus or damage to this particular plan, and decides to destroy the deal, they are not able to do so. That is so important, because this plan will sustain us for the next 100 years. I suppose that my job as the member for the South Australian seat of Hindmarsh is to make sure that the horrendous impacts from the droughts that we saw affecting South Australia and most of the nation back in the late 1990s and 2000s are never experienced again—to be able to put measures in place that will ensure that we have the water required for our sustainability.

What I mean by that is that we need to be prepared for the next drought, because there will be a drought. There is no doubt that there'll be another drought, and we need this plan to help with that—to ensure that we are insured against the next drought that's going to hit Australia, whenever that might be. This is in addition to better environmental flows, which this plan will help with. Again, I want to thank the former Labor government and the member for Watson for that.

Also, South Australia, especially, has put measures in place for the next drought. We have a desalination plant. It gets a lot of criticism from people, but the reality is that when the next drought hits that desalination plant will be able to produce enough water for the entire metropolitan city of Adelaide—that is 1.1 million people. That will be water that won't be taken out of our flows and out of the River Murray. That is really important, even though we hear a lot of criticism about it. Measures like that may cost a bit, but they absolutely ensure that we do all that we can before the next drought decides to hit, whenever that may be, and provide water security.

It's only a matter of time, as I said before, when the next dramatic climate change event happens. We all know that climate change is real—I know there are others who don't believe in it—but droughts made by climate change are going to be prevalent, not just here but around the world. We need security: farmers need security and certainty, and our city planners need certainty as well. And, of course, our constituents—the people who we represent here—need the same thing.

So I welcome this legislation to the House. I look forward to working with this parliament and others to ensure a healthy, fairer and vibrant river system. Let's be remembered here as the generation that protected the River Murray, not the generation that sold the Murray to the highest bidder to the detriment of the entire ecosystem.

Ms LEY (Farrer) (12:43): I rise to speak on the Water Amendment Bill 2018. It's my pleasure in this debate to represent the constituents in my electorate of Farrer, who are primarily irrigators in the Murray River, the Murrumbidgee River and the Lower Darling.

It's very easy to talk about the basin plan from a distance away, and I understand that every Australian feels a sense of ownership, belonging and purpose when it comes to environmental water and, indeed, to the farmers who make their living, principally, from that environmental water. Few people have lived with this debate for as long as my constituents and those in the member for Murray's electorate, and I pick those two because I think it's fair to say we have been the most hurt, the most affected and, arguably, the most damaged by water policy that has failed us for so long.

But I am pleased that we have arrived where we are today, and I want to reflect the support of many of my constituents, the communities that rely on irrigation, for the agreement that the minister has made with the opposition to put the basin plan back on track—to deliver, principally, the SDL adjustment mechanism for the southern basin—and also to introduce a note of anxiety about what is commonly described as the '450 gigalitre up water'.

As the opposition spokesperson, the member for Watson, has mentioned many times, those two are inextricably linked, even though the 450 gigalitre up water was added to the basin plan in 2012. So there was a sense of concern about where this plan was heading. Then, when that measure was introduced, there was a sense of alarm. Some of that has abated, but we watch and note with interest. So that is the caution that I observe today, and I want to say that my communities are going to watch the implementation of the expressions of interest around the 450 gigalitres of additional water with great interest, and scrutinising that will be my job on their behalf.

As I said, this bill revisits the disallowance motion that was lodged in the Senate earlier this year. On 7 May, the coalition government reached the agreement, which we are supportive of, with the federal opposition, to deliver the basin plan in full and on time. The agreement will see the implementation of critical amendments arising from the sustainable diversion limit adjustment mechanism and the Northern Basin Review. It will provide certainty to irrigators, communities, investors and the environment alike, and it will allow those communities to look to the future.

As I travelled the electorate earlier this year and talked about the impending disallowance motion and what might happen, I think the most common piece of feedback—apart from the exhaustion that all of us reflect when we've debated water for so long, particularly those farmers who've lost water and are adjusting to a future with less water—was the uncertainty, which can cripple any investment program, particularly those as substantial as those for some of the farms in the Murray and Murrumbidgee valleys. The bill is a key, therefore, to unlocking millions of dollars of investment, not just to deliver those new environmental projects, important though they are, but to add value to the commodities that are now being grown very successfully. There are not just horticultural commodities, and rice, which we're used to. With the price of sheep and lambs where it is, people are actually growing pasture on irrigation, which I certainly haven't seen for many years. There is the introduction of cotton further and further south, with new plant breeding. The expansion of almonds, walnuts and hazelnuts, particularly in the Murrumbidgee, is very exciting.

The successful delivery of the SDL adjustment means that 605 gigalitres less water needs to be recovered from irrigators and communities without comprising basin plan environmental outcomes. As a result, the government has all but completed the task of water recovery in the southern basin. Unlike the opposition, we all stand behind no further buybacks—and that outcome comes as an enormous relief to the communities that I represent. The successful delivery of the amendment also opens the path to recovery of an additional 450 gigalitres, as I mentioned, to achieve enhanced environmental outcomes, with neutral or improved socio-economic outcomes through water efficiency projects.

So, in the southern Murray-Darling Basin, we know that the additional 450 gigalitres is essentially a task for us, and that's why we are so concerned about it. We know there's lots of language around the social and economic impacts, and we see that in the context of the Murray-Darling Basin's investigations, reports and deliberations over the years, which have demonstrated how much our communities have lost.

I don't like looking at agriculture in terms of what's lost; I prefer to look at what is gained. I would never talk these regions down. They do have a bright future. But they have lost a lot of water, and they have expected that that would be it.

So I just want to reflect on what those social and economic impacts have been. I know that you can put substantial dollar figures on these things, and what do they really mean? But I have looked at much of where this information has come from, and it has come from the authority itself. There has been an economic loss of $120 million at the farm gate—I'm talking about the Murray Valley—a 30 per cent decrease in rice production and a 21 per cent decrease in dairy. The average climatic scenario, which is the standard reference point, suggests that taking 20 per cent out of the consumptive pool through water buyback has led to an average increase in temporary allocation market prices of $70 a megalitre. This is close to doubling what would have been the market price, so, if you're buying water, that is an enormous impost. Reducing the size of the consumptive pool by 20 per cent increases prices in average seasons from $130 a meg to nearly $200 a meg. That increases the number of years when rice growers will sell rather than grow from seven years out of 20 to more than 10 years out of 20—I'll come back to that.

Murray Irrigation now delivers on average around 750 gigalitres a year compared with 1,350 gigalitres prior to the millennium drought—a huge drop in water to those farm producers. The decrease in farmgate production flows on to another $77 million loss in value-add and the loss of a total of 678 jobs, with 471 lost in the contraction of irrigation itself and a further 207 lost due to flow-on effects. This represents $21 million in lost salaries across the region. There have been population declines from 2001 to 2016 of 45.6 per cent in the Wakool community, 15.8 per cent in the Deniboota community, 32.5 per cent in the Denimein community, and 20.4 per cent in Berrigan and Finley.

I certainly have always pointed the finger at Labor for these dramatic socio-economic effects. Obviously they are not totally responsible. We in this parliament all had to take the steps that were necessary under the Basin Plan and the Water Act. But the way that the Labor Party recovered water through the horrendous Swiss cheese buyback and the disregard for the fabric of the community itself was really felt in some of the areas that I've just mentioned. As I've always said, if you have to recover this amount of water, why wouldn't you consult with the communities about the best way to go about it rather than launch the sorts of buybacks that perhaps created winners in some individuals—no communities, that's for sure—but created an awful lot of losers?

The problem with an approach where the government is paying for water is that you will have unwilling sellers but you will always have willing sellers, many of whom leave the district and therefore don't provide the jobs and the value-add. I'm concerned that with the price of temporary water as high as it is now and, indeed, the price of permanent water higher than it's ever been—we had a sale of permanent water at a water auction at the Riverina Field Days in Griffith recently, and it made $5,000, which is unheard of and, we suspect, is going to permanent plantings including walnuts or almonds; I think it was almonds—we're creating the haves and the have-notes when it comes to water. Those who have a permanent water entitlement can probably sit back every year and sell it, as some of the statistics I've indicated show, but those who have to buy it in every year are crippled by the uncertainty about the cost, the affordability and even whether they would enter the farm production process in the first place given the increase in those costs. I think that's actually been a ramification of the Basin Plan that no-one really expected. If I go back all those years to all those experts I talked to, I don't think any predicted that the price of temporary water would go as high as it has, and that does sound a note of real concern.

Just to finish with the 450 gigalitres of up water, as I said, it will be my job as the local member of the communities of Griffith, where they burned the Basin Plan, Deniliquin, where they're clearly more affected than anywhere else, and the Lower Darling, where viable, vibrant horticultural producers are looking at adjusting out so that further environmental flows can be delivered down the Darling river, to look very closely at any expression of interest that is released around the 450 gigalitres of up water to make sure that it isn't just about individuals but actually about communities, because if, in this process, we lose community trust then we really have failed. At many points along this road, we have lost community trust, but when I had the strong feedback from my constituents about the fact that the Basin Plan was back on track, and I heard the approval from both sides of parliament for that, I felt a sense of that community trust. As custodians of that we have to be really careful that we don't lose it again. If we launch any sort of approach into the basin that is seeking to capture water and tick a box that says 'socio and economic consultation and effects are neutral or positive' but they actually aren't really—if we do that and we don't do it well—then that trust will fall apart.

I am concerned that within the plan—and certainly intrinsically as part of the 450 gigalitres—there is a flow target at the South Australian border of 80,000 megalitres a day. Anyone anywhere in the southern basin, whether they are farmers or officials in the state or federal departments—perhaps I shouldn't say the federal department, but certainly the state department which is actually out on the basin understanding the day-to-day flow of the system—will tell you that that is completely impossible. We have to be pragmatic about this. If it can't be delivered, we have to acknowledge that it can't be delivered and South Australia has to acknowledge it can't be delivered. The opposition spokesperson on water has to acknowledge that it's unreasonable to place it there. If you have to deliver 80,000 megalitres at the South Australian border, what are you doing to the communities upstream to deliver it? How can you possibly push that water down a system with locks, weirs and the Barmah Choke—and even post the works that will be done at Menindee down the Lower Darling—and not sacrifice the farms and the communities upstream?

Effectively, the New South Wales government can't allow that to happen. The New South Wales government are the keepers of the final decisions on what projects happen on the ground. If there are genuine third-party impacts, they will wear them and they will be responsible. I know that as we get closer to this process from where we are now we will focus very much on what this actually means on the ground for riparian funding, for irrigator allocations, for the price of water and for the communities that depend so much on all of this.

I congratulate the minister for landing the deal that we were most worried about earlier on in the year. I congratulate too my constituents for coming on board and supporting all of us with a Basin Plan that looks to a brighter future.

Ms CHESTERS (Bendigo) (12:57): We have learnt a lot when it comes to water, particularly since the introduction of the Murray-Darling Basin Plan many years ago. It is true that, prior to the plan, the water wars did create a lot of uncertainty in our communities. There were those who thumped the table and said, 'You can never have our water.' There were those who thumped the table and said, 'We should completely end all forms of cotton growing or rice growing because they take too much water from the system.' We've come a long way from those days, from the days when people burnt the plan in protest. I want to acknowledge in this contribution on the Water Amendment Bill 2018 the mature role that these communities and the irrigators in the agricultural sector have played. They have said to all of their political representatives: 'We need to remove the politics from water. We need to focus on the plan and on the regions.' There's been a real acceptance and even an embrace in many of these communities of the positive impact the plan is making.

I want to acknowledge the work, particularly in the southern basin region, that communities and farmers in the agriculture sector have engaged in to really modernise and reduce their water impact. It is quite remarkable when you walk on farm and see the change that is occurring. Yes, we got some things wrong. Yes, in the early days there were projects that probably weren't the best projects. But as we grow in this plan and really mature we are learning more and more about the best way to become more water efficient and to return more water to the system.

I've had the opportunity to meet with rice growers and with cotton growers on farm. What you learn when you are on a header or on a picker does go a long way to really help understand where our growers and our farmers are coming from. Take cotton for example. Today they've reduced their water usage in the southern basin by about 40 per cent. The Murray-Darling Basin Plan has also helped unlock water in the region. Farmers who previously did not have a water entitlement or access to water can now purchase water on the temporary water market.

I do note that, whilst this plan doesn't look at the water market, there's work that we need to do in another space around the impact of the water market to truly ensure that it is a fair market. The idea of the Murray-Darling Basin Plan is we do need to have steps in place. It does need to be a robust plan that is able to reflect changes to the environment, changes due to drought and what may or may not be impacting on our rivers. Many people may not know this, but Bendigo is one of the electorates that is at the base of the plan. Whilst we are not on the Murray, we are very much part of the Murray-Darling Basin Plan. Water has always been a strong concern in my part of the world. We know that our river systems do not have the same inputs that they once had to the Murray. Because we are having drier seasons, the Campaspe and the Loddon are not delivering what they have previously. There are discussions that we have regularly with the catchment management authorities in our part of the world about what we're doing.

As has been outlined, the amendment that is before us has been about us in the federal parliament coming back together in a bipartisan way and engaging about how to get the plan back on track. Nobody for a moment should pretend that this is an easy area of public policy. It isn't just about bipartisanship in this place; it is also about asking states to partner with us on how to deliver and manage the Murray-Darling Basin Plan. Being from Victoria, all of you would know the comments of Lisa Neville, the water minister, who said 'not one drop more'. Lisa Neville is the water minister for Victoria and champions the best interest for Victorians. Equally, the same could be said about South Australian water ministers, New South Wales water ministers and Queensland water ministers. That is why it is so critical for us to have a plan that sits over the top of all of our states and works in collaboration. We cannot have a proactive plan that is about achieving outcomes for the system without the engagement of the states. It's just as important to have the states at the table as it is to have both sides of politics in this place at the table.

What also has been delivered in the plan is a commitment around the funding package to help deliver the 450 gigalitres that has been so talked about. We know that this will come through voluntary on-farm water projects with the Commonwealth, and calling for expressions of interest is the first stage. We also know, through work and conversations with the communities and the constituents engaged, that they have some innovative ways that they believe that they can help contribute towards achieving this environmental water outcome. That's the key point I was really wishing to express in this: in the years in which we've had the plan enacted, there has been real engagement, maturity, innovation and transparency that has come from a lot of the communities and the stakeholders engaged about how they can contribute and deliver.

I will be honest: I've met with a lot of dairy farmers and they have real concerns in the Murray region. Some farmers—and you can't hold this against them—sold out in the early days and sold their water entitlement. This is the Swiss cheese effect that we're talking about. In a particular area, you may have lost quite a few people in the system, and then the maintenance of the system that's left is left to the few dairy farmers that might be there. That is a real concern. We have to look at transition; we have to look at how we can help those areas. You can't hold it against the farmers, some of whom were crippled with debt. The banks put pressure on them, they had a water entitlement and so they sold it. With the farmers who are now left, we need to work with them to ensure that the ongoing cost and maintenance in those irrigation systems is fair. How do we make sure that the cost of that is fair?

Then you look to what's going on in the Riverina, and how some of the communities in the Riverina held back a bit and then proactively engaged on how to ensure water efficiency and energy efficiency. They really, really are driving the innovation in this space. There is an opportunity. What Labor is saying is that, 'Well, we can all work together on achieving good outcomes for irrigators and farmers at the same time as achieving good outcomes for the environment.' Transparency is paramount and compliance is paramount. We need to ensure that there is integrity within the plan. There are different interests; just take the states alone. They come to this from very different places. So ensuring that we have transparency and accountability and ensuring that we have compliance are paramount.

I know that in the southern basin, the area closest to me, there was a lot of concern about the issues being raised on what was going on in the northern basin. There were impacts further downstream because of the reports they were hearing about the northern basin. These were starting to concern communities. That is why it's good to see the movement by the New South Wales government and this government to ensure compliance and also transparency, giving those people in the south the security and the confidence in the plan that they need.

Metering funding is critical so that we know how much water is being used in the north. Again, it's to ensure that confidence and transparency going forward. Also, there are: having the modelling being done made available to the public; ensuring that the Murray-Darling Basin Authority has the resources that it needs and the expertise that it needs; and ensuring that there is genuine peer review in any work that's put forward so that we can have the confidence in the system going forward.

It is an area of public policy, as I have said, that is vexed and hard to navigate. For 100-plus years we've struggled with it as a country. It's one of those core issues when we debate state rights. But what was agreed in 2012 really put us on the path to resolving this conflict, and only through continued engagement and dialogue can we actually achieve and deliver what is necessary to keep the health of our river and our river system, not just for today but for future generations.

It's also great to acknowledge that in this set of reforms there is funding to assist our First Nations in the north and south basin to acquire water entitlements for cultural reasons. Cultural water is important. I know the engagement with our First Nations around the Gunbower area has really helped to drive changes in how the water is managed by the catchment management authority. It might surprise some environmentalists, but quite often the farmers and the local elders were on the same page about when the water should flow through the Gunbower network and systems.

There are a lot of those lessons, and I think that the point I'd like to end on is that the plan exists to restore health to the basin for all of those reasons: economic, social, cultural and environmental. We can all coexist. It is about open dialogue; transparency; supporting a just transition and funding towards those areas; encouraging innovation; and supporting the good work that's being done and building on those lessons. I understand that those opposite do sometimes like to reignite the wars for political reasons, but that doesn't do much to really help the situation. I do want to acknowledge the efforts that have been made by the minister to rebuild the bridges in those areas.

Unfortunately, not all of the members on the other side come to this debate with that level of maturity. The member for Murray should really reduce the politics in this space and get back to being bipartisan and working with all parties to deliver a just transition in his area. Our agricultural communities and our regional communities have so much opportunity. We do need to work with these areas to ensure that we have strong investment and that so that there is a plan for these areas going forward. Just seeing some of the transformations going on in the Riverina—there are some great things going on in that part of the world that other parts of Australia can really learn from.

Transparency and accountability are critical to the survival of the Murray-Darling Basin Plan. Working together in a bipartisan way can deliver on all four key factors—environmental, social, economic and cultural.

Mr BUTLER (Port Adelaide) (13:09): I'm happy to rise to speak to the Water Amendment Bill 2018. I do so as a member for a South Australian electorate, South Australia always having had a particular interest in the health of the Murray-Darling Basin, and also as a former water minister—albeit for a matter only of several weeks—and as a shadow water minister during the last term of parliament who understood, I think, the fragility of this plan and the importance of bipartisanship and agreement between the two major parties to keep on track a plan that was so hard fought.

I'll come to the processes that have led us to be considering this bill. The bill is quite specific. The bill allows for the Northern Basin Review instrument—the Northern Basin Review being an element of the plan—to be remade and to be tabled again in the parliament. But, more broadly, this bill reflects an agreement between the major parties, notably the minister who's at the table today and our shadow minister, the member for Watson, essentially to get the Murray-Darling Basin Plan back on track. I don't think it's any exaggeration to say that this plan was, for a period of time, hanging by a thread, and with it was also hanging by a thread the best possible chance our nation has of returning this incredibly important river system to a sustainable, healthy condition for now and the future.

The scale of the achievement that's enshrined in the Murray-Darling Basin Plan is difficult to overstate. It was incredibly hard fought and follows literally decades of disagreement and conflict around the way in which the Murray-Darling Basin Plan was managed. But it focuses on one of the most important environmental and economic assets that this nation has. About 40 per cent of the nation's agriculture is dependent upon the health of the Murray-Darling Basin Plan, feeding into about $19 billion of our GDP. Those figures are probably out of date; it's probably substantially more than that now. Particularly importantly—I say this as a resident and a representative of Adelaide—it delivers drinking water for about 1.3 million or more Australians. So this is an incredibly important environmental, social, cultural and economic asset, and the scale of achievement, as I said, in finalising and then delivering the Murray-Darling Basin Plan is really difficult to overstate.

The history of this basin has been one of political conflict, conflict within industry, conflict between industry and environmental groups, and essentially overextraction—extraction at levels that have seen a steady, inexorable decline in the health of this incredibly important national asset. That really is the history. The present and the future have added to that level of overextraction and mismanagement, I think, of what essentially is a national asset fought over between states. Added to those pressures is now the pressure of climate change and a drying trend that you, Deputy Speaker Irons, would certainly see in Western Australia, particularly the Wheatbelt of Western Australia, but that we also see in the south-east of our continent.

I just want to remind members of some of the work that the Bureau of Meteorology and the CSIRO have done around rainfall and stream flow rates in the south-east, including in the Murray-Darling Basin area. The bureau and CSIRO publish every two years what I think is an incredibly important, user-friendly report called the State of the climate report. In the 2016 State of the climate report there was a particular focus on rainfall and stream flow rates in those key growing regions of Western Australia, or the south-west of the continent, and the south-east of the continent, particularly in the Murray-Darling Basin. I just want to remind members a bit about what the CSIRO and the bureau said is happening in those regions to add additional pressure to the pressures that have been on this system, on the Murray-Darling Basin, already for many years because of overextraction. In their report of 2016, the bureau and the CSIRO said:

There has been significant drying across southern Australia, especially across the cool April-October growing season—

which is a particular pressure on our farming communities. The report said:

The recent drying across southern Australia is the strongest recorded large-scale change in rainfall since national records began in 1900. This decrease, at an agriculturally and hydrologically important time of the year—

the peak growing season—

is associated with a trend towards higher mean sea level pressure in the region … A known response to global warming is an increase in mean sea level pressure across southern Australian latitudes … This means that years with lower-than-average growing season rainfall are expected to be more frequent than in the past. Southeast Australia—

which obviously takes in much of the basin—

had below-average rainfall in sixteen of the last twenty April-October periods since 1997.

Perhaps more important for irrigator communities than rainfall data, though, as the minister would appreciate very well, is the streamflow—the amount of the rainfall water that actually reaches the river system. The bureau and the CSIRO particularly focused on streamflow rates, which are dramatically down in the south-west of the continent, in your state, Deputy Speaker—I won't go into that, because it's not covered by the Murray-Darling Basin Plan—but also down very dramatically in the Murray-Darling Basin Plan. The report says:

The reduction in rainfall across southern Australia is amplified in streamflow.

Obviously, rainfall needs to be sufficient to saturate the ground before rain then flows into the river systems and is available to irrigator communities. The agencies say:

Since the mid-1990s, streamflow in the southeast is around half the long-term average. During the same period—

since the mid-1990s, obviously—

streamflow in the Murray-Darling Basin was 41 per cent lower than average and in some basins in the west and central regions of Victoria, such as the Campaspe Basin, streamflows have declined more than 70 per cent.

If we were not able to start to get the controls on extraction in the basin that you see in the plan, these pressures would arguably place communities across the river system, and the environmental health of the river itself, in perilously dangerous condition.

I am a representative of South Australia in this debate. South Australia has been making demands since the 1890s for this basin to be managed better and better. At the constitutional conventions, as followers of these debates would know, Charles Cameron Kingston, who was perhaps the leading constitutional convention delegate from South Australia, argued that because the basin crossed then colony, and soon to be state, lines, it should be managed by a national government. It was then an incredibly important national asset, as it continued to be right through the 20th century. South Australia, as so often happens to be the case, got done over by the big states yet again. The upstream states, New South Wales, Victoria, and Queensland, particularly, were able to continue to extract water from the system as much as they wanted.

It wasn't until the federation drought, over the course of the turn of the 19th and into the 20th century, that pressure really built for the upstream states to come to the table and start to talk about a better management system for this critical water source. That happened in 1902, only a year after the creation of the Commonwealth and really at the point where the federation drought began to break. My great-grandfather was a signatory to the River Murray Water Agreement of 1914, which resulted from that coming together. It took 12 years to get an agreement. It took us a fair bit of time, as well, to get the basin plan agreed to by the member for Watson and different states. It's always been thus. It took 12 years to get the River Murray Water Agreement of 1914 signed, which my great-grandfather signed on behalf of South Australia. It resulted in significant infrastructure being built—locks and weirs in the river system—and secured minimum monthly flows to South Australia from upstream states.

But there really wasn't much progress from then. For the following 100 years there was not much progress whatsoever in a system that would better manage this critically important economic and environmental asset. Since that time, it was essentially a matter of ongoing dispute between the different states, particularly with South Australia, as the downstream state, feeling that it was in a fight against Victoria, New South Wales and Queensland.

Water reform did progress under prime ministers Keating and Howard. Internationally, I think our water market arrangements are seen as some of the best, some of the really exemplary water market arrangements anywhere in the world. But we weren't able to translate that foundation of a water market into better management for the basin until the member for Watson was able to finalise the Murray-Darling Basin Plan, in 2012. The Murray-Darling Basin Plan, at its heart, seeks to return the system to environmental health, because everything hangs on environmental health—industries and the health of the communities across the river system. Nothing will work if the river is not returned to environmental health. That is why we have argued against the, I think, inexplicable decision by Prime Minister Turnbull to give responsibility for the implementation plan to the agriculture ministry. This was something that Prime Minister Howard understood was not the right approach. This was something that Prime Minister Abbott understood was not the right approach. For some inexplicable reason, only able to be explained by base politics, Prime Minister Turnbull decided to give the then minister, the member for New England, responsibility for implementing a plan he had railed against year in and year out. We say that this should be a plan managed by the Department of the Environment and Energy and the Environment portfolio, because industry, communities and the environmental health of the system depend upon returning this system to a sustainable and healthy condition.

The core element was returning 3,200 gigalitres, or 3,200 billion litres, of water to the system. That was the core element and the central position of the plan. For some, for example the Greens party, the perfect was the enemy of the good. They thought it should be more than 3,200, so, often true to form in these policy areas, they voted against the plan. I understand that they've been railing against it in the Senate, in the other place, over the course of the last couple of weeks. Members of the National Party, including the current Deputy Prime Minister, voted against the plan as well. On the fringes—the far Right and the far Left—there was opposition, but, fortunately for the system and for the nation, there were enough sensible heads at the centre on both sides of politics to recognise this was our only chance of returning the system to a sustainable and healthy condition.

Within those 3,200 billion litres was a core condition, particularly for South Australia, and that was the additional 450 gigalitres. The member for New England had made his position clear before, and since, becoming the minister with the responsibility for this plan: he did not regard that as a favourable term. He made it clear that he had no real intention of implementing that critically important part of the plan, and that has been a central element in the undermining of confidence in this plan. I want to say that that is probably the key reason why the plan has been put back on track by the minister and by the shadow minister, the member for Watson, over recent weeks. The government wasn't really committed to the plan, as evidenced by the position the member for New England had for many years about the 450 gigalitres of so-called up water. Compliance was not being taken seriously, as seen most obviously in New South Wales. And there simply wasn't enough scrutiny on the so-called SDL adjustment projects—the sustainable diversion limit adjustment projects—with the 605 gigalitres of down water. There wasn't enough scrutiny for people to have confidence.

All of those elements and all of those concerns have been dealt with by this agreement between the minister and the shadow minister. There's a good package of measures, which I think gives a much clearer commitment to that additional 450 gigalitres, linking payments for those states that have SDL adjustment projects and linking payments for those projects to their cooperation with the 450-gigalitre process of so-called up water. There's better compliance in this package, particularly in the northern basin. There's better scrutiny of the SDL adjustment projects, including through technical workshops that the authority will run with groups like the Wentworth Group of Concerned Scientists, and, as the member for Bendigo said when she spoke before me, there's much better support for cultural water outcomes for Indigenous Australians in the basin area. I want to reiterate that this plan, the Murray-Darling Basin Plan, is far and away our best chance of returning the river to a healthy and sustainable condition, and we cannot let that chance slip away.

Ms KATE ELLIS (Adelaide) (13:24): I rise to speak on the Water Amendment Bill 2018 and to once again place on the record that federal Labor will stand up and will fight for a healthy Murray River wherever and whenever we need to. It's particularly the South Australian members of our federal Labor caucus who have shown that we are passionate about making sure that we have a healthy, strong and vibrant river, and we know that that is just not possible unless you ensure that the river is healthy all throughout.

When I stood in this place to make my very first speech, I made a commitment to the parliament and to the people of Adelaide that I would stand up and use my time as a member of parliament to fight for the River Murray. I'm here today to say that I intend to do that until my last speech in this parliament, because we know how critically important the river is. We know that we need to get the plan back on track, and we need to get it back on track now, which is why federal Labor have been working with the government to achieve these compromises and to make sure that the plan can proceed. We know that this plan has been worked upon for not just years or decades but a century. People have bickered about the River Murray. As South Australians, we see the result first when the Murray is not working, when consensus is not reached and when we don't have an agreement. We see it particularly in times of drought, as the member for Hindmarsh outlined to the House earlier. We also know that after a century of fighting, of different jurisdictions putting their own interests ahead of the interests of a strong and healthy River Murray, there was a historic agreement reached in 2012. We are proud that the member for Watson led those negotiations, and we are proud that it was a federal Labor government that finally saw a way forward and an agreement.

That agreement was put in great jeopardy in part because of the member for New England holding the water portfolio. This is the member who famously told South Australians if they were concerned about the health of the River Murray to just move to where the water was. We have also seen some horrendous examples of water theft, of corruption and of water being diverted away from our river system. After this evidence of water theft and corruption, we saw that, once more, the National Party, particularly the member for New England, were prepared to play politics, to say one thing to the national media but to say the complete opposite in their own communities when talking to irrigators. This was particularly so following the evidence of the water theft and corruption when the member for New England was recorded saying in a pub: 'I'm glad it's our portfolio, a National Party portfolio, because we can go out and say, "No, we're not going to follow on that".' He also went on to say, 'We'll make sure that we don't have the Greenies running the show.' Today my message to the National Party, to the member for New England and to anyone who tries to stand in the way of a healthy Murray River is that there are no jobs in a dead river. There are no jobs upstream; there are no jobs downstream. We know that we need to fight to ensure that the mouth of the river stays open and that we have the necessary environmental flows to ensure that the whole ecosystem is protected.

I know that there are some challenging elements of change for communities. I absolutely acknowledge that. But we have worked for far too long, for far too many decades, to see this plan fail. That's why the Labor Party were prepared to sit down, to compromise, to work with the government. We're really pleased with this package. We're pleased to see that the 450 gigalitres of environmental flows will be delivered. We're pleased with the commencement of recovering the 450 gigalitres through an expression of interest, that there is an assurance that the 605 gigalitre projects will be delivered by linking the payments for supply measures with efficiency measures for environmental water and that, if the 450 gigalitres isn't being recovered, the funding for the 605 gigalitres of projects won't be provided.

The member for Murray accused us of looking at short-term politics. Let's make this very clear: the Labor Party's position is about a long-term commitment to a healthy Murray River. We fought for it, we delivered a plan, and we are not going to see the politics that is being played by some put that plan in jeopardy. We will get it back on track and we will work with the government constructively to make sure that happens. We have seen that the South Australian community and, I must say, the South Australian media, including The Advertiser, have done a great job in putting pressure on members of parliament and on members of the government to ensure that this plan is delivered. But I have great fears. The draft redistribution in front of us at the moment shows no marginal seats in South Australia. I know that those opposite have only been encouraged to come to this plan because of the electoral consequences if they do not.

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

The DEPUTY SPEAKER ( Mr Hogan ) (16:19): I understand it is the wish of the House to consider the matter immediately. The question is that the motion by the honourable the Prime Minister be agreed to.

Question agreed to.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (16:20): I move:

That Mr Christensen be appointed a member of the Standing Committee on Industry, Innovation, Science and Resources; and that Ms Bird and Mr Conroy be appointed members of the Select Committee on Intergenerational Welfare Dependence.

Question agreed to.

Mr LITTLEPROUD (Maranoa—Minister for Agriculture and Water Resources) (16:20): It is with such pride that I stand here today to provide certainty to the two million Australians who live up and down the Murray-Darling Basin. Today is a historic moment for this nation. As the member for Watson so eloquently put it this morning, since Federation we've never had an agreement on the Murray-Darling Basin Plan, but this parliament today sets forth on a new direction for the people of Australia, and for those two million Australians. And as he quite eloquently also put it: this isn't perfect; it was never going to please everybody, but it was the best plan to give the best outcomes to the environment and to our farmers—for the social and economic benefit of this nation.

While I wasn't in this parliament when the plan came to be in 2012, I'm proud to say that I'm here to implement it as the new water minister. And I do it with some pride, because I know the personal stories of the hardship that this has caused to communities and individuals, and it's driven me to make sure that I have been determined to get outcomes rather than play politics. It's beholden on me to talk about some of those brave people whose livelihoods and lives we've impacted over the last five or six years. One in particular, who always will stick with me, is a young agronomist in Dirrinbandi, who, in tears, told me that because of the uncertainty he was unable to employ a second agronomist. So he was doing 17 hours a day of work, to the point of exhaustion. He rolled his ute, nearly killing himself and leaving a young family behind. I have seen fear in the eyes of a young man who wants to get ahead and wants to be in a nation that gets a fair go. That's driven me to make sure we've got outcomes. I've seen hardened men brought to tears over this—hardened farmers that have seen far, far greater adversity in their lives, but this has broken them to their absolute core.

And there are the business owners. A business owner that I met had been 40 years in the one business. Now, basically because of the uncertainty, his business is worthless—not worth a cent. He had no superannuation. He had a mental health plan. They were trying to keep him alive, let alone keep him in his business. These are the lives that we've impacted. These are the livelihoods of people that we are today going to fix. This bill will set us on a journey of bipartisanship to rectify that. I thank those opposite for coming on this journey.

The Water Amendment Bill 2018 will allow us to re-introduce the Northern Basin Review back into parliament. We were fortunate enough to have the sustainable diversion limit disallowance defeated the other day, with the assistance of the opposition. I sincerely thank them for that. This now sets us on a journey to complete the plan on time, in full. Can I say that the member for Watson, who has been forthright and honest in all negotiations with me during this journey, has ensured that we not only have in place a plan that was created in 2012; we've built on it. We've built on it to ensure that there is now compensation to the extent of economic reconstruction for some of those communities that have been hurt severely by the buybacks of water that stripped the livelihoods of businesses—like the gentleman who I just talked about who owns a business and is on a mental health plan. It's about trying to reconstruct their economy, with a $20 million injection into changing their industries away from irrigation and into other agricultural pursuits.

But it's also about compliance. It's about making sure there is integrity in this plan, whether it be from Queensland to South Australia.

If you are doing the right thing, you have nothing to fear. If you are doing the wrong thing, you are going to get caught. We'll be instituting a Northern Basin Commissioner to ensure that compliance by the states is upheld. That's a practical and sensible solution. That's something that gives integrity to this plan, which all Australians should be proud of, because we know that it will be sustainable.

But what I'm most proud about is the fact that we've made, for the first time, an investment for Indigenous Australians. As I sat in St George and listened to an elder whom I respect above all, Ronnie Waters, he told me that basically he had been forgotten in this whole plan and that he was not empowered to do something about it. I'm proud to say, and as the member for Watson said so eloquently this morning, this is probably a world first. We've ensured that we are now empowering Indigenous Australians to purchase cultural water for economic purposes. They have a place in this. They have a traditional ownership of this. They have a cultural feel for that water. When you sit there under a tree with Ronnie Waters and listen to him talk about water being in that river, passing on his culture to the younger generations of St George, not only Indigenous but white Australians, it bridges the gap more than anything else in regional and rural Australia. I'm proud to say that we've made that commitment. It was important to me. I'm pleased to say that the member for Watson came on that journey with me.

This plan was always about goodwill and trust, but over its journey we haven't had that. We've had vitriol and name-calling. I was never going to get into that. This was far too important. Those people's lives and livelihoods which I have been talking about were always inside me. It worried me that, unless we got this right, unless we set out on this journey now, it would fall apart and we would never have another opportunity to get it right again. I was determined for those people who had touched me during this journey to make sure that I got it right for them. I'm pleased to say that the member for Watson has done that every step of the way. The member for Watson was honest. He was forthright. He acted with utmost integrity in all our negotiations. We didn't all get what we wanted, but he made sure that we were honest with one another, that we held our hands out to each other and that we would walk out of this place having delivered something that was historic for this nation. This nation should be proud that we have a parliament that works, a parliament that will ultimately deliver a plan for the Murray-Darling that has never been done before.

I'm proud to say that the member for Watson is the architect of the Murray-Darling Basin Plan—something which he should be profoundly proud of. I'm proud to say that I have been here to deliver it. I'm proud to say that I put my hand out, he's taken it, and this parliament will now deliver the certainty to the two million Australians who have been impacted, who have been fatigued, by this issue for so long. Today we give them certainty. So, to those opposite, I say: thank you for the honesty and integrity that you have shown. I say to this nation: you should look at this parliament and see that it does work. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Mr LITTLEPROUD (Maranoa—Minister for Agriculture and Water Resources) (16:28): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fenner) (16:29): I move the second reading amendment that has been circulated in my name:

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 calls upon the Government to seriously tackle phoenixing and the black economy, including by urgently introducing legislation requiring every company director to be issued with a unique Director Identification Number”.

A couple of years ago, the Australian Taxation Office conducted a number of audits into illegal phoenixing activity. Following one of those audits, a Tasmanian business owner was charged with fraud for phoenix activity, which was alleged to have involved an original company that operated a chain of restaurants. According to the charges, the owners sold all the plant and equipment to another company, but didn't get paid. They moved the restaurant leases to the other company and then they put the original company into liquidation, leaving creditors with access to no assets. This is classic phoenixing activity in which a firm is deliberately burned and its assets moved to a new company.

Dodgy directors are in the minority but those who do it hurt their creditors, hurt taxpayers, hurt workers and hurt honest businesses. We have estimates of the cost of phoenixing activity in Australia. They're old estimates, because the government hasn't yet released the updated PricewaterhouseCoopers estimates, but even those outdated estimates suggest that phoenixing activity could cost every person in Australia $100 a year or more.

Labor has a plan to crack down on dodgy phoenixing activities. Over a year ago we announced that a Shorten Labor government, through a package of measures, would crack down on dodgy phoenixing activities. That package was based upon work done by the Melbourne Law School and Monash Business School phoenix research team. It included increasing the penalties associated with phoenixing activities, introducing an objective test for transactions depriving employees of their entitlements, clarifying the availability of compensation orders against accessories and consulting on targeted integrity measures, based on those recommendations from the phoenix research team.

But the principal measure underlying Labor's package, announced alongside the member for Gorton, was to ensure we have a director's identification number, with a 100-point ID check, because the extraordinary thing in Australia today is that it is tougher to open a bank account than it is to register as a company director. That means that a small minority of dodgy directors are setting up under multiple names, burning companies, and then re-registering as new company directors under a different name. To recognise how easily this could happen, I have to say that a backbench member of the government, a Liberal Party representative in this House, was registered under multiple names as a director. In that instance, I'm sure the error was inadvertent, but the fact that it could happen so easily to a member of the federal parliament illustrates the problem we're battling here in cracking down on dodgy directors.

The tax commissioner, Chris Jordan, said in response to answers to one senator that the current law was so easy that you could almost register your dog as a company director. That's why, on 24 May 2017, Labor announced that we would act. We would insist that all directors have a director's identification number. That's 371 days ago and we are yet to see any action from the Turnbull government. That's despite the fact that, in principle, they are supportive of the measure.

On 12 September last year, the coalition belatedly announced that they would follow in our footsteps with the director's identification number. That's 260 days ago. For 260 days the dodgy directors have been able to continue burning firms, hurting taxpayers, workers, and honest businesses—260 days in which dodgy directors have been able to siphon money out of our economy, yet the government has failed to act. It is 371 days since Labor said we'd act on dodgy directors. It is 260 days since the coalition said they would act on dodgy phoenix directors and we've still seen no legislation in this parliament.

The measures in this bill are unexceptional. They deal with the use of electronic sales suppression tools, prohibiting their production, distribution and possession to incorrectly keep tax records. The measures in this bill require entities having an ABN providing courier or cleaning services to report to the Australian Taxation Office information about transactions that involve engaging other entities to undertake those courier or cleaning services for them. But the measures missing from this bill are the critical ones. We need action to crackdown on dodgy phoenix directors. While the government is unwilling to crackdown on dodgy phoenix directors, it isn't taking the critical action which the experts recognise is needed.

It is not just Labor that believes we need to crackdown on dodgy phoenix directors. We have seen a plethora of organisations, across the political spectrum, saying that we need to stamp out this activity. Really, this activity is like tanking in AFL: it's failing to do your best, deliberately sucking resources out of one company and moving them into another company. We have seen the Productivity Commission, the Australian Institute of Company Directors, the Australian Small Business and Family Enterprise Ombudsman and the Australian Council of Trade Unions calling on the government to introduce a director identification number. The government have said that they will do it. They said 260 days ago that they'll do it, but there are still crickets when it comes to real action on dodgy phoenix directors. These measures may well add to the budget bottom line, but when we look at the budget papers the only revenue impact is an asterisk. It is an unquantifiable addition on to revenue, but it is an expense of a total of $40 million over the forward estimates. We certainly hope that these measures in the bill that we're debating today will add to the budget bottom line. But, as it is, we have unquantifiable impacts.

Reducing the prevalence of the black economy is absolutely critical, but it's Labor's leadership on this issue which has marked the true difference between the political parties. Australians should not have had to wait more than a year for this government to introduce a director identification number. When it comes to their proposed amnesty on employers who haven't paid superannuation for the past 25 years, that has been announced and they are trying to implement it straightaway. But when it comes to action on dodgy directors, they are as slow as a wet week. They are failing to act on the dodgy phoenix directors who are costing the Australian economy billions of dollars. Labor will act. A Shorten Labor government will crackdown on dodgy phoenix directors because we want to ensure that honest businesses, workers and taxpayers aren't being hurt by this egregious activity.

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

Mr GEE (Calare) (16:38): I rise to support the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, and I commend the minister for introducing it to the House. In case any members of this House or, indeed, any residents of Australia are in any doubt, I would like to briefly draw on the words and work of the Black Economy Taskforce. The task force was convened by the Minister for Revenue and Financial Services, the honourable member for Higgins, and chaired by Michael Andrew, AO. I note that the interim task force report stated as follows:

The black economy refers to people who operate outside the tax and regulatory system or who are known to the authorities but who do not correctly report their tax obligations. It encompasses a wide range of practices, including understatement of takings, the payment and acceptance of cash wages off the books, welfare fraud, sharing economy contractors not declaring their income, grey trading, activities in the so-called dark web, moonlighting and phoenixing (where businesses deliberately liquidate to avoid paying employees and creditors). Complex interactions with illegal activities, including money laundering, must also be taken into account.

As you can see, it encompasses a wide range of activities, including those involving organised crime to not declaring income.

The government requires resources to function. As we all know, taxation is essential for every government program or initiative from our defence and border security to Medicare, the NDIS and the Pharmaceutical Benefits Scheme, which saves the lives of so many Australians every year. Funding our social welfare system and our education system and the billions this government is pouring into infrastructure and development in our communities—all these essentials require taxation revenue. Government revenue is critical to every process or action in the aid of Australia, so it's in people's interest and the nation's interest to be addressing the issue of the black economy.

According to the Australian Bureau of Statistics, the black economy is estimated to be worth up to 1.5 per cent of GDP, or $25 billion in current dollar terms. That's an enormous figure. There is a huge amount of money circulating outside the Australian tax system. I think we should also note that, in terms of employees being part of the black economy and superannuation not being paid, it's often the workers who are the victims because they don't get the benefits of superannuation and wages can be underpaid. In some cases these workers don't receive any superannuation at all. Again, the sum of $25 billion is absolutely vast. The point of this is that, if we want those services and if we want our workers to be looked after, then this issue does need to be addressed. That is the price we pay for living in a society that provides the infrastructure and the services that are required to function.

The Black Economy Taskforce looked at particular occupations and industries that are more prone to operating outside of our tax and superannuation systems. Under the taxable payments reporting system, the ATO has already experienced a lift in contractor tax compliance and reporting of income by participants in the building and construction industry. It, therefore, makes sense to extend this reporting system, which the bill does through schedule 2. It addresses two industries—courier and cleaning services. Courier and cleaning services businesses will be required to lodge a simple annual statement with the Australian Taxation Office. This statement will essentially identify payments they've made to other businesses for such services—that is, if they subcontract cleaning or delivery services, they need to identify the annualised payments made to those subcontractors.

Extending the taxable payments reporting system is a simple measure—and a simple reporting commitment, for that matter—that will contribute around $132 million to essential government services over the forward estimates. Again, very substantial dollars will flow to the federal government. It will close the loop on reporting and payments in these industries and, indeed, could be extended to other cash-intensive industries should it become necessary.

With respect to the amendment to schedule 2, the government has acted on concerns raised by stakeholders that mixed businesses providing courier or cleaning services may have a disproportionate compliance burden where the provision of those services is merely a small part of the overall activity of the business. The introduction of the threshold test will mean that businesses that receive payments for courier or cleaning services that are less than 10 per cent of the business's overall GST turnover for the reporting period will be exempt from reporting the payments they make to contractors commissioned to complete these services.

Another feature of the bill is that it creates offences for the manufacture, distribution, possession, sale and use of electronic suppression tools—that is, the software that deliberately distorts records of businesses so that they can reduce their tax. As this House has already heard, this software has no legitimate purpose. According to the OECD, the use of this software has been spreading globally and has been specifically identified in Canada, the United States, Germany and Sweden, and these jurisdictions are moving on the issue. They're not going to tolerate it, so it's important that this government and Australia also take steps to crack down on this as well. There are no reasons for Australian businesses to be using these suppression tools. This is an important and timely measure. I think that most Australians would be supportive of not only this measure, but the whole bill. So I would like to thank the minister and the task force for its work, and I commend this bill to the House.

Mr THISTLETHWAITE (Kingsford Smith) (16:45): I'm speaking in support of the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018 amendment moved by the member for Fenner, which calls on the government to begin taking seriously the issue of tackling phoenixing and the black economy:

… including by urgently introducing legislation requiring every company director to be issued with a unique Director Identification Number".

I want to congratulate the member for Fenner for the work that he has done in this area over the course of the last couple of years. He's been working in particular with small businesses, with workers and with members of the Australian public on this issue of the black economy. This work will ensure that the true amount of revenue flows into government coffers so that we can adequately fund the important social services that we need, such as investment in hospitals and Medicare, properly investing in schools, investing in a decent TAFE system so that people get a tertiary education to give them a good start in life, and ensuring that we're investing in universities—all of the areas where we've seen substantial cuts in funding from this government.

We can't simply accept the status quo, that the government just prioritises tax cuts for big businesses rather than tackling some of the issues behind the scenes about businesses paying the right amount of tax and disclosing the right amount of tax. If we're going to build a stronger budget and a fairer tax system, we need to make sure that we're closing some of those loopholes and tightening laws. Instead of unwanted and unwarranted tax cuts for the top end of town, we should be cracking down on those companies and employees who are clearly operating outside the law. That's why we need to put the spotlight on the black economy, which the ABS estimates is costing at least $25 billion. Most experts agree that this figure is growing.

We know that there are dodgy labour hire firms paying casuals cash in hand, which means lower wages for workers, no superannuation contributions and tax avoidance by those companies. We know that the so-called gig economy jobs are inflicting industrial-scale underpayments on many people who are working in these emerging industries. We know that ABN fraud sees the use of multiple or incorrect business numbers to avoid paying tax, to avoid paying clients and to avoid paying workers. And we now know about phoenixing, which is where companies liquidate their businesses in order to dodge the debts that they owe to employees and creditors, and then, hey presto, they pop up a week later operating under a different name—truly unconscionable conduct. These problems have been left by this government for too long, despite a number of calls for reform to be undertaken in this area. You can't be serious about budget repair and stronger surpluses while standing by and allowing this kind of industrial-scale tax evasion to go unchecked. It really is all about priorities. The Turnbull government clearly aren't serious about tackling the blight of the black economy if they're not delving into those issues of phoenixing and looking at issues such as registration numbers for company directors.

It was only in September 2017 that the Turnbull government finally announced that it was taking action on phoenixing activity, including that it would finally introduce some of those reforms that Labor had been talking about for some time, including identification. Because of the slow nature of this reform, dodgy directors have been able to continue scamming honest businesses, employees and taxpayers. At present, the registration of an Australian company simply requires the name, address, and date and place of birth of each of the office holders. It obviously makes it too easy for fraudulent activity and for directors to escape their obligations. The phoenix operators are allowed to run rampant in our economy in areas like construction and labour hire. They're giving good directors a bad name and they're ripping off honest workers. The government needs to get serious about tackling phoenixing and the black economy, including urgently introducing legislation requiring every company director to be issued with a director identification number.

The case for such a move is clear. In requiring prospective directors to quote their numbers when incorporating a new company, ASIC would then be able to be given a detailed picture of the company and its management. With more information and more transparency, dodgy directors can be tracked via ASIC and through other government agencies. The unique identification number is also crucial for small businesses and liquidators to access information on directors, including accurate information about director histories. Yet the government hasn't clarified whether acquiring a director identification number will require a 100-point identity check—a fundamental aspect of the proposal that was announced by the Labor Party last year. The government keep missing deadlines on a register of beneficial ownership—something that they're yet to commit to publicly.

Questions also remain over the public release of updated modelling of the costs that dodgy directors impose through phoenixing activity. The Turnbull government is continuing to use figures from five years ago. Despite receiving updated costs in 2015, the 2012 estimate put the cost of phoenixing at up to $3 billion a year. The question needs to be asked as to why the government isn't using those updated figures. One suspects it's because the nature of that activity has grown and, indeed, the scale of it in dollar terms has grown as well.

Labor is serious about tackling the scourge of phoenixing on our economy. Labor has been calling for the introduction of a director identification number for well over a year now. We've seen the backing of director identification numbers from a number of organisations: the Productivity Commission, the Australian Institute of Company Directors, the Australian Small Business and Family Enterprise Ombudsman, the Tax Justice Network, the Australian Chamber of Commerce and Industry, the Masters Builders Association, the ACTU, the Australian Restructuring Insolvency and Turnaround Association, the Phoenix Project—a group of experts from Melbourne Law School, and the Australian Institute of Credit Management. It's clear that there's industry support for this proposal. It simply makes sense and it simply makes sense to do it properly. For the sake of Australian taxpayers, workers and honest businesses, the Turnbull government should take a fulsome approach to implementing this director identification number. We know that, although the Turnbull government are committed in some respects to the identification numbers, they've delayed implementation due to the modernising business registers measure in the budget. They haven't given a time frame, and it's clearly not a priority in terms of registration numbers for directors.

We know that ideology has been overlooking facts and figures on these issues when it comes to the budget, in particular, and some of the calls from people in the industry to crack down, particularly on phoenixing activities around labour hire. Instead of focusing on the checks and balances on government, there's no consideration given to the checks and balances on the power that dodgy businesses have over driving the black economy and the effects that can have on workers, families and, in particular, small businesses, who often rely on regular turnover and payment of invoices to ensure they can continue to survive. There's no prioritising cracking down on those who are clearly avoiding community obligations.

We have seen plenty of announcements and talk from this government but when it comes to action it's been quite scarce. It took Labor, really, to put this issue on the agenda. The member for Fenner and the shadow Treasurer have been pushing these amendments and changes for some years now. For the sake of Australian taxpayers, workers and honest businesses, the Turnbull government must implement Labor's director identification number proposal in full. It's time that the government ditched the tax cuts for the big end of town and it's time they started getting serious about shedding some light on the black economy, cracking down on some of those companies that are undertaking these activities—particularly in that area of phoenixing and, of course, the wrong payment of invoices, which are some of the activities that have been identified in the explanatory memorandum to this particular bill.

But, aside from that, I again reiterate the amendment that was moved by the member for Fenner regarding the introduction of legislation requiring every company director to be issued with a unique identification number. That is a big step towards cracking down on some of this phoenixing activity and ensuring that the right amount of taxation revenue comes into the budget to properly fund services in health, education and tertiary training.

Mr TIM WILSON (Goldstein) (16:56): I rise to speak on the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, and, as always, it's a pleasure to see you in the Chair, Deputy Speaker Buchholz!

When I think about the issues facing people around tax in this country, I always think of those thousands of small businesspeople who, whether in retail or running small businesses and activities, spend their days creating commerce and opportunity for themselves so that they can stand on their own two feet and support their friends and their family. Then I think also about the hours they spend at night working through paperwork: the obligations, the regulations, the BAS statements and the reporting requirements under the tax system which take them away from their family, their loved ones and their friends. I have always thought that the very basis of any just tax law is not just that people pay their contribution to the collective aspiration we have for our society, despite our differences, but that there's a sense of justice around making sure we minimise obligations and the burden that is placed on those people to adhere to the tax act.

Tax—paying tax—is not a privilege. Paying tax is a responsibility. Paying tax is a burden. It's when the government comes and takes away from people, compulsorily, their hard-earned work—the reflection of that work in their money. But part of making sure that you have a just tax system—and I put the emphasis on the word 'just'—is that everybody contributes fairly and that the tax system treats everybody equally: we don't have special legal privileges, we don't turn a blind eye to those who seek to avoid their tax and we make sure we capture as much of the economic activity that is engaged in in this country as possible. If we don't do that, if we overburden those mums, those dads, those fathers, those mothers, those brothers, those sisters—everybody who is making a contribution to paying the tax system and keeping it afloat—then what we are doing in giving people a free pass, where they do not have to contribute, is passing the buck onto those who are doing the right thing to benefit those people who can find their way out of it. That is, in the end, an unjust nature in our tax system.

There was a very good book written a few years ago called For Good Or Evil: The Impact of Taxes on the Course of Civilisation. It is a synopsis, looking at the history of taxation. I know it's something that will excite many members—a book on the history of tax—but it is a good read. When you read it, there are some very clear points about tax and how you have a just tax system to support a society, particularly one that either declines or succeeds.

A successful society has a taxation system that is actually relatively simple. It has relatively simple and clear rates so that people have no incentive to avoid it. But, critically, it has relatively low rates as well, and—importantly—everybody makes their contribution to the tax burden necessary to provide for the nation. When it becomes narrow, when it becomes high, when it falls onto the few rather than the many, and when there are incentives and ways and means that people can minimise their obligations, those who can, do. Let's face it, that's many of the problems at the heart of the tax system that we have in Australia today. It is a system that encourages people to minimise their obligations, to set up complex structures to try and minimise their contribution to the tax system. Increasingly, it is a narrow base of people who are paying tax, and they are people earning an income within a defined age range and, principally, at a particular income-earning age.

Every policy around tax and the economy I look at from that basic perspective. How do we make sure that we reverse that trend? And how do we make sure that we have a regulation or system that works for the decent, hardworking, honest Australians in the real economy, not the black economy. The people in the black economy are those who seek not just to avoid legality of their trade and commerce but to minimise their contribution to this nation. In many cases, they take advantage of the goodwill and aspirations of every Australian.

One of the hallmarks of the coalition's historic success is its balanced, evidence based approach to taxation and who shares the burden of our society. We reject attempts by those in the opposition and other minor fringe parties, where we say it should fall onto the few in favour of it falling onto the many, to the millions of Australians who share a collective responsibility for the nurturing of our nation. If government sets the rules for enterprise, then the basis of these rules should enshrine a sense of justice at the heart of it, that there be a level playing field for the Australian entrepreneurial and business community. When it comes to just taxation, our framework should be simple and, as I outlined before, non-discriminatory.

This bill is designed not to add more regulation but to protect our non-discriminatory tax system against the scourge of tax evasion by those who engage in black-market activity. On average, small-business owners spend three hours a week invoicing, bookkeeping, reviewing banking contracts and reporting their tax liabilities. That is time taken away from creating wealth, growing opportunity. It is time taken away from family and friends. It is the human cost of a burdensome tax system that, sadly, so many in the opposition never seem to understand, probably because they've never had to do it themselves.

The government is reducing unnecessary regulatory burden on business to the tune of $5.8 billion annually, but I won't try and pretend I think that is satisfactory. If the truth be told, I think that is the beginning, a start point, and there is so much further to go. Liberals do understand this burden and would never seek to add to it without justification. When sections of the economy start to chronically evade tax, you see a situation where too few carry too much.

This bill tackles one of the foundational ways that people minimise their tax obligations. It is one of the most modern methods by which sections of the economy undermine the integrity of a just tax system. It targets deceit and ensures that businesses report their income accurately and that those who seek to evade and operate in the black economy are caught out. Principally, it targets electronic sales-suppression tools that simply seek to facilitate tax evasion by suppressing or falsifying records or transactions. The tragic reality is, in a global marketplace, there will always be people seeking to find ways to use the advantages of each country's legislation to sell products to minimise people's contributions to them. And we must be forever vigilant. If you want to have a just tax system you have to evolve and adapt the laws with the technology to correspond with it and not engage in the cheap indulgences of so many on the other side of politics today, who constantly seek to demonise good, hardworking Australians who are setting up businesses and running them, but targeting those people and businesses that only survive by nefarious means.

In 2012, the Australian Bureau of Statistics estimated that the black economy in Australia could be as large as 1.5 per cent of Australia's gross domestic product, around $25 billion. Now, let's face it, that is a concerning percentage of enterprise operating outside of the tax system, operating with an unjust tax advantage and operating where they take the burden to carry the weight of the nation off themselves and disproportionately impose it on others. A free, enterprising economy should never reward people who are seeking to do so. We should, of course, reward ingenuity and disruption, but we should not reward not obfuscation. Electronic sales suppression tools serve no useful purpose. Their manufacture and sale should attract penalties. By extending the taxable payments reporting system to the high-risk courier and cleaning industries, the efficiency of taxes, such as GST, can ultimately be strengthened.

Ultimately, this bill depends on this fundamental principle: we are creating a robust tax system designed for the 21st century, one that will seek to ensure everybody contributes their fair and just share. We must make sure that those people who operate outside of the law are not able to do so and neither have the power of complication nor the technology to do so. That is so that we, as all Australians, can look each other in the eye and say that we are doing our fair share.

Mr KEOGH (Burt) (17:06): As we look at the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, which is about a crackdown on the black economy, what's at the heart of this? The government has worked out that, by cracking down on the black economy in Australia, it is able to skerrick together sufficient funds to almost bring its budget back into surplus. The Liberal government has worked out that by cracking down on the black economy, as well as tax avoidance and concessions, it should be able to bring its budget back into surplus—just—by 2019. That's because a significant portion of what's planned for this surplus will come out of the funding that the government believes it will get in revenue from this legislation.

Now, to be clear, the black economy in Australia is significant, it is complex and it is a growing economic and therefore also social problem. It is manifestly unfair to allow some to play by their own rules while penalising business, employees and customers who do the right thing in order to make sure that we can fund essential government services. Hiding under the black economy, workers can be exploited, criminal groups can flourish, and social capital and trusts are undermined. This task force that the government seeks to establish through these rules and laws will focus on minimising tax avoidance and on money launderers, while the illicit tobacco task force that has been created will investigate, prosecute and dismantle organised crime groups operating in the illicit tobacco industry.

In fact, through this process, the government has said in its budget that it will be providing additional funding to the ATO, Border Force and the Commonwealth Director of Public Prosecutions to pursue making sure that these revenues do come to government and those who are breaking the law do feel the full weight of the law. It's anticipated that many millions of dollars will come into the budget through revenue through these measures. As the Minister for Revenue and Financial Services has said, the illicit tobacco market is dominated by organised crime groups that use tobacco profits to fund their other criminal and black economy activities. The minister said:

These strong new measures will shut down the avenues that organised crime syndicates have to access illicit tobacco to fund criminal activity.

This is the fifth year of this Liberal government. It's better late than never, I guess, that they focus on this. But maybe there are some bigger, or at least other, eggs that also need to be fried.

Currently, the government is working with the banks to provide them with a $17 billion tax handout as part of its budget, whilst also defending—as part of this budget—its cuts to ASIC, which is the law enforcement body that should be tasked with holding the banks to account. That's not all, because the government has also reduced funding to the AFP and the Commonwealth Director of Public Prosecutions. Not only was this government dragged kicking and screaming to hold a royal commission into the banks; it's now rewarding those that have been the subject of this financial misconduct—those that have been creating it and that it is having a royal commission into—by making sure that they will be the biggest recipients of its corporate tax cuts. But, at the same time, this government is also ripping tens of millions of dollars away from the Commonwealth agencies, such as ASIC, that should be policing the banks. The government is taking millions of dollars off the Director of Public Prosecutions, which should be enforcing the law against the banks and against those whose misconduct has been revealed by the banking royal commission.

Then we find that the Serious Financial Crime Taskforce is not funded beyond the current year. So there is no funding in the budget in the forward estimates. The government tries to say that it will continue with this task force, but it hasn't actually allocated it any dollars. The Commonwealth Director of Public Prosecutions has revealed that there is no assurance that the funding for the Serious Financial Crime Taskforce will continue beyond June 2019.

This government needs to get its priorities right. It has funding to deal with a black economy but not to deal with the banks and the financial misconduct that has been revealed by the banking royal commission. It has specific funding line items in its budget for these very laws; yet—while we have a royal commission going on into the misconduct in banking and a Treasurer who has gone out in front of the media to say, 'We will throw the book at the people that have been responsible for this misconduct'—when we actually look into the budget, we see that the funding for the very agencies that should be doing that work has been cut! There's no special funding for them. If the government wanted to be taken seriously and show that it had some bite to go with its bark then it would also fund those bodies to follow up on the banking royal commission—just as it has, rightly, to make sure that this legislation is properly enforced as well. ASIC has been asking for five years for tougher penalties for this misconduct, and yet the government has done nothing.

And still it is doing nothing, but it is at least turning its mind to the black economy. So we've had nada when it comes to looking at financial misconduct and making sure that there's bite, but we are looking at the black economy. I guess it's a start, as I say.

But then look at this. We're going to make sure that those who are responsible for importing illicit tobacco face jail penalties. But what if you've ripped off your banking customers? What do you get? You just rock up at ASIC and enter into an enforceable undertaking for a nice little slap on the wrist—a few million dollars sent off to a charity, quite possibly tax deductible—and then you turn around and you keep going. Where's the penalty? Where's the enforcement? Where's the looking at what's happening to your financial services licence, as has been revealed by the ABC today? Effectively, ASIC says, nothing will happen to you.

We, on this side, have a different approach. Labor has committed $25 million to a special task force inside the Commonwealth Director of Public Prosecutions to pursue those who are found, through this banking royal commission, to have acted improperly. Only Labor will continue to work to ensure that the royal commission delivers justice to those who have suffered from the misconduct in the banking and financial services sector, and, importantly, that those who have been responsible are actually held to account for their actions, because it is only through that that we will see the cultural change that is fundamentally needed in our financial services sector.

Meanwhile, this government has worked out, it reckons, that it can cook up enough money out of pursuing the black economy to bring its budget back into a small surplus through the course of this budget. But, at the same time, it's going to hand over $17 billion in tax cuts to those big banks and $80 billion in corporate tax cuts overall.

Labor supports the proposals to reduce the amount of untaxed tobacco being smoked in Australia, to make sure that we're cracking down on the black economy. We recognise that unlicensed production and manufacturing of tobacco products not only significantly deprives the community of tax revenue but also puts Australians at risk. The measures to minimise tax avoidance will help ensure that businesses and employees and those people in Australia that are doing the right thing get the benefits.

But those in the Turnbull government do not have their priorities straight. They have allocated funds to help big business, through tax cuts, and they're helping their mates in the big banks by running a protection racket. Even when they finally concede we need a royal commission, they de-fund the agencies that will actually hold them to account.

In the scheme of things, these measures will not ensure that we're supporting low- and middle-income taxpayers and workers in Australia. They are a start, but they are a distraction from the main game. We need to do this, but we need to do so much more. Only appropriate regulation of the banks and our financial services, and funding for the authorities that will hold them to account, will ensure that businesses and employees that are doing the right thing benefit, and that they are contributing to the long-term and economic sustainability of our nation. Alas, this government appears completely incapable of delivering on such a mandate.

Mr CRAIG KELLY (Hughes) (17:15): I'm pleased to rise this evening, or late this afternoon, to speak on the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018. I want to start by talking about the black economy. There are really two forms of the black economy: firstly, there are the illegal activities. There are criminal enterprises dealing in drugs, illegal tobacco, prostitution and the like that are simply operating outside of the law and that are dealing in cash. We've seen some estimates that there is up to half a per cent of GDP in that activity. The other part of the black economy is legitimate businesses that are engaging in lawful activity but not declaring the correct rate of tax or paying the correct rate of tax.

Firstly, when it comes to those engaged in illegal activity, we have to have a strong iron fist to crack down on that activity. That's why we've seen strong legislation on the proceeds of crime, so that if people are engaged in that activity those proceeds can be confiscated. We've also seen unexplained wealth legislation. If someone cannot legitimately explain where their wealth came from, it most likely, or almost certainly, came from illegal, criminal activity. That also needs to be cracked down very hard on.

I'm pleased to see in the budget methods and improved resources to crack down on illegal activity when it comes to illegal tobacco. I don't think there's a member in this House or this parliament who thinks we should not do everything we can to drive down the rate of cigarette smoking in this country. One of those methods is through price. We are effectively going through a form of prohibition by price on tobacco. There is, I think, about a 12½ per cent increase in the excise on tobacco year after year after year. That will push the price of a packet of cigarettes to around $40. When that happens and when you can buy that same packet of cigarettes for around $1 to $2, lawfully—if it's a lawfully made product in the country of origin—overseas and the retail price is $40 in Australia, we will have created a huge incentive for a black market and for a black economy. So, it's very important that we put those extra resources into our Border Force and into tackling that scourge of illegal tobacco. The incentives, those price differentials, are far too great to just sit by and not do more in that particular area.

The other area of course is legal businesses—businesses operating in a lawful manner—that for some reason decide that it is better for them not to declare their rate of tax. The first thing we can do, and one of the best ways that we can do it, is make sure our corporate rate of tax is low and fair. Unfortunately, we are heading for a situation in this nation where the rate of tax will no longer be internationally competitive. That is the situation that we face today. Since the turn of the century, about the year 2000, we have seen almost every major OECD nation lower their rate of corporate tax. The reason almost every nation has done that is they understand that if you lower the rate of tax you actually create more incentives, you get more economic activity and you get more tax revenue flowing in. Some people say, 'Oh, that's just an assumption,' but I'll tell you what: it's not just an assumption. Every single time in this nation that we have lowered the corporate rate of tax we have ended up not only with a bigger economic pie but with more company tax receipts as a percentage of GDP.

When Paul Keating lowered the corporate rate of tax, he understood that it wasn't a giveaway of money, as we hear so often. He understood that it was important to keeping Australia internationally competitive and to driving entrepreneurial activity and that ultimately it would result in a larger economy, more jobs and more revenue flowing in. We saw the same thing when Peter Costello lowered the corporate rate of tax in this nation. He lowered it from 36 per cent to 34 per cent to 30 per cent, where we are stuck today. It was argued, yes, that it was going to give away a lot of revenue. But we've seen the lowering of the corporate rate of tax from 36 per cent to 30 per cent, and how much did it cost the economy? Nothing. We are getting more revenue at 30 per cent, as a percentage of GDP, than we got at 36 per cent, 39 per cent and even 49 per cent. That's why it's important that we lower our corporate rate of tax. We can't have an internationally uncompetitive corporate rate of tax. We can't have an internationally uncompetitive cost of energy in this nation and also have higher wages and a prosperous economy. The three things do not go together.

There are two schedules in this bill. The first schedule is a ban on electronic sales suppression tools. The schedule creates a new offence for the manufacture, distribution, possession, sale and use of electronic sales suppression tools for the purpose of not disclosing business income. There's simply no legitimate reason for such types of computer software. They remove transactions from electronic record-keeping systems, they change transactions to reduce the amount of each sale and they can modify GST-taxable sales to GST non-taxable sales in all instances, with no audit trail made to exist.

We want to have an economy with a low rate of tax because we want businesses to report their sales and, strange as it may seem, be happy to pay the rate of tax. That actually increases the value of that business. If a business is able to have a set of accounts that say, 'This is the rate of tax we have paid and these are the profits that we have made,' in the long term that makes that business more valuable. So, if that business owner ever wants to sell that business in the future, showing the results that they have and their sales makes their business much more valuable for them to sell. The benefit that they get from that can be much greater than any short-term benefit they may have got through avoiding tax. So I'm glad to see this measure of banning electronic software for suppression of sales information. It's something that should be banned. It should be prohibited. I'm pleased that the opposition have given their support to that part of the legislation.

The other part of the legislation goes to third-party reporting. From 1 July 2018, businesses in the courier and cleaning industries will be required to give annual reports to the Australian Taxation Office regarding the payment they make to businesses for them to provide courier and cleaning services. The reporting obligation will apply for the 2018-19 income year, and reports will be required by 28 August 2019. The government has acted on concerns raised by stakeholders that small, mixed businesses providing courier or cleaning services may have a disproportionate compliance burden where the provision of those services is merely a small part of the overall activity of the business. Again, that goes to making all these compliance burdens that we put on business as low as possible. We want Australian people who are running businesses to be entrepreneurs. We want them to spend as much time as they possibly can on improving their businesses and thinking of new ways of production, distribution and manufacture. We want them to be creative and come up with new products. That's what we want our entrepreneurs to do. We don't want them tied to a desk with a red tape burden, because not only does that have a direct cost; it has the indirect cost of taking away the time they should be spending on the creative and wealth-creation processes that are so, so valuable and vital to this nation.

We in this government have a big task. We've almost got the budget back to surplus. We've done the hard yards. We inherited a mess five years ago from the Labor Party. We've made hard decisions. We've got the budget in sight of being back to a balance and then a surplus, and we have the long, hard road to pay that debt down. The coalition has done it before. John Howard and Peter Costello did it when they paid back $96 billion worth of Labor debt, and along the way—we should never forget that it wasn't only the $96 billion—they also paid back $54 billion in interest payments on that debt.

The coalition have done it before and we can do it again, but to do so we must make sure that we've got the tax burden as low as we possibly can so we can incentivise Australians to get out there and take risks. Not all of them are going to succeed, but we need enough of them to take risks to develop new products, new services and new ways of distributing goods. We need them to develop those things to drive the economy and create wealth so we can get that debt down. That's the task of our government going ahead. We've done a good job so far. Over a million new jobs in this economy have been created since the coalition government was elected. I can remember being in this chamber when we first talked about a million jobs during the coalition's first two terms. Those on the other side laughed. They sat there and they laughed at us. They sniggered and said, 'You cannot create a million jobs in the economy.' Not only have we done it; we've done it early. We've done it in a little over five years and we're going to exceed those million jobs.

Ultimately, it's not us here in government who create jobs; it's those entrepreneurs out there, taking risks, who create the jobs. We have to provide them with the legislative framework that gives incentives to those who are doing the right thing and penalises those who are engaging in the black economy; a legislative framework that gives the businesses that are out there competing every day a level playing field and the opportunities they need to succeed. If we're able to do that, we'll see in the years to come, with continued good government, that we're able to get surpluses happening and get the debt paid down so that it's not something our children and grandchildren have to inherit. This legislation is just one small piece of the jigsaw that the coalition is working on. I congratulate the minister on the work done on this and I commend the bill to the House.

Mr FALINSKI (Mackellar) (17:28): May I say, Mr Deputy Speaker Buchholz, that chair suits you very well. You, sir, make the chair; the chair does not make you. May I also congratulate the member for Hughes on such a fantastic speech, in which he explained to all of us here the importance of incentives in the tax system, because that's what this bill is about. The Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018 is about ensuring that we incentivise people to do what is right, not what is wrong.

Australia has a population of 24 million people, and we very well know that those 24 million people love their caffeine. However, if we assume that each Australian consumes only one cup of coffee a day, so as to balance those who excessively drink against those who do not drink at all, we find that a total of $200 million is spent on barista-made coffee per year. Obviously, these calculations form an extremely rough estimate, yet even an error margin of 10,000 per cent would not be enough to justify the myth that Australia's cash economy is principally derived in coffee expenditure or daily purchases of a similar sort made in cash.

Our cash economy—or, better put, our black economy—could be as large as three per cent of GDP. In 2016, this was the equivalent of $50 billion of underreported income, money laundering, criminal activity and fraud, not merely unreported cash based coffee income. As a result of these evasive illegalities, government has lost approximately $10 billion of taxation revenue per annum. To put that into perspective, total revenue in 2016 was only $370 billion, meaning lost tax amounted to roughly three per cent of existing revenue. Further direct costs of the black economy include abuse of the welfare system resulting from claims for benefits that would not otherwise be claimed. On the other hand, indirect costs include an uneven playing field among competing businesses and lack of community trust in the tax system.

In response to this pressing issue, the Turnbull government consequently established the Black Economy Taskforce in December 2016 to develop a whole-of-government response for tackling the underground market. The task force has made 80 recommendations to government, many of which were addressed in the 2018-19 budget. These include an economy-wide limit of $10,000 for cash payments made to businesses for goods and services; a range of measures aimed at combating the sale and production of illicit tobacco and to improve the collection of excise and customs duty on tobacco; providing the ATO with $3.4 million over four years to lead a multi-agency black-economy standing task force; removing certain deductions for those taxpayers who fail to comply with their pay-as-you-go withholding obligations; and designing a new regulatory framework for the Australian business number system. Based on figures in the budget papers, these measures will produce a net gain of $4.6 billion.

I pause here to say that it is not about just getting more money for government to spend. This is about creating a fair system of taxation where all people, regardless of where they come from and regardless of what they do, have faith that the people in this place, those administering our tax system, are doing all that they can to ensure that our tax system is fair and equitable to those people who interact with it. The most important thing in a society is a fair society—one in which people, no matter where they're from, believe that what they put in they get out, not one where they believe that their next-door neighbour is somehow not doing all that they could to provide for themselves and provide for the community in which they live. That is the definite cancer which we find ourselves arguing against very strongly in this tax bill. If you allow people to believe, regardless of where they are, that they can get away with not making their fair contribution and not doing all they can for the tax system, then their neighbours and others in the community will believe that too. I believe in the economic textbooks it's called 'the tragedy of the commons'. Labor would never be able to achieve something like this. They are too focused on some sort of archaic class warfare wherein they snatch hard-earned money and reallocate it in a Marxist fashion. They redistribute income without valid justification.

Australia's top 10 per cent already contribute almost half the total net tax paid. Moreover, the top one per cent, about 90,000 individuals, are liable for approximately 17 per cent of the government's income tax revenue. There is absolutely no need to propagate this existing inequality. Instead of targeting the compliant wealthy, government should be knuckling down on those who rort the system and those who manipulate the cash economy, launder money, phoenix, commit fraud and underreport income. That is exactly what we on the right side of the chamber are trying to do here today. In addition to measures provided in our 2018-19 budget, we seek to legislate a number of other bills concerning the black economy.

The Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill, for instance, aims to criminalise the production, supply, use or possession of sale-suppression technology. It also extends the taxable payments reporting system to cleaning and courier businesses which have an ABN. The first part of the bill, creating new offences regarding sale-suppression tools, will ensure that our tax system is equitable, unbiased and efficient for all stakeholders and all Australians. The aforementioned technology removes transactions from electronic record-keeping systems, falsifies transactions to reduce sales revenue, and modifies GST-taxable sales to non-taxable sales—all of this while leaving no audit trail. There is no legitimate reason for these tools—well, there is actually, and that is precisely what they're not meant to be used for. The new strict liability offences will target each stage of the supply chain, potentially imposing heavy penalties so as to deter the production, supply, use and possession of this technology.

The latter part of the bill introduces compulsory reporting to the ATO for businesses operating in the courier and cleaning industries. The Black Economy Taskforce identified that contractor payments in such industries are areas of high risk for the non-reporting of income. The Turnbull government is therefore extending the taxable payments reporting system to the courier and cleaning professions. The taxable payment reporting system applies to entities holding an Australian Business Number that provide services in identified industries. These industries have to report annually to the ATO about payments they have made to contractors undertaking profit-driven services for them. Reporting these payments will improve transparency for the ATO, and will align the payments with compliance obligations of employers, who must report the wages they pay. The taxable payments reporting system has been successful. Its implementation in the building and construction industry led to significant improvements in contractor compliance with GST and income disclosure. Consequently, I believe that the introduction of mandatory reporting of business-to-business payments within the courier and cleaning industries will encourage correct disclosure of income. The payments received by the subcontractors will have been reported to the ATO by the businesses that acquired their services. This additional reporting will allow the ATO to target compliance activity.

As I said earlier, government should be sealing loopholes instead of increasing taxes on the compliant. The Turnbull government has listened to the needs of taxpayers. We are providing relief where relief is needed, and stricter policy where severity is due. Through legislation, both niche and expansive, our government is creating a prosperous economic environment. We are fulfilling our purpose as the great enabler—not the great enforcer—of the Australian society. Whilst Labor in opposition has already announced over $200 billion of taxes, we as a government have successfully sought to reduce our taxpayers' burden. At the same time, we have put an end to the debt-creating machine initiated by the Rudd government and the then Treasurer, Wayne Swan. We have established the Personal Income Tax Plan, a threefold, fiscally responsible strategy to alleviate household budget pressures and provide certainty for most working Australians. It is a long-term, sustainable scheme to reduce income tax payable for nearly every Australian. It puts an end to bracket creep and provides long-lasting certainty in our tax system. Through this plan, the 37 per cent tax bracket will be completely removed, and the top marginal tax rate of 45 per cent will remain only for those with incomes exceeding $200,000.

In addition to amending personal income tax policy, the government has proposed a number of more niche changes to legislation, such as the Primary Industries Research and Development Amendment Bill. This incoming statute aims to combat the ghastly cost of a statutory marketing levy by allowing R and D through voluntary contributions. For rural industries, this reduced regulatory burden results in more time spent on productivity-enhancing innovation. For individual Australians, the removal of the levy, and thus lower costs, engenders lower prices. And for the government, as always, reduced regulation results in more resources being devoted to higher priority and more productive areas.

It is absolutely imperative that Australia expands its research and development capabilities, as this is our future economic path. Following the mining boom, our economy has lacked impetus and direction. We were global economic leaders with our iron ore and minerals, but what do we have now? What makes the Australian economy special today and, more importantly, will make it special in the future? Where, in short, is our source of competitive advantage? It is about time that we consider the path of innovation, just like Israel, South Korea and the US. We should look to avant-garde creativity and development for economic progress. However, at the core of becoming a more innovative, efficient and equitable economy, is lower and fairer taxes, because decreased taxes, not higher taxes, represent lower costs for individuals and businesses, engendering significant increases in consumption, savings and, thus, investment. In a time where our economy is at a lag, where our confidence could be much, much higher and where progress is always at the forefront of our mind, lower taxes and a budget surplus are the way to go. This is what this bill is doing. This is why I rise to support it. This is why I commend it to the House.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (17:41): I thank the member for Mackellar for his sterling contribution to this debate on the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018. Firstly, I'd like to thank those members who have contributed to this debate.

This bill is the first instalment in the government's legislative response to the Black Economy Taskforce interim report. In last year's budget, the government responded to the Black Economy Taskforce's interim report by announcing measures to address the growing economic and social problem of the black economy. The non-reporting of income by contractors and the use of technology to conceal income are two such black economy activities that are targeted in this bill. More broadly, participation in the black economy undermines the community's trust in the tax system, creates an uneven playing field for business, fosters the exploitation of workers and results in loss of government revenue and undue welfare expenses.

Schedule 1 to this bill bans the manufacture, distribution, possession, sale and use of sale suppression technology. This technology has no legitimate use and allows businesses to understate their income. Large penalties for the use and possession of this software will strongly discourage its use. Currently, penalties are confined to the taxpayer for minimising their tax obligations. This is not a sufficient deterrent to this behaviour. This bill casts the net over those involved in manufacturing, supplying and using this software.

Schedule 2 to this bill provides that businesses that are in the courier or cleaning industries will be required to report to the Australian Taxation office details of payments they make to contractors who provide courier or cleaning services. The expansion of the taxable payments reporting system to the high-risk industries of couriers and cleaning will result in improved compliance in GST and income reporting.

The government is committed to countering the black economy and its practices in Australia. I commend the bill to the House.

The DEPUTY SPEAKER ( Mr S Georganas ): I thank the minister. 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 O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (17:44): I present a supplementary explanatory memorandum to the bill, and I move the government amendment as circulated:

(1) Schedule 2, Part 2, page 10 (after line 14), at the end of the Part, add:

3 General exemptions

(1) As from the commencement of this Schedule, the Commissioner is taken to have determined, under subsection 396‑70(4) in Schedule 1 to the Taxation Administration Act 1953, the matters in subitems (2) and (3).

Exemption in relation to cleaning services

(2) Where the amended provision requires an entity to prepare and give a report for a transaction that is described in item 11 of the table in that provision and that happens during a particular period (the reporting period), the entity is not so required if:

(a) the total value of the consideration that:

   (i) is received by the entity during the reporting period; and

   (ii) relates to the supply by the entity, including by a contractor or subcontractor on behalf of the entity, of a cleaning service;

is less than 10% of the entity's relevant GST turnover as at the end of the reporting period; and

(b) the transaction is not described in another item of the table in the amended provision; and

(c) the entity has not, before the time by which the amended provision requires the report to be given, or within such further time allowed by the Commissioner, chosen to be required to prepare and give a report for the transaction.

Exemption in relation to courier services

(3) Where the amended provision requires an entity to prepare and give a report for a transaction that is described in item 12 of the table in that provision and that happens during a particular period (the reporting period), the entity is not so required if:

(a) the total value of the consideration that:

   (i) is received by the entity during the reporting period; and

   (ii) relates to the supply by the entity, including by a contractor or subcontractor on behalf of the entity, of a courier service;

is less than 10% of the entity's relevant GST turnover as at the end of the reporting period; and

(b) the transaction is not described in another item of the table in the amended provision; and

(c) the entity has not, before the time by which the amended provision requires the report to be given, or within such further time allowed by the Commissioner, chosen to be required to prepare and give a report for the transaction.

Determination not a legislative instrument

(4) The determination under subitem (1) is not a legislative instrument.

Repeal or amendment of determination

(5) The Commissioner may, by legislative instrument under subsection 396‑70(4) in Schedule 1 to the Taxation Administration Act 1953, repeal or amend the determination as if the Commissioner had made it by legislative instrument under subsection 396‑70(4).

Note: See subsection 33(3) of the Acts Interpretation Act 1901. The legislative instrument would provide that the determination under subitem (1) is repealed or amended.

(6) For paragraphs (2) (c) and (3) (c), giving a report for the transaction is sufficient evidence of the making of the choice.

Definitions

(7) In this item:

amended provision means section 396‑55 in Schedule 1 to the Taxation Administration Act 1953, as amended by item 1 of this Schedule.

relevant GST turnover, as at the end of a reporting period, means:

(a) if the entity has been making supplies for at least 12 months—the entity's current GST turnover as at the end of the reporting period; or

(b) otherwise—the entity's projected GST turnover, within the meaning of the A New Tax System (Goods and Services Tax) Act 1999, as at the end of the reporting period.

[general exemptions]

The parliamentary amendment removes a mechanism to remove reporting obligations for businesses that provide courier or cleaning services where those services are merely a small part of the overall activity of the business. Following the introduction of the bill to parliament on 7 February 2018, additional stakeholder consultation was undertaken to address concerns that businesses providing a small portion of courier or cleaning services may have a disproportionate compliance burden. Stakeholders were supportive of the introduction of a threshold test based on GST turnover to exempt certain businesses from the reporting requirements. The threshold test will create an exemption for those businesses that receive payments for courier or cleaning services totalling less than 10 per cent of the business's overall GST turnover. If a business satisfies this test, they will be exempt from reporting the payments to the ATO that they make to contractors they engage to complete these services.

The Commissioner of Taxation may, through legislative instrument, amend or alter the threshold test in response to a change in risks and compliance burden identified in the courier and cleaning industries. Given that legislative instruments are disallowable by either house of parliament, any proposed change to the threshold test by the commissioner will be subject to parliamentary scrutiny. The introduction of the threshold test will not have a material impact on the costings as published in the explanatory memorandum to the bill. The ATO will publish guidance material on its website to assist businesses providing cleaning or courier services to determine when they need to report.

The government announced a further expansion to the taxable payments reporting system in the 2018-19 budget to the following new industries: security providers and investigation services, road freight transport services, and computer systems design and related services. Application of the threshold test for these new industries will be considered during the development of the legislation for the measure.

Question agreed to.

Bill, as amended, agreed to.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service) (17:47): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr FITZGIBBON (Hunter) (17:48): While I have the attention of the member for Blair as my seconder, I move the second reading amendment which has been circulated in my name:

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 Turnbull Government’s failure to protect Australia’s reputation as an exporter of clean, green, safe, high quality and ethically produced food”.

I will read the amendment into the record for the benefit of those participating in the debate. It reads:

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 Turnbull Government’s failure to protect Australia’s reputation as an exporter of clean, green, safe, high quality and ethically produced food”.

That's a good point from which to start. I've said in this place many times before that Australia's key competitive advantage in agriculture is our representation as a provider of clean, green, safe, high-quality and ethically-produced food. I make the point that those last two words, 'ethically-produced', are becoming more important over time as community exceptions on animal welfare issues grow, not just here in Australia but right around the world, and as people put more value as consumers on the idea that our food is ethically produced. We've seen consumers already being prepared to pay more for eggs and other products which they know have been raised in an ethical way or produced in an ethical way.

So, this is really, really important. And of course if we lose our key competitive advantage as a country, then Australian agriculture will not fulfil the aspirations we hold for it. This is a particularly important issue we are discussing tonight. I think most of my colleagues on both sides would agree that rarely does an issue come along that so agitates the Australian community as have recent events in the live sheep trade. I've been in this place for a very long time and I've seen a number of events do just that. But I think the recent Awassi Express incident, as shown on 60 Minutes, has caused more traffic—email and other correspondence and telephone calls—to members than any other issue I've encountered in this place in my 22 years here. Sure, it has become easier for people to access their members of parliament in more recent years. Obviously more and more people are using email. I do take account of that, but I believe I can confidently say that no other issue in our community has been bigger than this most recent one around live trade.

Before I move to the bill—which, I should say, Labor will support—I should explain the opposition's position on this trade and what future we see for it. I want to begin by saying that there is a big difference between the live cattle trade and the live sheep trade. I know that those opposite—in a foolhardy way, because they only make the community debate more difficult—will say, as sure as night follows day, that it'll be sheep today and cattle tomorrow. If only they understood how damaging that divisive approach to this debate is for the cattle industry. If only they realised that they only risk stimulating a debate in the community about cattle, rather than saying, 'Well, we don't agree with the Labor Party on this issue, but we're very pleased to learn that they have a different view about the cattle trade.' We don't want to have a debate about the cattle trade. We don't want it to be a divisive issue. We don't want that permeating in the community and therefore putting at risk a $2 billion industry in this country.

The cattle trade typically involves shorter voyages into less-harsh climatic conditions. In the cattle trade it's in the interests of both the sellers and the buyers to have those beasts arrive at their destination in good shape, in good health, ready to be fattened for markets in other countries—typically, in this case, Indonesia. In 2011 an event came along that those opposite like to talk about regularly. Whether they're talking about child care or agriculture, they seem to raise it out of some sort of attempt at political gain. But in 2011 we had a big problem. We had shocking cruelty towards animals in Indonesian abattoirs, and we had to do something about it. Quite frankly, the industry didn't give the government of the day much choice. It was a case of do everything or do nothing. So, the Gillard government was really left with no choice but to suspend, for a four-week period, a number of abattoirs in Indonesia.

What came out of that traumatic event was a new assurance scheme, embraced by the industry—out of necessity, because surely no-one can tell me that the industry would have embraced ESCAS, the assurance scheme if the suspension wasn't in place; of course they would not have. But for the all pain of the pause of 2011, it allowed us to put the cattle trade on a sustainable footing, and it's been pretty much incident-free since. There'll always be isolated incidents. There's a report of one today. But I think we can control isolated incidents, and we've proven we are able to do so. Labor recognises that northern producers in particular rely on live exports of cattle, because they can't grow the cattle to slaughter weight; they just don't have the natural resources in the far north of our country to do so. We acknowledge all of these things, and we support the cattle trade on an ongoing basis.

The sheep trade is much different. Its model is broken. The balance and weight of the scientific evidence tells us that you can't pack 50,000 or 60,000 sheep on a vessel for a four-week voyage, into the hottest temperatures, into the highest humidity known to man, and expect not to have breaches of animal welfare expectations. The Australian Veterinary Association, the RSPCA and many others have said that you just can't do it. It doesn't matter how hard you regulate, it doesn't matter how high the penalties are, it doesn't matter how much you threaten the exporters or anyone else along the supply chain, you just can't do it. It's the equivalent of saying, 'You can't leave three dogs in the car in the searing heat while you duck into the supermarket, but you can leave two dogs in the car.' It's not too good for the two dogs that are still in the car. The outcome is the same. It is just too hot and humid for those sheep to survive. I don't want to repeat descriptions of all the terrible scenes we've seen, not only on the Awassi but elsewhere.

The model is broken. Now we do understand there are many sheepmeat producers, particularly in Western Australia, who rely heavily on the trade. We do acknowledge that the live sheep trade produces price competition for them. They've got two potential points of sale: they can go to the meat processors in Australia, and if they're not giving them a good deal or the deal they would like then they can go to the live exporter. There is strategic price competition. We acknowledge that. But what is happening in this trade is that the exporters are externalising animal cruelty. They're jamming more and more sheep on ships to make more and more money. They give the farmer a drink, a proportion of that premium, and what happens then? Now our domestic processors are at a disadvantage. We want more sheep processed here in Australia, creating Australian jobs, adding value here. This is good for the Australian economy. And we don't want them in an environment where they face unfair competition because someone's externalising animal welfare breaches, externalising animal cruelty. It's not a good model.

Labor have said if we're elected to government we'll get rid of the summer trade at the first possible opportunity. There are no standards that can be put in place to meet community expectations on that summer trade. There would be probably a five-year period—the number is yet to be settled on, but I expect it to be a five-year period—where we would make a transition to something better. It will be something better for farmers, something better for processors, something better for the economy and, of course, something better for animal welfare standards. We will work with producers. We will work with unions. We will work with processors. We will work with international partners to further develop and expand overseas markets in chilled and frozen lamb and mutton, and of course in red meat more generally. This is Labor's plan.

The government's plan is a little different. The government's plan, if they were being honest in their contributions tonight, is this: rather than be upfront and honest and give the industry certainty about what lies ahead, they're going to drive them out of the industry using economic tools. We know the plan: make the regulations so tough that the trade becomes economically unviable. Where is the accompanying strategic plan for the industry that goes with that? How is this shock to farmers going to be dealt with and cushioned? If we have already started using stocking densities on voyages since the McCarthy review, as the minister asserts, then how is that affecting sheepmeat producers and how will that affect sheepmeat producers in the coming months or years? I haven't heard the government talk about that. I certainly haven't heard the government talk about what it will do to cushion that impact for sheepmeat producers. We've had no conversations in this place about that.

Immediately before the Awassi Express incident was exposed on 60 Minutes—I say 'immediately before' because the minister had the benefit of seeing the footage prior to the Sunday night airing—the minister feigned outrage; he swore on our national television screens—swore! He said this was unacceptable. I was delighted to hear him say that. I extended a bipartisan hand and said: 'Look, what we need to do is fix this thing and we need to fix it on a bipartisan basis. It's the best way to get the outcome we're both looking for, and it's the best way to put in place certainty for the industry so that we don't have governments changing hands and, therefore, changing the rules down the track. If the major parties agree on a construct then changes of government won't matter.'

The minister got off to a pretty good start. He, in fact, commissioned four reviews. One was into the ASEL—a review triggered by a former Labor government in 2013 but not pursued by this government until early 2018. He put in place what I think he likes to call a cultural review of the department. The department, of course, is also the regulator. He put in place the McCarthy review into the northern summer trade, which I made reference to. He put in a review of the regulator's conclusions on the Awassi incident.

I remind members that the regulator found no breach with respect to the Awassi incident. Of course, the Australian community were just gobsmacked. Having seen the footage on their televisions on that Sunday night they were simply amazed to learn that the regulator had reviewed the voyage and found no breaches of animal welfare standards. That can mean only one of two things: the animal welfare standards aren't sufficient or the regulator hasn't adequately and appropriately investigated the event.

We still await the review of the Awassi incident. We await that review with great expectations. We ask ourselves two months after the Awassi incident: what has changed? I do acknowledge that out of the McCarthy report new stocking densities have been proposed, as I said earlier. We now have observers on the vessels on voyages. I think we've done something in the area of vets and a few things around ventilation, water troughs et cetera. But the construct all remains the same.

Tonight we debate a bill that imposes new fines and increases current penalties. The opposition will support those changes. Obviously, they will do no harm, but the problem is that we know that historically penalties are very rarely imposed. I suspect that there has been somewhat of a moral hazard here because the regulator looks at the events and wonders whether the heavy fines are proportionate to the crime in its mind. I suspect that increasing fines and penalties might, indeed, make the situation worse.

How can it be that fines haven't been imposed? How can it be that breaches in the sheep trade continue to emerge? How can it be that the Awassi incident wasn't in any way a breach? I put it to the House that it's all about culture. Culture in any industry and within any regulator is all important to outcomes. Of course, when you have a minister who sends a very clear message to the sector and to the regulator that it should have pretty much a free pass, an unconditional pass, to continue the trade no matter the circumstances, then these are the sorts of outcomes you can expect.

I remind the House, even though I've highlighted this point before, that in its first four years of government the Abbott and Turnbull governments did 10 things to retard our efforts on animal welfare. Remember that I started my contribution by saying that the community expectations on these matters are exponentially on the rise. The best way you protect the industry is by responding to those community concerns by putting appropriate safeguards in place. That's how you protect the industry. That's how you put it on a sustainable footing. That's how you build for it a social licence. But, no, the new government ignored both industry and animal welfare group warnings on systemic failures, delayed the review of the Australian Standards for the Export of Livestock—the ASEL I was talking about—and rejected Labor's commitment to review ESCAS. Labor put ESCAS in place. We thought by 2016 it might be due for a bit of a relook and a bit of a refresh. I thought that was a reasonable thing to do, but both the government and the NFF on the day said, 'Oh, no, we couldn't support that. We couldn't support a review of the auditing system. We couldn't do that.' They abolished Labor's inspector-general of animal welfare.

As the minister in September 2013, I announced the Labor government would put in place the Independent Inspector-General of Animal Welfare and Live Animal Exports. That seemed a very reasonable thing to do. Why did we do that? It was because we could see community concern rising again about live exports, and we thought it was an opportunity to help both the sheep and cattle sectors to build on that social licence. We were able to say to people, 'That's okay. We've got a statutory independent officer looking at these things.' As we know, rightly or wrongly, the department is often accused of having a conflict of interest. People argue that the department can't be both the regulator and a promoter of the export trade. Its inherent goal in life is to export more Australian produce.

Now, we don't need to resolve that argument tonight, but we do need to concede that people need to have confidence in the system and be able to see that there's an independent statutory officer looking over the regulator, checking that it's properly investigating breaches of the standards and taking appropriate action imposing appropriate sanctions, et cetera. But this government rejected that. I appointed an interim inspector-general, but he or she had to be consolidated by legislation. The election came along, the Labor Party lost, Barnaby Joyce just let it go through the keeper and the inspector-general was no more.

I gave notice today of a private member's bill, which I will introduce in the next sitting fortnight. I'll be inviting members opposite to join with me in supporting that bill. It does no harm. There's no regulatory burden, necessarily, on the sector and particularly not the farming sector. The inspector-general looks over the regulator. Let me give you an example of something else: we have the Inspector-General of Biosecurity. I've never heard anyone complain about the red tape involved there. In fact, the recent IGAB review into biosecurity demonstrates what great work the Inspector-General of Biosecurity does. He or she doesn't just look over the regulator; he or she also looks at what's happening in the process of looking over the regulator. When the white spot disease outbreak came along in Queensland, the inspector-general not only checked that the regulator had done a proper job of investigating why we had that outbreak but also made recommendations about how we might make sure it doesn't happen again. It seems like a pretty sensible thing to do. It sounds to me like something the industry should be welcoming of.

Sadly, when we announced that we would reinstate the inspector-general during the 2016 election campaign, the National Farmers' Federation rejected it out of hand. They said, 'Unacceptable. It's regulation, red tape and a terrible thing. We can't have that.' I bet they wish they now had it. I bet they wish they had an inspector-general before the Awassi Express came along. I'd like to think we wouldn't have had an Awassi Express if we had the Inspector-General of Animal Welfare and Live Animal Exports. I'm pretty confident, actually, that if we had that inspector-general then we wouldn't have had an Awassi Express.

I proposed that the minister give regular reports to parliament about live exports. It's a pretty simple thing to do: in quarterly reports, how many were exported this fiscal or calendar year, how incidents there were, how many alleged breaches and what the regulator did about it. This government couldn't accept that. They didn't think that was a good idea—nor did the National Farmers' Federation. They abolished the Australian Animal Welfare Advisory Committee, they defunded the Australian Animal Welfare Strategy, they abolished the animal welfare unit within the Department of Agriculture and they allowed exemptions from animal welfare standards without review or sunsetting clauses.

Now, the member for Gippsland knows a little bit about this. We now know that sometime last year—I think it may have been in September; I'm not sure now—Wellard Rural Exports, one of the live exporters, wrote to the member for Gippsland when he was the minister for transport.

Mr Chester: It's not true, Joel.

Mr FITZGIBBON: The minister is saying it's not true. I will say that I have read reports of Wellards' letter to the minister. I'm wonder if the minister is saying it was a different minister, because I've actually had a conversation with Wellards about that matter and I understand it to be true. But I will acknowledge that the minister has challenged me, out of courtesy to him. Wellards told me that they did send a letter to the government of the day, saying, 'You've got to do something about these exemptions with no sunset clauses. We have vessels at sea that were given exemptions many years ago and the exemptions just remained in place ad infinitum. If you don't do something about this'—and this is one of the live exporters—'then there is going to be a catastrophic event in the sector.' What did the government do about the Wellard letter? Nothing. The first we learned of the Wellard letter was sometime after the Awassi Express incident, and we would still not know about it if parts of the industry hadn't started defending themselves against other parts of the industry.

I will just go back briefly to the summer trade while I'm talking about the industry. Graham Daws, the CEO of Emanuel Exports, the exporter involved in the Awassi Express, said on our national television screens, 'No matter what you do, you can't do anything about the northern summer trade.' His words were effectively, 'No-one can do anything about these climatic events. They just happen.' Well, I think that was the Labor Party's point. That it doesn't matter how heavily you regulate or what the standards are, they just happen. They're unpredictable, and when they come, you'll have significant mortality rates.

And with more on mortality rates, can I say again—and I do welcome the McCarthy review acknowledging this—that mortality rates aren't a measure of animal welfare standards. What we've been saying is that it's all right for 1,800 sheep to die, because that's within the mortality rates. If 2,500 sheep die, that's okay—don't worry about the other 58,000, who probably wish they had died because they suffered the whole trip. The ones which died were probably the lucky ones. But this is not a measure of standards, and McCarthy has recognised this. The government has embraced it and, of course, there will be a new way of measuring the animal welfare issues within these matters.

I'm talking about culture. Culture is all-important. When you have a minister who does all of these things with the full authorisation of his Prime Minister—and let's not single out the former, the almost former, member for New England—he was just the minister of the day. Those of us who have been in cabinet know that these are decisions of government, and these were all authorised by the Prime Minister of the day. Again, I suspect that members of this government regret allowing those two things to occur on their watch, because it did them no good whatsoever and it has been damaging to the trade.

I said that this is cultural; the minister's attitude affects the culture both within the regulator and in the industry. But it goes beyond that. It can also affect the culture in the research sector. LiveCorp is the RDC for the live export trade. We asked them a few questions at Senate estimates last week. We asked them, for example, why the language has changed about mortality rates in the live trade sector. In one initial report, the language changed from 'substantial increase' to something like 'minimal increases'. But, more particularly, they told us:

One high-mortality voyage each for 2013 and 2014 will not be included in some analyses, as the high mortalities occurred under exceptional circumstances, and would distort the study of long term trends.

What LiveCorp are saying is that when they have an 'exceptional' event, as they call it—and, no doubt, the Awassi Express incident was an 'exceptional' event—they don't include it in the data because it's an exceptional—

Ms Ryan: It's an outlier!

Mr FITZGIBBON: It's an outlier—it's an exceptional event. What a ridiculous thing to do! We on this side of the House want evidence based policy. We want to rely on the science in this case. McCarthy rejected the science, the science shared with us so competently by the Australian Veterinary Association. We want evidence based policy. We don't want a government which sends the signal to researchers that it's all right to change the data to get the outcome you're looking for. That's exactly what we don't want.

I want to inform the House that when we get to the in-detail stages of the debate on this bill, I'll be moving another amendment—a very serious amendment, which I want others opposite to give very genuine consideration to. I've chosen not to do it by surprise in the House—I could have snuck one in during the in-detail debate—but I wanted to give members opposite the time to sleep on it. That amendment, which I will move before the third reading vote, will in effect institute the Sussan Ley bill, or the bill proposed by the member for Farrer. It will put a stop to the summer trade at the first immediate opportunity, and it will phase out the live sheep trade over a five-year period. I'll put that tomorrow, assuming the government allows us to get to the in-detail stage of this debate now, and I do ask members tonight to have a think about that.

The member for Farrer's bill is a perfectly reasonable one. Again, it takes immediate action on the science. The science is in on that northern summer trade. As I have argued, it gives our sheepmeat producers and others plenty of time, with government support and strategic guidance, to transition to something better. I want to particularly make an appeal to those people on the other side who have already publicly expressed their very deep concern about that summer trade in particular, and expressed the view that this is a broken model and there is no long-term future for this sector.

So I'll put that amendment tomorrow. Again, I want to guarantee members they'll have the opportunity tomorrow to study the bill drafted by the parliamentary draftsmen, or I'm happy to give it to them tonight. In fact, Mr Deputy Speaker Georganas, I'm happy to table the amendment now, which I have with me, so that members do have access to the amendment tonight and can reassure themselves that it is an exact replica of what the member for Farrer has proposed in her private member's bill. I'm sure the minister will allow me to table that document.

The DEPUTY SPEAKER ( Mr S Georganas ): Is leave granted? Leave is granted.

Mr FITZGIBBON: The live cattle trade is worth close to $2 billion. It's a very significant industry in this country, and I made the point earlier that so many of our northern producers in particular rely upon it. Labor supports it. Labor wants it to thrive. But Labor wants to protect it as well. And Labor want those opposite to work with us in doing so. I don't want those opposite thinking just about the amendment I propose to move tomorrow; I want them thinking about that inspector-general.

The Productivity Commission recently recommended something very similar in their report—commissioned by the government, of course—on regulation of the agriculture sector. We don't hear much about the PC report on regulation in the agriculture sector. Remember, that was one of the government's key themes: red tape. We even had a red-tape reduction day. Do we still have those?

Mr Neumann: Review days, no.

Opposition members: No.

Mr Neumann: No, not anymore.

Mr FITZGIBBON: I don't think we have those anymore. But we had a PC report. It was a very good report. It identified enormous issues that could be tackled by this government. But it said a couple of things the government didn't like, like recommending independent oversight and regulation of live exports, that the sugar code was a pretty dumb idea—I think most of us agree with that—and there were a few more as well. So, where is the PC report? It's gathering dust somewhere. You can be sure of one thing: if we win government—and we don't take anything for granted there, far from it—we'll be dusting off the PC's excellent report and revisiting some of those issues that this government has chosen to ignore.

We support the live cattle industry, but we want to help it build and maintain its social licence, and we believe independent oversight is very, very critical. I ask members to think about, God forbid, an event in the cattle trade. How would we explain to people that we were serious about overseeing these things? An independent cop on the beat, the inspector-general, will allow us to do that, and I believe that person can do that job very effectively.

As for the live sheep trade, we acknowledge how important it is to some people. But, again, we want to work with them. It's unsustainable. Live sheep exports are on the decline. Our overseas markets are looking for something better. So the demographic is changing and the market is changing; there's an inevitability about this, in any case. Let's be honest with the sheepmeat producers: let's tell them where we want to take them and let's take them to a better place.

The DEPUTY SPEAKER ( Mr S Georganas ): Is there a seconder?

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

Mr RICK WILSON (O'Connor) (18:19): I rise today to speak in support of the Export Legislation Amendment (Live-stock) Bill 2018. I thank the member for Hunter for foreshadowing his motion and putting it on the table. I was going to accuse him of being a wolf in sheep's clothing, pardon the pun, but to the people in my electorate he's just a wolf!

The intent of the legislation is to increase criminal penalties and introduce new criminal offences and civil penalties for conduct that is unacceptable for livestock exporters. Those who obstruct or hinder an accredited veterinarian or authorised officer, or dishonestly influence any person performing their functions or duties or exercising power in relation to an export program, will be penalised. Exporters who commit an offence, intending to obtain a commercial advantage over their competitors or, by committing an offence, cause economic consequences for Australia will face severe penalties. Under this offence a company would face a fine of whichever is the greater of $4.2 million, three times the benefit gained by the company or 10 per cent of the company's annual turnover. A director of a guilty company could face 10 years in prison or a fine of $2.1 million, while an individual convicted under the same offence would face 10 years or a $420,000 fine. Other penalties will increase from the current five-year prison sentence and/or a $63,000 fine for an individual to eight years prison and/or a $100,000 fine. For a company the fine will be increased from $315,000 to $504,000. These are very serious impositions. A criminal offence with a jail sentence of up to 10 years shows that this government and this minister are very serious about tackling poor practices in the livestock industry.

Why is that important? It's important to me in particular as the member for O'Connor. The live export industry exports around 1.9 million sheep out of the country, and around 1.6 million of those sheep come out of Western Australia. Of those numbers about 65 per cent, or about 1.4 million sheep, come out of my electorate of O'Connor. This trade is worth around $220 million to WA, so around $150 million to the people, businesses and farmers across O'Connor. I've had it put to me that 1,800 jobs are reliant on the export trade, but I would contend that many more people partly rely upon the trade, whether they be farmers who derive part of their income from the trade, livestock agents who derive part of their commission income from the sale of sheep in the live export trade, or truck operators who derive part of their income from trucking sheep from the Great Southern through to the feedlots in Perth and then loading them onto the boats.

We've heard a lot about the trade, and the previous speaker, the member for Hunter, made mention that community standards have moved on. He's absolutely right. I think all of us who have received the emails would accept that community standards have moved to the stage where they will no longer accept the sort of incident we saw on the Awassi Express. I absolutely agree with the member for Hunter on that, and that is exactly why the government is instituting these very tough measures.

But we do need to talk about some of the issues where the industry has been kicking some goals. Firstly, the ESCAS has been a great success. We are one of a hundred nations that export live animals. We're the only nation that has an export supply chain assurance scheme. That export supply chain assurance scheme has lifted the standards in all of our destination countries not only for our animals but for animals from other nations as well. I think Australia as a nation can be very proud of that. If we pull out of the live sheep trade, there will be no-one left in the Middle East setting that standard.

The other thing that needs to be mentioned is that mortalities on these voyages have fallen from 1.9 per cent per voyage in the mid-1990s to 0.7 per cent in the last five years. So that's a significant increase in the success of these voyages—a significant decrease in the number of mortalities. That shows that we can improve standards, and we need to continue to work to improve standards.

Regarding the Saudi market, the Saudi market in 2008-09 imported around thee million sheep, including around 20 per cent Australian animals. When ESCAS was imposed, the Saudis declined to be part of it, and so Australia withdrew from that market. I've just had a look at some recent figures. Between 2015 and 2017, on average, the Saudi market imported five million animals per annum, so that's about a 40 per cent increase in the number of animals that the Saudi market imported. Not one Australian sheep now goes into Saudi Arabia. So, those people who suggest that by Australia withdrawing from the live sheep trade somehow there will be no more incidents for sheep from other destinations in the world are kidding themselves, to be quite frank. I think that what will happen is Australia will pull out of these markets—if the member for Hunter gets his amendment up, and I'll discuss that in a moment—but if anyone thinks that if we pull out of these Middle Eastern markets that they will stop buying live sheep, that is a complete furphy. The trade will go on; the animals will be imported from other countries. Just to go back to the Saudi example, most of those sheep come out of the Sudan, Ethiopia and Djibouti. They're not countries known for their high animal welfare standards. They may well be, for all I know. I don't want to prejudice those countries. Maybe some members on the other side know of some animal welfare initiatives in those countries concerning live trade. But certainly there's many, many animals coming out of the Horn of Africa and going to the Gulf States at all times of the year, including high summer.

This is not the only move that the minister and the government are imposing. The minister, on Thursday a week ago, accepted in full all 23 recommendations of the McCarthy report. The key recommendation from McCarthy was a reduction in stocking rates, and there's quite a complex formula that will be applied to boats that arrive at a destination in the Middle East, or in the Northern Hemisphere generally, during the months of June and September. These stocking densities will, generally, reduce the amount of animals on board by roughly one-third. So that will make a significant difference to the animal welfare of those animals on those boats.

The member for Hunter mentioned that the sheep in those hot conditions looked to be suffering—those that didn't perish—and no doubt it was very hot. But I will say that across the Great Southern and Central Wheatbelt part of my electorate on a hot summer's day you'll see a lot of sheep standing in the shade of a tree, and they'll be panting, because that's how they deal with extreme heat. I'm interested to see whether the member for Hunter and some of the harder-left members of his side will want to see farmers running sheep in a broadacre situation in the Great Southern penalised when the temperature reaches over 40 degrees, and those animals, just like the human beings who handle them, are suffering from heat distress. It is what happens in the farming industry across my electorate.

Another measure from the McCarthy report will be independent observers on board. With the Awassi Express incident, which happened in August last year, for some reason the footage was unfortunately not released immediately. It was held back and released at an opportune time by Animals Australia, so instead of it being possible for action to be taken immediately, we had another eight months, effectively, of the situation continuing without the government being made aware of it. So an independent observer on the boat will make sure that any of these incidents are immediately reported to the government and action can be taken immediately.

The member for Hunter has foreshadowed that he will be moving an amendment in the immediate future to suspend the trade in summer months and to phase out the trade over five years. We all know that capital these days is very fluid. International capital will find its best home, and most of the live export operators out of Australia are internationally based. There's no more liquid or fluid capital than a live export boat, which can be directed to any port where the owner sees that it's going to make its best profit. So to say that we will phase out the industry over five years and somehow we'll adjust and there'll be this gradual phasing out is a complete furphy. It's complete nonsense. What will happen is that the exporters will see that they have no future here in Australia, and they will withdraw their ships and their capital almost immediately. That is my feeling of how things will go.

While I'm on the topic of furphies, there are some facts that have been put about in this place which I just want to challenge—firstly, that the price of mutton in WA is 20 times higher than it was 20 years ago, in 1998. Why choose 1998? You can go back to 1990 or 1991, when farmers were destroying sheep because they couldn't find a market for them. That was when the single desk for wool, known as the reserve price scheme, was abandoned and the Australian sheep flock fell from around one billion sheep; it has stabilised at about 335 million. That's about a two-thirds contraction in the industry, and obviously over that period there was a great deal of pain for growers as they transitioned out of sheep into cropping and other enterprises. So, yes, there was a period where we suffered extremely low prices.

However, throughout that period there has always been a premium paid by the live exporters. Just the other day I had a case of an exporter who told me that he may have to divert some sheep that he purchased to slaughter. Because of the new rules, he may not be able to get them on the boat. He indicated to me that, while the live export price was around $110 per head, the maximum that he could make out of them as slaughter sleep was around $75 a head. So that's an indication of the premium that is in the market for the live export of sheep.

If you close the industry down effectively overnight, which is what the member for Hunter is foreshadowing with his amendment, you will not see the price fall by $30 to $35. With 1.6 million additional sheep to be processed on the market, out of a turn-off of about 3.5 million or 3.6 million in Western Australia, you will see the market collapse. As I said at the start, it would be wrong to say that every farmer relies on the live export trade for their livelihood, but every farmer who runs sheep would rely on the live export trade, and also the processing market which spins off the live export trade, for a significant part of their income. It might be their profit for the year. It might mean the difference between making a profit and a loss. It's the same for the truckie. For the truckie who carts sheep, that extra work that he gets carting sheep off farm up to the feedlots at Baldivis and then loading the sheep on the boat might be the difference between him having a viable business and not having a viable business. For the stock agent who earns his living out of commission sales, losing that $110-a-head sale and seeing the market overall come back by $30, $40 or $50 means a significant amount of income that comes off his livelihood.

So I commend the bill to the House, because we on this side of the House accept that changes need to be made. This bill does implement serious changes. It will make live exporters— (Time expired)

Mr STEPHEN JONES (Whitlam) (18:35): The Export Legislation Amendment (Live Stock) Bill 2018 is about export legislation, it is about the treatment of livestock and it is about the conditions upon which we as a civilised society allow farmers and businesses who are engaged in sheep husbandry to export those animals overseas. I want to note at the outset that the way in which we treat our animals—animals that are within our care—is an insight into our own humanity. It is not always a direct indication of how we will treat fellow human beings, but it is a pretty good indication of our underlying values as a society. I believe that we have an obligation to be good custodians of animals within our care, whether they are domestic animals or animals that are raised for the specific purpose of adding to our food supply. It makes no difference. We have an obligation to be good custodians of these animals.

On 24 May this year, the government introduced this bill into the House, a bill to amend the Australian Meat and Live-stock Industry Act 1997. We will support the bill, but it doesn't go anywhere near far enough. Labor have announced that we will end the export of live sheep. If a Shorten Labor government is elected, we will end the live export of sheep. We will phase out that export over a five-year period and we will work with the industry to ensure that it is able to adjust. To be very, very clear: a Shorten Labor government will phase out the export of live sheep and we will do it because it is simply not sustainable on a humanitarian basis.

The government is claiming that these amendments will ensure that the penalties and sanctions available are sufficiently high to provide a level of deterrence and punishment necessary to protect animals carried on livestock export voyages. We are only here because of the footage that was aired by the 60 Minutes program on 8 April this year—a program which exposed the horrendous treatment of animals crammed into a boat, sent on an extraordinarily long voyage in unbearable and intolerable conditions. The significant loss of life, which I will detail shortly, led to a predictable public outcry. People are saying: 'This should not be done in our name. As a country, we are better than this.'

The act purports to put in place a set of conditions and arrangements, and the bill puts in place some additional penalties that aren't currently available within the act. We are going to support them, because they do no harm to exporters who are doing the right thing. However, the new penalties and sanctions will do nothing to reduce the suffering of sheep, which will continue if we allow the voyages during the Middle Eastern northern summer.

I've got to say to those members opposite who are complaining that they have somehow been hijacked by this issue that, in many respects, they have nobody to blame but themselves and their own inaction on this issue. The live sheep export industry has been controversial for decades. Indeed, the industry has been in substantial decline for decades as well. In the 1980s, we were exporting somewhere in the vicinity of nine million head of sheep compared to the two million head of sheep that are exported today. Australian live sheep exports fell by 1.97 million in 2013—the lowest recorded level since 1975. Now, whilst only six per cent of the sheep production market goes to live exports, 82 per cent of that disembarks from Fremantle. So you can see from this that the West Australian producers are overwhelmingly more reliant upon it than their eastern state counterparts. The major markets for live sheep exports are the countries of Kuwait, Qatar, Jordan and Oman. Saudi Arabia and Bahrain have also been significant export markets during the past 10 years.

To say that this issue has crept up on the government is simply dishonest. It is not true. There has been significant public concern. It has been a matter of debate within this place and you could not have been a member of parliament over the last decade and not have received emails and letters from constituents who are deeply concerned about practices within the live sheep export trade. It has continued to attract significant public concern, and veterinary and other animal health and welfare sector concerns. From the 1980s onwards there have been ongoing incidents, reviews and reports into the welfare standards of the live export trades. These have recommended—serially—greater veterinarian oversight, more-comprehensive standards and mandatory reporting of incidents. I give you one example: back in 1985, a review of the live sheep trade by the Senate Select Committee on Animal Welfare found:

… if a decision were to be made on the future of the trade purely on animal welfare grounds, there is enough evidence to stop the trade. The trade is, in many respects, inimical to good animal welfare, and it is not in the interests of the animal to be transported to the Middle East for slaughter.

This was the finding of a committee in 1985! Here we are in 2018 debating the same issue. Neither the industry, the exporters nor the members opposite who defend the practices, could complain that this issue has crept up on them. It simply has not.

The export incident that has sparked the latest round of concerns occurred on a ship that the company Emanuel Exports used to ship sheep from Fremantle to the Middle East in August 2017. Around 2,400 sheep died on that voyage. The overwhelming majority of them died of heat stress. We know that this is not an isolated incident. What is revealed is that despite many chances the live sheep trade has been unable to demonstrate that it is capable of meeting reasonable animal welfare standards.

Exporters and the National Farmers' Federation—and it's worth noting that it is both the exporters and the National Farmers' Federation—when asked if they could guarantee that there wouldn't be such incidents in future have said that, no, they could not. Well, faced with a history of incidents, faced with overwhelming—overwhelming—evidence, we have to ask, 'Why is the government introducing a bill today that is so modest in its reach?'

I want to go through a chronology of some of the events. In 1980, one crew member and more than 40,000 sheep died when a Lebanese-registered livestock carrier, the Farid Fares, caught fire and sank en route from Tasmania to Iran. In June 1985, a Senate report into animal welfare, specifically on the live sheep export trade, was released. In 1989-90, trade with Saudi Arabia was suspended after two vessels, in July and August 1989, were prevented from unloading due to a scabby mouth infection of the sheep on board a ship. In 1996, one crew member and 67,000 sheep were killed when the Uniceb, registered in Panama and chartered by Wellard Rural Exports, caught fire and sank in the Indian Ocean while travelling from Fremantle to Jordan. In January 2004 we had the Keniry report, which said that the industry needs to improve its standards and that drastic reform was needed. In September 2012 Kuwait and Bahrain rejected sheep shipments due to claimed outbreaks of scabby mouth. Bahrain blocked the Ocean Drover, which was subsequently diverted to Karachi in Pakistan, where the sheep were culled by Pakistani disease control authorities. In January 2014, 4,000 sheep were reported to have died heat stress aboard the Bader III travelling from Adelaide and Fremantle to the Middle East.

From this chronology of events you can see that there has been occasion upon occasion where the industry has been sent a clear warning that the behaviours are not sustainable, that the practice is not sustainable and that change is necessary. Instead of apologising for the practices and stonewalling the inevitable change, we call on the government to do the right thing. The government could bring on for debate a bill before the House this week, introduced into this House by one of their own rural and regional backbench MPs, the member for Farrer. Members of the Labor opposition have said they are willing to have this bill brought on for debate and for it to be voted on in this House. That can be done at the next sitting of this parliament, so there is no need for further delay. We call on the government to do the right thing and ensure this private members' bill gets debated and voted on in this session of parliament. We do not need to wait until the next election to have this issue determined.

In my own electorate I asked my office staff to do a count of the number of emails, letters and phone calls we have had from constituents since the April incident. There were a full 1,054 letters, emails and phone calls of complaint from constituents on this matter. When compared to most of the other issues that I hear about through my office, this is one of the highest numbers of complaints I have received. On this alone we should say that the parliament needs to respond to deeply held community concerns. We should take the opportunity provided by the member for Farrer and her private members' bill to have this issue put before parliament. We would do it differently, but we respect that the member for Farrer has brought a bill into this place in good faith. We can vote to end this cruel trade, we can do it within the next sitting of parliament, and we should do it. Our constituents demand it, and it is the right thing to do.

The way that we treat animals in our care is an insight into our humanity. We have an obligation to be good custodians of the animals within our care. Whether they be domesticated animals, pets, or animals we are keeping to supply our food chain, the obligation is the same. I commend to the House the second reading amendment moved by the member for Hunter and again call upon the government to allow its members to vote on the private members' bill, moved by one of its own members, on this issue.

Ms MARINO ( Forrest — Chief Government Whip ) ( 18:48 ): I'm proud to say I'm here to support WA's sheep farmers, their small businesses and the communities that rely upon them. The Export Legislation Amendment (Live-stock) Bill 2018 will significantly increase criminal penalties and introduce new criminal offences and civil penalties for livestock exporters. The bill ensures that penalties and sanctions provide the deterrence and punishment necessary to protect animals on export vessels, penalising those who would obstruct or hinder an accredited veterinarian or authorised officer. Exporters who commit an offence for a commercial advantage over their competitors will face penalties. A company would face a fine of $4.2 million, three times the benefit gained by the company or 10 per cent of the company's annual turnover. A director of a guilty company could face 10 years in prison or a $2.1 million fine. An individual could face the same prison sentence or a $420,000 fine. There are additional increased penalties and fines for individuals and companies. Courts will be able to name and shame those who commit offences or contravene civil penalties.

Well, I don't want to see our farmers, small businesses, and rural and regional communities punished by closing the live sheep trade. Of the hundred-plus countries that export live animals around the world, Australia is the only country that is invested in, and continues to invest in, people, training, welfare and education. Added to that, this legislation introduces some of the highest penalties in the world. However, the Australian Meat Industry Employees Union wants to shut the live export industry down, so, of course, Labor wants to shut the industry down as well. Labor's shadow agricultural minister was quoted in the WA Farm Weekly as saying, 'Labor will shut down live sheep export.'

My state of Western Australia has the most to lose. A third of WA's sheep go into the live export market. Shutting it down would have a massive impact in Western Australia. WA has averaged nearly 85 per cent of the total of live sheep exports over the past five years: 1.6 to 1.7 million sheep. Critically in our state, there is a direct interdependence between trade lamb, mutton and live exports markets—something that's not well understood outside Western Australia. The live sheep exported are mostly older sheep; they're mutton. The chilled-box sheep trade is mostly lamb. They're two different markets. We have a very small domestic market compared to the far greater domestic demand on the east coast. The east coast also has a distinct freight advantage into the US market. But, of course, as we're hearing tonight, those on the east coast actually know much more about our market in Western Australia than our WA farmers do.

The live export trade in WA is worth $250 million. It supports jobs and economic development in our regions. With our predominantly merino flock, the flow-on effect on prices would be substantial. It would force people out of sheep production. Some believe there would be a collapse in sheep values that would have most impact on our producers in WA. A report I read recently put the cost between $80 and $150 million—it could be more. There's a lot of support for competition in Australian markets, but rarely, as we see from the other side, is there support for competition that improves farmgate prices. We're hearing it tonight repeatedly. This is a classic example. Labor will leave sheep producers with only one option—to sell to a meat processer and, certainly, to sell their oldest sheep. There is absolutely no question this would force prices down. The processors are probably rubbing their hands at this. But the producers know they will be absolute price-takers. There will be no competition. There is no magic transition here. The Gulf States ministers and livestock importers have said that if they're forced to look elsewhere for live animals, they'll look elsewhere for chilled meet also. Effectively, this means that, if Labor shuts down the live trade, the chilled trade would likely contract and our farmers could lose both selling markets. Just consider those who would be affected.

Let's look, for a start—for the first time tonight, perhaps, apart from my colleague the member for O'Connor—at the human cost of shutting down the industry or cutting millions of dollars from the industry. There is the effect it will have on individuals, small businesses and small regional communities, primarily our farmers, but also farming contractors; shearers; livestock transporters; feedlots; those who grow, supply and process feed for the live shippers; pellet manufacturers and staff; those loading the livestock on the wharfs; tyre dealers; mechanics; welders; fuel distributors; fencing contractors; and the countless other small businesses and their workers in rural towns and communities that rely on local farm incomes coming into their businesses. What about livestock agents? There are over 1,200 agency businesses across Australia who play a very important part in the livestock and wool sectors. There will be families who lose income and will not be able to afford to send their kids away to school. What sort of risk are we seeing already? I was talking to a contractor carting sheep feed out the back of Darkan, and he said the word from the farmers was that the banks are already nervous. I wonder how the banks are actually pricing the increased risk sheep farmers and those dependent on the industry are currently facing when they're applying for a loan.

In WA, this will impact right across the state, from the Wheatbelt through to Williams, Narrogin, Northam, York and Esperance, just to name a few. Take 35 per cent off farmers' incomes, and they cannot spend this in their small regional towns and businesses. They can't support the emergency services and the sporting and community service clubs in the same way. And how about the mental health issues? It's a massive issue already in rural and regional Australia. We're tight for feed in WA right now. Here's another layer of pressure for our farmers.

It doesn't matter how the members opposite try to package this and say there'll be some sort of magic pudding transition. We all know that there will be businesses that won't survive. It's not okay for those opposite to just shrug their shoulders and say, 'They're just collateral damage.' They are farmers like me. I didn't come into this parliament to put farmers and small businesses out of work, and I didn't come into this parliament to make decisions that put at risk, erode or destroy small regional communities.

Labor has said it will shut the industry down. Well, I was in this parliament in 2011 when the Labor government suspended the live cattle trade to Indonesia. It was disastrous for Australia's cattle industry. It destroyed some pastoralists, and I know only too well the impact on farming families in regions right around Australia and the impact directly on beef prices in the South West of WA. So Labor's ban on live cattle exports proved without a doubt that the live export market underpins the meat-processing trade prices. When live exports ceased, livestock prices crashed. When the live trade resumed, domestic prices in sale yards increased significantly. But what about that human cost? I saw the trauma and frustration of our farmers, graziers and small businesses.

There are direct parallels between what Labor wants to do to the live sheep industry in WA and my dairy industry, and I speak from personal experience. The industry deregulated in 2000. I'm the only dairy farmer in this parliament and the only person who's experienced what happens when there are sudden or ongoing cuts to farmers' primary source of farm income. The price for our litre of milk supplied to a processor went from 48c a litre to 28c a litre. It was said at the time that $28 million to $30 million exited the Harvey shire overnight. We had around 300 dairy farmers in the industry at the time and around 125 in the Harvey shire alone. Now there are barely 150 in total in the WA dairy industry and very few left in the Harvey Shire.

Of course, when you cut between a third and a half of farm incomes, it directly affects the farmers, their workers and the whole community. I was president of the local AFL footy club. We were fundraising to build our first clubrooms. Those cuts to our local farmers' incomes meant that we were down $30,000 a year on our fundraising. The local dairy farmers who supported us with hay, cattle and personal donations couldn't afford to do it anymore. The local businesses—the rural agency, the hardware store, the newsagent, the furniture shop, the car dealer, the supermarket, the local mechanics, the welders and the local cafes—were all affected when what was the local major industry took such a hit, just like the sheep industry. Those same businesses suffered reductions in their income and either reduced or completely cut their donations as well.

This was an industry that at the time underpinned much of the local and regional economy. In the very small town of Brunswick Junction, where I grew up, there was a strong contingent of viable dairy-farming families who underpinned the local community. The local supermarket was thousands of dollars down in its turnover in the first week following deregulation. The majority of those small dairy businesses did not survive, and the farmers left Brunswick. These were the people who were very committed to and active in the local community, just like our sheep farmers. They're the ones who financially and physically supported the local primary school P&C. One of the farmers used to coach the kids in sport and in basketball and take them to and from games. They supported the local volunteer St John Ambulance and fire brigade fundraising. These families had to sell their properties for what they could get and left the district. What a gap they left, both financially and physically. We really miss their commitment to the community. In other communities we saw local sporting, community service and emergency service organisations struggle for numbers of volunteers as well as financial support. It had been the farmers who provided the physical and machinery power to get the jobs done—something a lot here take for granted.

As someone who tried so hard to support those dairy-farming families during this time, I saw and dealt with the massive mental health problems. This was the real human cost and the risk involved in what those opposite are proposing. It's what you can't see behind closed doors that matters. There were both men and women who would break down and cry whenever I met them in the street or in a paddock. Some of those people never ever recovered. They carried to their graves the anger and frustration, particularly for some industry representatives and for the politicians who failed to stand up for our farmers—those who failed to understand just what a devastating effect this decision had on their families, their lives and their communities.

There is no question that dairy farmers in WA are now absolute price takers. We have three major processors, and last year we saw three dairy farmers told their milk would no longer be required. There was an excess in the market and they were put out of business. No other processor would take their milk. They had nowhere to go and they had a perishable product, so they had to shut down.

I look at the parallels with the live sheep industry. Labor wants to take millions out of the pockets of our sheep farmers, particularly those in Western Australia. We've heard talk in this place about transition, but transition to what? I've lived it and I've been there. Is it transition to processors? Well, why not come and walk a mile in my shoes. Let's have a look at what happens when I am reliant on processors; I am an absolute price taker in my industry. There is no magic pudding in this space, and there will be no magic for our sheep farmers. That's why I am very proud to come into this place and stand up for every one of those farmers and our farmers right around Australia.

Unfortunately, we have a lot of people who take for granted where their food comes from, how well it's grown and, equally, how much of the rest of the world we feed. It is a very important job, and, unfortunately, what we see here is people taking farmers, their businesses and those small communities for granted. Look at some of those more remote and small communities it's going to have a massive effect on. If it's what I saw in Harvey and Brunswick, in those towns that actually have many more people and small businesses than those rural, regional and more remote areas in the Wheatbelt region, the compounding effect will be huge. But what about the human cost?

Those opposite think that farmers and those communities really don't matter. Well, they do. They absolutely do. Their mental health matters, their contribution to our economy matters, their contribution to the Western Australian economy matters and each one of their families matters. So I'm saying to those opposite: you be very careful what you're actually proposing here. I've been through massive change in an industry, and I know what's ahead for our sheep producers. I also know what's ahead for those small communities and for the organisations, emergency services, sporting clubs and community groups that actually rely on those fantastic farmers who support and underpin so much of our regional economies.

I'm desperately concerned about the human cost of what is being proposed. It is not simple and there is no magic transition. I've lived it and, as I said earlier, I did not come to this place to put farmers, small businesses and those that support them out of business. I didn't come here to see small regional communities further eroded or more people leave rural and regional Australia. I am always proud to stand up in this place for our Australian farmers, and I do so in this debate.

Ms RYAN (Lalor—Opposition Whip) (19:03): As the member for Forrest leaves, I'd like to assure her that she's not on her own in this place. I'm the daughter of a mixed farmer. We grew grain, dairy, sheep and pigs, and I too lived through a crash in a market. It was a crash in dairy in Victoria that resulted, ultimately, in my father's death. But that's not what the Export Legislation Amendment (Live-Stock) Bill 2018 is about. This bill is not about crashing a market. This bill is about ensuring that Australia has a reputation as a clean, green, safe, high-quality and ethical producer of food. That's what the amendment to this bill is about. We come into this chamber to debate a bill that this government has put forward as a fix-all on what has residents in my community incredibly concerned.

Like those Australians, farmer's child or not, I was deeply disturbed and disgusted to watch the now infamous footage of sheep on board the Awassi Express. What is more disturbing than the footage itself, though, is the fact that this was not a one-off incident. The 60 Minutes program on 8 April showed on-board treatment of live sheep over a series of voyages. This segment shed light on an ongoing issue that is being left to spiral downward, without a regulator and without the teeth and the grunt for enforcement. And I don't believe that the legislation that's before us tonight will seriously change those practices.

The segment also shed light on the failures of this government, and, in particular, the series of ministers for agriculture who have done nothing. They have sat back and have allowed these incidents to occur without any kind of intervention. This government have continually failed in the live sheep export space, first with the former minister, the member for New England, Barnaby Joyce, and now with Minister David Littleproud. In fact, let us go through a brief timeline that demonstrates the government's repeated failures over the past couple of years.

It is too late now to cry, 'We need to fix this,' in terms of taking a long view and suddenly increasing fines to make things change. The behaviours haven't changed. What Labor is proposing is a transition period and a government that would work with the farmers to ensure that we can stop the summer trade and come to a situation where live exports and the farmers can continue but without the scenes that we have seen.

In October-November 2016, footage obtained by Animals Australia showed cruelty to Australian sheep in Malaysia and in the Middle East. Fast forward to 2018, April, and nothing had changed—same harm, no regulator. In August 2017, reports revealed that 3,000 sheep died due to heat stress on a single voyage to the Middle East in July 2016. So it took a year for that to be exposed. In November 2017, concerns that unfit ships were being used for live exports to the Middle East prompted the Western Australian government to seek to send a government official to inspect a live export vessel in the Fremantle Harbour. This attempt was unsuccessful. The result: the status quo remained and sheep continued to be loaded onto ships with inadequate ventilation on long-haul voyages in those summers.

In February, the Western Australian government commenced an investigation into a voyage by Emanuel Exports in which four per cent of the shipment of 63,000 sheep died. In March 2018 it reported that the live sheep export trade to Saudi Arabia was set to resume by mid-2018. In April 2018, the notorious footage of conditions on board an export ship bound for the Middle East in August 2017, released by Animals Australia, emerged. Approximately 2,400 sheep died of heat stress in this footage, and this footage was disturbing. I don't believe there's a member in this place that could see that footage and not be disturbed by it—as disturbed as members in my community.

I would remember the words of the member for Hunter—after the decades that he's served in this place—and his comments about the amount of contact he'd had from Australian citizens. I would echo that, that in the five years I have been in this place, I have not seen the amount of emails, the amount of letters or the amount of phone calls to my office on any other issue. And I want to share some of those here tonight.

One is from a local vet: 'I want to see Australia protect our farmers and protect our animals from this cruelty by stopping the live sheep animal exports and expanding a sustainable trade in chilled and frozen meat instead. We need to stop May-to-October exports now. We need to halve stocking densities now. We need highly trained, independent observers on all voyages now. And we need to plan how to end long-haul live animal exports for good.' These people aren't writing lightly. These people aren't similar to those in the past—just sending awful photos in the post. These people are thinking through the issues and contacting their local members to urge us to do what commonsense says we should do. Here is another from my hundreds of emails: 'I'm dismayed by the suffering of animals that I saw on the 60 Minutes program. It has absolutely stunned caring people everywhere. Temperatures well over 40 degrees, packed so closely they can't move, cooking alive. You wouldn't wish this on your worst enemy.'

There is no doubt about the impact that this footage has had, and there's also no doubt, in my mind, that this situation has worsened under this government. They have turned a blind eye to what has been occurring, not just on the AwassiExpress voyage but on other long-haul voyages. The cruelty to the animals involved in this trade needs to be pulled back and pulled into line. The farmers in this business need to be supported through a transition. I have people who work with animals in my electorate; farmers have said to me that they were disturbed by it. This should not become an argument about: it must go on or it must stop. This has to become something that this place can work and find a solution for.

This government now has the responsibility to legislate meaningful reform. The crux of this bill is to ensure that penalties and sanctions are high enough so as to provide a level of deterrence and punishment necessary to protect the sheep exported. The sentiment of that is welcome. But you have to ask: where has the regulator been? Why are we seeing this footage on our television screens, backdated, and nothing's happened in the interim? These are the questions the Australian public wants answers to. They want to know why so little, so late. And they want a different answer to this question. They're not going to accept an increase in penalties when it appears there hasn't been a regulator in place to oversee and ensure the penalties are actually placed when the breaches are occurring. This bill does nothing to address the ventilation issues, it does nothing to prevent the same kind of cruelty that we saw on our television screens from happening right now. We can't go far enough into the cruelty. The people who are writing to me are not people who normally pick up a pen to write about animal welfare. They're people who have been shocked and disturbed and don't understand how we can put profits above the way we are going to be perceived internationally for the way we treat our stock.

This bill needs to do a lot more than it already is doing. It was deeply disturbing to read two weeks ago that the ship at the centre of the latest live export scandal passed 39 inspections over five years. Deputy Speaker Andrews, if you thought the letters had stopped, once that became public knowledge they began again. Because, rightly, people are concerned that a ship can fail to comply with the ventilation requirements but can have 39 inspections over five years and be passed. Clearly, as the people writing to me have said, something's wrong with the system.

The system needs to be changed. We need to be legislating to ensure that the sheep at the centre of this scandal are treated humanely on their journey to the Middle East. That means stopping the summer trade. That means finding new solutions. Minister Littleproud saw the footage and said on the record:

I've seen the footage and I was absolutely shocked and gutted. … This cannot go on.

Well, hear, hear. That's what the residents in my community have said: 'This cannot go on.' Yet, for all the emotive language from the minister, we haven't seen any real and meaningful reform to ensure that we don't continue to see the horrifying footage of sheep suffering on those long-haul voyages.

The outcry from residents in my community about the issue has been overwhelming. We have received hundreds of emails and letters. On social media, it is hard to scroll for a few seconds without seeing a post about this issue. It is very real and very alive in my community. And I stand with those members of my community on this issue.

Those opposite want to talk about the past. They want to talk about the Australian government, the Labor government, having to stop live export in the meat industry in the past because of cruelty happening in abattoirs at destination points. I echo the member for Hunter's sentiments: things changed as a result of that pause. Things changed on the ground. And the level of animal cruelty was reduced dramatically. The industry won't change unless government acts.

I'll finish with a few more points that my local residents have made. 'Banning awful sheep live export means so much to me. People are disgusted by this cruelty, yet the government continues to ignore what the public wants.' I don't believe that the person who wrote that to me will be satisfied with this legislation—with an increase in fines but without the surety that there will be regulation of some kind. And I don't think that, at this point, the Australian public is going to be satisfied with anything but the cessation of the summer trade.

To quote another local vet in my community: 'I want to see Australia protect our farmers and protect our animals from this cruelty.' I don't think I can say it any better than that. We need to know, in our communities, that this trade has stopped—that what we saw on our television screens will not happen again.

We need to look at the mechanisms in this trade. Is the trade flourishing, or is the trade, in itself, reducing? Is this government just waiting for this trade to peter out? In the meantime, we'll continue to see these shocking images on our television screens—post-dated, of course, by some months. It is too late now to say that we can change the density on those long-haul summer voyages. It's too late for that. We need to stop the long-haul summer voyages. Then we need to look at a real regulator in the industry. We need to transition. We need to create, working with the farmers, a reasonable transition, to ensure that their livelihoods are protected but also that our country's reputation as a grower of ethical, high-quality food is maintained.

Mr DRUM (Murray) (19:18): This certainly is an emotive issue and one that has hit the interest of the broader community. We need to make sure that we fix this industry—and by saying 'fix this industry', I don't mean 'ban this industry'. It's such an easy target just to make decisions here in Canberra that we're going to ban this industry, and to not understand, as Ms Marino has said in this House, the true human cost of the decisions that the people in this parliament are prepared to make on this issue. Banning this industry is not going to stop sheep being imported into the Middle East. The countries have explained very, very clearly that there is a strong demand for the live sheep trade to Kuwait, Qatar and other Middle Eastern countries. If they can't get that produce from Australia then they will look to other countries to secure that produce—countries that have a far poorer animal welfare standard than the one that we enjoy here in Australia and the one that Minister Littleproud is going to work exceptionally hard at trying to strengthen over and above what we currently have.

Minister Littleproud has acted quickly in relation to these revelations. The footage is certainly shocking. I think, yes, we all saw the footage and we were all appalled by it. But, again, as I said, when the Labor Party did this back in 2011 with the beef trade after some shocking vision of the slaughterhouses of Indonesia was seen, the beef trade was shut down for approximately six months. It was only when the true cost of the human pain here in Australia, the human cost in Australia, was revealed to the Labor government at the time that they realised that they had to get this industry up and going again. Of course, what happened then was that the Indonesians said: 'Sorry, we've already found our markets elsewhere. We've already got our suppliers coming in from other countries.' We have been paying for that knee-jerk decision from the Labor government ever since.

As previous speakers have said, this trade is not about the lamb trade. Australia is well-renowned for its lamb, and we sell our lamb all around the world. Most of it goes in chilled boxes. However, in the Middle East, they have a strong demand for mutton. This is more to do with the wool industry. This is more to do with the wool farmers of Australia. As the sheep get older, they are only good for mutton. We eat very little mutton here in Australia, but we can actually sell it into these export markets for a substantial premium compared to what it's worth here in Australia. Make no mistake, if the Labor Party get their way and they shut down this trade, they won't stop there. They will just keep coming after the farmers. They will go after the beef industry. It has been very, very clear, as Minister Littleproud heard firsthand when he was in the Middle East last week, meeting with ministers from Qatar and Kuwait, that, if Australia is going to back away from its live sheep trade export, these countries are also going to look elsewhere for their chilled meat. It's not as though they're prepared to replace one with the other.

We need to find ways to fix this trade. We've been down the path before that Labor wanted to go. We were then made aware of the human cost associated with the extra pressure that we were going to put on our farmers in Western Australia and predominantly in South Australia, which are the two major states that enjoy the opportunity to export their mutton, their older sheep. We understand that we have to fix this trade. I will go through some of the penalties that this livestock bill is going to introduce for those who think that they can get away with poor animal welfare in the process of exporting our sheep. These new penalties are substantial. What we have to continually look at are the facts. As Minister Littleproud has said, we need to make sure that we go through this with a very calm head and that we make decisions that are based on science and evidence, as opposed to emotion. As I said, last week Kuwait were very clear in their explanation to Minister Littleproud that, if they are forced to look elsewhere for live animals, they will also look elsewhere for chilled meat. So, if Australia wants to phase out the live trade, the chilled trade would likely shrink, and Australians could lose selling on both markets.

This happened in Bahrain, where the removal of a government subsidy saw the end of Australia's live sheep imports in 2015. Australia's exports of chilled meat to Bahrain then shrank from 11,987 tonnes in 2014 to just over 8,000 tonnes in 2015, and was not even 7,500 tonnes in 2017. Kuwait, Qatar and the UAE import between 80 and 90 per cent of their meat. In 2016, Australia supplied Kuwait, Qatar and UAE with 60, 86 and 28 per cent respectively of their live sheep, and 68, 78, and 56 per cent respectively of their chilled sheepmeat. So these countries are currently very heavily reliant on Australia for their sheepmeat.

Further, as I said earlier, the sheep exported are mostly the older sheep, the mutton, whereas the chilled sheep trade is mostly lamb. It must be understood very clearly that once we take this option away from our farmers we are going to leave them with one option, and one option only. And that is that they will be at the mercy of the processors here in Australia. We understand what happens then, that the farmers become, yet again, price takers. Again, having no option but to succumb to the price offered by the local processors is what waits for our farmers if the Labor Party is to have its way on this issue.

It's quite pointed that the citizens of these Middle Eastern countries believe they have a right to freshly-killed meat. They have already reduced their live sheep import levels as much as they can, and they want to keep their current import levels where they are right now. They want to keep them there. So it's wrong to claim that the sheep trade is in terminal decline. The MLA analysis indicates that total global sheep exports into the Middle East have increased, with more supply from countries such as Romania, India and Georgia, as well as unknown numbers from countries such as Somalia, South Sudan and Sudan. This concept that the live sheep trade is in terminal decline and that we may as well just hurry it up anyway is simply a false claim.

There's also the claim that the Australian export of live sheep is in terminal decline. That's also false. Sheep exports from Australia declined over the past decade in line with the shrinking of the Australian sheep flock and the wish of some Middle Eastern countries to reduce their huge reliance on live sheep from Australia. And that's happened now—that happened years ago. Our sheep flock is now stable and our live sheep exports to the Middle East have hovered between 1.8 and 2.3 million tonnes per million sheep per calendar year. That has been constant since 2012.

The other claims that we hear, that this demand only comes due to government subsidies is also false, because due to a combination of historical, cultural and economic factors, locally slaughtered animals are still perceived to offer the freshest meat in the Middle East. And these markets are calling out for the freshest meat that they can possibly get.

So, as I said earlier, Minister Littleproud has put together a raft of penalties to ensure that no-one will be looking to take these penalties on, thinking that they can do this as part of business as usual. This will no longer be seen as the cost of doing business, to be happy to pay for these fines. We understand that under the offence, if a company were committing an offence intending to obtain commercial advantage over their competitors by committing the offence, and causing an economic consequence for Australia, they would face penalties to the tune of $4.2 million for a company and $420,000 for an individual. A director of a guilty company could face 10 years in jail. These are substantial fines, and the fines for every other offence in this are consistent with what we have here.

This is a very, very serious issue. I implore the people of Australia to look beyond the emotion, because this is a very emotive issue—as we understand, the vision was shocking. However, if we can improve the welfare of our sheep through those summer months—give them additional space, put the independent monitors on these ships and look out for the welfare of the—

Debate interrupted.