The SPEAKER (12:01): I have received a message from the Senate informing the House that Senator Hanson has been discharged from the Joint Standing Committee on the National Broadband Network and that Senator Georgiou has been appointed a member and Senator Hanson appointed a participating member of the committee.

Ms MADELEINE KING (Brand) (12:01): I rise today to speak in support, albeit reluctant support, of the government's proposed Australian Astronomical Observatory (Transition) Bill 2018. This bill seeks to amend the Australian Astronomical Observatory Act 2010 to amend the short title of the act, substitute a new outline for the act and abolish the Australian Astronomical Observatory and the AAO Advisory Committee.

This bill seeks to abolish the Australian Astronomical Observatory and allow for its function to be transitioned to two consortiums to manage the functions of the body. The functions that are now being outsourced, so to speak, are the operation of 3.9-metre Anglo-Australian Telescope on land owned by the Australian National University at Siding Spring near Coonabarabran in New South Wales, which is to be transferred to a consortium led by the very able ANU, and the operation of the astronomical instrumentation capability at North Ryde in Sydney, which is to be transferred to a consortium led by Macquarie University.

This legislation will give effect to the 2017-18 budget measure on access to world-leading astronomy infrastructure, which saw Australia sign up to a strategic partnership with the European Southern Observatory. This powerful strategic partnership allows Australian optical astronomers access to one of the most advanced telescopes in the world at the La Silla Paranal Observatory in Chile. This is a great thing. This strategic partnership will cost, in Commonwealth funding, $119.2 million over the decade from 2017, or $26.1 million over the forward estimates from 2017-18 to 2020-21. I know that many working in the field, many Australian astronomers, have for years argued the case for greater access to these facilities, so it's good to see that we are encouraging and facilitating that as a nation.

This legislation adheres to the most recent 10-year strategic plan, the decadal plan for Australian astronomy 2016-2025, produced by the Academy of Science, which has called for access to eight-metre class optical astronomy infrastructure that is currently not available in this country. The plan also calls for maintenance of efforts in terms of support for Australian domestic capability, including supporting the Australian national observatory and its capabilities. It is encouraging that we in this place are facilitating this vital research, and I'm very pleased this is happening. However, we in the Labor Party are reluctantly supporting this legislation, because, like most things on this government's agenda, it does seek to cut corners wherever it can. This government cares a bit more about how well or badly they are doing in the polls than about the future of this nation and its innovators and researchers.

This legislation proposes to off-load the main government astronomical assets, the Anglo-Australian Telescope near Coonabarabran and the AAO instrumentation, onto the Australian university sector. That's right: this government is seeking to off-load the work to our universities, which, as we already know, are apprehensive about funding arrangements and cuts due to this government's failure to provide certainty and proper funding to the sector. This government, which is quite happy to cut university funding by $2.2 billion over the next four years, is trying to force unis down the path of a deregulation system, which has failed before, by starving them of critical infrastructure funding as well as ongoing funding. At the same time, they're expecting universities to stump up the cash to keep these key astronomy facilities operational. It is quite a burden this government is seeking to put on the university sector without giving them additional funding. And this is ostensibly done to save the budget $26.1 million over the forward estimates. It's just another bit of trickery, if you ask me. What's happening is they are moving the burden of maintaining these facilities from the Department of Innovation, Industry and Science onto entities that are funded by the Department of Education and Training. As I said, it puts further strain on an already overstretched university sector, which is so important to this country, and on to its overall research infrastructure.

The transition is not without cost. It is expected that a small number of jobs will be lost in this transition: four to five at the Anglo-Australian Telescope and up to another nine at the North Ryde instrumentation laboratories. This is a government that has been spruiking an innovation nation, yet is happy to cull the jobs of some of the brightest researchers and technicians in the country. And by constraining universities, their funding and their research funding, this government continues to put our researchers down, whether they be researchers in social sciences, humanities or the technical sciences that we're talking about today.

Australia is a world leader in the field of astronomy, and we have worked very hard in this place to maintain this regional leadership. Currently the Department of Innovation, Industry and Science has two broad groups that manage Australia's government astronomy assets in partnership with the research community. The first group is the Australian Square Kilometre Array office. It is managing our engagement with the construction of the very exciting Square Kilometre Array, half of which is being built in Western Australia while the other half is being built in South Africa. This will become the world's most advanced radio telescope. I had a bit to do with the establishment of the International Centre for Radio Astronomy Research, headquartered at UWA, and also worked with great partners at Curtin University on the other side of the great Swan River.

ICRAR, the International Centre of Radio Astronomy Research, as part of the Square Kilometre Array effort, has made great advancements. Just recently, they reached a very important milestone with the first SKA-low prototype station being completed on site at Murchison, which has that very wonderful radio quiet that is an asset of that part of Western Australia. ICRAR also provides a remarkable opportunity for science outreach in this country, as does astronomy in general. ICRAR, through its work at Astrofest held at Curtin University, has seen more than 2½ thousand people come along and access very high-quality optical telescopes to not only learn a bit more about the important science that is going on in the international centre itself and the development of the SKA, but also for the pure enjoyment and love of looking further into the sky with the optical telescopes out there at Bentley.

The other Australian astronomy group managed by the department is the Australian Astronomical Observatory, which, since 2010, has managed access to the Anglo-Australian Telescope and maintained our national optical instrumentation capability. It's based in North Ryde, in Sydney. This legislation will abolish the AAO as a division of the department on 1 July this year, along with all AAO governance structures. The legislation also seeks to allow the transfer of necessary assets to external entities, in this case the two university-based and university-funded consortiums. As I said before, the consortium for the Anglo-Australian Telescope will be led by the ANU and it will include Curtin University and UWA—two of our great universities in Western Australia—as well as Macquarie University, Monash University, Swinburne University of Technology, University of Melbourne, University of New South Wales, University of Queensland, University of Southern Queensland, University of Sydney, University of Tasmania, and Western Sydney University. So it's a quite remarkable consortium of universities that, whilst having their funding cut by this government, are also expected to chip in to maintain the Anglo-Australian Telescope. The establishment of a national optical instrumentation capability which will build on and further develop the world-class instrumentation functions of the AAO will be led by Macquarie University and Australia Astronomy Limited.

When it was first constructed, the Anglo-Australian Telescope was one of the most advanced in the world and its operation gave Australian and international scientists access to the stars above in an unparalleled fashion. Additionally, it helped develop Australia's advanced scientific and industrial capabilities. However, this facility is now 44 years old. Despite this, it remains an important part of Australia's research infrastructure and we on this side of the House are relieved to see that these assets, as part of the AAO, will be maintained for the next seven years, making the AAT a very important and remaining-vibrant 51-year-old workhorse. While its future beyond that timeframe is not known, I'm sure this government have some plan in mind to keep it going. Especially given the fact that they wouldn't mind seeing us all work until we're 70 years of age before we have access to a pension, why should research facilities be any different?

What effect does this bill have on the astronomical research sector? We scrutinised this bill carefully, as we do all bills. It seeks to maintain and strengthen Australia's position as a first-class nation at the forefront of astronomical research by underscoring the need for access to world-class facilities, and that is something I most certainly support. It recognises that, in order to push forward into the next generation of research about the galaxy, our facilities need multinational partners to fund and construct on the scale and complexity that is required. We know that Australia has already begun to transition from a national research infrastructure portfolio of medium-tiered nationally-owned facilities into multinational partnerships worth billions that create world-class landmark research facilities, and this has been undertaken over many decades. Following on from this, Australia is already playing a critical role in two of the world's biggest billion-dollar astronomy projects: the SKA, which I spoke of earlier, and the Giant Magellan Telescope, which is seeking to be the very first of an entirely new class of extremely large telescopes, as they're referred to, as Australia constructs key components and instrumentation for the project. Both the GMT and the SKA represent a massive increase in the capabilities of these types of instruments and it's matched by a massive leap in the physical size of the telescope. Indeed, the last time such a massively sized leap in scale happened, humanity discovered other solar systems, the black hole, the centre of our galaxy, the Milky Way, and evidence of the universe's continued acceleration.

With such advances in technology, what results is great excitement and proof that the future in this sector is bright. However, future advances will require a sustained and long-term approach to research funding. Many researchers in the country will be well aware of the strains put upon them due to short-termism in government and in university funding agreements. In a former life, I spent 10 years working for the University of Western Australia and witnessed the move from longer-term funding contracts in research to short-term funding contracts, which led to scientists and researchers from all parts of the combined research endeavour leaving that sector and the public losing the capacity of great researchers across all our universities.

It should be noted while we talk about science and astronomical science in this place that, over the past five years, government support for science has been falling. It's now at its lowest share of GDP since 2005. The government's share of total research spending is now smaller than at any time since the 1980s, and that's a sad thing, in my opinion. Research funding is skewing more towards applied research than basic research. Continued mediocre investment in research and, in my view, this government's disgraceful dismissal of universities and the realities of their funding challenges endanger overall research effort.

I'm very pleased to talk about science and research in this place. I spruik at any time I get the chance that the developments made in this nation based on science are remarkable. We would not have been able to develop the south-west of Western Australia as a great agricultural effort without the agricultural scientists who identified the missing elements in our soil that meant that we could not grow wheat so well or that the sheep would die of Denmark wasting disease. Science has played a remarkable part in the development of my state, so, in talking about science, I'm pleased that Labor is committed to ensuring that, by 2030, three per cent of our national gross domestic product will be applied to science research and development. Under Labor, science research, innovation and education will be and are national priorities. We will have a dedicated cabinet minister for science, and that is critical to support efforts not only in the Australian astronomical area—as we have in this bill—but also across all regions of science and research in this country.

I mentioned before that research is a long-term proposition. We need longer-term funding arrangements with, of course, proper accountability. Researchers and scientists need some certainty for their careers so that we don't drive them out of the very important endeavours that they're undertaking at research institutions and universities around this country. I'm a keen supporter of science in this country, particularly the work undertaken at universities. I objected very strongly when the minister for education, Senator Birmingham, accused universities of having rivers of gold. It only demonstrated his total lack of understanding of how universities are funded and how the money that comes from student fees has cross-subsidised the research effort in this country. In my view, this country has to face up to the challenge of science and research funding so that we might have a better future for all young people—like those who are watching from the gallery—so they have the opportunity to study science and do research at schools and at university.

Ms BRODTMANN (Canberra) (12:16): Last month, I took part in the Australian National University's Guinness world record attempt for the greatest number of telescopes pointed at once at the night sky. More than 285 stargazing parties were registered across Australia, with thousands of telescopes delivered across the country. We're not talking about cardboard telescopes; we're talking about good-quality, entry-level telescopes that you'd probably get from Australian Geographic shops to help Australians develop an interest in—perhaps even a love for—astronomy. The night of the big stargazing Guinness world record attempt, I went to the party out the front of Parliament House—it was freezing—with one of my staff. I was pleased to see my colleagues the member for Macquarie and Senator Ketter raising a telescope to the night sky as well as some luminaries from various departments at the Australian National University. World experts were standing with me when we were looking up at the Moon and stars, trying to break the record on a cold Canberra night. According to media reports, more than 40,000 people simultaneously observed the Moon through telescopes for 10 minutes, eclipsing the previous record set by the ANU in 2015 of 7,960 people. It will be a tough act to follow.

We had Brian Schmidt with us on the lawns. Our event host was Professor Brian Cox, the rock star of astronomy. I have a huge crush on that man—I'm confessing that right here, right now! The night was telecast right across Australia. It was lovely looking at Professor Brian Cox and seeing him beamed right across Australia as part of this world record attempt. He said that breaking the record is only half of the story. He went on to say:

The real value is that many thousands of Australians have been introduced to the wonders of the night sky, and many of those will be children. They will develop a lifelong interest in astronomy and science, and the impact of that will be felt in decades to come.

Professor Cox's words have made me stop and think about space and space sciences, and the wonder that most of us had when we heard about the Apollo mission to the moon. I'm dating myself here, but I remember when I was a child—and there are some over across the aisle who may remember this as well—making my little lunar module when we were waiting, eagerly anticipating the first person on the moon. I had my little lunar module. I'd just done some research and found out that in the really posh, expensive breakfast cereals you actually got the plastic module. But I actually made mine out of cardboard—I think that was on the back of the relatively cheaper breakfast cereal that I had.

The Apollo missions to the moon excited all of Australia and the entire world. Here we were, as children, making our little lunar modules or pulling them out of the posh breakfast cereal. And there was Voyager's discoveries of other planets—and who could forget that first time we saw those amazing photos of the rings around Saturn?

Since the stargazing event sparked my interest, I've since learned even more about Canberra's longstanding and proud connection to space, astronomy and astrophysics. I'm lucky to be able to say that my electorate of Canberra is home to the Research School of Astronomy and Astrophysics at the ANU; the Mount Stromlo Observatory and the Canberra Deep Space Communications Complex.

The Mount Stromlo Observatory is one of the oldest institutions in the ACT, with astronomical observations occurring on the mountain since the early 1900s. The Commonwealth Solar Observatory was established on the site in 1924, and its research focused on solar and atmospheric physics. During the Second World War the observatory was used as an optical munitions establishment, and it was only after the war that its research direction shifted towards stellar and galactic astronomy. Aren't they fantastic words: stellar and galactic astronomy!

The observatory was amalgamated with the ANU in 1957 to support the university's astronomy degrees. A short time later the university established a second observatory at Siding Spring in the Warrumbungle mountains to provide a permanent dark site in response to the increasing growth and light in Canberra. Both of the observatories—Mount Stromlo and Siding Spring—formed one of the leading optical astronomical observatories in the world, supporting innovative and world-leading research into the structure and evolution of planets, stars and galaxies; the origin and development of the universe; and the physics of stars. Researchers also collaborate internationally, gaining access to different telescopes and keeping Australian astronomers at the forefront of astronomical research.

The ANU's Vice-Chancellor Brian Schmidt, who was there stargazing with me and my colleagues just a few weeks ago, led a top science team at the observatory in the 1990s, studying the rate of change of the cosmic expansion. In 1998 his team reached the conclusion that the cosmic expansion was accelerating, contrary to expectations. What this acceleration meant—and I'm not an astronomy expert, so I hope I get this right, Brian—is that it showed the existence of dark energy, a top science breakthrough which culminated in Brian receiving the Nobel Prize in Physics in 2011, along with his peers Saul Perlmutter and Adam Reiss.

Brian's success is a great story, showing Canberra's research prowess and affinity with space. Unfortunately, the fires of 2003 damaged the telescope capabilities on Mount Stromlo, and since then some capabilities have moved to its sister site, the Siding Spring Observatory. Despite this, new capabilities and opportunities have since been developed at Mount Stromlo. It is now home to the Advanced Instrumentation Technology Centre, a world-class facility for developing astronomical instrumentation. I have been out there; you can only imagine the precision work that you have to do in this space to build and test small satellites and space payloads.

But Canberra's space connection isn't only about research. We have also had a role in supporting a number of space missions undertaken by NASA. During the mid 1960s, NASA built three tracking stations in Canberra. The Tidbinbilla Tracking Station, which is now the Canberra Deep Space Communications Complex, opened in 1965 and is the only NASA tracking station in Australia still in operation. The Tidbinbilla Valley, 35 kilometres to the south-west of Canberra, was chosen to be the place for the deep space tracking station because of its close proximity to a city and because of the surrounding ridges—Cooleman Ridge, Urambi Hills and Bullen Range—that help to shield it from unwanted radio frequency noise. This is something unique to Canberra. During the Apollo program, Tidbinbilla was used for tracking the Apollo lunar module and was involved in the Mariner 4 spacecraft encounter with Mars.

The second station, the Orroral Valley Tracking Station, was opened in May 1965 in Namadgi National Park. It's role was orbiting satellite support, although it also supported the Apollo-Soyuz Test Project in 1975. Unfortunately, it was closed in 1985.

The third station, Honeysuckle Creek Tracking Station, also located in Namadgi National Park, opened in 1967 and was built primarily to support the Apollo moon missions—mainly communications with the Apollo command module. It was the 26-metre antenna at Honeysuckle Creek that received and relayed to the world the first historic TV images of Neil Armstrong setting foot on the moon on 21 July 1969, not the dish at Parkes—and I'm sure I'm going to be getting lots of mail about this—in the member for Calare's electorate that the movie portrayed. After the cancellation of the Apollo project, the station continued its important work. The station supported Skylab until its re-entry in 1979 and then joined the Deep Space Network in support of the Viking and Voyager projects to investigate the gas giants Jupiter, Saturn, Uranus and Neptune.

The year 1981 saw the closure of Honeysuckle Creek Tracking Station. Its antenna was moved to Tidbinbilla to become known as Deep Space Station 46, and it's there today. After the antenna was removed, the rest of the facility was dismantled and knocked down. Its foundation, access road and parking area are all that remains of this historic facility. After all of these missions, there was a period of construction at the Canberra Deep Space Communication Complex, with bigger and better antennas built to allow communication with spacecraft over longer distances. The complex is still a working location and is managed by the CSIRO, and it continues to support satellite communications, space shuttle missions and the Hubble Space Telescope as they pass over the Indian Ocean and Australia.

The Australian Astronomical Observatory (Transition) Bill 2018 focuses on the Australian Astronomical Observatory and unfortunate but necessary changes that we have to make. The observatory was established in 2010 to manage the operations of the Anglo-Australian Telescope. The need for the observatory came about because the government's partner at the time, the United Kingdom, withdrew from the joint funding arrangement during the GFC. The funding secured from government would cover the operations of the observatory for 20 years, to 2020.

For a number of years, members of the scientific community have asked government to explore entering a partnership with the European Southern Observatory so that access could be given to the La Silla Paranal Observatory in Chile. The funding envelope for such an arrangement has been beyond the capabilities of government until recently, when the European Southern Observatory approached government with an offer of a 10-year strategic partnership at a cost of $119 million. The government will make the agreement happen by transferring existing optical astronomy resources from the Department of Industry, Innovation and Science to the research community, saving $25.2 million. The arrangements will give the astronomy community access to the La Silla Paranal Observatory in Chile. But it will also mean the end of an era; it will mean the end of the Australian Astronomical Observatory, because it will need to close. That is the purpose of today's bill. It will abolish the observatory and allow for its functions to be transitioned to two consortiums to manage.

The 3.9-metre Anglo-Australian Telescope is currently located at Siding Spring Observatory, owned by the ANU, and will be transferred to a consortium managed by the ANU. The astronomical instrumentation capability, currently located at North Ryde in Sydney, will be transferred to a consortium led by Macquarie University. What this bill clearly shows is the funding cliff that torments many areas of scientific research in Australia. It shows that it is real. In this particular case, the new agreement simply pushes astronomy research back from the precipice for another 10 years. At that time, further decisions will need to be made. Will Australia become a full member of the European Southern Observatory? Will the research community or government seek access for Australian science to another telescope? Or, worse, will we discontinue or abandon this area of scientific leadership that Australia has enjoyed for so long?

While we have another 10 years before we need to make any of these decisions, I will make it clear that Labor supports retaining Australia's capability in optical astronomy. As the member for Canberra, I am very, very proud that my community is home to one of Australia's universities that is leading the way in astronomy research and that we have a proud and longstanding connection already to space and space sciences. It makes sense that Canberra is considered the home for the new space agency, and I welcome the commitment that was made by the shadow minister for innovation, industry, science and research last week at the Building Australia's Strategy for Space conference, organised by the Australian Strategic Policy Institute, where he said that Labor was committed to basing the new space agency in Canberra.

There's a natural fit. We have a rich history of the Mount Stromlo Observatory and the Canberra Deep Space Communications Complex. We have the Research School of Astronomy and Astrophysics at the ANU, led by a vice-chancellor who knows space and won a Nobel Prize in Physics for his discovery. We have the scientific skills of staff in the CSIRO, the Bureau of Meteorology, the Department of Industry, Innovation and Science. We have the engineering and coordination expertise in the Department of Defence and we have the Department of Communications and the Arts and the Australian Communications and Media Authority. These are the government agencies that industry comes to Canberra to work with, so it makes sense that Canberra would be the right fit, the natural home, for a space agency and for space facilities.

Australians have a great love for space. We saw it in the sixties, where everyone was out with their lunar modules and talking nothing but space and missions to the moon. Through the expertise that we have and through a commitment to a space agency and investment in space in the future, Labor hopes that we can excite future generations to enjoy the pleasure that we enjoyed so much in the sixties in that first mission to the moon.

Mr KHALIL (Wills) (12:32): It's a great pleasure to talk about this bill because it's about space—'to boldly go where no-one has gone before'. That's what Australian astronomers and scientists have been doing for decades, reaching out to the stars, with their eyes, their ears and the instruments that they use, to ask the most deep and meaningful questions that human beings have always asked. Are we alone? What's out there? What are these wonders out there in the universe that light up the sky? All of us have looked up at that sky, particularly on those clear starry nights in Australia, as kids and adults. We've all dreamed those dreams about other worlds and other places in our universe and asked those fundamental questions that go to the very meaning of life and our place in it. Therefore, the work that Australian astronomers do, both amateur and professional, is so important, not just for the scientific community but for humanity as well.

We know that this bill will abolish the Australian Astronomical Observatory and allow for its function to be transitioned to two consortiums to manage. The legislation will also give effect to the 2017-18 budget measure, access to world-leading astronomy infrastructure, which saw Australia sign up a strategic partnership with the European Southern Observatory. In terms of optical astronomy, the scientific community has been asking government for a number of years to explore entering into a partnership with the European Southern Observatory in order to gain access to the La Silla Paranal Observatory in Chile, which is quite significant. Until recently, this access has been beyond the fiscal capability of the Australian government. But recently the ESO approached the Australian government with an offer of a 10-year strategic partnership at a cost of $119 million. Access to the telescopes at the observatory in Chile will give Australia's optical astronomy community access to the eight-metre telescope they have long been asking for. However, all of this all requires changes to the existing act that will close down the Australian Astronomical Observatory.

I want to state clearly that Labor will support this legislation, but we will do so somewhat reluctantly. We support the views expressed by those in the astronomy community that the best way to expand Australia's optical astronomy industry is through a partnership with the European Southern Observatory.

Although approval or otherwise of this legislation will not necessarily impact on the government proceeding with the ESO strategic partnership, which has already been signed and funded through the 2017-18 budget, Labor does understand that this legislation is part of the process of partnering with the ESO and that, therefore, our support is necessary. Furthermore, failure to support this bill will result in the Anglo-Australian Telescope, the AAT—not to be confused with the Administrative Appeals Tribunal—and the Australian Astronomical Observatory, the AAO, in North Ryde, being unable to transfer to the university sector, resulting in their closure in July 2020 and the loss of up to 53 jobs.

We reluctantly support this bill because it is a stopgap and not a solution. This bill does not resolve the funding cliff that has long bedevilled many areas of scientific endeavour in this country but pushes it out by another 10 years. It should also be noted that, when the ESO strategic partnership expires, the Commonwealth will need to decide whether to become a full member of the ESO, seek access for Australian science to another telescope or discontinue this area of scientific leadership our country has long enjoyed and excelled at. It will be a real shame if Australia ever discontinues this area of scientific leadership, because currently the Commonwealth works to maintain Australia's position of leadership in astronomy.

The Department of Industry, Innovation and Science has two broad groups that manage Australia's astronomy assets in partnership with the research community. There is the Australian Square Kilometre Array Office, which is managing our engagement with the construction of the Square Kilometre Array, SKA, part of which is being built in Western Australia and the other half in South Africa. This will become the world's most advanced radio-telescope observatory. Then there is the AAO, which since 2010 has managed to access the Anglo-Australian Telescope and maintained our instrumentation capability based in North Ryde, Sydney.

This legislation will abolish the AAO as a division of the department on 1 July 2018 along with all AAO governance structures. It will allow the transfer of necessary assets to external entities, in this case the two university based consortiums. Firstly, there is the one led by the Australian National University, which transfers operations of the AAT to a consortium made up of several universities, led by the ANU, across Australia, including but not limited to Monash University, the University of New South Wales, the University of Queensland, the University of Tasmania and the University of Western Australia. The second consortium is with Macquarie University and the Australian Astronomy Limited consortium, which takes responsibility for the establishment of a national optical instrumentation capability and for the further development of the world-class instrumentation functions of the Australian Astronomical Observatory.

When it was constructed, the Anglo-Australian Telescope was the most advanced in the world. Its construction and operation granted the nation's scientists access to an advanced facility and allowed the development of advanced scientific and industrial techniques in Australia. While it is now 44 years old, the Anglo-Australian Telescope is still an important part of the nation's research infrastructure. Labor is relieved that the assets of the AAO will be maintained for the next seven years; however, their future beyond that date is still not resolved. The question of what happens beyond that date is key, because maintaining and strengthening Australia's position at the front line of astronomical research requires access to world-class facilities. The next generation of these facilities needed to make the next major discoveries about our universe are of such a scale and complexity that they require multinational partnerships to fund and build. That's just necessary to do that kind of work.

Australia needs to ask itself what it wants from optical astronomy. Does Australia want to lead the industry? Do we want to be at the front line of research? Do we want our scientists to make discoveries about our universe? The partnership with the ESO gives Australian optical astronomers access to one of the most advanced telescopes in the world at the La Silla Paranal Observatory in Chile. But it leaves us floating in a vacuum after it expires. Australian astronomy has already begun the transition from a national research infrastructure portfolio of midscale Australian-owned facilities to partnership in multinational billion-dollar landmark facilities.

We are playing a critical role in two of the world's biggest billion-dollar astronomy projects: the Square Kilometre Array, which will be partly built in Australia with local industry and regional engagement; and the new Giant Magellan Telescope, which will be the first in a new class of extremely large telescopes, for which Australia is building key instrumentation. Both the GMT and the SKA present an extreme leap in telescope size. The last time a size leap of this scale happened we actually discovered planets around other stars outside of our solar system. We discovered the supermassive black hole in the centre of our galaxy and evidence that the universe is accelerating.

The future is bright, but there needs to be sustained maintenance of effort and long-term security for our scientists. The Commonwealth-European Southern Observatory partnership provides for maintenance of effort for the next 10 years, but there is no certainty beyond that. Before 2028 the Commonwealth will again be obliged to decide whether to become a full member of the ESO or invest in the new GMT, which will be online by that time. So, at best, this is a medium-term stay of execution. Yet again Australian science is faced with replacing one funding cliff with a new funding cliff. So what does Australia get as a result of prolonging the inevitable funding cliff? The cost to the Commonwealth of this partnership is $119 million over the decade from 2017, or $26.1 million over the forward estimates from 2017-18 to 2020-21.

Improved access to these facilities has been a common refrain amongst astronomers for many years. Australia in the era of global astronomy: The Decadal Plan for Australian Astronomy 2016-2025, produced by the Academy of Science, calls for access to eight-metre-class optical astronomy infrastructure, which is currently not available in Australia. The same plan calls for maintenance of effort in terms of support for Australian domestic capability, including supporting the Australian Astronomical Observatory and its capabilities.

The legislation that we are debating proposes to off-load the main government astronomical assets, the AAT, near Coonabarabran in New South Wales, and the AAO instrumentation, onto the Australian university sector. This is being done ostensibly to save the budget $26.1 million over the forward estimates. In reality, it's pretty much a sleight of hand—moving the burden of maintaining these facilities from the Department of Innovation, Industry and Science onto entities funded by the Department of Education and Training. This transition doesn't come without a cost. It's expected that a small number of jobs will be lost in the transition—four to five at the Anglo-Australian Telescope and up to nine at the North Ryde instrumentation laboratories.

There is some irony that, at a time when the government is seeking to cut university funding by $2.2 billion over the next four years, it expects universities to stump up the cash to keep these key astronomy facilities operational. We hope that they are able to remain operational, because Australia has developed a longstanding and globally recognised expertise in astronomy and we don't want to lose that leadership. We have some of the best skies in the world for astronomical observation, and our continent faces 25 per cent of space. Many people have heard of the northern lights—otherwise known as aurora borealis—but, in our own southern skies, we can bear witness to the wonders of aurora australis, the same phenomenon but in the Southern Hemisphere.

This abundance of sky is not lost on Australians, as we are a nation of keen amateur astronomers. Earlier this year, the country was captivated with a super blood moon, where we were treated to the three lunar phenomenon all at once: a blue moon, or a second full moon in the same calendar month; a blood moon, where the moon is in full eclipse causing the usually white moon to become red or a ruddy brown; and a super moon, where a full moon coincides with the closest distance that the moon reaches to earth in its elliptic orbit. Social media lit up when this happened that night, with people sharing their photos of the moon. Those who had less than ideal weather also posted about their disappointment that they could not actually see it. Everyone had an interest.

That was not a one-off, either. We saw this when the ABC, in partnership with the Australian National University, led a Guinness world record attempt for the most people stargazing recently. This was to break the world record for the most people simultaneously observing the moon in the night sky through a telescope or binoculars. It was broadcast on ABC's Stargazing Live, which has returned to our screens due to outstanding success last year—a real demonstration of how much Australians are engaged in and passionate about science and particularly astronomy.

I would say that, on that basis, the evidence is pretty clear that Australians love astronomy. We have so many talented astronomers and we have many young people who look to the stars for inspiration. Yet, with this bill, we're presenting the astronomical community with a funding cliff—which has only been postponed—that not only affects our current scientists but also creates a level of uncertainty for any bright young mind that would look to the skies to help provide answers for our place in the universe. In some sense, we're hampering our ability to produce expertise. Even though Australian astronomy is world-leading and inspires thousands of Australians through citizens, science and activities, like the annual ABC stargazing, it is not backed up by the federal government with this bill. Providing a pathway where our scientists can have access to the best research infrastructure in the world is absolutely essential, but it should not come at the cost of outsourcing the existing infrastructure to a university sector that is already copping a $2.2 billion cut from the coalition government. It is an example of the government continuing to gut Australian science and the Department of Innovation, Industry and Science. We support this legislation, but we make a clear note of the cul-de-sac of uncertainty and cuts that this government has led us to.

I started my speech by talking about the fundamental questions that we ask when we look up to the night sky: are we alone? What's out there? What are these wonders of the universe that we dream about as kids and as adults? Astronomy is very much a part of our lives because it helps us ask those perennial human questions about who we are and our place in the universe. I will finish with a well-known farewell: 'Live long and prosper!'

Mr HAWKE (Mitchell—Assistant Minister for Home Affairs) (12:45): It is a privilege to sum up the Australian Astronomical Observatory (Transition) Bill 2018. I want to thank all honourable members for considering the bill and for their comments—even the reference from the member opposite to Star Trek and Star Wars. Being a bit of a sci-fi nerd, I very much appreciate your final comment there. The bill gives effect to the government's 2017-18 budget measure maintaining Australia's optical astronomy capability. In doing this, we open up a new and exciting chapter of astronomical discovery and technical innovation for this country.

A flagship element of this farsighted budget measure is that the Australian government has entered into a 10-year strategic partnership with the European Southern Observatory from 11 July 2017. For Australia's astronomers this changes everything. ESO is the world's foremost optical astronomy organisation—a multinational collaboration of 15 member states and host nation Chile. It offers its participants access to the world's leading-edge infrastructure, unparalleled research cooperation and collaboration, and strategic industry opportunities.

Australia, as a strategic partner, is now an integral part of the ESO story. Our astronomers have long told us that this type of stable, long-term partnership is absolutely essential to their ability to engage in the biggest questions of science and influence the technical innovation that goes into and comes out of world-class instruments. Australia's astronomers have lost no time in making the most of their new access. In a recent competitive call for ESO observing time, Australian-led research proposals enjoyed an impressive 38 per cent success rate. That includes over 300 hours on the world's most advanced optical telescope, the eight-metre diameter very large telescope at Paranal. This is a remarkable achievement for Australia's inaugural observing period. It confirms the strong international standing of Australia's astronomers.

In addition to access to the best telescopes in the world this partnership also provides Australians with professional opportunities at ESO through jobs, fellowships and scholarships. It allows for Australians to influence the frameworks and direction of ESO through participation in its strategic governance structures. Australian research institutions can develop new optical technologies and instruments for ESO telescopes. Australia has unique strengths in this field. We have the expertise and innovation the rest of the world wants—in our robotic fibre-optic technologies, control instrument systems, software, astronomical data pipelines and archiving systems. Australian based companies and institutions can now tender for work at the ESO's Cerro Paranal observatory. Engagement with ESO will help Australian companies expand their capabilities overseas, not only in astronomy but also in space stations and other spin-off technologies that will define our world in decades to come.

The ESO partnership heralds a new era of optical astronomy in our nation as we prepare for global investments and even larger telescopes that will see further into our universe. To meet this new challenge and demand, we are consolidating our optical astronomy efforts nationally. This bill provides a roadmap for that. From 1 July 2018 the key scientific operations of the Australian Astronomical Observatory will transition from the Commonwealth to the research sector. The Australian Astronomical Observatory will cease to exist in its current form, and the secretary of the Department of Industry, Innovation and Science will retain important optical astronomy powers under the Australian Astronomical Observatory Act 2010 to ensure a sound legislative basis for future government support of Australian optical astronomy initiatives.

Responsibility for operating the Anglo-Australian Telescope will transfer to the Australian National University, acting on behalf of a consortium of universities. This consortium will operate the telescope at Siding Spring Observatory in Coonabarabran in New South Wales until at least the end of its extended operational life in 2024-25. This extended operational life of the telescope will provide ongoing access to Australian researchers, international consortia and the next generation of home-grown astronomers and engineers. It will also continue to benefit businesses and tourism in regional Australia.

The Australian Astronomical Observatory's renowned optical instrumentation capability will transfer to a second consortium led by Macquarie University, in partnership with the ANU and the University of Sydney. This consortium will continue to develop and deliver world-class instruments to overseas observatories, strengthen research industry collaboration domestically, connect the national instrumentation effort and drive the commercialisation of optical astronomy innovation in adjacent industries.

The government has worked hand-in-glove with the astronomical community here, particularly in the lead-up to the new consortium—the ANU, the Macquarie University and Astronomy Australia Limited—to ensure a positive transformation of our domestic capability. The efforts of those involved have been concerted, positive, dedicated and far-sighted. This kind of government and research sector partnership will continue to ensure a strong, sustainable foundation for future discovery that can be shared with all of our citizens. I especially acknowledge the patience, cooperation and professionalism of the staff at the Australian Astronomical Observatory in this period of considerable organisational change. The deep expertise, decades of hard work, innovation and resilience provide a strong foundation for the work to come. The government's optical astronomy measure will strengthen our research and industry opportunities in the coming decade. It will extend the legacy of the Australian Astronomical Observatory and our global reputation. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Mr HAWKE (Mitchell—Assistant Minister for Home Affairs) (12:52): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms CATHERINE KING ( Ballarat ) ( 12:52 ): The Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018 is a bill about improved Medicare compliance. Labor is, of course, the party of Medicare. We invented it and we will always protect it. It is our universal public health insurance scheme. It is the heart and soul of our healthcare system and the envy of many other countries around the world. It ensures that Australians can access lifesaving treatment when they need it, without worry. More than 20 million services under Medicare are billed every year. They include GP visits, vital tests and scans and hospital treatments. It is without a doubt the most important program the Commonwealth government delivers. It's fundamental, not just to our healthcare system but to our economy and to our society. That's not to say it is perfect. With a program of this size, there are always problems and always improvements that can be made. Labor is always up for sensible improvements to Medicare.

This government bill implements a 2017 budget measure to improve Medicare Benefits Schedule compliance and debt-recovery practices and will result in an estimated combined savings over the forward estimates of $103 million. That money should, of course, be reinvested straight back into Medicare in a transparent way rather than returned to the budget bottom line, but that is an issue I will return to later. This bill amends three acts: the Health Insurance Act 1973, the Dental Benefits Act 2008 and the National Health Act 1953. These technical changes will hopefully enable improved compliance by better targeting unusual business billing and improving the consistency of administrative arrangements.

I do want to say, at the outset, that the vast majority of medical and allied health professionals that bill Medicare for services to their patients do absolutely the right thing, and provide amazing and excellent service throughout our entire community. But we also know that there are increasingly commercial interests at play in some areas, so compliance is something that we have to improve. Only 40 per cent of Medicare debts are currently recovered, meaning there is over $50 million in outstanding debt. So, obviously, there is a need for action in this space.

The changes in this bill clarify that the Professional Services Review, which investigates Medicare and PBS compliance concerns, has jurisdiction over corporate medical practices that contract health providers, as well as practices that employ providers and the providers themselves. The bill introduces compulsory offsetting and garnishee provisions for providers who do not voluntarily agree to repayment plans within 90 days. At present, these providers are still able to claim full Medicare benefits, even when they owe significant debts. Where a compliance debt is issued, both the employer and the contracted provider will be responsible for part of the debt, reflecting their shared responsibility for accurate billing.

This bill also makes record-keeping requirements consistent across different health professions. In particular, allied health providers will be required to keep copies of referrals for two years, just like doctors; pharmacists will be required to produce prescriptions to justify queried claims; and dentists and pharmacists will face the same administrative penalties on unpaid debts as other Medicare providers. I understand that further detail will be set out in the regulations, and that the new arrangements will start on 1 July 2019. But for now, I can say that Labor will be supporting this bill.

Like I said, we are always willing to support sensible improvements to Medicare. But we don't support the government's overall approach when it comes to Medicare, and I'll be moving a second reading amendment to that effect. It took two Labor governments more than two decades to shape and embed the Medicare that we know today. Many Australians take Medicare for granted, and that is as it should be. They should be able to rely on Medicare whenever they need it, without worry and without a second thought. But let's never forget that the conservatives opposed Medicare every single step of the way. Labor had a hard fight to set it up and now we continue to have a hard fight to protect it.

You cannot trust this government when it comes to Medicare. They talk about a 'rock solid' commitment to it, but we all know the truth: they deeply, deeply don't like it. They want to dismantle it. They just don't believe in universal health care like the Labor Party does. They dream of an Americanised health system where it is every man, woman and child for themselves—where people increasingly have to rely on private means to access health care. Every step of the way and every measure, that is what they have been doing. This is where people suffer for years because they cannot afford to see a doctor or go to hospital.

Every time the conservatives get into power they attempt to dismantle Medicare, either up-front or, more lately, by stealth. That is what they do. We have a system in this country now where, increasingly, you have to rely on your private means to access health care. That is what this government has delivered to the health care of this nation.

Ms Price: That's rubbish! You know that's untrue!

Ms CATHERINE KING: The government members can shake their heads and say, 'That's not true'. Every single person knows it.

Ms Price: Very naughty!

Ms CATHERINE KING: The backbencher there has just told me that I've been very naughty! Well, I'm very happy to be very naughty when it comes to actually standing up for Medicare, because it's actually one of the most important systems that we have in this country. The fact that the government has decimated it and continues to do that every day is something that should be called out. They might behave themselves for a little while when it comes to Medicare, but we actually know how much the Australian people need Medicare. Those opposite might agree for a little while, but we know that they constantly undermine this system.

Australians certainly sent that message loud and clear at the last election when the government was plotting to outsource parts of the Medicare system to the private sector. That is what they were doing. Labor, of course—

Ms Price: Not by lying!

Ms CATHERINE KING: Excuse me: I will ask the member to withdraw the comment that she just made.

The DEPUTY SPEAKER ( Mr Buchholz ): The member will withdraw that last comment.

Ms Price: I withdraw.

Ms CATHERINE KING: Thank you. Of course, we know that this government was planning to outsource parts of the Medicare system to the private sector. Labor staunchly and vehemently opposed that move. In the two years since that election, the government has been busy trying to rewrite history, pretending that that somehow didn't actually happen, that they weren't planning to do that, that they hadn't commenced the work—nor was it in their budget papers, which it was—that somehow this was a Labor invention, that it was a scare campaign. That is utter nonsense. The government was actively planning to outsource the Medicare payment system to a corporate player—one of the big four banks, perhaps, or a private health fund. That is what this government was doing. If we had let them get away with it, that would have been the beginning of the end for Medicare as we know it. The government dropped their plan because of Labor's tireless efforts to highlight the damage that they had done to our healthcare system and because the Australian people agreed that it was a terrible plan and punished them for it.

Eventually, as we know, the Liberals will have another crack. They'll come up with another scheme to undermine, weaken or sell off parts of Medicare, because they have form. Remember their $7 co-payment from just a few years ago. It was an unprecedented attack on the universality and accessibility of Medicare, effectively meaning that we would have a system where people were increasingly having to pay substantial out-of-pocket costs for Medicare. Then, too, it was Labor, it was the parliament, it was the Australian people who ultimately stopped the government from going down that road. As is so often the case, we helped save the government from itself, but the plan revealed what was in their hearts. When they couldn't get that plan through, they resorted to extending the freeze on Medicare rebates—a freeze that is still in place today—for six years. Again, under intense pressure from Labor, doctors and the public, the minister announced a thaw in that freeze in the budget last year. But, today, there still hasn't been a single element of it lifted. Some elements will come off as of 1 July, delivering GPs a 55c increase in the Medicare rebate for patients. It won't put a dent in the soaring out-of-pocket costs, and other elements of the freeze will stay in place until 2020. That's six years of slugging doctors and, ultimately, patients who simply want to access health care.

The rebate freeze has saved the government billions of dollars, and they're still banking those savings from patient rebates today. That is billions of dollars that should have gone into providing health care in this nation. Meanwhile, the latest Medicare data shows that the cost of seeing both GPs and specialists is at record highs because of those Liberal cuts. In the first three months of 2018, Australians paid an average out-of-pocket fee of $38.44 to see a GP and nearly $47 in some states and territories. The national figures have risen nearly $4 from $34.53 cents at the end of July 2017. Out-of-pocket fees to see specialists have soared even higher, up to an average of $87.62 in the March quarter. That's up from $71.75 in the last three months of 2017—up nearly $16 in just a single quarter. In some jurisdictions, the average out-of-pocket cost of seeing a specialist has now soared to well above $90. These are the average costs. They are far too high. Meanwhile, the government has tried to trumpet funding for the projected growth in Medicare service usage as, somehow, a record investment in Medicare. The Australian people are far too smart to fall for that. They know that the cost of going to see a doctor has risen under this government. They feel it every time they get sick or injured and need to access health care. That's why so many of them are delaying going to see a doctor. Official Bureau of Statistics figures show that one million Australians delay or avoid seeing their GP each year due to cost, with another 1.7 million Australians skipping specialist appointments. About the same number don't fill prescriptions because of cost. Older Australians fare worse, with one in eight telling the Commonwealth Fund that they have problems getting care because of cost. Only patients in the US—obviously no role model for us when it comes to universal health care—fare worse.

There have always been challenges with Medicare's universality, such as the difficulty of accessing services for Aboriginal and Torres Strait Islanders as well as for people in regional, rural and remote Australia, but, in recent years, out-of-pocket costs have become a significant barrier to universal access. Medicare statistics show that, 10 years ago, Australians paid an average out-of-pocket fee of $21 to see a GP. If that cost had increased in line with inflation, it would be around $26 today. The same is true for specialists. Ten years ago, Australians paid $44, equivalent to around $54 today, yet the Liberals make the laughable claim that Medicare has never been stronger. What rot. Whether it's making Medicare more expensive, cutting public hospitals or putting private health insurance profits before patients, the conservatives can never be trusted when it comes to our universal health insurance system.

In the last round of budget Senate estimates, officials said that the government's latest budget was trying to bend the curve of Medicare—that's their fancy new way of saying 'a cut to costs'. This government wants to bend Medicare, basically, until it breaks. In stark contrast, the Leader of the Opposition announced the first of Labor's new investments in Medicare in his budget-in-reply, and that is a significant investment in MRIs. Unlike other diagnostic imaging services, MRI scans can only attract a rebate if they're performed with an eligible machine. The licence system is difficult, but it worked relatively well until 2013, given that the last Labor government granted over 238 licences. Unfortunately, the current government has neglected MRIs, granting only four licences in almost five years. That is a woeful record when you know that there are communities across the country who are desperately seeking access to this diagnostic technology and are having to pay substantial amounts of money to do so. It is a woeful record. As a result, access to Medicare MRIs is patchy, with many Australians travelling long distances or experiencing significant wait times to access an eligible machine.

Labor's Senate inquiry into MRI licences heard evidence that in some primary health networks people are waiting an average of 50 days for an MRI after a specialist referral. That is too long. The inquiry also heard that a shortage of Medicare MRI licences could have deadly consequences, with evidence that children were being overexposed to the radiation of CT scans. That's why we announced that we will grant 20 new full MRI licences. The first 10 will be reserved for public hospitals, with locations determined based on evidence from Senate estimates and from advice from state governments and the Royal Australian and New Zealand College of Radiologists.

We've already announced that the first licence we intend to deliver is in Western Australia, with the community of Kalgoorlie to benefit from that. I do note the pretty appalling evidence that has come to light, that this government was prepared to trade an MRI licence for the people of Kalgoorlie for a vote in the Senate for its $80 billion worth of tax cuts—an appalling indictment of the way that this government does business when it comes to health. The remaining 10 licences from Labor will be awarded via a transparent application process under a Labor government. This will be the first opportunity for communities around Australia to apply for a licence since Labor was last in office. This $80 million investment will ensure that more communities have affordable access to life-saving scans. We've also said that Labor would re-invest into Medicare every dollar saved from the clinician-led MBS review. That is because we see the MBS review as an opportunity to improve innovation in Medicare, not as a cost-cutting exercise.

The government is making the claim that it will re-invest or redirect its savings back into the Health portfolio overall, but we on this side simply do not trust a single word that this government says when it comes to Medicare. The government's assurances are absolutely worthless. So, while there is $190 million in savings from the MBS review in the 2018 budget, there is just $25 million in new MBS listings, which means a net cut to Medicare. The minister is seeking to claim that putting money into the projected usage of Medicare services is somehow investing in new innovation in Medicare and investing all of the savings from the MBS review back into Medicare. It is not.

It is certainly not going into our hospitals, either. After four years of Abbott-Turnbull cuts to our public hospitals, Australia's public hospitals are in trouble. This government cut Medicare, they've cut public hospitals and they do everything they can to prop up the big private insurers. That is the Liberal Party's vision for health care in this country. Labor, of course, will have more to say about new investments in Medicare in the months ahead.

I understand the government will have two amendments that it will be moving to its own bill. The first is to resolve a drafting error to ensure existing debts can be recovered, and the second is to clarify that it is not the intention of the changes to PSR summons to see individual practitioners being subject to multiple penalties for nonappearance. Labor will support both of these amendments, but I do note that the government's approach has been very sloppy here. One would be warranted in thinking that maybe they are rushing things through a bit in an attempt to clear the decks before an election. As I signalled before, we will be supporting this bill, but, given the contribution to the debate, I move:

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

"whilst not declining to give the bill a second reading, the House condemns the Government for its ongoing Medicare rebate freeze and its attacks on the health of all Australians".

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

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

Ms McBRIDE (Dobell) (13:11): I rise to speak on the Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018 and to support the amendment moved by the member for Ballarat. This bill implements a 2017 budget measure to improve Medicare Benefits Schedule compliance and debt recovery practices, and will result in an estimated combined savings over the forward estimates of $103 million. This bill amends three acts: the Health Insurance Act 1973, the Dental Benefits Act 2008 and the National Health Act 1953. These technical changes will hopefully lead to improved compliance by better targeting unusual business billing and improving the consistency of administrative arrangements.

As a health professional myself—I am a pharmacist, and the only pharmacist in this House—I know that the vast majority of medical and allied health professionals that bill Medicare for services to their patients do the right thing. But we know there are increasingly commercial interests in play in some areas, so compliance needs to be improved. Only 40 per cent of Medicare debts are currently recovered, and there is over $50 million in outstanding debt, so there is a need for action.

These changes clarify that the Professional Services Review, which investigates Medicare and PBS compliance concerns, has jurisdiction over corporate medical practices that contract health providers, as well as practices that employ providers and the providers themselves. It introduces compulsory offsetting and garnishee provisions for providers who does not voluntarily agree to repayment plans within 90 days. At present, these providers are still able to claim full Medicare benefits even when they owe significant debts. Where a compliance debt is issued, both the employer and the contracted provider will be responsible for part of the debt, reflecting their shared responsibility for accurate billing.

This bill also makes record-keeping requirements consistent across different health professions. In particular, allied health providers will be required to keep copies of referrals for two years, just like doctors. Pharmacists like myself will be required to provide prescriptions to justify queried claims. Dentists and pharmacists will face the same administrative penalties on unpaid debts as other Medicare providers. Further detail will be set out in regulations, and the new arrangements will start on 1 July 2019.

One of the main reasons I'm in this House is my 20 years working in health, my 15 years in mental health and the last 10 years I spent at Wyong Hospital, working in the inpatient mental health units. I'm proud to be a member of the Labor Party—the Labor Party that introduced Medicare and will always properly fund and support Medicare.

Medicare is about universal health care. It's about every Australian, wherever they live, whatever they earn, being able to afford health care when they need it and access it where they need it. The Labor Party is always willing to support sensible improvements to Medicare. The Labor Party is justly proud of its work over many decades to create, properly fund and properly protect Medicare. It is our universal public health system, the foundation of our healthcare system, the pillar that underpins universal access to health care in Australia and the envy of many countries around the world. It means Australians can access life-saving treatment and life-saving medications when they need them, and it means that they can afford them. More than 20 million Australians access Medicare services every year, including GP visits, vital tests and scans, and hospital treatments, and it is without a doubt one of the most important programs the Commonwealth government delivers. It is fundamental not just to our health system but to our economy and our society. It took two Labor governments more than two decades to shape and establish the Medicare that we know and benefit from today.

Many Australians don't know what health care in Australia was like before Medicare. My colleague Dr Mike Freelander is here in this House because he knows, and that was one of the things that drove him to stand for parliament. He didn't want to end his career with children not being able to access health services that they need, as it was when he started his career. People should be able to rely on Medicare whenever they need it, wherever they live and whatever their circumstances. Let's not forget that the conservatives opposed Medicare each and every step of the way. Labor had to fight hard to set it up, and now we fight hard to protect it. Official Bureau of Statistics figures show that one million Australians delay or avoid seeing a GP each year due to cost, with another 1.7 million Australians skipping specialist appointments. About the same number don't fill a prescription because of cost. As a pharmacist and someone who's worked in health for 20 years, this really troubles me. Older Australians fare the worst, with one in eight telling the Commonwealth Fund that they have problems getting care because of cost. This is only made worse by delays with My Aged Care and Centrelink and the problems we've seen recently with homecare packages and residential care.

There have always been challenges to Medicare's universality, such as the difficulty of accessing services for Aboriginal and Torres Strait Islander peoples as well as people in regional and rural communities and remote Australia. But in recent years, out-of-pocket costs have become a significant barrier to access. Medicare statistics show that 10 years ago Australians paid an average out-of-pocket fee of $21 to see a GP. If that cost had increased in line with inflation, it would be around $26 today, and we know that's not the case. The last Medicare data shows the cost of seeing both GPs and specialists is at a record high. In the first three months of 2018, Australians paid an average out-of-pocket fee of $38.44 to see a GP, up to nearly $47 in some states and territories. The national figure has risen nearly $4, from $44.53 at the end of 2017. The same is true for specialists. Ten years ago, Australians paid $44, which would be equivalent to around $54 today. Out-of-pocket fees to see specialists have soared even higher than those for GP visits, up to an average of $87.62 in the March quarter. Recently, my sister, who's expecting her second child, had to see a neurologist. The up-front cost was $400. That's just out of reach for most Australians. In some jurisdictions, the average out-of-pocket cost of seeing a specialist is now well above $90.

How has this happened? How have we landed here? Well, remember when the Liberals tried to introduce the $7 co-payment? That was an unprecedented attack on Medicare and access to Medicare, effectively trying to end bulk-billing. When they couldn't get that plan through, they resorted to extending their freeze on Medicare rebates. That freeze is still in place today. Again, under intense pressure from Labor, doctors and the public, Minister Hunt announced a thaw in the freeze in May 2017, but he still hasn't actually lifted a single element of it. Some elements will finally be lifted on 1 July, delivering GPs a paltry 55c increase in the rebate. That won't have much impact on soaring out-of-pocket costs, and other elements of the freeze will stay in place until 2020. That's six years of slugging doctors and, ultimately, patients simply because they need care. The rebate freeze has saved the government billions of dollars, and they're still banking those savings right now. That is billions of dollars that should've gone to providing health care, not paying for tax cuts for big business and big banks.

Meanwhile, the government is out there trying to portray a static GP bulk-billing rate as some kind of achievement. The Australian people are too smart for this spin. They know that the cost of going to the doctor has gone up. They feel it every time they get sick or injured and every time they get a prescription filled. That's why so many of them are delaying going to the doctor, delaying urgent treatment from their GP. Yet the Liberals claim that Medicare has never been stronger. Whether it's making Medicare more expensive, cutting public hospitals or trying to sell them off, as they attempted to do to Wyong hospital in my community on the Central Coast, the conservatives can never be trusted with our health care. You just can't trust them with Medicare. They keep talking about their rock-solid commitment to it, but we all know the truth: they want to dismantle it. They just don't believe in universal health care like we do. They look to health systems like in America, where people increasingly have to rely on private means to access health care, where people suffer for years because they can't afford to see a doctor, go to a hospital or get medication, and where you have to get out your credit card rather than your Medicare card whenever you visit the doctor or pay for medication.

They might say what they think the public wants to hear, because they know how much the Australian people value Medicare. It underpins health care in Australia. Australians certainly sent that message loud and clear at the last election, when the government was plotting to outsource parts of Medicare to the private sector. Labor, of course, opposed that move. In the two years since the election, the government has been busy trying to rewrite history, pretending it was all a scare campaign—but we all know that's nonsense. The public knows it's nonsense. This government was actively planning to outsource the Medicare payment system to a corporate player—one of the big four banks, perhaps, or a private health fund. If we had let them get away with it, that would have been the beginning of the end of Medicare. The government only dropped their plan because of Labor's tireless efforts to highlight the damage it would have done to our health system and because the Australian people agreed it wasn't a good plan and punished the government for it.

Eventually, as we all know, the Liberals will have another crack. They'll come up with another scheme to undermine or weaken or sell off parts of Medicare. In stark contrast, in his budget reply speech the Leader of the Opposition announced the first of Labor's new investments in Medicare—a significant investment in MRIs. Unlike other diagnostic imaging services, MRI scans only attract a Medicare rebate if they are performed on an eligible machine. The licence system worked relatively well until 2013, given that the last Labor government granted 238 licences. Unfortunately, the current government has neglected MRIs, granting only four MRI licences in almost five years in office. Labor established Medicare. Labor will always defend Medicare. Labor will properly fund health care for all Australians.

I will conclude by again going back to my community and to the hospital that I worked in, in Wyong, on the New South Wales Central Coast. In communities like mine, where there are pockets of extreme disadvantage, people need to know that they can trust and rely on being able to access healthcare services. In my work, particularly in mental health and working in inpatient units in public hospitals, I have seen the most vulnerable people in our community, people whose circumstances are such that they are unable to care for themselves. These are the people that we need to protect. These are the people that we need to support. Undermining Medicare sends a strong signal to these people that the government doesn't care and thinks that these people don't matter. And this is a real risk. People need to feel secure. People need to know that they will be able to see their GP. They need to know that they will be able to go to their psychiatrist and be able to afford it. They need to know they will be able to get their prescription filled and get other treatments that they need. This is something that really matters; it matters to all Australians. As a pharmacist and a mental healthcare worker, and as someone who is new to this House, I feel that we really need to make sure that Medicare is always properly funded, and Labor will always do that.

Mr HUNT (Flinders—Minister for Health) (13:22): I want to thank all of the speakers to this bill. The Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018 amends the Health Insurance Act 1973, the Dental Benefits Act 2008 and the National Health Act 1953 to implement measures announced in the 2017 budget. These measures will support the integrity of Medicare and the Pharmaceutical Benefits Scheme, and will strengthen Medicare as part of a broader package that includes record funding for Medicare, each year, every year; record funding for hospitals, each year, every year; and record bulk-billing levels, up 3.8 per cent since we came to government.

The amendments are supported by our historic compacts with the Australian Medical Association and the Royal Australian College of General Practitioners. These compacts reflect shared principles that support a stronger, sustainable health system, including improved compliance processes to ensure Medicare overpayments are detected and recovered.

While the majority of health practitioners claim Medicare benefits appropriately, a very small number of practitioners do not. Where inappropriate claims are made—again, I emphasise that it is a rare and infrequent occurrence, not reflective of the extraordinary general practitioner population—some practitioners refuse to agree to repayment arrangements, yet they are still able to claim benefits through Medicare. In these cases, the amendments will allow future bulk-billed claims to be reduced or offset by up to 20 per cent until the debt is recovered. For those practitioners who do not bulk-bill, the amendments will allow garnisheeing of other funds owed to them if they do not enter into a repayment plan within 90 days. No patients will be affected by these arrangements.

I note there has been an increase in the role of practices, corporate entities and hospitals in the billing of MBS services on behalf of the individual practitioner. The amendments ensure that where these arrangements exist both the practitioner and their employer, or other related party, are responsible for the repayment of the debt. This change represents a significant shift, moving to a fairer distribution of the liability for debt, and is supported by key stakeholders, including the AMA and the Royal Australian College of General Practitioners.

The Health Legislation Amendment (Improved Medicare Compliance and Other Measures) Bill 2018 provides additional safeguards to protect doctors. Through further consultation, the AMA identified that proposed changes to the Professional Services Review Scheme may have had the unintended consequence of subjecting a practitioner to both disqualification from billing Medicare and a possible criminal prosecution for failing to attend in accordance with summons. This is not the intent. We have listened and we will therefore amend the bill accordingly. The amendment bill will also ensure that existing debts owed to the Commonwealth can be recovered.

I thank the members for their contributions to the debate on this bill and in particular the AMA and the Royal Australian College of General Practitioners and other proponents within the health sector for their support and assistance with this bill. I also want to thank the opposition for their support. I commend the bill to the House.

The DEPUTY SPEAKER ( Mr Buchholz ) (13:26): The original question was that the bill be now read a second time. To this the honourable member for Ballarat has moved an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question before the House is that the amendment be agree to.

Question negatived.

Original question agreed to.

Bill read a second time.

Mr HUNT (Flinders—Minister for Health) (13:26): I present a supplementary explanatory memorandum to the bill and I ask leave of the House to move government amendments (1) and (2), as circulated, together.

Leave granted.

Mr HUNT: I move government amendments (1) and (2), as circulated, together:

   (1) Schedule 2, item 6, page 13 (lines 17 and 18), omit the item. [summons to give evidence]

    (2) Schedule 3, item 34, page 33 (line 22), omit "on or after the commencement of this item", substitute "before, on or after the commencement of this item". [application of amendments]

I commend the amendments to the House.

Question agreed to.

Bill, as amended, agreed to.

Mr HUNT (Flinders—Minister for Health) (13:27): by leave—I move:

That this bill be now read a third time.

I express my thanks to the opposition for their cooperation. This has been a collaborative effort.

Question agreed to.

Bill read a third time.

The SPEAKER (15:17): I present the Commonwealth Ombudsman—Activities under Part V of the Australian Federal Police Act 1979—Report for 2016-17.

Ordered that the report be made a parliamentary paper.

Mr GOODENOUGH (Moore) (16:19): On behalf of the Parliamentary Joint Committee on Human Rights, I present the following reports: Annual report 2016-17 and Human rights scrutiny report: report 5 of 2018

Reports made parliamentary papers in accordance with standing order 39(e).

Mr GOODENOUGH: by leave—I rise to speak to the tabling of the Parliamentary Joint Committee on Human Rights' Human rights scrutiny report: report 5 of 2018 and the committee's Annual report 2016-17.

Of the new bills contained in report 5, 26 have been assessed as not raising human rights concerns as they promote, permissibly limit or do not engage human rights. The committee is seeking further information in relation to 11 bills and legislative instruments.

I would like to highlight one of these bills, the National Redress Scheme for Institutional Child Sexual Abuse Bill 2018. The statement of compatibility accompanying the bill draws extensively upon the committee's previous human rights analysis of the Commonwealth Redress Scheme for Institutional Child Sexual Abuse Bill 2017. This approach was valuable to the committee in undertaking its technical analysis. The department and minister are to be commended for their work. This example also illustrates the constructive role of the committee in helping to ensure that human rights issues are appropriately considered in legislative policy development.

The report also contains the committee's concluded examination of eight bills and instruments. Following correspondence with the relevant minister, the committee has concluded that three of these bills and instruments are likely to be compatible with international human rights law.

I also speak to the tabling of the Parliamentary Joint Committee on Human Rights' Annual report 2016-17. This report covers the period from August 2016 until the end of 2017 and provides information about the work of the committee, including the major themes and scrutiny issues arising from the legislation examined by the committee. The annual report details the significant work the committee has undertaken during the reporting period.

In this respect, the committee tabled 17 scrutiny reports examining a total of 405 bills and acts, and 2,942 legislative instruments. Of the bills considered in this period, the majority, 309, were initially assessed as either promoting human rights, permissibly limiting human rights or not engaging with human rights. The committee requested further information in relation to 54 bills in the reporting period, and provided 42 advice-only comments to legislation proponents. The committee also tabled one inquiry report during the period, a Freedom of speech in Australia report which contained 22 recommendations, including those aimed at improving the complaints-handling process of the Australian Human Rights Commission.

I encourage my fellow members and others to examine the committee's annual report to better inform their consideration of the committee's work during the relevant period. With these comments, I commend the committee's fifth report of 2018 and the Annual report 2016-17 to the House.

Mr THISTLETHWAITE (Kingsford Smith) (16:23): Labor will be supporting this Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018, and I foreshadow that I will move a second reading amendment later during my comments.

The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 extends for another year a measure first introduced in the 2015 budget which allows small businesses to deduct immediately purchases of assets they start to use, or install ready for use, that cost less than $20,000. The measure applies to businesses with a turnover of up to $10 million. Over the forward estimates, the measure will cost $350 million to the budget.

Labor supported the initial measures, which went from 12 May 2015 to 30 June 2017, and Labor supported the measure when it was extended for another year, to 30 June 2018, in last year's budget. Of course, we should all remember that the accelerated depreciation, or the ability to deduct assets, particularly in the first year of an asset's life, was originally an initiative of Labor. Labor originally recognised the value of an increased immediate deductibility threshold for small business entities. It was Labor that increased that threshold from $1,000 to $6,500 as part of a broader package of reforms contained in the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011.

Labor subsequently opposed the Abbott government's decrease in that threshold from $6,500 to $1,000, which they announced in the 2014-15 budget. We all remember that horror budget. It came in the wake of the election of the Abbott government. The then Leader of the Opposition, Tony Abbott, said there would be 'no cuts to health, no cuts to education, no cuts to the ABC or SBS', and then proceeded in the first budget to do exactly that. They undertook massive cuts to health, education and, of course, the ABC. And they're doing that again. We learned what they really think about the ABC on the weekend, when the federal conference of the Liberal Party voted to privatise Australia's national broadcaster. Nonetheless, I digress.

When the Abbott government did reduce that threshold from $6,500 to $1,000, making it more difficult for small businesses to use the ability to write off those assets, it was Labor that actually opposed it. For that measure, it was Labor that was standing up for small business in the wake of this government attempting to make things more difficult for small businesses in this country by reducing that threshold from $6,500 to $1,000 dollars.

But then we saw the government change its tune. Thanks to the good lobbying of the Labor Party, and indeed many in the community, in the 2015 budget they changed their tune. Labor has supported the government's measures since that time. We all know that these types of measures provide tangible benefits to businesses and their investment plans. Many Australian businesses, operators and their advocacy groups, the peak bodies, have actually indicated that these types of measures are more effective and have broader support than the proposed company tax cuts that the government is looking to get through the parliament. That is because these provide tangible and real benefits that are immediate to a small business.

We all know that the great benefits of the company tax cuts flow to foreigners compared to Australians, because of the operation of dividend imputation. The real beneficiaries of the company tax cuts, which the government is proposing will take $80 billion out of the budget—and bear in mind that the government is cutting funding to hospitals, schools, TAFE, the ABC and other organisations—will be overseas investors, because they're not affected by dividend imputation.

Labor has proposed a very different option to what the government is proposing in terms of relief for small businesses in particular. We have said we will support the government's tax cuts for small businesses up to a threshold of $2 million. But we won't proceed with the corporate tax cut that the government is proposing, the $80 billion corporate tax cut, which applies to all businesses, including the big mining companies and, indeed, the big four banks, who have done such a wonderful job in representing the interests of their customers and acting in their best interests over the course of the last decade! But Labor has come up with an alternative, which is based on our consultations with the small business community and their requests for relief, and we're calling it the Australian investment guarantee. This will allow all businesses to immediately write off 20 per cent of all new investments in tangible and intangible assets in the first year. The balance is then depreciated in line with normal depreciation schedules for the rest of the period in the life of that particular item. It's a real boost to the cashflow of small businesses, helping improve the prospects of the marginal projects that may otherwise be struggling to get up.

Our investment guarantee is an accelerator for small business growth in Australia, driving new investment in essential plant, machinery and equipment. It is also a measure to help the development of knowledge assets supportive of new investments in our economy which embody innovation and human capital. From firms expanding the capacity of their factories in outer metropolitan areas to farmers wanting to buy the most sophisticated trucks and machinery in regional areas and advanced manufacturers wanting to upgrade their computerised technology in Australian cities, Labor's policy supports all of those businesses and provides them with instant relief and instant encouragement for investment in small pieces of machinery and capital.

Let us also be clear that our support for this measure does not in any way influence Labor's position on the government's company tax cuts. As I said earlier, we remain opposed to the government's proposed corporate tax cuts for the big end of town. Unlike the government's company tax plan, Labor's Australian investment guarantee will provide targeted tax relief for businesses that invest in Australia and in Australians. It's part of our economic plan for our nation, which includes properly funding schools, universities and TAFE; boosting apprenticeships; building a better NBN; and investing in job-creating infrastructure. Our responsible economic plan will grow the economy, create jobs and improve the budget bottom line.

I want to detail for the House some examples of businesses that would benefit from Labor's investment guarantee. A food manufacturer operating in regional Australia may be looking to spend $6 million upgrading to new energy-efficient freezers to ensure it can store its growing stock of food. Labor's Australian investment guarantee would help deliver the investment because it would deliver an immediate cashflow of $1.2 million to the manufacturer. That money could then be used to hire new employees and continue their business development and expansion plan in key markets in the Asia-Pacific region. As part of Labor's measure, the food manufacturer gets both the benefit of the instant cashflow through the write-off and the improved energy efficiencies from the new freezer equipment. More efficient equipment can help to reduce the carbon emission intensity of the production processes and, of course, produce significant savings in energy costs each year.

Labor's Australian investment guarantee would significantly boost business investment in energy-saving projects, lowering energy bills, cutting carbon pollution and growing jobs. While the Turnbull government tries to talk up their commitment to improving energy productivity, the fact is that Australia's performance has been dismal in recent years in this area. We only need to look at the latest report card on national energy productivity, where it's revealed that energy productivity growth has fallen from a long-term average of 1.7 per cent per year to just 0.4 per cent in the last year. This poor performance puts a break on business and jobs growth. It also amplifies the effect of energy price hikes under the Turnbull government and makes cutting industrial carbon pollution harder.

The case for backing Labor's Australian investment guarantee is clear. Along with energy efficiency benefits, recent modelling by the University of Victoria shows that, compared to straight-out company tax cuts, an investment concession like Labor's investment guarantee can produce up to three times more effective stimulus to investment. And Labor's plan is permanent. The Australian investment guarantee won't be subject to annual budget cycles like the government's instant asset write-off and like this particular bill here. This is the reason we need to update this once again; it's reviewed every year by the government. Labor's investment guarantee, if we are elected at the next election, will be permanent. Of course, the government's corporate tax cut does not guarantee any new investment on each dollar spent. It's a clear contrast to what Labor is proposing. The corporate tax cut can go directly to paying for share buybacks or dividend increases here and offshore, and not to new investment. Labor's plan guarantees that the government is supporting investment in Australian businesses, and we all know that there's been underwhelming performance when it comes to business investment in this country.

There's broad support for the measure that Labor is proposing. The Australian Chamber of Commerce and Industry in its prebudget submission called for more incentives exactly like the one that Labor is proposing, specifically arguing:

… the government should adopt the Opposition's proposed enhancements to accelerated depreciation.

That's from the Australian Chamber of Commerce and Industry. James Pearson, the CEO of the Australian Chamber of Commerce and Industry, said:

Business welcomes this commitment from the Opposition—it's good policy … What's particularly positive is the proposal to make this a permanent feature.

This is important as policy certainty and policy consistency is critical for business.

Innes Willox, the AIG chief executive, said:

The Investment Guarantee would provide a significant boost for businesses to invest particularly for longer-lived investments.

The proposed measure comes at a time when business investment, and particularly non-mining investment, has been slow to recover in recent years.

As a measure designed to lift investment, the Investment Guarantee would increase the stock of invested capital, boost the quantity of capital per worker, raise productivity and underwrite an acceleration of real wage growth.

The Energy Efficiency Council said:

A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills …

Ken Morrison from the Property Council of Australia said:

… the Australian Investment Guarantee would be a powerful tool for accelerating energy efficiency gains across different industries, but especially in the built environment … We welcome Federal Labor's announcement of this policy and the potential it has to help reduce costs for consumers.

Finally, Peter Strong from COSBOA, the small business advocacy group in Australia, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.

So there's the voice of industry. That's what small business representatives, medium business representatives, bigger business representatives and the peak industry bodies in this country are saying about Labor's proposed Australian investment guarantee. It's clear that the investment guarantee really is about jobs, growth and rewarding businesses that make new investments in Australia.

While our plan guarantees that new investments in Australia are made in Australia, the Liberals' $65 billion tax handout will only guarantee windfall profits and windfall advantages for foreign shareholders and bigger executive bonuses. Labor's tax relief is targeted and affordable, and it works. That's why I move the following second reading amendment:

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

"whilst not declining to give the bill a second reading, the House notes that unlike the Government's company tax cut plan, the Opposition's Australian Investment Guarantee will provide targeted tax relief for businesses that invest in Australia and Australians, and guarantees new investment".

I commend that second reading amendment to the House.

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

Mr Dreyfus: I second the amendment.

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

Mr TED O'BRIEN (Fairfax) (16:38): Wasn't that speech from the member for Kingsford Smith a typical Labor speech? Of course, there were some wonderful lies in there—typical Labor lies—suggesting that the government is cutting funding for hospitals and schools when they know full well hospital and school funding are at record highs under the Turnbull government. But that won't hold them back. They shall lie, because Labor tells lies very well.

Something else Labor does well is raise taxes. Despite the member for Kingsford Smith's long speech about their—as they call it—alternative economic plan, the Australian public know full well that the Labor Party has a plan for an additional $200 billion of new taxes. I want to say to every mum and dad out there: vote Labor and you will be poorer. Vote Labor and you will have less money in your pocket. They know that if they are owners of homes they will have to pay more, and they know that they will be able to save less.

As for retirees, they are absolutely in the sights of the Labor Party. They have a model—as we worked out this week—and they have totally botched it; it's a $10 billion black hole. But the Labor Party are absolutely going hard after retirees, because they love taxing. They love to tax. This is why I'm so happy today, because I sensed in the member for Kingsford Smith's speech that they actually support at least instant asset write-offs, accelerated depreciation. That's good news. It's a hallelujah moment. The Labor Party has had a come-to-Jesus on this one. They have realised that we actually can reduce the impact on business, and we can help businesses out. We need to capitalise on that and move forward. It's once in a lifetime that we see the Labor Party actually wanting to help small and medium businesses.

So I am happy to rise today to support the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. I do so with my electorate of Fairfax sitting smack-bang in the middle of one of the fastest-growing regions in Australia. I constantly hear two things from small businesses in my electorate. No. 1 is that they want to keep creating jobs for Australians. No. 2 is that they want to see government continue to support small business. Indeed, this is what the Turnbull government is doing. We know we are delivering for small businesses, because we have seen more than 1,000 jobs being created every single day. That's over one million jobs created since the coalition was elected in 2013.

The Turnbull government is supporting Australian businesses to capitalise on an economy that is now in its 27th year of consecutive growth. We are supporting Australian businesses to grow and to capitalise on growth beyond our own borders, with global growth now at its fastest in six years. There's a reason the Australian economy's GDP growth is looking so strong, why the last quarter of national accounts showed a one per cent increase in our GDP, why we're now looking at a 12-month improvement of 3.1 per cent. It is because this Turnbull government wants to empower and is empowering small and medium businesses, and all businesses alike. It is fundamental in our DNA to empower people to achieve their best. That is precisely what we are doing with our tax regime. That is why we are supporting tax cuts for businesses. It is why we have already delivered tax cuts for small business and it is why we are also cutting bureaucracy to make their lives easier. In fact, the latest regulatory reform report shows the bureaucratic burden on business was cut by more than $800 million a year between 1 January 2016 and 30 June 2017.

We know that this bill before us today is a popular one. I believe that, despite the comments from the member for Kingsford Smith, it has widespread support among people in this chamber.

It also has extensive support from business and industry. That's because it's good policy. We know good policy when it works, and this policy has been proven to work. Extending the $20,000 instant asset write-off to 30 June 2019 supports small businesses to invest in their own core assets. This extension is for all small business entities, even those who have previously opted out of the accelerated depreciation rules. As for assets over $20,000, these can continue to be pooled and depreciated at a 15 per cent rate in the first year and 30 per cent each subsequent year.

Our accelerated depreciation measure, coupled with the Turnbull government's 2017 initiative to change the threshold that defines a small business from a turnover of $2 million up to a turnover of $10 million, is having a broad and positive impact on the small business sector right across the Australian economy. In my region of the Sunshine Coast, in Queensland, more than 5½ thousand small businesses have already taken advantage of the instant asset write-off. That is, 5½ thousand businesses have already used this measure, and what they're seeing as a result is more money put in their pockets. What they are typically doing with that money is investing in their business and employing more locals on the Sunshine Coast. It is giving them confidence to invest and grow. It is giving them the confidence they need to create more jobs. As early as March this year, more than it 12,700 new jobs had already been secured by Sunshine Coast residents. This number would have no doubt doubled by now, as we're heading towards the end of June.

These are real, tangible outcomes resulting from a highly practical set of measures adopted by this government to help small businesses grow and be successful. As sure as night follows day, it also leads to the employment of more Australians. I know this because I used to own and run my own small business. While I'm no longer in business myself, I speak regularly with business owners right across the Sunshine Coast, and they're singing praises for this measure.

I have been fortunate enough to have visits to my electorate of Fairfax recently from the Hon. Craig Laundy, Minister for Small and Family Business, the Workplace and Deregulation, and Senator Zed Seselja, the Assistant Minister for Science, Jobs and Innovation, and last year from the Hon. Michael McCormack in his then capacity as the Minister for Small Business. These visits allowed me to introduce the ministers to many small-business owners and visit their workplaces, like the printing business in Maroochydore that employs 10 locals. The instant asset write-off tax concession helped them purchase a new finishing machine for their printing press. Also, the self-employed photographer who purchased a much-needed drone to expand his business into aerial photography. These are just two simple examples of the Sunshine Coast's 40,000 small businesses investing into their businesses because of measures such as the instant asset write-off.

Those around the chamber may not know that the business environment is quite unique on the Sunshine Coast. In fact, according to the Chief Economist of Australia, the Sunshine Coast is one of Australia's only non-urban regions fostering innovative entrepreneurship, comprising a unique clustering of R&D expenditure, IP generation and entrepreneurship attributes. That may have something to do with our burgeoning medicinal cannabis industry, or maybe even our 13 craft breweries. I'll admit I felt a warm glow at budget time, when the Turnbull government took the popular decision to lower the keg tax for craft breweries while increasing the alcohol excise refund cap to $100,000. Even though some have joked about the keg tax, these measures are producing tangible outcomes—delivering for small businesses, increasing their production, helping them invest in quality improvements, and, more than anything, helping them hire more staff.

We know that small businesses are vulnerable to sudden adverse business conditions. They can put a strain particularly on a company's cash flow, and the smaller a business is, the more that strain on cash flow hurts. That is precisely why incentive measures such as the instant asset write-off are so important. Further, and quite deliberately, it is the temporary nature of the measure through to 30 June 2019 that the government hopes will encourage small businesses to bring their capital investments forward to help feed business confidence and drive economic activity at the local level. Continuing the support for immediate deductibility for businesses with an annual turnover of less than $10 million by allowing an instant deduction in the year the cost was incurred for depreciating assets of less than $20,000, while also offering the potential to leverage a small business asset pool for other depreciating assets that cost $20,000 or more, is excellent news. It's excellent news for the more than 3.3 million small-business owners across the country and the 40,000 small businesses on the Sunshine Coast. It's for those reasons that I'm more than happy to commend the bill to the House.

Ms OWENS (Parramatta) (16:51): I'm actually really pleased to be getting up to speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. Labor will support this bill, although we have moved a second reading amendment. The bill will extend for another year a measure, first introduced in the 2015 budget, that allows small businesses to immediately deduct purchases of assets that cost less than $20,000 that they start to use or install ready for use. Over the forward estimates, the measure will cost $350 million.

Having listened to the previous speaker claim that the Labor opposition had had some sort of epiphany in supporting this, I'd just like to correct the record a little. It's a good reminder that it was Labor in government that originally recognised the value of an increased immediate deductibility threshold for small business entities, and we increased the threshold from $1,000 to $6,500 as part of a broad package of tax reforms contained in the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011. That change was permanent. It was a permanent change in the tax law that allowed businesses to plan ahead on the assumption that, in any year, if they bought a piece of equipment, they would be able to have an instant write-off of $6½ thousand.

We opposed the Abbott government's decrease in the threshold—the effective abolishing of that change—from $6,500 back to $1,000 announced in the 2014 budget. We introduced the instant tax write-off; the Abbott government abolished it again in 2014-15. But then, a year later in 2015, the Abbott government decided to re-introduce it on a temporary basis until 2017, and we supported that. It was increased to $20,000 at that stage, but it was a temporary measure for two years. We supported it again when the government decided to extend it for another year to 2018 in last year's budget, and we support it again now.

However, we don't have the same admiration for the temporary nature of these kinds of tax laws. It's incredibly important for businesses of all kinds to be able to plan ahead. When you introduce a tax law which expires in a year then you affect the way that businesses spend their money; you affect their investment decisions. They pull things around. You can see that in the forwards. You see the cost of these measures during the years of operation, and then you see a dramatic increase in the tax take the year after because businesses have pulled their spending forward in order to make the most of a temporary change in tax law. We on this side of the House prefer to introduce tax laws that are affordable and on a more permanent basis. That allows businesses to plan under their normal business cycles rather than a cycle matching a short-term tax benefit—which this government clearly prefers, because this is the third time they've done it.

The instant asset write-off is a measure that benefits small business, and that is why, as the shadow Treasurer has said, Labor will support this bill. Labor has supported and recognised the value of increasing the deductibility threshold for small business entities, because we know it is the strength and diversity of our small and medium enterprises that will determine Australia's prosperity over the next decade. We want to get right for small businesses how we best position ourselves to take advantage of the massive wave of change that will revolutionise how our businesses operate and the world in which we live.

We know small businesses will be significant drivers of future economic growth. Small businesses are often the first to recognise new technologies, apply the energy, passion and entrepreneurial skill required to grow their business and find new ways to work in an ever more connected world. Strong local small businesses support community cohesion through the family businesses and local businesses that contribute to the fabric of our community, that satisfy local need, that create relationships and support other local businesses and that contribute to our sense of place and identity. We know that these types of measures help small business with their strategic development and their investment plans, but we don't flip-flop on our support. We believe these measures should be on a permanent basis. We opposed the Abbott government's decrease in the threshold for that reason.

We've also put forward our own policy, the Australian investment guarantee, which is a permanent tax write-off. It's a little different to the way the government has structured theirs. Theirs is on equipment up to $20,000. Ours allows business to immediately write off 20 per cent of all their new investments in tangible and intangible assets in the first year, with the balance depreciated in line with normal depreciation schedules from the first year. So there are two options on the table here: the government's temporary instant tax write-off on equipment up to $20,000; and Labor's Australian investment guarantee, which I believe is a superior plan and is a permanent one that allows businesses to immediately write off 20 per cent of all of their new investments in tangible and intangible assets in the first year.

It's worth looking at the problem that our approach solves. The economy is not delivering for middle-class and working Australians. Growth is below trend, wages are flatlining, more than 700,000 people are unemployed and nearly 1.1 million are looking for work. Business investment has declined by 20 per cent over the past five years, and the RBA has said non-mining business investment has been disappointingly low. This is despite a strengthening global economy. The government's only plan is a company tax handout to big business and multinationals, which doesn't guarantee any new investment or a single new job; it only guarantees a windfall to multinationals and costs the budget $65 billion over a decade. Labor believes that the Australian investment guarantee is a better way forward. Policies to grow human capital through substantial investments in education and skills, our physical capital through targeted investments in national and local infrastructure and an Australian investment guarantee that charges business investment into the future is the way to go.

We believe the Australian investment guarantee will boost investment and create new jobs, with the Australian investment guarantee providing targeted tax relief for businesses that invest in Australia and Australians. Under Labor's Australian investment guarantee, all businesses in Australia will be able to immediately deduct 20 per cent of any new eligible asset worth more than $20,000, with the balance depreciated in line with normal depreciation schedules from the first year. Assets such as tangible machinery, plant and equipment—for example, trucks and utes, but not buildings—and intangible investments such as patents and copyrights would be eligible for the immediate deduction. The Australian investment guarantee is a pro-growth, pro-jobs reform that rewards businesses for making new investments in Australia. Under Labor's Australian investment guarantee, only companies that make the decision to invest in Australia will benefit from this tax relief, while up to 60 per cent of the conservatives' company tax handouts, in contrast, go directly to foreign shareholders. So there are the two options: an Australian investment guarantee, which goes to companies that decide to invest in Australia, or the government's big business tax cut, 60 per cent of which goes directly to foreign shareholders.

Over the past five years, business investment in Australia has collapsed by 20 per cent. Despite strengthening global economic conditions, business investment in Australia has remained subdued, and we must act to change that. Our first plan was permanent, our instant tax write-off scheme back during the global financial crisis was permanent and so is the Australian investment guarantee. It's permanent into the future and that allows businesses to make big investment decisions and to plan ahead what they intend to do for the growth of their businesses, without considering the tax cycle as a factor in deciding how and when they invest.

I just want to run through what this actually looks like. Under normal depreciation rules for a piece of machinery, assuming the straight-line depreciation method, which is standard, manufacturing company A is allowed to deduct 10 per cent, or $1 million of the $10 million price, in each year over the effective 10-year life of the asset. So they spend $10 million on the equipment, their machinery, and they can deduct one million—that's the current situation—with the other $9 million, in equal proportions over the remaining nine years. But these arrangements aren't actually quite attractive enough to get the project off the ground.

Under Labor's Australian investment guarantee, the manufacturing company will be able to immediately expense 20 per cent, or $2 million, of its investment in the first year. The remaining 80 per cent of $8 million would then be depreciated over the effective life of the asset from the first year, in line with the original depreciation schedule. This means that the business would be able to write off $2.8 million in the first year of its investment instead of $1 million under existing arrangements. Again, because this plan once introduced is ongoing, business would not need to consider pulling that investment forward in order to get it into a year, as you would have to do with the government's plan.

I find it quite extraordinary that a government that talks about certainty and talks about supporting business comes back into this House three times in a row and extends this instant tax write-off for another year as if that has no effect. We all know in this place—any of us that pay attention to tax, and some of us do because tax is quite a fascinating subject—that best practice is that tax law shouldn't inadvertently affect the decisions that business makes. You shouldn't choose this investment or that investment because of the tax treatment. You shouldn't choose to spend now rather than later because of the tax treatment. In a perfect world, your tax system doesn't inadvertently change the behaviour of a business or an individual. Sometimes you do it on purpose—for example, you tax tobacco. You introduce taxes that incentivise or de-incentivise a particular behaviour. But you do that on purpose. You don't do it by mistake. I would say to this government that removing the permanent tax write-off and introducing a temporary one and then extending it for a year and then extending it another year and doing it so late in the year—I mean, we're doing it now for the next financial year—leaves businesses right up into this moment assuming that they need to spend their money now, because if they spend it next year the tax write-off will no longer exist. It really is quite extraordinary.

Again, your own figures show that you know that's the case, because the year after the tax write-off finishes your tax take suddenly increases. You know full well that what this does is pull the spending of businesses forward into another year, not because it's in the best interests of the business, but because you've introduced a short-term tax incentive that has that effect.

I would urge all businesses out there to have a very real look at our Australian investment guarantee. It gets an incredibly good response from the broader community. The Australian Chamber of Commerce and Industry in it's prebudget submission called for more incentives for businesses to invest, specifically arguing the government should adopt the opposition's proposed enhancement to accelerated depreciation. James Pearson, Australian Chamber of Commerce and Industry CEO, said:

Business welcomes this commitment from the Opposition – it's good policy. What's particularly positive is the proposal to make this a permanent feature. This is important as policy certainty and policy consistency is critical for business.

Innes Willox, Ai Group Chief Executive, said:

The Investment Guarantee would provide a significant boost for businesses to invest particularly for longer-lived investments. The proposed measure comes at a time when business investment, and particularly non-mining investment, has been slow to recover in recent years.

The Energy Efficiency Council said:

A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills …

Ken Morrison, Property Council of Australia Chief Executive, said:

… the Australian Investment Guarantee would be a powerful tool for accelerating energy efficiency gains across different industries, but especially in the built environment.

…   …   …

We welcome Federal Labor's announcement of this policy and the potential it has to help reduce costs for consumers.

Peter Strong, COSBOA CEO, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.

Tanya Barden, Australian Food and Grocery Council CEO, said:

This initiative will go a long way to encouraging investment in high tech and high skilled projects to enhance efficiency and increase scale.

We are particularly supportive of the Australian Investment Guarantee's inclusiveness across the industry sector. The opportunity to use this Investment Guarantee towards energy saving projects is also very important.

There is quite an extensive list of people supportive of the Labor opposition's approach through the Australian investment guarantee. I wish for once that the government would look slightly more broadly for a view rather than just in its own caucus room. Look at what people are saying about this and support our proposals.

Ms MARINO (Forrest—Chief Government Whip) (17:06): On this side of the House we all know that small business is the absolute engine room of the economy. There are 2,101,607 small businesses in Australia, with over 218,152 in my home state of Western Australia. In WA, 512,000 people are employed by those small businesses.

The Turnbull government is absolutely backing small business, and we always will. We're backing business with more competitive taxes to help them invest, grow and employ more workers. As the Prime Minister has said repeatedly, jobs and growth is not just a slogan; it's actually an outcome, and more than a million Australians are now in work since this government was first elected back in 2013. It's an absolute credit, though, to the hundreds of thousands of businesses around the country who have actually taken the risk themselves. They've invested their own money, they've done the hard work, they've often mortgaged their house and, as I've said, they often don't sleep at night either. They put in a massive effort and have given so many other Australians the best of all opportunities, which is, of course, a job. Often, small businesses give Australians their first job, and their last job as well. I've seen this repeatedly in the south-west in my electorate, the transformation of someone who's been able to come off welfare and get into work.

The government is backing industry and small business particularly to invest and create jobs. It is the central plank of our stronger economy that was set out in this year's budget, and the Turnbull government is delivering on that commitment. Employment is now at a record high of over 12.5 million Australians now in work. The government has already legislated tax cuts for 3.3 million small and medium Australian businesses, employing 6.8 million workers. This is a very key part of our 10-year enterprise tax plan. We've increased the unincorporated small business tax discount rate from five per cent to eight per cent, up to a cap of $1,000. This rate will increase to 16 per cent by 2026-27.

A key and important way we've supported small business is by lifting the small business entity turnover threshold from $2 million to $10 million. This measure has helped small businesses all over Australia. Another one of the measures that we've introduced that I hear so much about when I'm out in my electorate is the $20,000 instant asset write-off that we see in this bill here; this has been extended by this bill to 30 June 2019. I talk to so many owners for whom this has been such a great benefit to their businesses.

On Saturday night, I was fortunate enough to attend the South West Small Business Awards. They're the small business awards for the South West region in my electorate. They were held in Bunbury. I want to congratulate all of the winners and to speak about some of the small businesses that are actually benefitting from the decisions we've made on tax and also this decision to extend the instant asset write-off. When I look at the winners, I see Nudge Psychological Assessment and Consulting, based in Busselton and Bunbury. It's a private practice providing psychological services in areas around educational assessment, EAP services, victims of crime counselling, workers compensation and the NDIS. It employs a number of specialist clinical psychologists. It was awarded the best business with five to 10 employees, and co-owner Melissa Harrison, an absolute powerhouse in Nudge Psychological Assessment and Consulting, was named the Business Person of the Year. What a great result, Melissa; you've done a fantastic job.

The major winner of the award for a business with zero to four employees was The Barberia of Bunbury. It is a vintage style barbershop based in Bunbury. Adam and Saylor do a fantastic job in styling and cutting hair for everyone around the region, not just those in Bunbury.

In the award category of businesses with 11 to 20 employees, Constructive PD was the winner. They are a group of passionate local people who are absolutely making their mark in what are landmark construction projects. Innovative and cutting edge, they have dedicated employees who are led very, very competently by Ian Meachem. They're working so hard to provide quality building services in Western Australia. Ian was the runner-up in the Business Person of the Year award.

One of the major awards in the South West Small Business Awards was SportsPower of Bunbury and Eaton Fair. In 1978 a group of individuals had the foresight to see an opportunity and had the courage to actually have a go. Eight independent sporting goods retailers got together and formed a co-op called Sports Star. Their idea was very simple: operating as a group offered greater advantages than trying to survive as individual retailers. This strategy was so successful that Sports Star became SportsPower in 1985. The group has continued to increase its advertising and marketing presence and has embarked on an expansion program that has seen SportsPower create a significant network that is very highly regarded.

I really want to talk about the Home Based Business Award winner, The Goodnight Nurse. It's a fantastic home-based business. The Goodnight Nurse provides expert help for babies and new mothers to get through solving sleep issues. When you talk to new mums, the thing that challenges them the most with a young baby is dealing with issues around sleep. Emma Pollard is an absolute character, and she has an international following. She's providing in-house and phone consultations, as well as running her very much sought after public workshops. She established this business in 2008. She is an absolute character; a multi-multiaward winner. From her home-based business, Emma does amazing work helping not only young babies but also toddlers with sleep and behaviour issues. What an amazing business this is. I'm very, very proud of Emma and the work that she does.

The Start-Up Business Award winner was Eco Warehouse. They are a small, family-owned business. Michael and his wife and two young boys run Eco Warehouse from Bunbury. It's an amazing and diverse business. It has been built around a zero waste lifestyle. If you're becoming aware of the issues and the challenges facing us, Eco Warehouse is the place to get help and advice.

In the tourism section of the small business awards was Holberry House of Nannup. Louise Stokes offers people a wonderful getaway. It was built in the late 1980s, but it was inspired by the classic two-storey English manor. It's very comfortable, it's country style and it's enhanced by antiques and collectables. But mostly it's Louise there. She is an amazing local entity in Nannup.

In the retail sector, I need to mention Stepping Out. Established in 1996, it's a local supplier of dancewear. These are small-business people who take the opportunity and who are really good at what they do. Nicole and her team at Stepping Out are a wonderful example of that. Nicole invested her own money, she believed so strongly in this. She has filled a fabulous niche as a leading supplier of dancewear and accessories to dancers and dance schools throughout Australia. She is based in Bunbury. They have a massive range to choose from, and they are absolutely committed to delivering high-quality service. That's what small- to medium-sized businesses do: they deliver high-quality service. I know that Sienna Deane from Stepping Out was one of the finalists in the Employee of the Year Award.

In the Industry Award for Service, 3D HR Legal, which provides special employment law services for business, were the winners. The Industry Award for Construction, Mining and Manufacturing winner was the Caravan Doctor, based out of Busselton. People can just drop off their caravans for a service, without worrying—it's a drive-through yard. So they know their market, and that's what small business does so well too. Like the Caravan Doctor, they know their market and provide what their customers need, and people keep coming back. That's what's so good about small businesses. Keip Filtration won the Aboriginal Business of the Year and the Young Business Achiever Award. Daniel Macmillan from H&H Automotive was the Employee of the Year.

I really wanted to mention all those small businesses, not just because they won awards but because these are the people who actually had the courage to invest in a business that they believed in. Often it was a brand new business and a brand new idea, and they did it so well. The process that Business South West runs in enabling the businesses as part of the application process for this Business of the Year—going through their individual businesses—actually gives them the capacity to look at their business as well as work in their business. On the night I heard so often that that process was so valuable to each one of those small businesses, because they actually stepped back and had to look at their business almost in a hands-off approach. Those businesses that come back have all really benefited, year after year. They have actually learnt so much about their business and what else they need to do to progress and grow their business and their profits. The process has been very useful.

The other thing that has also worked very, very well for them is the support they've received from Business South West. I want to thank Business South West for everything they've done for the small businesses in the whole of the south-west. Robyn Morris, as the chair of the board, and Fiona Fitzgerald and her fabulous team have offered extraordinarily valuable services. I've recommended them so often to small businesses in my part of the world, and they have been very, very much part of the success of many small businesses. They don't just provide the support; they provide the care for the employees, the family members and the businesses more generally.

The measure in this bill of defining small businesses with a turnover of up to $10 million is one of the biggest issues. It's one of the biggest things to happen to small business taxation in generations. It comes from our deep commitment, acknowledgement and understanding as a government about what small-to-medium enterprise actually is. A small business has a turnover of up to $10 million: I have quite a number of these in my electorate, and they certainly appreciate the opportunity from what's in this bill. Allowing businesses to grow by extending the $20,000 instant asset write-off for a further 12 months will have impacts for businesses of up to $10 million. They can repeatedly buy eligible assets costing less than $20,000 that were first used or install-ready for another year to 30 June 2019. This really matters to small business. It can be something as simple as an oven if you're in the hospitality sector. In my electorate I have many of these types of businesses, as well as those in the small manufacturing and construction space. Each $20,000 matters and each new piece of equipment gives them the opportunity to grow their business and employ more people in my part of the world. I want to see more and more small to medium enterprises now—because they can as a result of this legislation—take advantage of this $20,000 instant asset write-off.

I will finish by saying a huge thank you to each of those small businesses. They are helping the government in its ambition to see over a million more people in work. That frequently comes back to the work and the efforts of people in small to medium businesses. I say thank you to each of them. Thank you for the fact that you actually had the courage to invest, to follow your passions, but to take a genuine commercial focus on your business—as we heard at the small business awards on Saturday night in Bunbury. Nudge Psychological Services said on the night that, at the end of their first full operating month, they made the princely profit of $1.40—I think that was the amount; I'm not 100 per cent sure, but it was some small amount—and grew their business from there. They persisted. That's what small businesses do, and that's why this government will continue to support their efforts.

Dr CHALMERS (Rankin) (17:22): It sounds like the member for Forrest has some terrific local businesses in her part of the world, and I enjoyed hearing some of their stories in her contribution just now. I'm also pleased that the member for Parramatta is here in the chamber. The member for Parramatta is an extraordinarily dedicated champion of small businesses not just in Parramatta but right around Australia. She has a small business background and is a very valuable and respected contributor to small business policy on our side of politics.

Chambers of commerce—they've got different names all around Australia—are so important. They do a really good job of representing the interests of small to medium sized businesses in our community. I want to begin my contribution by acknowledging the work of the Logan Chamber of Commerce. I've been a member of the Logan Chamber of Commerce for some years now. It is a great group, and a very well motivated contributor to our local community. I want to acknowledge in the House of Representatives just how much I appreciate the engagement that we have with the Logan Chamber of Commerce. Just two weeks ago I gave a breakfast briefing to the Logan Chamber of Commerce at Diggers RSL. I was joined by my friend and colleague Cameron Dick, a terrific minister in the state government. He is now the Minister for State Development and Infrastructure. What I told the Logan Chamber of Commerce then—and it is the crux of what I want to tell the parliament today—was that when you've got pretty serious budget constraints you want to make sure the tax relief you give to businesses is targeted to where it can do the most good. We want to make sure that we get the maximum bang for our buck when it comes to tax relief for Australian businesses. And that's why we wholeheartedly support the bill before the House, which is about the instant asset write-off. We wholeheartedly support it for a range of reasons. An important reason why we support it is that we were the authors of it. I worked on this policy in another role in this building. I worked for the member for Lilley, who was the first Treasurer to implement this instant asset write-off. Unfortunately, it was chopped by the member for Warringah and the member for North Sydney in their first budget and, frankly, I'm pleased to see it back and pleased to see it extended. We support that because it is an important way to deliver targeted tax relief which will make a real difference to businesses in our local areas.

We want to target tax relief to where it can do the most good, where we can get the maximum bang for buck. For the same reason, we have proposed an Australian investment guarantee, which is all about accelerated depreciation for businesses of all sizes to ensure that the money we're investing in that tax cut or the money foregone from that tax cut in the budget is guaranteeing investment onshore in Australia. That means investment in Australian jobs.

One of the issues that we have with the government's alternative—the $80 billion tax cut—is that, as Goldman Sachs, the Prime Minister's former employer, and others have pointed out, a large chunk of that $80 billion in tax cuts will actually spray around overseas in the form of executive bonuses, share buybacks and puffed up dividends. So we don't think that an $80 billion outlay on a tax cut like that will actually do the good we need it to do onshore. That's why we've proposed an alternative. That's how we roll on this side of the House. If we don't like something the government has put up, whether it be to do with personal income taxes, company taxes or other policy areas, we propose an alternative. Our alternative is the Australian investment guarantee. I think, together—

The DEPUTY SPEAKER ( Mr Rob Mitchell ): The member for Mackellar, on a point of order.

Mr Falinski: Under standing order 76, I believe the member is straying far and wide from the bill.

The DEPUTY SPEAKER: No, he's not. You will resume your seat. There is no point of order.

Dr CHALMERS: What an absurd interruption that is! I'm talking about company tax. If you don't understand that this bill is about company tax, you should go back to your office and have a read of it. That's just pathetic behaviour, and you should be above it. Stop wasting the time of this parliament with such childish and petty interventions. Anyway, back to the substance of the bill, which the government should be proud of. It's their bill; given I'm giving a speech about supporting the legislation, you'd think you wouldn't want to interrupt that, but I don't think we should judge you by normal standards, by the sounds of that intervention.

Anyway, back to the issue. We think that businesses deserve tax relief in this country, and it needs to be targeted. It shouldn't be the $80 billion gift to multinationals, of which $17 billion will go to the big banks. It should be stuff like what is in this bill. It should be the instant asset write-off for small businesses. It should be the Australian investment guarantee that we've proposed. That's how we get maximum bang for the buck when it comes to tax relief for businesses in this country.

I don't propose to deal with the bill in any detail in terms of its specific contents. As other speakers have said, the main aspect of the bill is that it will extend the government's accelerated depreciation measure for small businesses for a further 12 months, to 30 June 2019. The measure applies for businesses with a turnover of up to $10 million. It means they can immediately deduct those smallish capital purchases. As the member for Forrest rightly said, it might be an investment in a fridge or something like that if you're a cafe. You can imagine all the capital needs of genuinely small businesses. A lot of stuff that they need to conduct their business is under $20,000, and this allows them to write it off.

As I said before, we support it. We are the authors of this policy and we're pleased to see it extended. We were terribly disappointed when there were cuts made to this initiative in the 2014 budget. We made the point at the time that the government should reverse course on that, and we are pleased that they did. Whether it was a humiliating backdown or not is a matter for the political argy-bargy of this building. It probably was a humiliating backdown—there have been a few of those—but we're pleased to see the outcome will be what we called for at the time. If only the government would see the light when it comes to their $80 billion tax giveaway to multinationals and big banks as well. If they were able to swallow their pride on that, like they swallowed their pride on this measure, then the budget would be better off and we'd get more bang for the buck for our tax relief for Australian businesses.

As I said before, when you lay out the alternative tax proposals of that side and this side, really the main difference is the targeting towards smaller businesses and targeting towards investment onshore in Australia. It makes very little sense to give so many billions of dollars to foreign multinationals and the big banks at a time when we've got record and growing debt in this country.

It also makes no sense to give a tax cut of that magnitude or that nature to multinationals and the banks when, at the same time, while the government can find $80 billion for those purposes, they say they can't find $17 billion for schools; they can't find $715 million for hospitals; they can't find $3.8 billion for universities; they have $270 million in new cuts to TAFE in the most recent budget; they're taking the pensioner energy supplement off Australian seniors; and they say they can't afford to give $14 a fortnight to pensioners in this country to help them deal with energy costs—the list goes on and on and on—but they can give $17 billion to the banks. Really what I'm saying is that there is a series of warped priorities in their budget and in their approach to public policy when it comes to company tax.

As I alluded to a moment ago, it's not like we have billions of dollars lying around in the budget. The net debt in this country was $175 billion when the government changed hands in September 2013 and it's now $350 billion.

The DEPUTY SPEAKER ( Mr Irons ): The shadow minister will resume his seat. I call the member for Mackellar.

Mr Falinski: Mr Deputy Speaker, on a point of order: I would like to reiterate my point of order. The speaker has moved far and wide from the topic, which is about depreciation—

Dr Chalmers interjecting—

The DEPUTY SPEAKER: The shadow minister has been asked to resume his seat. Can the member for Mackellar repeat his point of order?

Mr Falinski: My point of order is standing order 76. The bill before the parliament—

Dr Chalmers: It's about whether or not we can pay for it, you fool.

The DEPUTY SPEAKER: The member for Rankin will be quiet while I listen to the point of order from the member for Mackellar.

Mr Falinski: I understand that I've upset the shadow minister, but—

The DEPUTY SPEAKER: Tell me your point of order.

Mr Falinski: It is standing order 76. This bill is about accelerated depreciation for small business. We have now endured many minutes of discussions about issues—

The DEPUTY SPEAKER: I thank the member for Mackellar. I'll ask the shadow minister to be relevant to the subject of the debate according to standing order 76.

Dr CHALMERS: The idea that we're not allowed to talk about where the money's coming from for legislation that the government's proposed and that the opposition supports is—even by the very, very low standards of this person—quite extraordinary. Is this the best use of his time? Surely it isn't.

The DEPUTY SPEAKER: The member for Rankin will resume his seat. I call the member for McKellar.

Mr Falinski: My point of order is on a reflection on another member.

The DEPUTY SPEAKER: I call the member for Rankin.

Mr Falinski interjecting—

Dr CHALMERS: Surely—

Ms Owens: Just keep going.

Dr CHALMERS: Yes, just keep going. You can't allow for certain levels of stupidity, can you, member for Parramatta?

The DEPUTY SPEAKER: The member will withdraw that.

Dr CHALMERS: Stupidity?

The DEPUTY SPEAKER: The member will withdraw that.

Dr CHALMERS: I withdraw. I consider that the commentary made by the member over there was stupid, and it was stupid for so many reasons. Principal amongst the reasons that it was stupid was that central to anything that should be proposed in this parliament is how we pay for it. I'm talking about how we pay for this measure of company tax relief for small businesses, and the point I'm making—and the point I will continue to make—is that the budget is not in especially good nick. That's a fact; it's in the government's own budget papers. Net debt has doubled. Gross debt is over half a trillion dollars for the first time in Australian history, and stays above half a trillion dollars every year for the next 10 years and is higher at the end of those 10 years than it is now. I would have thought that that was pretty central to our considerations. I will continue to make that point and those opposite can take as many points of order as they like.

Our Australian Investment Guarantee, as I have said, is all about targeting business tax relief. It's got a lot of support from the business community. We're very heartened by the support that our alternative has received, because it goes hand in hand with the measure that we're discussing. The $20,000 instant asset write-off in conjunction with the Australian Investment Guarantee is a superior way to give Australian businesses the support that they need to invest in our local economy. We've had modelling done by the Victorian University Centre of Policy Studies, which found that our policy is more effective in stimulating investment than the company tax cuts proposed by those opposite. The modelling found an investment subsidy like ours, compared to the company tax, is 'three times more effective as a stimulus to investment'. The authors of that report said:

... we strongly recommend that policy-makers consider an investment subsidy instead of a cut to company tax as a better value-for-money policy initiative to increase both investment and domestic material welfare.

That's a ringing endorsement. It didn't stop with the economic modelling performed by that university. The Australian Chamber of Commerce and Industry said:

... the government should adopt the Opposition's proposed enhancements to accelerated depreciation.

The CEO of ACCI, James Pearson, welcomed the commitment from the opposition and said it was good policy. From the Council of Small Business of Australia, Peter Strong, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow.

The Australian Industry Group supported it, as did the Property Council and the Energy Efficiency Council. The list goes on and on.

The reason we can afford to do the Australian investment guarantee hand-in-hand with accelerated depreciation for small businesses is that we wouldn't be proceeding down the path that those opposite proposed, which is to give the multibillion-dollar tax handout to multinationals and the big banks. We've also made some other difficult decisions and announcements in other areas of the budget to make sure that we can pay for our commitment.

We support this bill. We do it enthusiastically. We agree with much of what the member for Forrest said about it and what contributions on this side have said about it. This has the capacity to make a genuine difference, so we support the bill. We're proud to be the original authors of the instant asset write-off. I support the amendment by the member for Kingsford Smith, which says:

... unlike the Government's company tax cut plan, the Opposition's Australian Investment Guarantee will provide targeted tax relief for businesses that invest in Australia and Australians, and guarantees new investment.

(Time expired)

Mr FALINSKI (Mackellar) (17:37): I rise today to speak in favour of the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018, which is in favour of supporting Australian small businesses. Nine out of 10 Australian businesses are small businesses. They make up over 33 per cent of Australia's GDP, employ over 40 per cent of Australia's workforce and pay over 12 per cent of total company tax revenue. We are, in short, a nation of small businesses. My electorate of Mackellar is full of hardworking and enterprising Australians who are committed to making a difference. From the boutiques of Pittwater Place to the coffee shops of Narrabeen, Mackellar, like the rest of Australia, thrives when its small businesses are performing well. Never before has supporting small business been so important. Small businesses create jobs and investment and add so much to the Australian economy. However, they are often confronted with issues such as cashflow problems and disproportionately higher compliance burdens. This is where there is a role for government to conduct sensible policy and to create the conditions for good performance and growth.

This bill will amend tax laws to extend the period during which small businesses can access expanded accelerated depreciation rules by 12 months, to 30 June 2018. This includes the availability of an immediate deduction for depreciating assets, amounts included in the second element of a depreciating asset's costs and small business pools, with a $20,000 threshold still available rather than a $1,000 threshold. The amendment specifically focuses on businesses with an aggregated annual turnover of less than $10 million to ensure that there is scope for a variety of small businesses to make the most of the changes. Such amendments will facilitate and boost the capacity of small businesses to operate for another year by providing cashflow benefits and reducing red tape.

Depreciation can be a major issue for small businesses. Given that many are asset-reliant and have very little extra cash following asset purchases, the initial years of a business are when it is often most vulnerable and prone to failure, which is why it is important that the government enacts sensible policy to assist. Asset depreciation schemes are used around the world, such as those outlined in section 168 of the United States tax code. Other countries' providing such concessions requires us to match them in order to remain internationally competitive and to encourage investment in our small businesses and industries.

The coalition has a proud track record of supporting small businesses and giving all Australian entrepreneurs a fair go. We understand that the economy will not function to its full capacity without a thriving small-business sector. We also understand that it can be tough as a small-business owner to meet demands and to survive financially. The coalition is committed to reducing red tape in order to give small businesses a fair go. I know from experience how difficult it can be to go out on your own by starting a business and I know about the stress and uncertainty that can come with it. This is particularly the case when it comes to purchasing assets and the large costs associated with their maintenance. When Australians back themselves to start businesses they often make spending sacrifices in other areas of life so as to be in a position to buy those assets that are crucial to success. This can be extremely stressful and risky, and often puts individuals off pursuing business ideas in the first place.

Unfortunately, our contemporaries in the Labor Party do not share our passion for small businesses and the opportunities that start-ups create. Bill Shorten and his union bosses are not committed to jobs and growth. They are not committed to supporting hardworking Australian entrepreneurs.

Mr Rob Mitchell interjecting—

The DEPUTY SPEAKER ( Mr Irons ): The member for Mackellar will resume his seat. I call the member for McEwen.

Mr Rob Mitchell: Thank you. The member for Mackellar well knows to refer to members by their correct titles.

The DEPUTY SPEAKER: Member for McEwen, what is your point of order?

Mr Rob Mitchell: I just said it. The member for Mackellar well knows to refer to members by their correct titles, and he should be made to do that.

The DEPUTY SPEAKER: I remind the member for Mackellar to use members' correct titles, please. I call the member for Mackellar.

Mr FALINSKI: I will happily repeat myself for the benefit of those opposite. The Leader of the Opposition and his union bosses are not committed to jobs and growth. They are not committed to supporting hardworking Australian entrepreneurs. They are not committed to ensuring the prosperity of our economy and our nation. What are they committed to, you may ask, especially when it comes to this bill? They are committed to increasing red tape and imposing their agendas of big government on all in their path. History has shown that high taxes and government regulations not only drive away investment; they smother entrepreneurial spirit and will—

The DEPUTY SPEAKER: The member for Mackellar will resume his seat. I call the member for Parramatta on a point of order?

Ms Owens: On relevance. The member is straying a long way from the bill, Deputy Speaker.

The DEPUTY SPEAKER: I thank the member for Parramatta. I call the member for Mackellar and ask him to ensure his debate is about the bill, and, even though we were quite tolerant of the member for Rankin, I now call the member for Mackellar.

Mr FALINSKI: I appreciate your tolerance, Mr Deputy Speaker. They smother entrepreneurial spirit and the will of everyday Australians to have a go by creating businesses. This is an issue that shows that the contrast between the coalition and Labor has never been starker. One has a plan for jobs and supporting businesses, while the other seeks to help their friends in the union movement.

We must stand up to such attempts to stifle our nation's small businesses and economic performance. If the Leader of the Opposition—whose name is Bill Shorten—and his union bosses get their way, then both our current and our future generations shall be faced with an economy riddled with uncertainty and a jobs market beset by lack of confidence. We simply cannot allow this to happen, particularly given the crossroads which our economy finds itself at.

A recent book by the Institute of Public Affairs and the Fraser Institute, titled Demographics and Entrepreneurship: Mitigating the Effects of an Aging Population, delves into Australia's declining small business entry rate. It calls for governments to cut red tape, reduce taxes and create an entrepreneurial-friendly environment to combat stagnant productivity in order to support new drivers of economic growth. If the conditions for new and small businesses are not friendly, then they simply will not grow or will go elsewhere. Individuals need to feel that the government is working for them, not against them.

The story of Australian enterprise software company Atlassian is a remarkable one. It was founded in 2002 by Sydneysiders Mike Cannon-Brookes and Scott Farquhar. The two started out with the ambition of replicating the $48,000 graduate starting salary typical of the big corporations, without having to work for someone else.

All their early staff were mates. They started out with a $10,000 credit card, and from there they developed their issue management software, known as Jira, reaching 2,000 paying customers by 2004. From there it was all uphill, recording revenues of $100 million in 2011, without a single salesperson, before a 2015 initial public offering on the Nasdaq stock exchange.

That Atlassian story is viewed by many as the fairytale story of Australian small business and start-ups. There is nothing more inspiring than two young Australians deciding to try their luck on their own and take on the business world. It is often said for every small business and start-up miracle there are a thousand failures. More precisely, a 2013 Google and PricewaterhouseCoopers study found only a tiny percentage of today's 1,500 technology start-ups were survivors from 2001. Yet this does not have to be the case. I want to see Australia produce more Atlassians, but this will only happen if government does its part by supporting the next Mike Cannon-Brookes and Scott Farquhar.

Australians should feel confident that they live in a country that encourages and supports entrepreneurship and innovation. The end of the mining boom has left many wondering where the next major driver of economic growth will come from and what will happen if unexpected international shocks hit the economy. This is where small and innovative businesses should be filling the void and stepping forward to drive Australia's next era of growth. Recent OECD rankings on measures of economic complexity and sophistication place Australia 36th out of 36—dead last. Our great dependency on primary exports has resulted in what some argue to be overexposure to cyclical economic conditions. This must change, and this government supports small businesses and innovation wherever practical.

Innovation drives productivity growth and, in turn, long-term economic performance. The jobs and economic drivers of the future often stem from nations investing in and encouraging innovation entrepreneurship. The intense competitiveness of the global economy has made the need to innovate and have an adaptable economy more important than ever. We cannot rest on our laurels and assume that export sectors such as mining are going to continue to drive export growth indefinitely. Australia needs strong industries across the board, and the success of small business will underpin this. An economy full of innovative and prosperous small businesses will not only help to retain our best talent; it will also encourage the best and brightest from all around the world to view Australia as a destination for success.

All Australians, young and old, should feel that there are ample opportunities and jobs for them here in Australia. This government recently delivered on a significant commitment. There are one million more Australians in work than there were when we were elected. This truly is a reflection of the hard work of Australian businesses and the government's strong economic management and shows how effective the two can be when working together. A record of consecutive years of growth will only continue if our industries and businesses are strong and providing jobs for Australians. This is why bills such as the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 are so important. They showcase the commitment of this coalition government and represent an important step in ensuring the growth of this critical sector.

Australian business owners and entrepreneurs do it hard enough, so when government is going to step onto the scene it should be in a well-thought-out and calculated manner. This government is committed to small business and Australian jobs, while recognising the need to improve the options available for small businesses regarding asset depreciation. Without such measures, our small businesses will face an increasingly difficult and uncertain environment. I'm proud that this government is actively making changes for the benefit of small businesses and I urge the House to support the bill.

I would also point out, in response to previous speakers on this bill, that this is a fully costed policy, that this budget will come into surplus a year before it was scheduled to do so, that we have a plan that is comprehensive, that we have grown the economy, that we have created a million jobs under this government and that we have created the environment to allow this to occur. So, for this side of the House to be lectured by those opposite that they're concerned about spending, that they're concerned about tax cuts for businesses, just demonstrates the ongoing hypocrisy—

The DEPUTY SPEAKER ( Mr Irons ): The member for Mackellar will resume his seat. The member for McEwen on a point of order.

Mr Rob Mitchell: Standing order 76.

The DEPUTY SPEAKER: I'll call the member for Mackellar and remind him that—

An opposition member interjecting—

The DEPUTY SPEAKER: Order! You're speaking through the chair.

An opposition member interjecting—

The DEPUTY SPEAKER: You are if you're yelling out. I'll just remind the member for Mackellar that the amendment moved by the honourable member for Kingsford Smith to the original question 'That the bill be now read a second time' was 'That all words after "That" be omitted with a view to substituting the following words'. As with the member for Rankin, we will allow a fair bit of latitude. I'll now call the member for Mackellar and remind him that he's now speaking to the amendment; he's not speaking to the bill.

Mr FALINSKI: I would also like to take this opportunity to recognise the hard work of the chambers of commerce in my area, both at Mona Vale and Warringah, and the fantastic work they do to network small businesses in my area and encourage people through the thicket of red tape that was imposed on them by those opposite. They do an extraordinary job, and I do not believe that I have covered any subject—in fact, there are many subjects that I have not covered—that the member for Rankin hasn't spent many, many minutes in this House referring to with regard to the amendment. I'm sorry that it has upset the member for McEwen, but I've got to say: it's the best fun I've had all day.

The DEPUTY SPEAKER: The question is that the amendment be agreed to. I call the member for Hughes, and I'm sure he'll speak to the bill.

Mr CRAIG KELLY (Hughes) (17:51): I'm pleased to rise this evening to speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 and also address some of the issues raised in the amendment by the opposition: company tax, the opposition's so-called Australian investment guarantee, relief for small businesses, business investment and so on. The subject of this bill is so wide that it would enable anyone to speak on it, and I would hope that members of the opposition do not try and make frivolous and unwarranted interventions when we are speaking on the topic of the bill.

You know why they do it? They don't want to talk about the economics, because they know that when we talk about the economics of this nation and which side of government is best for the nation, when anyone looks at the details, it is the coalition government. That is why those opposite want to try and shut this debate down and not have a wide-ranging discussion. They know, as the health minister pointed out today, that it's the hard work that the coalition government has done on the economy, on enterprise and on small business and getting that investment that has grown the economy and enabled this coalition government to finance many things in the health sector. We've been able to put many drugs on the PBS. The Labor Party was not able to put a single new drug on the PBS, leaving Australians waiting for life-saving drugs, because their blundering and incompetence when it came to economics shrunk the economy and put the budget into deep deficit. It is the coalition government, with our policies to cover investment and wealth creation, that has made the difference for those people.

Firstly, I'll deal quickly with some issues on the amendment. The amendment that the opposition has put forward here talks about the government's company tax cut. What I see time and time again is that members of the opposition simply do not understand how incentives work in the economy. We've seen company tax rates in this nation cut from the high 40 per cents—48 and 49 per cent—down to the current 30 per cent. If you followed the opposition's logic, every single time those corporate tax rates were cut, the government would've ended up with less money because they would've been giving away all this money to big business. But you know what happened, when you look at the numbers?

In this nation's history, every single time we have cut or reduced the corporate rate of tax, two things have happened: we have grown the economic pie of this nation by enabling businesses to come and invest and, more importantly, at the same time, that slice of the company tax receipts pie has grown. Today, in the economy, company tax, at 30 per cent, makes up a greater percentage of GDP than it did when it was at 36 per cent or when it was at a rate in the high 40s. Paul Keating understood that. That is why Paul Keating cut the rate of company tax.

Mr Khalil: Great Prime Minister!

Mr CRAIG KELLY: I hear the comment from the member for Wills, saying that former Prime Minister Paul Keating was a great Prime Minister. Paul Keating understood the importance of reducing the rate of company tax. We have seen not only Australia but almost every OECD nation this century understand the same thing. Almost every OECD nation has reduced their rate of company tax. Why? They understand that that is the way you can grow your economy. We are now faced with a situation where our corporate rate of tax of 30 per cent is no longer internationally competitive. We have seen the US reduce their rate from 35 per cent all the way down to 21 per cent. We are trying to compete against countries like Hong Kong and Singapore, which have corporate tax rates of 15 and 17 per cent. We have seen New Zealand reduce their corporate rate of tax. It was great to see the former New Zealand Prime Minister John Key here in Sydney last weekend. When he reduced the corporate rate of tax, do you know what happened in New Zealand? It was exactly the same thing that has happened here: the economy grew, and they actually ended up with more tax revenue to spend. That is more money to spend on all the things that we need to provide welfare for those Australians who are unfortunate and less well off. The greatest contrast between the Labor Party and the coalition that I can recall was spoken of in the speech from the health minister this afternoon in question time. He said that it's all about creating more wealth so we can afford to put things such as life-saving drugs on the PBS. Everyone on this side of the House should be very proud of what we've done.

If we're going to have a competitive economy in the years ahead, we have to have an internationally competitive rate of corporate tax, yet we have the opposition over there doing every single thing in their power to stop that from happening. How can we have First World wages or the best public hospital system that this nation can afford if we no longer have an internationally competitive corporate rate of tax or internationally competitive energy prices? Those are the two policies that the Labor Party want to inflict upon this nation. They want to see us have the highest electricity prices in the world because their policy is to copy the failed South Australian experiment. They want us to stick to an uncompetitive international rate of corporate tax. Those policies forebode terrible things for our nation should Labor ever sit on this side of the parliament.

This particular bill is just another example of how the coalition is backing small business. It's through the backing of small business by this coalition government that we have seen over one million jobs created since we were elected in 2013. I remember that, back then, we said that we would set a target that, in two terms of government, the entrepreneurs would create another million new jobs in this economy. They laughed. They scoffed. They said it wasn't possible. And you know what? We have delivered that million new jobs and we've delivered it before we said that we would. You would expect the opposition to sit back and simply say: 'Well done. Congratulations. You guys got it right and we got it wrong.' That's what you would expect. You would expect them to say: 'We apologise. Coalition government, you put in the policies that created a million new jobs, something that we never dreamed of doing.'

Now to some of the specifics of this bill. As announced in the 2018-19 budget, this bill extends a $20,000 instant asset write-off for a further 12 months, to 30 June 2019, for businesses with an aggregate turnover of less than $10 million. This is something that we need to explain, because the Labor Party thinks that any business with a turnover of more than $2 billion is a big business. They simply don't understand the difference between turnover and profit. They have no understanding whatsoever. Any business in the country listening tonight should note that if they go out and they want to make a $20,000 investment in some new capital investment for their business they will get an instant asset write-off from this government. There are around 3.3 million unincorporated businesses with an aggregate turnover of less than $10 million dollars that will be eligible for it. Every single one of those 3.3 million businesses will be eligible for that $20,000 instant asset write-off.

Extending this threshold for a further year is the government striking a balance between helping small businesses' cashflow and investment and the revenue impact on the budget bottom line, which we are returning to surplus. We expect that the budget will be returned to surplus. We've finally turned the corner on the damage that was done by the previous Labor government, who drove the budget into deep deficit year after year after year. One year early we'll be getting that budget back into balance. And then we have the long, hard job of paying back that debt. The coalition have done it before. Going back to the previous century, in 1996, we know that the Howard government inherited a $96 billion deficit. They paid back every single cent. It took them at least six years. They not only paid back every single cent; but along the way they also had to pay back $54 billion in interest. Then they put $40 billion in the Future Fund and they had the budget in a $20 billion surplus. That is what the Labor Party inherited, and they squandered it. We are now within striking distance of getting that budget back into balance.

There is a lot more that the government is doing to help small business in addition to this $20 million instant asset write-off. We're also investing $20 million to help small businesses form local and regional business hubs so that entities can work together and access new export markets and global supply chains. We're providing $17.7 million to support entrepreneurs—the drivers of the economy; the wealth creators—including mentoring support and a focus on those aged over 45 years. We should be doing that, because over 45 years of age should almost be the time when many people start their entrepreneurial career, because they have the experience—the life experience, the business experience—that can help them make important entrepreneurial decisions.

We're also protecting small businesses from businesses that deliberately go bust to avoid paying their bills, with tough new measures to counter illegal phoenixing. We are continuing to reduce red tape burdens across the small-business sector. We are launching FTA negotiations with the European Union. That's also another huge difference.

Many of these small businesses that can take advantage of the accelerated depreciation will be working in export markets, because we, on this side of the House, understand how important it is to give Australian businesses access to markets. We have confidence that, if they get access to the markets, then they can compete on that international playing field as well as any other business from any other nation in the world. This is in contrast to what we have seen from the Labor Party. During the free trade negotiations with Japan, we had the Leader of the Opposition bring up midget subs. That was his contribution to the debate, to bring up the midget sub attack on Sydney during World War II. During the China free trade agreement discussions, the opposition quoted xenophobic statements about how, somehow or other, we shouldn't be doing that with China. We've seen the success of those free trade agreements. We've seen them give thousands of businesses opportunities to increase their exports across all sectors of the economy, and that's why we're continuing those negotiations with the European Union.

We've also redefined 'small business' as a business with a turnover of up to $10 million, which now includes 99 per cent of all businesses. We've cut taxes for small and medium enterprises to 25 per cent and increased the unincorporated business discount to 16 per cent. I've already mentioned that we've extended the $20,000 instant asset write-off for another 12 months. And, importantly, we've abolished $5.8 billion worth of red tape—or I should more correctly say red and green tape—whereas the opposition want to tie businesses up, put more regulations on them and give them more forms to fill out, because the opposition think that form-filling is productive. (Time expired)

Mr COLEMAN (Banks—Assistant Minister for Finance) (18:06): I'm really pleased to have the opportunity to speak on this important legislation that is addressing this very important issue of accelerated depreciation for small business, which makes a huge difference for businesses right around Australia. I'm also pleased to have the opportunity to speak to some of the issues raised by the absurd amendment moved by the opposition in relation to company tax more generally, and to highlight the very real contrast between this government, which is about lower taxes and more jobs, and those opposite, who are about higher taxes and fewer jobs. This is a very important contrast.

I want to turn my attention to the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 that is before us. This bill is really important because, as you know, Mr Deputy Speaker Irons, in small business cash is king. If, as a small business, you are considering buying a capital item, then you've got to pay for it today. If you're going to buy a coffee machine or a bunch of computers or any other sort of capital item, you need to pay for it on the day. But the way the tax system works, you generally can't claim the cost of that expenditure immediately; you have to do that over a number of years. It can be three years or five years; it varies, but you can't claim that expense immediately. While you've got the cash going out the door today, the cost from the perspective of your tax accounting actually comes through over a number of years and effectively you're out of pocket in the short term in a cash sense. That's a really difficult problem for small businesses.

What this bill does is extend the accelerated depreciation for small business entities. What we say in this bill is that any incorporated business with turnover of up to $10 million will immediately be able to expense capital expenditures of up to $20,000. There are 3.3 million businesses around the nation who are affected by this, and those businesses will be able to go forward and invest with confidence, knowing that that capital purchase can immediately go through their account and that tax deduction for the cost associated with that expenditure will immediately return to them in the form of reduced tax on their next tax bill. That's a really, really important initiative, and it's absolutely tremendous that it's being extended for a further 12 months in this important bill.

This bill, of course, exists in this broader context of supporting businesses to go out there, to invest and to create jobs. We on this side of the House can speak on this issue with great authority, because in the last calendar year, 2017, more jobs were created than in any other year in Australian history. We can pick any year in the calendar in the nation's history and ask, 'Well, how many jobs were created?' Every single year will have fewer than 2017, with a huge 415,000 jobs created across this great nation in that year. A big part of the reason those jobs have been created is the pro-business and pro-investment policies of this government, and tax is an important element of those policies. Mr Deputy Speaker Irons, as you know, this government has moved very strongly to provide tax relief to businesses to ensure that they can invest, to ensure that they can compete and to ensure that they can put their best foot forward, go out there and create jobs.

But those opposite have done everything they can to oppose tax relief for Australian businesses. This isn't a theoretical thing; this isn't just what people like the Leader of the Opposition say on the daily news. This is about what they actually voted against. It's a very important point: this isn't theoretical; this is real. The opposition voted against tax relief for businesses with a turnover of $2 million or more. We hear those opposite talk about the 'big end of town' and multinationals. Those are favourite rhetorical devices for them. But they voted against tax relief for businesses with a turnover of $2 million. As you know, Mr Deputy Speaker, a business with turnover of $2 million is in fact a very modest-sized business. It may well be a small suburban manufacturer, it might be a distributor of goods in rural or regional areas or it might be a farm. But those opposite say that business shouldn't have any tax relief and that that business should pay one of the highest tax rates in the world, some 30 per cent. Again, that's what they voted for. It's very important that people understand this.

With the tax reductions that we've seen for those smaller businesses and that have filtered through into the economy—helping those businesses to be confident, helping them to invest and helping them to create good jobs—all of that good work happened despite the vehement opposition of those opposite. It's very important that the Australian people understand that for a small- or medium-sized business with $2 million in turnover or more, the policy of those opposite is to increase their tax. They voted against tax reductions for those businesses. They want to increase their taxes—that is their policy, and that is a shameful policy.

In contrast, we know that jobs are created by the private sector. The overwhelmingly vast majority of Australians work in the private sector. They benefit when their employers invest, because you can't work for a business that doesn't exist. You can work for businesses that are investing and you can work for businesses that are creating jobs. You can't work for a business that isn't out there investing. That's why it's so important that we support small- and medium-sized—and, indeed, larger—businesses to be competitive internationally.

Oxford university recently found that Australia ranked 27th of the 33 OECD nations they looked at, with one being the lowest tax rate and 33 being the highest. Australia ranked 27th in terms of the competitiveness of our corporate tax rate. We've seen very significant movements in the tax rate in countries like the United States and the United Kingdom, with tax rates going to less than 20 per cent. Corporate tax rates are less than 20 per cent in the UK and in the low 20s in the United States. Those opposite say: 'Oh, well, just leave the Australian tax rate at 30 per cent. It will make no difference.' That's what they say. It's an absurd argument, because it basically says that business does not respond to incentives to invest and that the cost of doing business is irrelevant to business. That's what those opposite say, and that's just an absurd argument. Anyone who thinks at the most basic level of common sense can appreciate the bankruptcy of the position of those opposite.

As I said, this isn't theoretical. They actually voted along these lines. They voted for it. They voted to say a business worth $2 million should pay 30 per cent tax. They did. It's a very inconvenient truth, but they voted to seek to ensure that a business with $2 million of turnover maintains a 30 per cent tax rate, which is one of the very highest in the world. That's what they think is good for Australia. It's very important to remember this. The member for Kingsford Smith, no doubt seeking to make some sort of contribution to the debate, moved this amendment, but it's pleasing in that it gives me the opportunity to reflect on the absolute failure of those opposite.

But that's not all. There's quite a bit more to talk about on this topic of tax and the failings of those opposite. They say that capital gains tax should go up by 50 per cent for everyone. The policy is called 'housing affordability', so that might make you think it's just about housing. It turns out it's not. It turns out it's actually about every form of investment in the entire Australian economy. So, in order to encourage investment and in order to encourage jobs, they say: increase tax on capital gains—50 per cent on everything!

Someone might say, 'I want to invest in getting a new factory off the ground,' maybe in suburban Perth, and they might seek some investment from people to get that factory off the ground so they can go out and employ 20 or 30 people to get that factory happening. What those opposite say is that the person who invests in that factory should pay 50 per cent more tax on their investment. That is just an absurd policy. This just shows the paucity of understanding of the most basic economic principles over there. If you want people to invest more—and we do want people to invest more because we want more jobs—you don't say to them, 'Well, hey, here's what we're going to do. We're going to make you pay 50 per cent more tax.' But that's what they've done.

I suspect that, when their so-called housing affordability policy came out, some of the members opposite didn't actually realise that the 50 per cent capital gains tax increase would apply to absolutely everything in the economy. But, if they have any confusion about that, they should consult with the shadow Treasurer, and he will confirm that their plan is to increase tax by 50 per cent. So, if you've got a small business in Braddon or in Longman, or perhaps you're involved in some sort of business in the Adelaide Hills, and you're seeking investment, it's very important that people understand that under those opposite those investors who come forward to invest in, to help that business, would pay 50 per cent more tax. It's an absolutely ridiculous policy!

We say less tax means more investment. We say that the money in the economy is not the property of the government. It is generated by the hard work of individuals. It is generated by the hard work of businesses all around Australia. It's their money. It is not the government's money. Now, of course, government must charge some tax in order to manage the operations of the government and provide those essential services upon which we rely, but it is not our money; it is their money. We must respect the fact that it is those individuals and businesses who have gone out there and created that economic activity. The last thing we should do—the last thing any sensible government would do—is seek to penalise those people who are going out there and investing and creating jobs by hitting them over the head with more and higher taxes. It's the wrong thing to do. Certainly, on this side of the House, we will never behave in that way.

The proof of the pudding is 415,000 jobs created last year—the greatest number of jobs in Australian history. Those opposite should be celebrating. They should be saying to the government, 'We will back your economic policies because they're working.' It's the logical thing to do, isn't it? If something is working, you do more of it. The economic policies of this government are very, very successful. We have very strong job creation, and that is great news because it means more opportunities for Australian families, more opportunities for people to pursue their dreams and a greater sense of wellbeing across our community. These are all very, very good things.

But Labor want to increase company taxes by $59 billion. They want to talk about the so-called 'big end of town' whilst they're hitting over the head basically everyone, even retirees who have done the right thing: they've worked hard, saved and put away for their retirement. Labor come along and say, 'Oh, gee, there's a very attractive pot of money over there with those retirees. How do we get that and how do we get it straightaway?' The retiree tax is not grandfathered. There's no phasing in. No—bang; it's straightaway, under those opposite. They will take billions and billions of dollars from the retirement savings of ordinary Australians who have done nothing wrong. They've played by the rules, they've worked hard, they've supported their families and they've put a little bit away for their retirement. The shadow Treasurer and the Leader of the Opposition want to come in and take billions and billions of dollars from those hardworking, ordinary Australians. You can see a massive contrast.

The member for Kingsford Smith, in his perhaps misguided enthusiasm, has invited us to talk about the big contrast on company tax and tax in general. We created a record number of jobs last year. A big part of that is our support for small business through tax relief. This bill will provide more tax relief. It's absolutely the right thing to do. I'm pleased to speak in support of the bill. (Time expired)

Mr HOWARTH (Petrie) (18:21): I'm really pleased to rise and speak on the Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018. I'm pleased to do it because it's part of our plan for jobs and growth. We know that our policies are working. We've seen record jobs growth in the last 12 months—some 420,000 jobs, in fact, throughout Australia over the last 12 months, with the vast majority of those being in small and family owned businesses. Funnily enough for senators and MPs on the other side of the House, most of those jobs have been created in businesses with a turnover of up to $50 million. Why is that so significant? Because that's where we've reduced company tax, in businesses up to $50 million. They are the ones who are employing people. They're the ones giving people a head start, a job and aspiration as they move from one job to another. What's really interesting as well is that today those opposite opposed $140 billion in income tax cuts. They want to make sure that Australians don't keep their own money. They want to actually take more of your money—your hard-earned income tax. They don't want to pass that through the Senate, and it's an absolute shame. We know that hardworking Australians do extremely well.

We talked a little bit today about aspiration. The Deputy Leader opposite said she has no idea what that means or what it is, or she has no aspiration. The fact is that I know people who were earning $40,000 about six years ago and now they're on well over $80,000. Other people I know were on $90,000 and are now on over a couple of hundred thousand dollars. So aspiration is a good thing for everyone. For every young person in this country, for everyone who wants to get ahead, for everyone who has a goal or a dream, this is important. That's why we're eliminating bracket creep and providing aspiration to the people who want to do it. The Labor Party stand opposed to it because we know that, heading to the next election in next 10 months, they're for higher taxes and we're for lower taxes; they're for more spending of your money and taxing you more and we're for better management of your money and want to see the economy come back to surplus next year.

In relation to this bill in particular and company tax, we also know that small businesses aren't just businesses under $2 million, like those opposite would have you believe. It's an absolute fantasy. They need to get out in the real world. This bill will apply to all businesses earning up to $10 million. I want to say to the businesses in my electorate: you've got a great opportunity in the next week and a half. Go grab it. Before 30 June, next Saturday, you've got the opportunity to buy products—and it can be any product you like—up to $20,000 and you can instantly write it off this financial year, rather than having your accountant depreciate it over three, four or five years, or whatever is applicable. This is a good measure that was extended in this year's budget, so it will go next year as well. The Treasurer put it forward, and I'm very pleased to support it. But businesses should take advantage of it in the next week and a half.

There are lots of opportunities for businesses in my electorate and, I'm sure, in every member's electorate to take advantage of this measure. In my electorate, I have some fantastic artists. I have a lady called Jo St Baker. She is an individual artist who runs a business out of Mon Komo Hotel in Redcliffe. She does some fantastic artwork in relation to the local environment, the local seaside of the Redcliffe Peninsula. She has pieces from a couple of hundred dollars up to a few thousand. You might find that a business has just fitted out their office and they want a new piece of artwork for their front foyer. They can go down and see Jo St Baker and pick up a piece and instantly write that off this year, which is important.

There's a lady called Sharron Tancred, from Tailored Artworks. Sharron is a lovely lady and does some fantastic work. She's a really good networker. She lives just over in Murrumba Downs and goes to the North Lakes Chamber of Commerce. Tailored Artworks customises artworks and transforms spaces. A business might put in a new kitchen—we'll get to new kitchens in a moment—that has a splashback and they want to create a special art piece for it. They will be able to take advantage of the instant asset tax write-off, if Sharron can get it done within the next week and a half. I imagine she would be pretty busy.

If you're a business and you need a new kitchen, people like Kingswood Cabinets at Narangba in my electorate have a whole range of different kitchen products for a few thousand dollars. Not only will you be able to give business to them and instantly write it off this year; you will also be able to give the local carpenter or installers some work, which is important as well.

Businesses may be after a new car or a second-hand car. They could go and see Village Motors at North Lakes or Jeep and VW down near Redcliffe at Kippa-Ring. There are a whole load of car dealers in my electorate. There's Mazda at Aspley as well. People may be able to pick up a new vehicle for under $20,000—a small single-cab petrol ute—or a second-hand vehicle. They've got a week and a half to do so and take advantage of the instant asset tax write-off. Not only that, they can whack a new bull bar on the front. In my electorate, there's East Coast Bullbars at Clontarf, and also Ultimate Bullbars at Narangba, who make custom bull bars. I'm very fond of what East Coast Bullbars do in particular, because they employ over 100 people. They make the best world's alloy bull bars right in the Petrie electorate. So people can once again take advantage of the instant asset tax write-off.

Remember, if this wasn't extended, businesses buying these products would have to depreciate them over seven years. For the member for Kennedy, these are Australian made and manufactured bull bars; they are made right here in my electorate. I know he is always on about manufacturing. He should be jumping for joy on this one. We've also got Kennedy's Timbers at Narangba, which sell a whole lot of recycled timber, which is fantastic. If a business is looking to do up their foyer with some new timber, they could take advantage of that.

You can also buy new computers, new servers or new monitors, perhaps from one of the Harvey Norman stores or from an individual small business that sells computers in my electorate. You may want to reward the staff and get them a new coffee machine. I have a great coffee roaster in my electorate, Neli Coffee at Clontarf, that also sell machines. If you want to buy a coffee machine for $1,500, rather than depreciating it over a few years, you can instantly write that off in the next week and a half. Because the government has a plan for small business, it will be extended next year as well.

Another good manufacturer in my electorate is Polyworld at Clontarf. They sell all types of water tanks. If you want to get a water tank for your business—you may be using a lot of water—you can hook it up to the roof, catch some of that water and use it in your business. You will not only be providing some work for Polyworld but also for those individual plumbers that will install it for you.

We know businesses are very sensitive with energy prices at the moment. Energy prices are a real issue. I've spoken on this. We need to make sure that we have reliable, affordable energy, as well as renewable energy. We need to make sure that we adopt the government's RET and not go to the reckless 50 per cent renewable target of those opposite, which will continue to send prices up. When those opposite were in government, energy prices doubled for businesses in my electorate. You might want to take advantage of Springers Solar or Sunelec in Clontarf, local businesses who sell solar. They can put it on your roof. If you are a business, I would encourage you to take advantage of that now. Most businesses operate between 8 or 9 am and 5 pm—I know the days are a bit short in winter. That is the perfect place to install solar because, as you are producing it, you can use it at the same time. Don't worry about selling it back into the grid; just use it as you create it.

There are a whole range of businesses in my electorate where people can take advantage of the instant asset tax write-off. I am very pleased to support this bill. I know that it is creating jobs. It is part of the government's plan. Once again, I go back to the 420,000 jobs created in the last 12 months. This stuff doesn't just happen by accident; it was a detailed plan in relation to jobs and economic growth that centred around business tax cuts. We have seen the advantage in cutting company tax for businesses up to $50 million. Again, that is where the jobs are being created. The instant asset tax write-off is benefiting businesses as well.

Free trade agreements have also been beneficial. Moreton Bay Seafoods in my electorate sells prawns and so forth into China. They have been able to take advantage of that, which is really important. In defence manufacturing, I am very pleased that the government will be building the Land 400 project at Ipswich. That is good news for Queensland, and there are businesses in my electorate that will be able to take advantage of the supply chain as well.

We have also seen the free trade agreements helping in agriculture. A lot of people in my electorate really care about farming. We have seen some boosts to agriculture because of free trade agreements as well. Our plan around defence manufacturing, our plan around free trade agreements in agriculture and our plan around business tax cuts are all producing jobs and economic growth. The more economic growth we get, the more income tax and company tax we have. That's why next year we will be balancing the budget.

That is all at risk if the Labor Party is elected. We know they are reckless. We know they don't understand small businesses. If they did, they would certainly be supporting the instant asset tax write-off for businesses up to $10 million. It is outrageous that they think only businesses under $2 million should take advantage of this opportunity. This is good policy. I support the bill.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (18:33): In summing up, it is wonderful to follow the member for Petrie's very eloquent contribution and I want to thank all other members for their contribution to the debate on this bill. With 3.3 million small businesses employing 5.7 million Australian workers, the small business sector contributes in many important ways to every single town, community and city and to the entire country. The government is committed to continuing to back these Australian businesses. We have legislated tax cuts as part of our 10-year enterprise tax plan to reduce their tax bill. The government has increased the unincorporated small business tax discount and lifted the small business entity turnover threshold, very importantly, to $10 million. By backing these small businesses, they can invest more, grow more, employ more Australians and, ultimately, pay higher wages.

In contrast, the opposition, sadly, doesn't have a plan for a stronger economy and delivering jobs. At every opportunity, they seek to attack these small businesses who are, in the end, the engine room of job creation in our economy more broadly. We know that the Labor Party used to believe in competitive company tax rates. The Leader of the Opposition, as the Minister for Financial Services when Labor was last in government, said in March 2012: 'Any student of Australian business and economic history knows that part of Australia's success was derived through the reduction in the company tax rate. We need to be able to make life easier for Australian business, which employs two in every three Australians.' He was dead right. In 2013, the shadow Treasury spokesperson also wanted to cut the company tax rate, saying: 'It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.' But that is unbelievable. The Labor thing, in the end, is not about reducing company taxes but playing politics, and this is a very, very sad class-envy approach. The problem is that because Labor can't control their spending, they won't commit to a speed limit on taxes, and this is a recipe for higher and higher taxes that in the end we know will suffocate our economy, as the Treasurer has often said, just like a snake eating its tail.

In contrast, we have a plan for a stronger economy and we have a plan to guarantee the essentials and deliver tax relief. This bill is part of a suite of measures that the government's taking to deliver on our plan for a stronger economy by backing small business. The bill will extend the instant asset write-off for a further 12 months, to 30 June 2019. It will also allow immediate deductibility for assets below the $20,000 threshold. Extending this $20,000 instant asset write-off means we're continuing to help small businesses reinvest in their business and replace or upgrade their assets, making their business, in many cases, more efficient and more productive. Small businesses with annual turnover less than $10 million will be able to immediately deduct purchases of eligible assets which cost less than $20,000, with the requirement that they are first used or installed and ready for use by 30 June 2019. Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent in each income year thereafter.

The $20,000 instant asset write-off is a phenomenally successful initiative that is supported by the small business sector. The extension of this measure benefits hardworking Australian small businesses, boosting their activity and their investment for another year. In this sense, the government has a plan for a stronger economy and a plan to enable and encourage small businesses to contribute to that and to keep business competitive, which grows jobs and grows wages as well. I therefore commend this bill to the House.

The SPEAKER: The original question was that this bill be read a second time. To this the honourable member for Kingsford Smith has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The question is that the amendment moved by the member for Kingsford Smith be agreed to.

The House divided. [18:42]

(The Speaker—Hon. Tony Smith)

The division was unavailable at the time of publishing.

Question negatived.

Original question agreed to.

Bill read a second time.

Mr BANDT (Melbourne) (18:48): by leave—I move amendments (1) to (6) together:

Text of amendments not available at time of publishing

We should give extra support to businesses wanting to cut pollution. One of the best ways that businesses can take steps to cut pollution is by investing in new assets, and one of the best ways that parliament can support that is by giving targeted tax breaks to industries and businesses that decide to do that.

This series of amendments does two things. One is that it extends up to $30,000 the amount of expenditure that a business can invest in their capital to be entitled to get the write-off. The second thing it does is to make it permanent. So we're not just dealing with a year-by-year potential instant asset write-off; we're dealing with something that businesses now know will be there in perpetuity.

The measures that have been announced and legislated so far, and that have been in place for some time, certainly have the support of the Greens. One of the reasons we've supported that is we know it enables investment in renewable energy technology by businesses, and also in some areas of energy efficiency. The Smart Energy Council, for example, has been rightly promoting the availability of the write-off to enable the investment in some forms of generation of renewable energy.

One of the challenges we've got in this country at the moment is that the government does not have a policy to reduce emissions in industry. We used to have a policy that would do that. We used to have a carbon price that applied across the economy. We used to have funds that were established precisely to support businesses that wanted to invest in products or new equipment that would reduce the amount of energy that they used. This government got rid of all of that. The problem is that it's put nothing in its place—absolutely nothing. When you have stationary energy, excluding electricity, accounting for about 18 per cent of Australia's pollution, and industrial processes accounting for about another seven per cent, you've got up to 25 per cent of Australia's pollution, currently without any meaningful policy to reduce it. But you've got many businesses in that sector wanting to do the right thing. There is a lot of opportunity in that sector, if we had some policy, to actually start bringing down our pollution and reducing the power bills of businesses in that sector.

One of the things that we need to start encouraging our businesses to do is fuel switching. There is ample opportunity for many businesses to switch off gas and onto electricity, and if we then make our electricity powered by renewables, that will reduce Australia's pollution. Some good work has been done on this front by government agencies, including ARENA, that shows many businesses currently use gas not even as a feed stock; they use gas for low-temperature industrial processes where you could substitute electricity. They might use it to create steam, for example, as part of their industrial processes. If we could get people off gas and onto electricity, and if we could make that electricity more renewable, then we could help bring down pollution in this country.

We also know that a lot of businesses are increasingly seeing power bills going through the roof and wanting to take steps themselves to bring down their power bills through energy efficiency. It might not be fuel switching from gas to electricity; it might be straight energy efficiency measures. We should actively take steps to encourage those businesses that want to do that. That's why these amendments would extend the amount that a business is able to claim if they want to invest in energy efficiency measures and make that deduction available to them permanently.

I'll say this in conclusion: the Greens do not support giving an across-the-board company tax cut. That is not the right way to go, especially because we know that a big chunk of the money from that company tax cut is going to flow overseas and is not going to do anything to grow the Australian economy. What we do support is targeted tax incentives, which is why we've supported the R&D tax incentive over many years, and why we're now proposing that we should extend a series of measured tax incentives to those businesses that are wanting to take active steps to reduce their pollution by investing in new capital equipment for things like fuel switching or energy efficiency. That is a much better way to stimulate the economy and support the growth of a clean economy without the additional, unnecessary and unfair cost of an across-the-board corporate tax cut.

Question negatived.

Bill agreed to.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (18:54): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr BOWEN (McMahon) (18:55): The Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 includes four measures: a one-off 12-month superannuation guarantee amnesty to encourage employers who have not paid their employees the SG to do so; allowing employees who have multiple employers to apply to the tax commissioner for an exemption certificate from the SG for one or more of their employees, so as to avoid breaching the concessional contributions cap; ensuring that the non-arm's-length income rules for superannuation entities apply in situations where the superannuation entity incurs non-arm's-length expenses in gaining or producing the income; and amending the total superannuation balance rules to prevent self-managed super fund members from being able to use limited recourse borrowing arrangements to circumvent the $1.6 million transfer balance cap and the unused concessional carry forward rules.

We have no problem with three out of the four measures contained in this bill and have no problem supporting those measures through both houses. Avoiding a breach of the concessional contributions cap, the non-arm's-length income rules and the limited recourse borrowing arrangement changes are sensible provisions and we support them. But we have a very fundamental problem with the first measure—the amnesty for employers who have not paid their workers the superannuation guarantee.

Let me be very clear: superannuation is the member's money; it is the employee's money. Superannuation is a condition of employment. It is part of an individual's remuneration. Not paying the superannuation guarantee is wages theft. Not paying the superannuation guarantee is theft from your employees. It should not be provided with an amnesty. If anything, it should be provided with greater penalties for noncompliance. This amnesty would be a penalty holiday for people who had not provided the superannuation guarantee for up to 25 years. Somebody who has never paid the superannuation guarantee to their employees would be able to benefit from this amnesty. This is a serious problem.

There have been various mechanisms to look at this problem. There was a Senate Economics Committee inquiry into superannuation guarantee nonpayment. It made a series of recommendations—some of which the government supports and some of which we support, but most of which were good-faith sensible recommendations. What was not recommended was an amnesty. At no point did the Senate committee recommend an amnesty. The Turnbull government's own Superannuation Guarantee Cross-Agency Working Group did not recommend an amnesty.

This government is making changes that will mean that an employer could have kept superannuation entitlements from an employee for more than 25 years and now will not face any penalty at all if they pay it back. Usually when an employer does not does not meet their superannuation guarantee requirements—and it is found that they have not paid it; it's reported—there are two things that happen: a superannuation guarantee charge is levied, and that is not tax deductible if the superannuation guarantee charge is levied in that circumstance; and additional penalties of up to 200 per cent of the amount of the superannuation guarantee charge can be levied. The government's proposed amnesty will have the effect that the employer in question will be able to claim a tax deduction for the superannuation guarantee charge and avoid penalties. So they are going to make it tax deductible and take the penalties away. Honourable members might recall that we asked the Prime Minister about this in question time a few weeks ago. It was quite clear that the Prime Minister had absolutely no idea what we were talking about. He was unaware that this was his government's policy. It was one of the more embarrassing question times. Although today might have surpassed it, it was a pretty embarrassing question time for the Prime Minister.

We have a fundamental issue with this. I would say that over my 14 years in this House I would have seen—as many honourable members certainly on this side of the House would have seen—scores of people who have not been paid their superannuation guarantee and who have been at their wits' end about how to get their employer to pay their superannuation guarantee. You work with those people and you refer them to the tax office. A lot of women are affected by this in lower-paid, precarious employment, and employers think that they have the whip hand over those employees and that they don't have to pay the superannuation guarantee. It is a big problem. We're not talking about a few people. The Productivity Commission's draft report on superannuation estimates that, conservatively, there is $2.8 billion a year in unpaid superannuation. They did a model simulation of somebody aged between 21 and 25 whose employer did not pay 50 per cent of contributions and would have a retirement balance of $63,000 less than somebody who got all of their contributions, and, if they didn't get any of their contributions at all, they'd be self-evidently close to $120,000 behind. What we do not believe is that an amnesty is an appropriate way to deal with this issue.

If an employer has legitimate reasons, if an employer has made a very legitimate administrative mistake—there's been a natural disaster and their systems have been affected in some way—then, of course, people would understand, but not when an employer has knowingly engaged in theft from their employees and has knowingly engaged in noncompliance with the law of the land. This parliament legislated that the superannuation guarantee should be universal and compulsory, and 'universal and compulsory' means it should be paid to everyone. It's not an option. There are certain workplace conditions in this country which are not optional anymore. Workplace health and safety rules used to be optional. This parliament and state parliaments have improved working conditions. Working hours are regulated; conditions are regulated; there are obligations on employers and employees. You don't pick and choose. It's not a smorgasbord of what you're going to comply with or not going to comply with.

The government could look at the issue of superannuation guarantee noncompliance and say, 'Well, we could increase penalties, we could look at the Senate committee recommendations and we could look at the recommendations of our own working group. We could do all of those sensible things. We could engage with the opposition and we might get a bit of bipartisanship. This is a very serious issue and the opposition are very interested in working with people, with goodwill, across the board to try to fix it. We could do all of those things.' But, no, what does the government do? With no warning, with no indication of any consultation with anybody—certainly no public consultation—and with no process of draft legislation, they simply say, 'We're going to let people off. We're not going to enforce the law of the land.' It's been the law of the land for 25 years. 'We're not going to require employers to pay the superannuation guarantee of their employees. If they haven't, we're going to provide them with a penalty holiday. We're going to make it tax deductible and we're going to waive the penalties.'

This is, frankly, appalling. This is just an appalling piece of legislation. This legislation is an affront. It's an affront to the House and it's an affront to the hardworking Australians who deserve a dignified retirement. We are not talking about luxury; we are talking about people, often on low incomes, who, the parliament decided, under a Labor government, deserved a dignified retirement by having some money put aside for them from every pay packet for their future retirement, and it was legislated. I recognise and accept that the Liberal and National parties opposed that legislation. They opposed compulsory universal superannuation. They argued against it. They said it was a con job. They said we shouldn't have dignified retirement. They said superannuation should be kept the preserve of the few. That's what they argued when the Keating government legislated for compulsory universal superannuation. They made that argument and they lost, and it has been the law of the land for 25 years, like it or not.

The parliament should be saying to everybody, 'If you breach the law, there's a consequence. If this parliament passes a law, we expect it to be complied with.' That's how the system is meant to work. You can't pick and choose which laws you comply with. This is a government who say they're tough on law and order. They lecture us about the people they don't like and how we should be tough on unions and they hold royal commissions, but, if you have an employer who's not complying with the law and is ripping off employees, that's okay—'We're going to let them off.' Well, it's not okay and it won't be okay if we have anything to say about it in this House or the other House. We don't think that this should be the law of the land—that all of a sudden it's optional as to whether you comply with the superannuation guarantee. There is a difference of approach here. The Andrews government in Victoria has announced that it will criminalise wage theft. The Foley opposition in New South Wales have announced that, if they're elected, they will criminalise wage theft in New South Wales. Yet this government says superannuation theft is just fine. Just fine. No penalties. No reason to comply with the law. Don't worry about it.

This amnesty applies for 12 months, but it applies retrospectively for 25 years. What's to say that, when this 12-month period is over, the government's not going to do this again in a few years time? This legislation sends all the wrong signals about the importance of the superannuation guarantee. It sends all the wrong signals about all the wrong priorities of this government. I move:

The motion was unavailable at the time of publishing.

The final point refers to an announcement that the Leader of the Opposition and I made some time ago, that we would actually implement the recommendations of the Murray inquiry into limited recourse borrowing in relation to self-managed superannuation funds. There are some measures in this bill that we support, but the government should go further. They should accept the recommendations of their own inquiry, the Murray inquiry into financial system, as well. I can feel that the honourable gentleman here, the member for Scullin, is very keen to second the amendment. I commend the amendment to the House, and I hope the government sees sense and actually thinks that the law of the land should be complied with, implemented and policed.

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

Mr Giles: I'm very pleased to second the amendment, and I reserve my speaking rights.

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

Mr TED O'BRIEN (Fairfax) (19:07): The Turnbull government is committed to the financial security of all Australians. This was acutely evident in 2018 budget handed down last month, a budget that builds on a strong economy—an economy now in its 27th consecutive growth year. It's a budget that supports Australian businesses to grow and capitalise on global growth. Global growth is now the fastest in six years. It's a budget that continues to create jobs, to build on last year's average of 1,100 extra jobs every single day. This is a budget that plans for the future and the future prosperity of all Australians.

An essential part of that planning is to ensure all Australians have adequate retirement savings courtesy of our superannuation system, a fair superannuation system with reliable measures and enforcement regimes to protect the hard-earned savings of all Australians—measures such as placing a cap on superannuation account fees and a ban on exit fees; changing life insurance in superannuation from being a default option to an opt-in option for those who have low balances or have not received a recent contribution, or those under the age of 25; giving the ATO greater powers to consolidate lost superannuation accounts into active accounts; and compelling superannuation funds to provide more information to help consumers compare and choose products that best suit their needs.

The Turnbull government is introducing a suite of measures to further protect our hard-earned savings and help ensure that all workers get their full superannuation guarantee entitlements, and this bill does just that. Firstly—and this is important—this government will provide a 12-month superannuation guarantee amnesty for employers to voluntarily come forward to remedy historical nonpayment of their workers' superannuation. Those who fess up, those who cop it on the chin, those who voluntarily come forward and make good on historical nonpayments will not face the usual penalties. But here's the kicker: if they miss their chance, those employers who do not fess up will be found out and will face higher penalties.

It is expected that $230 million in retirement savings will be recouped for some 50,000 hardworking Australians under this superannuation guarantee amnesty. Some will argue, including the opposition—and we've heard it already from the shadow Treasurer—that this measure is in some way weakening penalties for noncompliance. Nothing could be further from the truth. How the shadow Treasurer, how the Labor Party, how the union movement could stand in the way of 50,000 Australians recouping their own hard-earned savings is beyond belief. There is no weakening. This is simply an incentive for employers to come forward voluntarily to pay all historical entitlements, with interest, in full, to employees.

This measure will deliver a real difference to the savings, financial security and retirement plans of at least 50,000 Australians who would otherwise miss out on a combined $230 million in superannuation entitlements if it were not for the amnesty proposed by this bill. Any suggestion, as the shadow Treasurer implied, that this is letting employers off the hook is patently untrue and wrong. Employers will only get the benefit of the amnesty if they pay their employees' entitlements in full and with interest and if they voluntarily disclose their noncompliance—that is, they aren't already under investigation by the ATO. Here we have $230 million that can be given back to those people, those 50,000 hardworking Australians, who have actually earned it for their savings, and who stands in the way right now? The Labor Party and the union movement. The very people who purport to represent hardworking Australians are the ones standing in the way of $230 million being returned. It's an absolute disgrace.

Secondly, this bill recognises that some employees may inadvertently breach their concessional contributions caps when they have multiple employers contributing to their superannuation. This bill streamlines the process and allows employees to opt out of the superannuation guarantee system by applying to the ATO for an exemption certificate to avoid such breaches. Once an exemption has been granted, employees can negotiate higher take-home pay in lieu of these contributions, if they so wish. Once again, this measure will provide a practical solution to a very real problem and, thereby, make a real difference to the financial security of Australians.

Thirdly, this bill protects the integrity of the 2016 superannuation taxation reform package. I remind the House that this package was supported by the opposition. The changes before us today will ensure that super funds cannot evade contribution caps by using non-arm's-length expenditure to enhance their total income. This bill also ensures that limited recourse borrowing arrangements aren't used inappropriately to access concessional cap carry-forward arrangements, or to circumvent caps on non-concessional contributions. These measures improve confidence in the system and ensure it is fair, equitable and used for its core purpose: to provide income security in retirement, whatever one's circumstances.

Those opposite don't have a good track record when it comes to the security of Australians' retirement savings. I do not need to remind the House, or the Australian people for that matter, of Labor's plans to abolish dividend imputation credits and increase capital gains tax as part of their so-called tax plan. As the Institute of Public Affairs astutely points out:

All 15 million prospective retirees who hold a superannuation account stand to be affected.

My electorate office has been contacted by hundreds of constituents, many elderly and meagre of means, all worried about their retirement savings and superannuation balances should Labor ever win government. Some of them were in fact traditional Labor voters, many of whom were pained to concede that the Labor Party had no idea of what it was doing. We know those opposite are very keen to immediately raise the superannuation guarantee rate in a historic low-wage-growth environment, even in the face of warning of their own so-called experts—the Grattan Institute, for example—that it would affect the retirement savings of Australians, particularly low-paid workers. In fact, under a Labor government, the superannuation guarantee rate was projected to increase to 11½ per cent at the end of this month.

And who pays for these increases? The employees pay for these increases with less take-home pay. There is less disposable income for workers—that's what Labor delivers, and Labor knows that. I really believe those opposite understand that their tax plan is going to adversely impact hardworking Australians. But they were happy, and they remain happy, to see that happen. The Leader of the Opposition knows that all too well himself, because he admitted it back when he was Minister for Financial Services and Superannuation, during an interview with Neil Mitchell on 3AW in 2012. Neil Mitchell says:

Okay. So you're saying that the superannuation increases will be paid for by absorbing money out of the wage increases.

Bill Shorten, member for Maribyrnong, says:

That's the evidence.

Neil Mitchell says:

So I won't get a wage—I won't get any more in my back pocket. It will go into super, right?

Labor simply cannot be trusted with the retirement savings of Australians. Even rusted-on Labor voters in my electorate of Fairfax are waking up to that. Labor simply can't be trusted to manage the economy, let alone look after older Australians.

The measures before us today, as outlined in this bill, provide for a stronger, fairer and more equitable superannuation system—a system that is sustainable and better aligned to its core purpose as a reliable, long-term investment and savings regime that gives Australians a secure retirement. And to that end, I commend the bill to the House.

Mr THISTLETHWAITE (Kingsford Smith) (19:18): This bill, the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018, includes four measures. The first is the one-off 12-month superannuation guarantee amnesty to encourage those employers who haven't paid their employee super to do so. The second allows employees who have multiple employers to apply to the tax commissioner for an exemption certificate from the SG from one or more of their employers. This helps to avoid breaching the concessional contributions cap. The third ensures that non-arms-length income rules for superannuation entities apply in situations where a superannuation entity incurs more arms-length expenses in gaining or producing the income. And the fourth amends the total superannuation balance rules to prevent self-managed super fund members being able to use limited recourse borrowing arrangements to circumvent the $1.6 million transfer balance cap and the unused concessional cap carry-forward rules.

The three latter amendments have merit, but Labor is certainly opposed to the first principle in this legislation of providing an amnesty for employers who have not been paying their workers the superannuation guarantee. It is clear that what the government is doing with this is basically letting dodgy employers off the hook from prosecution for breaking the law. There is a well-enshrined law in Australia that has been in place for the last 25 years that says employers are obliged to pay superannuation once they're above certain thresholds. And this government now wants to give those employers who have been breaking the law a free pass. You can get away with breaking the law under a Turnbull government because they'll give you an amnesty for it in respect of not paying superannuation.

It shouldn't be a surprise that this government has consistently supported big business and corporations over workers, which is what they're again doing with this particular aspect of this legislation. The fact is that this government is more concerned with the ideology of removing regulations on big businesses and giving handouts to big businesses through their corporate tax cuts than actually ensuring that people are paid properly, that people are paid legally, as they should be, under legislation. Instead of cracking down on bosses who have clearly done the wrong thing, the government is handing out leave passes. It wants to give employers who have not paid superannuation to their employees for 25 years a penalty holiday—that's right, 25 years, a quarter of a century. So you can be an employer who hasn't paid your employees' superannuation for the last quarter of a century and you will get away with it under this government. Imagine if the average taxpayer or the average small businessman didn't pay tax for a quarter of a century and then just rocked up to the Australian tax office and said: 'They're letting the employers off from paying superannuation. How about you give me a break. I'm not going to pay back any of the tax that I haven't paid to the government over the course of the last 25 years.' You would be laughed out of town—and so you should be.

But when it comes to superannuation, those bosses who haven't been paying superannuation for the last quarter of a century will get a break and be free from prosecution. That says everything about this government's approach to big business and their approach to superannuation. We all know that they've never really supported superannuation. They don't believe in the philosophy of compulsory superannuation contributions. They certainly don't believe in industry funds. At every opportunity they reduce the number of people who pay into industry funds and reduce the mechanisms to put people into industry funds. They oppose them. Superannuation theft is as bad as wages theft—and it is illegal. Why should dodgy employers get away with stealing hard-earned money from their employees? Why should employers who have ripped off their workers be given a tax break when the Australian average worker or small business isn't when it comes to paying their fair share of taxes?

This government just can't help themselves when it comes to giving more to business at the expense of Australian workers. And it is a common theme. For too long they ignored Labor's push for a royal commission into the banking industry. Their history on this has already been written. The evidence shows that the Turnbull government continues to get this and other big calls wrong when it comes to financial services regulation and acting in the interests of workers, families and small businesses. They even shut down calls to action on a royal commission from their own backbench. Calls to action from the likes of Senator Williams have been coming from their party room for many years. For 600 days they said there was no need for a royal commission. Given the evidence that has been given before the royal commission so far, Labor has been completely vindicated in our calls for a royal commission.

And here we are with an amnesty for dodgy employers, a surprise announcement that was made without consultation. It came completely out of left field with not a mention at all to the industry, to workers or, indeed, to the opposition. There was no mention of it in the budget. It was presumably a decision that was taken but not yet announced.

There are no recent parliamentary reports into unpaid super that actually recommend such a measure. The superannuation guarantee amnesty wasn't recommended by the Senate Economics Committee when they looked at superannuation and nonpayment. They conducted an inquiry into this, and they didn't even recommend it. Neither was it recommended by the government's own superannuation cross-agency working group, and recent reports of the announcement on the amnesty was a surprise even to the industry—peak organisations like the Association of Superannuation Funds of Australia, ASFA, the Financial Services Council or Industry Super Australia.

It is clear that the Turnbull government decided this at the last minute. It was decided by the minister as another break for big businesses that haven't been paying the right amount of superannuation for their employees. They didn't even bother to consult with key stakeholders in the industry. They will always place ideology above effective policy.

Usually, when employers don't meet their superannuation guarantee obligations, they can be liable for penalties and charges: the SG charge, comprised of the SG shortfall, nominal interest and a $20 per employee per quarter administrative component. Penalties can be up to 200 per cent of the amount of superannuation guarantee charge that is not paid.

There are general interest charges where the SG charge or penalties are not paid by the due date. Under the government's proposed amnesty, the administrative component of the SG charge and the penalties would be waived as well. Even worse, the SG charge and contributions offset against the SG charge would become tax deductible for employers, so dodgy employers get a tax break for doing the wrong thing. Yes, it's another unfair, undeserved tax handout from this government to large corporations.

The Prime Minister is out of touch. You've got to laugh at the hypocrisy of the Prime Minister coming in here and saying that Labor has been out of touch when it comes to economic policy and tax policy. We are the ones opposing the big tax cut for large companies, which is overwhelmingly opposed by the Australian public, particularly Australian workers, who haven't been getting wage increases for the last decade, really. They can see that it's unfair to be handing out a tax cut for big businesses. Only someone as out of touch as the Prime Minister would be seriously suggesting a reform such as this.

Businesses who do the wrong thing and steal from workers should pay the price for their misconduct, not get another tax handout from this government. When employees steal from employers, they rightfully have the book thrown at them and they are prosecuted. Why is it one rule for businesses and another rule for workers? The government is really saying that it's okay to steal from workers but it's not okay for employees to steal from their bosses—as it shouldn't be; no worker should ever steal from their boss. But this government is going to allow employers to steal from their workers.

Unpaid super is a massive problem across Australia. Recent estimates point to 2.4 million workers losing about $5.6 billion in superannuation payments each year. That's equal to those workers losing $2,000 per year; that's money that should be going into their retirement savings. Superannuation is part of a worker's pay and conditions and every worker deserves the right to superannuation that they are entitled to.

I just wish to finish with some final comments about the limited recourse borrowing arrangements. Schedule 4 of the bill amends the total superannuation balance rules that were introduced as part of the government's 2016 super reforms. The changes in schedule 4 are integrity measures to ensure that—in certain circumstances, involving LRBAs—the total value of a superannuation fund's assets is taken into account in working out individual members' superannuation balances.

Let's not forget that in 2014 the Financial System Inquiry recommended that super funds not be permitted to use LRBAs at all. They observed:

Further growth in superannuation funds' direct borrowing would, over time, increase risk in the financial system.

So, unfortunately, the government rejected that inquiry recommendation. Labor announced that we would prohibit this, as part of our housing affordability. This will prevent the unnecessary build-up of risk in Australia's superannuation industry. Labor created superannuation and will always defend it, and that's why we support the three other measures in this bill but we can't support the measure which allows wages theft from employees.