The SPEAKER (09:31): I present report No. 10 of the Selection Committee relating to the consideration of committee and delegation business and private members' business on Monday 10 February 2020 and the consideration of bills. The report will be printed in the Hansard for today and the committee's determinations will appear on tomorrow's Notice Paper. Copies of the report have been placed on the table.

The report read as follows—

Report relating to the consideration of committee and delegation business and of private Members' business and relating to the consideration of bills introduced 2 December 2019 to 5 December 2019

1. The committee met in private session on Tuesday, 4 February 2020.

2. The Committee deliberated on items of committee and delegation business that had been notified, private Members' business items listed on the Notice Paper and notices lodged on Tuesday, 4 February 2020, and determined the order of precedence and times on Monday, 10 February 2020, as follows:

Items for Federation Chamber (4.45 pm to 7.30 pm)

PRIVATE MEMBERS' BUSINESS

Notices

1   Mr Georganas: To move:

That the House:

(1) notes with great concern:

(a) Turkey's military operation targeting Kurds in northern Syria;

(b) Turkey's actions which are causing further destabilisation in the region, worsening the humanitarian disaster in Syria, and risk undermining progress against ISIS;

(c) evidence that innocent civilians are being killed and injured by Turkey's military operations and forces associated with Turkey in Syria;

(d) reports of possible war crimes being committed by forces associated with Turkey; and

(e) reports of Turkish intentions to resettle refugees from Turkey into Northern Syria outside of UN-sponsored mechanisms;

(2) recognises that the Kurdish forces in Syria have:

(a) been instrumental in fighting Daesh as an ally of the Global Coalition to Defeat Daesh/ISIS; and

(b) lost over 10,000 fighters in the fight against Daesh in Syria; and

(3) calls on the Government to:

(a) urge Turkey to cease its unilateral military operations in Syria; and

(b) support international efforts to hold Turkey to account for its actions.

   (Notice given 28 November 2019.)

Time allotted—40 minutes.

Speech time limits—

Mr Georganas—5 minutes.

Other Members—5 minutes each.

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

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

2   Mr Connelly: To move:

That this House:

(1) recognises:

(a) that society is more connected online than ever before in history; and

(b) the importance of keeping Australians safe online; and

(2) notes that:

(a) the Government established the world's first Children's eSafety Commissioner in 2015, and expanded this role to cover all Australians in 2017;

(b) in 2018 the Office of the eSafety Commissioner undertook research to examine some of the challenges faced by young people aged 8 to 17 in Australia online; and

(c) this research indicated that:

(i) 25 per cent of young people have been contacted by strangers/someone they did not know;

(ii) 13 per cent of young people reported receiving repeated unwanted· online messages from someone; and

(iii) 13 per cent of young people reported having lies or rumours spread about them;

(3) further notes the bipartisan support for the work of the Office of the eSafety Commissioner; and

(4) congratulates the Government for this world first initiative.

   (Notice given 15 October 2019.)

Time allotted—45 minutes.

Speech time limits—

Mr Connelly—10 minutes.

Next Member speaking—5 minutes.

Other Members—5 minutes each.

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

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

3   Mr Gorman: To move:

That this House:

(1) notes that:

(a) the captioned telephone handset, CapTel, is a popular service amongst the Australian deaf and hard of hearing community;

(b) according to the Department of Communications there are approximately 4,000 CapTel handset users in Australia;

(c) the average age of people using the service is 80; and

(d) with an increasing aging population, it can be expected more and more Australians will need to rely on this service to communicate;

(2) acknowledges the distress and loss that CapTel users and their families are experiencing due to the planned discontinuation of the CapTel service in February 2020;

(3) condemns the Government for its decision to:

(a) remove the CapTel service without any consultation with its users; and

(b) purchase an inferior, outdated, and less user-friendly product, forcing often elderly users to learn a new piece of technology or lose the ability to communicate; and

(4) encourages CapTel users and their families to contact their federal member of parliament to explain to them the importance of the CapTel service for the deaf and hard of hearing community of Australia.

   (Notice given 3 December 2019.)

Time allotted—40 minutes.

Speech time limits—

Mr Gorman—5 minutes.

Other Members—5 minutes each.

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

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

4   Mr Sharma: To move:

That this House:

(1) notes that Malka Leifer, the former Principal of the Adass Israel Girls School in Melbourne, fled Australia in 2008 as child sexual abuse allegations against her surfaced;

(2) reaffirms the formal extradition request that was filed by Australia in 2014 requesting she be returned to Victoria to face 74 charges of child sexual abuse;

(3) acknowledges the bravery of Ms Leifer's alleged victims—especially Dassi Erlich, Nicole Meyer and Elly Sapper for their tireless pursuit of justice;

(4) further notes that over 5 years have elapsed, and over 60 court hearings have been held in Israel, since this extradition request was first lodged, without any significant progress having been made;

(5) expresses regret and concern at the numerous attempts to prevent and delay Malka Leifer facing justice in Australia; and

(6) calls for the immediate extradition of Malka Leifer to Australia to face 74 charges of child sexual abuse.

   (Notice given 25 November 2019.)

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

Speech time limits—

Mr Sharma—10 minutes.

Next Member speaking—10 minutes.

Other Members—5 minutes each.

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

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

3. The committee determined that the following referrals of a bill to a committee be made—

Joint Standing Committee on Electoral Matters:

Commonwealth Electoral Amendment (Lowering the Donation Disclosure Threshold) Bill 2019.

THE HON A. D. H. SMITH MP

Speaker of the House of Representatives

5 February 2020

Mr FRYDENBERG (Kooyong—Treasurer) (09:34): I move:

That this bill be now read a second time.

Over the course of this bushfire season Australia has faced devastating fires which have deeply affected communities across the country.

The unprecedented scale and damage of these fires has warranted an unprecedented response. The tireless efforts of our professional and volunteer firefighters to protect life and property cannot be understated. Nor can the generosity of the broader Australian and international communities, who have come to the assistance of those impacted by the fires.

The Morrison government is conscious of the enormous challenges of rebuilding bushfire-devastated communities. Australians are resilient and they want to rebuild, and we will be with them every step of the way. The government has made an upfront $2 billion commitment and established the National Bushfire Recovery Agency to coordinate a national response to rebuild communities and livelihoods.

The government is committed to supporting volunteer firefighters involved in the firefighting effort as well as ensuring the communities and businesses affected by the bushfires can get back on their feet.

We acknowledge and support the generous donations being pledged to bushfire-affected communities. This generosity is being seen in the partnership between the Business Council of Australia and equity trustees to establish the Australian Volunteer Support Trust and the Community Rebuilding Trust in response to the 2019-20 Australian bushfires.

The Australian volunteers trust provides support to volunteers and their immediate families where the volunteer has died or become seriously injured during their service in responding to a disaster in Australia. The Community Rebuilding Trust will receive, manage and mobilise donations to help rebuild and re-establish communities affected by disasters in Australia. These two charitable trusts will be chaired by Jeff Kennett AC and General Sir Peter Cosgrove AK CVO MC (Retd) and will be supported by boards of eminent Australians as well as representatives from Australia's emergency service volunteer organisations. The government has announced it will extend DGR status to these two charitable trusts to encourage philanthropy and provide support for individuals, families and communities affected by the bushfires. This is implemented through schedule 2 of this bill.

Schedule 1 to the bill comes in two parts. The first part gives effect to the Prime Minister's announcement on 29 December 2019 that the Australian government would in cooperation with the New South Wales state government provide tax-free financial support to volunteers in the New South Wales Rural Fire Service who are employed by small or medium businesses and had volunteered for an extended period to assist in combatting the bushfires. This tax treatment will also apply to similar arrangements for volunteer firefighters reached between the Australian government and other states and territories. Payments for eligible volunteer firefighters will be treated as non-assessable non-exempt income, which means:

the payments will not be counted as assessable income; and

the payments will not reduce any tax losses that can be carried forward to future years by the taxpayer.

The second part of the schedule gives effect to announcements made by the Prime Minister and myself on 8 January 2020 that in addition to the tax relief for payments to volunteer firefighters, government disaster relief and recovery payments in response to the 2019-20 bushfires will be free from tax.

Under the bill, bushfire disaster payments made or non-cash benefits provided by the states and territories and local governments that are not already free from tax will be made non-assessable non-exempt income. Payments will be made free from tax including the Disaster Recovery Allowance and payments under the disaster recovery funding arrangements 2018.

The bill also creates a regulation-making power which will provide flexibility to ensure later payments that might arise in relation to the 2019-20 bushfires can quickly be made tax-free if required.

Further information on the support being provided by the ATO can be found on the ATO website. Impacted individuals or businesses can also contact the ATO's emergency support information line on 1800806218.

Schedule 2 to the bill amends the Income Tax Assessment Act 1997 to include the Australian Volunteer Support Trust and the Community Rebuilding Trust on the list of deductible gift recipients. DGR status allows members of the public to receive income tax deductions for the donations they make to these two organisations. Full details of the measures are contained in the explanatory memorandum. I commend the bill to the House.

Leave granted for second reading debate to continue immediately.

Dr CHALMERS (Rankin) (09:39): Thanks very much, Mr Speaker, for the opportunity to speak on the Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020. As we've said all along in this horrific summer of fire, Labor's highest priority is to provide support and assistance to those impacted by the bushfires, whether they be local communities, families, businesses, emergency services or others. We do recognise that these are truly exceptional circumstances. We will of course support the bill and we've also supported departure from the usual practice to ensure its quick passage in the House today and, I expect, through the other place tomorrow.

After the contributions made yesterday, nobody in here needs reminding of the truly horrific nature of this summer's fires—33 lives lost, 3,000 homes destroyed, more than a billion animals killed in New South Wales alone—and all of the devastation, difficulty and challenges, whether they be in mental health or other areas, that will flow from this summer as well. Communities have truly been devastated. Our fireys, emergency services, Defence Force personnel and volunteers have saved countless lives and properties. The earlier start to the bushfire season has meant that they've had to work harder and longer than we'd hoped. This is a huge sacrifice, and this week we will ensure that the compensation payments that are to be made to people, communities and businesses are exempt from tax.

This disaster has clearly brought out the best in the Australian community, and yesterday in this place we heard many of those stories of resilience and selflessness. But it is also well worth learning from and reminding ourselves of some of the difficulties that come from the various government programs to support people who are affected. It is important that we not only put this on the record of the parliament but act on the lessons learned. It is important that we make sure the assistance gets to families, communities and businesses as quickly as possible, that the unnecessary bottlenecks are removed and that some of the concerns raised by members in this place, including the members for Eden-Monaro, Gilmore and Macquarie, are properly addressed. Despite all of the best intentions, there have been issues with the implementation of some of the disaster relief programs, and I will get to some of those in a moment.

This bill will ensure that disaster relief payments, including the disaster recovery allowance, are exempt from tax, and that grants made to small businesses and primary producers are tax free as well. It will ensure that payments provided to volunteer firefighters to compensate for the loss of income—a very important issue—are tax exempt as well. This scheme will apply to those who are self-employed or work for small and medium-sized businesses and who have been called out for more than 10 days. It will include farmers, small-business owners, tradies and contract workers in rural and regional areas, who have been hit especially hard by this fire season.

The other part of the bill, as the Treasurer just reminded us, will provide deductible gift recipient status to two trusts that have been established by the Business Council of Australia with support from their members and other businesses. The first of these is the Australian Volunteer Support Trust, which will support the families of volunteers who have tragically died fighting these fires and those who will lose their lives in future disasters. The second is the Community Rebuilding Initiative, which will focus on helping businesses and communities impacted by the fires. This initiative recognises that the task of reconstruction will take some time, so it's focused on assisting over the next five years. I want to put on record that the opposition welcomes and appreciates the BCA's decision to support kids who have lost parents in the fires and to support businesses as they try to recover. We look forward to more detail on how the funds will ensure that spending decisions are guided by the evidence of best value and greatest need.

I think it is important, given we're talking about disaster relief, that we focus on the ways in which government could be doing better when it comes to responding to these fires and providing relief in other programs to Australians who have been affected. In many instances the member for Grayndler, the Leader of the Opposition, has made a series of very constructive suggestions and calls on the government for them to act in a more substantial way as he has picked up information from so many of the communities affected over the last few months. It is worth noting that, in a number of areas where the opposition has called for action, the government has responded in some fashion. It's true of volunteer compensation, though we still need a more substantial national scheme. It's true of aerial firefighting. There was a response of sorts after the Leader of the Opposition called for one. It's true of national coordination, similarly, as well as ADF deployment, a national health response and other areas, including the environmental impact and some announcements made by the government following calls by the Leader of the Opposition.

But it's worth noting as well that there are some things that we are calling for which have still not yet been implemented. COAG, the Council of Australian Governments, clearly should have been brought together by now. It is unusual in the extreme, disappointing even, that last year was the first year there was only one COAG meeting. COAG is not due to meet for another five or six weeks or so. It beggars belief, in my view, that COAG wasn't brought together sooner to deal with and manage some of the Commonwealth and state issues which clearly are at play when it comes to responding to the devastation of these fires.

Clearly the Prime Minister should be sitting down with the fire chiefs, who've got considered views based on many, many years of experience, who've been trying to meet with the Prime Minister for some time now to relay their serious concerns, many of which, unfortunately, they've been expressing for some time and which have come true this fire season. It is extremely disappointing that the Prime Minister won't sit down with the fire chiefs to hear what they have to say.

We also want to make sure that the Bushfire and Natural Hazard Cooperative Research Centre's funding is guaranteed, and we have other proposals as well. The government was prepared to act in response to a number of the issues that the Leader of the Opposition raised in his letters and public commentary over the last few months. It should pick up and run with the remaining ones which are still left unattended. That would give the government an opportunity to respond in a more substantial way to what we've seen in this extraordinary summer of fire and smoke right throughout our country. And that's before we get to the broader topic, the important topic, of how we deal with climate change in this country.

But, on the specifics of this bill, as we say, we support the tax-free status of the bushfire relief payments. We support the DGR status of the funds which have been set up by the Business Council of Australia. We are prepared to support them through the parliament very quickly—through the House today, in fact in the next little while, and our other colleagues in the Senate tomorrow—so that, when this relief is rolled out, Australians who've been impacted enough already financially, emotionally and in other ways are not asked to also pay tax on these arrangements. We think that's a good outcome and we support that.

Ms STEGGALL (Warringah) (09:48): I rise in support of the Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020. For six months Australia has been devastated by the worst bushfires in our nation's history. Communities have been wiped out, businesses irreparably impacted, cities blanketed by smog forcing many indoors, our courageous volunteer services stretched to the limit and our beautiful wildlife and landscape decimated. I'll never forget the images of Australian families being evacuated by the Royal Australian Navy or the first images of singed wildlife searching for water, all on the backdrop of a blood red sky with ashes eerily dropping like snow.

While we will rebuild and communities will recover, the psychological trauma will be with many for years to come. This period will live in the memory of our nation forever. We had repeated warnings from our former fire chiefs that it was all going to be bad, yet we were caught flat-footed. This disaster will give us many lessons, as we will continue to soul search in the weeks and months to come. Various royal commissions will look into the decision-making process, response and past practices that contributed, and all the factors that contributed, to the severity of the disaster. I encourage that. I intend to help by listening and finding solutions to prevent future disasters. The Standing Committee on the Environment and Energy, which I am part of, is tasked with an inquiry into the efficiency of past and current vegetation and land management policy, practice and legislation and their effect on the intensity and frequency of bushfires and the subsequent risk to property, life and environment. We must, of course, also broaden that to look at the impact on the environment and how we preserve the environment and address climate change.

But, for now, we need to focus on those who have been so devastated and provide immediate support. The government's response, if belated, has been adequate. I support the government's existing measures, such as the deployment of the ADF, the mental health counselling and further direct impact on the ground. But we can and must do more. I support this bill, as it will provide further relief to the individuals businesses that have been so impacted by the fires. In particular, we mustn't forget the communities on our North Coast of New South Wales and southern Queensland, who were already impacted in late August and early September, as we focus on the more recently devastated communities further south.

Schedule 1 of this bill will allow tax relief for all disaster relief payments to individuals and businesses impacted by the bushfires. Schedule 2 will provide some tax exemptions for compensation payments made to volunteer firefighters and schedule 3 will provide deductible gift recipient status to two trusts to support families and businesses affected. These are all correct and adequate responses, but consideration needs to be given to the scope of these responses being broadened to make sure that all those who have been seriously and severely impacted are assisted.

In all of this, we cannot overlook the major contributing cause: climate change. Now is, absolutely, the time to talk about it. The Commonwealth Scientific Research Organisation, the Bureau of Meteorology and the Intergovernmental Panel on Climate Change all state that there is a tangible link between increases in background temperatures and the severity and duration of bushfires. We continue to set temperature records: 2019 was the hottest year on record for Australia. It's likely, according to the new study by the Australian National University, that temperatures will likely exceed 50 degrees by 2040 and temperatures in the 40s will happen three times more often. This is all impacting fire severity and danger. In 2019, new records were set for high daily Forest Fire Danger Index reports in all states and territories of Australia. Australia's fire weather, therefore, will worsen in the future. The number of very high and extreme fire danger days is projected to increase by a further 15 per cent at the minimum—and, at the upper range, by up to 70 per cent—by 2050. It's hard to imagine that kind of environment or how we could possibly prepare and be fully equipped to deal with such a scenario. This will make fire management increasingly more challenging and near impossible. The only way to manage and prevent further worsening is to increase our emissions reduction ambitions, as we are committed to under the Paris Agreement, and limit warming to no more than 1.5 degrees.

On 23 March, I'll introduce a climate change bill—a national framework for adaptation and action—to this parliament, and call for a bipartisan approach so that we can, united, make 2020 the year where we have ceased being divided on climate and where we can work towards a safer future for Australia. It's a positive response to the current disasters and a reposition for Australia as a climate leader.

The bill has four key components: a net zero target by 2050, risk assessment, risk management and adaptation plans. We need to listen to the experts. We need to have a clear, empowered and independent climate change commission so that we have the expertise and the advice to properly manage our response and action. We know these elements work because they have been enacted in the United Kingdom, France, Germany and many other countries. Specifically, in respect of bushfire response, the national risk assessment will assess how increasing bushfires will affect our economy, our environment, our society and our communities as a whole. Following that, we will have mandated adaptation plans that assist in adapting and increasing our response to bushfire risk.

Part of the problem in this disaster was that there were no adequate plans, key agencies tasked with investigating and responding to bushfire risk were defunded and our services did not have the resources they needed to protect our communities. There were many calls during last year for meetings with the government by the ex-fire chiefs. I met with them in both September and November. Their warning and call was clear, but it went unheeded. By having plans set in advance and implemented accordingly, we can ensure that we are adequately prepared when disaster strikes again; sadly, it's not an 'if'.

The bill mandates five-yearly emissions budgets and emissions reduction plans that are designed to meet a net zero goal in an economically and fiscally responsible way that ensures proper growth for Australia. This is consistent with limiting warming to no more than 1.5 degrees. It is an opportunity for Australia to reset its position in the world, be ambitious and be a leader.

There will be no new normal to adapt to. We must operate in a continued state of readiness. Our defence forces know that. It's no longer acceptable to the Australian community to be unprepared. My heart and my mind are with the many communities that have been affected. For them, in this place, we must be willing to give our strongest effort to prevent these disasters in the future and keep future generations safe.

Ms SHARKIE (Mayo) (09:57): Centre Alliance supports the passage of the Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020 and acknowledges that the bill seeks to minimise the financial impact of the bushfires through three stages. The bill provides tax relief to individuals and businesses who receive a disaster relief payment, provides a specific income tax exemption for compensation payments made to volunteer firefighters and gives DGR status to two trusts established to support families and communities affected by this summer's bushfires.

Schedule 1 of the bill provides tax relief for all disaster relief payments to individuals and businesses impacted by the bushfires. The exemption will extend to disaster recovery allowance payments made to individuals and payments that would otherwise be taxable under the disaster recovery funding arrangements, such as grants that may be made to small businesses and primary producers.

I welcome the Prime Minister's announcement of $2 billion in financial support to help communities recover from the bushfires and for the establishment of the National Bushfire Recovery Agency. But, like so many things, the devil is in the detail. Over the last fortnight it has become quite clear to me that the announced assistance packages may not be filtering down to those who need them most and that business owners, primary producers and even accountants have struggled to navigate the grant application forms. I am also concerned that many primary producers and business owners who were affected by the Cudlee Creek and Kangaroo Island fires either do not fall within the strict grant guidelines or have been placed at a financial disadvantage as a consequence of having taken out insurance policies to minimise the economic impacts of bushfires.

To complicate the matter, these individuals are also often unable to source relief funds from charitable organisations unless they have lost their primary place of residence. While many in the Adelaide Hills region were fortunate to have their homes saved by CFS volunteers or their own farm firefighting equipment, their fodder, livestock, orchards and vines were destroyed, along with their shedding and tanks. Anyone who lives on property knows that shedding and tanks are as vital as the four walls and roof of your home. It's rectifying this damage that requires an urgent injection of funds if we are to maintain our vibrant communities and support local economies.

I wish to raise some issues in relation to the $75,000 grant being made available to primary producers, which is known in South Australia as the PIRSA grant. Firstly, the grant guidelines appear not to permit the purchase of farm firefighting equipment. Farm firefighting units played a vital role, a pivotal role, in defending lives and property on Kangaroo Island and across the Adelaide Hills. Often, CFS trucks just didn't get there; the fire was too enormous and widespread for the CFS to be everywhere. And there is currently no financial support offered to those who seek to purchase, upgrade or even maintain their systems for the remainder of the bushfire season. If we are to encourage preparedness and resilience in the face of worsening conditions, arguably this would be a sensible allocation of funds.

Secondly, the guidelines, by setting the off-farm income threshold at $100,000, do not recognise the unique character of primary production, particularly in the Adelaide Hills. One local accountant I spoke to believes none of his bushfire-affected clients will be eligible for financial support from the government as a consequence of this threshold. Unlike in other locations, many primary producer families in the Adelaide Hills supplement their income through off-farm employment. It's not uncommon for one or both partners to be in full- or part-time employment either in their local community or downhill in Adelaide. Similarly, in the face of worsening growing conditions and declining profits in the agriculture sector, many primary producers in the region have sought to diversify their income by setting up complementary tourism ventures, such as farm produce lines and accommodation. This is particularly relevant to producers on Kangaroo Island. We have been encouraging them for years to have agritourism ventures, and now they are being penalised for that. These primary producers have been operating successful ventures that supplement their modest primary production income—ventures that will no longer be viable without immediate government assistance.

Finally, even if they are eligible, the grant will not meet the costs that are covered by an insurance claim. Accordingly, any claim must be finalised prior to an application being made for the PIRSA grant scheme. This fails to acknowledge the time taken to finalise insurance claims. Dairy farmers, vignerons and farmers I know who are awaiting insurance payments have in many cases been waiting for over six weeks now and are unlikely to receive their payments in the near future. Yet they are unable to access PIRSA grant funds until this occurs and are therefore left without any access to any of the emergency relief funds. In the meantime, they are facing increasing costs in the light of overwhelming demand for fencing and irrigation. One vineyard owner I spoke to was quoted $85,000 for two kilometres of fencing. And a dairy farmer explained to me that every week his fencing quotes were creeping higher and higher. First, it was $10,000 a kilometre and in the next week it was $20,000 a kilometre. He remarked that he had not been insured for that amount and that, if he hadn't been insured, he could simply have taken the PIRSA grant and half of his fencing would have been replaced by now. So primary producers with insurance policies are being disadvantaged by the grant guidelines.

Further to that, if you are a hobby farmer you are not technically a primary producer—if you have 20 acres and you have some horses, a few goats, a few sheep and a bit of a veggie garden—you are not entitled to any of the PIRSA grants. That is placing many in the community at a serious disadvantage. I have previously proposed that the grant guidelines be amended to allow for the provision of an immediate grant of $15,000 pending the finalisation of an insurance claim. The payment could be determined on a case-by-case basis by PIRSA officers. It would at least enable people to buy fodder and remove items that have been destroyed, including vines or trees, and it would provide some limited financial relief from the bushfires. Now is not the time for the government to be concerned about the bottom line. It is an unprecedented disaster and the government should be responding accordingly. The more we delay supporting people to get back on their feet, the longer this recovery is going to take for all of us.

In relation to the $50,000 grant made available to small-business owners, I understand that small-business owners are only eligible if they can demonstrate a loss of stock, equipment or other physical damage as a consequence of the bushfires. The grant does not cover loss of income. The small businesses that are in need of immediate assistance are those that have suffered a loss of income as a consequence of the disruption of their businesses. This is true on Adelaide Hills and Kangaroo Island, particularly for tourism businesses. I understand that concessional loans of up to $500,000 may soon be made available, but I'm concerned that yet again the strict eligibility criteria may mean that many small businesses may not be eligible for this assistance either. Those that are likely to be eligible have said to me that they simply cannot face the prospect of sitting down at the kitchen table to decipher yet another incredibly long, difficult government form.

To support people navigating through this grant pathway I have written to the government to request business counsellors to be based at both the Parndana and Lobethal recovery centres. I understand that experienced business counsellors from the Rural Financial Counselling Service are ready, willing and able to provide such support should the state and federal governments wish to pursue this opportunity. While I think we need them to be based there, they need to outreach. They actually need to go and sit down at the kitchen table with families that have lost everything around their property. They need to be able to meet in a private way and actually support families one on one. I urge the government to review bushfire grant recovery guidelines to ensure that each grant meets the needs of the local communities and that the necessary supports are available to secure the long-term recovery of our bushfire affected regions.

Schedule 2 of the bill relates to payments made to volunteer firefighters and provides a specific income tax exemption for payments intended to compensate for loss of income. In South Australia, volunteer firefighters who are self-employed or employed by a small to medium business who have been called out for more than 10 days may be eligible for financial compensation. This bill ensures that these payments, of up to $300 per day and up to a total of $6,000 per person, are not subject to income tax. I note however that those who have already retired, and therefore do not suffer any loss as a consequence of days absent from employment, will not be eligible for financial compensation, but this does not mean that they did not incur costs as a result of their volunteer efforts. Many retirees are still active members of their local CFS. In fact, across Mayo the majority of people that I meet in our CFS are retired or semiretired, and they do incur costs such as fuel and meals during the course of their volunteer duties. I accept that volunteers do not expect to be paid for their time, but the public expects that the government will take a flexible approach to this reimbursement program and ensure that no volunteer firefighter is left out of pocket no matter their employment status. I think about the length of time fighting these fires that are still going on Kangaroo Island that were only contained; they're not extinguished.

Finally, schedule 3 of the bill provides deductible gift recipient status, otherwise known as DGR status, via specific listing in the income tax law to two trusts to support families and communities affected by bushfires. I have seen firsthand the benefits that flow from granting DGR status to charitable organisations. SAVEM is an emergency responder and animal welfare agency that assesses, triages, treats, shelters and returns, to their owners or to the wild, companion and assistance animals, sport and recreation animals, livestock and, as I said before, wildlife. SAVEM are the only charitable emergency management trained veterinarians in Australia and are much valued by my community and across South Australia, especially by farmers affected. However, the lack of DGR status had frustrated SAVEM's capacity to raise much-needed funds to support livestock owners and wildlife in the wake of the bushfires.

I urged the government to expedite DGR status to SAVEM so that they could more effectively assist farmers. Recognising the genuine need, both the Treasurer and Minister Seselja worked swiftly to make the changes necessary to see DGR status granted to SAVEM within a matter of days. I would like to thank the government and particularly the Treasurer for their assistance.

The granting of DGR status to SAVEM enabled the organisation to attract $300,000 in donations, and that figure continues to rise. Those funds have enabled around 20 fireground-trained vets and nurses to rotate through the firegrounds continuously for 40 days. SAVEM worked closely with the ADF's joint task force, RSPCA, Zoos SA and the South Australian department of environment, water and natural resources. Local vets also worked with them. Together they treated over a thousand animals.

I also want to thank Minister Littleproud for the assistance that he has provided to my community on behalf of the government. The minister has travelled to the Adelaide Hills and seen firsthand the devastation that our community has endured. The minister took the time to meet small-business owners, community leaders, farmers and winemakers in the region. I'm hopeful that the concerns that were raised, some of which I've already spoken about here today, will inform the government's recovery response. I look forward to continuing our collaborative relationship for the benefit of many fire affected communities, particularly mine in Mayo.

Finally, I wish to reflect on statements made in this place during the debate on the condolence motion. We heard stories of devastation and tragedy, but we also heard words of compassion and kindness. Similarly, while I have serious concerns regarding the implementation of the financial assistance offered by the federal government, I am optimistic that as the recovery process continues these matters will be dealt with in a fair and just manner.

Dr HAINES (Indi) (10:11): I'd like to make a brief statement today to support the Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020 and to underscore the critical importance of delivering support to individuals, primary producers and small businesses in bushfire affected regions. The support that the government has announced to date, part of which is contained in this bill, is extremely welcome, but as we shift from response to recovery we need to constantly interrogate whether the support that is offered is right and whether it is enough. Both of these questions are important, and to see why that is we need look no further than Murrindindi shire in the south of my electorate of Indi.

The recovery process after Black Saturday involved some things that were effective but others that were not enough or were not right for the community. On the one hand, we saw construction of white-elephant infrastructure that was neither asked for nor appropriate for the community's needs. 'Stadiums belong in Melbourne,' one constituent told me. 'We didn't ask for that stadium. It's underutilised and now our rates are going towards its upkeep.' Local government representatives have told me that public buildings were hastily constructed and of poor quality and have led to expensive long-term maintenance by councils that have insufficient funds to maintain them. On the other hand, many issues that should have been addressed properly received insufficient or unsystematic attention. We know that mental health impacts of Black Saturday are still prevalent 10 years on, and we know that parts of the shire of Murrindindi still struggle with a lack of jobs as businesses have struggled to establish, let alone new ones to develop.

As we move forward, though, we must have a community-led and community-centric approach to reconstruction, one which delivers enough support and the right kind of support. I'm really encouraged by a meeting I had last week with Mr Andrew Colvin, coordinator of the new National Bushfire Recovery Agency, who was very clear in his conversation with me that community consultation was his top priority. I look forward to working with him over the months and years ahead.

Today, I'd like to share some further details of people who have been impacted, to ensure that their stories and needs remain in the centre of this discussion and in the centre of legislation that's drafted in this place to support them. In my condolence speech yesterday, I mentioned stories of the impact of fire on people in Indi: the stories of Cindy Penny, who lost most of her cattle near Bandiana; of Sharan and Jay Rivett, whose pumpkin farm was left devastated after three weeks of forced evacuation and a poisoned water supply; and of Stef Antonello, whose grape farm is looking at a 100 per cent loss of crop due to smoke taint. There are many other stories like this.

Rob Hawkings runs a large local grape farm and winery that's been hit by smoke taint. Rob will also lose 100 tonnes of fruit that would have sold for $800,000 if it were not for these fires. For him as a winemaker, that hundred tonnes of fruit he will lose means lost income of $1.3 million worth of wine that will never be made and never be sold. Usually, this week would herald the start of the vintage, where he'd inject $150,000 into the local economy through labour to pick the grapes. None of that will happen this year and that casual workforce will not be spending money in the town, and so the trickle-on effect continues. The support that the government has provided so far is good and it's welcome. But we need to ask: Is it enough to sustain businesses like Rob's that will lose far more than they will get back in support? And, if it's not, what can we do to ensure our regional economies survive, not just in the immediate aftermath but in the longer term?

Diane Gibbons runs Bella's Cafe in Harrietville. She usually takes $700 a day. When she called my office a few weeks ago on a day that was supposed to be in the busiest week of the year she'd just taken $7. Steph Mannix, who runs the Beechworth on Bridge Motel has seen all her bookings cancelled. She called me in late January, frustrated that support for small business had been announced but was not yet accessible and that Beechworth sat outside the zone of ATO deferrals. Fiona Goldman runs High Country Horses in Mansfield. They run multiday horse rides into the mountains around the Howqua Hills and Mount Buller. They've cancelled weeks of rides, and even now that the parks have reopened people are very slow to come back. Over the Australia Day weekend, usually one of the busiest of the year, they had but four visitors.

In our Alpine shire we've lost 2,000 hectares of hardwood plantation, meaning a shortage for local timber mills. In Myrtleford, 22 per cent of the workforce is employed in the timber industry. These people will be affected in four to eight years time, when this shortage starts to hit. We need to plan for them too. I spoke to the owner of a restaurant in Tawonga. She employs five staff. On 1 January, during the dinner service, they received a text. It was an evacuation order for the Kiewa Valley. The next day, Alpine shire was declared to be in a state of disaster. Since then the business has been shut. All bookings for January and February have been cancelled. The owner left a fridge full of stock that's gone off, and she told me that she'd have to sell her vehicle and redraw on her mortgage in order to pay her bills. 'I've been putting in 100 per cent to build my business,' she told me, 'and I've worked too hard to go under.'

Likewise, I spoke to the owner of a caravan park in Bright, which employs 24 staff. Usually at this time he is at 95 per cent capacity; today he's at five per cent. A local bread company near Wangaratta has seen trade decreased by 90 per cent. They employ 30 people. The owner told me, 'If we don't have the turnover to pay wages at the end of the week I'll have no income to pay loans and living costs.' For each of these businesses, and for the people receiving the disaster relief payment, the provisions of this bill will mean more money straight into their pockets, so I welcome this and I congratulate the government on this move. But we must do more, and in every step we take we must centre the stories of the people affected to ensure they get the support that they need.

In that spirit, there are four things I've heard from my community that I'm calling on the government to do. Firstly, we must continue to systematically engage affected small businesses and primary producers to identify whether the support provided is enough to sustain them. If it's not, the government will have to decide what price it's willing to pay to save these regional economies. Secondly, I've talked today about the grapegrowers in Alpine Valleys facing thousands of tonnes of lost fruit, and I've been working with some of my local grapegrowers on proposals to take to government about possible support packages. Unfortunately, we're currently without an agriculture minister. But, when one is appointed, the new minister must urgently look at support for the grape industry nationally. I stand ready to engage with them.

Thirdly, the Australian Taxation Office has allowed affected businesses to defer their tax payments to the end of May. This provides life support to small businesses in the form of a rapid cash injection, and many of my constituents are thrilled to receive this extension. However, this allowance is available only to individuals in eligible postcodes, and this list of postcodes does not cover all those areas where small businesses have faced near-complete loss of income. I have fielded many, many calls from businesses that are desperate for this assistance and cannot access it. I believe the ATO allowances should be expanded to all affected businesses, and I call on the government to review this list of postcodes.

Finally, I'm calling on the government to update its payments to affected individuals. The disaster recovery payment—a non-means-tested transfer to affected individuals of $1,000 for adults and $400 for children—has not been updated since 2006. This means the value of this payment has fallen in real terms. I believe this level is no longer adequate. I'm calling on the government to lift the default rate of the recovery payment to $3,000 for adults and $1,000 for children.

Similarly, the disaster recovery allowance to support individuals who have lost income as a result of natural disaster is limited to 13 weeks. This may have made sense once upon a time when fires were a sudden event. But in our changed climate, where in some parts of the country the fires have been raging for months already and show no signs of slowing, I believe this is no longer adequate. I am calling the government to lift the cap on the allowance from 13 weeks to 26 weeks to enable individuals who are without income for long periods of time to continue to have the support they need.

I have already drafted legislation to give effect to these changes; however, of course, as a private member, I am not able to introduce them to the House, so today I'll be in touch and send a copy of my draft bill to the Minister for Social Services and the Minister for Natural Disasters and Emergency Response, inviting them to support such a bill by introducing it to the House.

Like many MPs, I've heard too many stories of individuals who are scared of being left out in the cold in the wake of this crisis, so this week many have called for cooperation and unity. It is in this spirit that I offer these proposals to government and I look forward to working with them so that together we can support our bushfire-affected and impacted communities.

Mr ROBERT (Fadden—Minister for the National Disability Insurance Scheme and Minister for Government Services ) (10:21): I thank those members who have contributed to the debate. The bushfire season in Australia has faced devastating fires. They have disrupted the lives of communities right across the country. The government is supporting volunteer firefighters involved in the firefighting effort as well as ensuring that communities and businesses affected by the bushfires can get back up and running as soon as possible. The government is making this support tax-free.

On 29 December 2019 the Prime Minister announced the payments being made to eligible volunteer firefighters will be free from tax. Further to that, given the exceptional circumstances of these bushfires, on 8 January this year the government announced the disaster payments in response to the 2019-20 bushfires will be free from tax. Schedule 1 to the bill gives effect to the announced tax treatment.

Schedule 2 to the bill amends the Income Tax Assessment Act 1997 to include the Australian Volunteer Support Trust and the Community Rebuilding Trust on the list of deductible gift recipients. Deductible gift recipient status allows members of the public to receive income tax deductions for gifts of $2 or more made to these organisations.

I would like to thank the opposition and the crossbench for their constructive engagement on this important bill and for their support for its swift passage through the parliament. I commend the bill to the House.

Bill read a second time.

Mr ROBERT (Fadden—Minister for the National Disability Insurance Scheme and Minister for Government Services ) (10:23): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

The DEPUTY SPEAKER ( Mr Rob Mitchell ) (10:45): I have to report to the House that on 9 January 2020 I received advice from the Chief Government Whip nominating changes to the membership of certain committees. In accordance with standing order 229(b), as the House was not expected to sit for several weeks, the appointments became effective on that date. I now call the minister to move a motion to resolve the membership of the committees.

Mr ROBERT (Fadden—Minister for the National Disability Insurance Scheme and Minister for Government Services ) (10:46): I move:

That:

(1) Mr van Manen be discharged from the Standing Committee on Procedure and that, in his place, Mr Vasta be appointed a member of the committee;

(2) Mr van Manen be discharged from the Joint Committee of Public Accounts and Audit and that, in his place, Mr Vasta be appointed a member of the committee.

Question agreed to.

Dr McVEIGH (Groom) (10:46): On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report entitled Inquiry into PFAS remediation in and around Defence bases—First report.

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

Dr McVEIGH: by leave—Today I present the Joint Standing Committee on Foreign Affairs, Defence and Trade's first report into the Department of Defence's national PFAS Investigation and Management Program. This report follows on from the joint committee's previous review of the management of PFAS contamination in and around Defence bases, conducted in the 45th Parliament.

Per- and poly-fluoroalkyl substances, known collectively as PFAS, are a growing environmental challenge. These manufactured chemicals have had wide domestic and industrial application for over 20 years. They are very persistent in the environment and are biocumulative in the bodies of living organisms.

The Department of Defence's national program focuses on remediation of contamination by PFAS based firefighting foams. Aqueous film-forming foams have been very effective in containing fuel and chemical fires. Unfortunately, high concentrations of PFAS are now found in soils and waters around Defence bases and are an environmental hazard for surrounding communities.

The joint committee's last parliament report on this matter, tabled in December 2018, made nine recommendations covering national coordination, health advice and obligations to affected communities, among other matters. With government still considering its response to that review, the report I present today commences a program of scrutiny which will not only monitor Defence's progress but also consider government-wide obligations to PFAS-affected communities.

The Department of Defence established its national program in 2016. At the end of last year there were 28 Defence sites under investigation for PFAS contamination. From experience, like other members of this House, I know the presence of PFAS can be very distressing. Oakey, in my electorate of Groom, was the first Defence remediation site. PFAS can divide communities, disrupt local economies and cause uncertainty, because the health impacts are yet to be fully evaluated or confirmed. In this situation, the government's priority has been to remove PFAS from the environment as quickly and as effectively as possible.

Defence told the committee at its review that its PFAS remediation methods are increasingly effective. Advanced technologies extract PFAS contaminants from water to drinking-water-safety standards. Soil is being cleaned for re-use, extracted PFAS concentrations can now be stored securely and research is underway to break these chemicals down. Defence is also to be commended for its public information program. Its website is now well developed. There are reports on all affected sites under investigation and management, with monitoring data regularly updated.

At the same time, the committee notes that there are no financial or detailed performance reports on PFAS identifiable in either the 2017-18 or the 2018-19 Defence annual reports. The committee also considered that information could be better calibrated so that affected communities get the advice they need on core matters, the implications for property post treatment and, of course, the ongoing health and safety of families in those communities.

At the first hearing in this inquiry, the committee heard from the ANU's PFAS health study of the volume of overseas research being done to establish the health impacts of PFAS. The ANU aims to deliver verifiable local data on both the physical and mental effects of PFAS by the end of this year. Meanwhile, the safety standards for PFAS in soil and water are being made more robust as evidence mounts on the detrimental effects of high-PFAS concentrations in the environment. In this context, this first report from our subcommittee does not yet make recommendations because the committee commits to ongoing and thorough review of the evidence in regular reports as the nature and impact of PFAS and its treatments are being better understood. As I mentioned earlier, in the meantime the committee awaits the government response to the report of the committee in the previous parliament. We are very hopeful of seeing that in the not-too-distant future.

The PFAS subcommittee thanks ANU experts and the Department of Defence for frank evidence given to date, and looks forward to evidence from other agencies in the coming weeks and months. I commend the committee's report to the House.

Ms SWANSON (Paterson) (10:52): by leave—I rise to speak on the Joint Standing Committee on Foreign Affairs, Defence and Trade's report Inquiry into PFAS remediation in and around Defence bases.

I would firstly like to thank the chair of the subcommittee, the member for Groom, and all other members who have played a role in this report, and of course the ongoing and hard work of the secretariat. This inquiry resonates with me, not only as a member of the committee but as the federal representative in this parliament for the people of Williamtown, Salt Ash and Fullerton Cove, who have been living with this disaster for too long. It will be five years this September since my community learned of PFAS contamination and how their lives would be literally turned upside down by it. But the story starts well before five years ago.

In 1938, a chemist by the name of Dr Roy Plunkett was experimenting with refrigerator coolant by placing various chemicals in small cylinders at dry ice temperatures. When he opened a cylinder expecting to find gas, he instead found a white powder. It was heat resistant and chemically inert, and had such a low surface friction that other substances wouldn't adhere to it. PFAS chemicals were created accidentally, used ubiquitously and marketed slickly. He showed this powder to his employer, American chemical giant DuPont, which then marketed PFAS chemicals as the most slippery substance on earth. They went on to be used in over 3,000 products worldwide, including non-stick cookware, waterproof clothing, camping gear, dental floss and even weapons. However, it was the use of PFAS in firefighting foams that caused these chemicals to leech into the land that surrounds RAAF bases all over Australia, including in my electorate of Paterson. The properties that made this chemical so popular also made it extremely difficult to expel from the environment and from the blood and body of humans. This report is the first step into how the Australian government plans to do this.

When this inquiry was announced, there was an overwhelming sigh in my community, but it wasn't a sigh of relief. This is the third inquiry around PFAS contamination and this government is still yet to respond to the last report, as the chair has already mentioned. There is still no PFAS policy, and communication between the Liberal government and residents in my community has been inconsistent, unreliable and inconclusive. In the absence of leadership, a class action was formed by residents in Williamtown, Oakey—as the member for Groom has pointed out—and Katherine, and in April it will finally be before the courts. I have pleaded with the Attorney-General to settle this matter outside of court, and I understand that this battle is ongoing. Regardless, it is a disgrace that it has come to this.

Last year, I welcomed the shadow minister for defence, Richard Marles, to Williamtown, again to meet with residents. It was after that meeting that I started a petition calling on the Prime Minister to visit Williamtown, to meet with residents—and I reiterate that invitation—something both he and the Minister for Defence are yet to do.

Last week, long-term resident and advocate for Williamtown Lindsay Clout penned an article in the Newcastle Herald. He referenced a critically acclaimed Hollywood movie about PFAS contamination in the USA called Dark Waters. It will be released in Australia this month. The film's based on a true story about a lawsuit against the chemical company responsible for contaminating thousands of people with the forever chemical PFAS. The lawyer representing the plaintiffs, Rob Bilott, highlighted how both government and regulators in the US failed to protect communities against PFAS contamination. He told Time magazine recently:

If we can't get where we need to go to protect people through our regulatory channels, through our legislative process, then unfortunately what we have left is our legal process …

Lindsay Clout, from my electorate, wrote in the Newcastle Herald:

That quote hit … home this week after the shutting down of a $6.7 billion road tunnelling project in Melbourne because workers came across PFAS contaminated soil. That project wasn't halted because a regulator said it couldn't go ahead. It wasn't halted because of legislation. It was instead two of Australia's biggest construction companies who said they were not prepared to put workers at risk. That decision highlights the utter contempt with which both the state and federal government have treated the families in Williamtown—

and across the country—

whose homes and properties are also contaminated.

For more than five years, the federal—

Liberal, coalition—

government has said there's not an issue with PFAS contamination still leaking off the Williamtown airbase. Health and environmental bodies in NSW have given residents confusing and—

at times—

conflicting advice.

Our political leaders and health and environmental regulators have utterly failed PFAS-contaminated communities like Williamtown. And as Rob Bilott says when that happens you have just one option—

the justice system.

I'm proud to be a voice in parliament for these people who I represent, especially those who the government has abandoned. We will continue to look, via this report process, at what the government is and isn't doing and hopefully get one step closer to justice for the people affected by PFAS contamination.

Ms BUTLER (Griffith) (10:58): by leave—I also rise to speak on this very significant report in relation to an issue of great importance to my community—that is, the presence of PFAS on defence sites.

Mr Deputy Speaker Mitchell, as you know, the Bulimba Barracks site is in my community. Last year there was an announcement of a preferred purchaser for the site. The sale of the site has been underway ever since, and I anticipate that settlement will be announced soon. But, in the meantime, it's important to note that last year it was revealed that there had been PFAS found on the site.

I met with the minister to raise with her my concerns about the presence of PFAS on the site and to ask that action be taken in relation to remediation on the site. Alongside my colleagues in the state and local spheres, the Hon. Di Farmer MP and Councillor Kara Cook, we have been supporting a petition to ensure that any contaminants found at the site be remediated promptly. I want to make it very clear to this House that we, the local representatives for that particular area, will continue to insist that contaminants be remediated, particularly contaminants of great concern such as PFAS, especially given the proximity of the site to the river and to neighbouring properties. Thanks very much for the opportunity, Mr Deputy Speaker.

Mr STEPHEN JONES (Whitlam) (11:00): I'm pleased to be speaking to the motion. I wish to move an amendment to the second reading stage, which I provide to the clerks.

The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Bill 2019 finally implements four of the government's long list of unmet commitments from its response to the banking royal commission. This will, when it finally passes the parliament, bring the government to a grand total of 10 of the 76 recommendations that were made by the Hayne commission into the banking and financial services sector.

I'll briefly summarise the effects of the bill and then review each of the schedules before addressing our amendment. Schedule 1 of the bill extends the unfair-contract terms laws to cover insurance contracts. Schedule 2 of the bill brings funeral insurance into the general financial consumer protections regime. And schedule 3 of the bill introduces a best interest duty for mortgage brokers and provides for regulations to reform mortgage broker remuneration.

I will address schedule 1. Can I say, as a preface, it's deeply disappointing that this wasn't introduced into the House before Christmas. Labor have long communicated to the government that they will have our every cooperation in ensuring that the Hayne royal commission recommendations on the banking and financial sector are implemented posthaste, and we'll do whatever we can, from a parliamentary sense, to ensure that those bills can be debated, debated early, improved where necessary and moved from this place to the other place and enacted. We do this because we take the view that the consumers of Australia rely upon it. We also make the observation that many of the recommendations—in fact, most of the recommendations—of the royal commission were not new to government. I'll go to that point when addressing the unfair-contract terms which are subject to one of the schedules before the House.

Given that they're not new to government, the government should have already implemented most of these recommendations. Work should have been well underway. So it's regrettable that here we are in the first session of this year and we are only now debating this legislation. It's regrettable for a second reason. Any Australian government can predict that, between October, November and December in this country, we approach, with great sadness, the period of natural disasters. Whether it be floods, whether it be cyclones in the north, whether it be bushfires, as we've tragically seen through the summer of 2019-20, or, as we've seen in our nation's capital, devastating hailstorms—all too frequent throughout the summer months—it is a very predictable phenomena. So, against that backdrop, you have to ask yourself: why would any government delay the implementation of legislation which improves the handling of insurance claims—insurance claims that we can predict with calendar certainty are going to increase after the summer period? We can predict with calendar certainty that that is going to occur. As you move through the flood season, the bushfire season, the hail season, you know that those insurance claims are going to increase. And this schedule deals with applying unfair terms to the insurance contracts, providing consumers with additional protections as and when they need to make their claims.

Any responsible government would know that insurance customers are going to need those protections as we move into the natural disaster season. They are not there, they haven't been there; that's bad enough. The government, in the last week of parliament last year, indicated that they were going to introduce this legislation into the parliament. But they chose not to. What was more important to the government than implementing these recommendations that were going to protect insurance consumers? Introducing the already failed union-busting Ensuring Integrity bills. It was a very costly stunt which is going to cost insurance consumers dearly. So if you're struggling with the terms of your unfair insurance contract, if you're struggling with the insurance claims management process and you're wondering who to blame, you need look no further than this mob over here. They were too interested in playing political parlour games and not interested enough in implementing the recommendations of the Hayne royal commission into the banking and financial services sector, most of which have been sitting in the government's lap since 2016.

Let's deal with schedule 1 of the bill. Schedule 1 of the bill brings insurance contracts from the Insurance Contracts Act 1984 into the unfair contracts regime established under the ASIC Act. Many businesses use standard form contracts which are set out on a 'take it or leave it' basis; whether it is a tenant taking out a new tenancy or the purchase of a motor vehicle, it is all too common in the insurance contracts area. These are standard contracts. It's not as if the average consumer sits down with their insurer and negotiates line by line the terms of the contract. They are a standard form contract: 'Here it is. Sign on the dotted line, pay your premium and you have cover.'

This is a reasonable and appropriate business practice when you are dealing with high-volume contracts. But it leaves customers with no power to negotiate with businesses if elements of a standard form contract are unfair. This is why Labor introduced the unfair contract terms regime in 2010—to protect consumers from exploitation and unfairness. Under the regime, terms in standard contracts are nullified if they are found to be unfair by a competent judicial authority. This provides powerful protections to consumers from exploitative business practices. But, until now, insurance contracts have been exempt, for the most part, from this regime.

These reforms have been a long time coming. It was highlighted as an issue by Commissioner Hayne in his final report back in February last year, which recommended that unfair contract terms be extended to cover insurance contracts. But that wasn't the first time that this recommendation has been made to government after thoroughgoing research and consultation with industry. Indeed, it was recommendation 6 of the Australian Competition and Consumer Commission's interim report into the Northern Australia insurance in 2018. It was recommendation 3.1 of the bipartisan report of the 2018 Parliamentary Joint Committee on Corporations and Financial Services inquiry into the life insurance industry. Indeed, in 2017, a year earlier, the Senate Economics Committee conducted an inquiry into the general insurance industry and at recommendation 11 they made a clear recommendation to government on exactly the same thing. We can go back to the 2017 Australian Consumer Law review. At proposal 10 it was exactly the same recommendation. I simply ask this: given that the coalition had report after report after report and recommendation after recommendation after recommendation, why is it that it has taken until today for these amendments to be introduced into the parliament and debated?

A 2012 government report estimated, from the available data on insurance, that the cost to consumers was somewhere in excess of $10 million a year. The failure of the government to act on report after report and recommendation after recommendation costs consumers $10 million a year. That may be pocket change to those opposite, but to consumers who are struggling with the devastation of a bushfire, their properties devastated by flood or their cars or premises wiped out by hailstones, that is real money that they need in their time of need. We also know that this $10 million is probably at the bottom end of estimations, because most detriment is likely to be underreported. Consumers often fail to claim and often fail to report issues. Since 2012, we have only seen the intensity of floods and bushfires increase.

To take these numbers as given, Australian insurance customers have suffered at least $20 million in detriments from unfair contract terms while the coalition government has sat on report after report after report recommending that they take action, with no action being taken. This means that, while this government has been busy wasting parliamentary time on bills aimed at tearing down workers' protections and workers' rights, Australian families have been left helpless in the face of unfair contract terms. We need a better approach. We need the government to take a serious, concerted, workmanlike approach to the implementation of not only the Hayne commission recommendations but also the series of reports that have recommended the same thing.

These new laws are welcome. They will bring insurance contracts into the unfair contract terms regime. But there are some sensible further refinements that are needed to redress the unique issues relating to insurance contracts. The terms that define the main subject matter of the insurance contract will be excluded from the regime. Terms determining the up-front prices, excesses and deductibles will be excluded where they are disclosed in a transparent manner. The utmost duty of good faith will be unaffected. The utmost duty of good faith, which applies via both statute law and common law to insurance contracts, will persist. These refinements however will ensure that insurers can offer insurance contracts with the knowledge necessary to set prices and assess risks while consumers are protected by the new features of the regime.

I want to go to schedule 2, which deals with funeral insurance. Schedule 2 is the subject of my second reading amendment, which I formally 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:

(1) notes that:

(a) it has been over 12 months since the Hayne Royal Commission exposed the fact that Aboriginal families have been taken advantage of by the deceptive conduct and the misleading selling of funeral insurance products in Aboriginal communities;

(b) the selling of these products has continued while the Government has delayed the introduction of remedial legislation;

(c) when passed, this bill will present a fundamental challenge to the questionable business model of the marketers of these products; and

(d) if the companies which have promoted those schemes fail, as many as 19,000 policy holders could lose the meagre benefit payments from those policies; and

(2) therefore calls on the Government to work with the Opposition, and representatives of affected communities, to ensure that the policy holders and their families will be protected".

Schedule 2 of the bill ensures that the consumer protection provisions of the Australian Securities and Investments Commission Act 2001 will apply to funeral expenses policies. We are deeply concerned. We congratulate the government on introducing laws to address this matter.

Everything that I have said about the delays in introducing schedule 1 of this bill applies to schedule 2 in double force, because between the time when Commissioner Hayne exposed the rorts and dishonesty in the marketing of funeral insurance, particularly in vulnerable Aboriginal communities, and now the practices have continued.

We still see these little-value or junk insurance products being marketed to vulnerable people in vulnerable communities. We are deeply concerned that that has persisted for more than 12 months—in fact, closer to two years—since the behaviours were originally exposed by the Hayne royal commission. Labour welcome the fact that laws have been introduced but we have some concerns. On 7 December, the shadow minister for Indigenous affairs and myself wrote to the Treasurer outlining our concerns about the consequences of this foreshadowed legislation and I seek leave to table a copy of that letter now.

Leave granted.

Mr STEPHEN JONES: I thank the minister. We welcome the fact that legislation is being moved. The amendments do not—I want to stress this—impact on the treatment of prepaid funerals, which have operated for well in excess of a century by reputable organisations including friendly societies, unions and others. They will continue to operate as funeral benefit funds. But I want to distinguish a product which is marketed as funeral insurance from those funeral benefit funds which will be interrupted by the passage of this legislation. We welcome the change. It is a capstone on a particularly sorry story in our nation's financial history.

Commissioner Hayne was withering in his condemnation of so-called financial expenses policies. They're policies of little value and may be particularly likely to be sold to Aboriginal and Torres Strait Islander people living in remote and regional Australia. The so-called Aboriginal Community Benefit Fund was one such company, one such fund marketing these insurance products. It's a particularly extraordinary story, exposed by the Hayne royal commission, of a for-profit funeral insurance company marketed as an Aboriginal community benefit fund that was run neither by Indigenous Australians for their benefit nor for the benefit of their communities.

This company is still trading, remarkably, as Youpla Group Pty Ltd. It sells insurance funeral products to Indigenous Australians, which leads to them paying more in premiums than their families could ever hope to claim from the policy itself. Extraordinarily, this company has until recently had a direct relationship with Centrelink's Centrepay system, allowing the company to arrange, perhaps with formal consent but—I wager—rarely with the consent of an Aboriginal and Torres Strait Islander person who had available to them the financial advice necessary to ensure that they made a proper decision in respect of that policy. So in a sense, Centrelink's Centrepay system has been incorporated into this great scam. The company has built a business model on exploiting the genuine desires of Indigenous Australians to ensure that their families were not left penniless when they passed away.

Labor welcomes the amendments in this schedule which will see an end to a particularly sorry business model by bringing these products within the regulation of the Australian Securities and Investment Commission and by ensuring that they will be dealt with as if they were any other financial product. It will end the business model which has allowed this exploitation to persist. Labor wants to ensure that approximately 19,000 policy holders who bought funeral insurance on the basis of these dodgy marketing practices will not be left in limbo. We do not want to see these Aboriginal and Torres Strait Islander Australians being ripped off twice.

This was the subject of the letter, which I have tabled, that the shadow minister for Indigenous Australians and I have written to the Treasurer. We think a proactive approach is needed to ensure that these vulnerable Australians do not get ripped off twice. We are very keen to work with the government to ensure that such arrangements can be put in place when and if they are necessary.

I will address schedule 3 of the bill, which introduces a best-interest duty for mortgage brokers that will ensure the consumers' interests are prioritised when a mortgage broker provides credit assistance. This will mean a duty will apply in relation to the provision of consumer credit assistance. The policy also provides a regulation-making power to regulate mortgage broker remuneration. The draft regulations set out by the government require that the value of the up-front commissions be linked to the amount drawn down by borrowers instead of the loan amount. It is often the practice that somebody purchasing a house—let's just say, for argument's sake, a $500,000 house with a $400,000 mortgage—may increase that mortgage by another $20,000, $30,000 or $40,000 to pay for other expenses associated with the moving into, the renovation of or the furnishing of that property. They may not spend all of that money at once. Under previous arrangements, a commission available to a mortgage broker may be available up-front on the full value of that mortgage, whether or not it was drawn down on, ever, or within a certain period of time. The amendments set out in the schedule make sense, and we support them.

The draft regulations also ban campaign and volume based commissions and payments, together with a capping of soft-dollar benefits. I've spoken about the drawdown phenomena and how commissions have been paid. The draft regulations also amend the period over which commissions can be clawed back from aggregators and mortgage brokers, limiting it to two years, and passing on this cost to consumers will be prohibited.

We support the reforms. We do note that the Productivity Commission has found the competitiveness of the Australian home loan market is now dependent on mortgage brokers. This is an important point—not a point fully ventilated through the Hayne royal commission but relevant to another observation I will make. A few years back, fewer than half of all mortgages written in this country went through a mortgage broker. At the beginning of the Hayne royal commission process it was probably around 50 to 55 per cent. Today it's in excess of 60 per cent. That's six out of every 10 mortgage loans that are written in this country for a home loan going through a mortgage broker. They are now well integrated into the financing of the home loan market and the housing market.

The Productivity Commission has acknowledged this. We'd like to see more competition in that area. We've said time and time again that we do not think there is enough competition driving down prices in the home mortgage market. We believe that mortgage brokers, where properly regulated, are a key to driving more competition, particularly within the home mortgage market.

But it's important that we ensure the reforms that are the subject of this bill work as intended. I note that the government has committed to a review of the mortgage broker reforms in three years time. This commitment doesn't appear as a part of the legislation. Labor won't block the passage of this bill, but we will ensure that this review takes place as promised.

I do want to say something about Commissioner Hayne's recommendation on the business model around mortgage brokers. Commissioner Hayne recommended that the commission based business model for the mortgage broker market be ended. The government has taken a different approach to that. This bill does not contemplate at this stage the implementation of the recommendation. I think there are sound reasons for hastening slowly in this area. As I've already said, 60 per cent of the mortgage market is now written through the mortgage broker system. Labor agrees with the government to the passage of this bill and not implementing the recommendation, which would ban commission based payments at this stage, but mortgage brokers are on notice. Mortgage brokers are on notice that the system has to work and it has to work in the interests of the customers that they represent, not the financiers whose products they are facilitating. If it emanates over the period of the next few years and evidence comes forward that that is not the case then we will be ensuring that those remuneration arrangements are subject to the review as recommended by Commissioner Hayne and contemplated by the government—in fact, guaranteed by the government.

So we commend both my amendment, which deals with the subject matter of general insurance, and the bill to all members of this place. It is important that the government get a giddy-up on implementing the royal commission recommendations. When this bill passes the House, as I hope it does swiftly, and goes to the other place—hopefully it will be passed before the end of this sitting fortnight—we will still have only met a grand total of 10 of the 76 recommendations of the Hayne royal commission. I think the community expects that we would have done much, much more than that after the more than 12 months since those recommendations were handed down, particularly when you consider that the vast majority of those recommendations have been presented to government not once, not twice, not three times, not four times but in some cases close to 10 times. With those observations I commend the motion and the amendment to the House.

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

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

Mr FALINSKI (Mackellar) (11:28): I don't propose to speak for long today on this bill, the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Bill 2019. Normally that gets me a round of applause, but apparently not today!

Mr Thistlethwaite interjecting—

Mr FALINSKI: Thank you! The member for Whitlam has spoken eloquently, eruditely and, of course, incorrectly on most of what is in this bill, and we thank him for his contribution today. We do share with him, however, his desire to see this legislation passed as quickly as possible, and perhaps the Labor Party could assist the government by not moving amendments that are both unnecessary and unlikely to assist in helping the consumers they so often mourn.

Unfair contract terms in insurance contracts is the subject of a recommendation of the Hayne royal commission. It is a recommendation that was proposed to that inquiry by ASIC. Just briefly, because the member for Whitlam has already eruditely already summarised what is proposed, the national unfair contract terms laws currently protect consumers and small businesses who purchase financial products and services through standard form contracts. Until now, insurance contracts, for very good reason, have been exempt from the regulation by these laws. The Insurance Contracts Act will be amended, however, to allow the ASIC Act's unfair-contracts laws to apply to all insurance contracts. This measure will offer protection to consumers who lack bargaining power and receive their contracts on a take-it-or-leave-it basis. These consumers are vulnerable to unfair terms, like exclusions or onerous conditions, which can be hidden in the contract. This will provide important protection in cases where an insurer has attempted to deny a claim or restrict the payout available to a consumer or a small business on the basis of an unfair term.

For insurance contracts, the regime will be tailored to increase clarity and certainty for industry and consumers. This includes defining the upfront price as premiums and excess or deductible payable and defining the main subject matter of the contract as what is being insured. This is in line with the royal commission's recommendation 4.7. Consumers and ASIC will be able to apply to a court for a declaration that a term of an insurance contract is unfair. If they succeed, the term will be void and therefore not enforceable.

Schedule 2 specifically deals with funeral expenses facilities and funeral insurance contracts. The financial services royal commission uncovered evidence of the significant harm caused to vulnerable consumers by the poor sales practices adopted by funeral expenses policy providers. The exemption in the Corporations Act that has allowed these providers to escape the scrutiny of the Australian Securities and Investments Commission will be removed once this bill is passed into law. They will be subject to the Australian financial services licensing regime. The bill will ensure that consumer protection provisions in the ASIC Act apply to funeral expenses policies, clarifying any ambiguity that may exist on this matter. The removal of this exemption will ensure consumers have appropriate protection when taking out policies to help fund the costs associated with a funeral. The provision of prepaid funerals will be unaffected by these reforms, on the ground that it will be able to rely on the funeral benefit exemption in the Corporations Act. The bill will come into effect after royal assent. Providers of funeral expenses policies that do not already hold an Australian financial services licence will be required to gain a licence by 1 April 2020.

Schedule 3 deals with mortgage brokers. Prior to the election, I found the recommendations of the royal commission on mortgage brokers to be somewhat contradictory. Labor, of course, backed these recommendations, but I'm glad to hear the member for Whitlam now saying that Labor agrees with our amended provisions here.

The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Bill 2019 fulfils the government's commitment to implement its response to two recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The bill will introduce a best-interest duty for mortgage brokers and reform mortgage broker remuneration. The regulations set out the details of the reform to remuneration. The best-interest duty will require mortgage brokers to act in the best interests of consumers when providing credit assistance in relation to credit contracts. The obligation will bring the law into line with what consumers currently expect of mortgage brokers. The bill and regulations make changes to mortgage broker remuneration by requiring the value of upfront commissions to be linked to the amount drawn down by borrowers instead of the loan amount, banning campaign and volume based commission and payments, and capping soft-dollar benefits. The new rules will also limit the period over which commissions can be clawed back from aggregators and brokers to two years and prohibit the cost of clawbacks from being passed on to consumers. The royal commission identified evidence of mortgage brokers recommending loans based on the commission they would receive. Both the best-interest duty and the reforms to mortgage broker remuneration will mitigate the incentive for mortgage brokers to suggest loans that are not in the best interests of consumers.

It would be remiss of me not to make some comments about this piece of legislation. First, the evidence out of the royal commission, particularly in its interim report, is that banks have been using behavioural science to create a blizzard of products in the market, confusing consumers and giving the appearance of competition without there being actual competition. We're seeing this in the superannuation sector as well. Increasingly, mortgage brokers and financial planners are becoming critical to Australians' financial wellbeing, both now and into the future. As we are creating a more complex financial system, of which we should be rightly proud—whether it be in insurance, or superannuation and retirement incomes, or simply in mortgage products to buy a house or build an investment policy—it is important that we avail all Australians, regardless of their income, of the capacity to get the most and the best form of advice that they can get, and not simply reserve that advice for high-net-worth individuals and insiders who know where to go. My problem with the royal commission is that we may have the unintended consequence of creating yet more complexity while denying people the capacity and the ability to reach out for that advice that they so sorely need at the time when they need it.

The Hayne royal commission also pointed out a lot of anecdotal evidence about a lot of consumers being badly impacted by financial service companies and providers. What it failed to understand was that this parliament has already passed laws which those consumers and ASIC could have used both to shut down and to prosecute those providers who had done wrong by the consumers. It should have made the point and should have asked the question why those laws had not been invoked, rather than insisting that this parliament create yet more complexity to confuse yet more consumers and to deny yet more Australians capacity to understand and to seek the advice that they so need.

We have now given ASIC enormous powers. We have cloaked it in great and immense capacity to do great good and to do great harm. We have provided it with more resources than it has ever had before, and yet it comes back to this parliament and asks for more powers and more resources. We understand why, on this side of the House, but we expect ASIC to finally put an end to this. We expect fewer reports, less lobbying, less communication and less of ASIC trying to impact this parliament and wanting more regulation. We expect it to undertake its role in what it does in the manner and form which promotes competition and empowers consumers, rather than reducing the choices that they have.

The member for Watson is often heard saying that this side of the House wishes to impose on unions laws that company directors would never have. However, when we have retorted that we are very happy to apply the Corporations Law to unions and to union leaders, he often falls silent on the idea that unions should be subjected to the Corporations Law. The truth is that company directors in this country now are very much on the hook for virtually anything that goes wrong and for any consumer that is harmed. Litigation funders run rampant through our legal system with billions of dollars, driving fear into the hearts of people who are simply trying to provide products and services to consumers so that they can be better off.

These laws will ultimately protect consumers, but this parliament must be very careful that we do not introduce so many laws that we reduce the choice and the capacity for consumers to seek advice and to run their lives in a manner and form that they see fit, not in the manner and form that members of this House believe that they should.

Ms RYAN (Lalor—Opposition Whip) (11:38): I'm pleased to rise after the member for Mackellar's short contribution, as he prefaced, in the debate on the Financial Sector Reform (Hayne Royal Commission Response-Protecting Consumers (2019 Measures)) Bill 2019.

Labor supports this bill because Labor is always on the side of consumers and Australians. Unlike the coalition, which had to be dragged kicking and screaming to have a royal commission into banking and financial services, Labor led from the front to end the rorts and the rip-offs that were being identified as our residents and communities came to us with what they saw as an unfair system. We'll continue to push to implement the recommendations of that royal commission.

The Liberals and Nationals never wanted a royal commission into banking misconduct and now they continue to drag their feet in implementing the recommendations. We don't really need to remind those members in this House—but perhaps after the member for Mackellar's contribution it is worth noting that the Prime Minister himself voted 26 times against the Hayne royal commission. One year after receiving the final report—until this piece of legislation passes this House—only six of those recommendations have been implemented by this government. When this piece of legislation passes, that will take it to 10 of the 76 recommendations being implemented. On Saturday, it was the anniversary of those recommendations coming down. This government continues to drag its feet. There was a commitment that parts of the schedules of this legislation were going to be passed before the end of 2019, and, despite us sitting at the end of 2019, we had to wait until now for this bill to be before us. Not even the full horror of the banking royal commission, which revealed a culture of appalling rorts and rip-offs, was enough to spur this government into fast-enough action.

Schedule 1 of this bill goes to impact of unfair contract. It will bring insurance contracts from the Insurance Contracts Act into the unfair contracts regime under the ASIC Act. In 2010, Labor introduced the unfair contract terms regime to protect consumers from exploitation and unfairness. Under the regime, terms in standard contract terms are nullified if they are found to be unfair. A government report in 2012 told us that, from the data they had on insurance claims, there could be an up to $10 million a year hit for consumers in detriments in this space. And, because consumers were unlikely to report the issues, that detriment was unlikely to be reported and unlikely to be challenged. This is becoming increasingly important. With the effects of climate change worsening, the intensity and the number of natural disasters, like floods and bushfires, have increased since 2012 when this report was handed down and that creates more impetus for why this schedule is important and why Labor supports it today.

But the government has adopted this go-slow approach, despite being told by report after report that Australian insurance customers are suffering by now at least an estimated $20 million worth of detriments per annum in unfair contract terms. Perhaps the government should be more focused on fighting for a better deal for Australians rather than, as we've seen this week, fighting one another. This affects Australians affected by floods and fire—that's the bush! Instead, the National Party, members of the coalition, would rather fight over the deputy prime ministership.

The new law that we're talking about today will bring insurance contracts into that unfair contract terms regime, and this is welcomed. But there are some further sensible refinements needed to address the unique issues related to insurance contracts. These refinements will ensure that insurers can offer insurance contracts with the knowledge necessary to set prices and assess risks while consumers are protected by the new features of the regime.

Schedule 2 of the bill goes to funeral insurance—and it goes to the amendment that is before us now. Schedule 2 makes sure that funeral expenses policies are covered by the Australian Securities and Investments Commission Act, and the amendment does not change prepaid funeral arrangements which continue to operate as funeral benefits and, as most of us here across the chamber hear from our communities about, are seen to have benefit and are seen to deliver that benefit. We welcome that change. As the shadow minister told us, in the Hayne royal commission we heard the dreadful story of the Aboriginal Community Benefit Fund, which this schedule will change. This fund was neither Indigenous nor run for the benefit of communities. It is a for-profit company now rebranded as Youpla Group. This fund sold expensive funeral expenses policies to Indigenous Australians like Ms Tracey Walsh, an Indigenous woman from Mooroopna, in Victoria. These policies were marketed in a misleading way, leading to men and women like Tracey Walsh paying far more in premiums than their families could ever receive in funeral benefits. Until recently the fund even had an arrangement with Centrelink which let them deduct payments automatically from Centrelink recipients.

This amendment calls on the government to ensure that the 19,000 Australians who have these policies are protected and looked after beyond this legislation, that the government ensure that these Indigenous Australians and their families are protected and their interests seen to. Labor will be working closely with these communities to ensure that their voices are heard here in the parliament and around Australia if this amendment does not pass this parliament. So schedule 2 is welcome, but there are 19,000 Australians who already have policies in this space that need the government's attention and we need to ensure that they suffer no further negative impacts.

The third schedule goes to mortgage brokerage. Schedule 3 of the bill introduces a 'best interests' duty for mortgage brokers that will ensure that consumers interests are prioritised when a mortgage broker provides credit assistance. The draft regulations set out by the government require that the value of up-front commissions be linked to the amount drawn down by borrowers rather than the loan amount. It bans campaign and volume based commissions and payments and caps 'soft-dollar' benefits.

We support these reforms and note that the Productivity Commission has found the competitiveness of Australia's home loan market is now dependent on mortgage brokers. I know colleagues who have sat with local mortgage brokers and I know that, like others in this chamber, I spend a considerable amount of time with the mortgage brokers in my electorate hearing stories of opportunities where my local people are working diligently to assist people, particularly those on the margins, to enter the housing market. They are strong advocates for ensuring that, in this space, people behave in an honest and a responsible manner. We must, however, ensure that the reforms that are in this schedule work as they are meant to.

Despite promising a review of the mortgage broker reforms in three years, this appears nowhere in this legislation. I would further call on the government to ensure that that review happens so that we can have confidence that my local mortgage brokers, operating in a community that is in a growth corridor—we are building thousands of houses a year, and there are thousands of mortgage contracts being drawn up in a year. My community needs to know that they can, in all confidence, use a mortgage broker if that is their choice and know that they are going to be treated fairly in the longer term. The opposition will not be blocking any part of this legislation, but it is not a blank cheque. Labor will work tirelessly to make sure that this review occurs in three years.

In conclusion, it's a year on and the government haven't done enough to implement the royal commission's recommendations. At this moment, in this parliament, only six of the 76 recommendations have been implemented. When this bill passes the parliament there will be 10 of the 76 recommendations implemented. I know that I speak for those on this side of the House, who heard the harrowing stories and saw the rorts and the rip-offs, and I know that in my community we want to be able to know that our banking and financial services sector is operating in a fiscally and morally responsible way. The inaction coming from those opposite is not giving us comfort.

Their inaction means that families who suffer claims-handling issues from the devastating bushfires, hail storms or other extreme weather events this summer are still left without protection. The Morrison government missed their own deadline to introduce this legislation by the end of 2019, and I know that's going to reverberate in communities in Victoria who've been impacted dreadfully by the bushfires. No compensation scheme of last resort is in place for distraught customers. No new disciplinary system is in place to punish unscrupulous financial advisers. Mortgage brokers have no legislated duty to act in the best interest of their customers. Unscrupulous operators will be able to hawk junk insurance over the phone, and car dealers will still be able to claim commissions on dodgy add-on insurance products. ASIC still lacks essential enforcement powers, and industry codes of conduct remain completely unenforceable.

The Morrison government has a dismal record when it comes to going soft after this royal commission. The Prime Minister and the Treasurer pretended to care about the recommendations of the banking royal commission but their actions since tell us another story. While the coalition continues to ignore those recommendations, Labor will always push to fight for consumers, to protect the Australian people and to ensure that this parliament delivers on its promises.

Mr THISTLETHWAITE (Kingsford Smith) (11:51): The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Bill 2019 is late. Like many of the government's responses to the royal commission, it comes delayed to this parliament. This particular provision relating to unfair contract terms in insurance contracts was identified as something of a priority by the Hayne royal commission into financial services when it reported in February last year. Aside from that, this is an issue that has been identified by this parliament for close to a decade now as something that required urgent attention to protect consumers from what is often a very complicated financial transaction relating to the negotiation of insurance contracts.

These are really important reforms for consumers. They provide additional and fairer protection for consumers when it comes to insurance and funeral insurance and to dealing with mortgage brokers and accessing mortgage broker services. As I said, these are complicated financial transactions. They often involve very long product disclosure statements. Most people don't read these statements, so they are not aware of the finer details when they are entering into these contracts. In relation to insurance, when people go to make claims and they haven't read the fine print, they find that they are not eligible for compensation for particular items they thought they were insured for. On many occasions, to the average Australian, the negotiation and the inclusion of those terms would seem unfair.

I mentioned that these are issues that have been identified by this parliament going back almost a decade. It was first identified under the previous Labor government, when David Bradbury was the minister. In 2013 he attempted to bring legislation to this parliament to enforce unfair contract terms in the insurance contracts regime. Unfortunately, the parliament lapsed before that could be prosecuted. In addition, there have been numerous inquiries imploring the government to act on this issue. Recommendation 6 of the ACCC's first interim report on the Northern Australia insurance inquiry in 2018 recommended provisions such as these. Then there was recommendation 3.1 of the report of the 2018 Parliamentary Joint Committee on Corporations and Financial Services inquiry into the life insurance industry; recommendation 11 of the 2017 Senate Economics Committee inquiry into the general insurance industry; and proposal 10 of the 2017 Australian Consumer Law Review. So the government's argument that the royal commission only reported 12 months ago and the government has been consulting—there has been an exposure draft—and gaining the necessary evidence to bring this to parliament does not hold up. This is an issue that has been identified through parliamentary and other inquiries for close to a decade now. Unfortunately, it is too late. Many Australians have suffered at the hands of large insurance companies when they should have been protected by earlier action from this government on these issues. Nonetheless, this bill does finally bring the unfair contract term regime to the parliament and Labor will be supporting this particular provision.

The bill contains three schedules which implement some of the recommendations of the financial services royal commission. Schedule 1 extends the existing protections of the unfair contract terms regime under the ASIC Act to insurance contracts governed by the Insurance Contracts Act. Schedule 2 extends consumer protection provisions of the ASIC Act to cover funeral insurance policies. Schedule 3 sets out a new best interest duty for mortgage brokers and allows for new regulations to restrict conflicted remuneration being received by mortgage brokers.

Schedule 1 finally implements the financial services royal commission recommendation 4.7 to extend the provisions and protections of the ASIC Act to unfair contract term provisions to insurance contracts covered by the Insurance Contracts Act. This means the bill will only apply to insurance contracts taken out by consumers or small businesses, not group insurers. One of the problems under our current insurance contracts regime is that the ASIC Act presently excludes terms that define the main subject matter of the contract from the unfair contract term regime. This bill will rectify that deficiency and it will amend the ASIC Act to provide that the main subject matter of an insurance contract is limited to the description of what is being insured.

The bill will also amend the ASIC Act to exclude terms that set the quantum or existence of the excess or deductibles in an insurance contract from the unfair contract term regime. This bill also amends the ASIC Act to allow for third-party beneficiaries to bring actions against insurers under an unfair contract term regime. They would be examples where a son or daughter of someone under a particular form of personal insurance seeks to bring a claim that's been denied by an insurer. This regime will allow a person to bring an action under the provisions of the act where they believe that there has been unfairness. But the test of unfairness, importantly, under this bill relates to what's been negotiated between the parties to the contract—in other words, the insurance for which the person was covered, not the third-party beneficiaries. It also maintains the current obligation under the Insurance Contracts Act for the parties to insurance contracts to act with utmost good faith.

In addition, the bill will ensure that terms that define the main subject matter of an insurance contract will be excluded from the UCT regime; however, terms defining the main subject matter of an insurance contract will be limited to terms which define what is being insured: for example, a house, a car or a person. Terms defining the upfront price payable for an insurance contract will continue to be excluded from the unfair contract term regime. Terms defining the quantum or existence of the excess or deductible of an insurance contract will also be excluded from the regime if they are disclosed up front and they are transparent and known by the person taking out the insurance.

Some examples of how this particular bill, once it is enacted, will assist consumers and rectify, hopefully, or provide the opportunity for people to take actions to rectify deficiencies in insurance contracts include home building insurance terms that provide that the most the insurer will pay in the event of loss of damage to a building is the cost to the insurer of rebuilding or repairing the building as opposed to the actual cost of the repair, which may be higher for the insured. When you go to insure your house you believe, if it burns down or something like that, it is going to be repaired in a similar vein to what you had there in the past. There have been provisions in contracts that allow insurers to get away with not repairing or not providing recompense to what was there in the past.

Other examples include: car insurance terms that require the insured to provide the name, registration and contact details of an uninsured at-fault driver when making a claim; consumer credit insurance terms that prevent an insured from making a disability claim if they were not diagnosed with a disability prior to leaving work; and travel insurance terms that allow a claim to be denied on the basis of a blanket mental health exclusion. They are examples of some of the provisions which will provide people with the opportunity to launch actions if actions such as those are taken by insurers in the future, once this act is enacted.

Schedule 2 of the bill implements the financial services royal commission recommendation 4.2, which recommended the removal of the exclusion of funeral expenses policies from the definition of 'financial products' under the Corporations Act and also recommended amending the ASIC Act to put beyond doubt that the consumer protection provisions under that act apply to funeral expenses policies. The ASIC Act currently provides that funeral benefits are not financial products and are, therefore, not subject to the consumer protection provisions of the act. The effect of this carve-out from the act is that providers of funeral expenses policies do not have to obtain an Australian Financial Services licence, are not bound by the general conduct obligations contained in section 912A of the Corporations Act and are not restrained by the antihawking provisions in the Corporations Act. As a result of that, we've seen some terrible behaviour that was highlighted in the financial services royal commission in this space by people and organisations selling dodgy products to, in particular and unfortunately, First Australians—Aboriginal and Torres Strait Islander Australians—in situations where people are vulnerable.

The royal commission uncovered evidence of the significant harm that can be caused to vulnerable consumers through poor sales practices adopted by some funeral expenses policy providers. Funeral expenses policies provide for the payment of funeral costs up to a nominated limit, and the payout of a policy only covers the cost of the funeral or things incidental to it, but nothing else. Some of the stories that were uncovered by the royal commission in the examples found that people with funeral insurance were paying considerably more in premiums than the payout that they were actually getting upon the case of death. There is a significant concern amongst consumer advocates that the Aboriginal Community Benefit Fund, which was heavily criticised in the royal commission, may not be able to conform to these changes. A failure of this organisation may leave a large number—it's estimated at about 19,000—of Indigenous policyholders without any insurance, after paying for it for many years. The royal commission heard evidence that this fund was accused of ripping off and misleading Indigenous families by creating pressure through sales tactics to sell them expensive funeral plans. When the fund's CEO appeared before the commission, it became clear he had no background in insurance at all and no qualifications that you would expect to be necessary for someone selling these types of policies to people.

The shadow minister, the member for Whitlam, has moved a second reading amendment calling on the government to protect the customers of the Aboriginal Community Benefit Fund. People simply cannot be made worse off because of the passage of this bill—that's something that we implore the government to take notice of. The government must protect these people in this situation. It's been identified by the royal commission as a big issue, and, if the passage of this bill means that that particular fund falls over, those people deserve protection. They've paid for that insurance over the course of their lifetimes.

Schedule 3 implements some of the financial services royal commission recommendations in respect to mortgage brokers, specifically recommendations 1.2 and 1.3, which recommended applying our best interest duty for mortgage brokers and banning conflicted remuneration for mortgage brokers. One would think that mortgage brokers would act in the best interests of their clients, but, unfortunately, as the royal commission uncovered and as numerous inquiries have uncovered, like most of financial service transactions in this country over the course of the last decade, that hasn't been the case. Notably, the government has chosen not to accept royal commission recommendation 1.3, unfortunately. This schedule, instead, provides for regulations to restrict the circumstances under which conflicted remuneration can be given in relation to mortgage brokers' services. The best interest duty will require mortgage brokers to act in the best interests of their clients and put their clients' interests as a priority when providing credit assistance. As I said earlier, one would hope that they do act in that manner, but that hasn't been the case. This government doesn't have the best record, I've got to say, when it comes to implementing best interest duties for financial services for consumers.

We all know that the government opposed FOFA when it was originally introduced by the Labor Party back in 2012, which provided a best interest duty generally for the provision of financial services in this country. Believe it or not, those opposite opposed that. They opposed the provision of a best interest duty in the FOFA regulations in that catch-all provision. The regulations restricting conflicted remuneration are expected to prohibit a number of forms of conflicted remuneration, including volume-based benefits, campaign-based benefits and benefits that include a clawback period greater than two years.

In conclusion, we support this bill. I do want to thank the Consumer Action Law Centre, CHOICE, Super Consumers Australia, the Financial Rights Legal Centre and WEstjustice for their feedback in Labor formulating our position on this important reform. It's overdue but it's now time for the government to get on and implement these important reforms and protect consumers in financial services.

Ms BURNEY (Barton) (12:06): People, including the previous speaker, the member for Kingsford Smith, have outlined in very clear detail what Labor's position is in relation to the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Bill 2019 and that is, of course, that we will support it, but we've moved some second reading amendments, and they are done very, very seriously. I want to restrict my remarks to schedule 2, which extends consumer protection provisions of the ASIC Act 2001 to cover funeral expense policies.

I have spoken previously to the Treasurer about the seriousness of this particular part of the legislation. It goes very much to what I am sure previous speakers have spoken about from this side of the House and that is around funerals. The Hayne royal commission has been clearly outlined, and it made some very real comments about the efficacy or lack of efficacy of the Aboriginal Community Benefits Fund. I just want to speak very clearly about that and the absolute need for the government to make sure that the people who have invested in that scheme—and we know that there are thousands of those people—are not disenfranchised because of the passing of this bill and the potential for organisations to fall over.

Within the Aboriginal community—and I will outline it here very clearly—the life expectancy, as people know, is much, much shorter than in others. The rate of disease is much, much higher. I have to say that there are many funerals that I have been to that are of people that are very young. Had they not been Aboriginal, they would still be with us. We know that infant mortality is much higher. We know that death from homicide is much higher. We know death from suicide is much higher. We know death from a number of diseases, including cancer and in particular heart disease, is much, much higher. We know diabetes is much, much higher. These are often comorbidities. So the issue of death is also, from a cultural perspective, viewed in a very different way. I can't tell you, Madam Speaker, how many funerals I've been to where people say to me, 'The only time we see each other now is at funerals,' and that is the reality for First Nations people in this country.

Thousands and thousands of First Nations people have taken the step of investing early, and they believe they've done it appropriately, in funeral benefit funds. I pay tribute to my very dear friend, Mr Graham Mooney, who died a dreadful death. He died far too young. I spent most of my holidays, as many others did, helping to organise and officiate at Graham's funeral. Graham had invested in this fund. It is so important that the government and the departmental people understand that this is a very real issue. We're talking about people who are poor. We're talking about people who have not wanted to burden their families, because they knew their families could not bear the cost of a funeral, so they have invested in this fund, often in very difficult circumstances. It is absolutely critical that this group of consumers is taken particular notice of, and that particular care is taken of them, if the passing of this legislation is going to null and void those insurances.

Many of them have been paid over and over again, because the investment was often when people were very young. In fact, there are many circumstances where parents actually signed their children up to these funeral funds because of the circumstances that I have outlined. So I urge the government, from a very human perspective, to please take notice of this and to please make sure that this group of consumers—I think you were talking about how many, Mr Jones?

Mr Stephen Jones: About 19,000.

Ms BURNEY: About 19,000 people—that they are not disadvantaged by this legislation. That would be a dreadful unintended consequence. That would be a cruel unintended consequence. Once again, I put on record that it is absolutely critical that this group of consumers is considered in the passing of this legislation. If they are not, it makes a mockery of the reason why we are supporting this bill, and if they are not, then it really does add another dreadful mark to a sorry history.

Like I have said, people have invested in good faith for the absolute right reason, and that is not to burden their families with the expense of a funeral. They have invested in these funds because they know the death rates of Aboriginal people and the ages of Aboriginal people in this country. We're not talking about statistics here; we're talking about real people and real families. Once again, I urge the government to make sure that the consideration in the implementation very much considers appropriately the group of people I'm speaking about.

Mr LITTLEPROUD (Maranoa—Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management) (12:13): I present a replacement explanatory memorandum to the Financial Sector Reform (Hayne Royal Commission Response-Stronger Regulators (2019 Measures)) Bill 2019.

Firstly, I would like to thank those members who have contributed to this debate. The government is committed to implementing its response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by extending unfair contract terms to insurance contracts; ensuring that adequate consumer protection provisions apply to funeral expense policies; introducing a best-interest duty requirement for mortgage brokers; and reforming mortgage broker remuneration.

Schedule 1 of the bill implements recommendation 4.7 of the royal commission. Extending an unfair contract terms regime to insurance contracts will ensure that consumers and small businesses are protected from insurers using unfair terms in standard form contracts. By preventing insurers from including unfair terms in insurance contracts and providing a mechanism to enforce, it enhances consumer rights and provides consistency in financial service regulation. The bill has been tailored to the specific features of insurance contracts to ensure its effectiveness. Applying the unfair contract terms regime to insurance is an important component of the reforms to this sector which, together, represents real, beneficial change to the insurance industry.

Schedule 2 of the bill ensures that the consumer protection provisions in the ASIC Act apply to funeral expenses policies. Many vulnerable consumers have been harmed by the poor sales practices adopted by funeral expenses policy providers. These reforms will subject providers of funeral expenses policies to the Australian financial services licensing regime.

Schedule 3 of the bill will impose a duty on mortgage brokers to act in the best interests of the consumer when providing credit assistance regulated by the National Consumer Credit Protection Act 2009. The reforms being introduced to mortgage broker remuneration will require the value of upfront commissions to be linked to the amount drawn down by borrowers instead of the loan amount, ban campaign and volume based commissions and payments, and cap soft-dollar benefits. Further, the reforms introduce a limit to the period over which commissions can be clawed back from aggregators and mortgage brokers to two years and prohibit the cost of clawback being passed on to consumers. Collectively, these reforms will mitigate the incentive for mortgage brokers to suggest loans that are not in the best interests of the consumer and will improve consumer outcomes. I commend the bill to the House.

The SPEAKER: The original question was that this bill now be read a second time. To this the honourable member for Whitlam 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 be agreed to.

Mr LITTLEPROUD (Maranoa—Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management) (12:25): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr STEPHEN JONES (Whitlam) (12:26): I am pleased to be speaking on this important piece of legislation, another one of the royal commission implementation bills. I'll interrupt myself and say the bill goes by the name of the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2019 Measures)) Bill 2019. It could equally go by the title: 'The Hayne royal commission has given us a boot in the backside for sitting on a report that we have been sitting on for well over two years and have done nothing on. We voted against a royal commission 27 times, and were dragged to the mark, and, by God, we better be seen to be doing something about this bill in 2020'. That would be a more accurate title for this bill.

With that said, we welcome the fact that, after sitting on a report that they themselves commissioned back in 2016, a report to government about what they needed to do to strengthen the powers of the enforcement regulators, of the corporate regulators, they've finally done something. They wanted to be seen to be doing something when they actually weren't. After commissioning the report, and then sitting on it since 18 December 2017, and with all the speed and agility of a wounded wombat, they have brought this bill into the House today and they expect a pat on the back. We will support the bill, but we're not going to issue them with a pat on the back. We will support the bill but there'll be no pats on the back.

The bill provides ASIC with some new powers to help them combat corporate crime and bad behaviours by banks—powers that they've needed for a long time. Schedule 1 and 2 of the bill extend ASIC's powers to search and receive evidence, providing them with new capabilities that will help prosecute serious offences. Schedules 3 and 4 of the bill enhance ASIC's licensing and banning powers, giving the corporate regulator a greater ability to stop bad actors before they go too far—sensible stuff.

Labor support the enhancement to ASIC's powers and we will support the bill. But, as I've said in my introductory comments, we do ask why it's taken the government so damn long to get here. Why has it taken them so damn long to get here when the ASIC Enforcement Review Taskforce handed down its findings more than two years ago and the government then sat on those findings? Schedule 1 of the bill actually harmonises and aligns ASIC's various search warrant powers with those contained within the Crimes Act, removing the current requirement for ASIC to forewarn those under investigation. That's important. If we're going after these crooks we don't want to put them on notice and give them the opportunity to avoid detection. We don't want to be providing corporate wrongdoers with the opportunity to destroy or conceal evidence of misconduct. ASIC is responsible for investigating serious indictable offences involving corporate criminal misconduct, those that carry a prison sentence of 12 months or more. In cases like this, ASIC should have the powers of any law enforcement body charged with investigating serious crimes. The government has our full support.

Schedule 2 of the bill also amends the law to allow ASIC to access and receive telecommunications and intercept material to investigate and prosecute serious offences, bringing them into line with other agencies responsible for investigating serious offences. In fact, it might surprise many that they don't already have the ability to receive this information. They don't, but they should have. The chief officer of an interception agency will be able to provide an ASIC member or staff member with information about an interception warrant or lawfully intercepted information—that is, they are able to pass on that information. It makes sense and should be supported by all members of this House. This will apply where the information relates to matters involving a serious offence or the likely commission of a serious offence. These are serious powers only because—I'm sorry, that is Siri on my phone! Who said Siri's not listening!

Schedule 3 of the bill—now that I've switched off the interception powers of Silicon Valley—strengthens ASIC's licensing power. This will also help ASIC ensure that credit and financial service licensees and the people who control them are fit and proper to be carrying on financial services businesses. Ensuring that controllers such as significant shareholders are fit and proper is essential in deciding whether a license should be granted or retained. Too often we saw that in evidence before the royal commission, and I dare warrant members of this place have had representations from constituents who have been victims of poor financial advice. I myself, in my first term in office, received representation after representation from victims of the collapse of Trio Capital. They had been sold investments into these by financial advisers who were subsequently disbarred. The enforcements actions of ASIC should have kicked in a lot earlier. We want to make it a sufficient bar. It is described within the industry as a nuclear option but it is an option that should be available to ensure that we aren't creating more victims, as many members of this place will attest to.

Schedule 4 of the bill expands ASIC's power to ban people from the financial services industry. They're important reforms. As Commissioner Hayne has shown, there are too many shonks and shady operators that have been allowed to swim in the sea of finance. It is consumers and investors who are the victims. The schedule 4 reforms will give ASIC a much broader range of grounds to make a banning order against such a person. Importantly, that will include noncompliance with financial service laws—and so it should—and the management or oversight of the conduct of a financial services or credit business.

In the course of my contributions I was unusually interjected on by my phone, the voice of Siri shouting, 'I'm on it.' If only it were so easy to get reform in this place as to bark to your mobile phone—that would be a good thing. The reforms recommended by the ASIC review handed to government two years ago would have already been implemented. And there were the recommendations—the giddy-up—given by the Hayne royal commission, instructing the government that it really ought to have implemented the recommendations of that review over 12 months ago. It behoves the government and all upright thinking members of this place to act in the interests of their constituents, of the consumers of financial advice and of all of us who rely on having a financial services sector staffed by professionals and overseen by regulators who are ready to ensure that wrongdoers are brought to justice. With those brief and precise comments, I commend the bill to the House and I move the amendment circulated in my name:

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

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

(1) has taken more than two years to implement the recommendations of the ASIC Enforcement Review Taskforce; and

(2) chose in December 2019 to prioritise failed anti-union bills instead of legislation to implement the recommendations of the Royal Commission".

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

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

Mr FALINSKI (Mackellar) (12:36): After such a stirring speech, I am inclined to sit down and just say we agree with the member for Whitlam. No-one else can take 10 minutes to say 'I agree' as well as the member for Whitlam. So stirring was his speech that even Siri wanted to get in on the act! I can't follow that. I can't beat what he said, so I will keep it brief. We are moving the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2019 Measures)) Bill 2019. The bill seeks to do the following. The financial sector reform bill forms part of the government's comprehensive response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which is set out in the Financial services royal commission implementation roadmapreleased on 19 August 2019. The bill implements a number of recommendations of the 2017 ASIC enforcement review taskforce report, and will benefit Australians by strengthening ASIC's regulatory powers, helping ASIC to better protect consumers—

(Quorum formed) What a disgrace. The Labor Party claims to be in favour of consumers and this is how they treat this House. They say that they want to pass the Hayne royal commission recommendations. They can't help but play games. They are a disgrace. They say they want to protect consumers. They just want to protect their union mates and industry super, who are only interested in ripping money off consumers in Australia. They will shut down for as long as they possibly can any speaker who points out their hypocrisy. They say that no-one in this House who wants to speak on consumer protection is important enough to shut down, but they can't help but move their silly recommendations and their stupid amendments while they say that they're in favour of the bill. They are a disgrace. The people of Australia should realise that the one party in the parliament of Australia that is standing between them and consumer protection is the Labor Party.

I will also say this: the Labor Party had six ignominious years in government between 2007 and 2013.They gave ASIC more powers, more resources than they've ever had before, and what did it result in? It resulted in the Hayne royal commission. They talk about Trio. They talk about Storm. When did they happen? They happened under Julia Gillard, under Kevin Rudd, under Bill Shorten, under all of their ministers, under their entire government. They have nothing but the most reprehensible record when it comes to financial services. They have nothing but the most ignominious record when it comes to protecting consumers, but they have the gall to come into this House and lecture us. And the minute someone stands up and tries to point out their hypocrisy all they can do is shut down debate, because that's what the once great Labor Party has turned into. This House should pass this bill and it should do it now. It should do it without considering the amendments of the member for Whitlam.

Mr LITTLEPROUD (Maranoa—Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management) (12:42): It gives me great pleasure to be able to summate this bill, an important bill, as we've heard from our passionate speakers from both sides. I thank all members for their contribution in this debate. Obviously, it's an important part of reform that the government has taken seriously, and the government has been calm and methodical in its implementation. We will make sure that this has considerable impact on the community moving forward. Obviously, I commend the bill to the House.

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

Mr LITTLEPROUD (Maranoa—Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management) (12:52): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr STEPHEN JONES (Whitlam) (12:53): I am pleased to be speaking on this important piece of legislation, the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019. It concerns mandatory credit-reporting arrangements. It is probably worth explaining a little bit how these arrangements work. For a bank or any financial organisation to pass personal financial information to a third party, they would need the permission of the owner or the party to whom the information relates. Otherwise, they would be in breach of the National Privacy Act and the National Privacy Provisions. However, Labor has always considered that there was a consumer benefit in having a national credit-reporting arrangement. We think it's pro-competition because it sets up a regime whereby we can have a standard and objective set of measures which enable a bank or another financial institution to assess the creditworthiness and the credit history of an applicant for a credit product. To enable such an arrangement to be put into place, clearly we needed to make some amendments to the national privacy legislation. Indeed, that's exactly what Labor did back in 2012. We put in place a comprehensive credit reporting regime by amending the Privacy Act to allow for credit providers to share repayment information with credit reporting agencies who can consolidate that information and then onsell it to lenders. We believe it's pro-competitive. It supports competition in the financial industry. It allows small banks and lenders who do not have access to the significant amounts of information and perhaps the market reach to get access to financial data, enabling them to make better lending decisions.

I make the point of identifying small banks and small financial institutions for this reason: most of the large banks have already got this information. If they've been dealing with a customer for many, many years and have access to multiple financial product information and the repayment history, they'll have that data. It's the small banks who won't have access to that data. Therefore, when they get an application from a consumer who wants to switch banks, it's that much harder for them to assess their credit history and therefore their creditworthiness.

Credit reporting also allows for increased price discrimination by lenders and may reduce the ability of people with bad credit histories to receive loans. The legislation before the House, in part, goes to this issue. Let me explain this: the current framework for the Privacy Act does not adequately support transparency of credit reporting information and does not currently support all of the passing on of information that we think is necessary.

One of the things that has been identified is what is described within the industry as a hardship flag. Let me explain how that works. Let's take a very probable set of circumstances that can occur at the moment, after the bushfires, the floods and even the hailstorms. Somebody has a credit arrangement with their bank. Their property has been burnt down and their business has been burnt down. They're going to have a period of time out of work or with disrupted income flows. The bank knows that. The banks, for the most part, have published nationally their willingness to enter into hardship arrangements, suspend repayments et cetera. That person goes to their bank and they say, 'Look, I need a holiday on my repayments because of this hardship.' A good banker, and most of them are, will agree and put in place an informal suspension of repayment requirements.

For the most part, in those sorts of hardship circumstances where it's a natural disaster or some other unforeseen event, it won't constitute a variation to the credit contract. The credit contract remains in place but there's an informal arrangement between the bank and the creditor. A hardship arrangement is flagged within the bank's system but is not passed on to the credit reporting agency as a hardship flag. What is passed on is that the repayment history has been interrupted. What the bank actually passes on to the national credit reporting agency is what is referred to as RHI, or repayment history information, that relates to each and every one of those individual customers. So, if we take the current bushfires as an example, when an informal arrangement is reached with your bank and you're not meeting your mortgage repayments, the bank will still pass on information to the national reporting agency, and that will affect your credit score.

This obviously has to be dealt with and, in the context of widespread disruption to economic activity visited upon businesses and households by the bushfires, this should be urgent business. We should be dealing with this. This should be urgent business to ensure that the initial hardship visited on somebody by the natural disaster is not compounded by the fact that they have a hard-to-repair interruption to their repayment history information. We want to have that fixed. We were actually concerned when this matter came before the last parliament that we needed to be cognisant of a review that was going on with the Attorney-General's Department so as to ensure the feedback through the Attorney-General's Department was reflected in the legislation. Our initial view is that most of that has. I will flag here that we won't be opposing the bill in the House—we support the general thrust of what is being proposed here—but it is almost certain that we will be moving some amendments in the other place.

Labor believes that there is a need to ensure that the current credit-reporting arrangements allow more-frequent and more-detailed access to information on behalf of consumers. We want to ensure that consumers are able to have access to information that relates to them. There are two reasons for that. It's their information, and there may be errors in the information or the need for them to repair some of that credit history information. Quite often when somebody is going to take out a new loan or apply for the refinancing of a loan the bank will have access to the information but the individual may not. We want to ensure they have that. Under current arrangements, the current framework within the Privacy Act, individuals are only allowed to access a free copy of their credit information once every year and in certain other specific circumstances. In addition, under the current arrangements reporting agencies have used loopholes within the Privacy Act to refrain from disclosing what is known as 'credit scores'—RHI credit scores. As a result, credit-reporting agencies have developed quite a profitable side business in the onselling of those credit scores—in fact, charging customers to access the individual's personal credit history. We think it's the individual's information and that they should have access to that and should have more timely access to that information.

The sorts of amendments that we will be proposing will allow individuals to access a copy of their credit information held by a credit-reporting agency free once every 10 days. They will require derived or generated credit scores to be disclosed to individuals as part of their rights of access to credit information. They will require the individuals to receive a statement summarising the key determinants of their credit score as part of their rights of access to credit information. They will allow the Australian Information Commissioner to create rules in relation to each of the above proposals. These are propositions that are strongly supported by consumer advocates. It is worth pointing out that similar provisions currently exist in New Zealand. We don't believe, on the information available to us, they will impose any significant new cost on the credit-reporting industry. They will, however, provide additional rights to consumers and additional competition benefits to the sector as a whole.

With these observations, I commend the bill to the House. I hope it has a swift passage here, and I look forward to progressing in the other place some of the issues that I've foreshadowed.

Mr FALINSKI (Mackellar) (13:04): I appreciate the opportunity to speak on the bill. I also appreciate that this time the member for Whitlam has decided to agree with us without moving an amendment, so we are finally making progress in the House.

The National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019 will deliver benefits for both consumers and credit providers, and increase competition in the lending market by reducing credit data advantage held by the major banks. Comprehensive credit reporting seeks to achieve several benefits both for credit providers and for consumers. Consumers will have better access to consumer credit, with reliable individuals and small-business owners drawing on their credit history to seek more competitive rates when purchasing credit. In addition, consumers that possess a poor credit rating will also be able to demonstrate their credit worthiness through future consistency and reliability.

Credit providers will have the ability to obtain an accurate and comprehensive picture of a consumer's financial situation. This will enable providers to better meet their responsible-lending obligations and price credit according to a consumer's credit history. As the member for Whitlam pointed out, schedule 1 of the bill means that the five largest banks will be required to supply 50 per cent of their comprehensive credit information to credit-reporting bodies within 90 days from 1 April 2020. The information on the remaining accounts must be supplied within 90 days from 1 April 2021.

The security of consumer information is of high importance to the government. The Privacy Act already has strict provisions that apply to how consumer credit information is handled. The bill maintains these provisions, and also requires credit providers to satisfy themselves that a credit-reporting body is meeting reasonable security standards before they supply consumer data. The bill also requires the credit-reporting body to store credit information within Australia and external territories or according to alternative security requirements in regulations, if established, for storage outside Australia. The Australian Securities and Investments Commission will enforce the new mandatory regime. Where credit providers and credit-reporting bodies are subject to requirements under the bill they will be subject to penalties if they fail to comply.

The second schedule of the bill will establish a new type of credit information—financial hardship information—in the Privacy Act to allow reporting of consumer credit contracts affected by hardship arrangements, with hardship indicators to identify such circumstances. To ensure consumers are not being unfairly disadvantaged by this change, the bill will amend the credit act to prevent banks from using financial hardship information as the sole reason to freeze an existing credit account or to reduce a credit limit on an existing credit account. The bill will also prevent credit-reporting bodies from incorporating financial hardship into credit scores. The Office of the Australian Information Commissioner will continue to oversee the credit-reporting system, including receiving and attempting to receive complaints about mishandling of credit information or inaccurate credit information. The OAIC also has the power to investigate, order compensation and issue fines. The bill also requires the government to complete, prior to 1 October 2023, an independent review of the mandatory regime and the credit-reporting provisions, including the impact of hardship-reporting requirements.

The state of Georgia in the United States, for reasons known only to them, decided to ban credit-reporting bureaus until the year 2004. When they finally legalised this form of credit reporting, it allowed people, banks and financial institutions in that state to massively increase the amount of credit available to consumers by over 50 per cent, reduce margins by over half to all consumers, and to grow the economy in Georgia by an above-average rate for the next decade and a half. Credit reporting is key to what the financial services sector does in order to make sure that our economy gets to grow, in order to ensure that people are able to live their lives to the full capacity they want to live them.

This parliament now insists—in my view dangerously, but nonetheless—that financial institutions are responsible for the decisions that consumers make in terms of whether they can or cannot afford the credit that they have decided to borrow and that that falls solely on the financial institution, which they're doing. This parliament has hamstrung financial institutions from doing that by only allowing them to have limited information in terms of credit scores. It has also stopped third-party people from being able to provide applications and services which allow them to help consumers break through the complexity of our financial system to find the best products that they want.

This bill and the reforms contained within it are critical to us delivering a better life for millions of Australians who have been denied credit, who have been denied the best form of credit that they can have and who sometimes have been provided with credit they should not have taken. I commend the bill to the House.

Mr THISTLETHWAITE (Kingsford Smith) (13:10): The continuing flow of credit is the lifeblood of the Australian economy, and this must be effectively balanced by the need for free-flowing credit along with responsible protections for customers and their personal data. Since Labor's 2012 reforms to the credit reporting system, we've encouraged competition in the credit lending marketplace. This system allows smaller banks and lenders who do not have access to significant amounts of financial data themselves to make better lending decisions.

This bill legislates the requirement for major banks and credit providers to provide detailed credit information to credit reporting bodies, with the aim of enabling credit providers to better meet responsible lending obligations. At the same time, it provides protections for consumers to ensure that the supply of that credit information can't be abused by unscrupulous operators within the sector.

Schedule 1 of the bill requires major banks to provide detailed credit information to credit reporting agencies from 1 April 2020. This element of the bill will have no immediate effect. All eligible major banks already supply this detailed credit information to credit reporting agencies, so it is basically legislating something that already occurs within this industry. But, admittedly, it is a reform that the banks have only taken on in recent years.

Schedule 2 sets out new standards for how people in financial hardship should be treated by credit reporting agencies. The new standards will create two hardship flags that are placed into credit reports for individuals. The hardship flags will set out whether an individual has a permanent variation or a temporary variation to their credit obligations.

The changes in this legislation bring it into line with current industry best practice and will allow for customers to better demonstrate their credit worthiness. This change will also generate more transparency and accountability and competition in the credit market. The bill also establishes new standards, as I mentioned earlier, for people who are experiencing financial hardship. These two financial hardship flags can be placed into credit reports for individuals. Those hardship indications will better distinguish between customers experiencing long-term hardship and a permanent variation to their credit obligations and customers experiencing a temporary variation to their credit obligations. This allows customers more freedom to access hardship provisions without undue fear of negatively affecting their credit rating into the future.

These protections are important. We have all seen how, in other jurisdictions, credit ratings can be used against customers—in particular, vulnerable customers—to deny them credit in situations where they otherwise would not be affected. By allowing customers greater access to nuanced hardship provisions, the bill seeks to ensure the continued flow of credit in our economy and to allow customers to access legitimate hardship provisions before their financial situation deteriorates beyond repair.

Further amendments could be made to reduce the length of time for these hardship provisions and how much information is stored by credit reporting bodies once the hardship provisions have ended. We know that people go through situations in life where they experience hardship in terms of their financial position, but they get out of it. They work their way through it. That financial hardship doesn't last forever. Similarly, when people access these nuanced provisions and are taken by the hardship flags, once they are out of that situation that particular classification shouldn't last forever on their credit file. Perhaps that's something the government should consider further into the future. This will further remove barriers for customers to access hardship provisions, which will be better for both credit providers and customers, allowing credit providers to receive the money they're rightfully owed and ensuring customers can continue to make repayments within their means.

The banking royal commission has demonstrated that customers need more protection and freedom, and under this bill customers will continue to be eligible to only one copy of their credit information each year. This puts customers at a disadvantage when making financial decisions and shopping for the most competitive credit. Individuals should be able to access their own credit information significantly more often. They should also be entitled to know how this credit information is calculated and what the key determinants of their scores are. In the credit market, information is powerful. It's time that we levelled the playing field and gave customers access to their own information about their own credit scores. The credit-reporting system should be as transparent as possible so that people can access, understand and seek corrections to their credit-reporting history.

The Information Commissioner should be given the liability to protect sensitive personal data, as customers have seen too often in recent years that large financial institutions we trust with our personal data have been unable or unwilling to adequately protect some of that data. Effective oversight of personal information available in the credit-reporting marketplace is central to ensuring public trust of credit reporting systems. This bill reflects many of those concerns which we've heard from the industry, customers and the Office of the Australian Information Commissioner by allowing credit providers to withhold personal credit information if they reasonably believe that the credit-reporting body is not complying with the data security requirements of the Privacy Act. That's an important reform as well.

The bill in its current reform goes some way to bringing the legislation in line with current industry practice, but the government should consider further reforms in ensuring protections for customers seeking credit and information on their personal data in a regular and timely fashion. Nonetheless, this bill is an improvement and a codification of the way the industry works at the moment. On that basis, Labor will be supporting the bill and its passage.

Ms HAMMOND (Curtin) (13:18): I'm pleased to speak in support of the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019. The government has consulted widely with credit providers and consumer groups in relation to this bill, and all are supportive. The bill is another example of the reforms implemented by this government that are designed to increase competition in the financial sector. The bill is going to implement the government's comprehensive credit-reporting regime and will place Australia in line with many other developed nations who already have comprehensive credit-reporting regimes in place—this includes the US, the UK and New Zealand. This regime will provide benefits to lenders and borrowers while also preserving and enhancing important security and consumer protections. It will also increase competition in the lending market by reducing the credit data advantage held by the major banks.

Consumers are going to have better access to credit, and those with a reliable credit history will be able to use this to seek more competitive rates. Those consumers who possess a poor credit rating will be able to demonstrate their credit worthiness through future consistency and reliability. Credit providers will have a more complete picture of a consumer's financial situation. This will help them to better price credit, better assess risk and meet the responsible-lending obligations.

Schedule 1 of this bill amends the credit act to establish a mandatory, comprehensive credit-reporting regime which will apply from 1 April 2020. It does this through requiring our largest banks, those with total resident assets of over $100 billion, to provide comprehensive credit information to credit reporting bodies from 1 April 2020. By mid-2021 our largest banks will have supplied comprehensive credit information on all consumer accounts to every eligible credit reporting body.

This bill, importantly, is also going to ensure the security of consumer credit information. That's an issue of high importance to this government, and data privacy is an issue of grave and significant importance to all Australians. This bill is going to strengthen the already strict provisions of the Privacy Act relating to how consumer credit information is handled. The current provisions in the Privacy Act regarding disclosure and use or collection of credit information are maintained. This amendment is not going to affect those, but this bill is going to add to the protections in a number of ways, including, firstly, requiring credit providers to satisfy themselves that a credit reporting body is meeting reasonable security standards before they supply their customer data, and, secondly, requiring credit reporting bodies to store credit information within Australia and external territories or according to alternative security requirements in regulations for storage outside Australia, if established—if the regulations are put in place.

As I said before, while people are happy accessing and providing information, people are very concerned about what their data and information are utilised for. This particular bill will enhance the existing protections relating to credit. It should also be noted that the Australian Securities and Investments Commission is going to enforce the new mandatory regime. Where credit providers and credit reporting bodies are subject to requirements under the bill, they will be subject to penalties if they fail to comply.

Schedule 2 of the bill incorporates the results of a review by the Attorney-General into the treatment of financial hardship information, providing the legal certainty required for this information to be shared. Based on this review, the bill establishes a new type of credit information in the Privacy Act that will indicate consumer credit contracts affected by a financial hardship arrangement. To ensure that consumers are not unfairly disadvantaged by this change, the bill will amend the credit act to prevent banks from using financial hardship information as the sole reason for freezing an existing credit account or reducing a credit limit on an existing credit account. The bill will also prevent credit reporting bodies from incorporating financial hardship information into credit scores. This should assuage any concerns that consumers have with respect to their data.

The Office of the Australian Information Commissioner will continue to oversee the entire credit reporting system, including receiving and attempting to resolve complaints about the mishandling of or inaccurate credit information. The OAIC has the power to investigate, order compensation and issue fines.

As with most laws, a balancing act needs to be taken. In this case, as with everything that came out of the Hayne royal commission, we want to make sure that there's not an undue restriction on people's access to credit. As has been noted before, particularly in light of the disasters and the tragedies that happened throughout the end of last year and the beginning of this year, it is important for our small businesses and our families to have access to credit and to not have that access restricted. At the same time, and to balance that, we need to measure it against irresponsible lending practices and risky borrowing. This bill achieves that. It will set up a framework that will make sure that that balance is actually attained. To that end, I commend this bill to the House.

Ms SHARKIE (Mayo) (13:25): I rise to briefly speak on the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019. The bill will establish a mandatory comprehensive credit reporting regime to apply from 1 April this year. It will provide that a credit provider cannot refuse to provide further credit, or reduce a consumer's credit limit, merely because of financial hardship and that information that will exist.

While Centre Alliance support the bill, we are concerned that the hardship arrangement indicators scheme, as outlined in schedule 2, may lead to unfair outcomes for people who are financially vulnerable. However, it has been noted by both the Financial Rights Legal Centre and the Consumer Action Law Centre that the retention of hardship information for a period of 12 months may ultimately mean people are less likely to reach out to credit providers to help for fear of having a hardship flag placed on their file. As noted by the Financial Rights Legal Centre, this may have a perverse impact on those families and businesses that are coming to terms with the financial consequences of the bushfires.

Many banks are offering assistance packages to those who may be unable to meet their financial obligations in the short-term. However, those individuals who then access any assistance will have a hardship brand on their credit report, and that hardship information will remain on their credit report for a period of 12 months, notwithstanding their financial difficulties may only have been for a few months or even, indeed, weeks. As a consequence, individuals may be forced to seek out riskier forms of credit such as high-cost payday loans, which are trapping Australians in a cycle of debt. Similarly, as individuals in hardship are unfairly rejected for credit, there may be no other option for those experiencing financial hardship than to turn to those payday lenders and consumer leases to secure the goods they need to recover from the recent bushfires. This will make getting out of the poverty trap, out of the debt trap, even more difficult.

In relation to payday lenders and consumer leases, I again note that there have been over 1,000 days since the government accepted the independent Review of Small Amount Credit Contracts and that the government is still yet to introduce legislation to address all of the recommendations of the SACCs review. I therefore move the following amendment in the terms circulated in my name:

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

"whilst not declining to give the bill a second reading, the House notes with concern that:

(1) the retention of hardship information on individuals' credit reports for 12 months is unfair and will discourage people from seeking help from credit providers;

(2) this bill may encourage people to seek out riskier forms of credit, such as high-cost payday loans that are trapping Australians in a cycle of debt; and

(3) it has been over 1,000 days since the Government accepted the recommendations of the independent Review of Small Amount Credit Contracts but the Government is yet to introduce legislation to address these recommendations.

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

Dr Haines: I'm pleased to second the motion and I reserve my right to speak.

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

Question negatived.

Original question agreed to.

Bill read a second time.

Ms LANDRY (Capricornia—Assistant Minister for Children and Families) (13:30): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.