Senator RONALDSON (Victoria) (09:32): I seek leave to move the amendments standing in my name together.

The TEMPORARY CHAIRMAN ( Senator Hutchins ): Is leave granted?

Senator Wong: We did not receive these, Senator Ronaldson, so I would prefer it if we could go through them separately.

Senator RONALDSON: I am very surprised if that is the situation because these were circulated some considerable period of time ago.

The TEMPORARY CHAIRMAN: Leave is not granted. Senator Ronaldson, would you like to move your first amendment?

Senator RONALDSON: Yes, I would. I will say, prior to doing that, that this is no secret or surprise to the government. This was all flagged well in advance, in fact, during the May session. I move amendment (1) on sheet 7037 revised:

   (1) Title, page 1 (line 2), after “ 1973 ”, insert “ and the Defence Forces Retirement Benefits Act 1948 ”.

Senator HUMPHRIES (Australian Capital Territory) (09:34): I rise to support not just the amendment that Senator Ronaldson is moving but the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010 as a whole, which is being presented by Senator Ronaldson to ensure that Australia attends to one of a number of serious omissions with respect to proper indexation of pensions of those who have served Australia, in a variety of ways, in what might loosely be described as public service.

It has been clear for some time that Australia has experienced a problem with the standard of living provided to those Australians who have been either public servants or members of the Defence Force in that it is not keeping pace with the standard of living provided to other Australians who are the beneficiaries of Australian govern­ment pensions. The pensions of, for example, aged pensioners—as is well known—are adjusted by a combination of factors, the greater of the consumer price index or the male total average weekly earnings. As a result, it is fair to say that pensions overall, such as age pensions, have kept pace quite appropriately with the level of rising prices and in many cases have exceeded those levels. What is also clear, however, is that those with fixed incomes based on other kinds of pensions—Commonwealth super­annu­ation pensions and various Defence retirement pensions—have not had the benefit of that adjustment. It is time that we as a nation took proper steps to respond to the expectation of those Australians that their living standards would be protected by virtue of their having been servants of the Com­monwealth.

This bill deals with the question of the indexation of the pensions of Australians who have served in certain forms of defence. It is appropriate that that indexation be considered—not as the entire and final answer to this issue because, as I indicated, there are other manifestations of this problem which are not addressed this bill but must be tackled in the longer term—in order to ensure that Australians do justice by those people who have served loyally and whose standard of living is not keeping pace with rising prices. I particularly look forward to hearing the contribution of the Australian Greens to this debate. I can recall this issue being one of extreme importance in the ACT context during the last federal election. I can recall that the Australian Greens made a sweeping promise that their support would go to the improvement of indexation arrange­ments for all retirees—all Australian government or defence retirees—at the higher standard of male average weekly earnings or the consumer price index. They solemnly maintained that this was a fair, appropriate and just thing to do. The bill before the Senate today, although it does not entirely achieve that objective, does take that objective an important step forward. I hope and expect that the Greens will be good to their word—particularly as it relates to the Australian Capital Territory electorate, where this was an issue of some considerable importance to a very significant proportion of the population—and that they will ensure that this legislation is passed.

It is important to ensure that the Australian government and the Australian parliament review these arrangements on a continuous basis. That has occurred, in a sense, through a number of inquires in this parliament. The Senate has conducted a number of inquiries into the question of indexation levels of Australian retirement pensions provided by the government. It has looked at this issue on numerous occasions, and on every occasion a Senate committee has addressed this issue it has come to the same view: that the consumer price index is not of itself a satisfactory measure of indexation for people in that position. Sadly, other reviews conducted outside the parliament, by people who have been commissioned to consider this question, have not come to the same conclusion. With all due respect to the minds that were applied to this issue outside the parliament, I think they have got it wrong and that the question of appropriate indexation is better addressed through Senate committees—which were often chaired by Senator Watson in previous parliaments—and other parliamentary committees.

I think it is important that we come to this issue afresh and begin to address the issue. It has remained unfinished business for such a long period of time before the parliament and particularly the Senate, which has focused on the issue very strongly. The amendments that Senator Ronaldson will move today will ensure that the legislation better focuses on that question. They deserve the serious and sympathetic attention of the Senate. We must not let this issue remain unaddressed for much longer. It is clearly a question that many people in our community depend on having answered in order to address what for them is a static or even declining standard of living. We simply cannot tolerate that to be the case. This legislation takes an important step in the direction of addressing that unfinished business, as I have called it, which does need to be tackled as soon as possible.

Senator RONALDSON (Victoria) (09:41): by leave—After some discussions with the minister, I also move amendments (2) and (3) on sheet 7037 revised together:

(2)   Clause 2, page 2 (table item 2), omit "Schedule 1", substitute "Schedules 1 and 2".

(3)   Clause 3, page 2 (line 11), after "members", insert "and Defence Forces Retirement Benefits Scheme members".

Amendments (1), (2) and (3) are the enabling provisions for proposed schedule 2, or amendment (5), which is to bring the DFRB scheme into this bill. There was a drafting error and these amendments seek to address that so that the DFRB and the DFRDB will be dealt with by this bill.

Quite rightly, there is a very strong view in the community that this is a fair, just and equitable indexation outcome. There is a very strong view amongst those on this scheme that they are currently being un­reasonably dealt with. They have made it quite clear, and I and the coalition fully support them. How can it be that they are treated differently from age pensioners? How can that be fair or just? Clearly, it is not. I say to the chamber today that there is a huge obligation on us to ensure that people who have served this country are appropriately dealt with. How can it possibly be that this chamber can tolerate differential treatment of people in this situation? Are we now to throw out once and for all the notion of the uniqueness of military service? Effectively, if this bill is not supported today, we are removing something that has underpinned this parliament and this country for decades. On a bipartisan basis we have supported the notion of the uniqueness of military service —and, if this bill is not supported, it will be unique for all the wrong reasons. It will be unique because fair and equitable indexation will not be provided.

When the CPI was first used as the measure of indexation decades ago, it was a reasonable measure, but it is no secret, and nor should it be, that age pension indexation was changed because the CPI no longer reflected what was reasonable indexation. It no longer reflected the maintenance of purchasing power—and that is the very reason that age pensions were altered.

I look back at this debate over the last 12 months and at those who have supported it. Senator Lundy will come in here today and vote against this bill given her previous comments and those of many of her colleagues. I have with me a letter that was written by Senator Lundy and those who supported her. They were the former member for Fraser, Bob McMullan; the member for Canberra, Annette Ellis; the member for Wakefield, Nick Champion; the member for Eden-Monaro, Dr Mike Kelly; and Senator Lundy. They said that, by failing to act, the government had gone back on an election commitment made in 2007.

The letter was written to Lindsay Tanner, the former finance minister, after the release of the now severely tarnished Matthews report, which I do not think anyone supports in any measure at all. I know for sure that the RSL does not support it. I note that Rear Admiral Ken Doolan AO RAN (Rtd) and Les Bienkiewicz, who is from the Defence Force Welfare Association, are here. I do not think any of their members thought for one minute that the Matthews inquiry was a reasonable inquiry; no-one supports it, and nor should they, because it has been completely tarnished. In the letter Senator Lundy and her colleagues said:

Understandably, there is a huge disappointment in both the findings and the government response announced on the same day. It had been widely expected that the recommendations would have supported a change to the method of indexation of these pensions to that of which is high, MTAWE or CPI, consistent with the pension, following the earlier Senate and other inquiries. Significantly, many people genuinely believe that prior to the 2007 election the ALP had committed to determining a fairer method of indexation, and a review would provide the direction. So the immediate acceptance of the recommendation of no change in government response is being seen as a reversal of the pre-election position espoused by the ALP …

So how could Senator Lundy possibly come in here today and oppose this? This is longstanding ALP policy, and quite rightly, because the differential is unfair and unreasonable. How can the government come in here and use as their only method of defence the fact that it is fiscally irres­ponsible? No doubt the finance minister will also do that. It is complete and utter bunkum. How dare this government oppose this equity measure, this fairness measure, on the back of some quaint notion about fiscal irres­ponsibility!

Senator Wong: 'Quaint'!

Senator RONALDSON: I will take that interjection from the finance minister. Her government has overseen a level of expenditure and wastage unseen in this country's history. Why should the gentlemen sitting in the gallery today, and the 30,000 people who will be supported by this bill, pay for your fiscal recklessness? Why should they be penalised for the fact that you have absolutely no control over your spending, that your spending has been completely out of control, and that you have taken this country from $40 billion in the black to $110 billion in the red? Why should they pay for that? How can you come in here and plead some case when you know that the government does not even support what you say?

Senator Wong: You can't even get your figures right. It is complete incompetence.

Senator RONALDSON: Senator Wong, I would like you to go back to South Australia and explain to the DFRDB men and women why you opposed fair indexation. I hope members from South Aust­ralia were listening to your comment. I am sure that you will be reminded on many occasions of your comment in relation to this matter.

As we have discussed before, Senator Wong's, in my view, cute defence—although 'cute' is too tawdry a word—in relation to costings, with carefully selected quotations from the AGS, is absolutely appalling. You and I know, Minister, that there are savings that were identified by the coalition which—surprise, surprise!— the government took up in the budget. So, having accused us of not having any offsets, you actually stole the offsets that we had identified. 'Oh, no, they're not there!' the minister said. 'Oh, no, they're not there!' other ministers said. Well, they were there, and they were identified. They were identified by the government itself in the budget and you lifted exactly what we were talking about.

I am not suggesting that that was inappropriate, clearly, because we had suggested it ourselves. What I am saying is that you actually have taken the money that we used as offsets and put it somewhere else—not to support these people, these superannuants. You have taken it elsewhere. Why should they cop that? Why should they cop you taking our savings and putting them elsewhere? The fact is there is absolutely no reason why they should cop it at all, and everyone in this chamber knows that.

I am very interested in hearing what the Leader of the Greens will say today, because he and I know that his office has sent out emails to people who will be positively impacted by this change. I will read the email from Senator Brown's office: 'The Australian Greens support the full indexation of pensions for all Commonwealth employees, including defence force personnel.' That was sent by John Dodd, from the office of Senator Brown. So, Senator Brown, I have a challenge for you today. Are you prepared to stick to what you said or will you sell these superannuants down the drain as well? Are you prepared to follow on the back of that email from your office to a superannuant? I have the email. If you do not believe me I will table it, but I think you know full well that that is exactly what you said.

Senator Brown, you and I know that the Australian Greens—along with the govern­ment and the Independents—are obligated to support this bill. You will stand condemned if you go back on your own words in relation to this matter. It is there for all to see. You have made it quite clear. You have an opportunity this morning to put into practice what you have written. I trust that you will do so because, as I said, you will stand utterly condemned if you do not take the opportunity to confirm what you said you believed in this email. I do not know what Senator Xenophon is doing with this bill, but I make this plea to him: take this opportunity to protect the notion of the uniqueness of military service today. He has the oppor­tunity to send out a very clear message that he and this chamber are not prepared to tolerate an intolerable situation, that he is prepared to stand up and say: 'How can someone in their position be treated differently from someone on an aged pension? How can that possibly be?' Senator Xenophon should look again at this matter. As a man who does believe in fairness and equity—I think he has espoused that before—he should ask himself, 'How can I possibly not support this bill?'

As I said earlier, these amendments enable amendment (5), which deals with schedule 2, to include the DFRB. I urge the chamber to ensure that these men and women are treated fairly.

Senator BOB BROWN (Tasmania—Leader of the Australian Greens) (09:53): I have gone back to page 1732 of the Hansard of Thursday, 24 March. In the earlier debate on this bill I moved a funding proposal for the new indexation method for Defence Force superannuation pensions, which is at the heart of this bill—that is, to adopt the Treasury recommended mining super profits tax. This would take a tiny amount of the super profits tax made from the massive resources boom currently being experienced by this country—which has disadvantage almost everybody outside that resources boom as we face increased interest rates coming down the line in two months, a high Australian dollar, a squeeze on business and a squeeze on pensioners as food prices go up, amongst other things—and fund this very bill that is now before the Senate.

But there was a division on the bill, and listed for the noes in the Hansard on that funding mechanism for this bill are Senator Humphries and Senator Ronaldson. So the opposition voted down a legitimate funding option for this legislation—and the opposi­tion have not come up with one—because it was against the Abbott mantra of not having any tax placed on anything, including the foreign owned corporations that are ripping billions out of the country at the moment and sending it to rich shareholders overseas. Senator Humphries and Senator Ronaldson, and indeed the whole of the opposition and the government, voted down that clear and Treasury recommended option for funding the legislation.

In proposing this legislation the best that the opposition can do is to bring forward a funding mechanism that would divert moneys not spent by the defence forces into funding this bill. Unfortunately for them, those moneys had been co-opted into the government's own budget for spending on other priorities. So we now have a stoush between the government and the opposition which we did not need to have. If they had supported the Greens option then we would have had this bill moving towards the funding that is required and the recipients getting a fair go.

We have here a lot of sound and fury from the opposition, but a failure to take responsibility, as if they were in government, to take up a proper funding option that is Treasury recommended. Instead they have said no to that because they take the political point of view that tackling the mining companies to pay a fair go is more important than funding the entitlements that are outlined in this bill.

I said in my speech during the second reading debate—and Senator Humphries is correct on this—that we wanted to extend these benefits to the whole of the public sector. The opposition will not do that. Instead, they are supporting a two per cent cut for the people currently in jobs in the public sector—a squeeze on public servants—when it is entirely unnecessary in this age of a resources boom in this country. I submit to the Senate that where private members' legislation has big costs involved we need to be mature, grown up and financially responsible—and the government notes that the liabilities for this legislation will extend to $6 billion in the future. The opposition have to be able to point to how they are going to finance that. In that, they have been a complete failure. The govern­ment opposes the legislation so it does not believe it has to work towards it. The Greens came forward with a Treasury recommended option for funding this legislation, and the opposition voted down their own bill when they voted down that funding option.

Senator Humphries: That is a pathetic argument.

Senator BOB BROWN: I hear Senator Humphries saying it is pathetic. I believe it was pathetic. He ought to have voted for that funding option when it was here, but he did not. He voted it down. That shows you how seriously the opposition look at the all-important and critical matter of having the funds available for an important measure like this. They failed, they did not take it seriously, and they have to bear the responsibility for that failure.

Senator LUNDY (Australian Capital Territory—Parliamentary Secretary to the Prime Minister and Parliamentary Secretary for Immigration and Multicultural Affairs) (09:59): It is no secret that I have continued to seek a way to improve the method of indexation for Defence and other Commonwealth superannuation pensions. Unfortunately, this bill is not the answer. We do acknowledge the unique nature of military service and our debt to our service men and women, and I welcome the acceptance of the motion of support to this effect in the House of Representatives on 2 June and support the expression for fair indexation. I also accept, as I have often argued, that the CPI is no longer an accurate measure of the changes of the cost of living. This has been acknowledged by the Australian Bureau of Statistics and the government, and I have therefore agreed that a better measure of indexation for military and other Commonwealth superannuation pensions should be developed. This was the reason for the Labor government's develop­ment of the PBLCI, the pensioner and beneficiary living cost index, which has already improved the standard of living for pensioners, including those military and civilian superannuants whose Common­wealth pensions fall below the age pension income and asset levels.

That the CPI alone is no longer the best measure of changes in the cost of living was also recognised in the Matthews review of pension indexation arrangements in Australian government civilian and military superannuation schemes. One of its recommendations states:

If a robust index which reflects the price inflation experience of superannuants better than the CPI becomes available in the future, the Australian Government should consider its use for indexing Australian Government civilian and military superannuation pensions.

The government's commitment to fiscal responsibility and to returning the budget to surplus by 2012-13 is and must be of paramount concern. This government is proud of its handling of the global financial crisis and the way we are coping with the costs of this year's natural disasters in Australia—and we are proud of our responses to the disasters and distress of neighbouring countries—but we know that, consequently at this time, all new expen­diture must be offset by savings over the forward estimates. The proposals for this bill do not satisfy this criterion.

In initially providing estimates of the cost of this bill to 2014-15, the Minister for Finance and Deregulation, my colleague Senator Wong, noted that no offsetting savings were proposed. The bill's explana­tory memorandum proposed only that the costs could be met through the accrued funds of the Future Fund, but this assertion has been challenged by the Department of Finance and Deregulation and by the Government Actuary.

This bill is divisive. A major problem is that it unfairly applies to only a section of the Defence superannuants and debars over 7,200 current Military Superannuation Benefits Scheme superannuants, as well as the future beneficiaries of the MSBS—and, of course, all other Commonwealth super­annuants, including those employed in the Department of Defence. This point was made in many of the submissions to the Senate inquiry, even those in support of the bill. The Australian Veterans and Defence Services Council, for example, noted that the bill was 'a start' but would not overcome the financial problems of all veterans. I have had emails and messages from Commonwealth defence and civilian pensioners who have long campaigned for measures such as those outlined in the bill but find that they have been excluded from its provisions. In the context of the bill's title, 'Fair Indexation', is it fair to discriminate in this way?

In March the Senate referred the bill to the Senate Finance and Public Administration Legislation Committee, which considered departmental and public submissions and reported on 10 May. The committee recom­mended that the bill not be passed. Coalition senators presented a dissenting report. The Department of Defence submission to the Senate committee opposed the bill, reasoning that the military superannuation schemes had been designed to reflect the unique nature of military service and did already provide benefits well in excess of the community standard. Any requirement for Defence to fund the changes proposed by the bill would significantly impact on Defence funding for ongoing programs. The Senate Finance and Public Administration Legislation Com­mittee agreed that the unique nature of military service is already reflected in pro­visions and entitlements. It also highlighted that significant factors in its assessment were the impact on the government's fiscal position and the ability of the Department of Defence to deliver ongoing programs. The committee pointed to the gap between the target level of assets required in the Future Fund and the actual level of assets in the fund and stated that 'the game would be exacerbated if the bill is passed'.

I would like to acknowledge the com­mitment and hard work of those who have made submissions to this inquiry despite the difficult time constraints. Some of the individuals who have made extremely useful contributions were constituents of mine. I would like to mention in particular the ongoing and valuable work of Peter Thornton and Bert Hoebee. I remain committed to trying to improve the indexation methods applying to military and civilian Commonwealth pensions and will continue to do so within the fiscal constraints and all of those factors that do apply. I will continue to work with representative organisations such as DFWA, SCOA and ACPSRO, to whom I am indebted for their ongoing advice. I am convinced, as I think we all are, that the CPI no longer provides the kind of indexation that responds to the cost-of-living needs of this group of superannuants and pensioners, and I have sought advice on the development of the new analytical living cost index to reflect more accurately the cost of living of military and civilian superannuants, including those to whom this bill would apply.

I challenge the empty rhetoric and the feigned indignation of Senator Humphries and others opposite with respect to my constituency here in the ACT. You do not need to look too far into the policies of the coalition and their attacks on Canberra and the Australian Public Service—to the tune of 12,000 jobs; that still stands as a coalition policy. It exposes the duplicitous nature of their presentation here to feign concern for the welfare of superannuants while attacking the very jobs for the people who will find themselves on a Commonwealth super­annuation pension at some point in the future. So let us not stand here and feign indignation. This bill is divisive in its character and nature. I understand what you are trying to do—tap into the discontent that prevails right across Commonwealth and military superannuants—but this bill does not achieve it. It is, I think, an attempt to tap into sentiment without providing any solution whatsoever.

Senator FIELDING (Victoria—Leader and Whip of the Family First Party) (10:06): I rise to speak on the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010. I will speak to this amendment and the whole bill. It is a great honour to stand here in support of this bill. Fair indexation for military super­annuation is something that Family First has been campaigning on for some time now. I rose here in the parliament to speak on this issue in November 2009, and I later raised it with the former minister, Alan Griffin, as well. Last year I began a petition on my website calling on the government to fix the unfair indexation of military superannuation. In just a matter of days it attracted thousands of signatures, highlighting how many people feel strongly about this matter. It is an issue that I have followed closely because it is something I care about deeply.

Last year I travelled to Afghanistan to see firsthand our diggers in action and witnessed the tough conditions they are forced to endure on a daily basis. Service in the Australian Defence Force is no ordinary job. It is a unique service which deserves special recognition. It is unique because, when you sign up to the ADF, you give the state or the nation the authority to send you overseas into a role where your life is potentially at risk 24/7. We send our soldiers into dangerous places on orders that will put them in harm's way. We ask our soldiers to follow through with their orders, even when they know that this may mean they will never see their family or loved ones again. It is an incredible situation to put yourself in, and it takes incredible people to do this. Given these circumstances and the uniqueness of this, we as a society have the obligation to give them our full support and respect.

Unfortunately, when it comes to retirement and death benefits, governments, both Liberal and Labor, have not honoured this obligation in the way I think we should. The current arrangements for indexing of these retirement and death benefits are inadequate and put our military pensioners further behind community income standards. This bill seeks to rectify this inequality through a fairer indexation regime. At the moment, the Defence Force and super­annuation pensions are only indexed to CPI, which is not always the best and most appropriate index. Even the Australian Bureau of Statistics has said that 'the CPI is not a purchasing power or cost-of-living measure'.'

The CPI is just a measure of changes in the price of a basket of goods and services and should not be used as the only measure to index the military pensions of our former servicemen and servicewomen. This is an outdated way to index pension payments because, at the moment, the true value of those military pensions is falling compared to the rising incomes of the general popu­lation. Even the government has admitted that the CPI is not an appropriate measure for indexing the pension, and has reformed other government pensions which were previously indexed to CPI. These include the age pension, the wife pension, the disability support pension, the widows pension, the parenting payment, the carer payment, the service pension, the partners service pension, the income support pension and the war widows pension. With all these, the govern­ment has already recognised that CPI is not the best indexation measure.

In the 2008 budget, the government recognised that many seniors were concerned that their cost of living may rise faster than the consumer price index. To address this concern, the government announced:

… the Government will guarantee that the Age Pension will increase in line with the higher of the consumer price index, increases in male total average weekly earnings or the living cost index for age pensioner households. These arrangements will ensure that the Age Pension keeps pace with increases in prices and improvements in community living standards.

I believe that our veterans should have their superannuation treated in a similar way. Their military pension payments must be linked to the average wage so that they do not slip below a certain percentage of any increase in the average wage. This method of indexation makes a lot more sense, and it is ridiculous that the government has not been prepared to budge on this issue. The current indexation arrangements have meant that military superannuation pensions are 35 per cent lower than they would have been if they had been linked to wage based indexation such as male total average weekly earnings 20 years ago. This gap of 35 per cent works out to be an enormous amount of money and would make a real difference to veterans. Not changing it not only seriously erodes the standard of living of people relying on these payments but also sends a terrible message: that this is the way that government treats those people who have given their all for Australia.

This bill is about giving a fair go to those Australians who have put their lives on the line. Here is a key question: why should politicians have their superannuation payments indexed more generously than our veterans? Why should Federal Court judges have their pensions payments indexed to the increases in judicial salaries but military personnel have their payments linked only to the CPI? Why should veterans be worse off compared to others? How does this possibly make any sense?

Senator XENOPHON (South Australia) (10:12): I rise to make some remarks on the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010. I am grateful for the discussions I have had with the federal member for Fadden, the shadow minister for defence personnel, as well as Senators Johnston and Ronaldson in relation to this bill. Like most Australians, politicians always want to be supporting the troops. This is an admirable desire and, given the nature of the jobs performed by the defence forces, it is completely justified. Let me be clear: there is no question that the men and women who serve or have served in our defence forces are inspirational individuals whose dedication to protecting our country should be recognised. But the brilliance of our Defence Force is not the only factor in play when it comes to this bill.

This bill has been put forward at a time when Australia is still in budget deficit and we need to be fiscally cautious. This bill also needs to be seen in the context of the extraordinary budget Australia spends on defence each year—$26.9 billion in 2010-11. That is an NBN every two years without the need for private equity. And, while we should all be concerned about the potential waste with the creation of the NBN, I wonder if successive Australian governments have been as concerned as they should have been about waste in our defence forces. The opposition says that it has identified money in the budget which could be directed towards funding this measure. The govern­ment has countered that it will slash 1,000 civilian jobs from its procurement budget, although the opposition argues that those are not current jobs but simply jobs that are expected to be created in the future—in other words, the opposition claims they are phantom cuts. The Alliance of Defence Service Organisations supports the oppo­sition's bill and has made a number of criticisms about Treasury estimates on the costs of the coalition's bill. Treasury have responded to those criticisms, standing by their figures. A number of things have been put: that the current rate of Commonwealth contribution is over three times the com­munity standard; that the notional contribution rate for the DFRDB is 33.3 per cent, which is over three times the com­munity standard of nine per cent as required by the superannuation guarantee; and that the proposed changes would increase the notional contribution rate to 40.6 per cent, which is over four times the community standard. Those are some of the arguments that have been put.

You need to look at the general principle of indexation. I think there are compelling arguments in relation to that. It is important to acknowledge that, currently, pensions payable under the DFRDB and DFRB schemes are defined benefits and are essentially risk-free, unlike the retirement savings of most Australians. Many Aust­ralians suffered because of the GFC and were forced to watch and worry as their superannuation shrank. It should be fairly noted that the recipients of these defined benefits fortunately do not have similar worries. That is entirely appropriate.

There are troops who have been injured on active duty and are not receiving the proper care and compensation they deserve. I acknowledge that there is a current review of military compensation for those injured in battle and the widows who are tragically left behind. I would argue that if we were to increase the benefits to anyone, in terms of priorities, surely we should be increasing the benefits to those brave men and women first. That must be our priority. That is not to say that support staff in the Defence Force do not play a critical role, but I reiterate: our first priority should be to those who have faced real danger and have suffered injuries, both physical and psychological. Shouldn't we be pushing the government to target any additional benefits to those individuals first?

I am grateful for the very passionate and articulate representations from Rear Admiral Ken Doolan, National President of the RSL; Colonel David Jamison, National President of the Defence Force Welfare Association; and Les Bienkiewicz, Executive Director of the Defence Force Service Welfare Association. They have all strongly argued the case that the time for change is now.

I am also concerned about how the government approaches what I believe is an unacceptably high level of waste and fraud in the Defence Force—in particular, the issue of waste. It is important that, if we are to have these reforms, they must be sustainable. It is important that there is long-term funding for them, because the fiscal implications in the longer term will be very significant.

I recently spoke to the Minister for Defence, Stephen Smith, about the issue and argued that there were significant savings to be made within Defence which I believe could be used to better compensate both front-line troops and other Defence employees—in other words, the opportunity exists for Defence to save money that could be spent on its people. We do not do nearly enough in this country to stop waste within the Defence budget. In the UK, by comparison, the tasks of investigating waste and fraud are properly resourced and, not surprisingly, waste and fraud rates are demonstrably lower. There is a much more effective mechanism for dealing with waste and fraud.

I have real concerns about Australia's Defence Materiel Organisation, in terms of its size and efficiency. Why does Australia's DMO have a staff of around 7½ thousand people when the equivalent organisation in the UK has a staff of around 2½ thousand people and the UK has a defence budget four times that of our Defence Force? More broadly, how can the Australian Defence Force justify having one public servant, one bureaucrat, for every two soldiers? We need to get serious about this issue in Australia so that money currently wasted or fraudulently appropriated can be better directed to defence personnel. That is why I will be moving to amend the terms of reference to the Senate Foreign Affairs, Defence and Trade References Committee inquiry into procurement procedures for defence capital equipment to include the following: the committee should assess the effectiveness of the Defence Materiel Organisation, including the size and level of its management structure, as compared to a similar organi­sation in the United Kingdom and large Australian industries, and have its costs judged against the timeliness and quality of its output, the service it provides to the Australian Defence Force, the extent to which it value-adds to national defence, and the long-term viability of Australian Defence Force industries.

To complement that inquiry, I am also proposing that the Senate Economics Legislation Committee inquire into defence accounting in the context of ascertaining whether strategic reform program cuts are real or notional, to further examine the whole of the department for real savings in the budget and to look at funding those sorts of pension increases in the longer term. The government says that there is no money and disputes that there is a live dispute about the figures, but I am saying that there are ways of finding that money and that targeting waste in the defence budget is the logical place to start looking. I believe these savings need to be found quickly—say, in the next 12 months. The process of having rigorous, forensic and thorough inquiries by the Senate into this ought to be the way to go. I think that is the long-term, sustainable process to deal with this issue.

I will not be supporting the coalition's bill. I do support the longer term aim and believe that the steps I have outlined are a more prudent way of getting us to where we need to go as a nation. It is one thing to say that you want to support the troops today, but surely the best approach is to rebuild the system, eliminate waste and use those savings so that troops and support staff can rely on improved benefits on a long-term basis. That is my position. I am looking forward to working with the coalition and my colleagues in the Australian Greens to find those savings so that we can have a long-term, sustainable solution to this problem.

Senator HUMPHRIES (Australian Capital Territory) (10:21): I want to respond to the remarks of particularly Senators Bob Brown and Lundy in this debate. Both of those individuals and their parties to some extent have paid lip service to the principles behind this bill. Both of those individuals have gone to very large public meetings and told those public meetings, with their hand on their heart, how sincerely they believe that justice needs to be done for people in defence retirement, with respect to their pensions. Both of those individuals today betray those constituencies and those people by their actions. I will turn first to Senator Lundy. Senator Lundy has shared the platform many times with me in the ACT over several elections where members of the retirement community—self-funded retirees and government superannuants—have come in large numbers to hear what we have to say about this issue. As Senator Lundy herself said in today's remarks, she acknowledges that the CPI is no longer an appropriate measure of indexing pensions. She acknowledges that there have been flaws in previous government inquiries into this matter. I think she was strongly implying, without saying as much, that the Matthews report, the most recent of those reports, had serious flaws in it. She acknowledges that something needs to be done but she found reason today not to do what had to be done and that is to take the first step towards addressing this issue with a vote in favour of this piece of legislation.

Why did she not support it? It was on two grounds. One is that she said that the coalition had not justified its savings to offset the cost of this measure. She misrepresented those savings by saying that we were proposing to raid the Future Fund in order to achieve this. That was either deliberately or accidentally a serious mis­representation of what the coalition has proposed. We did propose, it is true, to put money into the Future Fund which would then be drawn out in the future to pay for the additional superannuation costs which this measure would incur. But to say that we were going to raid the Future Fund without making clear that we were also putting money into the Future Fund to meet those obligations is frankly false. We have made very clear that we propose to achieve those funds being put aside for that purpose by reducing the growth in the APS full-time equivalents in the Department of Defence by one-third. This is a decision that would still see projected staff numbers in the Department of Defence grow by something like 8.3 per cent by financial year 2013-14 compared with a larger projected growth in the previous budget, not in this year's budget.

We are not proposing to cut Com­monwealth employees in the Department of Defence in real terms; we are talking about reducing projected government growth. Even a justification based on wanting to protect Public Service numbers can hardly point to a decision made by the opposition that we would not be allowing growth to occur at such a large scale in the future as somehow justification for not supporting this bill. Public servants that are not yet there are being cut, not ones that are actually there at the moment. It is an extraordinarily stupid—with respect—argument. There is no basis for it whatsoever.

Then there is the argument that we are dividing the community by this—we are picking off some Commonwealth super­annuants and not others. On what basis does the government think that we cannot deal with this issue on a progressive basis? That has not been explained. Senator Lundy fled the chamber as soon as she had made those remarks and will have to come back to the people of this community—

Senator Wong: Mr Temporary Chairman, I rise on a point of order. It is inappropriate to make that kind of con­struction that a senator leaving the chamber has 'fled the chamber'. He should withdraw it.

Senator HUMPHRIES: That is not a point of order. I am making reference to the fact that Senator Lundy is prepared to make promises to the people of this community in Canberra with her hand on heart and then, when it comes to actually exercising her vote to support those measures, she is not around. She is not here to do what she should be doing for the people of Canberra.

Senator Wong: You were going to sack 12,000 public servants. You're a hypocrite.

Senator HUMPHRIES: I am not a hypocrite on this issue, Senator Wong, I am sticking by my word. I told the people of Canberra I wanted to support this measure and I am doing it here today. Senator Lundy is not.

The TEMPORARY CHAIRMAN ( Senator Hutchins ): Senator Humphries! Come to order! If you want to make any comments you have to make them through the chair.

Senator Ronaldson: A point of order, Mr Temporary Chairman. How can you possibly pick Senator Humphries out from this exchange when the minister was the one that started it? If you are going to ask for some order in the chamber, can you at least please be fair about whom you call to order.

The TEMPORARY CHAIRMAN: I am afraid, Senator Ronaldson, that Senator Humphries was speaking.

Senator Ronaldson interjecting—

The TEMPORARY CHAIRMAN: If you want to interrupt him again, you can go right ahead but it is taking out of his time. Do you want to say any more?

Senator Ronaldson interjecting—

The TEMPORARY CHAIRMAN: I'm playing fair. Senator Humphries.

Senator HUMPHRIES: Mr Temporary Chairman, I have to say that I think it is disgraceful. I give Senator Lundy credit for the fact that she did come and take part in this debate—

Senator Wong: A little hollow man, seriously.

Senator HUMPHRIES: I am sorry it has come to name-calling, Senator Wong, but I have to say I have stood by a consistent position on this matter.

Senator Wong interjecting—

Senator HUMPHRIES: I have stood by a consistent position. I certainly have.

Senator Wong interjecting—

The TEMPORARY CHAIRMAN: Minister, allow the senator to speak uninterrupted, please.

Senator HUMPHRIES: I have maintained a very consistent position about this matter. I have always argued that indexation should be improved and today by my vote I am backing that position. I am supporting what I have always said to the people of the ACT is the case. With great respect, Senator Lundy and her former colleagues in the ACT Labor Party, Ms Ellis and Mr McMullan, and Dr Mike Kelly, the member for Eden-Monaro, and a host of other Labor members with significant numbers of Commonwealth retirees in their electorates have made the same sorts of sounds. The difference between them and me is that today I am going to honour the commitment that I have made to the people of my electorate by voting for this bill and they will not. That is the difference and that is consistency. I want to turn to what Senator Bob Brown has had to say in this debate. At the last federal election the Greens in the ACT fought very hard on this issue. They argued very strongly that indexation had to be improved for Defence superannuants and for civilian superannuants. Senator Brown has justified not supporting the bill today on the basis of having on a previous occasion put to the Senate a motion to link support for this legislation to his proposal to increase the mining tax, saying that, because the coalition failed to support his measure to increase the size of the mining tax to pay for this particular expenditure to increase super­annuant pensions, therefore he cannot support the coalition's bill. A few logical observations need to flow from this. First of all, if we had put forward a bill which had no savings in it to address this issue—if we had no savings proposed in our legislation to deal with the extra expenditure which we are asking the Commonwealth to incur—there would be some justification for Senator Brown saying to the Senate, 'We can't support you because you don't tell us how you are going to pay for this piece of legislation'. But, of course, we did not do that. We did come forward with savings to address the cost of this measure. And those savings were valid savings; they were effective savings. How do we know that they were effective? Because the Labor government itself has taken up those savings in the budget of this year. It has cut projected growth in the size of the Defence civilian workforce: that is exactly what it has done. As they say, imitation is the sincerest form of flattery. You are flattering us by saying we were right with those measures; we could achieve those savings. And, with you having achieved those savings with the measures we proposed, I think it is now incumbent on you, the Labor Party, to support the measures in this bill.

But Senator Brown's position is another one altogether. He tied this into his mining tax—a measure that he knows the coalition would not support, does not support and will not support—and had us say, 'We can't support you because we don't believe that we need the mining tax to be increased or that we need the mining tax at all, and we have other alternative measures for making these savings.' We voted against Senator Brown's motion, as he knew would be the case. Having done all of that, Senator Brown now says, 'Well, we don't need to support your legislation, because you did not support our particular proposal for how to pay for it'.

My question to Senator Brown is: will that be a test he applies to every piece of legislation for additional expenditure that comes forward to this Senate in the next 2½ years? And, if not, why not? If you felt that a particular measure had to be paid for by linkage to an increase in the mining tax, will you apply that test to every piece of legislation that the opposition brings forward or, for that matter, that the government brings forward? 'Good idea; we like what you're doing but we won't support you unless you also support our position on a mining tax.' There is no obvious linkage between Commonwealth superannuation, Defence Force retirement benefits and mining, so on what other basis would Senator Brown be making this proposition?

I will tell you what Senator Brown was doing: he wanted to break his promise and he wanted to betray the people to whom this promise had been made. He did not have the guts to say, 'We're not prepared to do that anymore. We're not in election mode and we don't need the votes at this stage.' So he concocted a little scheme where he linked this to something which he knows the coalition does not support, had us defeat his motion and then said, 'Oh well, therefore I can't support your bill.' It makes absolutely no sense; there is no logic in that whatsoever.

This is a measure which the coalition has funded in the package it has put to the Senate. We know it has funded it because you have taken the saving yourselves. It is incumbent on you, therefore, not to use the argument that we have not paid for it. We have paid for it. If you do not believe that the pensions are worth paying and if you do not believe that the people who have served Australia in the Defence Force are worth this increase then say that. Say it in as many words: do not pretend that there is some other fiscally responsible reason why you cannot support the legislation.

I am sorry that Senator Wong needs to resort to name-calling in this exercise, but it is something that I feel very strongly about, and have ever since I entered this Senate. I had been here only a little while when I went to two people: I went to Senator Watson, the former long-serving senator from Tasmania, and asked him, 'What's the argument about this indexation of Commonwealth pensions? What's the argument against indexing it by some higher measure than the CPI?' He said, 'There is no argument.' I also went to my predecessor, Senator Margaret Reid, and asked her a similar question, and she gave a very similar answer. I have stood by that view ever since then, and today I am going to vote consistently with the views that I believe in and which I have expressed to my electorate. It is a great pity that others who have reaped votes from retired public servants in the ACT by saying, 'We sympathise with your point of view, and we will do all we can to support it,' are not taking the same position here today.

Senator WONG (South Australia—Minister for Finance and Deregulation) (10:35): I rise not only in relation to this amendment but in relation to the great many contributions which have been made. I want to start by being really clear about what this bill is about and what it is not about.

The first thing I would like to emphasise is that this bill is not about whether people in this chamber, on any side, honour and respect the service that our military personnel engage in. Frankly, I find it a little offensive that that is how some—and particularly the previous speaker—have chosen to play this debate. There is nobody in this chamber who lacks in patriotism. There is nobody—

Senator Humphries: I didn't accuse you of lacking patriotism.

Senator WONG: There is no-one in this chamber who lacks for patriotism. There is no-one in this chamber who does not honour deeply the work that our serving personnel undertake, and the nature of that service has been most tragically brought home in recent weeks. That is not what this bill is about.

What this bill is about is whether or not the government is able to change the indexation of superannuation payments to some military personnel. I have sat through many debates in the almost nine years I have been here and, I have to say, cynical, sometimes hypocritical, contributions do occasionally make their way into the Senate chamber—but today would probably have to be amongst the top five. I say this to those people who firmly and with great merit advocate for increases in indexation: the position of the opposition should be judged not just by their words—sometimes 'fine'; sometimes feigned indignation—in the chamber today. They should be judged by what they did in government, when they never funded this. Eleven years in govern­ment with revenues being upgraded every year, particularly for much of that last period of government, and they never sought to fund this. They did not properly fund this in their election campaign. Those are not my words. You can look at the way in which their costings were considered by the department of finance and the Treasury. They have not funded it properly in this bill, and I venture that they will not properly fund it in the election costings campaign for the forthcoming election.

On this, one is judged not by what political points you make in the chamber but how you find the money to do worthy things. One of the things that finance ministers experience—and I am sure Senator Minchin would agree with this—is that you are generally making decisions between meritor­ious requests for funding. There are some which are not, but by and large what come before the Expenditure Review Committee are things that are worthy of funding. Generally, you do not make decisions, because this would be easy, about funding or not funding things that are not worthy. You often have to make decisions between things which are worthy. I again say: judge the opposition not by the contributions they have made today; judge them by 11 years in government when they had the opportunity and never funded it, by an election campaign when they had the opportunity and did not properly fund it, by today when it is not funded, and by whether or not they fund this in the election campaign in a couple of years—whether they actually make the savings to fund this.

Senator Humphries interjecting—

Senator WONG: I will be very interested, Senator Humphries, if you do it.

There are a few points I want to make. The first is in relation to numbers. There have been a few numbers thrown around. The hard edge—and this is probably why the Howard government, in 11 years, never funded this—is that this bill has a fiscal cost of $1.7 billion over four years and an under­lying cash cost of $175 million over four years, and it will increase the Common­wealth unfunded liabilities by $6.2 billion. If it were to be extended to all Commonwealth superannuation schemes, this would have massive costs: an immediate increase in the unfunded superannuation liability of $32.9 billion, a cash impact of $322 million over four years and a fiscal impact of $12 billion over four years. They have gone very quiet over there, Madam Acting Chair.

They say they have savings. Let us examine that carefully, because, when you are judged as a party of government on your policies, you are judged by where the rubber hits the road, which is whether you actually find the money to fund it. Let us look at where the coalition would currently be in terms of the budget were they in government. For all their fine words, the coalition, first, before they did anything, would have entered this parliamentary term with an $11 million black hole.

Senator Humphries interjecting—

Senator WONG: Senator Humphries sighs. That is what the Department of Treasury and the Department of Finance and Deregulation found, Senator, if you do not like it—if you do not like what Peter Costello set up as the Charter of Budget Honesty.

The coalition have subsequently blocked savings measures the government has put forward worth $5 billion. Add to that the $11 billion black hole savings measures blocked, which worsen the budget position by over $5 billion. Additional savings measures not supported were $7.7 billion, and in the 2011-12 budget—and we have not seen their final position on this; I notice there is a lot of argument about it—they are also proposing to not support a range of government savings measures. This would again worsen the bottom line. In addition—this is inter­esting—they also double-counted savings. They used savings for their election policy, which they still say they are going to fund, which include a contribution to but not full funding of this policy. They then used some of those savings for the flood package. You cannot go to the same well twice. You cannot use one set of savings for a range of different expenditures; it just does not add up. You cannot say, 'We are saving this amount of money here and we are going to use that money twice, at least, to fund things such as rebuilding Queensland after the floods or funding additional superannuation indexation.'

So what is the total impact of the coalition's set of decisions from the election campaign until now? There are really two propositions that people need to know about. The coalition would be in deficit every year until 2013-14 and potentially beyond. They would not have a deficit in 2012-13. They would have a deficit in 2013-14. They would be some $12 billion worse off than the government's budget position over the four years out to 2014. And then they tell us, 'We found the savings to fund this.' It is laughable. You are prepared to play with the legitimate concerns of a constituency because you know you do not have to actually find the money. The cynicism of that, I think, is shameful. You know you cannot fund this, but you are cynically playing politics with people who would like an increase in their indexation, because you want to make a political point. You should be judged pretty harshly on that.

I want to make a point about the hypocrisy of the coalition. On the one hand they say, 'We want a strong budget position; we want a surplus,' but on the other they proceed to seek to wreck it. Senator Ronaldson used the old line that it is okay because they would not have wasted so much money. Let's be clear about what he is actually saying. What the coalition are actually saying is that they would not have put money into the economy during the global financial crisis. What Treasury tells us about the effect of that stimulus is that some 200,000 Australians would have been on the dole queues were that stimulus not put into the economy. So essentially Senator Ronaldson's position is, 'We would rather have had 200,000 families without a wage earner than have put the stimulus in.' That is not good economic policy and it is not an answer to the fact that you do not have the money to fund this today.

There are some in the coalition who understand this. It is interesting that in this chamber today we do not have any of the hardheads. We do not have Senator Minchin making a contribution to this debate. We do not even have Senator Cormann, who osten­sibly is one of their economic spokespeople in the Senate, explaining how they would fund this. We have Senator Humphries, who is making an ACT political point against Senator Lundy, and Senator Ronaldson, who is playing a bit of politics with a constituent. So we do not actually have the people who will make the decision about the budget.

Senator Minchin made this point. He was reported on by the Australian Financial Review:

Even as he leaves, Minchin, a former finance minister, has been trying to instill in his party some respect for good policy.

He's been banging this drum for some time, going back at least to a meeting of the Coalition economics committee earlier this year that considered a Liberal MP's private member's bill to award a higher rate of indexation to veterans' pensions.

Confronted by arguments that the move would be very "popular", he told his younger colleagues, in part, that such a proposal risked being a "thin edge of the wedge".

If veterans were given a higher rate of indexation on what was already a defined benefit pension, he argued, what was to stop others wanting the same thing?

The Coalition had to protect its credentials as fiscal conservatives, he said …

Senator Minchin's views became more public when he confronted Mr Abbott, as reported in the press in recent times, in the party room about the need to support good policy. I could not have put it any better than Senator Minchin myself. It is interesting that he, as a former finance minister, is not prepared to come in here and argue this, because he knows he did not do this for good reason and that you do not have the savings to do this.

I had a few more issues, which I may need to into in another part of the committee debate. The coalition claimed that they have moved a second reading amendment, which I think is already before the chamber, which simply calls on the government to reassess the growth in civilian bureaucracy, within the DoD, including in the Defence Materiel Organisation. They should be aware that the government took some $1.2 billion worth of savings in this budget. I think Senator Humphries referred to this. He said, 'They must be real because the government took them.' The government did—in addition to the efficiencies the government is also finding through the Strategic Reform Program.

Those savings, Senator Humphries, go to the budget bottom line and to help fund things such as the mental health package; to help fund things such as the extension of family tax benefits to teenagers, which you supported; and to help fund things such as the increase in the childcare rebate, which is obviously an ongoing expenditure of the Commonwealth. These are the hard decisions that you refused to engage in. Are you saying those savings are hypothecated only for this policy, in which case you should be up front with people and say, 'We are, therefore, not going to take those savings which are already taken for the mental health reform package'? You are very quiet. These are the decisions you refuse to be transparent on. You refuse to be transparent on them because you know that those savings are not real and you are not prepared to be up front with the Australian people about how you will reprioritise expenditure in order to increase the indexation of payments in the way this bill proposes.

I might have to do this in a subsequent contribution, but I also want to address the extraordinary comments in the dissenting report that the opposition has made and the response to it by the Australian Government Actuary —'setting the record straight'—which I think the Senate should be referred to. I will do that subsequently.

Senator RONALDSON (Victoria) (10:50): I want to finish up in relation to some comments that have been made. I am bitterly disappointed that Senator Xenophon has chosen this course of action. He cannot in any way call our savings 'phantom savings'. They most certainly are not. In relation to Senator Lundy, Senator Lundy had a great opportunity today—

Senator Xenophon: I didn't call your savings that. You got it wrong.

Senator RONALDSON: Okay. If you want to take a point of order, that is fine.

Senator Xenophon: This is not so much a point of order. What I actually said, so that there is no misunderstanding, was that the coalition has said that the government's proposed cuts in personnel were, in fact, phantom savings because they were cuts to proposed increases in staff. I was actually supporting what the coalition was saying in relation to that. I can show you the transcript.

The TEMPORARY CHAIRMAN ( Senator Troeth ) (10:59): Senator Xenophon, if you wish to explain further, I will give you the call after Senator Ronaldson.

Senator XENOPHON: I just wanted to clarify that. I was actually with Senator Ronaldson on that particular point.

Senator RONALDSON: I do not think that comment has been made, but let us not get bogged down on that. Senator Lundy said that we are tapping into sentiment. The only reason that we took this policy to the last election was because of the anger coming from the military superannuants in relation to their unfair treatment. That is the only reason that that was in our policy at the last election. We saw a situation that needed to be addressed having been approached by those who were being treated unfairly. That is why it is in our policy, so do not talk to me about coming at the 11th hour in relation to this matter. We have been absolutely and utterly consistent about this. Not only did we respond when we were approached in relation to this matter but we put in our election policy and we have the bill before the chamber today. Senator Lundy said that we have tapped into sentiment but have no solution. We have a solution all right, and I have a solution for Senator Lundy—vote for it. That is the solution for Senator Lundy.

Senator Bob Brown's comments were in typical style for him, but I will not reflect on that. The interesting part is that this 'fake amendment', as I would call it, was moved by Senator Brown on 24 March. Guess the date of the email from the senator's staff member to one of the superannuants confirming their commitment—28 March. Senator Brown, I think you should be very careful when you come in here and start bandying around that political twaddle when you actually fell at the first hurdle by your going back completely on commitments that you made.

I congratulate Senator Humphries and turn to a motion moved by my good friend and colleague the shadow minister who has responsibility for this, the member for Fadden, Mr Stuart Robert. I congratulate him on a motion that went through the House last week, moved by Mr Robert, which was supported on the voices. The motion was:

That this House:

…   …   …

(2) calls on all Members to support the:

…   …   …

(b) Coalition's policy to index the military pensions to members of the DRRDB and DFRB schemes who are aged 55 and over, to the higher movements in the CPI, Male Total Average Weekly Earnings or the Pensioner Beneficiary Living Cost Index.

Did the government oppose this in the other place? Did they oppose it downstairs? No, they did not. Why did they not? Because they were concerned that if they went for a vote they would lose it and they would be obligated when it came back here to support it. What a deceitful action on behalf of these 30,000 people who deserve this indexation. What a deceitful government you are, Minister Wong. You had the opportunity downstairs to stake your claim about your view, and you know why you did not do it downstairs? You were concerned that the motion would go through on the voices, you would see where the Independents were and, when it came back up here, you thought you had a commitment from one of the Independents that he was going to vote this legislation down. What a dishonourable approach to take in relation to this matter. The government has been caught absolutely red-handed in its duplicitous behaviour in relation to this bill.

It is not good enough to talk to me about making sure we limit speakers and then attack the coalition for not having Senator Minchin and Senator Cormann in here. Please do not play politics when you have already made a request in relation to how many speakers there are going to be. I want to make it absolutely clear that if you think the indignation of these 30,000 super­annuants is feigned then you stand utterly condemned for that comment. Their indignation in relation to this is real.

Senator Wong: Madam Temporary Chairman, on a point of order: that is a misrepresentation. That is not what I said. The indignation that is feigned is yours, Senator Ronaldson, because you have never funded this and you are not doing so now.

The TEMPORARY CHAIRMAN: There is no point of order.

Senator RONALDSON: This is false or feigned indignation when we took it to the last election, when we fully costed it at the last election and we have brought it in in a bill?

Senator Wong: You did not!

Senator RONALDSON: Is that feigned indignation? Well, deary me, look at that, that is feigned indignation! You go through and put in your policy—

Senator Wong: Madam Temporary Chairman, on a point of order: Senator Ronaldson is misleading the Senate. The coalition did not fully fund it at the last election. He should correct the record. He is misleading the Senate.

The TEMPORARY CHAIRMAN: I call Senator Ronaldson.

Senator RONALDSON: Senator Wong, I am not surprised you are embarrassed about your behaviour today and I am not surprised you are embarrassed about what you are doing to these 30,000 men and women. You should be embarrassed when you take silly points of order which just show how extensive your embarrassment is. You have an obligation to do the right thing today. If you choose to talk about everything bar the bill, as you did—let the record show how much discussion there was about this bill in your 15-minute contribution, Minister—if that is the way you want to approach it, that is fine, but your problem is the Hansard is forever and 30,000 people now know how utterly duplicitous your government is. Thirty thousand people now know that you had the opportunity in the House on 2 June to test the water in relation to this. You did not do so.

Senator Cameron: It's a coalition con job; that's what it is.

The TEMPORARY CHAIRMAN: Order, Senator Cameron!

Senator RONALDSON: You're a very strange man, Dougie, you really are. You are the one who comes in here and bangs on about fairness and equity day after day, week after week, year after year. You have the opportunity now to do something about an utterly unfair situation and of course you will just sit there.

Senator Cameron: A coalition con job.

Senator RONALDSON: You are the zombie, Senator Cameron. You have had the opportunity, and you are the zombie who will sit there and vote with the government. You are the king of the zombies, my friend.

Senator Cameron interjecting—

Senator RONALDSON: You are the king of the zombies. I will say it again—

Senator Cameron interjecting—

The TEMPORARY CHAIRMAN ( Senator Troeth ) (10:59): Order! Senator Ronaldson has the floor.

Senator RONALDSON: I will say again before I sit down: there is an opportunity for this chamber to do the right thing. There is the opportunity for this chamber to treat 30,000 people, in an indexation sense, no differently from those on the age pension. What is this argument about? When you are confronted with that situation, what is this argument about? Is it petty jealousy on the part of the government because you have not done this—and, because we have done it, you are not going to support it? Is that one of the reasons? Because there is no reason for you not to do the right thing in relation to this matter. None of the arguments that you have put up support in any way your refusal to vote for this bill.

Minister Wong, you have selectively quoted from the Australian Government Actuary's report, but you know what the Australian Government Actuary said about this—exactly what was said. I am not going to go through that today but I invite hon­ourable senators and anyone listening to this, or reading the transcript later, to go and have a look at what the Australian Govern­ment Actuary said. It shows how fallacious this government's arguments are. Thank you.

Senator XENOPHON (South Australia) (11:01): Madam Chair, if I may briefly clarify this so there is no misunderstanding, I said in my contribution earlier that the government has counted that it will slash 1,000 civilian jobs from its procurement budget, although the opposition argues those 1,000 jobs are not current jobs, simply jobs that are expected to be created in the future—in other words, the opposition claims they are phantom cuts. So I think I was fairly representing what the opposition's public position was in relation to those job cuts. I hope that clarifies any misunder­standing on Senator Ronaldson's part. I was not having a go; I was simply recounting what I understand to be the public comments of the opposition, saying that what the government says are job cuts are phantom cuts because they are not jobs that actually exist. Hopefully, there was no misunder­standing in relation to that.

Senator WONG (South Australia—Minister for Finance and Deregulation) (11:02): There were two other matters I wanted to make sure I got on the record. The first is that Senator Xenophon flagged in his contribution his intention to move for an inquiry into defence procurement matters—

Senator Xenophon: It is an additional term of reference on the DMO.

Senator WONG: Yes. So there are a range of terms of reference he is seeking in relation to defence procurement. Obviously, we are willing to work through those constructively with Senator Xenophon. He has raised that and we will have that discussion with him, and I just wanted to make sure I put that on the record.

The second point is in relation to the Australian Government Actuary. On 24 May there was a letter from the Australian Government Actuary which sets out the response to the coalition's dissenting report on this bill, which I think is important reading because it demonstrates the falsity of some of the assertions that Senator Ronaldson is making today and that were made in the dissenting coalition senators report. There were three aspects of the coalition's report that the Australian Government Actuary disagreed with. The first was, and I quote:

The dissenting report claimed that the departments of Defence and Finance and Deregulation reached different conclusions based on AGA advice. I can confirm that the statements made by both departments are correct and that they are not inconsistent.

Second, on the use of fiscal balance figures—and I am quoting from the Aust­ralian Government Actuary here:

The dissenting report misrepresented our advice in relation to the use of fiscal balance and cash expenditure figures by selectively quoting text out of context. We specifically stated that in the context of the current costings the short-term fiscal balance costs probably are not unreasonable when used in a decision-making context.

Third, and I quote again:

The dissenting report suggested that the AGA's position was that cash expenditure figures are the most appropriate basis on which to cost this bill. This is diametrically opposed—

diametrically opposed—

to the Australian Government Actuary's actual advice, which made it clear that we believed the best measure of the underlying costs to the Commonwealth was the increase in the unfunded liability together with the increase in the notional employer contribution rate.

So, leaving all of the technicalities aside, essentially the Australian Government Actuary are refuting three propositions that were made in the dissenting report by coalition senators. They are also saying that the government should be looking at fiscal balance and unfunded liabilities. I again remind the Senate that the fiscal cost of the bill is $1.7 billion over four years and the unfunded liability increase is $6.2 billion.

The fact that the coalition does not have a funding stream for this is demonstrated by the amendment we have not got to, which is amendment (4). That is the amendment seeking to get around the issue of this not being allowed to be a money bill, which requires the parliament to appropriate money for this purpose. You do not have savings for this. You did not do it in government, and nothing Senator Humphries or Senator Ronaldson have said today explains that to the 30,000 people you keep speaking about. You had 11 years in government, with far higher increases in revenue than this government is experiencing, and you never, ever chose to put in place this change. You did not properly fund it in the election campaign and you are not properly funding it now. That really goes to the heart of the reality of your position in this debate. You have not done what would be required, were you serious about funding this bill. Again I say I look forward to seeing whether your election policy actually funds this, because it would be contrary to all of your form to date. Maybe, when you stand up in this place and talk about this, people will have regard to your form, not to what you say you are going to do. I would also make this point, because there was some discussion about Defence expenditure. I am not sure if it is being pressed but this is in response to some assertion that we do not have sufficient regard to the importance of military service and to those serving. I would remind those opposite that, in addition to the obvious ongoing costs of operations, in the 2010-11 budget this government funded in excess of $1 billion for additional force protection measures and, in the 2011-12 budget, an additional $252 million for the C17 Globemaster and $177 million for the Bay Class vessel to extend our amphibious capability. We spend over $20 billion per annum.

Senator Ronaldson: You are filibust­ering now.

Senator WONG: I am being accused of filibustering when I am outlining the $20 billion plus—

Senator Humphries interjecting—

Senator WONG: Actually Senator Ronaldson did, Senator Humphries. At least he has done the right thing and recognised that. I am outlining the substantial amount of money that we rightly put towards our serving men and women. Really, amend­ments (1) to (3) are simply to fix up a mistake that the opposition made in the drafting of their bill when they forgot this particular scheme. Given the government's position, which is that these are not affordable changes, the government is not supporting these amendments. To try and expedite the debate, I will flag that the government is also opposing amendment (4), which really goes to the heart of this fiscal issue because it is saying essentially, 'Government, go and find the money.'

Senator RONALDSON (Victoria) (11:09): We stand by the dissenting report. The 30,000 are those people who will immediately benefit but there are 57,000 who will ultimately benefit.

Question put:

That the amendments (Senator Ronaldson's) be agreed to.

The committee divided. [11:14]

(The Chairman—Senator Ferguson)

Question negatived.

Senator RONALDSON: I move amendment (4), standing in my name:

Schedule 1, page 6 (after line 15), at the end of the Schedule, add:

7 Subsection 125(3)

Omit “All”, substitute “Subject to subsection (4), all”.

8 At the end of section 125

Add:

(4) Payments for the purposes of the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Act 2011 are to be made out of money appropriated by the Parliament for the purpose.

This amendment will avoid any dispute with the House of Representatives about right of the Senate to initiate bills which increase expenditure under the appropriation, by expressly providing this bill does not appropriate funds of itself.

Question put.

The committee divided. [11:19]

(The Chairman—Senator Ferguson)

Question negatived.

Senator RONALDSON: I move opposition amendment (5) on sheet 7027 revised:

(5) Page 6 (after line 15), at the end of the bill, add:

Schedule 2—Amendment of the Defence Forces Retirement Benefits Act 1948

1 Section 15D

Before 'Any ', insert '(1) '.

2 Section 15D

Omit 'Any ', substitute 'Subject to subsection (2), any '.

3 At the end of section 15D

Add: (2) Payments for the purposes of the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Act 2011 are to be made out of money appropriated by the Parliament for the purpose.

4 Subsection 83(1)

Insert:

LCI means Pensioner and Beneficiary Living Cost Index.

5 Subsection 83(1)

Insert:

LCI number, in relation to a quarter, means the All Groups Pensioner and Beneficiary Living Cost Index number that is the weighted average of the 8 capital cities and is published by the Statistician in respect of that quarter.

6 Subsection 83(1)

Insert:

VEA means Veterans' Entitlements Act 1986.

7 Subsection 84(1)

After 'in this section ', insert 'and section 84AA '.

8 Subsection 84(2)

Omit 'The ', substitute 'Subject to section 84AA, the '.

9 After section 84

Insert:

84AA Additional increase in certain pensions

(1) This section applies in relation to a pensioner who is 55 or older.

(2) In relation to a pensioner to whom this section applies, the prescribed percentage for a prescribed half-year, ascertained in accordance with subsection 84(3), is taken to be increased in accordance with this section.

(3) If the prescribed percentage for a prescribed half-year is less than the percentage for the prescribed half-year worked out using the pension MBR method in section 84AB, the prescribed percentage is taken to be the percentage worked out using the pension MBR method.

(4) If, after applying subsection (3), the prescribed percentage for the prescribed half-year is less than the percentage for the prescribed half-year worked out using the LCI method in section 84AC, the prescribed percentage is taken to be the percentage worked out using the LCI method.

84AB Percentage increase using the pension MBR method

The percentage worked out in relation to a prescribed half-year using the pension MBR method is the percentage that represents A—B expressed as a percentage of B,

where:

A is the single pension rate MBR amount (see item 1A of the table in section 59A of the VEA) applicable on the adjustment day prior to the first day of the prescribed half year; and

B is the single pension rate MBR amount (see item 1A of the table in section 59A of the VEA) applicable on the day before that adjustment day

worked out to 3 decimal places.

Note: Changes in the single pension rate MBR amount reflect changes in Male Total Average Weekly Earnings (MTAWE).

Rounding

(2) If a percentage worked out under subsection (1) would, if it were worked out to 4 decimal places, end in a number that is greater than 4, that percentage is to be increased by 0.001.

Publication of substituted amounts

(3) If at any time (whether before or after the commencement of this section), the Australian Statistician publishes an amount in substitution for a particular amount previously published by the Australian Statistician, the publication of the later amount is to be disregarded for the purposes of this section.

Interpretation(4) In this section:

adjustment day means:

(a) 20 March; or

(b) 20 September.

84AC Percentage increase using the LCI method

(1) The percentage worked out in relation to a prescribed half-year using the LCI method is the percentage that represents A—B expressed as a percentage of B,

where:

A is the LCI number in respect of the first quarter of the most recent half-year; and

B is the highest LCI number in respect of the first quarter of any half-year earlier than the most recent half-year

worked out to 3 decimal places.

Rounding

(2) If a percentage worked out under subsection (1) would, if it were worked out to 4 decimal places, end in a number that is greater than 4, that percentage is to be increased by 0.001.

Publication of substituted living cost index numbers

(3) Subject to subsection (4), if at any time (whether before or after the commencement of this section) the Australian Statistician publishes a living cost index number for a quarter in substitution for a living cost index number previously published by the Australian Statistician for that quarter, the publication of the later living cost index number is to be disregarded for the purposes of this section.

Change to reference base

(4) If at any time (whether before or after the commencement of this section) the Australian Statistician changes the reference base for the Pensioner and Beneficiary Living Cost Index, regard is to be had, for the purposes of applying this section after the change takes place, only to living cost index numbers published in terms of the new reference base.

Interpretation

(5) In this section:

most recent half - year means the half-year immediately preceding the prescribed half-year.

[also amend Defence Forces Retirement Benefits Act 1948]

Question put:

That the amendment (Senator Ronaldson's) be agreed to.

The committee divided. [11:23]

(The Chairman—Senator Ferguson)

Question negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

Senator RONALDSON (Victoria) (11:26): I move:

That this bill be now read a third time.

In doing so, could I say how disappointing today is for 57,000 people who expected that this fair indexation bill would go through this chamber. I thank those who have contributed positively. I thank those who have contributed positively. I thank the member for Fadden, the shadow minister, who has worked tirelessly to ensure that this bill got to this place. Those who oppose it stand condemned for not providing fair indexation to those 57,000 men and women. You will stand utterly condemned from now on, for time immemorial, for doing so. I thank Senator Fielding for having the intestinal fortitude to take on those who are trying to force him to oppose this. Thank you, Senator, for agreeing to this bill.

I say to the Greens: you cannot say on one hand that you will do something and then, when it comes to the crunch, do another. There is another senator here, whose name I will not mention, who has done exactly the same thing, and she will stand condemned in the community of Canberra. I say this finally: the Australian Labor Party cannot effectively vote for a motion in the House of Representatives and then come back into this place and vote against it. It is utterly duplicitous behaviour. You are not prepared to test the floor in the House of Repre­sentatives, and you came up here because you knew you had the numbers. You stand utterly condemned. On behalf of this chamber, I apologise to those 57,000 people who have been, quite frankly, utterly let down by this parliament.

Senator BOB BROWN (Tasmania—Leader of the Australian Greens) (11:28): I can only reiterate that had Senator Ronaldson and the opposition voted for the Greens amendment to fund this legislation when it came before the chamber in March, there would be a different outcome today. But they did not.

Opposition senators interjecting—

Senator BOB BROWN: We take upon ourselves the responsibility in this chamber to fund the measures we put through. The shadow minister, Mr Robert, has been a very good liaison point. He came up with a good idea for funding this legislation. It was then found that that option was not available, because it had already been taken up by the government in prior budget considerations. That left the Greens option on the table, and the opposition voted that down; otherwise, we would have a different outcome. The opposition needs to look at that. I reiterate that the option put forward is a Treasury backed option for funding social measures as well as many other measures. The opposition is putting its head in the sand. Not only does it not want to fund this legislation; it wants to cut income to the Treasury. You cannot expect to be seen as fair dinkum with legislation like this. Vote for the Greens financing option and be responsible, and you will get the right outcome.

Senator WONG (South Australia—Minister for Finance and Deregulation) (11:30): I was not going to speak on the third reading, because we wanted to deal with all of the divisions quickly, but, given that Senator Ronaldson has chosen to do a bit of grandstanding, I think a few facts in reply would be useful.

For those coalition senators who have recently entered the chamber, you are now about to vote for a bill which you have not funded, which has a fiscal cost of $1.7 billion.

Senator IAN MACDONALD: Rubbish.

Senator WONG: You cannot say 'rubbish', Senator. Those are the facts. Secondly, it has an underlying cash cost of $175 million over four years and would increase the Commonwealth's unfunded liability by $6.2 billion. That is just this bill.

Those of you who are supporters of Senator Minchin might want to be aware of his comments on this bill. At a meeting of coalition senators considering this bill he warned his colleagues about this move. When confronted by arguments that the move would be very popular, he told his younger colleagues that such a proposal 'risked being the thin end of the wedge'. The coalition 'had to protect its credentials as fiscal conservatives', he said. Senator Minchin is not in the chamber today, but he is at least inside the coalition arguing for a fiscally responsible position, and it is very interesting that no-one has answered his criticisms of this legislation.

Senator Bob Brown put it well when he asked whether the coalition was fair dinkum on this issue. I again say this: if the coalition were serious and fair dinkum on this, they would have done something in government; they never did.

In 11 years, you never—it is very quiet now—found the money to fund this. In your election policy you did not fully fund this, and you are not fully funding this now. You only care about this issue when you do not have to find the money to fund it. That is the reality and it is shameful.

The government is being consistent on this position. We are very clear. We have to take a fiscally responsible approach. We agree with Senator Minchin, unlike many of his colleagues.

Senator XENOPHON (South Australia) (11:33): I reiterate that the responsible thing to do, the best thing to do, is to go through a process in the next six to 12 months to see what savings can be made from Defence. I have had discussions with Senator Ronaldson, Senator Johnston, the govern­ment and my crossbench colleagues in relation to this. Let us go through the process of seeing what savings can be made—thoroughly, forensically, robustly—with the Defence Materiel Organisation and the Department of Defence. That is the best way of dealing with this. There are live issues in relation to the Government Actuary with respect to this. I want to get a long-term sus­tainable outcome. The best way to do this is to work through that process, and I look forward to working with the government, the opposition and my crossbench colleagues to achieve that outcome.

Question put:

   That this bill be now read a third time.

The Senate divided. [11:38]

(The President—Senator the Hon. JJ Hogg)

Question negatived.

Senator CAMERON (New South Wales) (11:41): For generations Australians have understood the need to preserve precious areas of land through the creation of national parks. Our oceans contain many iconic and increasingly fragile sites which now more than ever need protection. Our planet is under pressure from climate change, ocean warming, acidification and calcification. If you look at the recent CSIRO report, you will see how much pressure our oceans are under. That has also been clarified by the Climate Commission report, by sea level rises, by warming and by the calcification of some of our iconic areas. I chaired the inquiry into the bill by the Senate Environment and Communications Legis­lation Committee and I tabled its report yes­ter­day afternoon. That report recommended that this bill not be passed.

Australia has the third-largest marine area of any nation. Our marine region extends from the coral-rich tropical seas of the north to the subantarctic waters of the Southern Ocean. Our oceans, which cover an area of over 16 million square kilometres, are twice the size of our continental landmass. In the unique area off the coast of south-west Western Australia, water depths reach almost six kilometres. These waters contain extraordinary natural biological diversity and richness. Many of the species found in Australian waters are not found anywhere else in the world—and there is still much more to be discovered.

Australians rely on our oceans for resources, recreation and livelihoods, and with this reliance comes a responsibility to manage our oceans sustainably now and for the benefit of future generations. Marine bioregional planning is focused on the conservation and sustainable use of Australia's oceans. That is why the Australian government is working with stakeholders and communities to develop marine plans and marine reserves. The planning process is based on scientific analysis of Australia's marine environment as well as analysis of socioeconomic factors, and it includes community consultation and input.

The scientists of this country are under severe pressure from those who have antiscientific views, many of whom are sitting opposite.

Senator Boswell interjecting—

Senator CAMERON: There we go—I just thought that Senator Boswell would come in right away. Senator Boswell is one of those who has no credibility in terms of scientific analysis. Senator Boswell is one who says that there are no CO2 emissions causing problems anywhere in the world. Senator Boswell is a climate change denier, and that is why he is on his feet.

Senator Boswell: Mr Acting Deputy President, I rise on a point of order. I do not mind a fair exchange across the chamber, but Senator Cameron is going over the top. If he can show where I have ever said that I do not believe—

The ACTING DEPUTY PRESIDENT ( Senator Mark Bishop ): What is your point of order, Senator Boswell?

Senator Boswell: Mistruth, dishonesty and lying to the Senate. I want him to withdraw that remark. If he can find it, I will get up and apologise. He owes me an apology, but he will not be forthcoming.

The ACTING DEPUTY PRESIDENT: There is no point of order, Senator Boswell.

Senator CAMERON: As I have said before, Senator Boswell, I will not be apologising to climate change deniers. The planning process that the government has got is based on the scientific analysis of Australia's marine environment, the analysis of socioeconomic factors, and community consultation and input. Marine bioregional plans are being developed in Commonwealth waters in each of the five large marine regions around Australia. They are not being developed in state and Northern Territory waters close to shore. State waters start at the coast and usually extend three nautical miles out to sea. State waters also include a three-nautical-mile area around islands and include all enclosed waters. Commonwealth waters start at the outer limit of state waters and extend to the edge of Australia's exclusive economic zone, 200 nautical miles from shore. Commonwealth waters are protected as a matter of national environmental signi­ficance under national environmental law—the Environment Protection and Biodiversity Conservation Act 1999. This is why the marine bioregional plans are being made under national environmental law.

The planning process is also being used to identify regional networks of Common­wealth marine reserves that will become part of the national representative system of marine protected areas. The bill will amend the EPBC Act to alter the process by which bioregional plans are made. Bioregional plans form part of Australia's environment management system. The plans may include an overview of the region's key ecological features, an analysis of regional pressures and information to assist persons to determine whether to seek the minister's approval before conducting certain activities in the region.

While the majority of plans cover marine areas in Commonwealth waters, the plans may also be established for land based regions. The plans are non-binding, as they do not declare or alter a person's rights or obligations. Their purpose is to inform the administration of the EPBC Act. The minis­ter is required to have regard to bioregional plans in making certain decisions under the act. Such decisions include fisheries, export approvals, listing and recovery of species and ecological com­munities, and approvals for proposed activity in Commonwealth waters. More broadly, bioregional plans are intended to promote environment manage­ment and conservation values.

The information contained in the plans is intended to foster a cross-jurisdictional approach to ecosystem management by Commonwealth, state and territory agencies. The plans are also designed to enhance community understanding of environmental management and encourage decision making by private industry that is consistent with environmental management principles. While bioregional plans are not binding on persons, the decisions that may be informed by bioregional plans can impact on their rights and obligations. For example, without prior ministerial approval, it is an offence to act in a manner which damages or is likely to damage Commonwealth waters. The minister may grant approval and, therefore, an offence may be avoided where the proposed activity is consistent with a bioregional plan.

There are five steps to the development of bioregional plans. Firstly, there is the characterisation of the region, including its natural systems and conservation values. A bioregional profile for each region brings together the available scientific information about a region's biophysical and broad socioeconomic characteristics and conser­vation values. Secondly, there is the regional assessment of the conservation values. This step consolidates information about the conservation values, their status and the pressures on them. The assessment is used to categorise pressures on conservation values and identify regional priorities in relation to managing these pressures. Thirdly, there is the development and release of a draft marine bioregional plan. Consultation with stakeholders and community provides essential input in developing a marine bioregional plan. The EPBC Act requires the minister to consult publicly on a draft of the plan. Fourthly, there is the release of the marine bioregional plan. Following the minister's consideration of all input received on the draft plan, it is finalised and released. Fifthly, there is the update and review of the marine bioregional plan. Plans are reviewed periodically to accommodate new informa­tion and data about conservation values and the pressures acting upon them—regional priorities, government policy priorities and management and regulatory arrangements.

Bioregional plans are not legislative instruments but are made at the minister's discretion. Bioregional plans are also not subject to parliamentary disallowance. This bill will amend the EPBC Act to make bioregional plans disallowable instruments under section 46 of the Acts Interpretation Act 1901. While bioregional plans would continue to be non-legislative instruments, the amendment would authorise either house of parliament to disallow a bioregional plan. The amendment would not operate retro­spectively but would apply only to bio­regional plans made after the commen­cement of the provision in the bill. Classifying bioregional plans as disallowable non-legislative instruments would alter the process of preparing the plans. The bill would require bioregional plans to be published in the Commonwealth of Australia Gazettewith copies available for purchase from the date of publication. The bill may also affect the date on which the bioregional plan commences. Unless otherwise specified in the bioregional plan, the plan will commence on the day after the notification in the Gazette. The bill would also require bioregional plans to be tabled in each house of parliament within six sitting days of commencement. If not laid before both houses within this time frame, the bioregional plan would cease to have effect. Once the plan is tabled, both houses of parliament would have 15 sitting days in which to give a notice of motion to disallow the bioregional plan.

Debate interrupted.

Senator FIFIELD: by leave—I move:

That the Finance and Public Administration Legislation Committee be authorised to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today, from 1 pm.

Question agreed to.

Senator BUSHBY: by leave— On behalf of the chair of the Rural Affairs Transport References Committee (Senator Heffernan), I move:

That the Rural Affairs and Transport References Committee be authorised to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today, from 3.30 pm.

Question agreed to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (11:56): I seek leave to amend the motion standing in my name for today proposing a reference to the Rural Affairs and Transport References Committee on live export markets.

Leave granted.

Senator SIEWERT: I move the motion as amended:

That the following matters be referred to the Rural Affairs and Transport References Committee for inquiry and report by 25 August 2011:

(a) the role and effectiveness of government, Meat and Livestock Australia, Livecorp and relevant industry bodies, in improving animal welfare standards in Australia’s live export markets, including:

   (i) the level, nature and effectiveness of:

      (a) expenditure and efforts to promote or improve animal welfare standards with respect to all Australian live export market countries,

      (b) expenditure and efforts on marketing and promoting live export to Australian producers,

      (c) ongoing monitoring of the subscription to, and practise of, animal welfare standards in all live export market countries, and

      (d) actions to improve animal welfare outcomes in all other live export market countries and the evidence base for these actions;

   (ii)   the extent of knowledge of animal welfare practices in Australia’s live export markets, including:

      (a) formal and informal monitoring and reporting structures, and

      (b) formal and informal processes for reporting and addressing poor animal welfare practices;

(b)   the domestic economic impact of the live export trade within Australia, including:

      (i) the impact on regional and remote employment especially in northern Australia,

      (ii) the impact and role of the industry on local livestock production and prices, and

      (iii) the impact on the processing of livestock within Australia; and

(c) any other related matters.

Question agreed to.

Senator HANSON-YOUNG: I move:

That the following bill be introduced: A Bill for an Act to amend the Migration Act 1958, in relation to the declaration of third countries for the removal of offshore entry persons.

Question agreed to.

Senator HANSON-YOUNG: I present the bill and move:

That this bill may proceed without formalities and be now read a first time.

Question agreed to.

Bill read a first time.

Senator HANSON-YOUNG (South Australia) (11:58): I move:

That this bill be now read a second time.

I seek leave to table an explanatory memorandum relating to the bill.

Leave granted.

Senator HANSON-YOUNG: I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Migration Amendment (Declared Countries) Bill 2011 seeks to amend the Migration Act 1958 to require that any agreement to send asylum seekers to a third country is brought before both houses of Parliament as a disallowable instrument.

Currently under section 198A, an 'offshore entry person' may be taken to a declared country, whereby the Minister may, but is not obliged to declare in writing that the specified country:

(i) provides access, for persons seeking asylum, to effective procedures for assessing their need for protection; and

(ii) provides protection for persons seeking asylum, pending determination of their refugee status; and

(iii) provides protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country; and

(iv) meets relevant human rights standards in providing that protection.

While all ministers have discretionary powers within their portfolios to make decisions without the need to put something before Parliament, any decision to export our international obligations onto another country, can hardly be argued as being discretionary. The very nature of the debate around whether Australia will send asylum seekers who have arrived by boat, seeking our protection, to a third country, be it Malaysia, Papua New Guinea, Manus Island or Nauru, should not be a decision left to the Minister of the day.

The fact that previous declarations made for Nauru and Manus Island under the former Howard Government were never made public, highlights the importance of this amendment, particularly when dealing with countries that have not signed or ratified the UN Convention on the Status of Refugees, or the UN Convention Against Torture.

Any discussion around the movement of asylum seekers within our region must focus on a genuine protection framework, working towards encouraging the countries of first asylum to sign and ratify the conventions on refugees and torture. While the Greens do not support any attempt to export those who have come to Australia seeking our protection to another country, this Bill will ensure that both houses of Parliament have the opportunity to debate whether or not it this approach acceptable, and to debate the impacts that any declaration would have on our international and domestic obligations.

It is clear that the Act as it currently stands is inadequate when dealing with such an important issue. We cannot simply allow a decision that affects the lives of some of the world's most vulnerable to be left to the Minister of the day, with no parliamentary scrutiny.

From human rights activists, legal experts, and members of the community to members of parliament, the proposal for a third country removal agreement has brought with it both concern and criticism.

More than 15 Australian refugee groups recently issued a joint statement condemning federal political leaders for arguing asylum seeker policy was a choice between reopening Nauru or a new detention centre in Malaysia. These groups, like the Australian Greens, condemn that policy, arguing neither is acceptable. The groups also said: 'The question Australian and international policy makers should focus on is not how to stop the boats but how refugees in Asia-Pacific can receive effective protection.'

This amendment to the Migration Act should not be considered controversial, but rather an essential part of our parliamentary process. Signing an agreement with another country to export people who have reached our shores seeking our protection, deserves proper parliamentary scrutiny and transparency, not simply an assurance from the Minister of the day that the country in question ticks all the boxes laid out by the Australian Government.

Any proposal where humans are exported to another country deserves proper scrutiny, and the Greens' position on this is clear: We do not support sending people in need to a country where their rights and protection are not guaranteed. While this Bill is not about preventing the Government from engaging in international affairs, or overriding any attempt to negotiate a genuine regional protection framework, it is about acknowledging that any proposal of this nature is given the attention and debate it deserves.

I urge all sides of Parliament to support this Bill, and allow both Houses of Parliament to appropriately scrutinise any proposed declaration to send asylum seekers who arrive in Australia to another country.

I commend this Bill to the Senate.

Senator HANSON-YOUNG: I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator PARRY (Tasmania—Chief Opposition Whip in the Senate and Deputy Manager of Opposition Business in the Senate) (12:00): At the request of Senator Cormann, I move:

That the Select Committee on the Scrutiny of New Taxes be authorised to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today, from 1.50 pm.

Question agreed to.

Senator McEWEN (South Australia—Government Whip in the Senate) (12:00): At the request of Senator Crossin I move:

That the Joint Standing Committee on the National Capital and External Territories be authorised to hold a public meeting during the sitting of the Senate on Wednesday, 22 June 2011, from 12.30 pm to 2 pm, to take evidence for the committee's biannual review of the National Capital Authority.

Question agreed to.

Senator McEWEN (South Australia—Government Whip in the Senate) (12:21): I move:

That the final report of the Finance and Public Administration Legislation Committee on its inquiry into exposure drafts of Australian privacy amendment legislation be presented by 30 September 2011.

Question agreed to.

Senator XENOPHON (South Australia) (12:22): by leave—I seek to amend the motion standing in my name relating to a reference to the Community Affairs References Committee before asking that it be taken as formal. I seek to amend the reporting date for this inquiry from 22 August 2011 to 12 October 2011 and also to change paragraph (c) so that it reads 'the effectiveness and accuracy of the billing code and prosthesis list' rather than the current wording, which is 'the effectiveness and accuracy of current billing systems'. I seek leave to make a short explanation.

The ACTING DEPUTY PRESIDENT ( Senator Mark Bishop ): Leave is granted for two minutes.

Senator XENOPHON: The reason for the amendments to paragraph (c) is that my office was contacted by the committee secretariat in relation to the wording. There was concern that 'current billing systems' may have been too ambiguous and changing that to 'the billing code and prosthesis list' would give a clearer definition in the event that the department was concerned about it. I make it clear this is not a request of the department in terms of the amendment, but the committee secretariat raised an issue about what it meant and this clarifies that. On that basis, I move my amendment, as amended:

That the following matter be referred to the Community Affairs References Committee for inquiry and report by 12 October 2011:

The regulatory standards for the approval of medical devices in Australia, with particular attention to devices with high revision rates, and in undertaking the inquiry the committee consider:   (a)   the role of the Therapeutic Goods Administration in regulating the quality of devices available in Australia;   (b)   the cost effectiveness of subsidised devices;   (c)   the effectiveness and accuracy of the billing code and prosthesis list;   (d)   the processes in place to ensure that approved products continue to meet Australian standards;   (e)   the safety standards and approval processes for devices that are remanufactured for multiple use;   (f)   the processes in place to notify the relevant authorities and the general public of high revision rates or possible faulty devices;   (g)   the effectiveness of the current regimes in place to ensure prostheses with high revision rates are identified and the action taken once these devices are identified;   (h)   the effectiveness of the implemented recommendations of the Health Technology Assessment; and   (i)   any other related matter.

Question agreed to.

Senator McEWEN ( South Australia — Government Whip in the Senate ) ( 12:24 ): I present additional information received by the Legal and Constitutional Affairs Legislation Committee relating to the 2010-11 additional estimates.

Senator BOYCE (Queensland) (12:24): On behalf of the Parliamentary Joint Committee on Corporations and Financial Services, I present two reports of the committee as listed at item 7 on today’s Order of Business, and seek leave to move a motion in relation to the reports.

Leave granted.

Senator BOYCE: I move:

That the Senate take note of the reports.

Senator BOYCE: As Deputy Chair of the Joint Corporations and Financial Services Committee I am pleased to speak to these two reports. The first was the committee's report into access for small and medium business to finance and the second was the committee's report on the statutory oversight of the Australian Securities and Investments Commission. On 25 November last year, the House of Representatives referred to the committee an inquiry into small and medium business's access to finance. The report was presented to the Speaker out of session on 28 April, and I am pleased that I can now present that report to the Senate.

As senators know, access to finance from lending institutions is crucial to the ongoing productivity and growth of the small- and medium-business sector. While Australia came through the GFC relatively well, the crisis continues to leave its mark on our economy, particularly in the area of small and medium business, who are facing a perfect tsunami of problems relating to their ability to conduct business. This was no more evident than in the small- and medium-business finance sector. The committee heard evidence that, due to be GFC initially, lending competition decreased while the cost of providing finance increased. Small and medium businesses could access finance, however on less favourable terms and on less favourable conditions than prior to the crisis. Also those who were successful often had to wait longer, which stifles innovation, the keystone of small business.

In a unanimous report our committee made four recommendations to help improve the financial environment for Australia's small and medium businesses. We recommended that the government assess the value of developing uniform definitions of micro-, small and medium business to be applied for data gathering, policy develop­ment and analysis by Commonwealth and state agencies. That might sound like a minor change, but in fact it is not because across the ABS, the ATO, ASIC and a dozen other regulatory organisations and a dozen or more lending institutions different definitions are used all the time as to what constitutes micro-, small and medium business. The impost on many businesses is huge. We also recommended that the Reserve Bank of Australia specifically track the impact of the introduction of Basel III on the cost of small and medium business finance and residential mortgages. We recommended that the Code of Banking Practice and the Mutual Banking Code of Practice be amended to include a standardised notice period for notifying business borrowers of changes to loan terms and conditions that may be materially adverse for borrowers. This issue was raised with us often by small and medium bus­inesses who were given varying amounts of notice about changes to their loan conditions. We recommended that the government undertake further work to explore policy measures that may strengthen the mutual sector as a fifth pillar of the banking system and therefore promote competition. I turn now to the second report, tabled in the House of Representatives on 23 May 2011, on the committee's statutory oversight of ASIC. This is a requirement under the ASIC Act. ASIC is charged with monitoring and promoting market integrity and consumer protection in Australia's financial system. The relevance of ASIC's responsibilities to the ethical performance of this nation's financial system cannot, in my view, be overstated. The committee's oversight of ASIC provides an opportunity for the parliament to be assured that the regulator is operating effectively and to identify opportunities for improvement. The com­mittee would like to direct parliament's attention to several areas, including ASIC's complaints-handling practices, compliance with the Legal Services Directions, and measures to promote financial literacy. We will continue to engage with ASIC to identify areas for improvement.

In preparing the report, the committee held a hearing on 11 March with ASIC officials, the Office of Legal Services Coordination and the Australian Securities Exchange. We would like to thank ASIC for their continuing cooperation and assistance, and the representatives from the Office of Legal Services Coordination and the ASX for the additional insights they provided. This is going to be a new direction that the Joint Committee on Corporations and Financial Services will take. We will hold four statutory oversight hearings into ASIC each year and we intend to broaden the number of people that we speak to about ASIC and its operations, partly to inform our work but also to inform ASIC's work and to develop a better level of communication between the financial sector, ASIC and academics working in this field, and to establish a sense of where we sit in the international framework on our regulation of ASIC. I am very hopeful that this will deepen our ability to provide assurance to this parliament on the workings of ASIC.

I also take this opportunity to thank the former chairman of ASIC, Mr Tony D'Aloisio, for his work with and his assistance to the committee. We found his reports to us always insightful and informa­tive. And I would like to welcome the new chairman, Mr Greg Medcraft. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator HUTCHINS (New South Wales) (12:32): I present the report of the Parliamentary Joint Committee on Law Enforcement, Adequacy of aviation and maritime security measures to combat serious and organised crime, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator HUTCHINS: I move:

That the Senate take note of the report.

Since 2009, the Parliamentary Joint Committee on Law Enforcement has been examining the security of Australia's aviation and maritime sectors. Specifically, the committee has been inquiring into the exploitation of these sectors, including our airports and seaports, by serious and organised criminal networks and whether our current security arrangements are adequate in the face of this threat. On behalf of the committee, I would like to thank all those who contributed to the inquiry. We were fortunate to be able to consult with a wide body of experts, including senior law enforcement officials, private operators, union groups, industry associations and security consultants. I would particularly like to thank the secretariat—Dr John Bell, Mr Bill Bannear and Ms Rosalind McMahon—and previous secretariat staff who also contributed to the inquiry: Mr Tim Watling, Dr Shona Batge, Dr Jacqueline Dewar, Dr Tim Kendall, Dr Robyn Clough, Ms Nina Boughey, Ms Danielle Oldfield and Ms Victoria Robinson-Conlon.

The committee received a large amount of evidence pointing to ongoing penetration of our airports and seaports by organised crime. In addition to evidence provided by Australia's law enforcement community, particularly the Australian Crime Com­mission, the committee also had the opportunity to discuss the state of affairs with industry insiders during airport and seaport site visits in six states and territories. As a result of this comprehensive inves­tigation, the committee is deeply concerned by the level of organised criminal activity occurring in the aviation and maritime sectors.

A key driver for this criminal activity continues to be the lucrative profits made by the importation of illicit drugs. The committee heard that a kilogram of cocaine that might cost a few thousand dollars in a source country such as Colombia might have a wholesale price of around $300,000 in Australia and a street-level price approaching $1 million. As the majority of illicit drugs, either in their final form or as precursor chemicals, are sourced overseas, this lucrative trade corrupts the same air and sea routes used by legitimate commerce.

In addition to the drug trade, the committee heard that the range of serious criminal activity includes, amongst other things, money laundering, tobacco smuggling, counterfeiting and the illegal trade in flora and fauna. This corruption of the industry is facilitated in part by trusted insiders within it—a small minority of individuals working within the aviation and maritime sectors, either recruited or placed by criminal networks, who have a disproportionately large impact. Current efforts to ensure the integrity of the workforce in these sectors are not adequate. The prevailing security regime in the aviation and maritime sectors was introduced in the post-September 11 climate and focuses narrowly on the threat of terrorist attack within these sectors. While the committee agrees that such security measures are vital for the safety of the community, it makes recommendations in this report that would see the security regime extended to defend against the threat of organised crime. This is in line with this government's policy since the inaugural National Security Statement in which serious and organised crime was identified as a threat to national security. A key recommendation, in line with this statement, is the strengthening of the Aviation and Maritime Security Identifi­cation Card schemes. During the course of the inquiry, the committee became aware that a number of individuals known to be closely involved with criminal activity continue to hold these cards allowing them to freely access sensitive areas. For this reason, the committee has recommended a mechanism by which such individuals could have their card revoked on the basis of compelling criminal intelligence. Further changes to the ASIC and MSIC schemes recommended by the committee include its expansion to cover important elements of the supply chain outside of the airport or seaport environment and the introduction of biometric information to simplify and strengthen the management of the system.

The committee also spent considerable time examining the law enforcement res­ponse to organised crime in the aviation and maritime sectors. The committee identified the key role that intelligence played in ensuring an informed response. Intelligence, including from overseas partners, has a dual purpose. On the one hand, it informs successful operations such as the seizure of 460 kilograms of cocaine from a yacht in Brisbane in October last year. This successful operation required the timely sharing of information and coordination of action at an operational level between key agencies. On the other hand, intelligence can be used at a strategic level to build a picture of criminality that allows not just reactive intervention but proactive prevention. The committee is therefore keen to see an enhanced analytical use of intelligence from all sources and supports ongoing efforts that allow such 'fusion' to take place.

The committee has been encouraged by the development of joint-agency task forces in a number of states, and has recommended this be emulated in all jurisdictions. State based task forces would be supplemented by a national flying squad that would direct a joint-agency response to trouble spots on an as-needs basis.

In chapter 4 of the report, the committee recommends a number of measures that would reduce the vulnerability of ports and airports, referred to as 'target hardening'. These measures include an enhanced role for CCTV, drug and currency sniffer dogs, and the development of a confidential means for container examination. Importantly, the committee has recommended a number of enhancements to the air passenger environ­ment. Organised crime figures are currently able to travel under false identities with impunity, facilitating criminal activity. In response, the committee has recommended that travelling under a false identity be made an offence. In addition, the committee has recommended that the provision of photo identification by passengers be made mandatory prior to boarding a plane.

In conclusion, I note that serious and organised crime continues to threaten Australia's community and is estimated to cost the national economy more than $15 billion each year. The government will need to continually adapt to this evolving threat. I therefore commend the committee's report and recommendations to the Senate. I note that the Australian government is serious about defending the community from the threat of organised crime, and I therefore commend these recommendations to the government as essential to that effort.

Senator PARRY (Tasmania—Chief Opposition Whip in the Senate and Deputy Manager of Opposition Business in the Senate) (12:40): I also rise to speak on this report on aviation and maritime security measures to combat serious and organised crime, being a member of the committee and being involved with the inquiry for its duration. I recommend the report to all senators and members to read. It has some revealing information. The committee, in taking a lot of in camera evidence, was given information that really assisted in the compilation of this report, which obviously cannot be discussed. However, the evidence that is in the report is compelling. The evidence given by agencies certainly led us to the 21 recommendations and I whole­heartedly support the recommendations.

Senator Hutchins touched on one of the recommendations I wish to highlight, and that is recommendation No. 4. The com­mittee recommended the formation of a maritime crime task force that would be a national flying squad led by the Australian Federal Police. The intent and the purpose of this flying squad is to randomly check and go to any areas that they are required to go to in the light of information or intelligence that comes before that flying squad. I believe this would be a great deterrent to illicit activity in the maritime sector in particular. To have a flying squad that could arrive unannounced at any time to investigate issues, be they intelligence based or random, would be a great deterrent.

Senator Hutchins also touched upon the prices of illicit drugs on the international and domestic market. This is a cornerstone aspect of why crime activity and the importation of illicit material, in particular drugs, are prevalent in our maritime and aviation sectors. I will go through some detail because the main rationale for organised crime is simply to drive profit. The profit is enormous.

Senator Hutchins touched upon cocaine. I will go to heroin. Heroin, when it leaves its source in Afghanistan—and this is shown in a table in appendix 4 of our report—can have a top price of about $2,500 for a typical kilogram. When it comes to Australia 700 grams, so just under a kilogram, can wholesale for $210,000. That is an enormous mark-up from $2,500 a kilogram to $210,000 for less than a kilogram when it arrives in Australia.

Ecstasy—a tablet of choice, sadly—can leave the Netherlands at a wholesale price for the top range of about $4,700 per 1,000 tablets. It will then wholesale in Australia at the top price of around of about $20,000 per 1,000 tablets. A lot of tablets can come through our airports and our ports. Methyl­amphetamine can leave Canada with the top-range price of $23,000 for a kilogram—I am quoting the top range; the wholesale price can be a lot less in the source country—and be wholesaled in Australia for $210,000 a kilogram.

Australia is the most lucrative country for organised crime because we seem to have the ability to pay and we pay higher prices. If you look at the average prices in other countries, in the United States methyl­amphetamine is about $70,000 per kilogram. Likewise, if we go back to cocaine, it is about $43,000 per kilogram for cocaine in the United States compared to $250,000 per kilogram here for the top-range wholesale price Senator Hutchins also quoted. So we seem to have the ability to pay. The end-users here want to pay and that is why the crime syndicates are lucrative options for organised crime. They are certainly picking a market and that is why we need to be tougher on our borders in Australia. This report goes to address how we can harden our borders and how we can detect crime operations on our waterfront and in the aviation sector, and I commend the report to the Senate. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Senator SHERRY: I indicate to the Senate that these bills are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper. I move:

That these bills may proceed without formalities, may be taken together and be now read a first time.

Question agreed to.

Bills read a first time.

Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (12:45): I table a revised explanatory memorandum relating to the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further Election Commitments and Other Measures) Bill 2011 and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further Election Commitments and Other Measures) Bill 2011

This Bill delivers on three important election commitments made by the Government during the 2010 election campaign to improve support for Australian families and children. These will make the system of family tax benefit advances more flexible to better meet families’ needs, and make sure children have a health check before they start school.

The Bill also includes a measure from the 2010-11 Budget on streamlining notification of compensation payments, along with some minor clarifications to family payments and technical amendments.

An additional two election commitments for Australian families were included in an earlier Bill. These were:

improved support for families with teenagers, which will provide substantial increases in family assistance for families with teenagers aged 16 to 19 in secondary school or vocational equivalent; and

better access to the baby bonus to assist families with the upfront costs of having a new baby.

Together, these commitments will significantly improve the assistance available to Australian families to assist with the costs of raising children.

More flexible family tax benefit advances

The first election commitment in the Bill being introduced today overhauls the advance payment rules for family tax benefit Part A to better meet families’ needs. This initiative is part of the Government’s Better Access to Family Payments package, which will give families improved and more flexible access to their family payments.

One element of the Better Access to Family Payments package has already been introduced in a recent Bill – a $500 upfront payment of the baby bonus for eligible parents.

Managing the household budget can be a delicate balance, especially when something unexpected happens. The fridge or washing machine can break down, or a school uniform can get damaged and need replacing.

The measure in this Bill will ensure that advance payment rules for family tax benefit Part A are more flexible, helping families deal with unexpected expenses.

Under the new rules that will apply from 1 July 2011, families will have more choice over the size and timing of their advance payments.

For some families, this new flexibility will mean avoiding higher credit card bills or small loans from high interest providers such as payday lenders. For others, it will make it easier to manage the family budget around one-off expenses like the car registration or a broken fridge.

Currently the maximum advance amount is fixed at around $330 for six months for all families, and this full amount can only be advanced twice a year – on 1 July and 1 January. This means that families do not have the flexibility to request advances when they actually need them to meet unexpected costs.

Under the new rules, families will be able to choose the value of their advance payment between minimum and maximum amounts. The minimum amount for all families will be 3.75 per cent of the maximum standard rate for a child aged under 13 – this would give a minimum advance amount of around $160.

The maximum amount will be linked to the family’s usual annual rate of payment. Generally, a maximum of 7.5 per cent of that rate will be available for advance payment.

For a family not receiving rent assistance, and with one child under 13, this would give a maximum advance amount of around $320. For a family not receiving rent assistance, and with two children under 13, the maximum advance would be around $640.

The maximum advance would be higher for a family receiving rent assistance.

An overall maximum will apply, set initially at $1,000 in 2011-12, and maintained at the same percentage of the maximum rate for one child under 13 as in the first year.

Some families on the base rate of family tax benefit Part A would have access to a smaller advance amount because of their smaller existing entitlements.

Families will repay their advances through adjustments to their ongoing fortnightly family tax benefit Part A entitlement in the following six months.

From 1 July, families will be also able to request advances at any point in the year, and can have multiple advances up to their maximum advance amount.

However, Centrelink will not approve advance payment requests if they would result in financial hardship. Families making repeated requests will also be assessed to see whether they may benefit from financial advice or financial counselling.

There are currently around 1.5 million families that could benefit from this measure if they choose to take these more flexible family tax benefit advances.

These reforms for families are similar to the improvements that this Government has already implemented for age pensioners as part of its historic pension reforms.

Healthy start for school

The second election commitment delivered through this Bill will set up a new requirement for income support recipient parents of four year-olds, to make sure their children have a health check before they start school.

The new arrangement will make payment of the family tax benefit Part A supplement (which is paid to families at the end of a financial year) conditional for these families on the children undergoing a health assessment, such as the Healthy Kids Check.

The new requirements apply to families where either member of a couple has received income support for any part of the year.

The requirement will also apply to non-parent carers who have received family tax benefit for a child in their care for at least 26 weeks, and who also received an income support payment at some time during the financial year. In addition, the new requirement will only apply to non-parent carers who still have the care of the child at the end of the financial year.

Pre-school health checks make sure children are healthy, fit and ready to learn when they start school. These important checks promote early detection of developmental issues and illnesses.

Research indicates that disadvantaged children not only begin school less well prepared, but that early gaps persist and even widen as children progress through school. An early check is critical to help detect any developmental barriers, such as hearing or sight impairment.

The health checks to be included will be set by Ministerial determination. Many children receive health checks through child and maternal health clinics or through other health services. In 2008, the Federal Labor Government also introduced a Healthy Kids Check for four year olds so that families also have the option of receiving these services from a general practitioner or practice nurse.

Parents will need to confirm with Centrelink that the check has been done. There will be an exceptional circumstances provision to waive the new requirement, such as when the child has a severe disability or terminal illness.

This requirement will apply from the entitlement year that begins on 1 July 2011 and it is estimated around 92,000 children aged four, whose families receive income support at some point in the year, will be affected by this measure each year.

This important measure is another example of this Government putting the health and wellbeing of children and families at the centre of our welfare reform agenda.

The Government’s welfare reforms reflect the expectations of the broader Australian community – that people receiving welfare support should take personal responsibility for themselves and their families. People must participate in study, training or work and parents must care for their children.

It builds on the new model of non-discriminatory income management already rolled out in the Northern Territory, and the income management trials in Cape York and across metropolitan Perth and the Kimberley. Income management makes sure welfare payments are spent in the best interests of the child.

Income management is having positive results:

More welfare money is being spent on food, clothing and school-related expenses and less on alcohol, gambling, cigarettes and drugs.

Over half of those who could have left the scheme in the Northern Territory have volunteered to stay on it – they find the Basics Card is a helpful budgeting tool.

And in Western Australia, two-thirds of people on compulsory income management and 82 per cent on voluntary income management said they recommended income management to others – a pretty good endorsement.

Strengthening child support compliance

In the third election commitment in this Bill, the compliance regime on the use of default income in child support assessments will be strengthened.

A new, more accurate, default income arrangement will be introduced that uses a parent’s previous taxable income, increased by wages growth, instead of a lower default income in cases where they have not lodged a tax return.

Currently, when a parent has not lodged a tax return, their child support assessment is estimated at two-thirds of the Male Total Average Weekly Earnings. However, this figure often understates the parent’s actual income.

Almost one in four child support cases have incorrect assessments due to late or non-lodgement of tax returns. Some parents have failed to lodge returns for over seven years. This non-compliance with tax obligations works against the policy objective of the Child Support Scheme that parents contribute towards the cost of raising their children according to their capacity to pay.

Under legislative changes made in 2006, and implemented during 2008, a new default income of two-thirds of Male Total Average Weekly Earnings has applied in child support cases where a person does not lodge their tax return for more than two years. This default income is around $39,000 per annum.

Since 1 July 2008, there has been a 570 per cent increase in the use of this default income where it is lower than the person’s previous taxable income.

To ensure a more accurate child support assessment and therefore better support for children in separated families, the new process will generally use the parent’s last known taxable income, indexed by the growth in average wages. However, if the current calculation of two-thirds of Male Total Average Weekly Earnings would produce a higher income, that figure will be used instead.

This measure will help ensure that child support assessments are fairer and more accurate and remove the unintended incentive for parents on higher incomes to benefit from a lower child support assessment if they do not lodge a tax return.

Streamlining of compensation payments notification

A measure from the 2010-11 Budget will also be introduced in this Bill. This measure will streamline the process of notifying Centrelink when payments are made by compensation payers and insurers.

These compensation payers and insurers will now need to tell Centrelink before compensation payments (lump sum payments as well as ongoing periodic payments) are made to compensation recipients or their partners.

The new requirement will help make sure people are paid their correct Centrelink entitlements and avoid overpayments and unnecessary debts accruing.

This measure will help simplify the process of Centrelink notification for recipients of compensation who also receive Centrelink payments.

Minor amendments

Lastly, some minor clarifications will be made to several family assistance and child support provisions. These clarifications do not change current policy.

This Bill delivers on three important election commitments and a measure from last year’s Budget. The measures in this Bill will improve support for Australian families, improve child support assessments and help prevent compensation recipients accruing unnecessary debts with Centrelink.

Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011

Today I am introducing a Bill to that builds on the Government’s commitment to better ensure the financial viability of the child care sector.

Members will recall the overnight collapse of ABC Learning in 2008 – a collapse that was simply unprecedented in this country.

It was a collapse made possible by the fact that the former Coalition Government allowed ABC Learning to continue to expand virtually unchecked and unhindered.

As a result, with virtually no notice, almost 100 000 families across the nation were left wondering what they were going to do the next morning.

Tens of thousands of confused parents didn’t know if they’d be able to go to work or to study the next day.

16 000 child care workers didn’t know if they still had a job to go to.

When a child care provider as large as ABC collapses, the consequences for both families and staff are severe.

If it hadn’t been for the Australian Labor Government’s quick and decisive action in 2008, when we stepped in to stabilise the sector and keep ABC’s doors open for families while future arrangements were made - these families, children and workers would have been left in the cold.

Instead 90 percent of these centres continue to operate for Australian families today.

Following that catastrophic collapse the Australian Government committed to strengthen stability in the child care industry so that parents’ could be confident that their care arrangements would be there to support them when they need it.

We have introduced a range of new measures to better ensure the financial viability of child care providers.

We are:

more closely scrutinising the financial background and key personnel of child care providers when granting approval to operate a child care service; and

requiring operators to give the Department 42 days notice of their intention to close.

Furthermore through legislation that is currently before the Senate, we will:

enhance the Government’s ability to deal with ‘pheonixing’ – where an operator who accumulates debts, exits and then re enters the market under a restructured company; and

strengthen the Secretary’s powers to refuse applicants who are not fit and proper persons to operate child care services.

The Family Assistance Legislation Amendment (Child Care Financial Viability) Bill 2011 builds on these reforms.

The amendments in the Bill broaden the powers of the Secretary of the Department to request detailed financial information about large Long Day Care providers and use this information to assess their financial viability on an ongoing basis.

It will also deliver greater audit powers to the Australian Government where we have serious concerns about a provider’s financial health.

This means that for the first time large Long Day Care providers will be required to demonstrate that they are financially viable as a condition of receiving Government funding.

These providers will also be required to continually demonstrate their financial viability each year in order to receive Government funding.

This will establish an ‘early warning’ system, so that the Australian Government can anticipate and respond to a potential collapse of a major child care provider.

Our focus on large long day care providers in this Bill is in recognition of the widespread impact a collapse of such a provider – like ABC Learning – can have on families, children and child care workers.

The Australian Government recognises that child care is an essential enabler of workforce participation, most particularly for Australian women.

At a time when employers are crying out for workers then it is essential that we are supporting parents who want to return to work to be able to participate confidently.

Parents need to have trust that when they drop their child off in the morning that their child is in quality child care.

Importantly, they also need to know that when they drop their child off at care, someone will be there to meet them each and every day.

Debate adjourned

Ordered that the bills be listed on the Notice Paper as separate orders of the day.

Senator SHERRY: I indicate to the Senate that these bills are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed on the Notice Paperas indicated on today's Order of Business. I move:

That these bills may proceed without formalities, may be taken together and be now read a first time.

Question agreed to.

Bills read a first time.

Second R eading

Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (12:48): I table a revised explanatory memorandum relating to the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further Election Commitments and Other Measures) Bill 2011 and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Governance of Australian Government Superannuation Schemes Bill 2011

The Governance of Australian Government Superannuation Schemes Bill 2011 (the Bill) is part of a package of Bills to improve and modernise the governance arrangements for the main Commonwealth civilian and military superannuation schemes.

The Bill gives effect to the Government’s announcement, in October 2008, to merge the trustees for the Commonwealth’s main civilian and military superannuation schemes – that is, the Australian Reward Investment Alliance, the Military Superannuation and Benefits Board and the Defence Force Retirement and Death Benefits Authority (DFRDB Authority) - to form a single trustee body.

The main civilian and military superannuation schemes that will come under the single trustee are the:

Commonwealth Superannuation Scheme;

Public Sector Superannuation Scheme;

Public Sector Superannuation Accumulation Plan;

Military Superannuation and Benefits Scheme;

Defence Force Retirement and Death Benefits Scheme; and

Defence Force Retirement and Benefits Scheme.

The single trustee will also assume responsibility for the scheme established by the Superannuation Act 1922, the Papua New Guinea Scheme and the Defence Force (Super­annuation)(Productivity Benefit) Scheme. These schemes currently come under the Commissioner for Superannuation and, in the case of the latter scheme, the DFRDB Authority and the Commissioner for Superannuation.

The Bill establishes the Commonwealth Super­annuation Corporation (CSC) as the single trustee. CSC is a Commonwealth authority for the purposes of the Commonwealth Authorities and Companies Act 1997.

Importantly, the Bill does not impact on the design of the schemes or on members’ entitlements, which are protected by separate scheme legislation that cannot be changed by the trustee. In particular, there is no change to the existing features and benefits that reflect the unique nature of military service in the Australian Defence Force, such as death and disability arrangements.

The Government’s decision to merge the civilian and military trustees was made with the aim of improving member benefits and service levels.

The ability of a single trustee to consolidate scheme funds will provide the opportunity to access increased benefits of scale. This includes access to higher service levels and better investment opportunities, which will allow members of all the schemes to benefit through lower investment costs and higher investment returns.

Members of the Military Superannuation and Benefits Scheme (MSBS) – which comprises the bulk of serving Defence Force personnel – stand to gain substantial benefits from the merger. Shis is because the scheme has just over $3 billion in assets under management whereas the civilian schemes have approximately $18 billion in assets under management. There is clear industry experience that members of smaller superannuation schemes have the most to gain when their scheme funds are consolidated into a larger pool of funds.

All scheme members will also ultimately benefit from a highly skilled and innovative trustee being responsible for their superannuation schemes. This includes the ability for the single trustee, due to its increased presence in the superannuation industry, to attract and retain quality and experienced board members and staff.

Since last year, the Government has under­taken consultation with military stakeholders on how the Bill will affect members of the military schemes. While recognising that members of the MSBS in particular will benefit from the trustee consolidation, the Government has also accepted many of the suggestions made by the ex service community to protect the status of military superannuation. This includes a requirement for CSC to have regard to the unique nature of military service as set out in the relevant military superannuation legislation when it is performing a function under that legislation. I thank the ex-service community for their dedication to representing the interests of their members.

Both military and civilian interests will be represented on the 11 member governing board of CSC. The Chief of the Defence Force will be responsible for nominating two member directors and there will be consultation between the Finance and Defence Ministers on suitable candidates for the five employer director positions. Three other member directors are nominated by the President of the ACTU.

The Government has also responded to suggestions that there be a review of the first five years of the operation of the Act. This will ensure the ongoing effectiveness of the single trustee arrangements.

Overall, the Bill will better secure the superannuation arrangements for military personnel and Commonwealth civilian employees for the long term. It will also allow substantial benefits to flow to members, while retaining the individual scheme benefits and entitlements.

The Bill reflects the Government’s ongoing commitment to provide efficient and sustainable superannuation arrangements for Commonwealth employees and military personnel, together with its strong commitment to protect those features of military superannuation that recognise that military service is unique and different from civilian employment.

ComSuper Bill 2011

The ComSuper Bill 2011 (the Bill) is part of a package of bills to improve and modernise the governance arrangements for the main Commonwealth civilian and military super­annuation schemes.

This Bill will establish ComSuper and provide that it is a statutory agency for the purposes of the Public Service Act 1999 consisting of a Chief Executive Officer (CEO), as head of the agency, and staff. The Bill will also provide that ComSuper will be a prescribed agency for the purposes of the Financial Management and Accountability Act 1997.

The Bill will modernise the governance structure of ComSuper as a statutory agency, and clarify ComSuper’s functions. The Government’s decision to improve superannuation administra­tion was made with the aim of improving service levels for current and former members.

The function of the CEO will be to provide administrative services to the Commonwealth Superannuation Corporation (CSC), which will be established as the trustee of the main Australian Government civilian and military superannuation schemes from 1 July 2011 by the Governance of Australian Government Superannuation Schemes Bill 2011. The CEO will be responsible for providing administrative services to CSC.

The CEO will be appointed by the Minister for Finance and Deregulation in consultation with the Minister for Defence.

Overall, the implementation of the Bill will better secure the superannuation arrangements for Commonwealth civilian employees and military personnel for the long term. The Bill reflects the Government’s ongoing commitment to provide efficient and sustainable superannuation arrangements for Commonwealth employees and military personnel.

Superannuation Legislation (Consequential Amendments and Transitional Provisions) Bill 2011

The Superannuation Legislation (Consequential Amendments and Transitional Provisions) Bill 2011 (the Bill) supports signifi­cant reforms to the governance of Commonwealth superannuation that are included in the Governance of Australian Government Superannuation Schemes Bill 2011 and the ComSuper Bill 2011.

The Bill makes consequential amendments to a range of other Commonwealth Acts of Parliament to take account of the changes to governance arrangements for Commonwealth superannuation schemes. It also puts in place transitional arrange­ments necessary for the reforms.

The Bill amends the Superannuation Act 2005 to facilitate public sector employees being able to consolidate their superannuation savings under the management of one trustee.

Following consultation with ex-service organisations, the Government has strengthened recognition of the unique nature of military service in the Bill. In particular, the Bill amends the Defence Force Retirement and Death Benefits Act 1973 to mandate the establishment of a dedicated Defence Force Case Assessment Panel by the single trustee, Commonwealth Super­annuation Corporation. The establishment of the Panel ensures the continuation of the role and function currently performed by the Defence Force Retirement and Death Benefits Authority within the framework of the single trustee.

The Bill requires the Panel to have military representation. This includes representation nominated by the Chiefs of each of the three services. The Bill also prescribes the Chair as being one of the directors of CSC who was nominated by the Chief of the Defence Force.

Taxation of Alternative Fuels Legislation Amendment Bill 2011

This Bill is one of a number of Bills that together introduce fuel tax reforms first announced by the former Howard Government in its 2003-04 Budget.

The Bills phase in the new taxation arrangements in respect of liquefied petroleum gas, liquefied natural gas and compressed natural gas. The Bills also clarify the tax treatment of renewable fuels, namely ethanol, methanol and biodiesel, and correct a legislative anomaly that was wilfully ignored by the former Howard Government, providing much needed certainty for the renewable fuels industry.

Over time, the rate of excise applied to LPG, LNG and CNG will be calculated on the basis of the energy content of those fuels, discounted by 50 per cent to recognise the fuel security, potential environmental, and regional develop­ment benefits arising from their use. These arrangements will be phased in incrementally over a five year period to ensure that industry and users of the fuels have sufficient time to adjust to the new system.

According to the ACCC's December 2010 report on the petroleum industry, Australia enjoyed the lowest automotive LPG prices in the OECD. The introduction of taxation on LPG will bring Australia into line with most other OECD countries.

This Bill also includes a commitment that renewable fuels (ethanol, methanol and biodiesel) do not pay effective excise. This commitment reflects discussions with our cross-bench colleagues and industry on these longstanding reforms. It will mean that these renewable fuels will play an important part in Australia's transition to a low carbon economy and future energy security.

The taxation and grant arrangements that currently apply to ethanol, namely application of fuel taxation to both imported and domestically produced ethanol with a grant for domestically produced ethanol, will be maintained for a period of 10 years before a review is undertaken. Similarly, the taxation arrangements for biodiesel and renewable diesel, and the availability of the Energy (Cleaner Fuels) Scheme Grants, will remain in place before a review is undertaken after 10 years.

The Government will also exclude methanol, used in certain racing vehicles, from the new regime because of its limited use and small market. This recognises the concerns of the industry.

While the Government has not made any final decisions about the treatment of fuel in the carbon price arrangements, a principle of carbon pricing is to apply a price that reflects the relative emissions of different activities.

The Government notes the claims of the LPG industry that LPG generates 13 per cent less emissions than regular petrol and the low carbon opportunities of ethanol, methanol, biodiesel and other alternative fuels. The Government is committed to addressing the relative emissions generated by those fuels as part of its consideration of arrangements for fuel under the carbon price.

The support of the Parliament for this legislation is crucial.

Under the former Government's legislation that will apply unless new legislative arrangements are made, the taxation arrangements for both imported and domestically produced ethanol will both jump to 7.6 cents per litre from 1 July 2011. This will mean that on this date the net excise on domestic ethanol will rise by 7.6 cents per litre and the duty on imported ethanol will fall by more than 30 cents per litre. In addition, the tax on imported and domestic ethanol will continue to rise each year by more than 7.6 cents per litre until they are both taxed at the petrol rate of 38.143 cents per litre. Biodiesel will also be overtaxed from 1 July 2011 if the Bills are not passed. The consequences of these arrangements would be devastating for industry.

The Gillard Government is committed to completing the unfinished business of the Howard Government and to acting in the national interest. It is imperative to have these Bills passed to avoid the unintended tax consequences on the ethanol and biodiesel industries.

Once enacted, the legislation will provide certainty for alternative fuels taxation so that industry will be able to make decisions, confident in the knowledge of the tax arrangements that apply.

This is in stark contrast to the position of the Liberal-National Coalition.

In May 2003 the then Treasurer Costello announced the alternative fuels tax arrangements as long-term, important reforms—saying Australia must have a more consistent and sustainable fuel tax regime.

In December 2003 the then Prime Minster Howard said the reforms will result in a more consistent and neutral tax regime for fuels used in vehicles. The Deputy Prime Minister John Anderson at the time emphasised the importance of investment certainty.

This stance was reaffirmed by the Coalition as recently as the 2010 federal election campaign. But after eight years of being Coalition policy, on 28 January this year, the Leader of the Nationals made it clear that the Opposition now opposed these once bipartisan fuel tax reform arrange­ments. This is despite the fact that the Coalition was happy to include the positive revenue implications of this policy in the budget forward estimates from the time the policy was first announced.

In the face of this opportunistic policy reversal by the Coalition, the Government is getting on with the job, mindful of the new paradigm, but determined to act in the national interest.

It is critical that the Bills are considered promptly in the Parliament. Royal Assent is necessary before 1 July 2011 to prevent the changes legislated for ethanol, biodiesel and renewable diesel by the Howard Government coming into operation on 1 July 2011. These changes would seriously undermine Australia's renewable fuels manufacturing industry.

These Bills have been developed following an extensive consultation process with industry that included the release for comment of a discussion paper and release of exposure draft legislation.

The Bills also give effect to the Government's decision announced on 24 January 2011 at a cost of $26 million, to defer the start date of the new taxation arrangements for alternative fuels until 1 December 2011. This decision reflects the Government's commitment to listen and respond to concerns raised by industry and provides additional time, particularly for the gaseous fuels industry, to prepare for the changes.

The new tax arrangements contained in the Bills that apply to the taxation of LPG have been developed in close consultation with the LPG industry to ensure that industry compliance costs are minimised to the greatest extent possible.

These Bills also address industry concerns about the fuel tax credit arrangements applying to alternative fuels when blended with other fuels. The Bills set out rules to work out fuel tax credit entitlements for blends of fuels and ensures that current arrangements are maintained.

The application of fuel tax to alternative fuels by the package of Bills recognises that ethanol, biodiesel and renewable diesel are already in the excise and customs system and generally qualify for existing grants. The Bills ensure that these current arrangements will continue with a review after ten years.

Grants currently payable under the Energy Grants (Cleaner Fuels) Scheme Act 2004 will continue to be payable from 1 July 2011. Renewable diesel and biodiesel will continue to have fuel tax applied at the full fuel tax rate of 38.143 cents per litre with cleaner fuels grants offsetting the fuel tax.

Methanol and the gaseous fuels (compressed and liquefied natural gas and liquefied petroleum gas) are not in the fuel tax system at present. Methanol will remain outside the system.

CNG, LNG and LPG will enter the fuel tax system from 1 December 2011 and be covered by new arrangements. These set duty on a net basis without applying an offsetting grant against duty payable and set the rates of fuel tax on CNG and LNG in cents per kilogram rather than on volumetric terms. These changes were supported during consultations as industry considered that they would reduce business compliance costs.

These improvements to the former Howard Government policy reflect a Government that is willing to listen. The Gillard Government is committed to getting this policy right, and to continuing to monitor the policy settings over time.

Accordingly, the Gillard Government will review the operation of the legislation after 30 June 2015 as it applies to LNG, CNG and LPG. At this time, a review of this longstanding policy will be timely given broader energy issues, including a carbon price. It would also be an appropriate time to analyse industry compliance costs, particularly in the LPG sector. Such a review can also consider issues such as the size of the alternative fuels sector and the market growth of these industries.

A separate later review of the taxation and grant arrangements that apply to ethanol, biodiesel, renewable diesel and methanol will be undertaken by the Government after 30 June 2021. The exclusion of methanol from duty will also be reviewed at this time.

Full details of the Taxation of Alternative Fuels Legislation Amendment Bill 2011 are contained in the combined explanatory memorandum.

Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011

The Bill is part of a package of Bills concerning the taxation of alternative fuels. The Bill provides for excise to be applied to certain fuels manufactured or produced in Australia.

The Bill sets out the excise rates that will apply at each stage of phasing in the new alternative fuels tax regime for compressed and liquefied natural gas and liquefied petroleum gas, and sets out how blends of fuels in the fuels tax system should be handled to determine excise duty obligations.

Full details of the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 are contained in the explanatory memorandum.

Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011

The Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 is one of the package of five related Bills which impose rates of duty on alternative fuels, biodiesel, renewable diesel, ethanol, methanol and gaseous fuels.

The Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 will amend the Customs Tariff Act 1995.

These amendments impose customs duty on those tariff subheadings in the Customs Tariff Act that apply to alternative fuels. The Bill creates new subheadings to specify those products and also certain blends containing ethanol and biodiesel.

The new rates of customs duty will apply to alternative fuels imported from all countries, including alternative fuels imported under Australia’s Free Trade Agreements.

These amendments will ensure that the rates of customs duty on imported alternative fuels are the same as the rates of excise duty on those goods when produced in Australia.

The amendments to the Customs Tariff Act will take effect from 1 December 2011.

Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011

The Bill is part of a package of Bills concerning the taxation of alternative fuels. The Bill amends the Energy Grants (Cleaner Fuels) Scheme Act 2004 to extend its operation.

The change is a consequence of two circumstances. First, the Government’s decision announced on 24 January 2011 to allow an additional five months until 1 December 2011 for affected industry participants and, in particular, the gaseous fuels sector to adjust to the changes. Second, as a result of revised fuel taxation arrangements for ethanol, biodiesel, renewable diesel and methanol.

Full details of the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011 are contained in the explanatory memorandum.

Debate adjourned.

Ordered that the bills be listed on the Notice Paper as orders of the day as indicated at item 8(b) of today's Order of Business.

The ACTING DEPUTY PRESIDENT (Senator Pratt): A message has been received from the House of Representatives transmitting for concurrence a resolution proposing the formation of a joint select committee. Copies of the message have been circulated in the chamber.

The House of Representatives mess a ge read as follows—

Message no. 173, dated 2 June 2011—Proposed Joint Select Committee on Australia’s Immigration Detention Network, and transmitting for the concurrence of the Senate the following resolution:

That:

(1) a Joint Select Committee on Australia’s Immigration Detention Network be appointed to inquire into and report on:

(a) any reforms needed to the current Immigration Detention Network in Australia;

(b) the impact of length of detention and the appropriateness of facilities and services for asylum seekers;

(c) the resources, support and training for employees of Commonwealth agencies and/or their agents or contractors in performing their duties;

(d) the health, safety and wellbeing of asylum seekers, including specifically children, detained within the detention network;

(e) impact of detention on children and families, and viable alternatives;

(f) the effectiveness and long-term viability of outsourcing immigration detention centre contracts to private providers;

(g) the impact, effectiveness and cost of mandatory detention and any alternatives, includ­ing community release;

(h) the reasons for and nature of riots and disturbances in detention facilities;

(i) the performance and management of Commonwealth agencies and/or their agents or contractors in discharging their responsibilities associated with the detention and processing of irregular maritime arrivals or other persons;

(j) the health, safety and wellbeing of employees of Commonwealth agencies and/or their agents or contractors in performing their duties relating to irregular maritime arrivals or other persons detained in the network;

(k) the level, adequacy and effectiveness of reporting incidents and the response to incidents within the immigration detention network, includ­ing relevant policies, procedures, authorities and protocols;

(l) compliance with the Government's immigration detention values within the detention network;

(m) any issues relating to interaction with States and Territories regarding the detention and processing of irregular maritime arrivals or other persons;

(n) the management of good order and public order with respect to the immigration detention network;

(o) the total costs of managing and maintaining the immigration detention network and processing irregular maritime arrivals or other detainees;

(p) the expansion of the immigration detention network, including the cost and process adopted to establish new facilities;

(q) the length of time detainees have been held in the detention network, the reasons for their length of stay and the impact on the detention network;

(r) processes for assessment of protection claims made by irregular maritime arrivals and other persons and the impact on the detention network; and

(s) any other matters relevant to the above terms of reference;

(2) the committee consist of 11 members, 2 Members to be nominated by

the Government Whip or Whips, 2 Senators to be nominated by the Leader of the Government in the Senate, 2 Members to be nominated by the Opposition Whip or Whips, 2 Senators nominated by the Leader of the Opposition in the Senate, 1 Member and 1 Senator nominated by the Aust­ralian Greens Whip, and 1 non-aligned member;

(3) participating members may be appointed to the committee. Participating members may participate in hearings of evidence and deliberations of the committee, and have all the rights of a member of the committee, but may not vote on any questions before the committee;

(4) every nomination of a member of the committee be notified in writing to the President of the Senate and the Speaker of the House of Representatives;

(5) the members of the committee hold office as a joint select committee until the House of Representatives is dissolved or expires by effluxion of time, whichever is the earlier;

(6) the committee shall elect a Government chair and deputy chair;

(7) the deputy chair shall act as chair of the committee at any time when the chair is not present at a meeting of the committee, and at any time when the chair and deputy chair are not present at a meeting of the committee the members present shall elect another member to act as chair at that meeting;

(8) in the event of an equally divided vote, the chair, or the deputy chair when acting as chair, have a casting vote;

(9) 3 members of the committee constitute a quorum of the committee provided that in a deliberative meeting the quorum shall include 1 Government member of either House and 1 non-Government member of either House;

(10) the committee have power to appoint subcommittees consisting of 3 or more of its members and to refer to any subcommittee any matter which the committee is empowered to examine;

(11) the committee appoint the chair of each subcommittee who shall have a casting vote only;

(12) at any time when the chair of a subcommittee is not present at a meeting of the subcommittee the members of the subcommittee present shall elect another member of that subcommittee to act as chair at that meeting;

(13) 2 members of a subcommittee constitute the quorum of that subcommittee;

(14) members of the committee who are not members of a subcommittee may participate in the proceedings of that subcommittee but shall not vote, move any motion or be counted for the purpose of a quorum;

(15) the committee or any subcommittee have power to call for witnesses to attend and for documents to be produced;

(16) the committee or any subcommittee may conduct proceedings at any place it sees fit;

(17) the committee or any subcommittee have power to adjourn from time to time and to sit during any adjournment of the House of Representatives and the Senate;

(18) the committee may report to both Houses of Parliament from time to time and that it present its final report no later than 7 October 2011;

(19) the provisions of this resolution, so far as they are inconsistent with the standing orders, have effect notwithstanding anything contained in the standing orders.

Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (12:50): I seek leave to have the message considered immediately.

Leave granted.

Senator SHERRY: I move:

That the Senate concurs with the resolution of the House of Representatives contained in message no. 173 relating to the appointment of a joint select committee.

Just to clarify for the Senate the provisions relating to the membership of the select committee, I inform senators that a reference to a non-aligned member relates to a member of the House of Representatives.

Question agreed to.

Senator CAROL BROWN (Tasmania—Deputy Government Whip in the Senate) (12:52): On behalf of the Chair of the Senate Economics Legislation Committee, I present the report, together with the Hansard record of proceedings and documents presented to the committee, of the Economics Legislation Committee on time critical legislation relating to the provisions of the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 and related bills.

Ordered that the report be printed.

Senator CAROL BROWN (Tasmania—Deputy Government Whip in the Senate) (12:53): Pursuant to order and at the request of the chairs of the respective committees, I present reports on legislation from the Economics Legislation and the Community Affairs Legislation committees as listed at item 10 on today’s Order of Business, together with the Hansard records of proceedings and documents presented to the committees.

Ordered that the reports be printed.

Senator BOB BROWN (Tasmania—Leader of the Australian Greens) (12:56): To conclude my contribution to the second reading debate on the National Radioactive Waste Management Bill 2010 and the opposition that I share with Senator Ludlam and the Greens to the establishment of a radioactive waste dump in the Northern Territory, there is a curious piece of history here. Some years ago I was speaking to Premier Rann in South Australia when it was proposed by the Howard government that a nuclear waste dump be established in the north-east of that state. In the wake of the High Court ruling on the Franklin, which went into matters of who has control over resources and land management in this country, I suggested to him that it would be very difficult for the Commonwealth to impose a nuclear waste dump on a sovereign state of the Commonwealth, like South Aust­ralia. To cut a long story short, South Aust­ralia did take legal opposition to that pro­posal; whatever influence I may or may not have had on it, it took that opposition. Unfortunately, it has led to this situation where the Gillard government is moving to override the people of the Northern Territory and their elected assembly to impose a waste dump there, because constitutionally the Com­monwealth is able to legislate for territories—notwithstanding the assembly. What is being used here is a legal con­venience to impose a waste dump on the Northern Territory, which the Com­mon­wealth would not be able to impose on New South Wales, Queensland, Victoria, Tas­mania, South Australia or Western Australia. It is unfair, it is imprudent and it is not ethical for the Commonwealth to be doing that.

Senator Ludlam has proposed an alternative process paralleling that which is underway in the United Kingdom. But let us take one step back from the search for the answer to the storage of nuclear waste, because there is no good answer, and that is to question the accruing usage of nuclear options in a world which would be better off nuclear free. President Obama has pointed to the nuclear industry and nuclear technology as perhaps the greatest threat to humankind in the 21st century. That is saying something in a century which is challenged by over­population, climate change, destruction of fisheries, loss of arable land, growing food prices and an inability for human beings to be able to settle matters without resorting to the use of weapons. What Obama was pointing to was the highly concerning, potential use of nuclear weapons in the coming century. You might say, 'Well, what has a radioactive waste dump got to do with that?' The answer is: the more we make the facility readily available and commercially available for the depositing in the future of high-level radioactive waste—not just med­ium- and low-level radioactive waste—the more we facilitate an industry which is not necessary, which is dangerous and for which there are better alternatives, whether you are looking at energy production or not.

Our submission is simple. This nuclear waste dump should not be being focused on the Northern Territory or forced on it against its will. It certainly should not be forced on the people of Muckaty—nor should they be inveigled into it—when their will is certainly not in unison on the matter and there are thoughtful people who do not want radioactive waste on their land.

I commend the work that Senator Ludlam has done on this legislation. He has travelled a great deal. He has spent time on-site and he knows how the people in the region and in the Northern Territory—and, indeed, in Australia generally—feel about this proposal, which is a hangover from the Howard era. Yesterday we heard Senator Minchin's proposal—as ever, he was not beating about the bush; I have to give him that—for a future for Australia with nuclear reactors. It is tied in to this proposal before us today.

We do not want and are not supporting nuclear reactors in this country and we are certainly not supporting this proposal for a nuclear waste dump at Muckaty in the Northern Territory.

Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (13:02): I thank all those senators who contributed to this debate. We are dealing with the National Radioactive Waste Management Bill 2010, which provides for the national radioactive waste management framework.

Most Australians benefit, directly or indirectly, from the medical, industrial and scientific use of radioactive materials. A small amount of radioactive waste is an inevitable by-product of these applications. For far too long, Australia has failed in its efforts to establish a national framework to safely store and dispose of our radioactive waste. This bill puts in place a voluntary process to select a site for a national radioactive waste management facility for the disposal of low-level radioactive waste and for the secure storage of intermediate-level waste.

In terms of international best practice, the International Atomic Energy Agency, the IAEA, has stated:

Almost every country can, in principle, establish a near-surface repository … for disposing of short-lived waste generated in the country.

…   …   …

Establishment and operation of these repositories is technically mature and there is no major disagreement among experts on the acceptability of the concept …

Senator Siewert made much of the nomination of a remote facility site, observing that 'a facility would never be proposed in a leafy suburb'. It should not be, according to well-established international and national site selection criteria for low-level waste disposal. These state:

… site should be in an area of low population density and in which the projected population growth or the prospects for future development are also very low; …

This principle has been applied in Senator Ludlam's own state of Western Australia where there is the Mount Walton East intractable waste disposal facility in the goldfields region for disposal of low-level radioactive waste. This has operated in a very remote location since 1992. In his contribution, I think he has—deliberately or otherwise—not acknowledged this occurr­ence in his own state.

International practice demands that Australia implement a national framework to responsibly manage our radioactive waste. This is what this bill is all about. It is not about anything else. It is about making sure we implement a national framework to manage responsibly our radioactive waste.

In 2007, a Lauder branch of the Ngapa clan volunteered a site as a potential location for a facility. This community has a right to be heard. In their speeches in this debate, the Greens suggested that evidence on the owners of land at Muckaty Station from the 2008 Senate inquiry were being ignored. Let me clarify what the Senate inquiry actually concluded. It said:

The Committee is not competent to deal with the anthropology that goes to the question of who has decision-making responsibility for particular areas of country within the area held by the Muckaty Land Trust.

It does not seem reasonable to … suggest that Ngapa clan members might not be responsible for the area under present discussion.

The Greens have also, I would argue, selectively heard the evidence presented to the 2010 Senate Legal and Constitutional Affairs Legislation Committee inquiry. For example, Dianne Stokes, a Yapa Yapa woman, told the Senate Legal and Con­stitutional Affairs Legislation Committee in Darwin that her country ends at the railway, which is 50 kilometres to the west of the nominated site, and this means that the nominated site cannot be in their country. On the assertion that Aboriginal groups from Muckaty Station are jointly the traditional owners of all land, Ms Stokes told the committee that each group had its own country. She said, 'We have all got different areas in the Warlmanpa land trust.'

One person has brought a matter before the Federal Court—one person—which touches on the nomination process for the site on Muckaty Station. It is contrary to proper process with respect to the independence of the judiciary for senators to state unambiguously who the traditional owners are and to claim that the traditional owners have not been consulted when these are precisely the matters of fact to be determined by the courts. I suggest that senators realise this but are making a political decision. That is their right, but let us understand this: they are making a political decision over judicial independence.

I am not going to comment on the merits of the case, but I note the following. The operation of the National Radioactive Waste Management Bill 2010, once it became law, would not depend on any particular outcome from the litigation. Rather, the legislation would accommodate any decision the court might make. For example, should the court find wholly for the applicant, the existing nomination would fall away, and the minister, having already given undertakings that he would abide by its decision, would be able to invite fresh nominations of potential sites from the Central and Northern land councils. Such nominations would have to be made in accordance with the decision of the court and the processes and protections set out in this bill. Alternatively, if the court found that the NLC has acted as the law requires, the Commonwealth would continue to honour its agreement with the Ngapa, since the court had determined that it was properly entered into.

The current bill offers a framework for radioactive waste management that is much broader than the single nomination of Muckaty Station. For this reason, it is important that it proceed rather than the government act under the previous govern­ment's—the former Howard government's—legislation. The Minister for Resources and Energy stated in the House on 21 February 2011:

As soon as this bill is passed and litigation concludes, I will consult widely with the parties that have rights, interests or legitimate expectations with respect to any nomination.

The objective of the bill is to ensure that Australia has a framework in place to safely and responsibly manage our radioactive waste at a purpose-built facility. The process to identify a site will be based entirely on voluntarism. Comprehensive and indepen­dent environmental and nuclear regulatory approvals will apply to the siting, the construction and the operational phases of this project. In this way, the bill will ensure that we take responsibility for managing the wastes that arise from the range of uses of radioactive material that benefit all Australians. With those remarks, I conclude the debate.

Question negatived.

Original question agreed to.

Bill read a second time.

Senator LUDLAM (Western Australia) (13:11): I have a number of amendments to the National Radioactive Waste Management Bill 2010 which I wish to speak to and which I addressed very briefly in my speech on the second reading; however, I did not go into a great deal of detail about the way that the Greens would approach the committee stage of this bill. I have said—and we were happy to let it go through on the voices—that we do not support the bill proceeding to the committee stage, and that is because we believe that it is irredeemable: it is a bill based on a false premise and a broken promise, and we genuinely do not believe that it can be greatly improved. However, in the interests of allowing the Senate to undertake its role of scrutiny and improvement of bills, some time ago the Australian Greens went to the trouble of proposing a number of amendments that fall into a couple of key categories.

Before I go into greater detail, I state that broadly the amendments try to improve the legal integrity of the bill as well as to somehow and somewhat constrain and curtail the minister's total and unambiguous discretion in siting decisions. We recognise that this bill relates to siting; that once a decision has been made on location, whether it be Muckaty or somewhere else, a whole range of processes kick into gear, chief among which is the process of environmental assessment under the Commonwealth EPBC Act. That is the central vehicle through which many of these issues will be addressed, but the regulator, ARPANSA, will also be quite centrally involved in establishing the radiation health and safety impacts of the facility, of the transfer of the materials to the facility and of its operation once it is up and running.

So we quite clearly recognise that this debate is effectively about siting and about who gets to decide which of the sites will be subject to those further processes of scrutiny and so on. But the difficulty we have is that, once these processes have been set in train, they will effectively be treated by gov­ernment as a foregone conclusion. Before the minister jumps up to argue that due process will be followed in all instances and so on and that we are basically pre-empting the process of an environmental impact assess­ment and a radiation safety assessment, you do not have to look too much further than the motion put up jointly by Senator Siewert and I on Woodside in the West Kimberley. Woodside are in the middle of applications to flatten 25 or more hectares of bilby habitat in the West Kimberley before the strategic impact assessment of the proposal for a gas plant in the Browse Basin in WA has been approved or even considered. It is well understood by the Western Australian government and by the proponents that that project is going ahead right where it is proposed to be—to the degree that the company is already going ahead and putting bulldozers to the site—before the process of environmental impact assessment has been undertaken and concluded.

It is distressingly common in Australian environmental law that once a decision on a site or location has been made, either by a private proponent or by a government, it is full steam ahead. Investment decisions are made, board approval is given, the processes roll out and bulldozers go to country and start flattening the pace in preparation for site works. Often these are negotiated away or are described as being preparatory or part of the environmental impact assessment process or whatever it might be. But effectively the entire process of the environ­mental impact assessment and radiation safety impact assessment will be thoroughly pre-empted by this minister, if past form is anything at all to go by. As soon as that pin hits the map and the minister has pointed a finger and decided where that site is to be, it will be full steam ahead.

We will pursue the processes that roll out with great diligence and attention to detail, but we know for sure that the government will be basing all further actions on the assumption that that site will go ahead, irrespective of what falls out of the environmental impact assessment process. That is why we need to pay so much care and attention to the process, in the first place, of siting the dump, which this bill quite clearly covers. What guides the discretion of the minister in the first place? On what grounds will the minister be making a decision about what is a site and what is not, what is appropriate for a store or a dump of this kind and what is not? The fact that we know—as we will go through in great detail during the committee stage of this bill—is that there is nothing whatsoever to guide the discretion of this minister. That is what a number of our amendments go to: the legal integrity of the process that allows a minister essentially unfettered discretion to go ahead and put this dump where he wishes and set these processes into motion.

We will probably hear shortly—and probably from Minister Sherry at the table, who has been given the unfortunate task of defending this appalling proposal this afternoon—comments relating to procedural fairness being restored, to rights of appeal being restored, to rights of judicial review being restored. We will go through this in a great deal of detail and point out to the government and to the coalition—whom I presume at some future stage will file in here and vote for the bill; they chose not to do so in the House of Representatives but we can only presume that they will vote for it here in the Senate—that there is no such guidance being placed on the minister's ability simply to point at a map. That is why we will be paying such clear attention to this bill.

It is not good enough, we believe, simply to stand up and wave this proposal through and give dignity to the fiction that the government is repealing the coalition's act, which has been in place from 2005, and replacing it with substantially different legislation. Large parts of the bill that we are debating this afternoon were cut-and-pasted from the Howard-era bill that was introduced at the end of 2005, when I was working for Senator Siewert, and was then amended again at the end of 2006.

Those cut-and-pastes from the earlier bill into the one that we are debating today relate most essentially to preserving the Muckaty nomination. This is even though Labor MPs in opposition during the election campaign, as Senator Minchin quite correctly pointed out yesterday, went on the campaign trail calling Prime Minister Howard's proposal to coercively and quite aggressively dump this material in the Territory an outrage. They called it sordid and shameful and they called quite unambiguously for its repeal.

Then, right after the election, for some mysterious reason that nobody has ever satisfactorily explained—and I asked Senator Sherry what the basis for this was a couple of weeks ago in question time and there was not a satisfactory answer, but perhaps one can be provided today—the decision was made to transfer responsibility for radioactive waste management from the science portfolio, where it has been for decades into the resources and energy portfolio. What sense does it make to take responsibility for the waste products of this industry, which has been regulated for years within the science ministry—and we heard Senator Carr during the election campaign being very clear on his views of the shameful way in which the Howard government engaged in this issue—and transfer it right after the election to Minister Martin Ferguson? As far as I am aware, he made no statements at all on the issue during the election campaign, because it would not have been part of his responsibilities from opposition to have a view on the matter. It is pretty evident to us all what the view is now.

The view now is simply to crash this project through or crash. As I explained at some length in my speech in the second reading debate, this is a proposal and a way of doing business that is prone to failure. It has failed a number of times, not just in Australia, whether it be the Pangea example of 1999 in Western Australia or the rather shameful episode in South Australia, which Senator Minchin addressed in his comments yesterday. The idea of aggressively rolling into a community and telling people that the material is going to go there is a recipe for failure, obviously. When you turn up, the people who live there or who have traditional responsibility for the area have nowhere else to go.

I acknowledge, as Senator Sherry does, that views are divided on the ground, in the area most close to the front line, that communities have been split and families have been pitched against each other. This would happen in any community if somebody in a suburban neighbourhood decided that they were going to give their backyard up for a radioactive waste dump, giving the neighbours no opportunity whatsoever to have a say. Even if you accept the tenure argument that will be run in the Federal Court by the Northern Land Council that the right people have been consulted, imagine being a neighbour and discovering that the decision has been made and that it is a done deal and you are told: 'Sure, we'll go through environmental impact assessment processes and whatnot but you have no rights as a neighbour whatsoever.'

If that is the outcome—and I am not going to reflect on the arguments that will be heard in the Federal Court, hopefully later this year—there will be people from the Barkly region, from all of the families that played a role in the establishment of the Muckaty land trust, who will feel justifiably ripped off by what they heard from the opposition, now government MPs, in the run-up to the 2007 election. They were absolutely unambiguous in their opposition to the way that this debate was conducted.

Before I go into too much detail on the amendments that I propose to move, I will ask my first question. Minster, do you recall me asking a question in question time a month or so ago—I might have inadvertently put the question to Senator Carr but I have been told that it is actually your portfolio responsibility—around what the thinking was after the 2007 election for transferring responsibility for radioactive waste to the Minister for Resources and Energy?

Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (13:22): I can provide some information. Senator, you have suggested that it is an unorthodox arrangement that it is not in the science portfolio. I have been advised that locating the radioactive waste management policy function as part of the resources policy function has been the prevalent arrangement over the last 30 years, so it is not unusual.

Radioactive waste policy has been the policy responsibility successively of the Department of National Development and Energy, the Department of Resources and Energy, the Department of Primary Indust­ries and Energy, the Department of Industry, Science and Resources and now the resources division of the Department of Resources, Energy and Tourism. It was only in the period 2001 to 2007 that the radioactive waste function was located in the Department of Education, Science and Training. It was reunited with resources because of the commonality of the nuclear issues involved in uranium mining and radioactive waste policy deliberations.

Regardless of the location of this function, it continues to have access to the advice of relevant expert Commonwealth agencies, including the Australian Nuclear Science and Technology Organisation in the innovation portfolio and Geoscience Australia in the Resources and Energy portfolio.

Senator LUDLAM (Western Australia) (13:24): I thank the minister for that quite comprehensive answer. It would have been great to have got that in question time. Nonetheless, I acknowledge that you have provided it to us.

Senator Sherry: If you'd given us some notice we could have provided it to you.

Senator LUDLAM: It was nearly two months ago. I would like to ask a question that, again, the minister referred to obliquely in his second reading speech, about the case for remoteness, which we have heard a lot of here in Australia and around the world when it comes to final disposal of radioactive waste. Why exactly is it that the industry is so keen and that the government is following this lead on a remote site? I can certainly understand the arguments for why you would want to bring various categories of radio­active waste together into one place or two or three places—the so-called argument for centralisation—where properly qualified people can look after it, repackage it and so on when that is required. But the case dramatically has not been made for why that particular site should be remote. The minister addressed that issue to some degree in his second reading speech, where he quoted some of the guidelines—I think you were quoting the IAEA—but simply repeating guidelines does not actually justify the argument as to why the industry is so keen for this material to be placed as far from centres of population as possible.

This is a question that I have dedicated quite a bit of time to. If I genuinely believed that the best thing to do was to put this material on rail cars and take it to a sheep station, I would not be wasting my time arguing the matter; I would have spent most of my time making sure that the govern­ment's consultation processes were adequate so that we could get on with finding an appropriate location somewhere out in the bush. However, right from the time that I was working on the Pangea proposal to bring a substantial fraction of the whole world's radioactive waste to Aboriginal country to the east of Laverton in the Savory Basin in my home state of Western Australia, I have been intrigued as to the interest of the international nuclear industry, led by a Swiss consortium, for a remote site in particular.

There are two broad categories of waste we are discussing here and I do not think the government has necessarily made a particularly good case for the remote storage of low-level waste. For example, the minister addressed the Mount Walton East intractable waste facility in Western Australia, which takes, among other chemically toxic materials and other intractables, low-level radioactive wastes—gloves, medical equip­ment and so on—from the WA health sector, spent sources, engineering uses in the mining industry and so on. That material is taken to a remote location out in the desert and dropped down a hole, and that is presumably its final resting place.

As I said in my speech in the second reading debate, that material can be lethal for 300 or 400 years, after which the half-lives of most of the isotopes in question have faded away to background levels and that material can, effectively, be safely walked away from. It will not be by any measure different to the material before it was activated and made radioactive in the first place. In the instance of sources or materials that were generated from radioactive waste that do have further uses in engineering in the mining sector, you could say that the radiation has basically faded away to levels that would not be detected above the background level.

But, of course, that is not the only material that the government propose to take to Muckaty. When you preserved that nomination and explicitly named it in the legislation that we are debating today, you were also proposing to take waste which would be classified as high-level in the first few weeks and months after it is removed from the Lucas Heights reactor, past and present. Then, after a certain period of time of cooling, it is classified as long-lived intermediate-level waste. According to the international guidelines, which you can quote to me again if you like, that material is suitable for deep geological disposal—for burial—and that, of course, is not what is proposed at Muckaty at all, unless the plan has changed radically since the last time I asked departmental officials about it. The spent fuel in the reactor cores will be disassembled from Sydney and taken to whatever remote site ends up being used for the interim—and I will address during this debate exactly how long that interim is proposed to be.

Returning to the issue of remoteness, if this material has been in Sydney for 50 years, as some of it has, in a shed being looked after by people who are qualified in radiation waste management—that is what they do for a living—why exactly is the Western Australian government determined to place radioactive waste at a central remote site? I can understand centralising and bringing the material together, but why exactly to a remote site?

To give the chamber some idea of the thinking behind this, and let's make this explicit, in 2005 the former science minister Brendan Nelson asked:

… why on earth can't people in the middle of nowhere have low level and intermediate level waste?

His successor in the science portfolio, Julie Bishop—who I think I probably misquoted in my second reading speech the other day—noted that all sites on the government's shortlist were 'some distance from any form of civilisation'. What a remarkably enlight­ened comment! That did not go down all that well in the sites that were under discussion, in places like Tennant Creek. The member for Canning, Don Randall, said in the House during the debate:

… no-one, to speak of, lives there. It has a very sparse population. Barely anyone lives in that arid and desolate part of the Northern Territory.

So clearly the argument here is to get it as far away from people as possible.

Of course, the question that comes from that is: why exactly do you want to remove this material as far as possible from the centres where the decisions are made—and how do you explain that to the people who live where you propose to take it? Beyond the remarks the minister already made in his second reading speech—and I have the guidelines in front of me; you can read them if you wish, Minister, but I am fairly familiar with what you were reading from before—I wonder whether he would care to address exactly what the case is for remote storage, which I acknowledge is not centralised storage.

Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (13:31): Senator, I draw your attention to a document which you are probably aware of from the National Health and Medical Research Council: 'Code of practice for the near-surface disposal of radioactive waste in Australia (1992)'. On page 11, under 'Site requirements and selection criteria', it says:

2.4.1 General site characteristics

A near-surface repository site ideally should be located in an area with favourable meteorological, geological and geographical characteristics so that the radioactive waste, once in place, will be adequately isolated from the biosphere for the time that the radionuclides originally present, or their progeny, constitute a radiation hazard. Ideally the natural characteristics of the site should provide the initial effective barrier to the dispersal of radionuclides from the waste or to human intrusion. The location of the disposal site and its characteristics will influence the design of the facility. These should also be considered when determining …

There are a range of other references. Under 'Site selection criteria', 2.4.2, on page 13, it says:

e.     the site should be in an area of low population density and in which the projected population growth or the prospects for future development are also very low;

So these are some references to the selection criteria.

Senator LUDLAM (Western Australia) (13:33): I thank the minister for citing those guidelines; I suspected that that was where he would go. That refreshingly frank restatement of the guidelines is actually the nub of the problem. What the minister just told the chamber is that the industry wants to take the material to a remote site so that, when the dump leaks, it is as far away from people as possible. He said that quite explicitly. I do not think that is even a controversial statement; it is more or less black and white. When the stuff leaks out of the container, you want it to be somewhere with low rainfall, somewhere where the groundwater table is half a mile below the surface, somewhere where there are no earthquakes, somewhere where the climate has not changed markedly in the last couple of million years and obviously somewhere a long way from people. If the thing is going to leak and the stuff is going to go all over the place, you would absolutely want that to be somewhere remote.

That gives us something of a hint as to why the government is having such difficulty selling this proposal to the Northern Territory: 'We want to take this stuff to the cattle station in Tennant Creek so that when it leaks it will be a long way from us.' I wonder whether the minister will choose to acknowledge that that is why the government is having difficulty. It is also why the Howard government had that difficulty. Senator Scullion, who has joined us, has spent a long time thinking about these very difficult intractables as well, and we have also. It is extraordinarily difficult.

How on earth do you propose that a site is so indestructible that in two ice ages the material will not have dispersed all over the place? That is exactly the question that this government is facing now. You cannot explain to the traditional owners, to the Cattlemen's Association, to the council or to any of the residents of Tennant Creek that that is the reason you are having so much difficulty selling this proposal, getting decent headlines and getting it through this chamber. It is a really difficult sell when you have to go up there and acknowledge, 'We think it's very important that, when this stuff leaks out of its container, it be a long way from us.' That is really what this debate is about.

I am not blaming the minister for this, because this government inherited an issue that was inherited by the Howard gov­ernment, by the Hawke-Keating government and by the government before that. The reason for this inheritance is that, as with the nuclear industry everywhere else around the world, we just went ahead with building these reactors and churning out various categories of intractable waste without coming up with any idea of how we were going to manage the waste products.

It is interesting and profoundly important to acknowledge that the reason for choosing a remote location is that the stuff is going to wind up out of the box that you put it in. This is less the case for the low-level waste and I freely acknowledge that. A large volume of the radioactive waste that we produce in Australia, and the stuff that the government tends to go on about in terms of cancer treatments and so on, is low-level material that will still be able to kill you in 200 or 300 years time, and after that you can take your eyes off it. This material is literally lethal. In North America they have built houses out of uranium tailings waste, for example, and the radon emissions inside those places are enormous. That has happened because people have forgotten where the tailings piles were. Thirty or 40 years after the mines have become defunct, they have quarried the stuff because the signposts have all blown over. That is the kind of issue that we face here. We need to find a strategy, find a way of passing this material onto the generation that follows us so that they can pass it on to the generation that comes after them, for tens of thousands of years. It is formidably difficult, and that is why successive governments have struggled so hard. I will tell you one thing that I am reasonably sure of: in the midst of the ambiguity of a task that difficult, one thing we certainly should not be doing is putting the stuff on a flatbed and taking it to a cattle station and then walking away.

What we have at the moment, the situation that has prevailed at Lucas Heights for the past 50 years since that reactor started churning this material out, is that it is being looked after, and we have been told that it has been looked after quite safely. I have no reason to dispute that. It is surrounded by scientists, engineers, technicians—smart people who study this stuff, who do it for a living, who look after it. Guess how many of them will be accompanying that material up to Muckaty? None. Nobody. Unless the minister would like to correct the record that the department put to me during an estimates committee last year, and probably the year before that as well when I checked, there will be rotating shifts of six security guards—two on, two off, two on, two off. There will be security guards on eight hour shifts around the clock for the next 300 years. Those are the jobs, by the way, that were promised to the people in the Barkly region. Some of the loneliest security guards in the country will be looking after that material.

But it is not the intention of the govern­ment, as far as I am aware—please correct the record if the thinking has shifted—to send any of those technicians after the waste they have produced, send any of those engineers or scientists or people who trained in the storage and condition of this waste. Not at all. This is going to be a lonely shed in the middle of nowhere, as the former science minister put it, with two security guards looking after it. That is quite some employment boost for the Barkly region! They are really looking forward to that economic development arriving in their area!

I tested these ideas a couple of times. The people who made it the most explicit, which was extremely valuable when I was working on the Pangea campaign in 1999, were the company itself. This was a consortium based in Switzerland, with money from British Nuclear Fuels and involvement from various other members of the international nuclear industry. They proposed to put up to 20 per cent of the world's high-level spent fuel—this is material that is more intractable than the slightly lower level waste that we produce in Australia from a small research reactor—on a guarded railway line and take it up to Laverton and dump it in a hole there. Their promotional video was somehow found by Friends of the Earth and leaked to the press through my colleague and good friend Robin Chapple MLC before he went into parliament in Western Australia. The video spelt out exactly why Pangea was seeking a remote site. It was really interest­ing and it is worth looking at; it is still online if senators care to track it down. With all of the preconditions that the minister read into the record before—low rainfall, low geologi­cal activity, not too many earthquakes, low water table and really simple stratified geology—when you put this stuff into a hole half a mile underground and it burns its way out of the container, you would want to be a long way from it. That is the case for remote dumping. It is a hideous concept when you consider it as starkly as that, but that is how Pangea put it in their video. There is a cute little graphic of this stuff burning its way out of one of the containers they put down there. You would want that to be a long way from a regional water table. You would not want mining operations anywhere near that for any time in the next quarter of a million years or thereabouts because presumably your fences and signposts will have blown down.

I recognise that this is not geological disposal, that what is proposed for Muckaty is not a hole in the ground half a mile below the surface. It is in fact an interim store for one of the categories of waste—the so-called long-lived intermediate level waste—to sit around for the next 200 or 300 years while people scratch their heads and work out what on earth to do with it. Maybe we will chase some of that suitable geology—which, ironically enough, as Senator Minchin acknowledged yesterday, was what Minister Crean was doing all those years ago. He was setting out to find the right kind of geology in Australia for a remote hole in the ground so that, when the stuff leaked out of its containment, it would be a long way from most people. It is a very difficult proposition to sell to people in the Barkly region that that is explicitly what is going on here. By world standards we have relatively small volumes of the really dangerous stuff that will last and be very dangerous and lethal for tens of thousands of years; but we do have some, and it is our responsibility to look after it. Looking after it does not mean sticking it behind barbed wire on a cattle station.

Australia has never really had a debate about the most appropriate management strategy. The debate we have had here in Australia has been about which remote Aboriginal community should host this stuff. In remote areas where we have starved people for resources in health care and education—the kinds of issues that Senator Scullion and Senator Crossin have been working on—who is interested in 12 million bucks, which is about $40,000 a year for 300 years? People representing the Territory know very well, as I do from a Western Australian perspective, the kinds of extraordinary disadvantage and deprivation suffered by Aboriginal communities in this country. And that again is something this government inherited. It is trying to do something about it. Some of that activity is dramatically misguided, contemplating the intervention, and some of it is helpful. But the fact is that this is the kind of economic development that these communities do not need—hosting, for a pittance and a tiny handful of jobs, material that industrial society here in Australia and everywhere else in the world has not the remotest idea what to do with. We need to get over the debate that we have had in Australia about which remote Aboriginal community should host this stuff until the end of time. That is absolutely an appalling way to continue.

We all thought, from the comments that Senator Carr was making in the run-up to the 2007 election, from the statements that he put out, from what Senator Crossin said, from things that Mr Snowdon put out at the time, that the ALP had got it, that they had spent a bit of time thinking about it. They acknowledged the difficulties that had been run into in South Australia and that there was the prospect that we would see this debate going differently. It was pretty explicit. I was really excited because it looked like we had a breakthrough. We had an opposition with some energy and some drive that, for the first time in a generation, got this issue. And look what happened right after the election. Portfolio responsibilities were taken away from Minister Carr. I strongly suspect that he would have made a much better job of this issue than Mr Martin Ferguson has, but I guess we will never get to find out. But away it went, and we are straight back on track. The Muckaty nomination will be preserved. 'We will eventually repeal the Howard government bill, and we know that that is nothing more than a cut and paste job, and away we will go.' It has become very strongly apparent since then, and it is written into every line of this bill, that nothing has been learnt at all. That is why we are in the middle of a fight. That is why this issue is back in the NT News today and in the nation's media and the ABC. We have another confrontation, and it was a needless one. I will put on the record again, as I did during my speech in the second reading, that the Australian Greens will work with the government, will work with the opposition, will work with anybody with goodwill who wants to acknowledge that this is a complex and intractable issue. This is something that is not going to go away any time soon. But the strategy of aggression and coercion has got to stop. That is the message that I have heard loud and clear in the time that I have spent in Tennant Creek and on site in Alice Springs chasing this issue around the country in committees and taking evidence from people who dispute the tenure of the land in question—and now that is being tested in the Federal Court case—and also dispute the deeper idea. Even if the Federal Court finds that, according to the requirements of the Aboriginal Land Rights Act, the right people have been spoken to, they dispute the idea that it should automatically be a remote Aboriginal community that has to host this material. I think that fundamental underlying premise is what needs to be very, very strongly contested.

I approached ANSTO when they gave evidence on my original bill at the end of 2008—which I think is one of the reports that Senator Sherry read from—that we should simply repeal the Howard legislation and move ahead, as the government was telling us they proposed to do at the time, with a different strategy with a bit more scientific integrity. I asked ANSTO:

... is it the case that we are looking for the stable geology and distance from groundwater sources [because] there is no form of engineered containment that can hold this material for the time periods that are required?

Mr McIntosh quite rightly replied:

For low-level waste, it is not such an issue.

And I tend to agree. I asked him:

Yes, but for the long-lived, intermediate or high-level waste, it is?

Mr McIntosh said:

Yes.

Senator Pratt asked Mr Bradley Smith, the Executive Director of the Federation of Australian Scientific and Technological Societies: 'What is the urge to take this to out of town and dump it on a cattle station somewhere, and what do we have to do to get it right?' I think Mr Smith's answer was actually quite instructive. He said:

The history of discussion about a facility since 1979 shows that all communities have reacted strongly, or there has been activism from communities. South Australia, three or four years ago, was a recent example. At some point a decision has to be made. I understand your argument. I am just saying that there is an obstinate fact here. We have radioactive waste. It is not stored on an optimal basis. We need a national facility or a commonwealth facility to do that. That means hard decisions have to be made.

That is code. Senator Pratt continued:

You are arguing that at some point, because there will inevitably be community opposition to such a site, the scientific factors in terms of the demand for a site are going to have to override a community mandate to locate the site.

Mr Smith, not representing the government but representing FASTS, said yes, that is what will happen. Sooner or later we are just going to have to crush somebody. We are just going to have to come through the front door and dump it. That appears to be approach that the government is committed to taking. So my question to the minister is: has the government ever assessed options for long-term storage, intermediate storage or interim storage of this material that do not involve remote dumping?

Senator SCULLION (Northern Territory—Deputy Leader of The Nationals) (13:48): I thought I might take the oppor­tunity to put in context some of the comments of Senator Ludlam. He made a couple of observations that I would agree with: it is a difficult process; it is difficult for cattlemen and those traditional owners of country to understand what is happening. But, Senator Ludlam, with respect, it makes it a lot more difficult if we are not actually dealing with the facts.

This legislation does not prescribe Muckaty at all. What we are dealing with today has nothing to do with the location; it simply prescribes the circumstances around where it can be located and a whole suite of issues around that. The real reason that, first of all, it is currently in the Northern Territory is that there was a decision many, many years ago. There are very few in this place who can still remember when this started. I suspect there is no-one in the Senate who was around when that process started.

That was an agreement by all states and territories, paid for by the Parliament of Australia, that they would investigate the best site—not the best available site but the most suitable site. That site was to be found in the Officer Basin in South Australia. Millions of dollars were invested by the Australian parliament to do that. Mike Rann decided that political expediency was far more important to him and his party than the health and welfare of Australians. The states and territories would not take that so, of course, they have chucked it to the dear old Northern Territory—and those in this place would know my views on that.

But as for why it is on Aboriginal land, we now need to look at the Northern Territory. It was open for the then Chief Minister in the Northern Territory, Clare Martin, to nomin­ate anywhere in the Northern Territory because of all of the pastoral leases in the Northern Territory. She could have con­sidered not the most available site but the most suitable site. But on the very same day that she had that capacity—so it can hardly be seen to be a considered process—she decided that she would tell everybody that we were not considering any places.

That left only one group of people, the Northern Land Council, who you would have to have a deal of respect for because they were an independent group who decided they would have a process that would go through a selection period. Firstly, they had a meeting of all Northern Land Council members simply to consider whether or not their body would be a body under which nominations could occur. It was a three-day meeting simply to see if they were going to have anything to do with it. We have a process which is subject to a High Court decision at the moment, which is a very robust process. As I said, what we are talking about today has nothing to do with that. But at least they dealt with it with some independence and not with the same political self-interest that the Labor Party in the Northern Territory did. That is the reason why the site is now both in the Northern Territory and only on Indigenous com­munities. It is simply because of the political self-interest of the Labor Party, both in South Australia and in the Northern Territory.

There were a number of remarks from the senator in regard to why we locate these in remote areas. Whilst it was fairly dry, I would recommend to you the references by the minister in that regard. It is not about keeping things away from people; it is about finding a site that is unlikely to be disturbed in the near future—in geological terms, the next 100 years. It is a site that would certainly need to meet those specifications. But remember that, in terms of saying, 'Let's take all this material and hide it away somewhere,' this is only intermediate level waste. Remember, the high-level material is at Lucas Heights—right in the middle of Sydney. That is the only high-level waste we have in Australia—right in the middle of Sydney. So nobody is hiding it anywhere. This is simply the best place to keep it. And it meets those standards.

We have had remarks from the senator—and this is what makes me nervous—about things 'leaking out' and 'running out'. I can remember some of the local people from Muckaty being concerned because they had been told that, when the 44 gallon drums rubbed through, the material would simply run out into the sand and run out into the rivers and would hurt marlu and other things. I was pretty disturbed, and I asked them where they got that information. It was provided to them by a third party, apparen­tly—no doubt, without mischief. But I went on to tell them that we are not allowed to keep, nor do we keep, either liquid matter or particulate matter at the facility. So the notion of 'leaking' can be misinterpreted—and I am not verballing the senator—as a radioactive leak if there is a crack or something and it comes out. As for the notion of something 'running out' and getting into water sources no liquid, particulate matter or dust is stored there.

One of the most difficult things about this material is that in storage it is actually difficult to measure how much radiation is coming out of a drum, on the surface, or whether it is coming out of the material that is stored, because, in fact, the concrete, with the granite in it, has more radioactivity coming out of it than the container. So it is very difficult to measure all those things. But it is important in terms of safety to put that in the proper context. Firstly, there are no leaks and nothing is running anywhere or blowing around or running into rivers, or, in two ice ages' time, doing something. It is also important to note that this is all recov­erable—in other words, the intermediate level waste will be in a warehouse on a large concrete floor, which somebody hoovers, and there will be these big lumps of things sitting on concrete blocks. As I have said, there is more radioactivity coming out of the concrete than out of the container for that material.

It is also important to note that, as the senator indicated, there is no deep burial, no 'leave it and forget it'. All this material—and some of the low-level material is actually soil, much of which, in fact, is not actually radioactive anymore, though we do not have time for that story—being stored there is entirely recoverable. When I say 'recover­able' I mean that, if we need to move it or do something with it, we simply pull the gravel out, blow the gravel away, lift the containers and move them. So to say that somehow the level of amenity provided for safety and security is not adequate is simply not true.

I recall that earlier you said that we do go on about the health system. I have to say that this is one of the most important elements of our health system. As I have said in this place before, there are numerous uses for these medicines, and the only reason we produce this material is that we cannot have those medicines in this country without this material. It is as simple as that.

One of the most important medicines we have in this country is a product called technetium. The fact that we have tech­netium available in this country ensures that the very bad old days, particularly for things like breast cancer, are gone. A full mastectomy, and the trauma and cosmetic loss that go with that, can now be completely avoided through forensic surgery, with a great deal of confidence that the technetium will identify not only the tumour in the breast but also the lymph nodes that it drains to.

There are those who would say, 'There are always options; we can always import it.' Well, I would very much recommend to them the words of the former leader of the International Atomic Energy Agency, Dr ElBaradei. Dr ElBaradei was very clear about the future of access to radioactive pharmaceuticals. Radiopharmaceuticals will not necessarily be available unless every airport, wherever a plane lands, has stringent controls about fire safety mechanisms, because, if we have an aeroplane crash, then they need to have a level of amenity that will deal with radiation as well as a fire in those other materials. So the single message was: in the future, you will need to have some independence if you still want to keep a fantastic health system, which has to hinge on radiopharmaceuticals and radiology and oncology.

Cancer is still one of the greatest killers in this country and sadly we still do not have a magic wand or any unique solutions for treating or curing cancer. But, without doubt, anybody who is a commentator in this area knows that radiopharmacology and oncology pretty much depend on the production of these medicines and the capacity for us to have a research reactor which only provides medicines—only provides good things for all Australians. And, if the downside is this, this country accepted that it would take both the benefits of radiopharmaceuticals as well as the responsibilities. We have signed an agreement with the International Atomic Energy Agency that, because we can use nuclear fuel rods to produce medicine, we have the responsibility to accept that the rods, after they have been processed and had the plutonium taken from them, will be returned to Australia where they can be stored safely. And they can be stored safely. This is intermediate level waste. There is no particulate matter and there is no liquid matter. And, on any balance, this is something that Australia has to have. I am always saddened by the continual politicisation of an issue that is so central to the lives of Australians right across this country. And, as a Territorian, I am saddened that we have again been forced to do something, rather than having put our hands up and made our contribution to ensuring that this country has the same level of amenity, in terms of health, that other countries enjoy.

Progress reported.

Senator PARRY (Tasmania—Chief Opposition Whip in the Senate and Deputy Manager of Opposition Business in the Senate) (15:31): It is my privilege to present on behalf of the Chair of the Senate Standing Committee of Privileges, Senator Johnston, correspondence relating to the application of parliamentary privilege to working papers and reports from the Australian National Audit Office.