Senator CORMANN (Western Australia) (09:52): Courtesy of the Labor Party and the Greens, debate on this important piece of legislation will be gagged at 10 o'clock this morning. Courtesy of the Greens' suspension of standing orders this morning, we will have 7½ minutes to debate this whole bill about indirect taxation. I can well understand that neither the Labor Party nor the Greens want to spend too much time in the Senate talking about indirect taxation, because they are high-spending and high-taxing parties. I say to the people of Queensland, to whom Senator Brown was trying to send some vague message: if you want to vote against the carbon tax and if you want to vote against death duties, you should support Campbell Newman and the LNP in Queensland.

The Indirect Tax Laws Amendment (Assessment) Bill 2012 is about going down the path of self-assessment by extending the self-assessment arrangements to indirect taxation. It follows a Board of Taxation review into the administration of the GST, which made a series of recommendations for the harmonisation of the self-assessment system across a range of indirect taxes—including the GST, luxury car tax, wine equalisation tax and fuel tax credits. The bill also allows the commissioner to make a determination allowing taxpayers to correct errors in their assessments of GST and fuel tax assessments in the subsequent assessment year.

The coalition support this bill. However, what the coalition do not support is the high-spending and high-taxing agenda from this Labor-Greens administration. It is this Labor-Greens administration which has given us 20 new or increased taxes. Remember the increase in the alcopops tax? Remember the increase in the luxury car tax? Remember the new condensate tax, the $2½ billion tax grab at the expense of the North West Shelf gas project in my home state of Western Australia? Remember the flood tax? Wherever there is a tax to be increased, the Labor Party and the Greens will find it. Of course, since then we have had the carbon tax and the mining tax. If Labor are re-elected at the next election, no doubt there will be another 20 new tax grabs. And guess what? Having introduced 20 new or increased taxes, they still cannot balance the books. This Labor-Greens administration—which is desperate to limit debate on this bill to 7½ minutes—despite 20 new or increased taxes, many of them indirect taxes, still cannot balance the books.

Despite all of that, under this government we have had $167 billion of accumulated deficits. Despite 20 new or increased taxes from this Labor-Greens administration and despite inheriting a $22 billion surplus and a $70 billion net asset position for the Commonwealth, they have been able to turn that around to $167 billion of accumulated deficits, and are now heading for $133 billion of government net debt.

After the last election, the Labor Party and the Greens signed an agreement to form government. It was a highly publicised agreement; it is what gave us the carbon tax. The Greens want us to expand the mining tax. The Greens want to go down the path of death duties. The people of Queensland should be very aware of what will come their way if the Greens are successful in any way at the next election. There is really only one message to be sent to Queensland on Saturday—that is, a message against the high-spending, high-taxing and fiscally reckless agenda of Labor-Greens administrations around the country.

Ever since the Labor Party and the Greens signed an agreement to form government, our fiscal situation in Australia has gone from bad to worse. Before the election in the FIFO statement that had to be released by Treasury and Finance, we were told that the deficit this financial year would be about $10.4 billion. By the time the Mid-Year Economic and Fiscal Outlook came along in December 2010, three months later, that had gone up to $12.3 billion. So in just three or four months, it had blown out by more nearly $2 billion. But guess what? By the time of the budget in May 2011, we were told that the deficit this financial year would be $22.6 billion. That means that from the time of the election to the time of the budget, which was less than a year, the budget deficit had blown out by more than $12 billion. What happened after that—because, as you know, the gov­ernment then releases a Mid-Year Economic and Fiscal Outlook in December 2011? Do you know what the deficit now is for this financial year? It is $37.1 billion. The deficit has blown out by more than $26 billion since Treasury and Finance released the pre-election fiscal outlook.

That is why this government is such a high-taxing government. This is why this government has had to go for 20 new or increased taxes. Even though it comes up with one ad hoc tax grab after another, it still cannot balance the books. This is a government that does not know how to live within its means. This is a government that forever casts around for new ad hoc tax grabs. This is a government that tells us that it will give us root and branch tax reform to make our tax system simpler and fairer, and all it does is just whack on another tax. Rather than going through a proper process to make our tax system more efficient, to make our economy more competitive and to improve our productivity, this government just always chases more cash so it can use it for its reckless and wasteful spending here out of Canberra. This is a terrible government. This is a government that has seriously mismanaged our public finances.

People across Australia instinctively know that whenever the Labor Party get hold of the treasury benches they stuff up our public finances. People across Australia instinctively know that whenever the Labor Party have been in government—and it is even worse when they are in government with the Greens—it takes the coalition to come back to restore good financial management, to put the budget back into balance and to not only pay off Labor's debt but deliver income tax cut after income tax cut.

It is quite disgraceful that the Labor Party and the Greens would conspire to gag debate on this very important piece of legislation and then, on the day when we were always just going to have half an hour to debate this bill, the Greens jump up to cut down that part of the debate that was available, to the point where this legislation will now only have 7½ minutes for debate. Clearly, the Labor Party and the Greens hate the scrutiny that comes when we talk about taxes. They do not want people to know what their secret tax agenda is.

The DEPUTY PRESIDENT: Order! The time for the debate has expired. The question is that this bill be now read a second time.

Question agreed to.

Bill read a second time.

The DEPUTY PRESIDENT (10:00): The question now is that the remaining stages of the bill be agreed to and the bill be now passed.

Question agreed to.

Bill read a third time.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (10:00): Australia's fashion and clothing manufacturing sector is doing it tough. Be it the enterprises or the workers and contractors engaged in that sector, they are doing it tough. But this bill, the so-called Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 [2012], which we are debating, will make this tough situation even worse for the 8,600 enterprises and 22,000 workers engaged in the sector.

Regrettably, the Senate committee inquiry into this bill was cut short—as is this debate today—courtesy of the Greens-ALP alliance majority in the Senate, ruthlessly and recklessly using their numbers to avoid scrutiny. The chief industry body in relation to this sector was denied a hearing by the committee because the hearing was so truncated courtesy of the Greens-ALP majority. But you got it right: the union got a hearing, as it should have done, so I have no criticism of that. I will turn to the union later. But the industry body that deals specifically with textiles, clothing and footwear was denied a hearing. This is now just another example in a very long list of the Greens-ALP majority in this place deliberately truncating Senate inquiries and debates on bills to ensure that they are not put under the sort of scrutiny that the Australian people expect of us. The reason the Greens-ALP majority do not want this scrutiny is that they know their legislation is only designed to enhance trade union bosses' powers rather than enhancing the economic wellbeing of our nation or enhancing the benefits to individual workers and enterprises.

Let us be clear: there has been exploita­tion in this sector. That is why the coalition always had special protections in our legislation for outworkers. I pay tribute to former senator Judith Troeth, from my side, who as a distinguished former chair of the Senate Standing Committee on Education, Employment and Workplace Relations ensured that we got the balance right. I regrettably was unable to sit in on the Senate hearing, and no wonder because, if you blinked, you would have missed it—it was that short. As a result of my inability to attend, I did avail myself of a briefing by the TCF Union and I congratulate Ms O'Neill and her colleagues from the union on giving me a well-presented and professional briefing. They did their membership proud. However, we do disagree on the best way forward.

One of the things that have always struck me about the TCF sector and those that are exploited in it is that those who are vulnerable are those who do not have English language skills. That is why I repeat, as I do on a regular basis, the importance of government in ensuring that new entrants to this country are properly supported with language skills. Having proper English language skills is the fundamental ticket to ride to social justice, to social integration and to personal empowerment. If you cannot read a bus timetable, you cannot get around. If you do not know what the product labels tell you, you do not know what you are buying. If you cannot read the language, you do not know what the award entitles you to. As a result, English is a very fundamental prerequisite for our fellow Australians, albeit new arrivals, to be able to actively and equitably engage within our community.

The sad fact is that these people with poor language skills are often exploited by their former fellow countrymen, and that is also a matter of great regret. They seem to do a disservice to people from countries that they themselves came from. I say that as an aside in this debate, because it is vital to recognise that those who are exploited are often those who have very poor language skills. To those who say that we should be celebrating multiculturalism and those things, I say simply: don't forget the vital need to encourage people to learn the English language, because without it they cannot engage in Australian society.

Having accepted and acknowledged that there is exploitation in the sector does not mean that you therefore have to treat every single person in that sector on the same basis and force everybody into an employer-employee relationship. Indeed, in doing so we will do a huge disservice to the young, the vibrant and the innovative. I will talk about that later.

In the meantime, let us have a look at the government's justification for this bill. The government's justification, as presented by the then minister, Senator Chris Evans, was based on a reference to a 2007 report by the Brotherhood of St Laurence and a 1996 Senate Economics References Committee inquiry. It is interesting to note that it is both those reports, from which the Labor Party must have finally wiped the dust, which have motivated them, but both those reports were there before the Fair Work Bill was presented to this parliament and passed. The government knew about these reports. The government knew about the assertions made in those reports and the government deliberately dismissed the matters in those reports as they drafted and enacted the Fair Work Bill.

So one has to ask: why is it that these two reports have bubbled to the surface? Indeed, a number of people who I understand assisted in negotiating the Fair Work Act—indeed, Ms Gillard told us that she negotiated the Fair Work Act—got the balance right. In getting the balance right, from time to time you have to dismiss the assertion of certain trade union bosses—that comes with the territory. That is what Labor did to get the sign-on of certain businesspeople.

Having got the legislation through with the sign-on of certain businesspeople, what do Labor do? They have that locked away; they then move the amendments which they were not prepared to put into the original bill. Talk about a sell-out; talk about deception; talk about the Labor government, because that is the hallmark of the Labor government. They say one thing and do another straight after the event, be it the carbon tax, be it private health insurance, be it the definition of 'marriage' or be it the treatment of textile, clothing and footwear workers in the workplace relations regime of this country. They do a deal, they sign it off with somebody, they say, 'This is a great balance; well done,' they get that locked away and then, with a Greens-ALP majority in this place, they force through this legislation in breach of that which has previously been agreed, relying on reports that were in existence at the time and were deliberately dismissed. No wonder the government want a truncated debate. No wonder the government wanted a very truncated Senate committee inquiry into this bill, because they would have been embarrassed in trying to justify why these two reports, which allegedly underpin this legislation, all of a sudden have become so important.

They also need to justify the 12 amendments which were put into the Senate late yesterday. They were not part of the Senate inquiry or any of the analysis but they are now part of this truncated debate. Clearly we will not have time for any proper committee stage, if we are lucky enough to have a committee stage. We will not get explanations as to why we have these last-minute amendments. Exactly the same approach was taken by Mr Shorten, the Minister for Employment and Workplace Relations, in relation to the Office of the Australian Building and Construction Commissioner legislation. Make sure the Senate inquiry is finished, make sure you have a truncated debate in the Senate and then whack in the amendments, which are far-reaching and devastating, to ensure there is no proper public analysis of the government's changes.

This government is abusing the parliamentary process because it can gain a majority in this place courtesy of the Australian Greens, who, under the Howard government, were the champions of every single clause of every single bill, which had to be analysed for every comma and full stop. It is not so now under the Greens-ALP alliance. They want everything swept through without any consideration and it happens not only in this place.

Remember the so-called 'new paradigm' we were going to experience when Ms Gillard signed up the country Independents, Mr Windsor and Mr Oakeshott? What a disgraceful turnout that has been. They are complicit in this as well. Never once have we heard them complain that the government is guillotining legislation through the Senate, that the government and the Greens are disallowing proper analysis of bills. We were promised all this under the new paradigm. There was going to be new transparency, greater accountability. All of that has been thrown out the window by this government with the complicity of those so-called country Independents.

I said earlier in my contribution that this bill will stifle the young, the innovative and the entrepreneur. Allow me to read a letter I received recently:

I am an emerging Australian Fashion Designer starting a label from home. I would like to draw your attention to the Fair Work Act and the Textile, Clothing, Footwear and Associated Industries 2010 (the TCFAI Award) Modern Award regime which defines me as an outworker, despite my 4 year degree in fashion from Ultimo TAFE. The current TCFAI Modern Award definition has a "catch all" definition where anyone working from home in the fashion industry is an OUTWORKER … yes, I can be considered an OUTWORKER if I sell to a boutique or department store, because of the deeming provisions of the award. Most graduating & emerging Australian Fashion Designers starting out, establish a trading relationship with a fashion boutiques on “indent”. In the eyes of the law, MA000017- Schedule F that would mean boutique owners are required to pay me as an employee, including all benefits and entitlements under the National Employment Standards and unfair dismissal laws. This is unfair and an unworkable regime that disadvantages me and other graduating & emerging Australian Fashion Designers, and is making it very difficult starting up a new business, as no boutique owner will agree to employ me, and I don’t want to be employed by them either.

Beyond that as a fashion student/designer, if I hand out work to a “maker/outworker” to sample a design I am obligated by law to employ them with full benefits and entitlements, and that is against the law for me to employ them casually. Further I am aware that in the final form of the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 (the Bill) currently before parliament, deems all outworkers to be employees for most purposes of the Fair Work Act 2009 (Clth) (the FW Act) including the National Employment Standards, Superannuation and unfair dismissal laws. As a start-up business, in the beginning it will be challenging to pay myself, never mind employ a ‘maker/outworker’ on a regular basis, and pay all these entitlements. Again this is unworkable and in trading in such an environment, I face prosecution in breach of the TCFAI Modern Award 2010. The risks are too great.

I would like you and your government to consider this letter and make the necessary changes to allow me and other graduating & emerging Australian Fashion Designers making samples and small orders (with business turning over less than $100,000 per year) to apply for exemption to this onerous and impractical regime, as part of the Modern Awards Review 2012.

There you have it: a young, innovative individual who will be stifled. Is this really what we want for our modern economy in the 21st century, that the young and the innovative are so stifled that they cannot do that which they want to do? We have heard it firsthand and it makes sense. That is what happens when you try the one size fits all. But we know this government has a severe dislike for independent contractors. They see independent contractors as potential union members and employees. As we have seen from the Health Services Union, we know how some of the union bosses behave with union members' moneys.

Back to the issue at hand. We also have from designers and makers in Australia their very real concern. One such letter I got says:

I am writing to you today in great distress … We have developed this brand over the last two years with the soul of the brand being an Australian made product.

… … …

Over our journey so far we have met many wonderful people in the fashion industry. From designers to stylists, to garment makers we have a wonderful and colourful collection of talent here in the fashion industry in Australia. By introducing changes to the Fair Work Act that doesn’t allow the fashion industry to employ the use of outworkers in the production of garments you will be forcibly restricting the amount of garments that can be produced in Australia. Not only by the way manufacturing companies will be forced to employ but also by the increase in production costs that will result from this. Making an already expensive process even further out of reach for the average Australian.

We … are proud australians and who have seen over our generation many great brands including iconic Victorian names such as Rip Curl and Quiksilver send all there production off shore and even more recently Pacific Brands was forced to do the same in a whole other manner.

The plea in this letter is:

… I implore you to severely look at any changes you make that would effect a great industry that is trying to put the "Aussie" back in "Aussie made!!!

This bill will stop putting Aussie back into Aussie made. This bill will unfortunately adversely impact the 8,600 enterprises and the 22,000 workers in the textile sector. It is a matter of regret that this legislation is in breach of the deal that was struck when the Fair Work Act was originally implemented. Whilst it disappoints it does not surprise, because we know that this is a government whose word cannot be trusted in any area of endeavour that it engages in. Having said that, the coalition does believe there is a better way forward in looking after the needs of exploited workers, and we have put that on the record in the past.

Senator URQUHART (Tasmania) (10:20): Home based workers have always been a feature of the clothing industry and I recognise some of these workers in the gallery today. Since import tariffs were reduced, beginning in 1992, Australian manufacturers have been cutting their labour costs to compete with cheap imported clothing from low-wage countries. As a result there has been a substantial increase in subcontracting to sweatshop factories and home based outworkers. While the closure or downsizing of large companies creates the impression that clothing production is moving offshore, a sizeable industry slips under the radar here in Australia, hidden and largely unregulated in small sweatshop factories and private homes.

A major issue for most home based clothing workers is their status with their employer as a contractor not a worker. It is not a technically legal status but one pushed upon them just because they work at home. It is a status used by employers to try and cheat them out of the wages and benefits that a worker in a factory would receive. Under current legislation, TCF outworkers are entitled to most of the key protections and benefits of workers in a factory—namely, payment no less than the minimum wage and hourly rate for the clothing industry, superannuation, WorkCover insurance, annual and long service leave and severance pay if they are made redundant. But even though outworkers have a legal right to these and other entitlements that does not mean they actually receive these entitlements. In fact, outworkers are usually only paid a piece rate payment—a payment equal to as little as $4 or $5 an hour—while the legal minimum wage is almost $16 an hour. This payment does not reflect their skill, their effort or their investment—just their circumstances. These circumstances are exemplified for most by being from a non-English-speaking back­ground, by having poor English language skills, a lack of knowledge about the Australian legal system and low levels of union awareness and therefore membership. The payment of $4 or $5 an hour does not include superannuation, does not make provision for workers compensation insur­ance or severance pay and certainly does not reflect the casual nature of their industry. This payment might barely cover their electricity bills and their repayments on their industrial-strength sewing machine, let alone repairs to the machine if needed or any pleasures in life for them.

A sad tale is one of outworkers being gathered together and the work being auctioned off to whoever will accept the lowest payment. That is why I stand here and applaud the work of the Textile, Clothing and Footwear Union of Australia—with whom one of my staff worked in Darwin many years ago—to assist TCF workers to receive a fair day's pay for a fair day's work. The TCFUA have been there supporting outworkers in successful claims for unpaid wages and entitlements from their employers for many years. But, like all good unions, the TCFUA have also supported educational and community-building activities for outworkers such as information sessions on work rights, leadership training for outworker activists, free English language and literacy classes and a Vietnamese language radio program. The TCFUA's principal aim is to organise and educate clothing outworkers, and they have been effective in campaigning for legislative changes.

A number of inquiries have been conducted and reports published examining outwork in the TCF industry in Australia over many years. No less than five parliamentary committee inquiries have been held over the past 15 years. These inquiries go back to the Senate Economics References Committee's inquiry into outworkers in the garment industry in 1996 which found problems with payments and hours of work as well as confusion and misinformation in relation to rights and responsibilities. More recently, a report by the Brotherhood of St Laurence in 2007 found that outworkers experience poor working conditions and are frequently underpaid—sometimes as little as $2 or $3 an hour.

These reviews have found, and the government accepts, that outworkers in the TCF industry suffer from unique vulnerabilities as a result of their engagement or employment in non-business premises. As I stated earlier, these vulnerabilities are made worse by the fact that outworkers are often migrants with poor English language skills, a lack of knowledge about the Australian legal system and low levels of union awareness and therefore membership to support them. Currently, the Fair Work Act contains a number of important protections for TCF outworkers, including scope for awards to include targeted outworker terms and enhanced right of entry arrangements. There are additional entitlements and protections for outworkers contained in the Textile, Clothing, Footwear and Associated Industries Award.

Further, most states have legislation that provides protection for TCF workers. However, there are differences in the approaches that they take. For example, in New South Wales, Queensland and my home state of Tasmania legislation deems contract outworkers to be employees, while more limiting deeming applies in Victoria and South Australia. There is provision for the recovery of unpaid amounts up the supply chain in most states but not all states. There is a mandatory code of practice in place in New South Wales, Queensland and South Australia and there is no relevant legislation in Western Australia. In other words, most jurisdictions have recognised that special measures for outworkers are required but there has not been a uniform approach, meaning that outworkers do not have the same level of protection in all jurisdictions. Where outworkers are entitled to fair minimum conditions they can have difficulty accessing them. Even the Fair Work Ombudsman faces difficulties in identifying and assisting outworkers because outwork is, by definition, not performed in traditional workplaces and it can be difficult to identify for whom work is being performed.

The ongoing vulnerability of outworkers in the TCF industry, along with the lack of a consistent approach across the country, has led the Gillard government to conclude that federal legislation is necessary to ensure equitable and consistent protection for all these workers. These changes will promote fairness and ensure a consistent approach to workplace entitlements and protections for a class of workers that is widely recognised as being uniquely vulnerable to exploitation.

Of course, it is today the view of those opposite—as it was when they were in government—that it is too hard, that government is unable to do any more than stand by and hope that the TCF industry will voluntarily improve working conditions for outworkers. This is just not good enough. I know I am here because I believe in a fair go for all Australians. The track record of those opposite is that, together with voting against this important reform today, in 2006 they implemented measures worth hundreds of millions of dollars to support the TCF industry but did not see the need to include any specific measures to address the challenges faced by outworkers.

In comparison, the Gillard Labor government is again getting the balance right. We are assisting both the industry and its most vulnerable workers. Yesterday the Minister Assisting for Industry and Innovation, Minister Lundy, announced that businesses in the textile, clothing and footwear industry can partner dollar for dollar with the Gillard government and apply for a grant of $250,000 or more to support manufacturers who have a vision for their industry based on smart ideas, strategic thinking and technical excellence.

The measures in this bill will go some way to fixing the problems outlined before. It will extend the operations of most provisions of the Fair Work Act to contract outworkers in the TCF industry so that they are recognised as employees and not—unfairly—as contractors. The bill will provide a mechanism to enable outworkers to recover unpaid amounts up the supply chain if they go unpaid by the person responsible for paying them, because everyone deserves a fair day's pay for a fair day's work. The bill will enhance right of entry rules for the TCF industry to allow a permit holder to better target sweatshops. This ends the current limitation that exists in relation to right of entry into conventional business premises in the TCF industry operating under sweatshop conditions—another protection for these vulnerable workers. Further, the bill will extend outworker-specific right of entry rules to all premises in the TCF industry, to enhance protection for employees working under sweatshop conditions. There will be an exception for the principal place of business of a person with appropriate accreditation. In such cases, the standard right of entry rules will continue to apply. This means that permit holders will now be able to enter sweatshops to check relevant documents before businesses can be closed and moved to another location to avoid scrutiny.

A TCF outwork code will be issued to deal with standards of conduct and practice to be complied with by parties in the supply chain—holding all parties to account for their actions. The existing power of Fair Work Australia to include outworker terms in awards will not be limited. Additional protection for outworker terms will be provided by ensuring that these important industry-wide standards cannot be undercut by use of flexibility terms in enterprise agreements. This is a true Labor reform, helping the most vulnerable in our community access a fair day's pay for a fair day's work. I commend the bill to the Senate.

Senator CASH (Western Australia) (10:31): I rise to speak on the Fair Work Amendment (Textile, Clothing and Footwear Industry Bill) 2011 [2012]. It would be a furphy for those on the other side to say that the coalition does not support provisions and protections for those in the clothing, textile and footwear industry. When in government, the coalition was faced with some very compelling evidence of endemic and inappropriate conduct in workplaces in this industry. We acknowledged that protections were needed for people in this industry. And, faced with this evidence of the need for additional protections in the textile, clothing and footwear industry, we took the appropriate legislative action. The coalition, throughout its time in government, maintained protections for outworkers in the textile, clothing and footwear industry in the various iterations of workplace relations legislation between 1996 and 2007. It was on this same basis that the coalition implemented workplace legislation specific to the building and construction industry. Again, we recognised that specific protections were needed for people within a certain industry. And, in considering the need for the bill before us today, the coalition notes, as has been put forward by those speaking on the government side, that there continue to be specific provisions in the Fair Work Act to protect outworkers, as there should be, as well as varying equivalent provisions in state and territory legislation.

The question that the chamber needs to ask itself is this: why are we faced this week with yet another bill that seeks to change the industrial relations landscape in this country, given in particular that no commitment was taken to the previous federal election by the government in relation to introducing amendments dealing with industrial relations? I do qualify that comment by saying that commitments in the Labor government do not mean a lot; they promise one thing before the election and as soon as they are elected they do an entirely different thing. In relation to industrial relations commitments, one would think that, given the fact that we are this week debating a number of bills that are all of an industrial relations nature, the government may have flagged with the people of Australia that when they were elected they did intend to make changes to the industrial relations landscape. They did not do that.

But the answer, when it comes to commitments from the Labor Party, is quite simple. It would appear, based on everything that we have heard to date, that yet again, as with the abolition of the ABCC, the government's motivation for this amendment is more about giving something to its friends in the union movement in the lead-up to the next federal election. The government's modus operandi has been, since its election, to ensure that it appeases the unions, and for a very good reason—because it needs to do something to offset the acute pain employees will feel and are feeling as a result of the passing of the carbon tax legislation. The unions have for some time now made it very clear that they are not happy with this government and the impact the carbon tax legislation will have on their employees—pain that has been deliberately inflicted on them by their own Labor government.

These very real concerns in relation to the impact of the carbon tax have been exacerbated in light of a new study, produced by the Energy Users Association of Australia, which has found that that Australia's electricity prices are very near to the highest in the developed world and seemingly set to actually become the highest. The study found that electricity prices in Australia have risen by 40 per cent in real terms since 2007. And the reality for Australians and for all the unions and for the employees within the union movement is that from the 1 July, in 101 days, Australian households and businesses will pay the world's biggest carbon tax, which will increase electricity prices by more than 10 per cent in the first year alone. In subsequent years prices will go up and up.

Hence the bill we have before us today. The unions know that this is the worst time in history to introduce a carbon tax. It is also the worst place in the world to introduce a carbon tax that will see electricity prices that are already at global record highs go even further. This bill represents a very small gesture by the Gillard Labor government to appease the very real fears the unions have for employees because of actions taken by the Labor government.

One of the interesting facets of this debate is that the government's justification for the protections that are required for this industry is at odds with its justification for the abolition of the Australian building and construction commission. One of the government's core arguments in support of the abolition of the ABCC was that the ABCC discriminated against certain workers and that the industrial relations regime in this country should take a one-size-fits-all approach. That was the government's justification—which was actually elucidated yesterday in this place—for the abolition of the ABCC. The government said that the industrial relations landscape in this country should take a one-size-fits-all approach. But, a mere 24 hours later, the government comes into this place with another bill, a bill that is intended to change the industrial relations regime in this country, and the reasons that it puts forward for supporting this bill are in complete contradiction to the reasons it gave for the abolition of the ABCC. The government is saying that we have to pass the bill before the Senate because a one-size-fits-all approach to the industrial relations regime does not work.

One of the other issues of concern to the coalition in examining the justification for this bill is that the government continues to suggest that the measures proposed by this legislation are required because, as set out in the committee report on the bill, government members were struck by comments made by a deputy president of the Australian Conciliation and Arbitration Commission that related to the remuneration and treatment of outworkers. I too was struck by those comments. But the comments were made in 1987, some 25 years ago. Over the last 25 years appropriate changes have been made in legislation to ensure that workers in this industry are afforded the protections that they need. If they had not been made, those on that side of the chamber, quite frankly, are to blame. I would suggest that the government's comments, therefore, are a little disingenuous, to say the least.

An additional justification for this bill, as proposed in 2011 by the then Minister Chris Evans, was based on a reference to a 2007 report by the Brotherhood of St Laurence and a 1996 report of a Senate Economics References Committee inquiry. The government knows that both of these reports were completed prior to the passage of the Fair Work Bill. Therein lies a problem for the government, because if these reports constitute such a strong case for the bill that we have before us today, why has it taken the government so long to act? Why is it that on 21 March 2012, we are suddenly debating this legislation? If the government's concerns are so real, why didn't it address those concerns as soon as it had the first legislative opportunity to do so? That was, namely, the introduction and the subsequent passage of the Fair Work Bill.

In relation to the bill before us, the Australian Chamber of Commerce and Industry, in its submission to the Senate Standing Committee on Education, Employ­ment and Workplace Relations, has also expressed concerns about the evidence supporting this legislation. It said:

Apart from references in the Minister’s second reading speech to a November 2011 Channel 9 story in a Melbourne TCF “sweatshop” and a July 2011 Sunday Herald Sun report on “sweatshops and outworkers producing school uniforms for Victorian families for as little as $7 an hour”, there are no examples provided in the extraneous materials as to the precise deficiencies of the existing legal framework, what recommendations these proposals are based on (such as from the Productivity Commission or a dedicated independent inquiry by the Federal Government) and how the proposed measures will reduce possible exploitation of workers in the TCF industry.

There is no evidence that actually supports that these measures will reduce exploitation.

Then we have the evidence of the Council of Textile and Fashion Industries of Australia, who expressed similar concerns:

The arguments for introducing the legislation are based on research conducted nearly 5 years ago not current evidence and fail to acknowledge the gains made in the 10 years of existing legislation and the 4 years of investment by the Federal Government in Ethical Clothing Australia.

Indeed, in support of those concerns are statements made by the current Prime Minister when she was the Minister for Education and the Minister for Employment and Workplace Relations. Ms Gillard said at the time: 'I believe the fair work system is right. We worked hard to get the balance right and I believe that the Fair Work Act is right.' During the passage of the Fair Work legislation, when confronted with all of this evidence, Ms Gillard said, 'I believe that the Fair Work Act is right.'

There appears to be a problem with that statement because if there is, as we are now told by the government, such a strong case for change in the industrial relations landscape in this country, then clearly the balance was not right when now Prime Minister Julia Gillard made that statement. In fact, the very nature of this bill and the comments that Ms Gillard made to workers in this country, in particular to workers in this industry, actually shows that the government had not got the balance right.

Despite everything the government said at the time, that they were going in to bat for the workers and that they were making these fundamental changes to the industrial relations landscape in the country, and despite the Labor Party going on record as saying to the people of Australia, 'We got the balance right,' the mere fact that we are in here today debating this legislation shows that that was yet another Labor Party lie. They deliberately misled some of the most vulnerable people in Australia; hence the bill we have before us today. But, as with so much of the legislation that is currently being debated or, should I say, not being debated because, as we all know, we are not getting the opportunity to properly investigate this legislation by way of a proper committee process, we are also subject to the unholy alliance of the Labor Party and the Greens, which will, at 12 o'clock today, guillotine debate on what is acknowledged to be a very important piece of legislation.

We suspect that the government's motivation for this amending legislation is more about cleaning up a very big mess that it has made in passing the carbon tax and the economic pain that the government knows is currently being felt by those who are most vulnerable in this country. What is worse is that that pain will be further exacerbated on 1 July, when the carbon tax legislation commences.

If the government were dinkum about giving further protections to people within this industry, they would wait for the outcome of the Fair Work Act, the debate of which is currently underway. This is an industrial relations bill. The provisions of this bill should be considered as part of a total review of the Fair Work Act, along with any other changes proposed in any final and publicly available report resulting from that review.

The Bills Digestfor this bill sets out concerns of the major interest groups about this legislation. As set out in the Bills Digest:

The National Retailers Association … states that there has been no consultation with industry about the changes included in the proposed legislation and has criticised the timing of the Bill's release which coincided with the peak trading season for retailers, inhibiting the ability for the organisation to consult with its members.

And remember that this government was all about consultation—but consultation on its own terms, not consultation where you have a major industry group, faced with a major change of legislation, not being given the opportunity to actually consult with the industry.

Then there are the comments of Heather Ridout, Chief Executive of the Australian Industry Group, who voiced employer concerns about the bill. In November 2011, Ms Ridout commented in a National Press Club address that the bill:

… will add another 30 pages to the Fair Work Act to increase union entry rights and protections for workers in the Textile Clothing and Footwear industry.

Ms Ridout listed a raft of government measures, such as the Road Safety Regulation Tribunal Bill 2011, funding award wage increases for social and community workers et cetera, including the bill to abolish the Australian building and construction commission, as evidence that this bill is indicative of the government not acting in the national interest, not acting in the interests of workers but agreeing to an extraordinary series of union claims. This is what Ms Ridout said.

The (TCF) Bill implements longstanding TCFUA claims which were opposed by Ai Group and other employer groups when the Fair Work Act was being developed and rejected by the Government at that time.

In relation to the legislation before us today we are presented with a government that told the people of Australia that it had got the balance right when it passed the Fair Work Act. The mere fact that we are debating the legislation today clearly shows that that was a lie.

We have a government that has failed to identify and present sufficient evidence that the measures contained in this legislation are justified. We have a government that has failed to justify the need for this legislation, based on the consistency of its approach to other legislation, namely, the abolition of the Australian building and construction com­mission. We are faced with a government that is yet again delivering a suite of measures that are designed to appease the union movement in the light of the devastating impact of Labor's toxic carbon tax on the most vulnerable people in Australia.

Senator THISTLETHWAITE (New South Wales) (10:51): I am pleased to support the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 [2012], which amends the Fair Work Act to deliver greater fairness, justice and safety for one of the most vulnerable groups, if not the most vulnerable group, of workers in our country—outworkers in the textile, clothing and footwear industry. This industry has undergone significant structural change in Australia over recent decades. As with many other industries in the manufacturing sector, changes to our systems of tariffs and industry support have seen the makeup, scale and nature of the TCF industry change substantially.

One of the most striking elements of the textile, clothing and footwear industry today is the huge proportion of outworkers—that is, people who perform work from their homes on a contract basis for suppliers in a supply chain. Outworkers within this industry are effectively employees who are engaged to work from home. Often they are migrants from non-English-speaking backgrounds, and some of them unfortunately have very poor communication skills. Sadly, as a result of that, they often have very little concept of their rights or a knowledge of the Australian industrial relations and legal systems. A large proportion of these workers are women from South-East Asia and are essentially exploited for the gain of fashion houses and retail outlets that require cheap and easy labour for their production lines. These workers are often paid much less than the relevant award rate—sometimes $3 to $5 an hour.

Outworkers typically receive no superannuation, annual leave or workers compensation, and usually have to pay for their own machinery, tools and sewing supplies. Some of these workers have openly told their stories as part of the Fair Wear campaign. They have bravely put their case for reform in this industry through a campaign which seeks to end Australian sweatshops and assist workers in the clothing industry secure a living wage. Take Dung, for example, who says:

I migrated to Australia in 1999, and I live in Sydney. In Vietnam, I was a garment factory worker.

I started sewing from home a few months after I arrived in Australia. At first, I was making only parts of a garment. I was paid per piece. I was earning – roughly, an average of $6 an hour. I had to work very long hours and had very little sleep.

Then there is the story of Ms Nguyen, who says:

I came to Australia in the early 1980s as a refugee from the Vietnam War. At the time I had two young children and had another one on the way. We were very poor. We would often eat rice mixed with tea and dried fish. We slept on old mattresses that were found on the side of the road. Life was tough.

My partner and I soon invested in an industrial sewing machine so I could start sewing from home.

Back then if you worked in the factory you could earn about $5 an hour cash-in-hand. Working from home, payment was calculated per garment and you could earn about $3-5 per garment.

Unfortunately, in this day and age in Australia, some of these situations persist, with circumstances such as these still occurring in the textile, clothing and footwear industry. Surely these stories have no place in a modern Australia.

The Fair Work Act currently allows for special provisions relating to outworkers, allowing specific terms to be included in the Textile, Clothing, Footwear and Associated Industries Award. Most states have legislation that provides for TCF outworkers. However, unfortunately there is an inconsistent approach across the states. For example, in my home state of New South Wales we have specific legislation which means that outworkers are regarded as employees, while Victoria takes a more limited approach. Queensland also deems outworkers to be employees, while Western Australia has no legislation relating to outworkers. This bill provides for a uniform approach at a national level. It ensures that outworker provisions contained in the TCF award are enshrined in law to guarantee fairness and ensure consistency across jurisdictions.

This bill means that the provisions of the Fair Work Act will apply to all outworkers as if they were employees in a regular workplace anywhere in Australia. This will mean that outworkers will have the same rights and entitlements as workers who are engaged directly. Outworkers will be treated as an employee of the person or firm who directly engages them. Simply put, being an outworker does not mean you should be at a disadvantage in this industry; you should have the same rights and entitlements as ordinary employees throughout Australia.

This bill will provide a mechanism to ensure that those rights are protected and to ensure that outworkers can recover unpaid amounts up the supply chain when breaches occur. This means that outworkers who are owed money can recover payment from the firm or person who directly engaged them. Where an indirect entity pays an unpaid amount, they will be able to recover the payment from the person who was responsible up the supply chain. For an outworker in the TCF industry this means that wages, commissions and superannuation are protected and are unquestionable rights, no matter where they work.

The amendments in the bill allow for the creation of an outwork code of practice to be issued that deals with standards and conduct in the TCF industry. The code may impose reporting or other requirements on employers to ensure transparency in supply chains and make arrangements for the monitoring of the supply chain. The bill also seeks to extend the Fair Work Act's right of entry provisions into outworker arrangements and into exploitative segments of the industry, such as sweatshops. The amendments within the bill will mean that the 24-hour notice period that normally applies to right of entry into workplaces will not apply to sweatshops. There is good reason for that. The evidence that was presented to the Senate inquiry and many other inquires into this bill is that, once an official of the Textile, Clothing and Footwear Union of Australia identifies a sweatshop and gives the required notice under the Fair Work Act, it is not uncommon for that sweatshop to disappear overnight, particularly when we are talking about circumstances where these facilities are set up in someone's garage. Under amendments contained in the bill, the problem should not persist, creating a new level of fairness and equity in this industry. This provision will mean that sweatshops can be located and that rights can be enforced but, importantly, also explained to workers in these exploitative situations. Unfortunately, those opposite are opposing these provisions—and I do take issue with the claim made by Senator Cash that there is no connection between these provisions and improving the rights of outworkers in this country. I take heart in the fact that those opposite do recognise that there is a significant issue in Australia at this point in time in terms of the working conditions of outworkers. They recognise that there is a level of exploitation in this industry. However, they are wrong when they say that there is no connection between the implementation of these provisions and improving the conditions, working rights and safety of workers in these industries.

The Textile, Clothing and Footwear Union of Australia have, over decades, conducted studies and investigations into the effect of these laws, and the evidence is irrefutable that, when workers have protections and can make claims up the supply chain, the rights, entitlements and safety of workers in these industries are improved. One need look no further than New South Wales to see the evidence of that claim. I think it is instructive that Senator Cash was the one making these allegations, because the one state in Australia where provisions that protect outworkers such as these do not exist is Western Australia—which, of course, is the state from which Senator Cash hails.

I can say to the Senate that in New South Wales these provisions have made a big difference to the lives and working interests of workers in the textile, clothing and footwear industry. And these provisions have been in place since the 1990s. These are not revolutionary reforms. These are not new provisions. These are not unwarranted amendments to the Fair Work Act—as those opposite claim. They are basic protections that all workers in Australia should have the right to enjoy.

I want to close with some remarks from Anna. Anna was a child of parents working as outworkers while she was growing up. She says:

In order to make enough money to keep up with rent, my family started taking sewing work home. We had two home machines, so often my father and mother would sew until after midnight each weekday, and all day on the weekend, while I would cut the threads between the fabricated pieces. We would break for meals, sleep, school and work. This was our daily home life. I was twelve years old.

No child should have to be brought up in those circumstances in modern Australia. I am a big believer in free markets, but I am not a believer in free markets where they produce unjust, unfair and unsafe outcomes. What we have currently in the textile, clothing and footwear industry is exactly that: unjust, unfair and unsafe outcomes.

On that basis, we as legislators and leaders of this country have an obligation to regulate this industry to ensure that those unsafe, unjust and unfair work practices are eliminated from this industry and from this country. We go about our daily lives and sometimes we are often wearing the clothes produced by people who have been exploited in Australia. The time has come for that exploitation to end.

I congratulate the Textile, Clothing and Footwear Union and all concerned with the Fair Wear campaign and for their decades of hard work and advocacy on behalf of one of the most vulnerable groups within society. Their hard work and their efforts are commendable—and hopefully in a few hours time that work will be justified and the bill will pass the Senate. I commend the bill to the Senate.

Senator FISHER (South Australia) (11:04): Members opposite say that they were struck by the comments of a then deputy president of the Conciliation and Arbitration Commission, which was essentially Fair Work Australia in one of its former guises. They say that they were struck by the comments made some 25 years ago by the deputy president of that body. They were struck by those comments about the state of conditions and pay for workers in the textile and clothing industry. And they are so struck, that somehow that is now a basis for this bill, the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011, which is presented to the parliament after a very much-truncated Senate committee inquiry, allowed less than one day, where particular witnesses who wanted to appear before that committee were denied the opportunity to do so by the Labor dominated committee. In particular I am talking, for example, about the Council of Textile and Fashion Industries of Australia. So members opposite are struck by the comments of a learned person made some 25 years ago and for that reason we are presented with a bill which is subject to inadequate inquiry, which is not going to be able to go to committee in the inadequate time that we have before the chamber today and for which there is zero mandate.

It has all happened so quickly that I forget which bill Senator Thistlethwaite was speaking about, but I think it was the building and construction industry bill. In that speech he placed much importance on the mandate that he claimed the government had for the building and construction industry bill. Funny that he was conspicuous by his silence as to the mandate that the government has for this bill—because, of course, it does not have one. If it was so compelling, why did the government not say that it would be changing the protections that already existed, which were put in place by the Howard government in the late 1990s to protect textile and clothing industry workers? If they wanted to say they had a mandate, why didn't they promise something then?

The Howard government and the coalition have long recognised that there is exploitation in this industry and have tried to do something about it. There has been some criticism of the adequacy of those provisions, but the trouble with the government's bill is that we are struck by the lack of evidence that it will work. I note the presence in the gallery today of Ms O'Neil and her colleagues. I do want to pay tribute to the tireless work that she and others have done to help workers in this industry. I do not for one minute want to take away from the good intentions of the union and Ms O'Neil, and I am not trying to be condescending in saying that. This bill will pass. I hope that it will do what the government says it will do. I fervently hope that it will, because some of the evidence with which the committee was presented at its recent hearing is heartbreaking. And it is heartbreaking to think that those sorts of experiences continue to occur despite the length of time for which there have been provisions in the federal laws and also in state laws. It is absolutely heartbreaking.

Senator Thistlethwaite said that workers in this industry are more often than not immigrants, that they have poor English skills and that they have little concept of their rights. I would suggest that unfortunately they also have little concept of what this bill is about in its detail and whether or not it will actually help them. I do not want to be condescending and I do not want it to be taken that I am trying to take away from the very good efforts and the very good campaign that was being run long before I came to this place. My problem is that I am not convinced that this bill will do the job that the government is telling everybody—including the very vulnerable workers in this industry—that it will do. I think this is a snatch-and-grab job by the government, a kitchen-sink job. Throw anything at it to see if it will fix the problem, because nothing else has worked. If the government really has the confidence that this bill would work, why is the government not allowing the bill the proper scrutiny that this chamber would normally give—particularly when the government did not say, prior to any of the recent elections, that it intended to do this?

In the lead-up to the last two elections, this government talked about abolishing the Australian Building and Construction Commission on the basis that it discriminates against one set of workers and because there should be one set of workplace relations laws for all. The coalition has always acknow­ledged that where there is compelling evidence of ongoing and systemic issues in any industry then we are prepared to consider industry-specific legislation for those industries. Take, for example, exhibit A: the special provisions attached to the then Workplace Relations Act about the textile and clothing industries; and exhibit B, the Australian Building and Construction Commission. But not this government. This government, up until now, has said, 'The ABCC discriminates. There ought to be one set of laws for all.' To find evidence of that you do not need to look much further than the comments of government members when talking about the need to abolish the ABCC. Mr Neumann said in the House of Representatives on 13 August 2009:

The truth is that the Cole Royal Commission into the Building and Construction Industry was … to ensure that the salary and conditions of those hardworking men and women in the building and construction industry would find themselves subject to a different rule of law than any other worker in any other industry.

I have a fundamental belief that, whether you live in Palm Beach, Perth, the Torres Strait or Tasmania, there should be one law for all.

There are no qualifications on that from Mr Neumann and no qualifications on that from any other member of the government, and the comments were of course echoed by the cheer squad for the government, the ACTU, on 28 September 2010 when talking about the Building and Construction Commission: 'There should be one set of laws for all workers, regardless of the industry they work in.' No qualifications at all. Yet, when we got to the recent sitting of parliament, the government realised, 'Oopsie! We'd better change the hymn sheet, because we're going to want to wind back the Australian Building and Construction Commission at the same time as we build upon specific provisions for textile and clothing industry workers, at the same time as introducing completely new workplace relations laws'—because that is what they really are—for the trucking and road transport industries in the form of the so-called safe rates legislation.

Senator Conroy: 'So-called safe rates'?

Senator FISHER: So-called safe rates, because, just like this bill, there has been no opportunity for the coalition to obtain answers to questions like safe rates: if the establishment of the remuneration tribunal in the road transport industry is about safer roads, then at what precise pay point will all truck drivers across Australia decide to get more sleep rather than work more hours? There is no answer to that question, no evidence forthcoming from the government that the law which establishes the Road Safety Remuneration Tribunal will in fact make our roads safer. It is the same deal here, yet the government wants the vulnerable workers in this industry to believe that the something—anything—bill which we now have before us will do the job.

As for the bill itself, Ms O'Neil was at pains to say to the Senate committee that she considered that the provisions in the bill were not radical. She quite rightly pointed to, for example, the deeming provisions that already deem outworkers to be employees in various state jurisdictions like New South Wales, Queensland, South Australia, Victoria and Tasmania. That is five out of the potential seven. Four out of the six states allow recovery of underpaid entitlements. Three of them—New South Wales, Queensland and South Australia—also have a code. So in Ms O'Neil's view this bill is not radical; it will just achieve national consistency.

That, of course, begs a couple of questions. First, if this bill is not radical and it just ensures some consistency, then I think we are entitled to see the evidence that surely must exist that the provisions that have been operating in various states for some time actually work. If the national legislation, which is this bill, is going to do the job the government says it will do, then where is the evidence that the state and territory based provisions from which it is drawn have done the job? We are not able to see that evidence.

But the flipside of that argument applies. Critics of our position are able to say, 'Why are you opposing something that already exists when it is simply about making it national?' That is a fair question, but I think it is more than adequately answered by the fact that we have not been presented with any evidence that shows that the state provisions upon which this bill is based have actually done the job that the government says this bill will now do.

This bill goes beyond what you could call traditional workplace relations principles. In fact, in some respects it turns them on their heads. I guess that is why the government is proposing with this bill to have provisions very specific to this industry. The trouble is that that turning on its head arguably creates precedent for other industries. It creates precedent for other circumstances in which this government might consider, in the words of former Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Chris Evans:

The government has only ever intervened to protect vulnerable workers at the risk of exploitation. TCF outworkers and owner-drivers are the two groups that meet this test.

He was reported saying this in the Financial Review on 23 November 2011. What other workers in what other industries is this government going to say suddenly meet this test so we can have a series of separate industries subject to separate and special workplace relations laws? We will not necessarily be told about it by this government before an election, because they do not bother to seek a mandate for laws like the ones we are considering right now. So there is every prospect that turning the workplace relations laws on their heads, as this bill does in some respects, will be used by this government as precedent for workers in other industries which this government subsequently decides are vulnerable and deserving of protection.

Some examples of the way in which this bill turns traditional workplace relations on its head is that it deems any outworker in the textile industry to be an employee. As the Senate committee heard in the evidence before it, this has caused great concern, for example, to those who do not consider themselves vulnerable, who do not consider themselves exploited or in need of any sort of protection offered by this government in its workplace relations regime. This legislation will essentially deem someone with a university degree setting up a garment designing business to be an outworker. So it is offering the same sort of so-called protections to those workers as it is to vulnerable and arguably exploited workers who cannot speak English. University qualified designers are given the same treatment as, in many cases, immigrants who cannot speak English. It is a sledgehammer to crack a walnut.

This bill also arguably makes independent contractors and those genuinely so, despite the hot gospelling paraded by many mem­bers opposite about the so-called prolifera­tion of this dreadful sham contracting. There is the circumstance where it is proper in commercial circumstances for there to be independent contractors who are not employ­ees, but this bill will say it is simply no longer possible for there to be an indepen­dent contractor. It is simply no longer pos­sible to be treated as an independent contrac­tor in the textile industry if this bill becomes law, and that is wrong. This bill also singles out outworkers in the textile industry as not being able to enter into individual flexibility arrangements. These things which the Gillard government think are so cool—they were their creatures—for all other workers are barred as an option for workers in the textile, clothing and footwear sector.

This bill has not been properly thought through by the government. The government itself is not convinced that this bill will do the job that it promises it will do. That is why members opposite have not offered any evidence that it will do so. They properly talk about the very distressing situations and experiences we have seen in this industry and then they simply say, 'This bill will fix it.' They do not join the dots—pretty much, as the Greens have discovered to their horror, as the government has not joined the dots with all the cycleways across country, that little dirty side deal to get the support of the Greens for the stimulus package. Oops, the government has not managed to join the dots on all the cycleways either. This bill does not join the dots.

This bill is a sledgehammer to crack a walnut, and probably one of the most concerning aspects of this bill is that it is supposedly designed to protect and intended to protect workers. The design falls down. It is intended to protect workers who are usually immigrants and cannot understand English. Yet the industry is concerned because this bill overreaches and Labor, in its desperation, has not bothered to do its homework. It has had plenty of time with Ms O'Neill and her colleagues' long and sustained—and proper—campaign for a solution in this industry. It has had plenty of time to make sure it got its detail right.

Businesses in this industry fear that, because this bill overreaches, it will lead to job losses. So the very people who this bill is supposedly designed to protect and intended to protect may well lose their jobs. You may say, 'What good is an exploited job?' In some cases, workers who are being exploited will continue to be exploited if this bill goes through, because there are rogues in every gallery. These workers today have the option to not have the jobs, exploited as they are, yet they are unfortunately continuing to work in those circumstances. The coalition is not convinced that this bill will fix the problems the government says it is designed to fix, and we look forward to seeing the proof over time since, unfortunately, this bill is going to go through this chamber.

Senator POLLEY (Tasmania—Deputy Government Whip in the Senate) (11:24): I rise today to speak about the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011. When I came to this place just over six years ago, one of the first issues I confronted as a senator was to visit some sweatshops in South Australia, talking to very vulnerable women—mostly women—who have been exploited for too many years in this country.

We have sat here and listened to Senator Fisher's contribution. We in this chamber remember, and I am sure many others listening to this broadcast remember, that Senator Fisher was a former adviser to Peter Reith. We know what happened on the waterfront. We know the history of those people on the other side of the chamber when it comes to Work Choices. We know what you are all about, and that is bringing back Work Choices mark 2. That is your agenda. Today in this chamber, we are talking to a bill that illustrates again the complete lack of regard for Australian workers by those opposite.

Opposition senators interjecting—

Senator POLLEY: At least you are consistent, Senator Fisher. Of Senator Cash's contribution, I am not sure that she has actually ever met a worker, let alone someone who has worked in a sweatshop in this country.

This bill aims to address the abuse of the most vulnerable workers and disadvantaged Australians. All the coalition are interested in is the big end of town. They are interested in protecting their mates. They have a record of not speaking up for Australian workers. These changes will promote fairness and ensure a consistent approach to workplace entitlements and protections for a class of workers that is widely recognised as being one of the most vulnerable and exploited in this country.

Let us have a quick look at the history. Despite decades of long restructuring and staff reductions, the textile, clothing and footwear industry remains a significant sector within the Australian economy. My hometown of Launceston, where I live, was the centre of the universe of the textile industry in this country. I had family members working in the textile industry. We had mills. What do we have now? We have one small mill left. What do we have in Tasmania? We have very limited opportunities. So, when I come in and speak about an issue like this, I do so because I can relate to those people that have been exploited, and I think that is part of our responsibility when we come into this chamber.

The most recent large-scale review of the TCF industry found that at May 2008 there were approximately 48,500 direct manufacturing jobs. That figure is not indicative of the significant numbers of additional workers engaged as outworkers within the clothing industry. Given the acknowledged difficulty of finding outworkers within the TCF supply chains, and then quantifying the volume of work they produce, it is impossible to state with precision an accurate total number of persons employed or engaged in the TCF industry. However, based on its knowledge of the industry and its compliance and education work, the Textile, Clothing and Footwear Union of Australia estimates that the ratio of factory based workers to outworkers within the clothing industry currently varies between 1:4 and 1:10, depending on a particular supply chain.

Exploitation has been a persistent feature of the TCF industry for many decades. Workers in the TCF industry, both in the formal and home based sectors, are some of the most vulnerable workers in Australia. A significant percentage of TCF workers are from a non-English-speaking background and have poor English language and literacy skills. If people in this chamber had bothered to go to the media conference that the union organised yesterday and had met those women who actually work in that industry, I am sure even you, Senator Fisher, would have had a heart and recognised that these people have been taken advantage of. Many of these people have worked in the industry for a significant amount of time. In the formal, factory based sector the great majority of workers are dependent on the minimum safety net—the modern award and the NES—and have limited economic power to negotiate enhanced conditions through enterprise bargaining. Even within the formal TCF sector, noncompliance with award and other legal obligations is widespread. Many factories operate under substantially substandard health and safety conditions.

The phenomenon of sweatshops within the TCF industry is not new, but they are increasingly adaptive to the needs of the TCF supply chains. These sweatshops may be considered to be part of the formal TCF sector in one sense but they exist in a type of parallel economy with extremely low levels of scrutiny and transparency of operation. Some sweatshops operate entirely on a cash-in-hand basis, others operate with a mix of workers on the books and those who do not officially exist in time and wage records. Even where a sweatshop operates formally, many employees on the books will be engaged on a casual or periodic basis, which will mirror the surge or drop in orders. So there is no consistency in the amount of money that these people earn.

We know that many of these workers are being ripped off by the contractors. That should not be happening in Australia. Workers in the sweatshops rarely have any say in how they are engaged and how they seek to make a living, and we know that the employment is inconsistent.

As I indicated earlier, sweatshop workers are almost uniformly from a non-English-speaking background and are often unaware of, or feel unable to enforce, their legal rights and entitlements. Many are migrants or refugees who have had no experience of independent unions or the role of government in enforcing minimum conditions of employment. Some have been subjected to imprisonment and oppression in their home countries. Fear of government and authorities is commonplace.

Now, let us have a closer look at a series of studies that have provided a history—evidence that the Howard government ignored. Remember, the Howard government was in power for 11½ years and did nothing. Sorry, it was not nothing; they brought in Work Choices. In July to November 1994, the Textile, Clothing and Footwear Union of Australia conducted a national outwork information campaign targeted at out­workers, their employers and ethnic communities to gather information about the largely hidden outwork sector of the Australian workforce. Over the eight weeks of the campaign, bilingual workers employed by the TCFUA received a total of 3,000 calls from outworkers—an average of 375 calls per week. The campaign found, amongst other things, that (a) the numbers of outworkers in the clothing industry was much larger than the union had realised; (b) outworkers' working conditions had deteriorated; (c) when outworkers did get work, a typical working week involved 12 to 18 hours per day, seven days per week at about one-third of the award rate of pay; (d) outworkers had virtually no access to the minimum conditions enjoyed by factory workers; and (e) abuse and harassment from employers was widespread and had become daily occurrences in some outworkers' lives.

One of the findings of a University of Melbourne study of outworkers in 2001 was that outworkers reported earning an average hourly rate of pay of $3.60. So how those opposite can come into this place and vote down this bill is beyond belief. In that study 75 per cent of outworkers said that they had experienced not receiving wages on time whilst 46 per cent had experienced not receiving wages at all for work performed and 89 per cent said that their family could not manage without their wages.

The study found that the average number of hours worked per day was more than 12 hours; 74 per cent reported working in the range of 12 to 19 hours per day; and 62 per cent reported working seven days per week, with a further 26 per cent working six days per week. Only a small minority worked less than this.

Of those in the study, 65 per cent said that they did not like their work. Most were resigned to working because 'I just have to do it'. The main reasons that were given for doing this type of work were that they could not get a job outside the home—70 per cent of them—and that their English was not good enough to get other work—63 per cent. Of those surveyed, 68 per cent reported relying on family members to help complete work orders. The vast majority—93 per cent—reported that they worked routinely during the school holidays, 91 per cent worked on Saturdays and 87 per cent worked on Sundays and public holidays.

Senator Fisher interjecting—

Senator POLLEY: Before you interject, Senator Fisher, I know you support Work Choices and I know that you accept that those sorts of conditions should be what all Australians have. But the people on this side of the chamber—the government—will never, ever relinquish support for Australian workers.

In 2004, the TCFUA Victorian branch completed a compliance report for the Ethical Clothing Trades Council Victoria as to the level of compliance within the clothing industry in relation to outworkers receiving their lawful entitlements. The union undertook inspections in 151 workplaces and interviewed a group of outworkers. The report's key findings concluded, based on the inspections and interviews, that in the vast majority of cases outworkers were not receiving award rates of pay; outworkers were not receiving award entitlements such as annual leave, long service leave, overtime and public holidays; outworkers were being forced into sham contractor and company arrangements as a systemic method of employers avoiding legal obligations to employees; outworkers were not receiving superannuation—

Senator Fisher: Tell us something we don't know.

Senator POLLEY: We know where you stand, Senator Fisher, on superannuation. That is on the public record: you vote against it each and every time.

The survey found that employees were not being identified as employees for the purposes of WorkCover, companies were not keeping transparent and correct work records, and companies who give out work are not registered with the Board of Reference.

A subsequent report by the Brotherhood of St Laurence in 2007 found that out­workers interviewed for the research indica­ted that conditions for outworkers had actually worsened in the previous five years. That was in 2007, for the previous five years. Guess who was in power? John Howard and the coalition. I want to quote from this report:

A shortage of work had left them with very little bargaining power with contractors. One group said that they were paid $2.50 for a detailed shirt which took one hour to sew. Another group said they were paid between $2 and $3 an hour. When asked about hours worked, most indicated that they often went weeks without a job but when the work was available they worked long hours.

These outworkers also said that compared with ten years ago, companies increasingly demanded quicker turnaround times. The scarcity of work and precarious nature of employment leave outworkers with little choice but to accept the job.

Look at the pattern: 1994, 2001, 2004 and 2007. Look at the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011. The bill will amend the Fair Work Act 2009 to enhance existing protections for vulnerable workers in the textile, clothing and footwear industry. Despite the existing provisions in the Fair Work Act, the relevant modern award and state legislation, outworkers continue to experience poor working conditions. This bill is intended to ensure equitable and consistent protection for these workers—and I make no apology for that, like the rest of my colleagues, who unfortunately will not get an opportunity to speak in this debate today.

The bill will also address a limitation that currently exists in relation to right of entry into premises in the TCF industry operating under 'sweatshop' conditions. The bill will extend the operation of most provisions of the FW Act to contract outworkers in the TCF industry; provide a mechanism to ensure that TCF outworkers recover unpaid amounts up the supply chain; and extend specific right of entry rules that apply to suspected breaches affecting outworkers—which allow entry without 24 hours notice—to the industry more broadly, with an exception for the principal place of business of a person with appropriate accreditation to which the standard right of entry rules would apply.

I would like to turn to another element of this industry, one which should not be left without having a comment made on it. It is the fashion industry, not only here in Australia but worldwide, because they also have a responsibility to ensure that their workers, the ones that make the garments that we all wear, are not exploited. Not only do they have a responsibility to those workers; as I have talked about in this place on many occasions, they also have a responsibility to ensure our young men and women have a healthy outlook on their body image. They take profits out of this industry, but they particularly do so at the expense of these workers that have been exploited for far too long and whose rights should be taken into account on this issue.

I would also like to place on record my appreciation and thanks for the people that have opened my eyes to how these vulnerable people have been exploited in this country for far too long, going back to Steve Brennan, a former official of the South Australian branch of the Textile, Clothing and Footwear Union of Australia, to Barry Tubner, to Tony Woolgar. I note those three people in particular because when I came to this place they educated me on this important issue. You should be aware of at least some of these people, Senator Fisher.

Senator Fisher: I know Mr Brennan.

Senator POLLEY: I mention Michele O'Neil and the other officials and, more particularly, their organisers, being those people who have gone out into the sweatshops and out into people's homes to bring this to our attention. They should be commended for their effort and I apologise that it has taken us so long to address this very, very important issue.

As I said earlier, these changes will promote fairness and ensure a consistent approach to workplaces to ensure that entitlements are protected for the class of workers that we on this side of the chamber all know have been exploited. I return to the people that I met yesterday. There has been only a handful of such people that I have met over the years that I have been in this place. There is not one of those people in my mind at least—and I know those people opposite have a different view—that should not enjoy the same rights and protections held by every other worker in this country. I know those opposite will get up after I finish and babble on about how they are protecting their mates. I think this of those people opposite: we know whom they protect; it is the big end of town. When it comes to workers' rights, we know what their agenda is. What they ought to be doing is coming out and saying now what their Work Choices mark 2 version, which they will take to the next election, is going to be about. We know what their view was when it came to the mining resource tax. We know what it was when we were talking last night about the transport industry and protecting that industry. We know their history when it comes to protecting workers. Well, we on this side of the chamber make no apology and while we are in government we will continue—as I will certainly do while I am in this chamber and beyond—to ensure that Australian workers are not exploited by the likes of those opposite. So I take great delight in standing up in here today on this and once again I commend the union, their membership and, in particular, those workers who have been exploited for having the guts to stand up and make sure that they are heard. I commend the bill.

Senator EDWARDS (South Australia) (11:42): I rise to talk about the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011. I cannot let the moment pass without reminding Senator Polley that we actually took our policies to all of our elections, unlike this current government, which seems to backflip.

Honourable senators interjecting—

The ACTING DEPUTY PRESIDENT ( Senator Cameron ): Order! Senator Edwards, address your remarks through the chair.

Senator EDWARDS: This bill extends the operation of most provisions of the Fair Work Act 2009 to all of those contract outworkers in the textile, clothing and footwear industry—which I will refer to as the TCF industry—by deeming contract outworkers to be employees. It will provide a mechanism to enable TCF outworkers to recover unpaid amounts including those from contractors along the supply chain. It will facilitate a TCF outwork code. Not surprisingly, this bill will give additional powers to unions by extending specific rights of entry rules. Once again the Labor-Greens government have forced their way into another section of the community's homes. This creeping Orwellian government culture is consuming Australians.

Like other manufacturing industries the TCF industry has undergone transformation and structural adjustment. This is a consequence of tariff and industry assistance reforms beginning in the 1970s. With the Australian dollar currently so high in the TCF industry, whose export is now worth $1.7 billion a year, they need flexibility now more than ever. These businesses include new start-ups. As has often been the case in this industry, there are a lot of cottage start-ups coming through all the time—lots of imagination, lots of endeavour and lots of entrepreneurship. This kind of legislation that we see here in this bill will discourage the very entrepreneurship that I talk about and the risk-taking that is necessary for the industry to survive in this country.

Like many of Labor's policy forays, there has been limited consultation on this bill with those who are actually directly involved. This bill is another piece of legislation Labor are rushing through the parliament in order to satisfy their union cronies in their haste to gain more power in the Australian workplace in case this government collapses. There is a growing dominance by Labor of rushing legislation through this parliament, as we will see in just 14 minutes when they again guillotine another piece of legislation which has not been properly scrutinised.

Senator Jacinta Collins: Oh, it's been 15 years!

Senator EDWARDS: The National Retailers Association is also particularly concerned, Senator Collins, with this bill. Echoing their concern, the Australian Chamber of Commerce and Industry, representing some 350,000 businesses nationwide, noted how this bill will make changes and the results of those changes:

The Bill makes complex and technical amendments to the Fair Work Act there 2009, some of which appears to result in changes which are not practical, will add costs throughout the supply chain and create uncertainty in existing commercial arrangements. We also find it extraordinary that the Government is proposing such changes without consulting key industry stakeholders and seemingly without regard for their impact on an industry already struggling to maintain a presence in Australia.

Senator Bilyk: And they won't be able to be ripped off anymore!

Senator EDWARDS: Similarly, The Ark Clothing Co. claims, and I quote, Senator Bilyk:—

We have serious concerns that the amendments will inadvertently harm the very workers they seek to protect by restricting their ability to operate as independent and autonomous businesses. We believe that these amendments are responding to an outdated view of the industry, and that most of the workers this Bill seeks to protect do not see themselves as outworkers or employees, but as independent contractors working from home businesses.

Likewise, the Australian Industry Group states that the bill would:

… create a complicated web of laws for those in the textile, clothing and footwear (TCF) sector but furthermore the Bill is unbalanced and unfair on business.

I am drawn to repeat the phrase which Senator Fisher used earlier and say: what is it with Labor, that you take to industry with the vigour of a 'sledgehammer to a walnut'?

The Productivity Commission, in its final report on the review of the TCF assistance in June 2003, estimated that in 2003 not more than 25,000 people were working as outworkers in the TCF industry. For the same period, ABS data cited in the final report showed that around 58,000 people were directly employed in the industry. Using this data, the Productivity Commission came to the conclusion that outworker employment was about 40 per cent of total factory-based employment in the sector and exceeded factory-based clothing employment by about 25 per cent.

From this we can see that outworkers make up a significant proportion of those undertaking manufacturing work in the TCF sector. Ai Group goes on to state:

In circumstances where any business that operates in a supply chain which contains outworkers will find themselves legally liable for unpaid monies owed to those outworkers, it is conceivable that businesses will find this risk too great and either contractually prohibit the use of outworkers or cease manufacturing within Australia. Either scenario would be harmful to the Australian economy and the TCF sector.

This will export this country's jobs in conjunction with those jobs set to be lost due to the reckless and mindless carbon and mining taxes. The Labor Party has never seen an Australian success story that it does not want to tax, regulate or levy.

Under Labor's bill, union bully bosses will be able to come once again and extend their antiproductivity agenda into the Australian industry scene. The union movement is flexing its muscle here in parliament and forcing their backward vision upon the Australian economy. This bill comes at the same time that Labor has fundamentally undermined the construction industry by approving yesterday the abolition of the Australian Building and Construction Commission. This legislation appeases the left of the Labor Party in their ideological crusade that only damages Australia's productivity.

One of our most serious worries with Labor's bill is that the fair work agency will struggle to control the bullying union bosses when addressing complex issues in industries such as this. The Cole royal commission stands testament to what can happen when they take their eye off these union bullies. We must maintain our vigilance in the textile, clothing and footwear industry. This bill has the potential to enable the resurrection of misplaced union power and it will stifle Australian innovation and productivity gains in this highly competitive sector. True labour reform? Yes it is, with no view to the longer term sustainability of the clothing, textile and footwear industry.

When the coalition was in government we recognised the need for additional protections in the TCF industry and provided additional protections and safeguards. At the same time, the coalition also recognised the need for protections in the building and construction sector, leading to the establishment of the Australian Building and Construction Commission. Ah—but it is now all back to the future with this dysfunctional Gillard-Brown Labor government!

At present, one of the core arguments of the government in abolishing the ABCC is that it discriminates against certain workers and that the industrial relations regime should take a one-size-fits-all approach. This bill clearly defies Labor's view in relation to the ABCC. Convincing evidence of endemic and inappropriate conduct within workplaces in this industry has been presented in submissions to this inquiry. The coalition has had a strong track record of maintaining protections for outworkers in the textile, clothing and footwear industry in the various forms of workplace relations legislation between 1996 and 2007. With this reality central in our minds the coalition suspects that the government's central motivation for this amendment is to appease the trade union movement in the lead-up to the next federal election. The review of the Fair Work Act currently underway provides the best forum in which the provisions of this bill should be considered.

The coalition has received representations from many young and upcoming designers concerned about this bill. We support individual enterprise and innovation by those willing to take a risk to realise their potential. That is why we are concerned that genuine independent contractors or others could be unjustifiably covered and disadvantaged by this bill. The Council of Textile and Fashion Industries of Australia has outlined such examples, and we worry that independent innovators in this industry will be held back.

The Fair Work Act allows for individual flexibility arrangements—IFAs, as they are known to us—to be made, which they say meet the genuine needs of the employee and the employer subject to complying with certain requirements. These include that the employee must be better off overall under the IFA. This bill appears to deny access to IFAs for outworkers whether they be in the TCF industry or not—the term 'flexibility' must not allow the effect of those outworker terms to be varied. This is also despite the better-off-overall test which ensures that IFAs cannot undercut outworker terms.

There are serious concerns from textile suppliers that business and jobs in garment construction may continue to disappear off­shore as the textiles and accessories are outsourced in the locations where the work is undertaken. This bill claims to be for the benefit of the TCF industry and all that work in it but it may, in fact, end up shipping their jobs offshore. This bill represents another piece of policy failure from the Labor gov­ernment. It is another burden on enterprise, just as the carbon tax, mining tax and the Fair Work Act have made it harder to do business in Australia and to provide jobs for the broader Australian public. Labor is hell-bent on driving Australia's competitiveness into the ground. The party that is meant to represent working Australians is imple­menting policy that will destroy the jobs it is meant to be championing. It is for these reasons I cannot support the bill.

Senator BILYK (Tasmania) (11:56): In the few minutes I have left to speak today on the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 I note that all we have heard this week with regard to any legislation we have put up is the antiworker and anti-union comments from those on the other side. We have heard about the union thugs and the union bullies but I have not ever heard from that side of the employers who hold the power as being employer thugs or employer bullies, and as most of us know there are certainly a lot of them out there. Their comments on the union movement throughout the week have been very disrespectful and a gross injustice to all those many fine men and women who are out there every day—union delegates, union officials and the ACTU—working to improve the rights of everyday Australians in the workforce.

I offer my congratulations and commen­dations to the TCFUA and the ACTU for succeeding in helping us get this bill to this place today. It has been a long struggle. They have been working on it for over 15 years; there have been a number of Senate inquiries and the Brotherhood of St Laurence has done reports. All those reports show that out­workers in the textile, clothing and footwear industry are vulnerable and do not get paid the right amount of wages. Some of them work for as low as $2 or $3 an hour and they work really long hours just to try to make ends meet. They are often non-English-speaking migrants and so are a vulnerable group in our community that is taken advantage of.

It does not matter how many people on the other side stand up, as a number of senators opposite have done, and say that this is not going to improve anything—this will im­prove the working rights for people. To be quite honest, if it improves the working rights for one person then I think that lot should be supporting it! But oh, no! They come in and say: 'No, no, no, no. We're not going to support this because the unions are behind it. We hate the unions. The only people we like are those rich mining people.' They have no logical arguments. I listened to those arguments and I did not think the previous speaker was talking about the same bill for half of his contribution.

Senator Furner: Very confused.

Senator BILYK: And I was confused, Senator Furner, not because I do not understand the bill but because I could not relate what was being said to the bill that we are discussing. But those union people have worked hard not just over the past year but for decades—15 years or so. The first Senate inquiry went back to 1996, I think, and there may well have been some earlier. Senator Collins participated in that. Those opposite were in government for 11½ years and they did nothing. They just want to move back to Work Choices. We know that is what it is all about. Your problem is that you know that the people of Australia know that is what you want to do, so you come in here and run fatuous arguments and disingenuous com­ments about unions, union officials and those everyday working people who are members of those unions. You all ought to be ashamed of yourselves. You need to get your policies together. You need to get them funded, and tell the people— (Time expired)

The DEPUTY PRESIDENT: Order! The time allotted for consideration of this bill has expired. The question is that the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 be now read a second time.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (12:07): I table a supplementary explanatory memorandum relating to the government amendments to be moved in this bill. The memorandum was circulated in the chamber on 20 March 2012.

The PRESIDENT: The question now is that the amendments on sheets 7214 and 7218, circulated by the opposition, be agreed to:

(1) Clause 2, page 2 (table item 2), omit the table item, substitute:

(1)   Schedule 1, item 61, page 25 (after line 12), at the end of Division 5 of Part 6 4A, add:

789EB TCF outworkers not to be worse off

   (1)   This Part applies in relation to a TCF outworker only to the extent to which, in a particular respect, the outworker would not be worse off.

   (2)   A reference in subsection (1) to this Part includes a reference to any regulations made for the purposes of this Part.

   (3)   The regulations may prescribe:

   (a)   what a particular respect is for the purposes of subsection (1); or

   (b)   the circumstances in which a TCF outworker would or would not be worse off for the purposes of subsection (1).

Senator Abetz: Mr President, I rise on a brief point of order. It is usual that you put all the coalition amendments together, so I do not quibble with that, but one of those amendments is to ensure that nobody would be worse off as a result of the passage of this legislation. It may be possible, and I do not know if this is the case, that certain senators might wish to vote for that amendment but not the other one. That is all that I put to you, Mr President: they should be dealt with separately on that basis.

The PRESIDENT: It is available to senators to make that request, if senators feel that way. Otherwise, the question now is that the amendments on sheets 7214 and 7218, circulated by the opposition, be agreed to.

Question negatived.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (12:09): by leave—I very briefly indicate the coalition's disappointment, but we will not seek to divide, given the next gag motion which will limit debate on the next bill.

The PRESIDENT: The question now is that the amendments on sheet CA223, circulated by the government, be agreed to:

(1)   Schedule 1, page 3 (after line 25), after item 4, insert:

4A Section 12

Insert:

apparent indirectly responsible entity: see subsection 789CC(2).

(2)   Schedule 1, item 61, page 14 (line 15), omit "engaged", substitute "engages".

(3)   Schedule 1, item 61, page 14 (lines 25 and 26), omit "for the purpose of a contract for the provision of services (rather than as an employee)", substitute "other than as an employee".

(4)   Schedule 1, item 61, page 16 (line 19), omit "instrument; and", substitute "instrument.".

(5)   Schedule 1, item 61, page 16 (lines 20 and 21), omit paragraph 789CA(1)(d).

(6)   Schedule 1, item 61, page 17 (line 27), omit "Subject to subsection (2), each", substitute "Each".

(7)   Schedule 1, item 61, page 17 (lines 30 to 33), omit subsection 789CB(2).

(8)   Schedule 1, item 61, page 18 (line 4), omit "subsection (5)", substitute "subsection 789CE(1A)".

(9)   Schedule 1, item 61, page 18 (lines 6 to 14), omit subsection 789CB(5).

(10)   Schedule 1, item 61, page 18 (line 15) to page 20 (line 3), omit sections 789CC and 789CD, substitute:

789CC Demand for payment from an apparent indirectly responsible entity

(1)   The TCF outworker, or a person acting on behalf of the outworker, may give an apparent indirectly responsible entity a written demand for payment of the amount that the outworker reasonably believes the entity is liable for under section 789CB.

(2)   An entity is an apparent indirectly responsible entity in relation to the TCF work if the TCF outworker reasonably believes that the entity is an indirectly responsible entity in relation to the TCF work.

(3)   The demand must:

   (a)   specify the amount, and identify the responsible person; and

   (b)   include particulars of the TCF work to which the amount relates, and why the amount is payable by the entity to which the demand is given; and

   (c)   state that if the specified amount is not paid by a specified time, proceedings may be commenced against the entity under section 789CD.

(4)   The time specified for the purpose of paragraph (3)(c) must not be less than 14 days after the demand is given to the indirectly responsible entity.

789CD Court order for entity to pay amount demanded

(1)   If:

   (a)   in accordance with section 789CC, an apparent indirectly responsible entity has been given a demand for payment of a specified amount; and

   (b)   the amount has not been paid in full by the time specified in the demand;

a person or organisation specified in subsection (2) (the applicant) may commence proceedings for an order requiring the entity to pay the specified amount.

(2)   The proceedings may be commenced:

   (a)   by the TCF outworker; or

   (b)   on the TCF outworker's behalf, by:

      (i)   an organisation that is entitled to represent the industrial interests of the outworker; or

      (ii)   an inspector.

(3)   The proceedings may be commenced in:

   (a)   the Federal Court; or

   (b)   the Federal Magistrates Court; or

   (c)   an eligible State or Territory court.

(4)   Subject only to subsections (5) and (6), the court may make an order requiring the entity to pay, to the outworker or to another person on the outworker's behalf, the specified amount (or so much of that amount as the applicant alleges is still owing).

(5)   The court must not make an order under subsection (4) if the entity satisfies the court that the entity is not liable under section 789CB to pay any of the specified amount.

(6)   If the entity satisfies the court that the amount of the entity's liability under section 789CB is less than the specified amount (or is less than so much of that amount as the applicant alleges is still owing), the court must not make an order under subsection (4) requiring the entity to pay more than that lesser amount.

(7)   In making the order, the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary.

(8)   Without limiting subsection (7), in determining the amount of interest, the court must take into account the period between the day when the unpaid amount was due for payment by the responsible person and the day when the order is made.

(9)   Proceedings cannot be commenced under this section more than 6 years after the time when the unpaid amount became due for payment by the responsible person.

(11)   Schedule 1, item 61, page 20 (lines 4 and 5), omit the heading to section 789CE, substitute:

789CE Effect of payment by entity (including entity's right to recover from responsible person)

(12)   Schedule 1, item 61, page 20 (lines 6 to 9), omit subsection 789CE(1), substitute:

(1)   This section applies if an entity pays an amount in discharge of a liability of the entity under section 789CB, or pursuant to an order under section 789CD.

(1A)   The payment discharges the liability of the responsible person for the unpaid amount, to the extent of the payment. This does not affect any right that the entity has to recover an equivalent amount from the responsible person (under this section or otherwise) or from another person, or to be otherwise indemnified in relation to the making of the payment.

Question agreed to.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (12:10): by leave—I very briefly make a similar statement: to save the time of the Senate and given that the next bill will now only have four minutes for debate, we will not divide.

The PRESIDENT (12:10): The question now is that the remaining stages of this bill be agreed to and that this bill, as amended, be now passed.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (12:10): by leave—Once again, Mr President, I indicate the coalition's opposition to this bill for the reasons outlined: given the time constraints foisted upon the Senate by the Green-ALP majority, we have no option but not to divide to at least allow three minutes on the next bill.

Question agreed to.

Bill read a third time.

Senator BIRMINGHAM (South Australia) (12:11): What an utter mockery of parliamentary democracy we have here. I rise to speak on the Broadcasting Services Amendment (Regional Commercial Radio) Bill 2011 [2012]. I am the first speaker on this piece of legislation and I have fewer than 3½ minutes to make my contribution, which of course will leave absolutely no time for any other senator in this place to make any contribution whatsoever. I know full well that on this side many senators are interested and concerned about regional radio services. I know that Senator Fisher wanted to speak on this bill; I know that Senator Macdonald wanted to speak on this bill; I know that Senator Eggleston wanted to speak on this bill; I know that Senator McKenzie wanted to speak on this bill. We have a number of senators who care about regional radio who wanted to have their say.

Senator Conroy interjecting—

Senator BIRMINGHAM: Senator Conroy interjects that we are supporting this bill. We may well be supporting this bill, but that does not mean that it is unworthy of proper consideration in this chamber. That does not mean that it is unworthy of proper debate. It is an utter mockery to come into this place and be told: 'You've got three minutes to debate an entire piece of legislation.' It is a piece of legislation that has been on the Notice Paper since 2011 and the government has several amendments to it. The government itself is deleting several pages of its own bill. Again, we support that and we welcome the fact that the government has made that gesture and has done that in response to concerns that we raised, but it would have been nice to have had the opportunity in this place to examine the implications and the reasons for the changes to this legislation.

Senator Conroy: That's sad and tragic.

Senator BIRMINGHAM: What is tragic, Senator Conroy, is the way in which you and the Labor Party manage proceedings in this place. What is tragic, Senator Conroy, is that you cannot manage to run your own legislative agenda in a sensible way. What is tragic is that you cancelled sitting days last year, and then we come in here this year and we are told that we have three minutes to debate legislation. That is what is tragic, Senator Conroy. What is tragic is that you do not accept that people want to have sensible debates in this place and that people on this side want to talk about issues about regional radio. On this side we have many senators who know that regional radio services are a lifeblood to regional communities. Regional radio services are the way people get local news, the way they hear about local sports results, the way local communities get to stay together and the way local communities get all of the information they deserve to hear. We think it is important that regional radio functions in a viable and sensible way. We have approached this legislation in a constructive sense. We have engaged in negotiations with the government. We have done this in a way to make sure that we get a good outcome for regional radio—one that preserves local content and regional radio stations but helps with their commercial viability. I welcome that. I only wish that we had had the opportunity to examine just what this would really achieve and just what the impacts would be and to have a proper conversation about this legislation rather than the debacle that is taking place.

The PRESIDENT: Order! The time allotted for the consideration of this bill has expired. The question is that this bill be now read a second time.

Question agreed to.

Bill read a second time.

The PRESIDENT: The question now is that amendments (1) to (3) on revised sheet BL249, circulated by the government, be agreed to:

(1)   Schedule 1, page 3 (line 4), omit the heading.

(2)   Schedule 1, item 1, page 3 (lines 5 to 17), omit the item.

(3)   Schedule 1, items 10 to 12, page 6 (line 30) to page 8 (line 9), omit the item.

Question agreed to.

The PRESIDENT (12:15): The question now is that the remaining stages of this bill be agreed to and the bill, as amended, be now passed.

Question agreed to.

Bill read a third time.

Senator CORMANN (Western Australia) (12:16): The Insurance Contracts Amendment Bill 2012 introduces two changes, in particular, to the legislation: it introduces a standard definition of 'flood' in insurance contracts and it introduces a key fact sheet that is required to be provided for home building and home contents insurance policies. While the coalition will support the bill, we do have a number of concerns. The concerns are that, when it comes to flood insurance or to appropriate cover to deal with circumstances of floods, you would remember that, in the wake of the tragic events in Queensland early last year, Minister Shorten raised significant expectations. He was going to fix everything. He was going to make sure that every single person was not going to be left out of pocket as a result of the tragic flood events in Queensland. People across Queensland were left with the impression that he was going to solve it all. But all we have had from the minister so far, after all of the expectations he raised when he commissioned the Natural Disaster Insurance Review, is legislation which still does not even include a standard definition of 'flood' even though there has now been a consensus for many years that it is very important for us to have a standard definition of 'flood'. The government are going to say that they are going to put the standard definition of 'flood' into regulations. But, as I understand it, even to this day the government still have not been able to settle on a final definition of what a flood actually constitutes.

Following the major incidents of flooding in 2010-11 in parts of Queensland, New South Wales and Victoria, the issue of inadequate flood insurance cover and confusion as to what was covered in insurance policies became a very important and prominent issue. There were seriously damaged households with no or inadequate insurance coverage. There were wide variations in the definition of 'flood' between insurance policies and a lack of understanding of what was covered by a policy, which contributed to these gaps in insurance coverage. The Natural Disaster Insurance Review was commissioned in response to this problem on 4 March 2011, and the review recommendations were received by the government back on 30 September 2011 but then were not released until the middle of November. The report contained 47 recommendations, providing independent review of issues relating to insurance in light of the natural disasters. Despite having six weeks to consider those recommendations, true to form Minister Shorten deferred decisions on 39 of the report's 47 recommendations. Again, true to form from this minister for reviews, indecision, further consultation and more discussion papers, the biggest decision he made was to commit to further reviews.

This bill makes two changes to insurance contracts law following on from the review, as I have said: it provides for a standard definition of 'flood' in insurance contracts and requires that consumers are provided with a key fact sheet outlining key information about their home building and home contents insurance policies. However, this is enabling legislation only. Both the standard definition of 'flood' and the specific content of the key fact sheet will be made in regulations through changes to the Insurance Contracts Regulations 1985. Industry support the changes that are being proposed, but they do have some concerns about the final version of the regulations. However, in general there has been a consensus for some time now that this is an appropriate way forward, particularly in the wake of the confusion and uncertainty that surrounded the issue of insurance coverage in the wake of the 2010-11 floods.

We will be watching the final regulations closely to ensure that they provide adequate certainty to all parties to insurance contracts, because the government does not have a very good track record when it comes to this. What we have to remember is that the standard definition of 'flood' was on the table as far back as 2006-07. The government had a specific proposal in front of them in 2008. At the time this whole proposition of a standard definition of 'flood' was covered by the ACCC, and the government never had the fortitude, strength of character, persistence and determination to deal with it then. If they had dealt with it then, it would all have been in place by the time of the January 2011 floods in Queensland. But this government—because of indecision, because of delay, because of characteristic incompetence, because of their general dysfunction and because they were not able to make a decision and get past the first barrier and the first bit of resistance—sat on their hands.

Then we had Minister Shorten, after the events in Queensland in early 2011, trying to big-note himself, making himself look as if he could solve everything and raising expectations significantly—and the only response we are getting is to tell us that we need to do something that it has been agreed for five or six years now needs to be done. But still, to this day, it is not being done. We just have here an empty vessel that is before us saying, 'One day in the future we will agree to a common definition of 'flood' and might be able to reach some sort of consensus around how the regulations should be amended, but we can't tell you when that is going to be.' A standard definition of 'flood' is a very good idea. A standard definition of 'flood' will mean that every time the word 'flood' appears in an insurance contract it will be taken to mean the definition as outlined in the regulation—if only we knew what it was. The legislation also restricts contracts including compound phrases containing the word 'flood', such as 'flash flood' or 'accidental flooding'. The legislation does not require that all insurance policies insure against flooding.

If I can just pause here on this point to say that at some point the impression was created by the government that, somehow, an answer to this problem faced by people that were either underinsured or not insured at all in Queensland would be to impose compulsory insurance across the board. That would be a very bad policy approach for the government to take. We have seen bad policy approaches by this government before so, who knows, they might well have been sincere when they created the impression that they wanted to impose compulsory insurance across the board.

What we need to remember here is that, as tragic as the events around the flood are when they occurred, 90 per cent of Australians live in areas not affected by flood, 10 per cent of Australians live in areas affected by flood and some of them in areas of extreme risk. But if you impose compulsory flood insurance across the board, irrespective of whether or not people face that risk, then that is no longer insurance. Insurance is a transfer of risk. Insurance is paying a premium so that somebody else takes on the risk for you, and you can join a pool and spread the risk across that pool. If you force somebody to pay a premium, if you force somebody to pay to transfer a risk that they do not face in order to cross-subsidise across the board, that then becomes taxation rather than insurance.

It was never going to happen. As much as Minister Shorten was trying to make it look as if he was going to do something, as much as Minister Shorten was trying to make people believe that he had all the answers, when it was all said and done, all he came up with were these two proposals in this legislation which have been on the table for a very, very long time. They are two proposals which are completely non-contentious. Even with the non-contentious proposals, he still has not been able to bring them to a final conclusion.

The coalition has consistently supported efforts to develop a single standard definition for 'flood' across the entire country and across every insurance company. After the floods in New South Wales in mid-2007 and in Queensland in 2008 the common definition of 'flood' was put forward as an important change by the industry at the time. The federal Labor government did nothing to progress a common definition of 'flood' after the ACCC scuttled the previous attempts to introduce such a definition back in 2008. It took the disastrous floods of 2011 for Labor to finally consider this matter again.

The coalition supports recommendation 36 of the Natural Disaster Insurance Review that the government introduce a standard definition of 'flood' so as to avoid any consumer confusion surrounding flood coverage within insurance policies. The final report recommends the definition of 'flood' as proposed within the Reforming flood insurance: clearing the waters consultation paper which states:

Flood means the covering of normally dry land by water that has escaped or been released from the normal confines of:

(a) Any lake, or any river, creek or other natural water course, whether or not altered or modified or

(b) Any reservoir, canal or dam.

It needs to be noted here that, as far as I am aware, the government has still not settled on that definition or on any other definition. As far as I am aware, the government is still dithering, the government is still being indecisive, the government still is not able to cut through and make a decision. Probably it will take another flood before we finally get some action. Probably it will take another disaster before another minister—probably one of Minister Shorten's successors—will finally be able to bring this whole issue to a conclusion. It is completely unacceptable that, for more than 12 months after the tragic events in Queensland in early 2011 and for more than five years after the insurance industry first put the proposal of a common, standard definition of 'flood' on the table, we still have not got a decision from the government on what definition they want to proceed with.

So to come to this chamber with an empty vessel, with a piece of legislation that has nothing in it other than a promise that 'at some point in the future we will do something', is just not good enough. We have this empty vessel here. Enabling legislation is a technical term where the government tells us: 'We want to have, one day, a common definition of 'flood'. We want to have, one day, a key facts sheet, but we will give you all the detail that we haven't agreed to yet in regulations.'

Senator Jacinta Collins interjecting—

Senator CORMANN: I can see that the senator representing the government in this chamber is getting fidgety. She is getting fidgety because she is, clearly, not entirely in agreement with the things that I am saying. I would be very pleased to engage in a thorough and comprehensive debate about the many flaws in this legislation and in a comprehensive debate about the many flaws in the government's approach when it comes to the issue of flood insurance. But, of course, the Labor-Greens government, again, on as important and critical an issue as this—what have they done? They have moved to gag debate, to guillotine debate, on this.

There is a state election in Queensland on the weekend, and the people of Queensland need to know that this Labor-Greens administration does not want to have a proper debate about the issue of flood insurance in this chamber today. We were given 15 minutes for the whole debate on the issue of flood insurance. This is all that this Labor-Greens administration thinks the discussion about flood insurance deserves. After all of the expectation that Minister Shorten raised with people in Queensland about what he would do and what he could do to address the issue of flood insurance, after he went to Queensland and raised a lot of expectations with people in Queensland, all he has delivered is an empty vessel and a promise that at some point in the future he will do a little bit. Out of all the recommendations that came out of the Natural Disaster Insurance Review his biggest action so far is to commission another review into the review. This is a minister for reviews and indecision. This is a minister that, after he receives a review, commissions a review into the review, followed by a further inquiry into the review into the review. Perhaps after that we could have a public discussion paper. That is the track record of this minister. The approach by the Labor-Greens administration to cut short debate on this very important issue on how we can improve flood insurance is just completely disgraceful.

The DEPUTY PRESIDENT: Order! The time allotted for the consideration of this bill has now expired. The question now is that this bill be read a second time.

Question agreed to.

Bill read a second time.

The PRESIDENT (12:31): The question now is that the remaining stages of the bill be agreed to and the bill be now passed.

Question agreed to.

Bill read a third time.

Senator CORMANN (Western Australia) (12:31): The Excise Amendment (Reducing Business Compliance Burden) Bill 2011 and the Customs Amendment (Reducing Business Compliance Burden) Bill 2011 establish a seven-day cycle for returns and the payment of customs duty. They allow for eligible small business entities to apply for permission to defer their customs duty settlement to a monthly reporting cycle from a weekly cycle. These bills also make changes which seek to reduce the excise compliance burden for eligible small businesses. The coalition supports these bills.

Excise is a tax on certain goods produced in Australia, including alcohol, other than wine; tobacco; fuel; crude oil; condensate; and lubricants. Where such goods are imported into Australia they are subject to excise equivalent customs duty. Under excise and customs law, taxpayers are required to lodge an entry and pay the applicable excise or excise-equivalent customs duty prior to the goods entering the domestic market. However, section 61C of the Excise Act and section 69 of the Customs Act establish a weekly accounting period, allowing the lodgement to occur after the good has entered the domestic market.

In practice, this has been on a weekly reporting cycle beginning Monday and ending Sunday. The amendments allow for the taxpayer to apply for a new weekly period to begin on their preferred day. The bills allow for a seven-day cycle that suits the business and should reduce administration costs of the duty. The amendments also allow for small businesses to apply for permission to defer their excise settlement to a monthly reporting cycle. The bills also give these small businesses a further 21 days from the end of the month to remit their tax liability. This will reduce lodgement paperwork from 52 to 12 returns per year, which is a good thing.

The amendments also allow businesses selling gaseous fuel on a seven-day reporting cycle to give the commissioner a return on or before the sixth business day following the end of each seven-day period. This legislation confirms the existing monthly settlement arrangement for stabilised crude oil and condensate. These changes represent a sensible, if minor, reform to excise and customs duty and are supported by the coalition.

While the coalition supports these particular bills, I take the opportunity to note that this government has been an absolute failure when it comes to reducing the burden from overregulation. You might remember, Mr Deputy President, that both the then Leader of the Opposition, Kevin Rudd, and one of the then senior shadow ministers, Dr Emerson, in the lead-up to the 2007 election made much of the promise of 'one in for one out'. They made this promise that somehow for every new regulation there had to be one regulation taken off the books. Of course, when it comes to lowering the burden of regulation, as the government says it tries to do in these bills—which is a good thing—there is much, much more to do.

This government has introduced more than 12,500 new regulations—and how many of them have gone? Fewer than 60. So much for the promise before the 2007 election that the government would get rid of one regulation in exchange for every new regulation it puts on the books. This government has put more than 12,500 new regulations on the books. Just imagine the amount of additional red tape faced by business as a result of the actions of this government. Just imagine the impact on productivity. Just imagine the impact on the competitiveness of business in Australia compared to the competitiveness of business in other parts of the world. This is a government that, across the board, is choking business in red tape.

There needs to be way more action to do the sorts of things that the government is trying to do in a minor way in the bills that the Senate is debating at the moment—to ensure that we increase productivity more rapidly; that we become the most competitive internationally that we can be; that we can maximise our trade; that we can grow our economy. If we do all of that—if we grow our economy based on increased productivity and being as competitive internationally as we possibly can be—we can not only spread more economic wealth and prosperity across the nation but also increase revenue for the government. And we would increase revenue for the government without the need to impose all these new taxes that this government has been imposing on the Australian people.

This is a government that comes in with 20 new or increased taxes. This is a government that comes in with 12,500-plus new regulations. This is a government that chokes businesses in red tape, that chokes them in more tax. What we need is a government that is focused on taking Australia forward, on making sure that we are the most competitive and the most productive that we can be. Obviously this is a very competitive world, and a lot of the changes that this government has been pursuing seriously undermine the international competitiveness of Australian business—whether it is the tax and regulatory burden that comes from the carbon tax; whether it is the tax burden that comes from the 20 new or increased taxes the government has put forward, or whether it is the 12,500-plus new regulations that this government has imposed on Australian business. The focus in the past and in the future under a coalition government has always been and will be on economic reform that increases the international competitiveness of the Australian economy. This government has been a very bad government in the sense that it has actually pursued changes that reduce our international competitiveness and make Australia less productive than we could be. This is a government with a combination of new or increased taxes and massive increases in regulatory burdens that have actually undermined our efforts to make us more productive, to make us more competitive and to grow our economy more strongly.

While we support the small effort that the government is making through these two bills that the Senate is currently debating, we think that there is much, much more that the government needs to do. Of course, on the coalition side we have a deregulation task force which is chaired by Senator Arthur Sinodinos, who is doing a fine job in that role and in many other roles he has taken on on behalf of the coalition, injecting his undoubted and very significant talent and experience across senior levels of government and across economic and financial affairs. He will be ably assisted in the task of trying to cut red tape and providing $1 billion worth of savings for business across Australia by Senator David Bushby and by Kelly O'Dwyer, the member for Higgins. That committee is consulting with business across Australia right now on how we can cut red tape, how we can make sure that we increase productivity, and how we can make sure that we make our economy more competitive internationally, because that is the way we grow the economy and ultimately grow government revenue without the need for all of these new ad hoc Labor Party taxes—like the mining tax, the carbon tax, the flood tax, the alcopops tax, the increase in luxury car tax and the new condensate tax. If I had to go through a list of 12,538 new regulations the government had introduced, we would be here for a couple of weeks. But the government's guillotine in terms of this legislation does not allow me to get anywhere near the increased number of regulations this government has imposed on the Australian people. That will have to be a debate for another day. But I am sure that people across Australia share the coalition's view that we need to seriously cut red tape and make our economy more competitive.

The DEPUTY PRESIDENT: Order! The time allocated for consideration of these bills has expired.

Question agreed to.

Bills read a second time.

The DEPUTY PRESIDENT (12:40): The question now is that the remaining stages of these bills be agreed to and that these bill now be passed.

Question agreed to.

Bills read a third time.

The DEPUTY PRESIDENT (12:40): A message has been received from the House of Representatives returning the Telecommunications Universal Service Management Agency Bill 2011, and informing the Senate that the House has made the amendments requested by the Senate to the bill.

Senator Farrell: I move:

That this bill be now read a third time.

Question agreed to.

Senator KROGER (Victoria—Chief Opposition Whip in the Senate) (15:38): I move:

That the time for the presentation of the report of the Standing Committee for the Scrutiny of Bills on the future direction and role of the committee be extended to 9 May 2012.

Question agreed to.

Senator KROGER (Victoria—Chief Opposition Whip in the Senate) (15:41): by leave—On behalf of the Chair of the Rural and Regional Affairs and Transport References Committee, Senator Heffernan, I move:

That the time for the presentation of the report of the Rural and Regional Affairs and Transport References Committee on biosecurity and quarantine arrangements be extended to 4 April 2012.

Question agreed to.

Senator KROGER (Victoria—Chief Opposition Whip in the Senate) (15:41): by leave—On behalf of the Deputy Chair of the Parliamentary Joint Committee on Corporations and Financial Services, Senator Boyce, I move:

That the Parliamentary Joint Committee on Corporations and Financial Services be authorised to hold a public meeting during the sitting of the Senate today, from 4.30 pm.

Question agreed to.

Senator BUSHBY (Tasmania—Deputy Opposition Whip in the Senate) (15:42): I move:

That the following bill be introduced: A Bill for an Act to provide for equity in relation to the provision of certain dental services, and for related purposes.

Question agreed to.

Senator BUSHBY: 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 BUSHBY (Tasmania—Deputy Opposition Whip in the Senate) (15:43): I move:

That this bill be now read a second time.

I seek leave to table an explanatory memorandum and to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

HEALTH INSURANCE (DENTAL SERVICES) BILL 2012

I introduce this Bill today to redress an injustice that the Government appears determined to inflict upon the nation’s dental health professionals.

The Bill requires the Minister for Health, in conjunction with such other Ministers as may be necessary, to redress past and future inequities that have arisen from the operation of subsection 10(2) of the Health Insurance (Dental Services) Determination 2007.

The Bill describes the inequities imposed on dental practitioners by the operation of the subsection of the Determination and specifies five courses of action which the Minister can take to redress those inequities.

It establishes a timeframe within which action is to be taken and requires a report to be tabled in both Houses of Parliament detailing the actions taken.

I commend the Bill to the Senate.

Senator BUSHBY: I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator FIERRAVANTI-WELLS (New South Wales) (15:49): I move:

That the Senate—

   (a)   notes:

      (i)   on 20 May 2009, Mr Craig Thomson MP wrote to the then Minister for Employment Participation (Mr O'Connor) supporting Central Coast Group Training's (CCGT) proposal for the construction of a new Youth Skills and Employment Centre for the Central Coast, New South Wales,

      (ii)   an Australian Labor Party statement, dated 20 July 2010, by the Minister for Infrastructure and Transport (Mr Albanese) and Mr Thomson concerning funding for the centre,

      (iii)   on 5 April 2011, the Minister for School Education, Early Childhood and Youth (Mr Garrett) wrote to Mr Thomson stating that the Government was providing $2.7 million in funding towards the centre under the Community Infrastructure Grants Program,

      (iv)   on 16 June 2011, Wyong Council wrote to the Minister for Infrastructure and Transport, asking about confirmation or progress of the funding for the centre,

      (v)   on 8 July 2011, the Department of Education, Employment and Workplace Relations (DEEWR) wrote to CCGT regarding the centre,

      (vi)   an extract from one of the documents provided under freedom of information (FOI) states that, on 20 July 2011 'Mr Craig Thomson wrote to Minister Garrett raising concerns about interaction between…and DEEWR',

      (vii)   on 25 August 2011, Senator Fierravanti-Wells submitted a FOI request to DEEWR requesting inter alia copies of all representations and advice between Mr Thomson and ministers, their offices and departments on applications for funding a jobs incubator (the Youth Skills and Employment Centre) at Wyong proposed by CCGT, including secondary references to such representations or advice,

      (viii)   that while documents were provided in response to that request, they were almost all in a redacted form with large portions of the documents exempted, and

      (ix)   that the documents were not disclosed inter alia because they contained "unsubstantiated allegations of misconduct or unlawful, negligent or improper conduct"; and

   (b)   orders that there be laid on the table by the Leader of the Government in the Senate, no later than 5 pm on Thursday, 22 March 2012, in an unredacted form:

      (i)   all documents pertaining to "unsubstantiated allegations" made by Mr Thomson to the Minister for School Education, Early Childhood and Youth and the former Minister for Employment Participation regarding CCGT, and

      (ii)   copies of all representations and advice between Mr Thomson and ministers, their offices and departments on applications for funding a jobs incubator (the Youth Skills and Employment Centre) at Wyong as proposed by CCGT, including secondary references to such representations or advice, including but not limited to the following:

   (A)   letter from Mr Thomson to the then Minister for Employment Participation dated 20 May 2009 re. CCGT, and

   (B)   letter from Mr Thomson to the Minister for School Education, Early Childhood and Youth dated 20 July 2011 re. CCGT and attachments thereto.

The DEPUTY PRESIDENT: The question is that the motion be agreed to.

Senator FIERRAVANTI-WELLS (New South Wales) (15:57): Pursuant to contingent notice and at the request of the Leader of the Opposition in the Senate, Senator Abetz, I move:

That so much of the standing orders be suspended as would prevent Senator Abetz moving a motion to provide for the consideration of a matter, namely a motion to give precedence to a motion relating to the Government’s failure to provide documents concerning the construction of a new Youth Skills and Employment Centre for the Central Coast.

This is an absolutely disgraceful move in this sad, sorry and sordid saga in relation to this job centre. The minister in his answer said that there had been 'usual communications'. If there are only 'usual communications', why are the Australian Labor Party and their alliance partners, the Greens, going to so much length to stifle debate on this and not produce these documents? That is the issue. What is this government hiding? I will tell you what they are hiding: they are protecting the member for Dobell. What hypocrisy! So much for the Greens. They will sit there day after day and prattle about transparency. You are all hypocrites, because today—

The DEPUTY PRESIDENT: Order! Senator Fierravanti-Wells, you will need to withdraw that. That is unparliamentary.

Senator FIERRAVANTI-WELLS: I withdraw that.

Senator Abetz: They apply double standards.

Senator FIERRAVANTI-WELLS: Senator Abetz, they absolutely apply double standards. Yesterday, I was asking legitimate questions. Of course, we have copies of documents. There are all the matters that I have referred to in this chamber about this issue since August last year, and there are lots of documents, but all I got produced from this government was 44 folios, most of which were just blank pages. We know that Minister Garrett received correspondence from the member for Dobell, because on one little line that was unredacted it refers to Mr Thomson raising concerns about interaction between '…' and DEEWR. Who is '…'? We know who '…' is: it is CCGT. Of course, because the documents were denied to me because of unsubstantiated allegations, this is only a cover-up.

Debate interrupted.

Senator MASON (Queensland) (16:02): Minister, you would be aware that the Department of Innovation, Industry, Science and Research has completed the Focusing Australia's Publicly Funded Research Review. I am sure you are aware of that. The review was undertaken from February to July 2011. It examined a number of issues in regard to the nature and utility of Australia's publicly funded research arrangements, with a particular focus on priority setting. So I ask this as my introductory question: how will the government's response to this bill affect the operation of the Australian Research Council in relation to the Focusing Australia's Publicly Funded Research Review?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:03): I am sure, Senator Mason, that the provisions in this bill are perfectly consistent with the priority setting that has been proposed. But, if you bear with me for one moment, I will seek some further details for you.

Unfortunately, Senator Mason, we would like to take that on notice to give you a more definitive response other than our overall view that they are indeed consistent.

Senator MASON (Queensland) (16:04): Minister, could you let the Senate know who will be included on the Australian Research Committee.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:04): Bear with me a moment and I will find the detail on the composition of the committee.

The CHAIRMAN: While we are waiting, I advise the Senate that this debate will cease at 4.15 pm.

Senator JACINTA COLLINS: Senator Mason, I am not sure what you mean by 'the committee'. Do you mean the composition of the council itself?

Senator MASON (Queensland) (16:04): Will there be a representative of the ARC on the Australian Research Committee?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:05): Officers are still unclear on what you mean by the Australian Research Committee.

Senator Mason: All right—

The CHAIRMAN: Order, Senators! Rather than just go across the chamber, could you wait till I call you, for two reasons: it keeps the debate under a degree of control and it also enables the people in the audio room to switch the microphones on and off.

Senator MASON (Queensland) (16:05): Mr Chairman, you are not implying, are you, that I am speaking too softly? That does not happen very often, but let me raise my voice! I ask, then: can the minister explain why HASS—that is, humanities, arts and social sciences—is gaining greater priority than it once had?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:06): Thank you, Senator Mason. Perhaps you can clarify for me: is that question related to the composition of the committee or is this a separate question about—is it humanities?

Senator MASON (Queensland) (16:06): Humanities. Humanities, arts and social sciences are gaining greater priority than they once had—or that is my understanding from having looked at the Focusing Australia's Publicly Funded Research Review. There is a greater priority given to the humanities, arts and social sciences. I am not suggesting that that is necessarily a bad thing; I am simply asking the question.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:06): I take it that what Senator Mason is asking about is that the priority settings from the review give a greater emphasis to humanities, arts and social sciences, and you are interested in how that is reflected with respect to the composition of the council. My advice is that the statistics do not actually show that to be the case.

Senator MASON (Queensland) (16:07): Then what are the current National Research Priorities?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:07): We do not have the list of those here at the moment. Certainly, on notice, we could get those for you fairly quickly. I am conscious that we will be dealing with this matter fairly quickly too, so I am unsure whether that would be made available to you ahead of the vote.

Senator MASON (Queensland) (16:08): I am learning. What are the current National Innovation Priorities? Could you also make that available to the Senate either now or shortly.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:08): Shortly.

Senator MASON (Queensland) (16:08): In what way will priority goals be measured after the implementation of the Focusing Australia's Publicly Funded Research Review?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:08): Chair, I think I should indicate to Senator Mason that the government will be more than happy to provide him with further information about the priority goals of the review he mentioned, but I am unclear as to how that level of detail at this stage relates to this bill around establishing the Australian Research Council. Certainly they are very meritorious subjects, and matters that interest me also, and we are more than happy to cooperate. But I am sure Senator Mason appreciates that that information is not presently available with these officers with respect to this bill.

Senator MASON (Queensland) (16:09): The reason I ask is that presently the government is considering, in the context of funding research in this country, looking at the role of and trying to divine how to measure the impact of research on our country, both social and economic. Let me just concede that it is a very difficult measure. My question really related to whether this review will assist and whether the impact is being taken into account in the context of this review. I think the government is right to start assessing impact because without it—how do I put this gently?—some taxpayers find it difficult to fund research when they believe that academics are simply writing for each other. They would prefer something with a social and economic impact.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:10): Before I venture to answer that question, perhaps I can backtrack to the National Research Priorities. The first of those is An Environmentally Sustainable Australia; the second is Promoting and Maintaining Good Health; the third is Frontier Technologies for Building and Transforming Australian Industries; and the final one is Safeguarding Australia. In respect to the question that Senator Mason just raised, I need to be confident that a focus on the outcome or the output from research would be a significant element, but I will wait for further information from the officers. Yes, I can assure him the impact is included in all ARC proposals.

Senator MASON (Queensland) (16:11): Thank you for that. I have a technical question. How will the impact be measured? It is a very simple question.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:12): Senator Mason and I have both been around long enough to understand that that is far from a very simple question. How the impact will be measured relates to what it is you are seeking to measure and what the project is. As to where it might fit in terms of any of the National Research Priorities, obviously measuring something in relation to an Environmentally Sustainable Australia is going to be different from how you might measure Frontier Technologies for Building and Transforming Australian Industries. It would be different on a case-by-case basis for the four projects.

I think the important element is a bit like the debates we have in this place about government addressing particular priorities and family impact assessments. Simply making the output one of the significant factors in assessing the projects focuses those who are putting forward projects and those who are assessing them on that issue and how output might appropriately be measured on a case-by-case basis.

Senator MASON (Queensland) (16:13): Minister, I thank you for detailing the National Research Priorities. The last one you mentioned was Safeguarding Australia. Does it include security and defence issues?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:13): Officers are working on that point. I think it is a very good question because Safeguarding Australia could relate to quite a broad range of security issues. It could pertain to food security or border security. The answer, Senator Mason, is yes.

Senator MASON (Queensland) (16:14): With respect to environmental sustainability, is that a theme that runs through all the criteria for the Research Council grants these days? Environmental sustainability seems to be an overarching policy perspective of the government. Is that a policy direction that runs right through ARC criteria for grants?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:14): Off the top of my head, Senator Mason, I could not immediately answer that question. I am not sure it has quite the same status, for instance, as measuring outputs in relation to each project—but bear with me.

The CHAIRMAN: Reluctant as I am to interrupt debate, Senator Collins, time for this debate has concluded. I think we will record 'No' in the Hansard. The question is that the bill stand as printed.

Question agreed to.

Bill reported without amendment; report adopted.

The DEPUTY PRESIDENT (16:15): The question now is that the remaining stages of this bill be agreed to and the bill be now passed.

Question agreed to.

Bill read a third time.

Senator CORMANN (Western Australia) (16:16): As a result of the Labor-Greens guillotine that is in place, we now have 15 minutes to talk about an important piece of legislation, the Financial Framework Legislation Amendment Bill (No. 1) 2012. This is really quite disgraceful because we in the coalition do have some concerns about this legislation. Indeed, we have circulated some amendments in relation to it. So, in order for me to be able to get straight to the actual amendments so that we can have a discussion in relation to them, I seek leave of the chamber to incorporate—on behalf of the coalition and as the shadow representing the coalition in this chamber—my speech in the second reading debate on this legislation.

Leave granted.

The speech read as follows—

I rise to speak today on the Financial Framework Legislation Amendment Bill (No.1) 2012.

This Bill seeks to amend four Acts and repeal two Acts across three portfolios.

It is part of an ongoing program of updating and enhancing the Commonwealth's financial framework.

This is the ninth Financial Framework Legislation Amendment Bill since 2004.

These Bills generally seek to correct misdescribed provisions, add clarity where required and enhance Acts to make them consistent with complementary legislation.

They also seek to repeal redundant components of the financial framework such as prior programs that have expired.

Financial Framework Amendment Bills are generally non-controversial in nature but occasionally a provision emerges that could either result in unintended consequences or afford additional power to government that could be misused.

While this Bill is largely of the 'housekeeping' variety, the Coalition has some serious concerns with the debt "set off' provisions which are detailed in Schedule 4.

I will address this in more detail later in my contribution.

Schedule One

Schedule One of the Bill seeks to amend the Auditor General Act 1997 to clarify that the Auditor General may accept an appointment under the Corporations Act 2001 as the auditor of any company that the Commonwealth controls.

This will align the Act with the definitions of Commonwealth control which were made in 2008 to the Commonwealth Authorities and Companies (CAC) Act 2007.

Schedule Two

Schedule Two would amend the CAC Act itself to ensure that directors of Commonwealth authorities and wholly-owned government companies and enterprises prepare budget estimates as directed by the Finance Minister rather than the responsible portfolio minister. This would make the Act consistent with long-standing actual practice.

The most significant component of Schedule Two is a new obligation on the directors of Commonwealth authorities and wholly-owned companies to notify their responsible minister of "actual decisions" about significant events immediately after a decision has been taken.

Significant events include: forming a company or participating in the formation of a company, acquiring or disposing of a significant shareholding in a company, acquiring or disposing of significant business, or commencing or ceasing a significant business activity.

You would hope this type of communication occurs as a matter of course however this would place a firm obligation for this to happen.

Schedule Three

Schedule Three of this Bill is devoted to correcting two misdescribed provisions in the Financial Framework Legislation Amendment Act 2010, which are contained in section 27 A of the Commonwealth Authorities and Companies Act ie replacing references to "at common law and in equity" and "at common law or in equity" with "under the general law".

Schedule Four

Schedule Four - relates in part to Special Account Appropriations under the Financial Management and Accountability Act 1997.

This provision applies to Special Account Appropriations which relate to either the COAG Reform Fund Act 2008 or a Special Account established under the Nation-building Funds Act.

Determinations for such appropriations are done by way of disallowable instrument.

As it stands such a Determination takes effect after the five sittings days pass for which the parliament can move to disallow.

Such appropriations may be used by new government agencies once they are established.

For the purpose of practicality this amendment allows the minister to prescribe a date in the instrument for which the appropriation takes effect.

This allows a future date to be set which corresponds with the establishment date of a new agency.

It has no material effect and serves to add clarity to the Act to confirm that such an instrument can come into effect at a nominated date beyond immediately after the expiry of the disallow able instrument.

Off-setting Debt

The most notable feature of Schedule 4 is the provision to give the Finance Minister the discretionary power to off-set debts owed to the Commonwealth by an individual or entity against payments owed to the same individual or entity.

This is defined in Item 10 and Item 13.

As it stands Commonwealth payments must be paid in full regardless of debts owing.

The government makes the point that this new section provides a mechanism for the Commonwealth to recover debts in a cost neutral way and more efficient manner than allowed under current provisions.

On the surface this does seems a sensible measure as observed by the Shadow Finance Minister however after closer examination and consultation the Coalition has some serious concerns about how this power could be applied.

In our view, the Bill as drafted lacks sufficient clarity and definition and is open to misuse.

While the Minister's office has endeavoured to provide some verbal reassurances as well as some departmental advice there is insufficient comfort in the amendments themselves for the Coalition to support this component of the Bill as it stands.

The Bill's digest released by the Parliamentary Library captures our discomfort.

And I quote: "There is concern that this gives the Commonwealth too much power in a relationship with a member of the public. It can assert that a debt is owing, and the person involved may not have the resources to challenge the Commonwealth and may thus lose and entitlement "

There is also insufficient clarity about what happens in the event of a dispute over a debt. For example, can the Minister ignore a dispute and recover a debt regardless; by off-setting it against another form of payment that might be owed by the Commonwealth.

The department provided the following written advice:

"The set-off provisions under proposed section 35 of the Financial Management and Accountability Act 1997 (FMA Act) could not be applied where the amount is not objectively ascertainable, there is a genuine dispute regarding the amount owing or the amount is not capable of being recovered."

Based on this the application of this authority could be very subjectively applied. For example who decides that a dispute is genuine and based on what?

Presumably, it is at the discretion of the minister.

The government says in the Bill's explanatory memorandum that "in the context of a current Budget deficit with a clear policy of returning to surplus, set-off may provide a more cost effective mechanism to preserve public finances."

This suggests the government will be actively looking for opportunities to utilise these discretionary powers. Our concern is it could come at the expense of natural justice and as mentioned earlier harm those who are not in a position to take on the Commonwealth.

Another concern is the prospect that this authority could be used as a means to override agreements or agreements that might be in prospect in relation to repayment arrangements for debts owed.

Tax liabilities come to mind.

The government, verbally, has also said that "it does not intend that this provision be used in relation to a tax liability that may be payable to the Australian Taxation Office."

But again and intention is one thing, what actually occurs is another.

While a subsection 35 (2) specifies that certain Commonwealth payments are exempt from being used for an off-set, on account of being "inalienable" or "absolutely inalienable", explanatory material advises that this only applies to "advance" social security payments or paid parental leave instalments.

There are a number of payments made by the Commonwealth that could be subject to the off-set provisions, whether they be grants, payments owed for services or goods provided, regular salaries or allowances, compensation, or tax rebates etc.

Again there is a lack of clarity and definition.

The Definition outlined also state that amounts owing to or by the Commonwealth include those amounts that are "owing but not yet due for payment".

This is a troubling definition as it means that debts, that while not even yet due, could be called in and settled against other amounts payable.

If applied this indicates how this authority could in practice create cash-flow, overdraft or other financial problems for an individual who is subject to the "set off' determination.

The last thing the Coalition wants to see is a power that was perhaps devised with the best intentions abused in a way that could put a taxpayer, a small business, or other entity at an unfair disadvantage against the Commonwealth.

The Coalition has come to the view that this provision is not essential to the functioning of the financial framework and should be omitted.

Schedule Five

This Bill also proposes to repeal two redundant special appropriations to "clean up the statute book".

These include the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009.

In conclusion

I flag that it is my intention to move amendments that have been circulated in my name with the aim of removing items 10 and 13 of Schedule 4 of this Bill, which relate to the proposed section 35.

It should be removed and if the government feels strongly about the importance of the provision it could withdraw it and re-present it in a future Financial Framework Amendment Bill.

With clear definition and with sufficient safeguards in place it is something we could be prepared to re-examine at a future date.

The Coalition will not ultimately support this Bill while this vague, but material provision remains within it.

10 After section 34

   Insert:

35 Set off

   (1) If:

      (a)   an amount (tire first amount) is owing to the Commonwealth by a person; and

      (b)   an amount (the second amount) is owing by the Commonwealth to the person; the Finance Minister may, on behalf of the Commonwealth, set off the whole or a part of the first amount against the whole or a part of the second amount.

       Exceptions

   (2) Paragraph (1)(b) does not apply in relation to a payment if:

      (a)   a law of the Commonwealth provides that the payment is absolutely inalienable; or

      (b)   a law of the Commonwealth provides that the payment is inalienable; or (e) a law of the Commonwealth provides that the right to the payment cannot be assigned; or

      (d) a law of the Commonwealth provides that the payment cannot be assigned.

       Definitions

   (3) In this section:

   amount owing by the Commonwealth includes an amount that is owing but not yet due for payment.

   amount owing to the Commonwealth includes an amount that is owing but not yet due for payment.

   Note: See also subparagraph 65(2)(a)(iaa) (which allows regulations to be made about the Finance Minister considering a report from specified persons before setting off under this section, in a case where the amount of the set-off is more than a specified amount).

13 After subparagraph 65(2)(ia)

   Insert:

      (iaa) the Finance Minister considering a report from specified persons before setting off under section 35, in a case where the amount of the set-off is more than a specified amount;

Senator CORMANN: I thank the Senate. That means that I can go straight to the coalition amendments in relation to the financial Framework Legislation Amendment Bill (No. 1) 2012. The key purpose of the amendments which have been circulated in my name on behalf of the coalition is to remove the set of provisions in schedule 4 of the bill before the Senate. The government's bill would see a new section 35 inserted into the Financial Management and Accountability Act 1997. This is outlined in item 10, while item 13 is directly related—

The DEPUTY PRESIDENT: Senator Cormann, could I just interrupt for a moment just to get absolute clarity. We are still in the second reading stage of the bill. For the amendments to actually be moved in the committee stage we would need to put the second reading question. I understand that you are alluding to the amendments now in continuation of your speech in the second reading debate.

Senator CORMANN: To assist the chamber I have incorporated my speech in the second reading debate. So it might be better if we deal with the second reading part of the equation and then move into committee so that we can deal with the amendments.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:18): I thank the Senate and those who have contributed to the debate on the Financial Framework Legislation Amendment Bill (No. 1) 2012. The bill would if enacted amend four acts to strengthen and clarify aspects of the Commonwealth's financial framework and repeal two acts that include special appropriations, which are now redundant.

I wish to offer a point of clarification on the proposed provisions for set-out arrangements under item 10 of schedule 4 of the bill, which would introduce a new section 35 to the FMA framework. It is the intention of the government to institute a consultative process around the use of this provision. The minister will consult with members of the parliament on this process. For example, there is regulation-making power linked to the proposed section 35 included in the bill through the proposed amendment to section 65 of the FMA Act which is set out in item 13 of schedule 4 of the bill. Such regulations could potentially use an approach that already exists for an act of grace or debt waiver provisions, such as to specify that a decision maker must have available an advisory committee report where the amount involved exceeds a prescribed limit.

I would like to put on the record some further information in terms of the use of this provision for an amount that the Commonwealth merely asserts as a debt. If Senator Cormann is happy, I am happy to incorporate the rest of my speech.

Leave granted.

The speech read as follows—

The amount in question must be established as a debt owing before the proposed section 35 could be applied.

The set-off provision could not be applied where:

the amount is not objectively ascertainable;

there is a genuine dispute regarding the amount owing; or

the amount is not capable of being recovered.

In general, this Bill will help with the preparation of the Budget, such as through the changes to the Commonwealth Authorities and Companies Act 1997, and make useful clarifications, such as the role of the Auditor-General in auditing companies controlled by the Commonwealth.

I commend the Bill.

The DEPUTY PRESIDENT: The question is that the bill be read a second time.

Question agreed to.

Bill read a second time.

Senator CORMANN (Western Australia) (16:20): As I started to say earlier in the second reading debate, the key purpose of the amendments circulated in my name is to remove the set of provisions in schedule 4 of the bill before the Senate. The government's bill would see a new section 35 inserted into the Financial Management and Account­ability Act 1997. This is outlined in item 10, while item 13 is directly related to item 10. It is the coalition's view that item 10 is vaguely drafted and lacks definition and clarity in relation to the powers it would afford to the finance minister. I detailed some of our concerns in my second reading contribution, which, of course, has been incorporated—so the Senate might have to consult the written version of that contribution.

The exceptions outlined in subsection 2, in our view, provide insufficient comfort that this authority may not be abused by the Commonwealth. It has the potential to be used to shift the power balance too far in the government's favour in its financial dealings with a person. Subsection 3 states that an amount owing by or to the Commonwealth 'includes an amount that is owing but not yet due for payment'. This means that action could be taken to set off a debt that is not even due to be repaid. If this were imposed, it could have a detrimental impact on the financial affairs of a person who is subject to a set-off action. This could create cash flow problems or worse and override a person's right to hold off on payment until money is actually due. The government has been unable, in our view, to satisfactorily explain how this power will be applied. There is clearly scope to use this authority as a means to bypass potential legal processes associated with a dispute. This could deny a person natural justice or, in other circumstances, deny others the right of a proper negotiation. It would disadvantage those without the resources to fully challenge the Common­wealth, which would be, of course, most taxpayers. It would allow the minister to call in a debt at his or her discretion and offset against another payment which might be due from the Commonwealth. There is insufficient definition about how a legitimate dispute would be defined. It seems it would be a subjective decision for the minister. For example, the minister could decide that there is no legitimate dispute even if there is one based on objective consideration. There is an attempt to define exceptions in relation to inalienable and absolutely inalienable payments—for example, advance welfare payments and paid parental leave payments—but there is not clarity or protection over potentially a number of other payments which the Commonwealth makes. Stakeholders have raised examples of salaries, allowances, grants, payments due to small business and so on.

We have formed the considered view that this section of the bill is unnecessary, it could lend itself to both abuse and unintended consequences, and therefore it should be removed. There is scope for the government to think through this provision more carefully and re-present it in a more lucid form in a future financial framework amendment bill with proper and clearly defined safeguards. We urge the Senate—particularly the Greens—to very carefully consider the implications of what the government is proposing to do in its Financial Framework Legislation Amendment Bill in relation to these matters and to consider the implications of significantly increased government power at the expense of the person. Some of the persons who have financial dealings with the Commonwealth can be the most vulnerable members of our community. To give the government the sort of power that is put forward in this bill is, we believe, excessive.

I would be interested to hear the government's response to the very genuinely held concerns of the coalition in relation to the matters I have raised, and then I might have some further questions. The opposition oppose item 10 and 13 in the following terms:

(1) Schedule 4, item 10, page 11 (line 11) to page 12 (line 10).

(2) Schedule 4, item 13, page 12 (lines 23 to 28).

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (16:25): As with Senator Cormann, in incorporating elements of my speech in reply to speed up this process, there were some points that might address his question and assist.

Senator Cormann: It is a very unfortunate gag, isn't it?

Senator JACINTA COLLINS: Senator Cormann, I could focus on your interjection rather than the subject matter that you are seeking, but I am sure you would rather I address the latter than the former. Indeed, I think I have some detailed statistics with respect to the amount of time the Senate has been able to focus on legislation this week that I could spend some time on. But let me respond to the issues raised. Could the proposed section 35 set-off of the FMA Act be used to set off amounts owed by an individual to the Commonwealth, with a social security payment that would be made to that individual? The response on that point is: no. Proposed subsection 35(2) of the FMA Act provides that certain payments are exempt from being used for a set-off action. That is, amounts cannot be set-off against payments by the Commonwealth that would be inalienable or absolutely inalienable—being wording that appears in legislation for entitlements to payments such as section 1061EK of the Social Security Act 1991 or section 66 of the Paid Parental Leave Act 2010, which make an advance social security payment and a paid parental leave instalment absolutely inalienable.

With respect to the point about proposed section 35 being able to be used to override an agreed arrangement between a taxpayer and the tax office, such as a repayment schedule, where an arrangement has been agreed between a taxpayer and the tax office, made pursuant to the Tax Administration Act 1953 or other statutory mechanism, there would be generally no ability to use the set-off provision to override any such arrangement.

On the further points, I would suggest Senator Cormann refer to the further remarks I incorporated.

Senator MILNE (Tasmania—Deputy Leader of the Australian Greens) (16:27): I have only a couple of minutes, I understand, but we did take the concerns seriously that were circulated to us by the coalition and had similar concerns with regard to social security. But we recognise that, in the explanatory memorandum and in the document the government has tabled, that matter has been dealt with. We had similar concerns with the second matter of significance in relation to offsetting debt, but I understand that, in the document that has now been tabled, the government has been specific in addressing that to our satisfaction. And we do note the government's undertaking in relation to this that the intention is not that this provision be used in relation to a tax liability that may be payable to the tax office in the context of pursuing individuals in the manner which people fear. The tabled document should address those matters.

The CHAIRMAN: The question is that schedule 4, items 10 and 13 stand as printed.

The DEPUTY PRESIDENT (16:36): The question now is that the remaining stages of this bill be agreed to and the bill be now passed.