The CHAIRMAN (09:31): The committee is considering the Fair Work Amendment Bill 2012.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (09:31): This is the continuation of the committee stage of the Fair Work Amendment Bill, and last night I was asking whether the government could provide us with an estimate of the costs associated with the proposed name change. The Senate committee inquiring into this was told a week ago the question would be taken on notice. We were told last night the question would be taken on notice, and I am wondering if the government now might actually have a defined figure to provide to us, rather than the rubbery explanation we have continually been provided.

Further, I asked the parliamentary secretary if the appointment of two new vice-presidents is going to cost Fair Work Australia $1.5 million or thereabouts per annum; if the name change is going to incur a cost; and, if all those costs are going to be absorbed by Fair Work Australia, what areas of Fair Work Australia's current activities will be curtailed for the extravagance of appointing these two new positions and for the this non-name change?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (09:33): I can apprise Senator Abetz that since 10 o'clock last night there has been no change in the advice government has from Fair Work Australia with respect to their internal processes that I described during the committee stage last night, looking at the detail of the cost involved to change the name. So I cannot advise him further on any defined figure; only the information I gave him last night about the process under which Fair Work Australia is determining such matter. As Senator Abetz full knows, Fair Work Australia are an independent statutory body. They will go through their process and, at such time as we have advice for the Senator, we will inform him.

I will clarify also a component of the advice I gave last night: the absorption of the cost for the name change was the information I gave; it did not pertain to the issues around the appointment.

Senator Abetz is also asking with respect to what areas of current activities might be curtailed. Again, that is a matter for Fair Work Australia. I will seek to ascertain whether there is further advice on that matter.

I am also in the hands of the Senate as to whether, at this point in time, we want to move to the matters that Senator Cormann raised last night or whether Senator Abetz would like to remain on the areas that, prior to that, he was canvassing yesterday.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (09:34): The last point of the parliamentary secretary is a fair question. I do not know how many other senators have general questions, though I still have a few. After that I would suggest we start moving through the amendments formally. I would then, according to the sheet, move the vice-presidential amendments and then Senator Cormann will come back into the chamber and canvass opposition amendments to superannuation. Given Senator Cormann's absence at the moment, if the parliamentary secretary could oblige by responding when Senator Cormann returns to the chamber I think that would be the most beneficial for both the parliamentary secretary and, if I might say so, especially for the opposition.

In relation to the issues I raised, I do note the parliamentary secretary's comment that the position has not changed since 10 o'clock last night. But the regrettable thing is that the position has not changed since the matter was before the Senate committee a week ago. The government makes money available to Fair Work Australia to undertake all sorts of issues and activities. We have been told in recent times now that Fair Work Australia from its budget will simply absorb the costs of a new registered organisations regime with new forensic accountants, new forensic lawyers, beefed up—all to be absorbed by Fair Work Australia without an extra allocation of money. We are similarly told that Fair Work Australia is simply going to appoint two new vice-presidents at a cost of at least $1.5 million per annum, simply to be absorbed. Fair Work Australia is now going to have a name change and the cost of that simply to be absorbed.

How much more is the government going to demand from Fair Work Australia and why was Fair Work Australia given such a big budget if it can afford all these extra changes without any curtailment of its existing activities? Clearly something must be giving within the Fair Work regime for all these extra financial burdens to be placed upon it without any extra money being made available. The Australian people are entitled to an answer, and to simply hide behind the fact that it is an independent statutory authority is not good enough because it is the government that makes the money available. This independent statutory authority operates under legislation that this government introduced, and the people of Australia are entitled to know where the money is coming from and what areas of Fair Work Australia's activities will be curtailed to fund all these new activities without supplementation to Fair Work Australia's budget.

The CHAIRMAN: Senator Collins, do you want me to seek from the Greens an answer to your question about the general questions, whether the Greens have an indication as to whether they have many questions in this segment or they are happy to move through the amendments? Senator Wright.

Senator WRIGHT (South Australia) (09:38): The Greens do not have any further questions in relation to the general issues. We are happy to move through the amendments.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (09:38): With respect to Senator Cormann's questions, I am happy to defer them even if it is necessary to do so during the discussion of the amendments themselves. So if it suits Senator Cormann to simply come and move his amendments I am happy to deal with the issues that he raised last night at that stage.

With respect to the issues that Senator Abetz raised, I described last night that Fair Work Australia has a process to work through to determine the costs involved with the change of name. It is not that there is no understanding of cost but rather that Fair Work Australia have advised government of their process and we are waiting for an outcome of that process. We are quite happy to inform the Senate and indeed Senator Abetz of the outcome of that process once it becomes known.

I can clarify further the point I made in response last night to a question on the name change. I indicated that the costs were to be absorbed by Fair Work Australia. I differentiated just a moment ago between that and the costs associated with the new appointments.

However, no differentiation is warranted: it is indeed the case that Fair Work Australia will absorb the full cost involved in the changes that have been sought. However, the precise details—and I think I mentioned this last night—in relation to the costs associated with the new appointments are still subject to the Remuneration Tribunal.

But we can be quite clear that the government is confident that Fair Work Australia will continue to fulfil its functions under the Fair Work Act diligently and well. Senator Abetz would be aware that over time, since the establishment of Fair Work Australia, there have been differential arrangements in relation to the costs of the agency, some of those associated with dealing with the new act and the new arrangements that were first implemented and with changes that have occurred subsequently. What the government has done on this occasion is respond to requests from Fair Work Australia to set up new administrative arrangements. We rely on Fair Work Australia to advise us on what administrative arrangements it needs, and any further costs that may need to be considered would be a matter of the usual budgetary arrangements. We are confident that Fair Work Australia will absorb the cost in relation to these measures that they have sought, without any loss of function in other areas.

On the cost of the vice-presidents, I have already mentioned this is a matter for the Remuneration Tribunal and any costs beyond those that have been estimated in a broad sense would be subject to normal budgetary processes.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (09:41): So what we have is a situation where we do not actually know the cost of these two new appointments; the cost is going to be subject to whatever the Remuneration Tribunal might determine. But, irrespective of what the cost is, the government is saying it will be absorbed by Fair Work Australia. We do not know what the cost of the name change is going to be, but it is going to be sorted out by Fair Work Australia simply absorbing the costs.

We cannot be told where the money is going to come from within Fair Work Australia because Fair Work Australia is still working through it. What that tells us clearly is that this has been rushed. Fair Work Australia itself still has no idea where the money is going to come from within its internal budgets. This is indicative, yet again, of the shambolic and rushed nature of this legislation, because Fair Work Australia itself has not been given the time to work out where the money is going to come from. The parliamentary secretary has been kind to tell the Senate that, when the process is known and the outcome of the process is known, she is willing to tell the Senate. But what we know is that we will not know the answer before the vote. So here we have the parliamentary secretary, and I am sure the Greens will oblige her, asking the parliament to vote for legislation when we do not know where the money is coming from and how the arrangements are going to be made internally.

It is this sort of shambolic management—just a snapshot—of Fair Work Australia which provides us with a window into the total management of the Australian economy by this government. They have no idea where the money is coming from and they make changes with no idea how much it is going to cost. We are still waiting on Fair Work Australia, we are still waiting on the Remuneration Tribunal—and so the uncertainty goes on. But we need to vote on this today, irrespective of what the actual outcome or consequences might be!

I am a relatively hopeful individual, and a person who has a positive outlook, but I must say I doubt that the Senate is going to get any further answers in relation to these matters, so allow me to move on and test the parliamentary secretary. Every piece of workplace relations legislation that this government has introduced thus far has been rushed through the House of Representatives only to find itself in an embarrassing position in this place requiring further amendments. Can the parliamentary secretary guarantee us that the government is absolutely and utterly confident that this legislation does not need any further government amendments?

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (09:44): Perhaps I will close off on the last set of questions from Senator Abetz by making the point that Fair Work Australia has sought to make administrative changes for quite sensible reasons, and the government has responded to those requests.

Fair Work Australia understand that they need to absorb the costs of those arrangements and, other than the issues that the opposition is now raising, I am not aware of any concerns about them needing to do so. Senator Abetz may want to wait until the next round of estimates and explore this issue further, but there has been no evidence before me that there is an issue for Fair Work Australia in absorbing the costs associated with the changes that they themselves have sought.

With respect to every piece of workplace relations legislation, Senator Abetz wants to test me within the recent period of workplace relations. He knows as well as I do that workplace relations law is a constantly evolving issue. I think back to the various waves of workplace relations law, and were I to ask a similar question during a period of the Howard government it would possibly have had a response which was even more so. But I take the Senate back to the context of my summing-up speech, where I indicated and, indeed, Senator Cash highlighted—and I think that even Senator Abetz has used this language too, but I might be wrong there—that this is the first tranche of amendments, the matters that are generally agreed in response to the review of the Fair Work panel.

The first tranche are those matters which we think have general agreement and which can be moved forward fairly speedily. That said, the government has indicated that we have an open mind to further amendments that may be required in response to the other recommendations of the review panel. Some of those recommendations may cross some of the amendments that we are dealing with here so, no, Senator Abetz, I would not be in a position to say that there will not be a requirement for further amendments in the matters that we are dealing with now.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (09:47): Of course, it is very obvious that Fair Work Australia accepts that it has to absorb the costs. What else can it do? What else can it do in the face of the government changing legislation and foisting these things on Fair Work Australia without giving it extra money? The parliamentary secretary says, 'Oh, they realise that they have to absorb it.' Everybody knows that they have to absorb it, but that is not, with respect, a justification for what has occurred, especially in circumstances where we do not know where those cost-cutting measures will occur within Fair Work Australia. I have a funny feeling that those cuts may well occur in the area of monitoring registered organisations, and that in the event that we have another Craig Thomson-Health Services Union debacle we will once again see Fair Work Australia underresourced and incapable of dealing with the issues as it should have done. But let us move on.

I seek leave of the Senate to move opposition amendments (2), (3) and (5) on sheet 7305 together.

Leave granted.

Senator ABETZ: I move:

(2) Schedule 2, item 43, page 22 (line 10), omit "Vice President or".

(3) Schedule 8, item 1, page 43 (line 7), omit paragraph 606(2)(c).

(5) Schedule 8, item 16, page 49 (line 7), omit "a Vice President,".

The opposition also opposes schedules 8 and 11 in the following terms:

(6) Schedule 8, items 17 to 56, page 49 (line 9) to page 53 (line 16), TO BE OPPOSED.

(14) Schedule 11, item 21, page 184 (lines 13 to 16), TO BE OPPOSED.

I thank the Senate. This raft of opposition amendments deals with the creation of two new vice-presidential positions on the body known as Fair Work Australia. These two new positions were not canvassed in the Fair Work Act review panel's report. In the 250 submissions made to the review there was no such suggestion. As a result, not surprisingly, the review panel saw no need to make such a recommendation.

It is therefore appropriate to ask from whence did this recommendation come. We now know that this recommendation came as a result of one ex-trade union boss talking to another ex-trade union boss—the former Assistant Secretary of the ACTU, who just happens to be the president of Fair Work Australia, talking to Mr Shorten, the former AWU boss, who now happens to be the Minister for Employment and Workplace Relations—and it was determined that it would be a good idea to have these two new vice-presidential positions.

This is a very important issue. The reason it is important has been highlighted by no lesser authority than the Law Council of Australia. The Law Council of Australia have set out, in a very articulate manner, a very well-reasoned manner and a very robust manner, how these two new appointments will be a diminution of judicial independence within Australia. It is a bad precedent, and they have said so. The government's response is like Ms Gillard's response in relation to the AWU scandal—basically a lot of words without any meaning and without any proper defence of the matters put to them.

This bill creates two additional vice-presidential positions and they will be the second and third highest positions within Fair Work Australia. The minister has completely failed to explain why these positions are required, let alone justified, apart from the department's submission that the president of Fair Work Australia—a former assistant ACTU secretary—sought the additional roles. These two positions would slot in as the second and third most senior officers of the tribunal.

Since the announcement of these two additional positions, there has been widespread community concern, including from within Fair Work Australia itself. Clearly, with this new appointment in Fair Work Australia of a new president, there is a power struggle occurring within Fair Work Australia. And what better way for the government to get complete domination than simply creating two new positions and appointing two new people into them? The Australian Financial Review recently reported:

In an email obtained by the Weekend Financial Review, Senior deputy president Les Kaufman wrote to Fair Work president Iain Ross on Wednesday questioning the need for two positions, which reintroduces a level of seniority at the tribunal that was removed under the Fair Work Act in 2009.

Mr Kaufman, the senior deputy president, said the appointments would 'further erode the standing' of the tribunal and 'gives rise to the perception it is being stacked'. It is no longer a perception that it is being stacked; it is absolutely proven that it has been stacked. But allow me to continue to quote. The article went on to report that senior deputy president Les Kaufman said in his letter:

Although I have no direct interest in the creation of the two new vice-president positions because, as you know my commission expires on December 1—

so only a few more days to go, and nothing in it for this senior deputy president, Mr Kaufman; he is just expressing his concern. He goes on to say:

… I wish to express my dismay at what appears to be a retrograde step.

You might think senior vice-president Les Kaufman was having a whack on the way out and might be a lone voice, but it is not so. The article goes on to say:

Deputy presidents Graeme Watson and Peter Richards have also written to Justice Ross over concerns the federal government will use the opportunity to install government-friendly appointees.

Here we have a senior deputy president and two deputy presidents writing to the president of Fair Work Australia and disagreeing with his suggestion—which he seems to have cobbled together with the minister—to create these two new positions.

Many submissions to the Senate committee in relation to this expressed deep reservations about the inclusion of these two positions. Some of the comments included:

From our perspective the need for the creation of these additional positions and the requirement that they be statutory positions is unclear. Neither the Fair Work Act Review Panel nor submissions to the review have identified the absence of these statutory positions as inhibiting the performance of Fair Work Australia.

Possibly, we might get an explanation from the government as to how the lack of these positions is inhibiting the performance of Fair Work Australia. Clearly, three deputy presidents of Fair Work Australia do not think it is. They have very real concerns and, of course, we know about the Law Council's concerns. Another submission said:

This was not recommended by the Panel. It is unclear why these amendments are necessary or required and are opposed without amendments.

Another comment from the submission reads:

It is unclear why the existing Vice Presidents would not be suitable for re-appointment to the new statutory Vice Presidential roles.

To this end, there was wide stakeholder support for the appointment of the two members of Fair Work Australia to the new positions titled as vice-president. Steve Knott of AMMA told the committee :'The legislation previously recognised the two existing vice presidents, Vice President Lawler and Vice President Watson, but the current legislation does not.' Clearly what we have, with the move to the Fair Work Act, is the government deliberately cutting these two people out of vice-presidential positions to move them to the side. The government is now moving to create two new positions and, as a result, is sidelining these two vice-presidential office holders of Fair Work Australia.

The proposal to have the legislation recognise these two roles once again, and put two new people into them, is unacceptable. It is real pea-and-thimble trick. For those with long memories in industrial relations, we will go back to the eighties when there was new legislation and everybody got appointed except one member of the tribunal—a fellow by the name of Justice Staples. I think this gives the opportunity—and again, we have commented on this publicly—to really damage the independence, or the perceived independence and impartiality, of the tribunal. We have senior appointments made to the tribunal through the political cycle. There are people who are appointed by one side who may not be appointed by another side, but that is the way it goes over the fullness of time in the political cycle.

The coalition is deeply concerned that the appointment of pro-Labor vice-presidents would bring into question the tribunal's integrity, which has already suffered considerable damage courtesy of the Health Services Union scandal. But, if I may say so, the most significant submission comes from the Law Council of Australia, which said in part:

Members of FWA are appointed to a quasi-judicial position. The status of FWA depends upon the independence and impartiality of its Members being maintained and being seen to be maintained.

As a general principle, once a person has been appointed to sit on a Court or independent Tribunal with designated powers and privileges, any change that would have the effect of removing or reducing that particular person's powers or privileges while not affecting the powers and privileges of other Members of that Tribunal, has a tendency to undermine the independence of the Court or Tribunal.

…   …   …

Should the Government appoint the two individuals currently designated Vice President to the two statutory Vice President positions, then their status will not be reduced. However, if the two Deputy Presidents designated Vice Presidents are not so appointed, the effect of the Bill will be to reduce their status. Henceforth responsibilities that would have been capable of being delegated or given to them by nature of their senior status would instead be given to the new statutory Vice Presidents.

This would have the tendency to reduce the independence of the Tribunal in that it will reduce the role and privileges associated with particular individuals.

So says the Law Council of Australia.

The government's argument in response to that to date has been shallow, has been hollow and has been completely absent of any rationale, any robust rejoinder. The only rationale is that this is a government that thinks it might be in its death throes and wants to future-proof Fair Work Australia from any future appointments by another government and therefore has rushed through this legislation, created two new positions and further stacked Fair Work Australia.

I remind the parliamentary secretary of Mr Rudd's promise before the 2007 election:

I give you this as an absolute guarantee here on your program. I will not be prime minister of this country and appoint some endless tribe of trade union officials to staff or ex trade union officials to staff the key positions in this body. That's not my intention. That's not the way in which it's going to work.

Well, we now know that that is exactly the way it has worked under both the Rudd and Gillard governments. It is like their carbon tax promise: hollow, shallow, with no intention of delivering on it—simply words before the election to get them over the line and then do the exact opposite afterwards.

I ask of the parliamentary secretary: what are the entitlements of the two new vice-presidents? We do not know that as yet, I understand, because the Remuneration Tribunal still has to make the determination. This is very unhelpful in circumstances where we are supposed to vote on this without knowing what their entitlements will be. The Greens might like being treated as mushrooms, but we, the coalition, do not.

The other answer that I have is about the current people on Fair Work Australia who have judges pension entitlements. If they apply for one of these two new positions on Fair Work Australia, would they lose their judicial pension entitlements? It is understood that the new appointments will not have these judicial pension entitlements so, apart from their remuneration, there is also the question of what their pension entitlements might be.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (10:03): I might commence by dealing in general with the government's response to these opposition amendments and then I will move to answer the questions that Senator Abetz asked at the conclusion, as well as perhaps addressing a few of the other observations he made in that process which do not stand up to any serious scrutiny. I know that Senator Abetz thinks that he has got case closed on balance and appointments to this tribunal but I would suggest that he is making quite a few cheap political points that would not stand up to any serious scrutiny.

The government does not support the opposition's proposed amendments. The two new vice-president roles to be created within the tribunal were recommended by the President of Fair Work Australia, Justice Ross. In establishing Fair Work Australia, the government took the decision to abolish the formal statutory positions of vice-president and senior vice-president, as Senator Abetz has indicated. Vice-presidents and senior deputy vice-presidents became deputy presidents within the Fair Work Australia structure. Let us remove that illusion around the seniority issue that Senator Abetz has raised.

In the transition arrangements in moving from the Australian Industrial Relations Commission to Fair Work Australia former senior deputy presidents and vice-presidents were entitled to retain their former entitlements and titles. Indeed, this gives me the opportunity to reflect on Senator Abetz's visit to the 1980s around appointments and remind those listening and the Senate that in the transition from the Australian Industrial Relations Commission to Fair Work Australia all positions were maintained—complete balance, complete reflection of the existing arrangements. Those arrangements had principally been established under the Howard government with a track record I do not intend spending some detail visiting; I think it is pretty much a matter of record.

Justice Ross recommended to the government providing for two senior positions within the tribunal to ensure senior legal specialists with high-level expertise were attracted to Fair Work Australia, and, I stress, to assist him in the administration and management of the tribunal. Senator Abetz likes to highlight some of the issues facing Fair Work Australia. He likes to highlight the need for independence and the need for administrative and management improvements. This is indeed the solution that Justice Ross has raised in relation to some of those issues. So it surprises me now that the opposition seek to oppose the president of Fair Work Australia in dealing with some of the internal management issues that the opposition themselves have canvassed.

Fair Work Australia deals with important and complex matters of industrial law and should be resourced accordingly. In addition to matters of industrial law, Fair Work is undertaking a broad range of functions, including the new Road Safety Remuneration Tribunal jurisdiction, a major projects panel and a new comprehensive stakeholder engagement model. Creating these positions will assist Fair Work Australia to deal with such matters. The criteria for appointment as vice-presidents will be set out in the Fair Work Act and are reflected in the bill. This reflects the approach taken in respect of other members of Fair Work Australia and previous iterations of legislation.

The process for selecting the two new vice-presidents will be open and transparent. The government has committed to a merit-based selection process for these appointments. The positions will be advertised publicly and anyone will be able to apply for the positions. An advisory panel consisting of senior officers of the Department of Education, Employment and Workplace Relations and the APSC will recommend a short list of applicants and the incumbent minister will then seek cabinet's endorsement of the appointments, as is the usual practice. The endorsed candidates will then be recommended to the Governor-General and to the Executive Council.

I dealt with Senator Abetz's brief visit to the 1980s on the issue of appointments and highlighted probably the most recent principal example of how the Prime Minister has met the commitment she made in relation to balance within Fair Work Australia, to be the Fair Work Commission. But I think I need to address in a little more detail Senator Abetz's claim that there is a perception that Fair Work Australia is, in his words, being stacked. Whilst he relates to some internal memos or communications from some existing commissioners, the public record on recent appointments highlights that there is a general satisfaction with the balance that has been established within Fair Work Australia. I have in front of me three press releases. The first one relates to ACCI: 'Employers welcome Fair Work appointments'. Another is dated February this year: 'Employers commend Shorten on Geoff Bull's appointment to Fair Work Australia'. A further newspaper article in the Australian in February this year: 'All sides approve of Fair Work appointees'. So I do not think that the case is quite as established as Senator Abetz seems to think it is. I do add some further context, since Senator Abetz referred to the Prime Minister's remarks. She referred to ministerial advisers. If I a recall correctly, there was a chief of staff of Minister Reith who was appointed to the Australian Industrial Relations Commission as registrar.

The government has gone nowhere near the excesses of the Howard government in the balance that it has introduced into Fair Work Australia and the Fair Work system. We have maintained appointments that were made under the Howard government. The appointments made to the Fair Work Ombudsman and the commission have been balanced and fair.

The ongoing problem that I might highlight to Senator Abetz—as a challenge more than anything else—is finding high-calibre women candidates to appoint, particularly on the employer side. He might like to assist the minister and me in encouraging more candidates to seek appointment to the tribunal. This is a challenge that we have raised with employer organisations, and we hope that over time there will be some improvements in that respect.

Senator Abetz asked and then answered his own question on entitlements, and we will be waiting for the Remuneration Tribunal to establish some detail there, but he did seek an assurance on judges' pension entitlements with respect to existing office holders, and I am advised that if existing office holders who carry such entitlements are appointed to the positions the government will, through regulation, ensure that those arrangements are preserved.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (10:11): So when did the government decide to make sure that those things would be preserved by regulation? Undoubtedly, that is something that should have been in the legislation itself, but it will seek to cover a deficiency via regulation. Just in case anybody who is listening thought that there was a substantial argument made out by the parliamentary secretary that that which I had asserted does not stand up to scrutiny about the stacking of Fair Work Australia, let me just ask them—in particular the parliamentary secretary—that, out of the 17 appointments made thus far, who can tell us how many were ex-trade-union bosses, given the promise that it would not be an endless tribe of ex-trade-union officials? Would you think one or two, possibly? Three or four? Five or six? All right, let's go halfway at eight out of the 17. Nah—you got it wrong; it is 12 out of the 17—over two-thirds. But that is not an endless tribe of ex-trade-union officials according to the parliamentary secretary. Heaven help us if two-thirds plus is not an endless tribe. What it means is that a 100 per cent stacking and packing of Fair Work Australia also would not be an endless tribe to Fair Work Australia appointments.

Need I remind the parliamentary secretary of the appointment of the very first manager of Fair Work Australia—an ex-trade-union official. What was that person's role? The oversight of the Health Services Union inquiry and the inquiry into Craig Thomson. And just when the heat was getting on, just when we as a coalition were seeking to have questions asked of him at a Senate estimates hearing, what does the government do? It miraculously appoints him to the commission of Fair Work Australia to put him out of reach of senators' questions as to the absolutely disgraceful handling of the Craig Thomson and the Health Services Union matter. So this manager, who oversaw this absolute disregard for process and this disgraceful delay in the Craig Thomson-Health Services Union matter, is not chided but rewarded by this government and elevated to the bench of Fair Work Australia. If that is not enough, there is a vacancy created in the managerial role of Fair Work Australia. I wonder what sort of person we might appoint to that vacancy. Guess what! Another ex-trade-union official. But it is not an endless tribe, you understand; it is not an endless tribe of ex-trade-union officials being appointed!

Well, chances are that I misinterpreted what Mr Rudd meant when he said there would not be an endless tribe of ex-trade union officials being appointed. I actually took him at face value. Clearly, I was wrong, as the Australian people were wrong in relation to the no carbon tax promise made at the last election.

We have been told that these appointments are open, transparent and merit based, as undoubtedly was the appointment of that greatly successful manager of Fair Work Australia who oversaw the Health Services Union debacle—open and merit based. What a fantastic job! They did a great job looking into the Craig Thomson Health Services Union for—how many years was it?—three years or whatever it was. Great! And merit demanded that this sort of performance saw this person put onto the bench of Fair Work Australia.

What about the trade union official who was in diabolical trouble with his own trade union, the Electrical Trades Union, which was suing him, if I recall, for about $1 million? They were wanting back pay for the moneys he had received while sitting on one of those industry super funds as a board member, milking out money. There will be more talk about the industry super funds and the default funds under the modern award system later on today. But guess what happened to this person? The day before his announcement to Fair Work Australia was made public—it was just serendipitous; it was just coincidental—the case with the union miraculously settled. Oh please! Merit based? Open? Transparent? I could go on with a list. I think the government knows it cannot claim honesty in relation to that assertion.

Coming back to the issue that Justice Ross says is required, namely, a 'high level of expertise', I think the term was, I am sorry but, with great respect, is the government asserting that that high level of expertise does not currently exist on the bench of Fair Work Australia? I can tell you, there are many people who would clearly fit into that category who would be, I am sure, more than willing to assist the president if he were willing to use their expertise, their experience and their reputation to assist him in the management and running of Fair Work Australia. I say to the government again that no genuine argument has been made out for this enhanced stacking and packing measure of Fair Work Australia.

I finally make a comment in relation to female appointments. It is amazing. The second-last time around, when I pursued the so-called merit based appointments to Fair Work Australia, it was astounding how the selection process showed a complete dearth of quality private sector people worthy of the short list. But, oh, the ex-trade union officials made the short list. They were in there, right through. They made the short list as high-quality individuals. All I would ask you to do, Parliamentary Secretary, if you do want to look for female candidates for appointment to workplace relations tribunals, is look no further than the new LNP government in Queensland, which have appointed for their industrial commission a very distinguished lady, Minna Knight. But people like that, I am sure, simply would not make the short list or would—

Senator Jacinta Collins interjecting—

Senator ABETZ: I am not going to indicate whether or not, because there are privacy considerations involved.

But it is interesting that, when you have an LNP government elected, all of a sudden it finds meritorious female candidates to appoint to its industrial tribunals, yet this government, with all its quotas and other things, seems to have great difficulty.

I will leave my contribution to this amendment at that. I commend the amendment to the Senate. I believe it is worthy. I simply say to the Greens: even if you want to discount every single word I have said in this debate, as is usually your wont, please do so—please be my guest—but you cannot discount—

Senator Polley: Yes.

Senator ABETZ: Senator Polley smiles and says, 'Yes.' But, even if you discard every single word I have said, how on earth do you discard the words of three deputy presidents of Fair Work Australia and how do you discard the very wise counsel of the Law Council of Australia? The parliamentary secretary and the government can play politics with my words, but they cannot play politics with the considered views of three deputy presidents of Fair Work Australia or the Law Council of Australia. That is what makes the coalition so confident that it is right on the fundamental matter of principle that these amendments should be carried—namely, that these two new positions should not be established. Given that the government cannot respond in any coherent way to reject the views of these three deputy presidents and the Law Council of Australia, we can be left with no other conclusion than that this is a deliberate attempt to stack and pack Fair Work Australia, as the government feels it might be in the death throes.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (10:21): Unfortunately, I have been provoked to traverse some territory I was hoping not to occupy Senate time with, but I think the responses of my colleagues and others to at least three references of 'stacking and packing' warrant some consideration. Those listening and other senators need to understand that Senator Abetz's view about what constitutes a union official is a particularly interesting one. Anyone who has ever, at any stage of their professional career, been associated with a trade union would fit his category. So just imagine, across the Australian workforce, people across a broad range of professions and experience—for instance, mine, professional social work. Because I was involved with a union—because I joined a union at the age of about 16—I would fit his category. It is just ludicrous. He counts, for instance, Justice Ross as one of these 'stacks'. He may not particularly like that particular appointment, but it is not really a fair characterisation of the balance and composition of Fair Work Australia, and I do not think that Senator Abetz does the tribunal justice with this approach.

In relation to the Law Council's submission, we need to remind the chamber that what the government is doing is re-establishing an arrangement of seniority that had been in place for many years. The Law Council is concerned about relative positions of some of the existing office holders. Unfortunately, change involves affecting relative positions of existing office holders. That is a necessary consequence of change.

The other three considered views that Senator Abetz highlights relate, if I have got this correct, to at least one and perhaps three leaked emails, possibly taken out of context. I am not sure about how those deputy presidents feel about the opposition bandying around leaked emails, or what their motives may or may not have been in commenting, or how that material came into the public realm. It may have been reported by the Australian Financial Review, but I remind senators and those listening that that is the context of the reporting of those views, not necessarily in their full context. These were private communications between them and the President of Fair Work Australia and certainly cannot be taken as representative of the view of Fair Work Australia commissioners and deputy presidents.

What we do know, as a matter of fact, is that the President of Fair Work Australia sought to have the government re-establish seniority arrangements that had previously been in place to assist him in the administration and management of an agency which we all know has reviewed its internal processes so that it can deal with some of the issues and problems associated, as Senator Abetz highlighted, with resourcing and work in certain areas.

This is what the government is doing to try to assist Fair Work Australia overcome some of the difficulties that have arisen in recent times.

The TEMPORARY CHAIRMAN ( Senator Fawcett ): The question is that opposition amendments (2), (3) and (5) on sheet 7305 be agreed to.

The CHAIRMAN (10:31): I will now put the second part of the opposition amendments. The question is that items 17 to 56 in schedule 8 and item 21 in schedule 11 stand as printed.

Question agreed to.

Senator CORMANN (Western Australia) (10:32): Before I move the opposition's next amendments, I advise that I placed on record a series of concise questions last night, and I would be interested in the government's answers.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (10:32): For Senator Cormann's benefit, as he may not have been listening at the stage when Senator Abetz and I discussed how to deal with the issues that he raised last night, I advise that we agreed—I think as a courtesy to Senator Cormann—to delay responding to Senator Cormann's questions until Senator Cormann was in the chamber. So I am happy to cover those issues now.

As I highlighted with respect to their amendments generally, the government does not support the opposition's proposed amendments. Our reforms to the default fund selection process will ensure that default superannuation contributions in modern awards will be directed to funds that meet the best interests of employees covered by modern awards. We are enabling superannuation funds to apply for default fund status on an equal footing. This will increase competition in the default fund market, which will drive product and service improvements for the benefit of both members and employers.

Our reforms largely reflect the approach recommended by the Productivity Commission. I think this is a critical point, picking up some of the issues that Senator Cormann raised last night. I should highlight that we are proud of our superannuation reforms and further refinements are simply that—refinements responding to the recommendation of the Productivity Commission.

The opposition's approach, on the other hand, is for employers to be able to select from any available MySuper product. This approach was comprehensively rejected by the Productivity Commission. On the opposition's approach, the Productivity Commission noted it:

… does not have an explicit focus on the best interests of employees. It assumes that their best interests will be reflected in the decisions made by employers …

This is one of the critical reasons around why industry superannuation was established in the first instance. We know from the history of superannuation that you cannot have a system based on relying on the best interests of employees being reflected in the decisions made by employers.

The commission went on to note that most employers, particularly small- and medium-sized employers:

… do not necessarily have the incentive, interest or expertise to make a decision that is aligned with the best interests of employees …

The government's approach will ensure that the best interests of employees covered by a specific award are protected by ensuring those employees are placed in the most appropriate MySuper products. The opposition's approach was strongly opposed by unions, industry superannuation funds and employers, including the Ai Group. The government is looking after the best interests of employees whose super is directed to the default fund. The opposition are only looking after their own cheap political interests.

In respect of how these changes will improve the existing approach, our reforms ensure that default superannuation contributions in modern awards will be directed to funds that meet the best interests covered by the relevant award. For the super funds, our reforms enable them to apply for default fund status on an equal footing. All funds with a generic MySuper product will be able to apply to the Fair Work commission for selection as a default fund on an equal basis, which will bring greater contestability to the system. We are increasing competition in the default fund market, which will drive product and service improvements to the benefit of both fund members and employers while ensuring that the default superannuation system operates in the best interests of employees and at the same time responding to the clear recommendations of the Productivity Commission.

Senator CORMANN (Western Australia) (10:36): I have a few observations in relation to that. That was an extraordinary contribution by the government. Just to explain this: so the government is saying that an amendment which would provide that all MySuper default products—products which are in the process of being legislated by this government—which have in them all of the consumer protection mechanisms that this government judges are necessary, that giving the option for any such products to compete with each other, can somehow be contrary to the best interests of employees? If that is what the government is saying, then it should withdraw its MySuper bills immediately. What it is saying is that even though a super product can qualify for registration as a MySuper default product, consistent with its legislative requirements, that is not in itself a guarantee that that product is an appropriate default fund product. Quite frankly, if that is the government's position, then this whole process—going through three different bills in order to legislate the features of a super product that have to be there in order to ensure that those Australians who are not making active choices about their superannuation are properly protected and have a product that properly caters for their needs—is a complete waste of time.

Given the government is currently legislating to ensure that those Australians who do not make active choices in relation to their superannuation arrangements end up in a default product that has been designed by this Labor government—which is called the MySuper product—if the government is now saying that those products are inadequate and are not in the best interests of employees across Australia, then why bother with that at all? You are completely wasting your time.

The other thing the minister said is that the Productivity Commission recommended against us. That is only a half-truth. The Productivity Commission recommended genuine competition until Minister Shorten bullied them into changing their minds.

Senator Jacinta Collins: Please!

Senator CORMANN: That is exactly what happened. I refer you back to the draft report, the interim report and the interim recommendations that were put out by the Productivity Commission.

They were very clear in recommending strong and appropriate moves to a more open, transparent and competitive process. Minister Shorten took the unprecedented step for him to respond to a review before it had actually finally reported. That is never what Minister Shorten does. That is completely inconsistent with his usual modus operandi. Everybody that has anything to do with Minister Shorten knows that that is not normally how he does business. It was a very unique approach. Normally, for any report that comes back to him he has a follow-up consultative review and discussion—a review into the review type process. Quite frankly, in a general sense, Minister Shorten struggles with making decisions. But on this one there was a very clear driver: Minister Shorten wanted to protect the vested commercial interests of his friends in the union movement, who clearly have an interest through union-dominated industry funds to preserve the current situation for as long as possible, which gives them an unfair competitive advantage.

The minister talks about the fact that the Australian Industry Group is also supportive of the government's approach through this legislation—prescribing further government intervention through Fair Work Australia, despite the fact that the Fair Work Australia process as deployed over the last four or so years has been widely discredited. There is such a thing in Australia, still, sadly, called the industrial relations club. There are some cosy arrangements at times between organisational stakeholder interests that are separate from the actual best interests of individual Australians. That is what is happening there. They want to have this cosy arrangement through which, behind closed doors and through a non-transparent, non-competitive process, they can make deals. That is not in the public interest.

What is in the public interest is to have the greatest variety and number of suppliers from across the board—industry funds, retail funds, you name it—competing with each other and keeping each other on their toes in terms of fund performance, investment performance, fees and quality of service. Across all these aspects of the superannuation value proposition it is important to have appropriate competitive tensions to ensure that people can make informed decisions about what is in the best interests of employers and employees in a particular set of circumstances.

The minister in her answer today effectively told us that the MySuper default fund product is not worth the paper the legislation is written on, because, in her words, 'Letting employers direct Australians who do not make active choices in relation to superannuation into MySuper default fund products is contrary to the employee's best interests', unless Fair Work Australia can do another job on top of it—

Senator Jacinta Collins: I quoted the Productivity Commission.

Senator CORMANN: That is exactly what you said, Minister. Either the government trusts its own legislation in terms of defining in legislation what a default fund product should look like—either the government agrees that it has come up with the right consumer protection features in their MySuper legislation, and then as soon as a product complies with the conditions of registration as a MySuper product then any of them should be adequate and appropriate and in the best interests of employees that are not making active choices in relation to their superannuation—or do you think that what you have done is inadequate? If so, you should go back to the drawing board. But to somehow say, 'We're going to let all of you register but even though all of you comply with our conditions of registration we are going to determine through a secretive process who is going to be allowed to compete and who is not allowed to compete,' is just completely inappropriate. It seeks to enshrine yet again an anti-competitive arrangement that, quite frankly, has been widely discredited for some time.

With those few words, I will talk through all of the amendments before moving them in turn because, procedurally, I will not be able to move them all together. Essentially, the objective of the amendments that I am about to move is to ensure that there can be proper and genuine competition between the great diversity of MySuper products which will be available from 1 July 2013, and that all Australians in default super can have the benefits of genuine competition between any MySuper product which complies with the government's requirements for registration as a MySuper product and not just with those select few which have been identified through a discredited process through Fair Work Australia.

Amendments (1) and (2) remove commencement dates for schedules that the coalition is opposing. Amendment (3) provides that the changes in the amendments will not commence until after the commencement of relevant schedules in the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012—currently a bill before the parliament—that is, to link this amendment with what I have just talked about in terms of the availability of the government's own legislated MySuper default fund products.

Amendment (4) removes schedule 1. Schedule 1 at present amends the Fair Work Act to introduce a process under which the Fair Work Commission will review default fund terms in modern awards every four years. This will no longer be necessary if all MySuper products can be selected under any modern award as we believe should be the case.

Amendment (5) removes schedule 2, which currently institutes the expert panel as part of the Minimum Wage Panel in Fair Work Australia. Again, this is an unnecessary layer of bureaucracy. Consumer protection requirements have already been built into MySuper products—or so we have been led to believe by the government, which is clearly completely internally inconsistent with the way it has approached this.

Amendment (6) makes the substantive change to allow for any MySuper product to be available under all modern awards. Amendment (7) makes a minor consequential change to schedule 11.

Let me also point out that we are moving these amendments today to give the Senate the opportunity to do the right thing, to give the Senate the opportunity to help ensure that Australians who are not making active choices in relation to their superannuation arrangements can nevertheless benefit from the highest possible fund performance, the lowest possible fees and the best possible service and, because of competitive tensions that are engendered through genuine competition, this will lead to a maximisation of their retirement savings. That is the reason we are moving these amendments.

If these amendments are unsuccessful today, this will form part of the coalition policy going into the next election. Given that this government has been so belligerent in refusing to do the right thing in this area by continuing to protect the vested commercial interests of their friends in the union movement rather than do the right thing in the public interest, if this does not get fixed between now and the next election a future coalition government will fix it. With those few words I seek leave to move opposition amendments (4), (5) and (7) on sheet 7304 together.

Leave granted.

Senator CORMANN: I move:

(4) Schedule 1, page 5 (line 1) to page 16 (line 4),

(5) Schedule 2, page 17 (line 1) to page 25 (line 13),

(7) Schedule 11, item 1, page 179 (line 19) to page 180 (line 10), Part 2 TO BE OPPOSED.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (10:48): Just a very brief response to those comments: Senator Cormann has obviously failed to convince the Productivity Commission, which comprehensively rejected the approach that he is now proposing. Suggestions that they were bullied or that it was in an earlier interim report that was open for consultations simply seek to conceal that fact, and for those reasons we will be opposing these amendments.

The CHAIRMAN: The question is that schedule 1, schedule 2 and part 2 in item 1 of schedule 11 stand as printed.

Senator CORMANN (Western Australia) (10:55): Consistent with the comments I made previously in this debate, for the reasons that I have previously outlined, I seek leave to move opposition amendments (6) and (3) on sheet 7304 and to take them together.

Leave granted.

Senator CORMANN: I move:

(6) Page 26 (before line 1), before Schedule 3, insert:

Schedule 2A—Superannuation contributions

Fair Work Act 2009

1 Section 149A (heading)

   Repeal the heading, substitute:

149A Superannuation contributions

2 Before subsection 149A(1)

Insert:

   (1A) A modern award must include a term that permits an employer covered by the award to make contributions, for the benefit of an employee covered by the award who is a default fund employee, to any superannuation fund that offers a MySuper product.

   Note: An employer may make contributions under this term even if the superannuation fund to which the contributions are made is not specified in the modern award.

3 Subsection 155A(1) (note)

   Omit "section 149A", substitute "subsection 149A(1)".

(3) Clause 2, page 2 (before table item 4), insert:

The CHAIRMAN: The question is that opposition amendments (6) and (3) on sheet 7304 be agreed to.

Senator MILNE (Tasmania—Leader of the Australian Greens) (10:59): I move Australian Greens amendment (1) on sheet 7309:

(1) Schedule 5, page 34 (after line 9), at the end of the Schedule, add:

Part 3—Protection for whistleblowers

Fair Work Act 2009

4 Section 12

   Insert:

      public interest disclosure: see subsection 351A(2).

5 After section 351

   Insert:

351A Public interest disclosures

(1) A person (the first person) must not take adverse action against, threaten or harass another person because the first person believes that the other person made, or was going to make, a public interest disclosure.

   Note: This section is a civil remedy provision (See Part 4-1).

(2) A public interest disclosure means a disclosure covered by subsection (3) if it is made in the circumstances covered by subsection (4), but does not include a disclosure of information by a person if the person knows that the information, or part of the information, is false or misleading.

(3) This subsection covers disclosures by a person about any of the following kinds of conduct that the person reasonably believes an employer, employee or an independent contractor has engaged in, or intends to engage in:

   (a) an act or omission that would constitute a crime against the laws of the Commonwealth, a State or a Territory;

   (b) a misappropriation of money or property belonging to another;

   (c) a misuse or concealment of information that relates to, or has been obtained because of, a person's employment, where the misuse or concealment is made for personal benefit or is detrimental to the public interest;

   (d) an act or omission that presents a significant risk to:

      (i) a person's safety; or

      (ii) public health; or

      (iii) the environment;

   (e) an act or omission that has, or is likely to cause, an unjust or unacceptable impact on a person.

(4) A disclosure by a person is made in the circumstances covered by this subsection if:

   (a) either:

      (i) the person has made the disclosure to his or her employer and the employer has failed to properly respond in a reasonable time; or

      (ii) it is not appropriate for the person to make the disclosure to his or her employer; and

   (b) it is reasonably necessary for the person to make the disclosure to a person other than his or her employer.

(5) No action or proceeding, whether criminal or civil, lies against a person for or in relation to a public interest disclosure made by the person in accordance with this section.

6 Subsection 539(2) (column 1 of item 11 of the table)

After "351(1)", insert "351A(1)".

I rise today to move this amendment for the Australian Greens on whistleblowing or public interest disclosure. This is something the Australian Greens feel very strongly about. We note that the government made all sorts of promises about dealing with comprehensive whistleblower legislation, but we are yet to see it.

This is a really important amendment as we know that whistleblowers in Australia are afraid to come forward in many cases because they suffer vilification and frequently they lose their jobs or do not get promotion. So we are in a situation where, instead of transparency and openness and reporting of problems, we have covering up. This amendment will enshrine whistleblowing as a workplace right under Fair Work Australia. The act applies to 80 per cent of the Australian workforce, including the federal government sector, many state agencies and large swathes of the private sector. If claims are made that it covers small business, we can say that the overwhelming majority who are doing nothing wrong have nothing to fear.

Essentially, this amendment will enshrine whistleblowing as a protected right through the existing mechanism in the act called 'adverse action'. What that does is prevent an employer, fellow employee or contractor from taking an adverse action against someone after they have made a public interest disclosure. This could include firing them, demoting them, reducing their pay, cancelling supply orders et cetera. If an adverse action is taken they will be able to claim compensation under the act.

The example that I can give is one that has just been reported in the last couple of weeks—that is, with Mr Twiggy Forrest's Fortescue Metal Group. They commissioned an archaeologist firm to inspect the cultural artefacts and connections of the traditional owners in the Pilbara. When Fortescue did not like the results, they ordered that sections be taken out and they withheld payments until they did. This scourge affects environmental assessments and native title applications too. One firm wrote to the Western Australian department after the requested changes were made and the other refused to make the changes and had to forgo $70,000. In the private sector, whistleblowing protections should extend to contractual right to payment as well as subsequent adverse treatment against contractors if they make a protected disclosure.

Another example is the HIH collapse. This could have been avoided if these proposals were in place at the time. The external actuaries and auditors of HIH relied so heavily on their business that they did nothing when the HIH board refused to heed the recommendations and deferred to the board's authority in fear of upsetting the business relationship and regular work. So there was no incentive or protection for people to blow the whistle on what was clearly going on in that particular company. It is important that we move to recognise whistleblowing as a workplace right.

In addition to adverse action, the amendment also incorporates threats and harassment to stop workplace bullying, which commonly follows disclosure of the information. As we heard recently when a former policeman came forward in relation to what has led to a royal commission into sexual abuse, he knew that his career would be over in terms of the bullying that would go on as he revealed the extent to which moves had been suppressed within the police force formerly.

To qualify for the protections of Fair Work, the whistleblower must first raise the issue with the employer and then, if there is no adequate response to the disclosure within a reasonable time, they may make a disclosure that is reasonably necessary to another person. If it is not appropriate for the person to inform their employer for a justifiable reason, they can immediately inform a third party and still be covered by the scheme. If the above procedure is followed, they would be immune from civil and criminal action arising from the disclosure. It is really important that we take this on board and work now to make sure that we give whistleblowers this workplace right and protect them from any adverse consequences that might occur when they are clearly acting in the public interest. It needs to be not only in the public sector but it also needs to cover the private sector.

The classes of disclosable conduct are listed in the subclause, and there is a catch-all in (e) that says they include 'illegal acts, misappropriating money or property, misuse or concealment of information and risks to public health, a person's safety, and the environment'. In other words, they are disclosable conduct that would be protected by making whistleblowing a fairly extensive workplace right. But a person who discloses information, or even a part of it, with knowledge that it is false or misleading will not be covered by the provisions, so it is not just a carte blanche and it is not trying to encourage vexatious individuals or people making up things or presenting false information. It is actually saying that the provision for whistleblowers covers you providing the information you are giving is truthful and in accordance with what you are claiming. It will cover people in the public and private sectors.

Given the enormous wealth that is being made around the country, particularly in the resources sector, and the decision by the Commonwealth to devolve responsibility to the states for environmental protection and environmental assessment, it is critical that we get coverage for whistleblowers in legislation. I am hoping that there will be support in the Senate for acting on what people say they want—that is, actually protecting whistleblowers in the public interest and making whistleblowing a workplace right.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (11:07): While the government recognises the importance of providing strong protections to workers who act in the public interest, it will not support these amendments. The government notes that the Fair Work Act currently provides some protection from adverse action where a person has or exercises a workplace right. A workplace right relevantly includes where a person is able to make a complaint or inquiry to a person or body having a capacity under a workplace law to seek compliance with the law or a workplace instrument, or if the person is an employee in relation to their employment.

The government proposes that the need for any amendment to the Fair Work Act should be carefully considered following the release of the government's response to the report of the inquiry into whistleblower protections within the Australian Public Service, which is scheduled for early in the parliamentary new year. For example, the proposed amendments are broad and seek to provide protections to a broad range of disclosures without any appropriate framework for who such disclosures should be made to. Nor do they provide potential disclosers with the certainty of whether their actions are legal or not, with the courts having to make decisions about whether the public disclosure was reasonable or not. The government considers this issue is too important to rush ahead of proper consultation and response to the report, and also highlights that these amendments relate mostly to the first tranche of recommendations from the Fair Work Act review panel. It is in this context that we believe these matters should be dealt with elsewhere.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (11:09): Just very briefly, on this occasion I adopt the words of the minister in relation to this—especially her last words—that one of the reasons we should not be considering this is that we should not rush ahead without proper consultation. I think that has been a continuing theme of the coalition and the opposition in relation to this legislation—which, it will be recalled—was introduced into the House of Representatives one day, voted upon on the next day, and then it was exempted from the cut-off in the Senate. It was rushed through here, rushed through a committee, and we have said that proper consultation does need to take place. Clearly what the Australian Greens are doing this morning is to introduce a completely new issue—which they are entitled to do, but it is a completely new issue—in relation to the Fair Work Act regime which has not had consultations with the various stakeholders.

The coalition's amendments specifically deal with matters that have actually been canvassed in the bill and have actually had some exposure, albeit extremely limited. Having said that, the coalition will be opposing the Greens amendments.

Senator MILNE (Tasmania—Leader of the Australian Greens) (11:11): It is always interesting that when it comes to protecting whistleblowers there are always years and years more consultation that has to happen. Meanwhile, people who have blown the whistle suffer, lose their jobs, lose their promotions and frequently end up being smeared and vilified in the process, and we have years and years more consultation. How many more years do we need before we protect whistleblowers?

I remind the Senate: we have just been going through the Reserve Bank of Australia note bribery scandal. That would not have happened without three very brave whistleblowers who came forward and basically said, 'Enough is enough,' and got that scandal exposed. At the rate the government and the coalition want to move, it would have been, 'No, we have to have many more years of consultation before we work out how we would actually protect those whistleblowers'—not to mention someone like Dave Reid, for example, who came out and made his claim against ANSTO. He was smeared, he suffered character attacks, and of course he was eventually vindicated after he exposed the poor safety controls at the Lucas Heights nuclear reactor. We could go on and name many, many whistleblowers around Australia who have acted in the public interest, who have exposed appalling scandals. The RBA note bribery scandal is a case in point. If we want people to come out and tell the truth, as we had with the Wheat Board, as we have had with the RBA note inquiry and so on, you have to protect them. We have to encourage a culture of people coming forward in the public interest. But all we seem to do is have governments and oppositions, when they change sides, suddenly change perspective on what sort of protections they are prepared to give people who will come forward in the public interest. In the private sector, of course, there is virtually no protection for people at all.

It may interest both the government and the coalition to know that in the United States they have come forward with legislation which actually allows whistleblowers to get some of the benefit if they are saving money, if they are reporting maladministration or fraud. They actually get a percentage of that. That is not something the Greens are proposing, but it is certainly a way for people to have an incentive to watch what corporations and government agencies are doing in terms of reporting when money is being misappropriated, or fraud is occurring or whatever the allegation might be.

I would just stand here and strongly say that you cannot keep putting this off. You cannot keep saying, 'We are going to the election promising all this protection for whistleblowers', and yet the reality is that it is delay, delay, delay, weak action and ultimately we end up with nobody having the courage to come forward. It has been significantly undermined by the move to contracts in the senior echelons of the Public Service. People now are in the position of knowing that their contract may not be renewed.

There are all kinds of problems associated with why we end up not having people coming forward and telling the truth about what is going on in their companies and in the public sector. Senator Collins was talking about an agency. We have talked about having a national integrity commission that would work with the Ombudsman to make sure that when complaints are made if it is maladministration it would go to the Ombudsman and if it is fraud it would go to the Integrity Commission. We have proposed a structure and we have a bill in this parliament to have a national corruption capacity. For the life of me I cannot understand why neither the government nor the coalition is prepared to back a national integrity commission and serious legislation that deals with whistleblowers. I ask them to reconsider and to it least give in-principle support to whistleblowing as a workplace right.

The TEMPORARY CHAIRMAN ( Senator Bernardi ): The question is that Australian Greens amendment (1) on sheet 7309 be agreed to.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (11:21): by leave—I move opposition amendments (7) to (11) and (13) on sheet 7305 together:

(7) Schedule 8, item 57, page 54 (line 6), omit "paragraph 581A(1)(a)", substitute "subsection 581A(1)".

(8) Schedule 8, item 62, page 55 (lines 22 to 30), omit subsection 581A(1), substitute:

(1) Without limiting section 581 (which deals with the functions of the President), the President may, in accordance with subsection (2) of this section, deal with a complaint about the performance by another FWC Member of his or her duties.

(9) Schedule 8, item 62, page 56 (line 2), omit "paragraph (1)(a)", substitute "subsection (1)".

(10) Schedule 8, item 62, page 56 (line 27), omit "paragraph (1)(a)", substitute "subsection (1)".

(11) Schedule 8, item 62, page 56 (line 35), omit "paragraph (1)(a)", substitute "subsection (1)".

(13) Schedule 8, item 64, page 57 (line 31), omit "paragraph 581A(1)(a), subsections 581A(2)", substitute "subsections 581A(1)".

The opposition also opposes Schedule 8 in the following terms:

(4) Schedule 8, item 5, page 44 (lines 15 and 16), TO BE OPPOSED.

(12) Schedule 8, item 63, page 57 (lines 20 to 23), TO BE OPPOSED.

The coalition strongly believes in a strong and independent commission, and it is vital that the Australian people have confidence in Fair Work Australia. These amendments will ensure that the president's powers are not so broad as would provide him with an open remit to penalise people as he sees fit. I do not believe that is necessarily good within any workplace, let alone a workplace such as Fair Work Australia. Regrettably, we do know that there is some disharmony, to put it mildly, at the top of Fair Work Australia. That disharmony received public attention when the President of Fair Work Australia made some observations—I will once again use diplomatic language—about Vice President Graeme Watson's speech in recent times.

Mr Ross told us at Senate estimates that he had 'expressed concern' to the vice president following his speech, in which he expressed concern about the operation of the Fair Work Act and its review.

In July of this year Mr Ross then released a code of conduct which some people interpreted as a thin-veiled attack on Mr Watson. The Australian Financial Review said this code of conduct:

… reads disturbingly like an effort to enforce group-think on his subordinate commissioners.

Under the section headed 'Participation in the public debate', Mr Ross's code directs members to avoid involvement in political controversy when engaging in public debate and carefully consider how they express their views, as they may lead to the perception of bias. The quote goes on:

Other members may hold different views on contentious issues, and may wish to respond accordingly, possibly giving rise to a public conflict between members, which may bring the tribunal into disrepute or could diminish the authority of the tribunal.

Despite all of this, Mr Ross has provided separate advice that:

The President speaks on behalf of the tribunal and its members.

In other words, it is Mr Ross's view that will prevail and no other commissioner will be entitled to express his or her view that may not necessarily 100 per cent align with the president's view. I am not sure that that is healthy for any tribunal or indeed any court. The fact that they should resist involvement in public controversy is, of course, accepted wisdom. But if the president can do so, one wonders why deputy presidents and others cannot do so. What is difficult to swallow by some is that on the very day that Mr Ross appeared at Senate estimates, saying that it was inappropriate for Fair Work Australia tribunal members to 'enter the public debate about such issues', he appeared on the ABC 7.30 program to answer questions about Fair Work Australia's involvement in the investigation into Craig Thomson, despite saying that he had no responsibility for it.

The coalition does have some concerns in relation to what the government is proposing. I understand that the normal practice for tribunals is as is currently in the legislation. Without going into too much detail, what the government is seeking to do is to delete provisions of the existing Fair Work Act and give the president, quite frankly, unprecedented powers. At the moment a Fair Work Commissioner must, under section 640, disclose a potential conflict to the president. I should be starting at 643—Termination for appointment for bankruptcy et cetera. Section 643 reads as follows:

The Governor-General must terminate the appointment of an FWA member if—

then we go down to (c):

(c) the FWA member fails without reasonable excuse to comply with section 640.

Now allow me to go back to section 640 where the member, therefore, without reasonable excuse, does not disclose a potential conflict of interest to the president. If that conflict of interest is disclosed to the president then the commissioner can only deal with it with the president's approval, but the president must give a direction to the Fair Work member not to deal or to no longer deal with a matter if, and then those circumstances are set out. The government is basically seeking to delete a number of those aspects and simply replace it with the suggestion that the Fair Work Commission member must disclose the potential conflict to (a) a person who has made or will make a submission, and to the president, and that there are then no follow-on consequences.

We believe that if a Fair Work commissioner fails to disclose and behave as is currently required under section 643 then termination should take place. There is, of course, the get out, where that failure is without reasonable excuse; so there is that protection for an FWA member. But if they are without reasonable excuse and behaving in a particular manner then the Governor-General must terminate their appointment.

The government is now proposing that the president, basically in his full discretion, will be able to deal with that particular matter. It seems to the coalition that it is unhealthy that so much power should reside with the president of Fair Work Australia. I have also indicated in my other comments that we believe that the powers of the president will be too great, and that it will not be conducive to a healthy, robust Fair Work Australia, where different commissioners might actually be able to hold some differing views and give expression to their differing views—of course, within the bounds of appropriate expression.

I might say that we have that from High Court judges, who from time to time give speeches. I can think of speeches by Justice Kirby where the chances are I would not agree with much at all, yet with former Justice Ian Callinan giving speeches the chances are that I would have agreed with most of what he said. These people sat on the High Court together and the High Court did not fall into disrepute because of it. They were entitled to express differing views. Just imagine if today a High Court judge could not give a speech without Chief Justice French giving his imprimatur. I think that would diminish the High Court and, whilst Fair Work Australia is in no way to be equated with the High Court, being only a quasi-judicial body, it is nevertheless a similar principle that should apply, that there should be that freedom and that we should not have such an oppressive regime being foisted on Fair Work Australia commissioners.

I commend the amendments to the Senate.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (11:32): The government opposes the opposition amendments in this area regarding the powers of the president. The bill sets out clearly in law a complaints-handling process for members of the Fair Work Commission, including the president. The government considers an effective complaints mechanism is an important element of ensuring and maintaining public confidence in the commission.

The government's proposed section 581A provides a framework for the president to deal with complaints against members. The provisions proposed by the government are modelled on similar provisions recently passed by the Senate to deal with complaints made against members of the federal judiciary. Paragraph (1)(b) of new section 581A simply makes it clear that the president, as part of the complaints-handling process, has a responsibility to manage issues that could impact on public confidence in the tribunal. Any steps taken by the president during an inquiry into a complaint must be temporary measures taken until the conclusion of the inquiry and determination of the complaint.

The government supports the president having the discretion to effectively manage the affairs of Fair Work Australia as the head of the tribunal, with responsibility for ensuring that it performs its functions and operations effectively and in a manner worthy of public confidence.

The coalition have indicated that they will oppose the government's proposal to omit section 643C from the Fair Work Act. The proposed omission of the section relates to the amendments that the government has put forward in this bill to streamline and clarify the operation of provisions dealing with conflicts of interest. While a failure to comply with section 640, which deals with conflicts of interest, will no longer be a ground for termination of the appointment of a Fair Work Commission member under the bill, the member still retains the obligation to disclose any potential conflict to the parties and to the president under that section. A failure to disclose the conflict may lead to a complaint being made against the member, which would be dealt with in accordance with the new complaints-handling process set out in the bill.

The government considers that the framework it has proposed will bring greater certainty and transparency to handling complaints against Fair Work members, whether a complaint deals with a conflict of interest or some other matter. The important issue here is to have a mechanism or a process that works within the tribunal. That is why we maintain these proposals as they stand.

The TEMPORARY CHAIRMAN ( Senator Bernardi ): We have several questions here. The first is that item 5 in schedule 8 stand as printed.

Question agreed to.

The TEMPORARY CHAIRMAN: The question now is that opposition amendments (7) to (11) and (13) on sheet 7305 be agreed to.

Question negatived.

The TEMPORARY CHAIRMAN: Finally, the question is that item 63 in schedule 8 stand as printed.

Question agreed to.

Senator WRIGHT (South Australia) (11:36): by leave—I move Greens amendments (1) and (2) on sheet 7318:

(1) Clause 2, page 2 (after table item 4), insert:

(2) Page 60 (after line 14), after Schedule 8, insert:

Schedule 8A—Better work/life balance

Fair Work Act 2009

1 Paragraph 5(8)(a)

   Omit "or an equal remuneration order (see Part 2 7)", substitute ", an equal remuneration order (see Part 2 7) or a flexible working arrangements order (see Part 2 7A)".

2 Section 12

   Insert:

      flexible working arrangements order: see subsection 306F(1).

3 Subparagraph 43(2)(a)(ii)

   Omit "and", substitute "or".

4 At the end of paragraph 43(2)(a)

   Add:

      (iii) a flexible working arrangements order (see Part 2 7A); and

5 Subsection 44(2)

   Omit "65(5) or".

6 Subsection 44(2) (note 1)

   Repeal the note, substitute:

      Note 1: Subsection 76(4) states that an employer may refuse an application to extend unpaid parental leave only on reasonable business grounds.

7 Subsection 44(2) (note 2)

   Omit "65(5) or".

8 Division 4 of Part 2 2

   Repeal the Division.

9 Section 146 (note)

   Omit "65(5) or".

10 After paragraph 172(1)(c)

   Insert:

      (ca) matters pertaining to flexible working arrangements;

11 Subsection 186(6) (notes 1 and 2)

   Omit "65(5) or".

12 After Part 2 7

   Insert:

Part 2 7A—Flexible working arrangements

Division 1—Introduction

306A Guide to this Part

This Part provides processes for changing working arrangements.

Division 1 deals with preliminary matters.

Division 2 deals with requests for flexible working arrangements, including flexible working arrangements for employees who are carers.

Division 3 provides for the making of flexible working arrangements orders by FWA to ensure that employers comply with this Part.

306B Meanings of employee and employer

   In this Part, employee means a national system employee, and employer means a national system employer.

306C State and Territory laws that are not excluded

(1) This Act is not intended to apply to the exclusion of laws of a State or Territory that provide employee entitlements in relation to flexible working arrangements, to the extent that those entitlements are more beneficial to employees than the entitlements under this Part.

(2) However, a law of a State or Territory has no effect in relation to an employee to the extent that it provides an employee entitlement in relation to flexible working arrangements that is inconsistent with a term of an enterprise agreement that applies to the employee.

Division 2—Requests for flexible working arrangements

306D Requests for flexible working arrangements

    Employee or organisation may request change

(1) An employee, or an employee organisation that is entitled to represent the employee, may request the employer to change the employee's working arrangements.

   Note: Examples of changes in working arrangements include changes in hours of work, changes in patterns of work and changes in location of work.

(2) Neither the employee, nor the organisation, is entitled to make the request unless:

   (a) for an employee other than a casual employee—the employee has completed at least 12 months of continuous service with the employer immediately before making the request; or

   (b) for a casual employee—the employee:

      (i) is a long term casual employee of the employer immediately before making the request; and

      (ii) has a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

   Formal requirements

(3) The request must:

   (a) be in writing; and

   (b) set out details of the change sought and of the reasons for the change.

    Responding to the request

(4) The employer must give the employee, or the employee organisation (as the case requires), a written response to the request within 21 days, stating whether the employer grants or refuses the request.

(5) The employer may refuse the request only on reasonable business grounds.

(6) If the employer refuses the request, the written response under subsection (4) must include details of the reasons for the refusal.

306E Requests for flexible working arrangements—carers

    Request for change for employee who is a carer

(1) An employee who has responsibility for the care of another person, or an employee organisation that is entitled to represent the employee, may request the employer to change the employee's working arrangements to assist the employee to care for the other person.

   Note: Examples of changes in working arrangements include changes in hours of work, changes in patterns of work and changes in location of work.

(2) Neither the employee, nor the organisation, is entitled to make the request unless:

   (a) for an employee other than a casual employee—the employee has completed at least 12 months of continuous service with the employer immediately before making the request; or

   (b) for a casual employee—the employee:

      (i) is a long term casual employee of the employer immediately before making the request; and

      (ii) has a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

    Formal requirements

(3) The request must:

   (a) be in writing; and

   (b) set out details of the change sought and of the reasons for the change.

    Responding to the request

(4) The employer must give the employee, or the employee organisation (as the case requires), a written response to the request within 21 days, stating whether the employer grants or refuses the request.

(5) The employer may refuse the request only on serious countervailing business grounds.

(6) If the employer refuses the request, the written response under subsection (4) must include details of the reasons for the refusal.

Division 3—Flexible working arrangements orders

306F FWA may make flexible working arrangements order

    Power to make flexible working arrangements order

(1) FWA may make any order (the flexible working arrangements order) it considers appropriate to ensure that an employer complies with section 306D or 306E.

    Who may apply for flexible working arrangements order

(2) FWA may make a flexible working arrangements order only on application by any of the following:

   (a) an employee or organisation whose request under subsection 306D(1) or 306E(1) for a change in working arrangements has been refused;

   (b) an employee organisation that is entitled to represent an employee covered by paragraph (a);

   (c) the Age Discrimination Commissioner, the Disability Discrimination Commissioner or the Sex Discrimination Commissioner.

306G Implementation of flexible working arrangements in stages

   A flexible working arrangements order may implement changed working arrangements in such stages (as provided in the order) as FWA thinks appropriate.

306H Contravening a working arrangements order

   An employer must not contravene a term of a flexible working arrangements order.

   Note: This section is a civil remedy provision (see Part 4 1).

306I Inconsistency with modern awards and enterprise agreements

(1) A term of a modern award has no effect in relation to an employee to the extent that it is less beneficial to the employee than a term of a flexible working arrangements order that applies to the employee.

(2) A term of a flexible working arrangements order has no effect in relation to an employee to the extent that it is inconsistent with a term of an enterprise agreement that applies to the employee.

13 Subsection 539(2) (after table item 9)

   Insert:

14 Subsection 545(1) (note 4)

   Omit "65(5),".

15 After paragraph 557(2)(f)

   Insert:

      (fa) section 306H (which deals with contraventions of flexible working arrangements orders);

16 After paragraph 576(1)(f)

   Insert:

      (fa) flexible working arrangements (Part 2 7A);

17 Paragraph 653(1)(c)

   Repeal the paragraph, substitute:

      (c) conduct research into the operation of the provisions of the National Employment Standards relating to requests for extensions of unpaid parental leave under subsection 76(1); and

      (ca) conduct research into the operation of Part 2 7A in relation to requests for changed working arrangements; and

18 After paragraph 675(2)(e)

   Insert:

      (ea) a flexible working arrangements order;

19 At the end of subsection 716(1)

   Add:

      ; (g) a term of a flexible working arrangements order.

20 Subsection 739(2)

   Omit "65(5) or".

21 Subsection 739(2) (note)

   Omit "65(5) or".

22 Subsection 740(2)

   Omit "65(5) or".

23 Subsection 740(2) (note)

   Omit "65(5) or".

These are the better work-life balance amendments that mirror the Fair Work Amendment (Better Work/Life Balance) Bill 2012 introduced by my colleague Adam Bandt in the other place.

The TEMPORARY CHAIRMAN ( Senator Bernardi ): The question is that the amendments be agreed to.

Senator ABETZ (Tasmania—Leader of the Opposition in the Senate) (11:43): by leave—I move opposition amendments (15) and (1) on sheet 7305:

(1) Clause 2, page 3 (at the end of the table), add:

(15) Page 191 (after line 8), at the end of the Bill, add:

Schedule 12—Australian Workplace Relations Commission

Part 1—Amendments

Fair Work Act 2009

1 The whole of the Act

   Omit "Fair Work Commission" (wherever occurring), substitute "Australian Workplace Relations Commission".

2 The whole of the Act

   Omit "FWC" (wherever occurring), substitute "AWRC".

3 The whole of the Act

   Omit "FWC's" (wherever occurring), substitute "AWRC's".

Part 2—Transitional and consequential provisions

4 Regulations may deal with transitional etc. matters

(1) The Governor General may make regulations dealing with matters of a transitional, saving or application nature relating to amendments made by this Schedule.

(2) Despite subsection 12(2) of the Legislative Instruments Act 2003, regulations made under this item may be expressed to take effect from a date before the regulations are registered under that Act.

(3) In this item:

amendments made by this Schedule includes amendments made by regulations under item 5 of this Schedule.

5 Regulations may make consequential amendments of Acts

(1) The Governor General may make regulations amending Acts (including the Fair Work Act 2009) being amendments that are consequential on, or that otherwise relate to, the amendments made by this Schedule.

(2) Despite subsection 12(2) of the Legislative Instruments Act 2003, regulations made under this item may be expressed to take effect from a date before the regulations are registered under that Act.

(3) Amendments of an Act made by regulations for the purposes of this item can be incorporated into a reprint or compilation of the Act as provided by the Acts Publication Act 1905.

For all this government's rhetoric about consultation and listening to people, we have another good example of where the rhetoric does not actually match the action. The government set up the Fair Work Review Panel, stacked as it was, skewed terms of reference as they were, and the panel strongly recommended that the name Fair Work Australia should be changed.

What is the government's recommendation here: that the offending part of the title is not 'Fair Work' but 'Australia'. They want to delete the word 'Australia' and insert 'Commission' in direct rejection of the review panel's recommendation that it is 'Fair Work' that is the tarnished name. 'Fair Work' is the sullied name; 'Fair Work' is the name that has fallen into disrepute. Why? Because of this government. This government has tried to make Fair Work Australia into a political vehicle. We know that Fair Work Australia's reputation is diminished and tarnished because of the Health Services Union inquiry and the inquiry into Mr Craig Thomson. I do not need to canvass that scandal any further other than to say that after three long years Fair Work Australia finally came to the conclusion that I think that every other Australian had come to about 2½ years earlier that Mr Thomson was a bad egg, that he had misspent members' moneys. It took Fair Work Australia three long years to come to that conclusion.

It is no wonder that the review panel into the Fair Work Act came to the conclusion that the name should be changed with the deletion of the words 'Fair Work'. Let me remind senators of the actual recommendation. It says:

The panel recommends that the Fair Work Act be amended to change the name of Fair Work Australia to a title which more aptly denotes its functions. It is recommended that the new title contain the word "Commission"—

and the government has done that—

and that it no longer contain the words "Fair Work".

Was this a bolt out of the blue? No, it was not. The President of Fair Work Australia, Mr Ross, no less, when I asked him at a Senate estimates in May about these matters in relation to the name change, said:

I have put forward two suggestions. Frankly, I do not mind as long as it is not the same as the name of the act. The two names I have put forward are: the Australian Workplace Commission or the Australian Workplace Relations Commission. The key point is not really what the name is. It is that it be separate from the name given to the act and that there be a clear distinction between the administrative functions of the organisation and the adjudicative functions.

So you have got the Fair Work Act Review Panel making this recommendation and you have got the President of Fair Work Australia making that recommendation. Guess who else makes that recommendation? It is not often that we in the coalition would rely on these people as our allies, but listen to this: the Maritime Workers Union said:

The MUA welcomes a return to the inclusion of "Commission" in the name of the Tribunal.

However, the MUA supports calls for further amendment of the name to its natural form, "Australian Industrial Relations Commission".

The Commission has been and remains a cornerstone of a functioning Australian democracy and is renowned for its fair and efficient management of industrial relations following federation with the enactment of the Conciliation and Arbitration Act 1904.

As such, the Commission deserves a name that is recognised throughout Australia and should revert to its longstanding and accepted form.

So we can go from the extreme and the ridiculous with the MUA, who actually support this, right through to the Australian Metals and Mining Association who submitted:

Enacting a name change from Fair Work Australia to the Fair Work Commission will do little to rectify the branding challenges—

Isn't that a polite way of putting it? Some of us might say the 'trashed reputation', but very diplomatic language was used here. The submission continues:

the tribunal has experienced in the wake of the Health Services Union investigation or to clear up the confusion between the judicial and administrative arms of the Fair Work infrastructure. A more objective name for the tribunal such as the Australian Workplace Relations Commission (AWRC) if far more appropriate.

In its response to the Fair Work review, the ACTU said that they strongly supported the recommendation as it was.

So I ask the question: who is standing in the way of the name change? We have got the ACTU, we have got the Maritime Workers Union of Australia, we have got employer group after employer group—from the big ACCIs and AiG through to the Master Builders, the Housing Industry Association, the Independent Contractors Association, the Council of Small Business of Australia, and we have even got the Law Council of Australia—all supporting this.

Who has submitted or argued that the name should be 'Fair Work Commission'—nobody other than Ms Gillard, who created Fair Work Australia and the legislation. Her vanity is what stands in the way of this very sensible, practical recommendation. Indeed, Labor senators in considering this legislation—and rushed as the committee process was; a matter that I had previously canvassed—said this in paragraph 2.40:

A number of submitters saw merit in resurrecting the title 'Australian Industrial Relations Commission', on the basis that the name is well known and accepted in the community.

Even they were mugged by the overwhelming number of submissions in relation to this.

So, for good judicial and administrative purposes the President of Fair Work Australia has recommended this change. The Fair Work Review Panel, stacked and packed as it was by Labor for a certain outcome with skewed terms of reference, were also mugged by all the submissions that this name change should occur.

Indeed, the Orwellian name of Fair Work Australia, or now Fair Work Commission, has all the hallmarks of the sort of Orwellian naming that this government loves, but it has fallen into disrepute. The name 'Fair Work' is now a trashed commodity within the Australian community and within the workplace relations space. Everybody knows it, from the Maritime Union of Australia right through to the ACTU, all the employer groups, the panel and President of Fair Work Australia and even Labor senators on the committee; but who does not get it? The Prime Minister, in her vanity. Indeed, that is what some of the submitters have suggested. The feedback they have got is that this very sensible change was stopped at the very highest levels of the government.

I am not going to spend any more of this chamber's time on this, but it is yet again another window for the Australian people to see how this government operates. Let us start with consultation—'We will take into account community concerns. We are going to have a thorough, robust panel looking at this.' They made a recommendation that was supported by everybody—it was unanimous. Yet the government will not do it. Why? Because of the vanity of the Prime Minister.

It is a matter of great concern when the proper judicial and administrative functioning of such an important tribunal cannot be rehabilitated with a name change simply because of the vanity of the Prime Minister. She created Fair Work Australia. She appointed the initial personnel to Fair Work Australia. Of course, Fair Work Australia is now a trashed brand. That is recognised across the political divide, across the employer-employee divide and within Fair Work Australia.

Whilst we would argue that a name change is only a small change and there may need to be some cultural change attached to it, this government cannot even bring itself to a name change. If it cannot bring itself to such a basic change as that that has been so overwhelmingly recommended and so overwhelmingly endorsed, it stands to reason that the Australian people will come to the conclusion that this government will set its own course irrespective of the national interest and irrespective of the interests of having good functioning tribunals in this nation because the overriding factor will be the vanity of the Prime Minister. I commend the amendments to the chamber.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (11:55): For the reasons that have already been well canvassed at least three or four times in this debate, the government will be opposing these amendments. Let me conclude with one reflection. The only completely trashed name in this debate is Work Choices.

The TEMPORARY CHAIRMAN ( Senator Bernardi ): The question is that opposition amendments (15) and (1) on sheet 7305, moved by Senator Abetz, be agreed to.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (12:03): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator COLBECK (Tasmania) (12:04): I rise to make a contribution on behalf of the coalition on the Wheat Export Marketing Amendment Bill 2012. I indicate at the outset that the coalition is not supporting this piece of legislation, for very good reasons. I think that if you were to look at the government's history in relation to agriculture over the last couple of years you could understand that we do not trust the government when they ask us to trust them. You only have to look at the agriculture minister's record over the last couple of years in relation to his support for agriculture to see that the government has been a complete and dismal failure. I cite live exports, where the minister succumbed in cabinet—obviously his opinion not carrying any weight—to a decision that was made without even any cabinet documents being presented. If you look at the recent debacle where the minister was overridden by the environment minister in respect of fishing in the south-east small pelagic fishery in Australia, you see we had special legislation presented to this parliament only a few weeks ago to make a political decision to override the systems that exist in our agriculture, fisheries and forestry sectors. They are world renowned, particularly our fisheries management. So the currency of this minister to actually do what he might have promised is very low.

Look at what is happening in my home state of Tasmania right now, where we are looking at the locking up of over 50 per cent of our land mass, making it out of bounds. Again, where is the Minister for Agriculture, Fisheries and Forestry? The one who should be standing up for the forests sector has been completely stood aside by the environment minister yet again. What voice did we hear from the agriculture minister in the current Murray-Darling debate? Silence. So when we are looking at this government's management and handling of the agriculture portfolio, I think, as the coalition believes, we have reason to be very concerned.

Look at what this government did to exporters wanting to get their products into the market. We say we are going to be the food bowl of Asia, yet they made the cost of export more expensive by removing assistance to the export sector, by taking away the 40 per cent rebate for export fees and certification fees and charges and imposing an extra $40 million a year on industry. Had it not been for the opposition, a package would not have been put in place to lighten that load and force the government into a transitional process.

The government boasts about its $127 million package to assist exporters through the reform of the export fees and charges process. But it was because the opposition held out and because the then crossbenchers, Family First and Senator Xenophon, held out with us that we were able to force the government into putting a reasonable package on the table. The government might boast about it, but the reason it is there is that this coalition stood up for the agriculture sector. In the circumstance of the export fees and charges, the Greens were prepared to flip out for $20 million, but the package that we got was $127 million. We have a record of support for the agriculture sector and we are proud of it.

That is what sits at the genesis of this piece of legislation. We are concerned that a number of things have not yet been sorted out in relation to the export of wheat that need to be sorted out. It has been through an extensive process. It has been through Senate inquiries. In fact, a couple of Senate inquiries have looked at issues around exports, access to the belts and to the export facilities, at issues around quality, which I think are quite legitimately a major concern for our export industry in Australia, and at access to information around volumes, materials and wheat in storage. I think it is important that that sort of market information is available. We do not actually have in place the systems to achieve that, so the opposition are saying, 'Let's put those systems in place before we take away what is left of our regulatory process.' We are not opposed to removing the regulatory process, but we are saying, 'Let's have the mechanisms in place to make sure that the information that should be available is readily available to industry so that there is capacity for fair competition in the marketplace.'

This argument is not about the single desk. I need to make clear that that discussion is done and dusted and over. But the opposition remain concerned that there be fair competition in the marketplace. We are aware that this piece of legislation will now pass because the government has the support of the Greens and that the Greens have some amendments they will bring to this debate during the committee stage—we are also aware of some commitments that the government has made to the Greens in relation to those. We will obviously have that conversation during the committee stage.

It is important to note that the government has an abysmal record in relation to its dealings in agriculture, which is clearly visible to the agriculture sector and to the community. It is important that the government are properly held to account, so we want to make sure that they can be held to any commitments they make. We also want to make sure that all of the mechanisms that need to be put in place are there to ensure there is fair competition in the marketplace and that good data about supplies and stocks held is available, and not just to those who hold those stocks. That is an important piece of this overall puzzle.

Those are the issues that we are concerned about and that need to be sorted out as part of the development of this piece of legislation. So we will be looking very closely at the amendments that will be brought through the chamber by the Greens and by Senator Xenophon. We will be looking very closely at the commitments that have been made in relation to those. We want to make sure that commitments that are made are kept. I think it is important that we do that as part of this overall process so that we maintain our well-earned and hard-fought for reputation as a quality, reliable wheat supplier into global export markets. That is absolutely fundamental for us.

In recent visits to some of those markets, I have seen the value that is placed on the quality and safety of product that comes out of Australia. It is part of our reputation. It is a hard-earned reputation and, unless it is properly managed and protected, it will not be that an individual supplier has caused a problem but that there is a problem with Australian wheat. That is an issue that we in the coalition want to ensure is properly managed. So there needs to be a proper process for establishing and certifying wheat standards. There needs to be a mechanism to ensure that market information is freely available. Those are the things that the coalition want to see put in place as part of this process, and we will work with the chamber through both the debate and the committee process of this piece of legislation to ensure that those things are achieved. We trust that those commitments can be made and can be achieved through the chamber, and we are in a position to be able to support those.

Senator SIEWERT (Western Australia—Australian Greens Whip) (12:13): Firstly, I want to indicate that, with the amendments that we have circulated—and I will be seeking leave to table some additional correspondence—we will be supporting the Wheat Export Marketing Amendment Bill 2012. I have given this bill very serious thought and consideration. I want to acknowledge the process that has brought us to this point. I participated in the Senate inquiry and have consulted extensively with the industry, and at this point I would like to acknowledge all the people and the organisations that have very constructively engaged with me, with the Senate committee and with the process in general in this debate.

This bill has been on the Notice Paper for a significant period of time and yet up until very recently we have continued to seek assurances and amendments to ensure that we do find a way forward that meets the interests and needs of growers around Australia. As we have said previously in this place during the iterative debates on deregulation of the wheat market: the Greens are cautiously supportive. I can remember standing in this chamber last time saying, 'We are cautiously supportive', and that we were supporting the bill to move from the single desk to the process that we are using at the moment. We have always stated that we would watch this process carefully and continue to be engaged, which is what we have done.

This bill has clearly been a source of significant tension for all the people involved in this debate. Unfortunately, I suspect it has been sport for some, which I do not think shines a good light on such a serious issue for the sector. As a Western Australian, I am deeply aware of how this bill has brought out quite a serious tension between the east and the west on many substantive points. It is a tension that has been there all along, but this has highlighted it. Western Australians export nearly their entire crop. Western Australians have a different set-up and so it plays out very differently for them compared to growers in the east. However, that is not to diminish the very valid concerns of the growers in the east. We have seen growers in the west very strongly supporting this bill—I can show you any number of emails and letters I have had on it—and growers in the east expressing some very serious concerns, which we have taken very seriously.

As I have articulated, we will be supporting this bill with amendments. I really want to take some time to go through the issues that we have considered and why we have come to the conclusions that we have. The reason I made that point about the difference between growers in the west and the east is there are very significant differences of opinion, which I am sure the coalition will acknowledge, in the sector. We have tried to reach some sort of way forward for all those involved. If we just did not support this bill it would mean disadvantaging a significant number of growers in the west, and if we just support it without amendments it would mean disadvantaging some growers in east—and we would also miss the very important opportunity to start dealing with some of the ongoing issues that are still to be resolved.

As I said at the outset, we have consulted very long and very hard on these amendments and on this bill. With this bill, and in moving the Greens amendments that I understand have the support of government—I know that the coalition has been seriously considering them—hopefully we will reach a point where we can move on and finally resolve some of these ongoing issues. It is precisely because the Greens are concerned that the industry is not ready to absolutely, fully deregulate—and there are some ongoing issues which I will articulate in a minute—that we have seriously considered and questioned the effectiveness of a voluntary industry code. We do not believe we are ready for that yet. That is why, and I will discuss it a bit later, we are moving amendments to require that the access code be mandatory. That is why we oppose the bill in its original form and also why we contributed to the dissenting comments through the committee inquiry process.

There are still a number of long-term, ongoing issues which have been identified, particularly through the committee inquiry process, that this bill does not address. If it had gone through without addressing those, then those issues potentially would never be addressed. It would also bring up issues around the effectiveness and efficiency of the market and a failure in the market process, but we would not get an opportunity to address these issues again.

There has been, as I said, a very wide-ranging community debate on these issues and they have long been recognised. It is because of the lack of progress in addressing these issues that the Greens also sought to look at a mechanism to address these particular issues. These issues were articulated in the dissenting report, which goes to issues around access to stocks information—still an unresolved issue—and the quality of our wheat. People raised suggestions around what Canada and America do, where they have a board that looks at issues around the quality of the wheat exported—long, ongoing issues. There are also the issues that have subsequently been raised, or touched on, around failures and monopolies in the market and, as I said, the access code. We sought to look at a way to deal with those issues and it was suggested in the committee report—particularly the dissenting report—that WEA would be a body that is already in place that could take on these functions.

When we wrote the dissenting report, we thought at first that the WEA would be a body that could do that. However, we have subsequently conducted more consultation and we do not believe that mechanism is necessarily the right mechanism; we do not believe it is flexible enough. There is general agreement that the current undertakings and work of WEA has done that job and people do not seem to have any concerns around moving on from that particular role; but we have continued to identify these ongoing issues.

What was foremost in our minds was dealing with issues of not entrenching monopolies and not having faith in a voluntary code. I will come back to that in a second. We were also very strongly concerned about the ongoing issues around wheat quality and access to stocks information. The inquiry into the bill demonstrated that there are still significant concerns, particularly from growers, that relate to timely access to wheat data and stocks information, port access arrangements and cargo integrity which have not satisfactorily been addressed by the legislation as it stands without amendments. Submitters such as Grain Producers Australia and ASX reiterated concerns they first raised during the 2008 inquiry, in particular pointing to the fact that individual growers are unable to access market information, thereby allowing integrated grain handling companies a significant advantage over other participants in the supply chain.

Furthermore, the committee inquiry demonstrated that the voluntary code had the potential to be a toothless tiger as there was nothing to force bulk handlers, other than some complicated things they were trying to work out through existing processes, which the Greens had absolutely no confidence would deliver appropriate outcomes and therefore raised our serious concerns. It is evident from the inquiry and from conversations with stakeholders across Australia that maintaining the status quo would only defer the necessary changes, with significant cost to growers in the form of a 22c per tonne wheat export charge, which would continue if we did not deal with some form of regulatory approach. We came to the conclusion that WEMA was not the best organisation to deal with issues such as wheat quality assurances and stocks information and there could potentially be other bodies that would be more appropriate to look at that—for example, Wheat Quality Australia—and at other mechanisms to deal with wheat stocks information.

Again, there is not common agreement among the growers around access to stocks information. There is regarding some elements of stocks information. But, for example, in regard to up-country stocks information, I have had numerous organisations telling me they do not want to do it, they do want to do it and they want access to certain information. In other words, while there is agreement that stocks information needs to be addressed, there is not an agreement yet about how much. That is why we have been trying to come up with a mechanism to resolve these issues.

Since the report was delivered in October there have been some significant opportunities to take a constructive approach. Rather than simply just saying, 'No,' we believe these issues need to be addressed. As I have said, in my home state of Western Australia there is very, very strong support for these issues being addressed. However, there are growers, in the eastern states in particular—and still some in my home state of Western Australia—who have these ongoing concerns. So we know there are issues that need to be addressed. We have chosen to try to find a path for a way forward that would put in place mechanisms to address access issues and then those ongoing issues I have articulated.

I would like to very quickly take the opportunity to explain our thinking behind the amendments and also table some correspondence between the Minister for Agriculture, Fisheries and Forestry and me that will explain in a bit more detail some of the nuancing behind some of the amendments. Those have been circulated to the whips, as I understand it. I seek leave to table those three letters now.

Leave granted.

Senator SIEWERT: One is the original letter from the Minister for Agriculture, Fisheries and Forestry, Senator Ludwig, when we first announced that we would be making some amendments, which articulates the sorts of things the industry task force would establish—which one of our amendments addresses. There is a letter from me to the minister articulating some concerns and seeking reassurances around the amendments, and a letter back from the minister explaining and giving commitments around some of this detail. They have been circulated to the whips. I will now table those letters.

Our amendments firstly go to making the access code mandatory. I know that Senator Xenophon has circulated amendments about requiring a review of the process for the access code. Under ACCC rules— the mandatory code—there is a review after five years. We think this process, because it is new, is too long. The minister has agreed to put in place a review after two years. While this process of the bill being debated has been going on over the last couple of months, a committee has been set up to discuss the voluntary code. That committee, I understand, had made some significant progress and they had reached agreement about level of access to stocks information at port by grade. We have had assurances from the minister in that correspondence that in fact that process will still be included in the mandatory code, because there was some concern expressed by growers that discussions for the access code were going backwards. But the minister has now made a commitment that that information will be included via either that mechanism or another mechanism that is workable.

The other amendment that we are circulating and will be moving shortly is to establish a national wheat industry advisory task force. This task force will be tasked to look at these ongoing issues that are yet to be resolved, such as the issues around continuing stocks information access, quality issues, and also around failures in the market. We have also in that correspondence sought commitments from the government about independence. I will seek in this debate further commitments from the government around the independence of this committee. We have sought assurances about the selection process and the terms of reference. We have specifically not included that in the bill because we wanted a mechanism that was flexible enough that, if other issues came up, they could be referred to the task force. In the correspondence you also see that the minister has undertaken to have a regular reporting mechanism so that the considerations of this task force are transparent and accountable.

We have a strong belief that we need to get some experts around the table that can actually sit down, look at these issues and come up with a way forward. We have an industry divided over many of these issues. If we can get a task force of experts looking at these issues, providing advice and finding ways forward, I think we will be significantly helping the wheat industry in this country. That is the approach we have been taking the whole time: how can we ensure the future of our industry?

We understand that there are concerns about the further deregulation process. We do not think that we were fully ready for it. We understand there are concerns about potential failures in the market and the efficiency and effectiveness of the market mechanism, and we do believe that that needs to be addressed. We have very strongly heard the concerns from the growers around the need for a mandatory code for access. We have strongly heard about the need for a commitment, and we have a commitment from the government that that access code will in fact include stock by port zone by grade weekly during harvest and monthly thereafter.

These are very important issues to the sector. We know that because we have talked to them. We do not believe it is an option to do nothing here. We do not believe it is an option to sit on our hands for two years under the current process. We have genuinely sat down and talked to people to see how we can balance the needs of all in the sector and the industry, and we desperately hope that the task force mechanism will find us a way forward, where all the industry can engage and try to move forward, so that we have these ongoing issues resolved—because they do need to be resolved, we absolutely agree. We absolutely agree that there is the potential for monopolies to have undue influence, and we are concerned about denying access or making port access difficult. We are concerned that they have an unfair advantage in access to information. We are concerned about the reputation of our industry and the issues around wheat quality. We are not convinced that the old WEMA was the body to do that with. We are convinced that we need to look at it, find a way forward and find a mechanism once that task force has looked at and researched the issues to recommend mechanisms for the way forward. That information will be publicly available, it will be reported, it will be transparent and it will be able to engage with the broader community.

I would urge the opposition to very seriously consider our amendments. I understand to a certain extent where they are coming from, because there is strong concern in the eastern states, but the eastern states are not the growers in Western Australia. We are trying to find a way forward that meets the needs of the growers in my home state as well as meeting the ongoing concerns for the industry in the east, which has different circumstances. I very clearly acknowledge that it has different circumstances in the eastern states from what we have in Western Australia, which means that those needs need to be accommodated. We think we have found a way forward. It certainly is better than doing nothing, because these issues cannot sit on the table any longer; they need to be addressed. I commend our amendments to the chamber, and I am happy to discuss them further during the committee stage.

Senator EDWARDS (South Australia) (12:32): I rise today to speak on the Wheat Export Marketing Amendment Bill 2012, and I commend Senator Siewert's involvement in this process. I must say that I concur with her comments about the collegial work that has been done in the interests of trying to get a reasonable result between us, right up to the point where we came into the chamber today.

I have taken particular interest in the progress of this bill and the profound impacts that it could have on the grain industry across Australia. My interest is twofold. As a South Australian I know just how important this industry is. South Australia is a major exporter of grain—the second largest exporting state after Western Australia—and accounts for approximately 30 per cent of Australia's grain exports. We export, on average, 4.3 million tonnes, with a value this year of around $1.3 billion. Secondly, as a member of the Senate Rural and Regional Affairs and Transport Committee, I have fully participated in two recent inquiries—the first into operational issues in export grain networks and the second into the bill before us today.

Deregulation has been good for the wheat industry. On that I think we all agree. Wheat Exports Australia has done a good job in monitoring the transition to deregulation. It issued licences that allowed growers to export directly to markets abroad. In 2008-09, 14.5 million tonnes of wheat was exported, and three years later it rose to 18.7 million tonnes. Wheat Exports Australia has helped to facilitate this.

While I will outline a need for some retained oversight, I am not advocating the preservation of Wheat Exports Australia in its current form, nor am I advocating that there needs to be regulation forever. What I am advocating is that, for the next period of deregulation, we need some light-touch regulation and oversight in place so that growers are not disadvantaged. In doing this, we can have the most open, fair and competitive grains market possible.

I say this in the context of a maturing wheat market but one which I believe requires a bit more settling before we throw the gates wide open to the forces of the global commodity market without our domestic operating environment being functional and fair. The majority of wheat growers still want to pay for ongoing oversight. Let me make it clear to anyone who is listening outside this chamber that wheat growers have always paid 100 per cent for their oversight since deregulation began, after the abolition of the single desk, in 2008. Wheat Exports Australia has always been funded 100 per cent by growers.

I now turn the chamber's attention to what it is the wheat industry needs during the next phase of deregulation. The industry still needs national oversight on information, transport and the quality of wheat exported from Australia. This bill does not tell us who is going to ensure grain quality standards for wheat. Wheat needs to have its quality certified as accurately as practicable to facilitate trade and certainty for buyers. Buyers need the best possible information about the quality, type and standard of wheat that they are purchasing. They also need certainty that the wheat they order is the wheat they receive. The industry needs oversight of shipping slot allocations and auctions to ensure equitable and fair access for all. The industry needs timely and accurate grain stocks information to facilitate an open, well-informed, competitive market.

During the first inquiry we heard evidence from the Australian Securities Exchange:

ASX believes the current grain stock reporting framework is inadequate and, if not revised, will result in a sub-optimal outcome for Australia's grain industry. An opportunity to truly maximise the benefits available from the deregulation process will be lost.

That is from the ASX's representative at that inquiry. This bill in its original form offered none of these things. The bill only contemplates dealing with one aspect of the industry—marketing—without consideration of grain classification, access to storage facilities or access to efficient transport infrastructure. All of these elements need to be considered as part of the deregulation. It just throws growers to the wolves in its current form. The subsequent amendments proposed by the Greens that Senator Siewert refers to now go some way to addressing these issues by including a mandatory code of conduct.

The United States is often held up as the bastion of free trade and open markets, but even they have the Federal Grain Inspection Service, which is responsible for grain classification and inspection of grain-handling facilities. In Canada, the Canadian Grain Commission regulates grain handling through grain quality and quantity assurance programs and carries out scientific research on grain quality and grain safety to support the grain-grading system.

I would also like to address the attacks that the coalition have sustained over not supporting this bill and the apparent hypocrisy of being the party of free enterprise but not supporting further deregulation at this time. We do support the full deregulation of the wheat market. We are the party of individual freedom and free enterprise and we still believe that an efficient private sector, rather than government, unlocks opportunity and generates incentive. Our opposition to this bill is not inconsistent with our core values. You cannot have a competitive market if it is an evolving monopoly.

The wheat industry is dominated by a few large players who, without appropriate oversight, may act in a way that disadvantages growers so that in the long term we may not have a viable wheat industry. Now that is market failure. We see it in other sectors. Some would argue we see it in the retail sector now. There is no value in market failure. We can have further deregulation when the industry is ready. We have come a long way since the abolition of the single desk in 2008 but to completely abandon oversight now, at some arbitrary date that was set five years ago, would be like removing the training wheels from your child's bike for the first time without equipping them with a helmet.

When deregulation began in 2008 the government promised to do a few things. They promised to ensure effective competition, establish a market regulator with some teeth and provide fair and reasonable port access for other exporters to prevent the development of three regional monopolies. What we've seen during this first period of deregulation is a partial transition to that goal. The growers of Australia have said to me that Wheat Exports Australia has served its purpose and we need to move on, but we need some form of oversight in the short term to ensure the momentum is not lost or indeed that we go down a low road. And, while some will run around claiming we need to deregulate for deregulation's sake, how many markets are truly free markets? Most markets like banking and communications contain some kind of oversight, while bodies like ASIC and the ACCC work to ensure that markets are as open and fair as they can be. Why should one of this country's largest industries and biggest agricultural exports be any different?

We have heard a lot about Western Australian representative organisations that support this bill and further deregulation now. Let's just make sure we all understand the unique position Western Australian grain farmers are in. CBH receives and stores more than 90 per cent of grain produced in Western Australia. It is a co-operative which includes roughly 4,500 growers, so the growers own CBH. It has facilities able to store 20 million tonnes of grain and, as well, port capacity of more than three million tonnes. This is quite different from the markets in South Australia and the eastern states, where the storage, transport and port facilities are owned by a small handful of large multinationals whose sole interest, quite rightly, is to provide a return to their shareholders. A quick glance at the history of the grains industry in those states shows that they too started off with grower co-operatives which were eventually corporatised and sold off. You would have to be off with the fairies not to think that, at some point, the growers in Western Australia would not do or contemplate the same--particularly when some estimates put CBH's worth at $7.93 billion. In fact, in early November, when Archer Daniels Midland Co. initially looked at purchasing GrainCorp, Corporate Agriculture Australia managing director Gordon Verrall came out and said that the interest might spark Western Australian growers to sell up. Mr Verrall said:

Once farmers in Western Australia understand just how much their co-operative is worth, it will definitely put pressure on CBH to reassess the corporatisation process. That'll become more apparent in the next few years, driven by those exiting the industry and those undergoing succession issues, who would appreciate a cash lump sum.

That is the growers taking the cash off the table.

CBH director Vernon Dempster reportedly told an industry conference that the foreign takeover of GrainCorp would have serious implications for grain growers on the eastern seaboard. He went on to add that ADM's loyalties would never be aligned to Australia. He is reported to have said:

Their loyalties are going to be to their shareholders. The worry would be whether ADM are going to be more hungry and more exploitative than the current owners, and there would be a suspicion that perhaps they would be.

So clearly some sandgropers are cognisant of the implications for growers in a completely deregulated market with no oversight. It is only a matter of time before growers in Western Australia are grappling with the same issues as growers in South Australia and the eastern states—unless, of course, we do something about it now. During a hearing into this bill I asked GrainCorp about voluntary codes of conduct and whether they knew of any successful voluntary codes of conduct in the agriculture sector. I got the following response: 'No, not that we're aware of.' This view was later confirmed by the ACCC at the same hearing. The voluntary code of conduct was only looking at those things which are relevant to the operation of port terminal facilities. Under the terms of reference of that voluntary code of conduct, development committee up-country stock information is not directly relevant to the operation of the port facility and therefore would not come out. This code would be voluntary. After 2014, a party may simply opt out and not be bound by either access undertakings or the code—that is, if they actually get anybody to sign up to it. My experience with these voluntary codes of conduct is that it takes a long time, if ever, for parties to actually put their signature on the bottom line.

Debate interrupted.

The PRESIDENT (15:34): I move:

That the following bill be introduced: A Bill for an Act to amend the Parliamentary Service Act 1999, and for related purposes.

Question agreed to.

The PRESIDENT: I present the bill and move:

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

Opposition senators interjecting —

Senator Jacinta Collins: Are you sure you don't have a conflict of interest?

The PRESIDENT: I am getting too much help from the sides here!

Question agreed to.

Bill read a first time.

The PRESIDENT (15:35): I table the explanatory memorandum to the bill and move:

That this bill be now read a second time.

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

Leave granted.

The speech read as follows—

The Bill amends the Parliamentary Service Act 1999 (the Act) and runs in parallel with, but is distinct from, the Public Service Amendment Bill 2012 that has passed the House of Representatives.

The Act established for the first time a separate Parliamentary Service, independent of the Executive Government of the day. That legislation complemented widespread changes to the Australian Public Service which were introduced in the Public Service Act 1999 (the APS Act).

The Public Service Amendment Bill 2012 amends the Public Service Act 1999 to ensure the Australian Public Service is able to continue serving the Australian Government, the Parliament and the Australian public to a high standard. It implements recommendations of the report, Ahead of the Game: Blueprint for the Reform of Australian Government Administration, which require legislative change.

This Parliamentary Service Amendment Bill contains various amendments to the Act, most of which reflect changes to the Public Service Act 1999 in the Public Service Amendment Bill.

Changes to Act, arising from the Public Service Amendment Bill

1. Values and Employment Principles

The current set of 15 Parliamentary Service Values in section 10 of the Act will be amended to include a shorter set of five Parliamentary Service Values and a set of Parliamentary Service Employment Principles comprising items from the current Values that reflect organisational aspirations. There will also be a statement about the role of the Parliamentary Service.

It is worth noting that the Public Service Amendment Bill does not include an equivalent of this role statement. This statement in this Parliamentary Service Amendment Bill confirms the independence of the Parliamentary Service from the Executive Government

Section 11 of the Act will be amended so that the Parliamentary Service Commissioner may advise the Presiding Officers in relation to any of the Values, and the Bill moves the power for the Presiding Officers to make determinations about the Values to proposed section 11A.

The Bill will enable the Commissioner to give advice (but not directions) to the Presiding Officers about employment matters and the Employment Principles.

Proposed section 11C in the Bill will enable the Presiding Officers to make determinations on employment matters and the Employment Principles. Additionally, section 12 of the Act will be amended to require a Secretary to promote the new Employment Principles (in addition to the Parliamentary Service Values).

2. Code of Conduct

The Bill provides, through amendment of section 13 of the Act, that the first four elements of the Parliamentary Service Code of Conduct will apply where there is a connection with the employee's employment and, for example, will cover behaviour in circumstances such as training away from Canberra.

Subsection 13(11) of the Act will be amended to require employees to behave in a way that upholds the integrity and good reputation of their departments (as well as the Parliamentary Service, to which the current provision only applies), and the proposed Parliamentary Service Employment Principles as well as the Parliamentary Service Values.

Amendments to section 14 of the Act will provide for the Determinations to set out how the Code of Conduct is to be applied to statutory office holders such as the Parliamentary Librarian.

A number of amendments to section 15 will allow action to be taken in relation to Parliamentary Service employees who may have knowingly provided false or misleading information, wilfully failed to disclose relevant information, or otherwise failed to behave honestly and with integrity in connection with their engagement as a Parliamentary Service employee.

The amendments will also enable the procedures for determining whether a Parliamentary Service employee has breached the Code of Conduct to provide separately for different categories of employee, including employees convicted of a criminal offence.

The Bill explicitly provides that a determination of a breach of the Parliamentary Service Code of Conduct may be made after an employee has separated from the Parliamentary Service.

These amendments will require Secretaries to establish procedures for the above and for determining sanctions. Importantly, the procedures must have due regard for procedural fairness. The Presiding Officers' determinations may prescribe limitations on the power of a Secretary to determine sanctions.

Section 20 of the Act will be amended to clarify that Secretaries are not subject to general directions in relation to investigations into Code of Conduct breaches or whistleblower reports (as is already the case in relation to other staffing powers of Secretaries); and state that directions issued under section 20 are legislative instruments (noting, however, that the disallowance and sunsetting provisions of the Legislative Instruments Act 2003 do not apply to these instruments).

A new section 48A will enhance the Parliamentary Service Merit Protection Commissioner's functions (the MPC) to allow the MPC to determine, when requested to do so by the relevant Secretary, whether there has been a breach of the Code of Conduct. The consent of the employee concerned is required before the MPC may commence his or her inquiry. The Merit Protection Commissioner would have the discretion to decline such a request and would be required to establish appropriate procedures, which may entail different provisions for different classes of employee, (including employees who have been convicted of criminal offences).

As an important safeguard, the note to proposed section 48A confirms that the MPC's findings under proposed section 48A, are reviewable under the Administrative Decisions (Judicial Review) Act 1977.

3. Whistleblower reports

The bill amends section 16 of the Act to require Secretaries to establish procedures for a Parliamentary Service employee to make a whistleblower report, and to establish procedures for dealing with whistleblower reports.

It also enables the Parliamentary Service Commissioner to inquire into whistleblowers' complaints after notifying the Presiding Officers of a proposed investigation.

Finally, an amendment to subsection 48(2) will extend the MPC's inquiry powers to whistleblowing inquiries.

4. Review of Actions

Subsection 33(4) (d) of the Act will be amended to clarify that reviews of action will be able to be conducted by the MPC personally. This will be in addition to the current arrangements which provide that the MPC must nominate another person or establish a three-member committee to conduct a review.

5. Senior Executive Service (SES)

The role of the SES in subsection 35(2) will be amended to capture better their whole of Parliamentary Service responsibilities. Section 36 which deals with the Commissioner's guidelines on SES matters will be repealed and a new section 11B inserted into the Act to provide that the Commissioner may give advice to the Presiding Officers about employment matters, including those relating to the SES.

Section 37 of the Act, which deals with an incentive for SES retirement, will be clarified so that the retirement of an SES employee under that section is valid even though the employee has not attained the minimum retirement age specified in the Act. Terminology will also be changed to ensure consistency with superannuation legislation.

6. Secretaries

The description of the roles and responsibilities of Secretaries will be expanded by amending section 57 to better capture the service and performance expected of them.

7. Confidentiality of Information

The provisions for the use, and confidentiality, of information in the province of the Commissioner and MPC are to be expanded and included in the Act, instead of the Determinations where they are currently located. Section 68 of the Act dealing with the release of personal information will be repealed as it will be covered in these new provisions.

There will also be a new provision to provide protections for a Secretary or Parliamentary Service employee who provides information to the Commissioner or the MPC in the course of the exercise their review or inquiry functions.

8. Immunity from suit

Provisions for immunity from civil proceedings for both the Commissioner and MPC will be moved from the current location of the Determinations to the Act.

9. Legislative instruments

Several provisions are to be amended to reflect the provision and requirements of the Legislative Instruments Act2003. For instance, the requirement to gazette Classification Rules is replaced; the Rules are to be prescribed to be legislative instruments and a note mentions that the disallowance and sunsetting provisions of the Legislative Instruments Act do not apply.

10. Miscellaneous amendments

There will also be a range of miscellaneous amendments related to the reduction of classification of employees, the terminology of the provisions for the appointment of departmental secretaries, and empowering the Parliamentary Service and Merit Protection Commissioners to engage consultants.

Subsection 66(4) of the Act will be amended to provide that the amount of payments the Presiding Officers may authorise, in relation to matters arising from Commonwealth employment, is the same as the amount prescribed by the Public Service Regulations.

And section 71 of the Act will be amended to increase the maximum number of penalty units for offences against the Presiding Officers ' determinations to be consistent with provisions in the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers, published by the Attorney-General ' s Department.

Amendments not directly related to Public Service Act changes

Other changes are proposed which are not directly related to the Public Service Act changes. These include enabling the Parliamentary Service Commissioner and Merit Protection Commissioner to delegate their powers and functions, enabling the determinations to vary the scope and application of the Values and Employment Principles (eg, to vary the application of merit to enable the direct engagement of people with disabilities in specified circumstances), and revising provisions dealing with acting arrangements for statutory office-holder positions to align them with the Acts Interpretation Act 1901.

Summary

This Bill ensures that the Parliamentary Service will continue to provide professional support of the highest calibre to all parliamentarians, independent of the executive government of the day.

In a number of sections, provisions have been strengthened and clarified to ensure that this continues. A number of items have been clarified and, where appropriate, brought into line with the revised Public Service Bill.

All parliamentarians depend on a professional, non-partisan parliamentary service. After more than a decade since the Parliamentary Service was first created, this bill will ensure that the service can continue to provide a high level of support and advice which will ultimately benefit the wider Australian community.

I commend the Bill to the Senate.

Debate adjourned.

Senator WATERS (Queensland) (15:36): I move:

That—

(a) the Senate notes, with concern, the recent and growing job losses in state governments around Australia, as well as the difficulties many state public sector employees face in bargaining over wages and conditions; and

(b) the following matter be referred to the Education, Employment and Workplace Relations References Committee for inquiry and report by 17 June 2013:

The conditions of employment of state public sector employees and the adequacy of protection of their rights at work as compared with other employees, including:

(i) whether:

   (A) the current state government industrial relations legislation provides state public sector workers with less protection and entitlements than workers to whom the Fair Work Act 2009 (the Act) applies,

   (B) the removal of components of the long held principles relating to termination, change and redundancy from state legislation is a breach of obligations under the International Labour Organization (ILO) conventions ratified by Australia,

   (C) the rendering unenforceable of elements of existing collective agreements relating to employment security is a breach of the obligations under the ILO conventions ratified by Australia relating to collective bargaining,

   (D) the current state government industrial relations frameworks provide protection to workers as required under the ILO conventions ratified by Australia,

   (E) state public sector workers face particular difficulties in bargaining under state or federal legislation, and

   (F) the Act provides the same protections to state public sector workers as it does to other workers to the extent possible, within the scope of the Commonwealth's legislative powers; and

(ii) noting the scope of states' referrals of power to support the Act, what legislative or regulatory options are available to the Commonwealth to ensure that all Australian workers, including those in state public sectors, have adequate and equal protection of their rights at work.

Question agreed to.

Senator CASH (Western Australia) (15:36): I seek leave to make a short statement.

The PRESIDENT: Leave is granted for one minute.

Senator CASH: The coalition finds this motion extraordinary on a number of accounts. Not all states have opted to refer their industrial relations arrangements to the Commonwealth, and for some states there was only a partial referral. In Queensland, New South Wales, Tasmania, South Australia and Western Australia, public sector employees are not covered by the Fair Work Act because successive Labor governments did not refer powers to the Commonwealth in respect of public sector employees and local government employees. Clearly, if federal Labor were to support this motion, it would be casting a vote of no confidence in former state Labor governments of New South Wales and Queensland. The then Labor state governments made the decision not to refer powers for public sector employees in those states, and therefore the issues raised in this reference are matters for state governments. The coalition will not support this reference, which seeks to undermine the principles of federalism.

The PRESIDENT: The question is that the motion by Senator Waters be agreed to.

Senator MILNE (Tasmania—Leader of the Australian Greens) (15:44): I move:

That the following matters be referred to the Environment and Communications References Committee for inquiry and report by 20 March 2013:

(a) recent trends on the frequency of extreme weather events, including but not limited to drought, bushfires, heatwaves, floods and storm surges;

(b) based on global warming scenarios outlined by the Intergovernmental Panel on Climate Change and the Commonwealth Scientific and Industrial Research Organisation of 1 to 5 degrees by 2070:

(i) projections on the frequency of extreme weather events, including but not limited to drought, bushfires, heatwaves, floods and storm surges,

(ii) the costs of extreme weather events and impacts on natural ecosystems, social and economic infrastructure and human health, and

(iii) the availability and affordability of private insurance, impacts on availability and affordability under different global warming scenarios, and regional social and economic impacts;

(c) an assessment of the preparedness of key sectors for extreme weather events, including major infrastructure (electricity, water, transport, telecommunications), health, construction and property, and agriculture and forestry;

(d) an assessment of the preparedness and the adequacy of resources in the emergency services sector to prevent and respond to extreme weather events;

(e) the current roles and effectiveness of the division of responsibilities between different levels of government (federal, state and local) to manage extreme weather events;

(f) progress in developing effective national coordination of climate change response and risk management, including legislative and regulatory reform, standards and codes, taxation arrangements and economic instruments;

(g) any gaps in Australia's Climate Change Adaptation Framework and the steps required for effective national coordination of climate change response and risk management; and

(h) any related matter.

The DEPUTY PRESIDENT: The question is that the motion moved by Senator Milne be agreed to.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (15:56): I seek leave to make a brief statement.

The DEPUTY PRESIDENT: Leave is granted for one minute.

Senator JACINTA COLLINS: Thank you, Mr Deputy President. It seems that with respect to an earlier vote, which was business of the Senate notice of motion No. 3, the government's position was incorrectly reflected to the chamber and I seek to have that vote recommitted.

Leave granted.

Senator FIFIELD (Victoria—Manager of Opposition Business in the Senate) (15:56): I seek leave to make a short statement.

The DEPUTY PRESIDENT: Leave is granted for one minute.

Senator FIFIELD: I simply say it could happen to anyone.

The DEPUTY PRESIDENT: I put the question that motion No. 3 moved by Senator Milne be agreed to.

Question agreed to.

Senator DI NATALE (Victoria) (15:57): I seek leave to amend business notice of motion No. 4 standing in my name for today, proposing a reference to the Community Affairs References Committee on air quality, before asking that it be taken as a formal motion.

Leave granted.

Senator DI NATALE: I move the motion as amended:

That, noting that work is currently underway towards the development of Australia's National Plan for Clean Air through the Council of Australian Governments, the following matter be referred to the Community Affairs References Committee for inquiry and report by 16 May 2013:

The impacts on health of air quality in Australia, including:

(a) particulate matter, its sources and effects;

(b) those populations most at risk and the causes that put those populations at risk;

(c) the standards, monitoring and regulation of air quality at all levels of government; and

(d) any other related matters.

Question agreed to.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (15:58): I move:

That the following bills be introduced:

A Bill for an Act relating to diseases and pests that may cause harm to human, animal or plant health or the environment, and for related purposes.

A Bill for an Act to provide for the appointment of an Inspector-General of Biosecurity, and for related purposes.

Question agreed to.

Senator JACINTA COLLINS: I present the bills and move:

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

Question agreed to.

Bills read a first time.

Senator JACINTA COLLINS (Victoria—Manager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (15:59): I table the explanatory memoranda relating to the bills and move:

That these bills be now read a second time.

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

Leave granted.

The speeches read as follows—

BIOSECURITY BILL 2012

Second reading speech

Australians benefit from Australia's world class biosecurity system, which underpins the comparative advantage of Australia's agriculture, fisheries and forestry sectors.

The Australian Bureau of Agricultural and Resources Economics and Sciences estimates the value of exported food and fibre commodities at $39.3 billion in

2011-12.

These exports underpin an estimated 300 000 jobs in regional Australia.

But Australia's biosecurity framework is not only about farmers.

Australia's unique pest and disease status helps to protect our environment, human health, the wellbeing of our domestic animals and our way of life.

Each and every day, Australian Government biosecurity officers facilitate the movement into and out of Australia of tonnes of goods, thousands of passengers, and many more thousands of parcels and mail items.

Yet the Quarantine Act 1908, from which those officers draw their powers, was designed to suit a vastly different time and operating environment.

It was a time when every point of entry into the new Dominion of Australia was a seaport. A time when the threat of diseases such as smallpox, plague, cholera and leprosy were at the forefront of policy makers' minds and those of the community.

The capacity for people and goods to move freely is an essential part of our modern way of life; but presents different biosecurity risks than were ever canvassed in 1908.

People and cargo move from one side of the world to another within 24 hours, transported in air and sea craft that were unimaginable in 1908.

Australia's biosecurity system needs to be underpinned by a modern and effective regulatory framework to manage the risk of pests and diseases entering Australian territory and causing harm to animal, plant and human health, the environment and the economy.

Quarantine Act

The century old Quarantine Act has been amended no less than 50 times. Overall, Parliament has helped ensure the legislation underpinning the biosecurity system has kept pace with a changing world.

But while the legislation has served us well, it has become cumbersome to administer and difficult to interpret.

We see this through:

complex and difficult to administer co-regulatory provisions

considerable gaps in the process for managing biosecurity risks at first ports of entry; and

multiple and overlapping powers to manage goods of biosecurity risk.

A new regulatory framework is now needed. New legislation is needed to provide for a safe and seamless transition of people and goods across Australia's borders.

It also needs to be more responsive to the threat of communicable diseases; while avoiding unnecessary burden on international passengers and trade.

Beale review

Prior to 2008, a spate of serious biosecurity events occurred, including:

the outbreak of foot and mouth disease in the United Kingdom

bovine spongiform encephalopathy (or "mad cow disease") in Europe, Japan and North America

the emergence of the H5N1 strain of avian influenza

incursions of several exotic pests and diseases in Australia such as the European house borer, sugar cane smut, citrus canker and khapra beetle, and of course

the well remembered 2007 outbreak of equine influenza in Australia which the Government of the day said would never happen.

Against this context, the Government commissioned a review of Australia's quarantine and biosecurity system, forming an independent panel of experts chaired by Mr Roger Beale AO.

The panel's report—One biosecurity: a working partnership (also known as the Beale review)—and the Australian Government's response was released on 18 December 2008.

The panel made 84 recommendations to enhance Australia's biosecurity system; focussing on a partnership approach to managing biosecurity risks and biosecurity decision-making based on risk and evidence.

The Beale review recommended a new Biosecurity Act be developed to replace the Quarantine Act, drawing on a broader set of the Commonwealth's Constitutional powers and providing for modern and effective management of biosecurity risks. This Bill addresses this recommendation and will enact 15 related legislative recommendations of the Beale review.

Biosecurity Bill

The Biosecurity Bill 2012 will provide us with a modern framework that allows the Australian Government to make biosecurity risk management decisions that are based on science and evidence. It will allow us to protect our unique biosecurity status, our citizens and our industries from pest and disease threats; as we have been since 1908.

Five broad principles underpin the Biosecurity Bill. These are:

managing biosecurity risk

improving productivity

strengthening partnerships

sound administration; and

increasing transparency.

Managing biosecurity risks

Identifying, assessing and managing risk is at the foundation of our biosecurity system. The appropriate management of risk is strongly supported by this new legislation.

In 2002, the Primary Industries Ministerial Council agreed that the policy framework surrounding ALOP, including its expression as "very low, but not zero", and the practical guidelines for risk analysis which illustrate the concept by way of a risk estimation matrix, adequately met Australia's needs.

This conservative level of protection acknowledges that we have a lot to protect; but that zero risk is not achievable.

Zero risk would mean no tourists, no immigration, no imports and as a result, no exports. Zero risk is not feasible.

To provide certainty to administrators, our trading partners and the community, the Biosecurity Bill expresses Australia's Appropriate Level of Protection.

The Bill includes mechanisms to more clearly identify risks across the biosecurity continuum—offshore, at the border and onshore—and will manage these risks using a broad range of Commonwealth powers.

In relation to risks posed to human health, the Quarantine Act was enacted before the considerations of individual rights and personal freedoms we have today. Within the Bill, the process for managing the threat of a serious communicable disease to human health will be better aligned with modern science relating to treatment and management of such diseases. It will also provide for consideration of personal freedoms and rights to review in human health biosecurity decision-making.

Improving Productivity

The Bill will help to ensure the regulatory framework is simple, clear and that regulatory burden is commensurate with the level of risk posed by the importer and/or their goods.

Making the regulatory framework easier to engage with will not only help to improve productivity at our ports, it will encourage compliance and therefore drive better biosecurity outcomes.

The Bill will facilitate modernising overly complex regulatory provisions and administrative practices under the Quarantine Act. Areas of improvement include:

the management options that may be covered by an approved arrangement will be expanded, processes simplified and clarified

the Bill provides that goods become automatically subject to biosecurity control on entering Australian territory; and

the Biosecurity Bill will now cover the field for goods imported into Australia, where additional measures to those established by the Commonwealth will not be able to be applied by states or territories; providing certainty to international trading partners, importers and industry.

These reforms continue to demonstrate the Government's commitment to reducing red-tape whilst ensuring the integrity of Australia's biosecurity system is upheld.

Strengthening partnerships

A central tenet of the Beale review was the need to strengthen the partnership approach to reflect the shared responsibility for biosecurity with stakeholders.

Ultimately, business and industries will be able to take a greater role in managing biosecurity risks—where it is appropriate to do so—with support and regulatory oversight from the Australian Government. In doing so, there will be a more appropriate level or intensity of intervention from the government.

Such arrangements and partnerships enabled by the new Biosecurity Bill will strengthen the relationship between stakeholders and the government.

The Intergovernmental Agreement on Biosecurity demonstrates the desired outcome of a partnership approach to biosecurity. The agreement signed by the Prime Minister in January 2012, between the Commonwealth and all state and territory governments—except Tasmania—is another key achievement envisaged by Beale.

The Biosecurity Bill continues this intent through providing expanded onshore powers for the Commonwealth to cooperatively manage and address pest and disease incursions. Provisions such as the ability to issue biosecurity control orders and the establishment of biosecurity zones enhance the powers available to the Commonwealth to address biosecurity risks within or across jurisdictions, in a consistent way. Particularly where state and territory government regulations are not harmonised or are absent.

Sound administration

As a regulator, there is a requirement and expectation that sound administrative procedures are upheld. This is essential to ensure that stakeholders:

are aware of their responsibilities in managing biosecurity risks

understand the legislative requirements they need to meet; and

recognise the potential consequences if they are non compliant.

The Biosecurity Bill will also provide the Director of Biosecurity with general administration of the legislation. The Director can offer practical guidance in situations where there are multiple ways to interpret the law or if there is ambiguity. This will help build the community's confidence in the fair administration of the biosecurity system.

The new legislation further provides a modern and graduated compliance regime. This will allow for a proportionate response to a non-compliance incident. The Bill maintains the existence of an infringement notice scheme for high volume, low complexity offences; for example for passengers in airports.

However, it also introduces an enforceable undertaking scheme and a civil penalty regime as an alternative to criminal penalties. The introduction of a civil penalty regime alternative—in addition to existing criminal offences—provides the greatest opportunity to take compliance action in a graduated and appropriate way, reflecting the significance of the non-compliance and the level of risk posed.

Increased Transparency

A key principle from the Beale review and of government policy is to increase the transparency of the biosecurity system for clients and stakeholders, including trading partners, in the assessment and management of biosecurity risks.

Ensuring that processes and decisions are transparent, open and reviewable where appropriate, provides assurance to clients and stakeholders and demonstrates the integrity of the system; building community confidence.

The Biosecurity Bill will better articulate the role of the Director of Biosecurity and the Minister to improve confidence in scientific and operational decision making processes.

The Bill establishes a process for Biosecurity Import Risk Analyses. The Director will be required to take into account Australia's Appropriate Level of Protection in conducting risk assessments for the importation of goods.

Science based biosecurity decision making has been the policy of successive Australian Governments.

This continues to demonstrate the focus on biosecurity risk management and supporting scientific and operational decision making, whilst providing appropriate oversight and review mechanisms; in conjunction with the proposed Inspector-General of Biosecurity Bill 2012.

Conclusion

This Bill is several years in the making. Consultation draft chapters of the Bill have been released progressively since early July 2012 and the Government is grateful for the feedback that has been provided.

After engaging with industry, state and territory governments, environment groups, health professionals, the general public and our trading partners—the Biosecurity Bill 2012 represents a comprehensive modernisation of Australia's biosecurity legislation.

The Bill directly addresses the Australian Government's commitment to reform of Australia's biosecurity system. It reaffirms our commitment to the Beale review recommendations to develop new biosecurity legislation.

Australia's biosecurity system is world-class.

The Australian Government employs and works with some of Australia's most knowledgeable and experienced plant scientists, veterinarians and medical and clinical experts.

These people are available to our biosecurity officers to provide current advice and guidance on the risks posed by the movement of people, aircraft, vessels and goods.

This Bill will ensure Australia's biosecurity system can continue to respond to future changes that this changing world presents and the challenges and opportunities that come with those changes.

INSPECTOR-GENERAL OF BIOSECURITY BILL 2012

Second reading speech

Australia's biosecurity system

Australia's biosecurity system ensures good biosecurity outcomes are realised through Australia's activities as an exporter and importer of goods.

Australia's economy and environment benefit significantly from a strong biosecurity system. Australia has enjoyed a high degree of protection from biosecurity risks based on natural advantages of relative geographical isolation, the absence of shared land borders and a border-focused system of biosecurity.

These advantages have meant that the environment has been free of many pests and diseases common elsewhere and has positioned Australia well to prevent their entry into the ecosystem. The freedom of the agricultural, fisheries and forestry sectors from the most destructive pests and diseases confers a higher degree of quality on Australia's exports.

Australia's biosecurity system has become increasingly complex. With increasing biosecurity risk there is a need to ensure consistent, systematic processes for oversight and continual improvement. The demonstration of integrity in the biosecurity system and review of the quality of processes is vital.

Our system put to the test

In the years preceding 2008, a spate of biosecurity events occurred. This included:

the outbreak of foot and mouth disease in the United Kingdom

bovine spongiform encephalopathy—or "mad cow disease"—in Europe, Japan and North America

the emergence of the H5N1 strain of avian influenza; and

more significantly, Australia's biosecurity system was put to the test in 2007 with the outbreak of equine influenza in Australia.

Against this backdrop:

complexity is constantly increasing in biosecurity risk management as new and different products arrive from a wider variety of countries

clients and stakeholders are continually seeking greater levels of assurance on the effectiveness of Australia's biosecurity system

there is a growing demand from international trading partners to access Australian markets

Australian businesses are seeking access to a greater number of overseas markets

Australian consumers are demanding access to a greater variety of goods; and

tighter timelines in logistics chains is increasing the pressure on border agencies to process goods more rapidly.

Reviews of Australia's biosecurity system

Australia's biosecurity system has been subject to review several times. Recommendations made for improvements to the way it operates started with the Nairn Review in 1995.

In response to the August 2007 outbreak of Equine Influenza in Australia, the 2008 Equine Influenza Inquiry was conducted by the Honourable Ian Callinan AC.

A key recommendation of the inquiry was the establishment of the Inspector-General of Horse Importation. The inquiry reported that regular checking and reporting on the compliance of biosecurity measures needed to be conducted by an individual external to the biosecurity system.

At the time, this was seen by Callinan as critical in the need for independence, detachment and the restoration of industry and public confidence.

This was reaffirmed in the 2008 independent review of Australia's quarantine and biosecurity arrangements—One biosecurity: a working partnership—also known as the Beale review.

The Australian Government commissioned an independent panel of experts chaired by Mr Roger Beale AO to conduct a comprehensive review of Australia's quarantine and biosecurity systems. The Beale review found that Australia's biosecurity system operated well, but could be improved.

It proposed significant reforms to strengthen the system by revising legislative arrangements and improving governance arrangements, transparency, timeliness and operations across the biosecurity continuum. In total, the panel made 84 recommendations.

The Panel considered that independent audit and review provided invaluable assistance in verifying the performance of individual programs and provided an objective overview of the system. It saw the creation of a position to conduct independent audit function, to assess activities along the biosecurity continuum, as critical.

Recommendation 20 of the Beale review sought that a statutory office of the Inspector-General of Biosecurity be established that will audit and report on the performance of the biosecurity system. This Bill directly addresses this recommendation.

This Bill will also enact two related legislative recommendations of the Beale review.

Inspector-General of Biosecurity Bill

The Inspector-General of Biosecurity Bill 2012 establishes the statutory office of the Inspector-General of Biosecurity. It defines its role, functions and powers.

The Inspector-General will report directly to the Agriculture Minister. The office is independent from the regulator and the Director of Biosecurity.

The Inspector-General of Biosecurity will undertake independent audit and review functions focused on biosecurity systems and processes. The office ensures that biosecurity processes are transparent and accountable.

In addition, the statutory position will perform an important role ensuring the integrity and transparency of the Biosecurity Import Risk Analysis process. Stakeholders will have the opportunity to appeal where they believe there was a significant deviation from the Biosecurity Import Risk Analysis process that adversely affects their interests.

Not only will the Inspector-General ensure transparency and integrity in the biosecurity system more broadly, the Bill also establishes a number of powers to ensure transparency in the way the role is carried out.

Conclusion

The Inspector-General of Biosecurity Bill 2012 is an important legislative reform. Such a position has been recommended in numerous reviews and inquiries over the last 17 years.

The Bill directly addresses the Australian Government's commitment to reform of Australia's biosecurity system. It reaffirms our commitment to the Beale review recommendations to implement a statutory position of the Inspector General of Biosecurity.

It introduces provisions that enhance the transparency of Australia's biosecurity system. It ensures independent review of the system's processes and activities to provide a high level of assurance to clients and stakeholders.

By having a dedicated office to review the performance of functions and the exercise of powers by the Director of Biosecurity, all Australians can expect an efficient, modern and robust biosecurity framework.

That is what this Bill provides.

Along with the proposed Biosecurity Bill 2012, the two Bills provide a strong and sound new biosecurity regulatory framework. This provides the Australian Government modern and comprehensive legislation to continue to manage the risk of pests and diseases entering Australian territory and causing harm to animal, plant and human health, the environment and the economy.

Australia's biosecurity system is world-class. This new Bill is about modernising our independent review and verification mechanisms of the system and creating a responsive and flexible operating environment to ensure that world-class standing into the future.

The DEPUTY PRESIDENT: In accordance with standing order 111, further consideration of these bills is now adjourned till 5 February 2013.

Senator McEWEN (South Australia—Government Whip in the Senate) (16:01): At the request of Senator Stephens, I move:

That the Joint Standing Committee on Foreign Affairs, Defence and Trade be authorised to hold a public meeting during the sitting of the Senate on Thursday, 29 November 2012, from 9.30 am, to take evidence for the committee's inquiry into Australia's trade and investment relationship with Japan and the Republic of Korea.

Question agreed to.

Senator McEWEN (South Australia—Government Whip in the Senate) (16:01): At the request of Senator Sterle, I move:

That the Rural and Regional Affairs and Transport Legislation Committee be authorised to meet during the sitting of the Senate on Thursday, 29 November 2012, from 4 pm, for a private briefing.

Question agreed to.

Senator KROGER (Victoria—Chief Opposition Whip in the Senate) (16:02): On behalf of the Chair of the Standing Committee for the Scrutiny of Bills, I present the 15th report of 2012, dated 28 November 2012.

Ordered that the report be printed.

Senator POLLEY (Tasmania—Deputy Government Whip in the Senate) (16:03): I present the final report of the Finance and Public Administration Legislation Committee on the performance of the Department of Parliamentary Services, together with the Hansard records of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator POLLEY: I move:

That the Senate take note of the report.

Today I table the report of the Finance and Public Administration Committee on the performance of the Department of Parliamentary Services. The report is a culmination of an inquiry that has taken the committee well over a year to complete. The committee's inquiry commenced as a result of evidence provided in relation to the sale of two billiard tables in 2010 by the Department of Parliamentary Services. This matter was examined in the committee's interim report and exposed poor asset management practices and the provision of misleading information to the committee during estimates hearings.

The committee's final report covers employment issues in the Department of Parliamentary Services, asset and project management issues, security and information technology issues, the DPS budget, performance reporting and accountability of the DPS to the parliament. The committee has also made a range of recommendations relating to these matters.

Most importantly, the committee has recommended that changes to the standing orders be made so that the Senate Appropriations and Staffing Committee and the House Appropriations and Administration Committee, acting as a joint committee in relation to the DPS, can consider the administration and funding of DPS. The committee considers that the implementation of this recommendation will improve accountability and oversight of the department. The committee also considers that the DPS should improve the standard of its performance reporting through its annual report and, in particular, its reporting on the condition of the building and the impact of budget constraints on matters such as maintenance. The committee believes that this should be done through improvements to the DPS annual report and biennial reporting on the building itself.

The inquiry undertaken by the committee has been difficult. The committee received information on individual cases concerning bullying and harassment. The committee has not adjudicated on these cases but has used them to build a picture of the employment environment in the DPS. The committee has also used information from staff surveys and a Comcare order to aid its deliberations on employment issues.

During the committee's inquiry, there were some major developments within the DPS. As a result of the review of assets disposal practices following the sale of the billiard tables, the Department of Parliamentary Services has implemented more rigorous disposal policies for assets which may have a heritage value. A survey of items which may have heritage or cultural significance to Parliament House has been undertaken and new items have been identified. This will improve asset management of these items.

A new secretary of the DPS, Ms Carol Mills, has been appointed. Ms Mills has commenced a restructure of the department in order to improve the delivery of services. The Department of Parliamentary Services is also developing a conservation management plan and a strategic asset management plan for Parliament House. The committee welcomes these developments and will continue to monitor the changes at future estimates hearings. In addition, the review of information and communication technology initiated by the Presiding Officers has reported major changes to the provision of ICT services to the parliament are underway, including the creation of the new position of chief information officer.

Finally, while the report focuses on the problems and deficiencies in the DPS, the committee would like to reiterate that the vast majority of Department of Parliamentary Services employees undertake their duties with professionalism, dedication to the support of the parliament and commitment to preserving Parliament House and its contents for the next 175 years and beyond.

I would also like to place on record and reiterate that this was a very difficult inquiry, but one that I feel very satisfied with. I am sure that I speak for the whole committee in the final report, so I urge people to read it. I would particularly like to thank the secretariat and the team for their hard work and their commitment to ensuring that we have produced the most complete and highly professional report possible. I also thank the committee members who participated and the many witnesses and all the submissions provided. I place on the record our appreciation for the effort that went in.

Senator FAULKNER (New South Wales) (16:08): I appreciate this opportunity to speak very briefly on the final report of the Senate Finance and Public Administration Legislation Committee inquiry into the performance of the Department of Parliamentary Services. In the very limited time available to me this afternoon, I want to stress the significance of this inquiry and the importance of its recommendations. I believe that this was an essential inquiry for the Senate committee system to undertake. By just simply holding this inquiry and listening to and treating seriously the concerns of so many DPS employees and others who have a very genuine interest in this building, much has already been achieved.

While I do not have time to speak in detail about the myriad complex issues canvassed in this report, suffice to say significant change in DPS, which I have previously accurately described as the worst administered government department I have seen in the time I have served in the parliament, is long overdue. I am delighted that the committee, its inquiry process and this report have been the catalyst for change in DPS. There is much to do, but we are starting to right the wrongs.

I also want to acknowledge the courage of those who have given evidence or submissions, including a significant number of confidential submissions. They have been absolutely critical in exposing the toxic culture that was allowed to develop in the Department of Parliamentary Services. The finance and public administration committee's secretariat has produced two outstanding reports—the one tabled today on behalf of the committee by Senator Polley and the interim report into the performance of DPS which preceded it. I too thank all those involved for their efforts. I know that they have made a real difference. I think responsibility now rests with the government—but not only the government, all of us who serve in the parliament—to ensure that the recommendations in this report are accepted and the positive changes we have seen in DPS in recent times continue into the future. I commend the report to the Senate.

Question agreed to.

Senator BUSHBY (Tasmania—Deputy Opposition Whip in the Senate) (16:12): I present a report of the Economics References Committee on the post-GFC banking sector together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be adopted.

Senator BUSHBY: This report builds on the Senate Economics References Committee's work over recent years on the effects that the global financial crisis has had on Australia's financial sector. In particular it follows on from the major inquiry into banking competition that the committee completed in May last year. Most of the recommendations made in that report have yet to be implemented, despite their impact in terms of increasing competition in the banking sector being just as strong now as when the report was delivered.

This year's inquiry focused on a number of additional important consequences of the GFC. One issue examined was how Australian banks' costs of funds had changed, an argument regularly put forward by the sector as to why loan rates diverge from movements in the Reserve Bank's official cash rate. It is evident that funding costs have remained elevated since the crisis as risk has been more appropriately priced and banks seek to secure more stable sources of funds. Expected falls in costs as funds sourced at high cost during the crisis are refunded do not appear to be happening due to ongoing economic uncertainties globally and the funding mix shift towards deposits and longer-term wholesale funding which retain a need to pay a premium. Despite this conclusion, this is a subject that warrants close ongoing scrutiny, given the implications for millions of Australians.

Another important topic covered was Basel III, the internationally agreed package of reforms that aim to improve banking regulation and supervision in a post-global financial crisis environment. Basel III is unlikely to be well known or even widely understood outside of banking and financial circles. But the changes that it introduces are important and warrant a public discussion. My concern with these changes has always been that they will introduce answers with consequent costs for Australians to problems that we in Australia have never experienced.

While the committee accepts that Australia cannot deviate too much from what the rest of the world is doing and that the Australian Prudential Regulation Authority has done an effective job at minimising unnecessary impacts on Australia, we are moving more quickly than many other jurisdictions to implement Basel III. The need for this haste is at first glance questionable. Nonetheless, the committee also accepts that the objectives of Basel III are appropriate, given international events in the financial sectors, and that, despite increasing costs to banks and hence consumers, Australian banks are well placed to meet the new requirements.

The implementation of Basel III will help ensure that Australia's banks remain safe and that risk is being prudently managed. Whether the best balance has been achieved between solvency/stability of the system and the desirability of a competitive and lean banking sector delivering credit to Australians at the best prices, I guess time will tell. There do, however, appear to be some commercial implications flowing from the accelerated implementation in Australia, and recommendations have been included in the committee's report regarding added transparency to address this issues, at least in part.

The issues raised during the course of this inquiry also lead to the conclusion that there is a need to further consider the current state of Australia's financial system as a whole as well as the direction it is headed in the longer term. Accordingly, the main recommendation of the committee is that an independent root and branch inquiry into Australia's financial system is needed. The last such inquiry was the 1997 Wallis inquiry. The nature and regulation of the financial system has changed significantly since that time. Australia's banking sector is in transition following the GFC and as a result of impacts of the development of new technologies and products.

While this transition is underway, a clear opportunity to conduct an independent inquiry is available and is needed. Although Australia avoided the worst of the GFC, this should not be allowed to result in complacency about the structure and performance of our financial system. The roles that financial institutions perform are far too important to the health of the broader economy for the sector not to be reviewed at regular intervals. To ensure that the system that we have, even if it has served us well under stress, is the most appropriate and best system as we move forward.

There are a number of critical questions that need to be considered and addressed. The sustainability and implications of the funding mix used by Australian banks is a key issue. Related to this are evident questions about the interaction of the banking and superannuation sectors. Australia's pool of superannuation savings totals $1.4 trillion and is expected to reach $3 trillion by 2020. Yet Australian banks have to borrow significant sums from offshore. An inquiry could consider whether this is optimal and, if it is not, explore ways to reach a better outcome.

The explicit and implicit government support for financial institutions should also be considered, as should means to encourage greater competition, greater choice and better outcomes for consumers. Essentially, a comprehensive debate needs to be had about what the financial system over the next 15 years should look like and what changes are needed to help it achieve that outcome.

I turn now to another distinct issue that featured prominently throughout this inquiry; certainly, it was the most controversial issue. At the height of the GFC, the Commonwealth Bank acquired Bankwest. The committee received sad and distressing submissions from many former small business and property developer customers of Bankwest who ultimately had their loans terminated after the takeover. Besides losing their business, many also lost their home and were made bankrupt, and now rely on family, friends and government assistance.

In examining these cases, it is evident that there are a number of similarities in what occurred in the lead-up to the funds being terminated. The borrower's businesses were revalued and assessed to be worth significantly less than what they had been when the loan was entered or upon revaluation prior to the GFC. High rates of penalty interest were imposed in many cases, overwhelming the borrower.

In the opinion of many borrowers, Bankwest was unwilling to work through the issues and receivers were instead appointed. Separate issues about the conduct of receivers were also received. Of course, there are two sides to every story. The sectors and regions involved were generally experiencing tougher times, and the aftermath of the GFC cannot be dismissed. Banks also are not charities. They have responsibilities to their depositors and shareholders, and should direct credit to where it will be the most effective. Nonetheless, the committee sympathises with the experiences of many borrowers who faced and continue to face difficult and sometimes impossible battles to have their cases reviewed or to seek a fair assessment of their argument against decisions of the bank or of the receiver. There is no doubt that, collectively, the individual cases raised before the committee pose serious questions about the power imbalance between borrowers and lenders in circumstances where factors sometimes outside the control of the borrower trigger technical or more serious defaults under loan agreements.

A Senate committee is not a court, and this point was emphasised by the committee throughout the hearings and in the report. Individual disputes will need to be considered through appropriate processes. What the committee has done, however, is develop a number of proposals to help ensure that future dealings between small businesses and banks are more equitable and that maybe the process for individual dispute resolution might better enable aggrieved borrowers to have their arguments fairly and more cost-effectively heard.

The committee has for sometime believed that an industry code of conduct that specifically deals with small business lending needs to be developed. The Bankwest cases further reinforce the need for action to be taken on this front. The committee has also identified ways to improve the ability of small businesses to have their disputes with banks and receivers externally reviewed.

The experiences of these Bankwest customers should lead to some straightforward but fundamental changes to how banks deal with small businesses. The sector has both the obligation and the opportunity to demonstrate that it takes concerns about small business financial issues seriously and that it is willing to develop a solution. Personally, I am not a fan of government regulation of legitimate private sector activity except where it is absolutely necessary. So I stress to the banks and to the financial sector that failure by the sector to embrace the committee's recommendations to voluntarily move to a small business code of conduct addressing these types of issues will only strengthen the public case for intervention through greater government regulation in this area.

I would like to thank all of the individuals and organisations who assisted the committee during this inquiry. I also thank my colleagues on the committee for their work over the past year and for their contributions to the report. Finally, I would like to pass on my sincere thanks to the secretariat: Tim Bryant, particularly Colby Hannan, and also Kate Campbell for all their hard work and understanding. I commend this report to the Senate.

Senator WILLIAMS (New South Wales—Nationals Whip in the Senate) (16:21): I would like to add some comments to what my colleague Senator Bushby has just contributed.

I have made some additional comments and recommendations to this inquiry. Senator Bushby emphasised that we are not a court, and how true that is. Some of the evidence that came forward was very concerning. People were distressed. They are under enormous financial pressure and, hopefully, this inquiry and the recommendations will bring this to the attention of both sides in this whole financial game, whether it be the banks or the lenders.

I have concerns about section 420A of the Corporations Act. There was a property owned by a Mr Jim Neale in Sydney. It was valued at $4 million. It was sold for, I believe, $645,000 and after the sale was valued at $3.58 million. Section 420A says that those receivers in place of controlling those assets must sell at the best possible market price. I asked ASIC at Senate estimates if they have ever charged anyone under section 420A, and they are coming back to me on that. They took it on notice. I think section 420A is a toothless tiger and it needs addressing so that when assets are cashed up the best possible price is achieved for those people who are being sold up.

I have huge concerns about Bankwest and when the Commonwealth Bank took over Bankwest. There were lots of arguments saying that Bankwest had a clawback system. It was in their interests to impair loans so that HBOS, Halifax Bank of Scotland that fell over in the UK, would have to reimburse the Commonwealth Bank for the price they paid for Bankwest, whereas Commonwealth Bank and Bankwest said this was not the case. I suggest that ASIC look at the whole transaction and see that the Corporations Law has been abided by all the way.

There is a lot of pressure to lend. No doubt a lot of bank managers and loan officers are under a lot of pressure to meet targets. This is concerning, and evidence from the Finance Sector Union is saying that when a loans officer has a target set to lend so much money a month, even if they go on holidays or are sick, they still must meet those targets. That can be very difficult at this time with the lack of business confidence that, sadly, we are seeing in many places in Australia now. We know that there is a lot of debt. There must be a limit to it, and so a lot of those workers are under enormous pressure.

One concern I have is the penalty interest rates when someone defaults on their loan. One customer at Bankwest was paying around eight per cent. When they defaulted, their interest rate went to 18 per cent. That is a huge increase. It appears to me that when you are down, they put the boot in. The point I am making is: if someone owes the bank a million dollars and their assets are $1.2 million, they put them on penalty rates of 18, 20 or 25 per cent. Nothing is regulated in that respect, then they sell the asset for a million dollars. If it takes 12 months to clear the decks, then their debt may have gone up another $200,000 or $300,000, and that is tax deductible to the bank. In that situation, banks can dictate their tax deductions. What other business can do that in Australia? This is something I think needs addressing: if you are paying eight per cent and you default, there should be a maximum of no more than an increase of 50 per cent on eight per cent—in other words, 12 per cent. We see interest rates go so high when people least of all in their business life do not need to have the boot stuck into them.

Low doc loans are very concerning. I tabled a statutory declaration to the committee this week where the loan application form had been falsified by the bank manager. Figures put in were not true. Assets and investments were simply not true, and it is clear that through the work of Ms Denise Brailey that they have been fudging the books, the applications—this is to get the loans over the line, to meet those targets the loans officers have to meet. I raised this with ASIC in Senate estimates. They said that is fraud. I asked ASIC to work with Denise Brailey, whose organisation is the Banking and Financial Consumers Support Association, to look at those and, if necessary, make a recommendation to the Director of Public Prosecutions.

We had one case of GST where the receiver had sold the asset for $9 million, and the receiver was paid $9.9 million. It attracted GST. That money went to the bank, but the bank did not want to hand that $900,000 back to go to the Australian Taxation Office. That is a very serious issue, and information I have received from phone calls and others are saying that this is not uncommon. The Australian Taxation Office should look at this very issue.

I will just raise this point in closing:

Under the GST Act, liquidators, receivers, managers and administrators are all collectively referred to as "representatives of incapacitated entities." Such representatives are personally liable for any GST payable on taxable supplies that are made by a company post appointment. The ATO ranks as an unsecured creditor in respect of pre-appointment liabilities. This means that the ATO is at risk that it will not recover pre-appointment GST liabilities in full. However, if a representative is personally liable for the GST liability that arises post appointment, the ATO is likely to recover its GST liability on post appointment supplies in full.

This situation needs to be clearly spelt out to the insolvency practitioners industry.

I fully support a full and thorough inquiry into the finance industry in Australia. It has been a long time since the Wallis inquiry. There are many issues I could talk about, be it support from the government to non-ADIs, which would obviously reduce competition. We know the costs of the banks have risen. There is no question about that; hence, their movements are not in parallel all the time with the Reserve Bank cash rate movements.

In closing, I would like to thank Senator Bushby for his chairing of the committee and his interest and input; to the staff, as he has mentioned; and to the other senators who were involved. To those who gave us evidence and submissions: many of you have had an extremely tough time. I hope you get over those tough times and your future is brighter financially and you can cope with the mess you have been in. There have been some terrible situations: Paul French at Cobar with his hotel—sold up for about the price of the poker machines. When I phoned the bloke, he was off to the Royal Prince Alfred Hospital to have his three-monthly check that his leukaemia is still in remission. Tough times for many—and I thank those people involved. The senators and the staff are doing a wonderful job.

Senator EGGLESTON (Western Australia) (16:29): I want to make a few additional remarks to those of senators of Bushby and Williams in regard to this report. The inquiry was essentially in two parts. The first examined the impact of the global financial crisis on the Australian banking sector, and in that we were reminded of just how resilient the Australian economy was. Senator Bushby has very largely dealt with that section of the inquiry. The second aspect of the inquiry, which interested me, as it did Senator Williams, was that the committee heard often startling and alarming evidence about the conduct of some players in Australia's financial sector around the time of the crisis and following it in dealing with mortgage holders. In submission after submission and testimony after testimony the committee received firsthand accounts of what can at best be described as unprofessional conduct and at worst criminal behaviour worthy of serious investigation by Commonwealth authorities. This was particularly with reference to the takeover of Bankwest and the use of so-called low doc loans.

The committee heard countless claims of how loan documents were altered and falsified; of foreclosure on multimillion dollar properties, as Senator Williams has referred to, literally overnight; of contradictory information and at times blatant lies, at other times a lack of action by the very authorities that were charged with protecting consumers and preventing misconduct. Low documentation or low doc loan facilities have clearly been misused and it would seem at times perhaps criminal activity in the form of fraud has occurred with the use of these facilities. I have to say that while there is no doubt that low doc loans fill an important role in accessing a proportion of consumers who would otherwise struggle to secure a loan, it was equally clear during the inquiry that the opportunity for abuse of this facility has been seized upon by some very unscrupulous operators. It is abundantly clear to me that everyday Australians have been wronged by organisations and people whose modus operandi raises questions about their ethics, and the question, as I said, of criminal behaviour arose on more than one occasion when documents were changed after they had been signed by the individuals.

Of the final 20 recommendations which were made, the most important was the recommendation for a widespread and independent root and branch inquiry into Australia's financial system. That has been referred to by Senator Bushby and I agree that it is very important and timely that such an inquiry is proceeded with.

In closing, I would like to thank those individuals who made submissions and appeared before the committee giving firsthand accounts of their experiences. I make particular mention of Ms Denise Brailey and Mr Geoff Shannon, who have proven to be competent advocates for those who have been wronged. Their selfless commitment is most commendable in the face of what too often was a David and Goliath battle.

Question agreed to.

Senator RYAN (Victoria) (16:33): I present the report of the Finance and Public Administration References Committee on Medicare funding for hyperbaric oxygen treatment, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator RYAN: I move:

That the Senate take note of the report.

Earlier this month a change to the Medicare Benefits Schedule came into effect that removed Medicare funding for hyperbaric oxygen treatment of non-diabetic ulcers. That may sound obscure to people listening today. In fact it is only for a few hundred people annually in Australia. But if you are one of the people who suffers from non-diabetic ulceration, this treatment has been shown to be of particular benefit for when months and months of very expensive nursing care have failed. No-one disagrees with the concept that we should seek value for money for the money we spend on health care.

No-one seeks to challenge the cost-effectiveness analyses that underlie the assessment of new medical procedures and particularly the assessment of new medications. But in this case the process has broken down. We were presented with submission after submission, many confidential, many from providers of the services and of course from the Medical Services Advisory Committee and the Department of Health, but also, importantly, from the architect of Medicare, Professor John Deeble.

Hyperbaric treatment for various conditions has been on the Medicare Benefits Schedule since its inception in 1984. Medicare funding for hyperbaric oxygen treatment for non-diabetic ulcers is a more recent innovation. It has been effectively on probationary funding for well over a decade now. The reason it was put in in such a fashion was that there was not much evidence for this particular procedure upon it being added to the Medicare Benefits Schedule. But before anyone jumps to the conclusion about how services are funded on the Medicare Benefits Schedule, let me remind them that the overwhelming majority of medical procedures in this country have never had a cost-effectiveness treatment. We do this for new procedures now and we do this for new medications now, but there are many procedures and many treatments for conditions that are on the Medicare Benefits Schedule for which no cost-effectiveness analysis has been undertaken.

They were attempting to collect the evidence for this particular procedure to show whether or not it did in fact save the Commonwealth money, whether it was cost-effective and how effective it was in clinical use for people with these chronic ulcers which often lead to amputations because there is simply no way to treat them. Can I also say that ulcers that are being treated in this fashion are immensely painful for sufferers. Can you imagine having a wound that needs daily or every second daily treatment, an open wound on your leg or foot for months, in some cases years, on end. It has a massive impact not only on quality of life but on your ability to participate in the economy as well.

The troubling aspect of this was that a couple of things occurred at the Senate committee hearing. In particular we seemed to manage to resolve a conflict between the proponents of this treatment and the department of health about how they had measured whether or not it was effective.

A system that requires a Senate committee hearing to get the two people to actually agree on how we got to this point means that this process has not worked effectively.

There was debate over whether or not the Medical Services Advisory Committee was considering this as first-line or second-line treatment. The proponents of this care thought they had been assessed as first line, and from reading the documents it seemed that was possible. But when we read the documents in more detail and we had the benefit of an explanation, it became clear that it was appropriately assessed as a second-line treatment. But the proponents of this treatment had never benefited from that interaction with the Department of Health and Ageing or the Medical Services Advisory Committee. They had never had the opportunity to put the questions and have them answered in the way that our committee did. That is a breakdown in the system.

This committee report points out and our second recommendation is that consideration should be given to an independent review mechanism for MSAC decisions in the same way it is now undertaken for PBAC decisions for pharmaceutical benefits. I want to clarify that that review does not overturn a PBAC decision. We are not advocating an appeal mechanism for MSAC decisions; we are simply saying that the review mechanism for the PBAC, which allows an independent person to come in, look at the evidence and send a report back to the originating committee for reconsideration, is a good idea. It probably would have prevented this issue coming before the Senate.

There was some concern about the evidence used in order to make the judgement that this was not cost effective. I want to say two things here. We are in the middle of the design of a trial as well as the collection of data for a trial that will assess whether or not this treatment is cost effective and whether it should stay on the Medicare Benefits Schedule. No witness who came before us said that that assessment should not be undertaken. It seems perverse that we would take this off the Medicare Benefits Schedule pending the collection of that data, even though we know that taking it off the Medicare Benefits Schedule will actually prevent the collection of that data. If this regulation is not reconsidered by the government, we will not be able to see whether or not this particular treatment is effective, because people will not be able to access the treatment supported by Medicare. That is, to me, a circular argument.

I would also note that the data used to assert that this was not cost effective was remarkably small. It was a randomly controlled trial in the 1990s. Though it did meet the standards set by MSAC, it was of only 16 people. In the complex world of health economics, in order to understand whether or not a treatment is cost effective and clinically effective, a trial of only 16 people does not really give you the data you need. In this case, the Medical Services Advisory Committee did not take into account other data.

I am not a clinician, nor am I a medical expert, but, if we have a service that has been on the Medicare Benefits Schedule for a couple of decades, if we have the data being collected, if the proponents of the service, the patients, and the department of health are having disagreements about when it should have been collected and we are only dealing with a tiny population in another couple of years, it seems to me perverse to try to take a stand on principle and take it off the Medicare Benefits Schedule now. And the reason for that goes to an old saying in health economics, which is that the absence of evidence is not evidence of absence.

I say that because in health economics—which is a bit of a dark art; it is a very complex area dealing with a lot of uncertain information—just because we do not have any evidence to prove something is effective does not mean that we can assert that it is not effective. In the world of assessing new medical treatments and new pharmaceutical benefits, this is a critical thing to keep in mind. If we assert, mistakenly, that we do not have the evidence to prove it is cost effective and therefore we will deny treatment, we could be denying to people for years a treatment that we find out three or four years later is very clinically effective and cost effective. In this case it may also prevent us determining whether it is cost effective, because we will not be able to collect the data. I say again that the overwhelming majority of money we spend through the Medicare Benefits Schedule has never been assessed on a cost-effectiveness basis.

These points were made by Professor John Deeble, the architect of Medicare—a man I think every Australian actually owes something to, not just for their health care but also for saving them tens of billions of dollars over the years. I had the privilege of spending some time with him and having a conversation with him. I would suggest that the report is short, but his submission is even shorter—and I would suggest that people who are interested in this would actually benefit from reading his submission, which is on the committee's website.

I finish by saying that we are simply recommending that the government reinstate this treatment to allow the collection of the data so that in about two years time a true assessment can be made on a trial of more than 16 people and so that, in the meantime, people who are desperate for pain relief and some hope that their condition can be treated—absent an extraordinary intervention like an amputation—can continue to be given that hope.

I would like to thank the committee secretariat who, as always, assisted dramatically. We as senators have the privilege of getting across topics in a very short time and delving into them more deeply than in the other place. We do that with the assistance of an extraordinary secretariat—Christine McDonald and John, who have helped us immensely.

I hope the government takes this report in the way it is intended. We would not want to establish a precedent whereby things can be taken off the Medicare Benefits Schedule just because we do not have the data. I fear that would lead to a lot more popular and a lot more significant treatments being removed that have never been given that assessment. It is not grounds enough to deny people treatments which have, in some cases, been there for decades. That was a point made by Professor John Deeble, and it one the majority of the committee sticks with.

Senator POLLEY (Tasmania—Deputy Government Whip in the Senate) (16:43): I rise to make some comments in relation to the government senators on this reference committee inquiring into Medicare funding for hyperbaric oxygen treatment and to put in perspective the contribution Senator Ryan made here in the chamber this afternoon. I want to make sure that those people who are listening to this debate understand that this is not something that has happened overnight. The funding for this treatment has gone on for over a decade and on three occasions the proponents have failed to meet the criteria for ongoing funding by Medicare.

It was identified over a decade ago, as I said, that a more substantial randomised control trial was needed. But such a trial has not provided the Medical Services Advisory Committee—MSAC—that evidence to date. There is currently a trial being undertaken, and when the trial has been completed the applicants can again seek funding.

In 2011 MSAC assessment of the hyperbaric oxygen treatment for non-diabetic wounds was also scrutinised by the National Health and Medical Research Council, as well as this inquiry. But, again, I can put on the record that government senators support the government's decision to withdraw the Medicare funding for non-diabetic wounds.

We had evidence from the chair, Professor Robyn Ward from the Medical Services Advisory Committee. That is the body tasked with looking at these issues, and I think that a 10-year period to be able to substantiate that this funding was warranted is a pretty fair thing. But it is also important to understand that this treatment is available for other diseases, including diabetic gangrene, diabetic foot ulcers and the list goes on. There are quite a few of them that it is still available for. But the decision is consistent with the commitment to evidence-based decision-making, and that is what we are charged with the responsibility of doing.

The department has gone out of its way to assist the applicants, including the special review by the NHMRC and the follow-up activities. That was evidence that was given to this hearing. Interim funding has been provided for around a decade, as I said, to enable new evidence to be obtained so that a proper and full determination could be made about the funding of hyperbaric oxygen treatment for non-diabetic wounds.

Yes, it is easy to come into the chamber, and always easy to play politics because we all have concerns for the health and welfare of our fellow Australians. I think that over 10 years it actually would include the former government, which did nothing to address this issue. So now they come into the chamber and try to paint a picture of how terrible it is that this government, through Medicare, is going to take that funding away. The trial is underway, and when that evidence is provided the applicants can then apply for Medicare funding. That is the way that it should be.

I, too, would like to place on record my appreciation—as all senators have when trying to get their heads around an issue like this—for the support we had from the secretariat. I place my thanks to them on the record and also to those witnesses, not only for the written submissions but also, particularly, to all of those who came and gave evidence.

I would just like to encourage those in the chamber and those who are interested in this issue to read the report that was signed by the Greens, by the Liberals and by Senator Xenophon, who I am sure is anxiously awaiting the opportunity to make his contribution. But the government senators could not support those recommendations. We support the decision. We are reliant upon MSAC to be the advisory body for the government of the day, irrespective of its political persuasion. We take their advice, and so therefore I urge you to read the dissenting report that has been signed by Senator McEwen and me.

Senator XENOPHON (South Australia) (16:48): Any suggestion that this is about playing politics in relation to hyperbaric treatment must be strenuously challenged. I have great regard at a personal level for Senator Polley, but the government's approach on this is fundamentally wrong.

If anyone is going to be accused of playing politics, accuse me, because I actually put up this resolution, which was co-sponsored by every other non-government side of this chamber—the Australian Greens, the coalition and the DLP. So let us put this in perspective: this is not about politics. This is about a wide range of political views coming together to say that there is something fundamentally wrong with the way the government has withdrawn Medicare funding for those seeking hyperbaric treatment for non-diabetic ulcerative conditions.

It is very clear that a mistake has been made here by the government by withdrawing Medicare funding. It is a penny-pinching, cost-saving exercise that will have significant implications for patients around the country who need this form of treatment that in some cases can be life saving and can actually mean the difference between people requiring an amputation or not. That is what is at stake here, and I am afraid that the government has made a fundamental mistake in the way that they have dealt with this. They should have intervened and they failed to intervene.

If we look at what the Australian Healthcare and Hospitals Association has said, they make it very clear that there has been a flawed clinical pathway followed in the analysis of outcomes and costs, and that the hyperbaric oxygen treatment was proposed as a second-line treatment in the applicants' submission, yet it was analysed as if it were a first-line treatment. There are also fundamental issues here in terms of a denial of natural justice in relation to this withdrawal of Medicare funding. Also, the study that the government relied on—and I will be corrected if I am wrong—was in the order of 16 to 18 patients and undertaken in Scandinavia. One of the authors of the report said, 'I have been misquoted,' effectively. So the logic is fundamentally flawed in what the government has done.

I agree wholeheartedly with the comments of the chair of the committee, Senator Ryan, because I think we did hear some valuable evidence. I think that the devastating blow for this decision made by MSAC and the government's position has been given by Dr Deeble, the architect of Medicare, and a man to whom I think every Australian taxpayer owes a debt of gratitude. He designed a very good healthcare system and has saved literally hundreds of billions of dollars for Australian taxpayers over the years because of the architecture and the design of the Medicare system.

Dr Deeble has made it absolutely clear that the government has made a mistake here. This is a man who has been trusted by both coalition and ALP governments over many years in terms of good public policy in health care. In his quite devastating critique of the MSAC decision and, by extension, the government's maintaining of that position, he has made it absolutely clear that a mistake has been made. So I would genuinely and sincerely urge the Minister for Health, Minister Plibersek, to reconsider the decision that has been made because the impact it will have on patients across the country could potentially be devastating. This is a line of treatment for people with a non-diabetic ulcerative condition. On average, people only get this treatment after 19.9 months of other treatments not working. It is not a first line of treatment: that is one of the fundamental mistakes that MSAC made in this assessment.

I would urge anyone who is interested in good public health policy to fundamentally reject what MSAC has done and to urge the government to reconsider its position. The consequences of this decision will be that there will be people who will ultimately require more expensive treatment because their conditions will not clear up, whereas with hyperbaric treatment there is a good chance that in many cases their conditions will clear up. There will be people who will require amputations because this treatment is being denied to them. I am very grateful to Dr Williamson from the Royal Adelaide Hospital's hyperbaric treatment unit who wrote to me and approached me about this issue. I am grateful for the good work that he does and that other hyperbaric units do across Australia. The public system does terrific work and there are private hyperbaric units as well.

Fundamentally, a mistake has been made. That mistake has been confirmed by no less than the architect of Medicare, Dr John Deeble, and that mistake must be rectified. The government's approach on this is wrong. I would respectfully urge them to reconsider their approach, and the sooner they do the better off hundreds of patients around the country will be, because otherwise they will be denied a treatment that is often the last resort to solve a chronic health condition that in some cases can, tragically, lead to amputations.

Question agreed to.

The ACTING DEPUTY PRESIDENT ( Senator Marshall ): Before I call Senator McKenzie, I indicate that the time for debate in this period for the tabling and consideration of committee reports will end at three minutes past five and then I will need to deal with each of the outstanding reports by resolution only.

Senator McKENZIE (Victoria) (16:54): I present the 131st report of the Joint Standing Committee on Treaties, on treaties tabled in 21 August, 11 and 18 September 2012, and I move:

That the Senate take note of the report.

The Joint Standing Committee on Treaties' Report 131 contains the committee's views on a series of treaties which were tabled on 21 August, 11 and 18 September 2012. Probably the most significant of the treaties examined by the committee in this report is the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP).

ReCAAP represents a regional response to the incidents of piracy in the Malacca and Singapore straits. The treaty became binding on the initial signatories in 2006 and currently has 18 signatories. Piracy in these waters is a significant concern for Australian businesses that export and import by ship. The Minister for Defence, the Hon. Stephen Smith, recently estimated that approximately $130 billion worth of Australian trade passes through these straits each year.

There are a number of ways in which ReCAAP assists authorities local to the Malacca and Singapore straits to combat piracy and armed robbery. ReCAAP provides the legal basis for the previously mentioned ReCAAP Information Sharing Centre, which:

ensures the expeditious transfer of information on incidents of piracy and armed robbery against ships to ReCAAP signatories;

collects, collates and analyses information transmitted by the signatories concerning piracy and armed robbery against ships;

provides alerts, wherever possible, of imminent threats of piracy or armed robbery against ships; and

prepares statistics and reports on the basis of information received.

ReCAAP also compels signatories to share whatever information they have about piracy and armed robbery at sea, and compels signatories to assist in either preventing or detecting, arresting or seizing persons, vessels or aircraft involved in piracy or armed robbery at sea.

Australia will benefit from the increased access to information on emerging regional threats related to piracy and armed robbery at sea. We will also become a more visible participant in the task of combatting piracy and armed robbery. Australia will also benefit from access to a regional maritime security network comprising national authorities that are responsible for managing the threat of piracy and armed robbery in our immediate region.

Report 131 also contains the committee's views on three other significant treaty actions: the Treaty between Australia and the Socialist Republic of Vietnam on Extradition, the Partial Revision of the 2008 Radio Regulations, and the Agreement between the Government of Australia and the Kingdom of Spain for the Mutual Protection of Classified Information of Defence Interest.

The first of these treaties provides for bilateral extradition arrangements between Australia and Vietnam. Australia does not currently have bilateral arrangements with Vietnam to facilitate extradition, which means that we can only consider extradition requests from Vietnam under multilateral conventions to which we are both parties, such as the UN Convention Against Corruption or the UN Convention Against Transnational Organized Crime.

The treaty will make it significantly easier for Australia to cooperate with Vietnam to request or grant extradition for offences punishable under the laws of both countries. Importantly, the obligation to extradite is qualified by a number of internationally accepted grounds for refusal. A person may not be extradited in relation to a crime punishable by the death penalty, unless a guarantee is given that such penalty will not be applied. The parties to the agreement must refuse an extradition request where there are grounds for believing that the extradited person would be subject to torture, or that the request has been made for the purpose of punishing a person on the basis of their race, ethnic origin, gender, language, religion, nationality, political opinion or other status.

The treaty is consistent with other Australian bilateral extradition treaties and adds to Australia's existing network of 38 other bilateral extradition treaties. On this basis, the committee supports the Treaty between Australia and the Socialist Republic of Vietnam on Extradition.

In addition, and in line with the views expressed by the committee on previously examined extradition treaties, the committee has recommended that new and revised extradition agreements should explicitly provide a requirement that the requesting country provide annual information concerning the trial status and health of extradited persons and the conditions of the detention facilities in which they are held.

The Partial Revision of the 2008 Radio Regulations updates the international arrangements for the management of the radiofrequency spectrum to ensure sufficient spectrum is allocated for, amongst other things: digital maritime communications technologies; unmanned aircraft systems; oceanographic radar to measure coastal sea surface conditions; and Earth observation systems that provide critical data relating to weather and climate forecasts. The treaty also improves the international coordination of satellite networks. The committee supports this treaty.

The Agreement between the Government of Australia and the Kingdom of Spain for the Mutual Protection of Classified Information of Defence Interest sets out security procedures and practices for the exchange and protection of classified information between Australia and Spain and for visits to either party that requires access to such information or restricted areas or facilities where classified information is held. The committee also supports this treaty. On behalf of the committee, I commend the report to the Senate.

Question agreed to.