The PRESIDENT (09:31): I remind senators that the question may be put on any proposal at the request of any senator.

Senator RUSTON (South Australia—Deputy Government Whip in the Senate) (09:32): It gives me great pleasure to rise today to continue my remarks in relation to this bill. At the end of my previous contribution on this bill I was talking about changes the government has already made to Centrepay which we believe need to have the opportunity to take effect before we start launching into anything new. There is no doubt that Centrepay is an extremely valuable bill paying service that helps very many Centrelink customers manage their ongoing expenses. In May this year the government announced changes to Centrepay which we think are going to go a long way to protecting the most vulnerable Centrelink customers.

The changes that have been put forward mean that Centrepay no longer supports consumer leases that are not regulated by the National Consumer Credit Protection Act 2009. Senator Cameron wanted us to ban all consumer leases from being able to be paid through Centrepay. Instead the government took a more responsible approach and said, 'Let's ensure that any consumer leases that are available are regulated by what would otherwise be a normal regulation that every other consumer in the community would seek to have regulated.' That was instead of a knee-jerk reaction that says anybody who is on Centrelink cannot access their lease payments through Centrepay.

The legislative changes are not required to make changes to Centrepay. The government is looking to change and improve outcomes for customers without taking away the important avenue of support for customers with limited options to obtain necessary credit. There is no doubt that many people on Centrelink would not otherwise have access to payment terms because of their lower income and their lack of a credit rating. It is really important that we as a government make responsible decisions to make sure that people who are on Centrelink still do have access to the kind of payment options that everybody else in the community is able to get and not discriminate against them just because they happen to be on Centrelink.

The government does not support Senator Cameron's private bill because we believe it is fundamentally flawed. By prohibiting consumer leases from Centrepay for all consumer leases, the bill discriminates against people who are currently on Centrelink. The main objective of Centrepay was simply to assist customers in managing expenses, which is consistent with the purposes of their welfare payments, and reduce financial risk by providing a facility to have regular deductions made from welfare payments. This bill overreaches by being overly prescriptive about not just the types of things that these people wish to purchase but also how they are able to access them.

Following a review and a subsequent stakeholder consultation, the Department of Human Services introduced a range of changes to Centrepay to improve its operation and provide greater information for customers. These changes were only introduced in May this year. They have not actually had the opportunity to even filter their way through so we can see whether they are working. I would suggest that Senator Cameron should have delayed the introduction of his more restrictive and prescriptive bill until after we had the opportunity to see whether the new changes had worked or not. As I said, the particular relevant change that occurred in May that relates to Senator Cameron's bill is the change to the National Consumer Credit Protection Act. I think this certainly goes a long way to dealing with many of the issues that Senator Cameron raised about people scamming or taking advantage of those in our community who, possibly, are not in a position to absorb any fluctuations in their expenditure from week to week. The expansion of Centrepay is also to support alternative consumer leases such as low-interest loans, savings plans and lay-by.

The government is seeking to give as much flexibility and opportunity as possible to people on Centrelink to manage their own finances in the way that they would like to manage them and to make their own decisions about their day-to-day expenditure. I think it is incumbent on government not to interfere in people's lives to the extent where we tell them what they can buy or not buy. As I said in my last contribution, to say that somebody on Centrelink is not able to purchase a washing machine or a refrigerator by using the Centrepay opportunity, which may be the only way they are able to get access to these fundamental necessities of life, needs a serious rethink of legislation that would even seek to do that.

For that reason the government are not supporting this private member's bill of Senator Cameron. The house needs to be assured that the government are very mindful of making sure that we protect everybody in our society from organisations that would seek to take advantage, so we have strengthened our credit laws across the board. Those credit laws have been strengthened for the benefit, not just of people on Centrelink, but of all members of our community who would seek to purchase items through some form of credit or alternative consumer lease or activity.

The department is working to build strong assurance practices for consumer-leasing industry groups and to influence their behaviour. We believe that the best way for us to protect consumers is to ensure that the people who are in this particular space in terms of consumer credit and leasing through providing credit to consumers understand their responsibilities and obligations, and are monitored, checked and reviewed to make sure that they are operating within a set of laws and guidelines that the Australian public would deem responsible. To be very, very clear the government do not disagree with the need to have strong consumer credit laws that protect all Australians and obviously take into account those in our society that are more vulnerable because they do not have the extra cash or disposable income to protect them from fluctuations or unexpected expenses. But to go to the extent of the overreach of this bill and to start proscribing what people can spend their money on is not something that the government could support.

Senator O'SULLIVAN (Queensland) (09:41): I rise to make a contribution to the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015 debate. The point has already been made that the government does not support this private member's bill. The intent of the bill, as we understand it on the part of Senator Cameron, the author of the bill, is that he wants to prohibit all consumer leases from Centrepay, but this bill clearly does not do that. It does not have the capacity to achieve that. Indeed the government through the Department of Human Services has already introduced a range of changes that will address most of what the concerns of Senator Cameron.

The changes have been made to improve the operation of the scheme by providing greater information to its customers. These changes include, but are not limited to, exclusion of consumer leases that are not regulated by the National Consumer Credit Protection Act 2009. So, in effect, the government through the agency had a close look at where some of the vulnerabilities might be and have risen to the occasion to make adjustments in the operation of the scheme to see that the consumers are protected. The legislation also takes on, in excluding the expansion of Centrepay, to support alternatives to consumer leases such as low-interest loans in addition to no-interest loans, savings plans and lay-bys. This, in effect, is providing the people with choice. It allows them to function their household budgets and operate with the necessities of life within the scope of those things that might be of that available to the rest of us in the community when we are trying to manage the affairs of our budgets.

Apart from the strengthening protections we need to go back and have a look at who the people are that are affected by these arrangements, the Centrelink customers. These are people who often find themselves in difficult circumstances. We are talking about difficult economic or budgetary circumstances. The legislation is more inclined towards people who find themselves in lower socio-economic circumstances where this current assistance is valuable. From our life experiences we all know people who have grave difficulties in managing money. I have a number of relatives who fall into that category. When you do not have that ability—when you do not have an ability to budget, to save and to make contingency provision for the essential things in life where you are in more difficult or measured economic circumstances—these difficulties become writ very large in your life. We spoke yesterday about the fact that these programs are meant to help these people manage their circumstances, not to hinder them. We are not here to take away the fundamental and basic right of people to choose what they do with their money, but this process aids them to be much more alert to what they might next do and guides them in ensuring that they have covered the general necessities of life.

Regulated customer leases are not going to be excluded from Centrepay. Welfare recipients are generally unable to access most forms of credit such as credit cards in any event, and regulated consumer leasing is one of the few ways of obtaining essential household goods quickly. As we all know, without security being provided, when you make application for any form of financial assistance where you enter into an otherwise contractual arrangement with a consumer lease, a low-doc loan or a low-interest or no-interest loan, the credit agency or individual or corporation extending the credit has regard not just to your security position but to your capacity to service the loan commitment. This program allows security for those lenders where they know that, through the Centrelink payments, these loans or other financial arrangements will be serviced.

When we look at alternatives to general consumer leases, such as the no-interest loan scheme operated by the Good Shepherd microfinance scheme, this bill of Senator Cameron's would exclude people from having access to these financial facilities, which are particularly designed to help these people who are in otherwise somewhat difficult circumstances. Let's just think for a moment about where they might find themselves. Many people who are on Centrelink support are not receiving it simply because they are unable to get employment. That is one of the main reasons, but there are any number of reasons and we have to remember that we need to think beyond the individual themselves. In some cases, a person whom this bill would seek to exclude from accessing any sort of consumer lease or low-interest loan may well be a parent, and that parent may well be in difficult circumstances.

We heard yesterday in contributions made on a related matter that a lot of these households and homes find themselves with someone or, on occasions, multiple people within the household who have some form of addiction, whether it be a drug addiction or an alcohol addiction. Indeed, it may well be a gambling addiction or they are just people who are completely incapable of managing their own personal finances—exacerbated, as I pointed out earlier, by the very difficult circumstances they might find themselves in through the perils of life. Just think about this for a moment. If this bill were to take effect, it might prevent a parent, even the addicted parent or, indeed, another partner in that household, from being able to, for example, purchase a fridge or a washing machine. Just imagine the circumstances where you have a parent who is financially struggling in any event due to any number of perils, some of which I have mentioned, and there are many others, and is unable to purchase a fridge.

Let's take a household where you are living in the suburbs. You may not even have a car; you might rely upon public transport or some other form of making your way around, and now you find yourself with a young family of four or five school-aged children. Your fridge is broken and beyond repair. You might not even have the capacity to meet the costs of repairs to a fridge, but let us assume for the purpose of this example that the fridge is no longer functioning and you need to get a new fridge. If this bill were to take effect, some of these people would not be able to enter into a consumer lease arrangement, firstly because it would be prohibited by this proposed legislation, but in reality it may be that they cannot enter into an arrangement if they do not have proof—if they cannot convince the consumer lender—that they are able to repay the loan. Entering into arrangements where a loan is serviced by a part of their Centrelink payments, of course, allows that household to replace that fridge. As burdensome as that purchase may be, it puts that family back on a fair footing, as we would all want to see, in relation to the necessities of that household.

In a similar fashion, if the washing machine in the house were to break and you have a family of six or seven who are already in difficult circumstances, in many cases exacerbated by some of the scourges in the household with these addictions, you could be left with a mother of young children who then has no capacity to wash the linen or the clothes of the family unless they are able to access some form of consumer lease, low-interest or no-interest loan or, as I said before, finances operated by schemes such as NILS, which is the Good Shepherd microfinance scheme.

Essentially, the impact of this bill is very clear: either we are prepared to support these people in these difficult circumstances by, in essence, guaranteeing the payment of the lease payments or the interest payments on these loans or we are not. There needs to be no confusion here and no crossover. I do understand the spirit of what Senator Cameron has tried to achieve. None of us want to see any unscrupulous lenders taking advantage of people who are in very difficult circumstances, who otherwise would not have a choice and who, in some cases, are in very desperate circumstances being exploited by lenders and financiers. Nobody wants to see that happen—me in particular.

In a former life, I had a lot to do with families who found themselves in quite tragic circumstances. I understand these stresses of day-to-day life. As a former police officer, I have been in their homes, I have seen their struggles and I have seen the pain of a mother who is a spouse to sometimes an abusive father, who was addicted to either drugs or alcohol. The circumstances in their homes are very pitiful. If this bill were to go ahead, on balance, it would prevent those mothers from being able to enter into any sort of consumer arrangements to bring to them some of the very basic necessities of life.

It may even extend beyond the basic necessities. I am not one of those who is of the school of thought that these people find themselves in these circumstances should be denied the opportunity to have some of those other things in life that we all experience and take the granted. You have got a young family coming through in that household, you want them to have the ability to be introduced to some of the technologies of life, either in an essential form, from an educational perspective or from a social development perspective. Might I say, to the cry of some others, it may be just to allow their children to be able to enjoy some of the functions in life that come with some computer games and the sorts of things that young people seem to be attracted to more and more these days. If this bill was take effect, for those mothers in those households—or a father, before I hear the cry of discrimination come my way from our side of the building—it would prevent them from being able to enter into leases or loan arrangements to bring those things into their family. I think that is completely wrong and, in effect, discriminatory in and of itself.

What this program does is assist them in doing this. Some people, believe it or not, are just not quite financially literature enough or have enough life experience to be able to wade their way through certain regulated lease agreements and the like. That is why the changes of policy—the Centrepay policy terms list and the categories and goods and services eligible for Centrepay deductions—that I indicated earlier have been done. This gives a guide to these households and, along with the consumer protection act, is meant—as best it can, in harness with each other and having a symbiotic impact—to in effect guide them.

Senator Jacinta Collins interjecting—

Senator O'SULLIVAN: I will not take the interjection. This guides these families who might not be as fortunate as some in terms of financial literacy to be able to make decisions and, as I have pointed out all the way through, guides them in what they do in making these purchases of things that you and I all fairly well take for granted.

We have also sometimes got the additional situation of the complexity of these agreements, which might involve—along with the lender—a finance institution such as a bank, where these people have to then start to engage in complicated arrangements as to how the periodic payments for these leases or loans may occur. I think we are all familiar with modern banking terms and that there is a cost involved in that, whereas this service provided for Centrelink customers has no cost.

When I talked about no interest loan schemes, we have got areas—like Good Shepherd Microfinance—which I am quite certain Senator Cameron did not mean to catch in this bill but would catch them. We have got areas where even these things are not available. I am instructed that in Normanton, for example, in the far northern part of my state, there is no NILS provider. As a result, an individual in that area who found themselves in these circumstances would have no alternative if it was not for the Centrelink program to be able to, as we have talked about, secure these essentials of life.

During the thin years of 2013-14, the NILS itself—which is, as I have referred to, operated by the Good Shepherd Microfinance—approved 24,378 loans with a total value of $22 million. I want to stay more with the number of loans. Whilst accepting that some people may have taken multiple advantage of the Centrelink program, there are in essence—even allowing for 20 per cent to be duplicate applications—some 20,000 households and 20,000 families who we know already probably in very ordinary or very difficult financial circumstances who have used the scheme to get the necessities of life. Those necessities are quite regulated in terms of what they can do and where they can do it. With that Centrepay for household goods, in just six months from July to September 2014, there were 136,000 customers with a total deduction of some $148 million. Not all of those deductions are for consumer leases, but the comparative volume does tend to indicate a significant demand for household goods—those goods that I referred to as the basics of life.

In closing my contribution, I have recognised Senator Cameron's intent with this legislation. I think we all have great sympathy for any measure that might protect the vulnerable in our society, particularly those who are really disadvantaged—for example, a mother and children in circumstances not necessarily of their making. Every one of us wants to join Senator Cameron in protecting these people so that they are not exploited by unscrupulous lenders of money or those who extend lease and finance arrangements. But because there have been changes which perhaps Senator Cameron was not previously alive to we believe the bill is not necessary. Indeed, limiting people's capacity to do this will just impact on their ability to take on the most basic things in life which we have all become somewhat accustomed to. So I think we should not support the bill. (Time expired)

Senator IAN MACDONALD (Queensland) (10:01): I congratulate Senator Cameron on bringing to the parliament a bill that at least heads in the right direction and has a concern and a solution for a problem that abounds. Having said that, I think Senator Cameron, whilst meaning well, has got it wrong again. But let that not withdraw from my acknowledgement that this is one of the more sensible contributions that my friend and colleague Senator Cameron has brought to the chamber. It is good that we are having a debate on this.

In reading some of the material about this, it reminded me of when I was a 17-year-old. I had just left school and could not afford to go to university. I started work as an articled clerk on about half the pay an apprentice would get. I studied externally through the University of Queensland at night to get my legal qualifications. I was certainly a poor Australian. Senator Cameron's wish is that his bill be all about harm minimisation for poor Australians. I remember the days when I certainly fitted into that category.

I lived some distance away from my work in the town of Ayr in North Queensland and, somehow, I had to get to work. It was too far to walk. I would rely on friends to give me a lift if they were going in to town at the same time. But because I wanted to be independent I bought myself a Honda 55 motor scooter. I emphasise '55' because it was five cc better than the regular Honda 50 at the time. I bought it on what was then called hire purchase. A lot of the ills that Senator Cameron talks about were, in fact, there in those days of hire purchase. You do not see hire purchase around much these days. I am wondering if it is still relevant. The idea of hire purchase is that you pay a deposit and then pay your purchase off in instalments. In my case, I got the motor scooter. I had to pay some sort of a deposit and then I had to pay it off. As I recall, I used to pay about two pounds—or $4—a month. I had the use of the motor scooter for a couple of years, whilst each month I would go into the hire purchase agency and pay my two pounds to enable me to continue operating the motor scooter.

Whilst I was responsible for maintenance and upkeep, and obviously for fuel and repairs, the actual ownership of the unit, the motor scooter, stayed with the lender all the time. The idea of hire purchase in those days—very similar to the situation that now applies under different bills—was that the lender retained ownership of the goods. At the end of the lease—I think my lease was for three years—the motor scooter effectively went back to the lender because they still had the ownership entitlement to it. But, as with all of those contracts provided at the time, in the goodness of their heart the lender could actually sell you the three-year-old motor scooter for a nominal price. It was very similar to the arrangements that apply in the situation Senator Cameron has highlighted.

As with a lot of the propositions that have been raised in this debate, I remember that the amount I actually ended up paying for the motor scooter was much greater than the purchase price. Adding up all the payments I made over the term of the hire purchase agreement, I paid something like three times the original cost of the motor scooter. But, of course, in those days there was no alternative. I did have the use of the motor scooter from day one and it allowed me to get around. Again, this is very similar to a lot of the situations that are highlighted in Senator Cameron's speech and in other contributions to this debate. Senator Cameron in his introductory speech on this bill said that the government should expedite the broader review of consumer leases that it announced and look at the national credit code and the implications of consumer leases on a broader basis.

On 7 August this year the Hon. Josh Frydenberg MP, the Assistant Treasurer, indicated that the government was establishing a review of the small-amount credit contracts, which I and probably everyone else in this debate have referred to as SACCs, and related provisions of the national Consumer Credit Protection Act 2009. The establishment of that review fulfilled a statutory requirement under the credit act to examine and report on the effectiveness of the law relating to SACCs that was provided in the credit act. In doing this the government recognised that the small-amount lenders can play an important role in the economy by providing credit to consumers who are excluded from mainstream forms of finance. The government wanted to ensure that the regulatory framework strikes the right balance by protecting vulnerable consumers without imposing any undue regulatory burden on the industry. These small-amount credit contracts are loans of less than $2,000 to the consumer, with a maximum term of 12 months. Since 2013 the credit act has placed specific obligations on small-amount credit contract arrangements and on the providers, including a cap on costs and a rebuttal presumption that a loan is unsuitable when the customer is in default under another small-amount loan.

The government's review also provides an appropriate opportunity to consider the laws that apply to regulated consumer leases. A consumer lease allows a customer to lease an item, such as a fridge—perhaps even a motor scooter!—until the term of the lease finishes, when the item is returned to the lease provider. It is similar to what happened in the case I was relating, about buying a motor scooter all those years ago. Consumer leases regulated under the credit act include those that are for a set period of four months or longer. While the customer base for small-amount loans and regulated consumer leases is similar, many of the regulatory requirements for small-amount credit contracts do not apply to consumer leases. The review announced by Mr Frydenberg will consider whether the provisions that apply to small-amount credit contracts should apply to consumer leases as well. While the customer base for small-amount loans and regulated consumer leases are similar, many of the regulatory requirements of these SACCs do not apply to consumer leases. The review, as I indicated, will consider whether the provisions that apply to small-amount credit contracts should also be extended to consumer leases.

I am pleased that, as Mr Frydenberg announced, the review will be chaired by Ms Danielle Press, the CEO of Equipsuper, who will be joined by panel members Ms Catherine Walter, the deputy chair of Funds Management Victoria, and Mr Stephen Cavanagh, a partner in HWL Ebsworth. The minister announced that the consultation process would involve the panel calling for submissions from interested parties. It will consult widely with stakeholders. The terms of review are quite extensive. I will not go through them all, but they include the review to make recommendations about effectiveness and where necessary to recommend any changes to the requirement to obtain and consider a consumer's bank account statements in certain sections of the credit act. The terms of reference also require the inquiry to look into the rebuttable presumption that a loan is unsuitable if the consumer is in default under another small-amount credit contract or has held two other small-amount credit contracts in the past 90 days in accordance with several provisions of the credit act. The inquiry will also look at the prohibitions on entering into and increasing the credit limit of a loan contract that has a term of 15 days or less with a consumer and on suggesting to consumers or assisting them to do all that is required by certain relevant provisions of the credit act.

The review panel is also required to look into the requirement to display a warning statement about alternatives available on small-amount credit contracts in several relevant provisions of the credit act. Also, the inquiry has to look at the cap on fees on charges, including the maximum of a 20 per cent establishment fee and of a monthly four per cent fee that, again, is referred to in several sections of the act. The inquiry will look at the requirement that consumers who do default under a small amount credit contract must not be charged an amount that exceeds twice the amount of the relevant loan in section 39B of the National Credit Code.

I cannot equate these things precisely with what happened 50 or more years ago when I bought my first 'vehicle' under a hire-purchase contract, but clearly these sorts of issues have been around for a long time. One often wonders about all this regulatory work that governments do from time to time. I note this National Consumer Credit Protection Act came into play in 2009 in the term of the previous Labor government. At times I think we should pause and think about whether we should be encouraging individual responsibility rather than having governments—big brother—trying to regulate every aspect of our lives to protect us from ourselves. I am not sure that my instance, where I paid, if I remember correctly, three times the amount of my motor scooter back in those days, was something that really needed regulation by government. I was aware of that as a 17-year-old when I went into it, but to me the convenience and use I got from that motor scooter was worth the extra amount that I paid in total, and it allowed me to pay it off by almost affordable payments every month until I completed the contract.

Whilst there was some legislation and regulation around hire-purchase agreements in those days, one wonders if at times we try, as a parliament, as various governments, just a little bit too hard to save people from themselves. There used to be the old legal principle of caveat emptor—be careful of what of you buy, think about what you buy—but unfortunately in this day and age there has grown up this view that bureaucrats and politicians in Canberra are better able to regulate the lives and responsibilities and obligations of individual Australians than those individual Australians are themselves.

What we have to strive to do in Australia, and what we do obviously do and have done for many years, is to make sure that every Australian has an education that equips them to be able to properly assess whether they should be taking out a small amount credit contract. Back in my days, you took out a hire-purchase agreement. Ensuring Australians are better informed and the better educated is a better way of addressing these things than having governments and bureaucrats in faraway Canberra trying to regulate what they think is in the best interests of the people of Australia.

I often make the same point in relation to Indigenous people. I find it offensive that people in this parliament in Canberra and bureaucrats are always trying to pass laws, to do things, to make special rules for Indigenous people. To me that always seems to suggest that we think Indigenous people are simply incapable of making the decisions that other Australians make. I find that very offensive. I have some caution with some of the things even my government does in relation to Indigenous people. I think that the best thing we can do for Indigenous people is to treat them exactly the same as every other Australian, with the same rights and responsibilities and opportunities and benefits that every other Australian gets. But some of the things we do from this building and from Canberra seem to me to be almost designed to ensure that that paternalistic situation continues to apply for Indigenous people, and I for one totally oppose that. I know a lot of Indigenous people, and they are equally as good as, if not better in most cases, than every other Australian. I think they are as well able to control their own lives and look after themselves as every other Australian. Again, I emphasise that education, training, the ability to participate fully in Australian society applies there, as it applies to every other Australians.

Senator Cameron said in his opening speech this was an attempt to help minimise harm to poor Australians. Of course, if we did not have any poor Australians in the country then perhaps Senator Cameron might not have thought it necessary to bring this bill forward. We, as a government, try our very best to make sure all Australians benefit from living in this lucky country. Having said that, and whilst I again acknowledge the good ideas and good principles behind Senator Cameron's introduction of this bill, I think he has got it wrong. The government is already addressing many of the issues that Senator Cameron indicated concerned him. When the reviews that the government has set up and other actions the government has taken come into play, this bill will be unnecessary. For that reason I intend to oppose it and I urge the Senate similarly to oppose the bill.

Senator FAWCETT (South Australia—Deputy Government Whip in the Senate) (10:21): I also rise to address the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015. I would like to address this in three key ways. Firstly, I want to talk about what Centrepay actually is, which is the mechanism that is being discussed. Secondly, I want to talk about the problem that the bill seeks to address. Thirdly, I want to talk about what the most effective approach is to actually mitigating the risk and the poor consequences and outcomes that Senator Cameron raises. I do this because my background, as you know, Mr Acting Deputy President Sterle, is that of an experimental test pilot, so I have seen many cases where people identify a problem and launch into what they think is a fix. But, if you do not identify what the crux of the problem is, what system needs rectification and what the possible unintended consequences are, you can spend a lot of time and effort but not address the problem you are seeking to fix. So I think it is important that we look at these factors.

What is Centrepay? It is a deduction service that is offered to customers of Centrelink by the Department of Human Services. It is free for recipients of Centrelink payments. It means that people can have payments for things like bills, utilities and other costs deducted from their Centrelink payments to meet those ongoing expenses, and then the residual Centrelink payments are deposited into their accounts. So it helps people to manage their funds, particularly people who, because of their own life circumstances and their ability to manage, or because in some communities there is an expectation that 'what you have is mine and you should share it', find it very hard to maintain control of their own income. Because of those social or familial pressures, Centrepay can be an invaluable tool to them.

Centrepay was used to transfer more than $2.1 billion deductions last financial year, so it is of substantial size in terms of its transactions. It is widely acknowledged as a very valuable service by the sorts of community organisations that get alongside people who are struggling in this area. It is used by around 600,000 people who are in receipt of Centrelink payments, and they represent about nine per cent of the total Centrelink customer base.

One of the things it does is link businesses who have met the policy and terms of Centrepay with these consumers. It does not operate carte blanche; it has a process whereby businesses have to agree to abide by certain policies and terms, and conditions in some cases, to be linked up and be able to receive those payments. So it is a fairly well-developed system.

The system has been developed over time, particularly in the area of consumer leases. The Department of Human Services has conducted a review of the system to change the way it works and to provide more information to more consumers—and I will get onto that a little bit later—but it has also excluded consumer leases that are not regulated by the National Consumer Protection Act 2009, and that is important. One of the roles of the Parliamentary Joint Committee on Corporations and Financial Services, which I chair, is to oversee ASIC, the corporate regulator, and one of the benefits that a regulated scheme brings is that people have to comply with the requirements of, and get approval from, ASIC in terms of how they run their business. For schemes that are not regulated, there is not that same oversight or that same framework to comply with, so this review has already excluded those kinds of businesses from the Centrepay model.

Importantly, this bill also expands the alternatives to consumer leases, and these are things like low-interest loans or no-interest loans, savings plans and lay-bys. That means that, when people are attracted by one of those lease-to-buy options because they need whitegoods or some service in their house, they know, 'I can buy those goods more cheaply with a low-interest loan or a lay-by plan than through that rental scheme.' There has been a lot of effort put into making those alternatives available and appropriately regulated, and making sure people are aware of them. The changes in the bill to the Consumer Protection Act and to Centrepay are to make more of those alternatives available to people, which then help them to make informed choices about their options when procuring household items they need for day-to-day living in a way that is ethical and fair in terms of the impact on them.

You need to bear in mind, Mr Acting Deputy President Sterle, that many of the people we are speaking about are excluded from normal avenues of credit, whether credit cards or store accounts, because they may be unemployed—and, in some cases, the unemployment is intergenerational. I certainly know from my time as the member for Wakefield in the other place, when I represented some communities in the Peachey Belt area, that there were a lot of long-term unemployed people. The work there of groups such as Anglicare and others who sought to get alongside people and help them with their financial literacy and understanding was critical in helping them to bridge these gaps between what the rest of us take for granted and what is available to them.

The new Centrepay policy and terms categorise goods and services that are eligible deductions and list a number of things that are specifically excluded so that people are only using the system for things that are important. The Centrepay terms do not rely on social security law to exclude particular goods, and I encourage those who have a deep interest in this to go and have a look at the Centrepay policy and terms.

This is where I think we move from looking at what Centrepay is to looking at mechanisms to bring about change. We have described Centrepay, and it is good. The problem with consumer leases, which is fairly well known—and I applaud Senator Cameron for his concern for people—is that somebody can make rental payments over a number of years for an item that might cost $600, but the amount they end up paying can be around the $1,100, $1,200 or $1,300 mark. Clearly, they pay far more for the item because they do not have the option of getting that up-front capital. It is a well-defined problem. But the mechanism to bring about change is not the act, because, if we exclude even regulated consumer lease options from this system, there are a few things that can happen. One is that the leases that are then made available to people will often not be regulated. So people who are under pressure to have a fridge or a washing machine in the house will still go to companies who have no obligations either through ASIC or, indeed, under the policy and terms of Centrepay to provide additional information to these people about alternative credit sources such as the low-interest loans et cetera or to operate in a fair and ethical manner. People will then be using the residual money they have from their Centrelink entitlement to pay for these items. So we are actually reducing the protections for them if we exclude the regulated consumer leases from Centrepay in this legislation.

If we were to try and do things in a different way through Centrepay, as opposed to ASIC—and I will come back to ASIC in a minute—then we would look at Centrepay's policy and terms. Under 7.3 in the policy and terms, any company that has an agreement to use the Centrepay system has to comply with the policy and terms and any additional conditions which are placed on it. So, we are talking about a regulated scheme which already has the calming effect of ASIC requirements and then the additional requirements that can be placed on the policies and terms. If we look at section 8.1.b, it says that Centrepay can approve an application to be part of this scheme either in its standard policy and terms or it can approve it with additional conditions. This is one of the options that would be far more precise in achieving the outcome that Senator Cameron is looking for, if we find that the other mechanisms are not having the desired effect—and, as I say, I will come back to those in a minute. The policy and terms and additional conditions could be a mechanism to say, 'If you want to be part of the Centrepay scheme'—and, for companies, that is obviously an attraction, because there is a lower risk profile for them if they are receiving these payments under agreement where Centrepay is an intermediary—'then Centrepay could use additional conditions to set caps on interest or other options.' So there are ways that those sorts of conditions could be used to deliver more protection to the consumer than just by eliminating these kinds of things from the legislation altogether.

It seems a self-defeating object, to my mind, to say that we are concerned that people are being exploited, therefore, remove these products altogether, as opposed to saying, 'Let's use the system to provide additional protections for people so that what they are asked to sign up to is equitable, fair and ethical for them.' The policy of the Centrepay system itself, under a regulated product, provides the sort of protection that we should be aiming for, as opposed to just excluding it and putting it out in the free market.

Part of the reason I say that is that the people who are responsible for regulating these products are ASIC. ASIC are responsible for the regulation of consumer leases under the National Consumer Credit Protection Act 2009. They undertake a range of research and activities to promote business compliance with the act, and they also provide a number of educational materials for the consumer. When it comes to education, I am very aware, having been the member for Wakefield where I have gone into schools and seen that in the foyer there are no written hand-outs. The schools have given up providing them to parents because they have realised that in some cases some parents cannot actually read. They will not admit it, and they do not get the information. So, for that cohort, no amount of brochures that highlight information is going to protect them. What these schools have done is put information onto an audio—so, it is a video or a power-point presentation with audio. They find that the parents will stand around and have a cup of tea that is provided. The whole object is to provide an environment where you convey information. So there are ways that we can convey information to people.

Part of ASIC's remit is educating consumers. They have their MoneySmart website and system, where they try to provide financial guidance. What we are seeing is that people like Centrepay are linking through to that information. So, in the increasingly online environment, people are being pointed to the fact sheets that are produced by ASIC around MoneySmart. ASIC have a whole section just on consumer leases, which explains how the leases work and the terms. It highlights the fact that, at the end of a lease, you might actually not own the item, despite the sometimes misleading advertising; you can be responsible if the item is damaged or stolen; and the terms and conditions can be complicated and they may need to seek additional support. They highlight the fact that leasing may not be the best way to buy something, the fact that there is often no cooling-off period and the fact that you may be better off with lay-by or low-interest type schemes. They also help people to working whether they can actually afford these repayments—so there is budget planning. They also point people to things like the no-interest loan scheme, which offers specific purpose loans for things like fridges or washing machines. There is the Good Shepherd Youth and Family Service, who can link people up with providers of these low-interest schemes. So there is a range of information available there.

By keeping these schemes within the Centrepay system, we can do things under its terms and conditions. For instance, if you as a business want to attract customers and want to have the security of using the Centrepay system then you need to provide them with this information. ASIC provides links to additional explanation, and advocacy and support groups in the community can use that information to help inform consumers. With the regulated schemes, ASIC takes action to make sure that schemes do comply. I am the first to admit—and it is the whole reason we have ASIC—that there are people who do the wrong thing. I look at ASIC's website and see that in February this year ASIC took action against five different companies—Goldhype, the Smart Link Rentals group, Keep Easy rentals, Rent To Keep, the RentEzi appliance rentals and the Wanted Rented group. They are obviously all aimed at getting people into this scheme as an easy and quick way for them to get something. As a result of ASIC's actions, over $230,000 has been refunded to 115 consumers, the majority of whom were in this cohort. They were people on Centrelink benefits who had entered into contracts with these lease providers.

Under the outcome that ASIC has imposed on these businesses, the businesses have agreed to collect only the cost price of the rented goods and to refund any amount that has already been received from the consumer over that amount. They have also agreed to transfer ownership of the goods to the consumer once the cost price has been paid and to stop offering regulated consumer leases. In other words, ASIC has said, 'Your conduct has been so poor that not only are we going to make you fix up the problem with your existing customers but you are no longer going to be offering leases in this space.' So ASIC is fixing the problem with companies like that but, by then saying, 'You cannot offer regulated products,' it means that Centrepay will no longer be offering the product.

So the whole intent of Senator Cameron's bill in this case does not achieve anything, because the system has already worked to exclude those people. People would get more protection by still coming through Centrepay with Centrepay's terms and conditions and regulated schemes than they would by going into a marketplace where people who have been prevented from providing regulated lease options are operating.

In June this year we saw another action by ASIC against a firm called Amazing Rentals. ASIC required that that company stop operating. The area where they had most noncompliance was in Darwin. ASIC said, 'You have to cease operating in Darwin for a minimum of 12 months.' That company had to terminate all the consumer leases that had been entered into at the Darwin store between October 2011 and May 2015. They had to cancel the payment arrangements in relation to those leases and transfer ownership of the goods to the consumers. They had to refund to consumers all credit charges and the difference between the retail and lease costs and they had to pay a total of $10,000 to some of the advocacy agencies that supported people—the North Australian Aboriginal Justice Agency and the Top End Women's Legal Service, who provided support to consumers in this case. They also had to engage an independent and external compliance expert to conduct an assessment and report to ASIC on Amazing Rentals' policies and procedures to ensure compliance with credit compensation in relation to responsible lending documentation obligations and make any recommendations about required changes.

To come back to my starting point, Centrepay is a useful system. It supports 600,000-odd people, about nine per cent of Centrelink recipients in the country. It has been recognised by ASIC as a useful system. There is a problem with leases that charge people far more than a product is worth, but the answer is not to exclude regulated leases from the Centrepay system, for the simple reason that we want people to be using regulated leases because that allows ASIC to take the kinds of actions I have just outlined that they have taken against six companies this year alone. But also importantly it brings it under the Centrepay system, where there is the policy, the terms and the additional conditions that they can apply, which will provide more protection, not less, to the consumer.

For those reasons, whilst I commend Senator Cameron for his concern for the people involved, I believe that the Centrepay system is worthwhile and that excluding regulated consumer leases is not the best way to provide protection to consumers, and so I will not be supporting the bill.

Senator BERNARDI (South Australia) (10:41): It gives me great pleasure to rise today and address some of the measures proposed by Senator Cameron's bill, which is known as the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015. I am particularly interested in this bill because it relates to a longstanding concern of mine about financial literacy not just amongst those who are on income management or income support but amongst our community generally.

One of the greatest things we as a nation can do is to ensure that young people develop an understanding of finance and money. That is not because they need to pursue money as their life's goal but because the astute management of money can prevent a great deal of misery and hardship in their lives. If they understand what the impacts of consumer credit and the long-term implications of not paying off your debts can be, it can prevent a lifetime of hardship.

I have been interested in this space for a very long time, particularly the benefits of teaching children about financial literacy. I wrote a little children's book, which I entitled The Money Tree, which was designed for parents to help their children understand money management through a fictional tale. I regret to say that it did not meet with widespread acclaim, but it has been distributed to schools and various other bodies for free at my own expense because I passionately believe that this is something that can change the lives of people forever.

I respect Senator Cameron trying to enact a bill which is designed to prevent people from getting in over their heads and facing financial hardship. The intention of Senator Cameron, I have no doubt, is quite sound and solid. But there are some flaws in this bill. We have to consider what the potential implications could be for those most impacted by this. What might sound intuitively like a really good idea can often have some impacts which need to be given consideration.

If this bill were enacted, it would mean that welfare recipients who are benefiting—and I strongly emphasise the word 'benefiting'—from income management would not be able to pay for any consumer lease obligations, whether they are regulated or unregulated, using their income managed money. Let's think about that for a moment. Those on income management would still be able to get involved in regulated or unregulated leases with their non-income-managed money. They could still do it with cash or various other things. But we have to ask ourselves: when people are going into what are generally longer-term obligations to buy whitegoods or merchandise, which is often very important to their lives and wellbeing, isn't it better for them to be in circumstances where their repayment schedules are managed and are not going to be subject to what I would call the weaknesses of indulgence that we all have? Marketers spend enormous amounts of money trying to part us from our cash, and if we have cash we can be vulnerable to those sorts of marketing overtures. That is fair enough, but not if it is going to leave you short for an ongoing repayment. It is not fair enough then.

We are talking about people who are welfare recipients, many of whom are doing it tough, many of whom need to purchase things which they cannot initially afford, so they need to go into a finance arrangement. Rather than risk those people losing their asset because they are vulnerable or their cash management skills are probably on par with most of Australia, we are better off providing them with some certainty and surety. That is what I sense.

This bill does not allow that to happen. As I mentioned, you can go to unregulated or regulated leases, and they can pay for that through their non-income-managed money. The risk here—and I seriously think it is a risk that Senator Cameron has not considered—is that this can cause further financial hardship for people that are already in very difficult circumstances. As I mentioned, for many welfare recipients this sort of surety is the only way that they are going to have a prospect of getting reasonable lease terms or rental arrangements, because there is a certainty that the financier is going to receive the regular payments. It does not mean it is going to be fair; it does not mean it is going to be good. It does not mean any of that, but it does mean that there is access to opportunity for people where otherwise there might not be or there is access to opportunity under terms that are probably much more appropriate and attractive than some of the payday lending terms or other less attractive options that are out there.

It is very clear to me from listening to the previous speaker that the government does want more lower cost options available for people. There are good Samaritans out there, including the Good Shepherd's No Interest Loan Scheme. I have had meetings over the years with members of the National Australia Bank and their social finance organisation, in which they provide no-interest or very-low-interest loans and support other organisations that are doing the same thing. These are very small programs in the scheme of things, but they make a huge difference. I think making a difference in this space is what we are all trying to do to get better outcomes for people and to make sure that government and taxpayers' money is used wisely and to the best effect. I think there is a general consensus that we want to stop predatory lending processes or make them as unattractive as possible, because of the difficulties that they cause.

I have seen it firsthand. I have been involved in the finance industry for a very long time. I understand how money worries can plague people. It does not matter whether you are rich or poor; if you cannot manage money effectively, you end up in a very dark place. If you start borrowing from some of the less-regulated lenders at some of the extortionate interest rates which are payable, or in some of the unregulated areas, it can cause enormous grief for you and your family because a lot of the less salubrious lenders are linked to very unsavoury characters. I know that firsthand because unfortunately I have had friends and clients who have gone down that path.

I think the Department of Human Services has to continue to ensure that people have access to goods using the most reasonable means that are available to them. That means giving some certainty to the vendor—the lender or financier in this case. The best possible way to do that is to allow access to income management. It takes it out of the discretionary hands of the recipient and provides that certainty to the vendor. There are a number of other things that we can do that would be positive in this sense, which I would like Senator Cameron to consider, if he wants to put forward another bill.

In the end, as I have said before, we need to make sure that the government and the taxpayer are getting appropriate value for money. We have to ensure that taxpayers' money is being used as wisely as possible. We also have to acknowledge that the interests of the welfare recipient have to play a significant part in this. It is not enough for us to wash our hands and say, 'You can have this bundle of cash every week'—it is hardly a bundle, I should say—'you can have this taxpayers' funding every week or fortnight and you can spend it on whatever you want.' We know that some people cannot or will not spent it appropriately, and that leads on to greater societal difficulties. It leads on to individual difficulties in health and wellbeing as well. We know that in some instances children are impacted by the choices that their parents make. We need to acknowledge that and we need to put in place measures that will protect the wellbeing of all participants in this process.

We have seen the success of income management in many areas. I know that in the previous government there were calls from the member for Wakefield for income management to be rolled out in his area—against the will of his government at the time. I remember there were calls from other members of parliament saying: 'No, this is a good idea. This will help alleviate suffering. It will help alleviate hardship. It will make things easier for people to make the necessary decisions for themselves because some decision making is actually being taken out of their hands.' It sounds a bit perverse, but limiting choices, even for a section of expenditure, makes for better choices. If people are compelled to provide for their rent and to provide, for their children, food and those sorts of things before some of the other discretionary items, they can be better off. And that was the intention. It has been hailed, I think, by most sides of the chamber—with some exceptions, I would say.

That is what the Centrepay policy and terms effectively do: they list the categories of goods and services that are eligible for these Centrepay deductions. They also list the categories that are explicitly excluded. But I need to be very clear here: the new Centrepay policy and terms do not rely on social security law to exclude particular goods. And that is why I would suggest that, no matter how well-meaning this bill may be, it is actually not needed, because this bill does not actually exclude consumer leases from Centrepay. As part of the transition to the new Centrepay policy and terms, businesses that are actually approved for the household goods categories have been required to specify whether they provide regulated consumer leases or unregulated consumer leases, and unregulated consumer leases are being excluded from Centrepay. The businesses are also required to provide positive agreement to comply with the new policy and terms. I will just state that again: businesses approved for the household goods categories have been required to specify whether they provide regulated consumer leases or unregulated consumer leases, which are being excluded from Centrepay. They are also required to provide positive agreement to comply with the new policy and terms.

We are also obtaining more detailed data on the usage of Centrepay for consumer leases, which was probably an omission because it was not the case previously. That is not in any sense a criticism; it is just one of these things that sometimes slips through the net. That will enable us to monitor much more closely the usage of Centrepay for unregulated consumer leases during the grandfathering period.

I will make a point here on regulation. The Department of Human Services is not a regulatory authority—and I do not think it should be. We have regulatory authorities. We have the Australian Securities and Investments Commission, which is the body responsible for the regulation of consumer leases. That is done under the National Consumer Credit Protection Act 2009, as I am sure you will recall. It undertakes research and activities to promote compliance with the national credit act.

Of course, ASIC has taken a great deal of action over the years. There are some in this chamber who are quite critical of ASIC for not taking action where it needs to take action and for prioritising the wrong agendas, but it has taken action against a number of consumer lease providers for failure to comply with the requirements of the national credit act, and particularly in regard to the responsible lending obligations.

ASIC is our regulator. It is meant to inquire into these sorts of things. The Department of Human Services should not be the regulatory authority in this space. However, the Department of Human Services should have a very close and ongoing relationship with the regulatory agencies, including the Australian Securities and Investments Commission. And I understand that it does. I understand that it has a very strong and close working relationship with the Australian Securities and Investments Commission and that cooperation has led to some businesses actually being removed from Centrepay. That is government as it should be working: the regulator and the department talk, and they come to determinations that are in the best interests of the taxpayer, the welfare recipient and the consumer credit supplier.

In that respect, I understand that the department recently provided information to assist ASIC with its current research to better understand consumer leasing practices and the impact on welfare customers. This is very important work, to establish the impact of consumer leases.

I want to come back to where I started. Understanding how money works and understanding personal finance—budgeting; your obligations; the implications of accepting credit at particular rates and not paying it off, and what that can do to your financial future, and the long-term effects it can have on your health and wellbeing—is one of the most important things we can ever instil in people in this country. If we could get people to think about the consequences of managing their money and the consequences of managing their health, this country would be immeasurably better off.

For many, I have to say, it is a bit too late. It is very difficult to get people to change their habits much later in life. But our responsibility is to instil in the next generation—in the boys and girls who are at school, some of whom I have seen touring this parliament today—the need to learn about and understand the implications of credit. In advance of that generation finally going into adulthood with that information, we now have to implement measures such as income management to assist people in making the right choices.

Once again, I say to Senator Cameron: this is a well-meaning bill; I understand perfectly what you are trying to do here, and I sense that you understand what I am trying to do as well, Senator Cameron. But there are consequences that the government has considered. I have to say that I stand with the government on this because the consequences of, and the omissions from, this bill mean I cannot support it. That may come as a surprise to you, Senator Cameron, but I am unable to support your bill today in its current form because I think the government has a persuasive case as to some of the implications of it—which I do not think are of benefit to those people who deserve our full support.

I will use the brief time I have left to encourage the government to continue its diligence in examining the implications of changes to consumer credit codes and financial management. I would encourage them even more warmly to invest in the next generation. The two best things they can do for the future of this country are, first, to instil in young people an understanding of how money works and how they can live a lifetime of financial independence by adopting some very simple practices and, second, to encourage them to take better care of their health.

Senator SINODINOS (New South Wales) (11:01): Senator Cameron says he wants to exclude all consumer leases from Centrepay. We in the government believe that his private senator's bill, the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015, will not do that and is flawed. The objective of Centrepay is to assist customers in managing expenses which are consistent with the purposes of their welfare payments and reducing financial risk by providing a facility to have regular deductions made from their welfare payments. The government has already taken action in this area. Following a review and subsequent stakeholder consultation, the Department of Human Services introduced a range of changes to Centrepay to improve its operation and provide greater information to customers. These changes include the exclusion of consumer leases not regulated by the National Consumer Credit Protection Act 2009—referred to as the National Credit Act— and the expansion of Centrepay to support alternatives to consumer leases such as low-interest loans, no-interest loans, savings plans and lay-by. We argue that it is important to ensure that people who have very limited access to most forms of credit—or to alternatives to consumer leases—are still able to access necessity goods, as we call them, such as refrigerators and washing machines.

The department works to build strong assurance practices for the consumer leasing industry and to influence its behaviours. Centrepay is currently transitioning to a new contract and assurance framework that will provide more options in responding to poor business behaviour and will provide additional dedicated assurance resources. The new Centrepay policy and terms list the categories of goods and services eligible for Centrepay deductions. The policy and terms also list the categories that are explicitly excluded. Let me be clear: the new Centrepay policy and terms do not rely on social security law to exclude particular goods. This bill is not needed and this bill will not exclude consumer leases from Centrepay.

As part of the continuing transition to the new Centrepay policy and terms, businesses approved for the household goods categories have been required to specify whether they provide regulated consumer leases or unregulated consumer leases which are being excluded from Centrepay. They are also required to provide positive agreement to compliance with the new policy and terms. We are also obtaining more detailed data on usage of Centrepay for consumer leases, which was not the case previously. Usage of Centrepay for unregulated consumer leases during that grandparenting period—we do not call it 'grandfathering' or even 'grandmothering' anymore; it is now 'grandparenting'—will be monitored closely.

I turn to the issue of the Australian Securities and Investments Commission, or ASIC. The Department of Human Services is not a regulatory authority, nor should it be. It is a payment authority of the federal government. ASIC are responsible for the regulation of consumer leases under the National Consumer Credit Protection Act 2009. They undertake research and activities to promote compliance with the National Credit Act. ASIC has undertaken enforcement action against a number of consumer lease providers for failing to comply with the requirements of the National Credit Act, particularly for failure to comply with the responsible lending obligations in the act.

The Department of Human Services has a close relationship with the regulatory agencies, including ASIC. This has led to some businesses being removed from Centrepay. So action has been taken. ASIC has been doing its job and the Department of Human Services has been doing its job; they have been working closely together in dealing with businesses that deserve to be removed from Centrepay. I understand the department recently provided information to assist ASIC with its current research aimed at better understanding consumer leasing practices and the impact on welfare customers. That is important work.

We all know there are concerns about the behaviour of some consumer leasing businesses and we are working with ASIC to address that. Some consumers, often welfare recipients, pay far too much for leased goods. It is those providers we need to address. This is something that has recently been acknowledged by Assistant Treasurer Josh Frydenberg. The department is going about addressing this issue in an informed and planned way, the way any good government would. There is no point rushing in with half-baked measures. That is why, at the minister's request, the Department of Human Services is chairing a working group which is consulting with business and non-government organisations about a requirement for Centrepay-approved businesses to disclose to their customers the effective interest that would apply for any consumer lease product. This will help ensure people make informed choices.

It is very easy to say those words, but think about what it means in practice. This is about transparency. This is about saying to someone, before they enter into a contract: 'This is the effective interest rate. This is what you will have to pay over that period. You think you are buying this refrigerator for X. However, because you are paying over time'—depending on the terms they may be able to buy the piece of equipment at the end of the term—'the effective cost to you is X times two.' This is the point. This is transparency at work. This is how you get people to make responsible decisions. They can then say: 'Okay, I cannot afford to do this. The interest rate is too high.' That is transparency, which is very important.

At the same time, the Assistant Treasurer, my friend the Hon. Josh Frydenberg MP, has announced an independent review of the small amount credit contract provisions of the National Consumer Credit Protection Act 2009. The review has been given terms of reference which include consideration of whether the small amount credit contract provisions should also be applied to consumer leases. The government is closely considering consumer leases and will take further steps as appropriate. When the Assistant Treasurer announced the review on 7 August 2015 he indicated that it fulfils a statutory requirement under the credit act to examine and report on the effectiveness of the law relating to small account credit contracts. He acknowledged there:

The Government recognises that small amount lenders can play an important role in the economy by providing credit to consumers who are excluded from mainstream forms of finance.

That is what we are talking about here. We are talking about people who do not qualify for most normal forms of finance. This is an issue for the banking system and for the financial service providers as much as it is for society — finding a way in which we can help those people who do not have access to other more mainstream forms of finance. Mr Frydenberg announced:

The Government wants to ensure that the regulatory framework strikes the right balance by protecting vulnerable consumers without imposing an undue regulatory burden on industry.

This review will have a consultation process. The panel will call for submissions from interested parties and consult widely with stakeholders and will report by the end of this year. We do not have to wait until the middle of next year for the report of this group — we will have it by the end of the year. That will provide us with the opportunity to consider all of these measures that Senator Cameron has rightly raised in the context of full information including a proper structured review by experienced people of the small amount credit contracts. The review will be chaired by Ms Danielle Press, the CEO of Equipsuper, and will include Ms Catherine Walter , Deputy Chair of Funds Management Vict oria, and Mr Stephen Cavanagh, p artner at HWL Ebsworth. So this is a blue-ribbon panel that I think will do an excellent job in looking at this matter.

The government has made it clear that it concedes the point that Senator Cameron has made. Mr Frydenberg conceded that there were issues, and while Senator Cameron was out of the chamber I made the point that we support greater transparency around disclosure of effective interest rates. We need to put consumers in a position to be informed. The other element of this, and it is not covered here, is that we also need to make sure that we are rolling out financial literacy programs to those most vulnerable people. Not everybody may have access to the ASIC website or to some of the programs that the banks and others have rolled out, so it is important for us to supplement what we are doing by having appropriate financial literacy programs.

I want to consider the impact of this bill on income management. If the bill were enacted there would be welfare recipients on income management who would not be able to pay for any consumer lease obligations, regulated or unregulated, using their income managed money. Those on income management would be able to continue to pay for regulated leases using their non-income managed money via Centrepay or unregulated leases via other private payment arrangements. This could place these vulnerable people in financial distress, which is what income management was designed to avoid. Excluding consumer leases from income management has the potential to cause further hardship to already vulnerable people. Some people have existing arrangements to pay consumer leases from income managed funds, and the Department of Human Services would be obliged to end these arrangements. For some people on income management this type of arrangement may be the only option available to them to obtain basic household goods. The government does want more lower cost options available to people, which is why it continues to support the Good Shepherd no-interest loan scheme and why Centrepay is expanding to include low interest loans, savings and layby.

I commend the financial system because over the last few years a number of the banks and others have sought to address issues in this area through mechanisms like no-interest loan schemes. Ironically, these are in part based on the experience in developing countries. In places like Pakistan and Bangladesh, the Grameen Bank provided low- or no-interest loans—very small loans—to people and they found, remarkably, that people were not frittering these loans away. They were either getting basic goods they needed or they were starting small businesses. The repayment rate was very high. If you backed these people, they more than repaid your faith in them by not just repaying the money but often by starting new businesses and getting their lives and their families in order.

I fully support the rollout of these sorts of alternative loan and payment options for lower income people, but that must go hand in hand with continuing to expand financial literacy and putting the Assistant Treasurer in a position by the end of the year, when we have the fruits of that review, to institute small loans. That will give us the chance to have a comprehensive package around this whole area. It will give us just a bit more time. Senator Cameron just has to wait until the end of the year and we can do things in a more comprehensive package, and this private member's bill and the debate on it will help inform the government's further consideration of options. That is very important, and it is a very useful thing that we have been able to do. It is particularly important that we look at how the government can encourage these alternative loan options that I talked about before. We should do whatever we can to link these options to broader strategies within government; to encourage people who are on the fringes of society—Indigenous groups are a particularly large part of that—into the mainstream by linking what we do in this area with workforce participation and other measures. This is not about being punitive; that is not what we are talking about here. We are talking about how we, in a whole-of-government way, can address the sources of disadvantage that people have so that they are in a position where they do not see themselves as passive welfare recipients condemned to a life on the dole or condemned to two or three generations of poverty. The intergenerational transmission of poverty is one of the biggest challenges we face with these groups on the margins of society. It is very important to take a whole-of-government approach to all of this.

In relation to the matters which are being considered in the context of this private member's bill, I think it would be good to have a whole-of-government approach which would take account of what the Assistant Treasurer will be providing to us in the form of a report by the end of this year. That report in part will be informed by work that is being done by ASIC, which released its report into small-amount credit contracts in March. That was focused on compliance. It did not look at policy questions such as whether the existing rules are effective or appropriate. ASIC found that compliance with some regulations was working well, including a requirement to provide a warning about alternative credit options. However, ASIC did find some issues present in the sector, including adequate documentation and record keeping, as I alluded to before. ASIC has put the industry on notice that it needs to improve. Since 2010 its enforcement action has resulted in close to $2 million in refunds to more than 10,000 customers who have been overcharged. The government fully supports ASIC's actions to date in ensuring that all lenders are complying with the law. I look forward to further debate on measures which can strengthen appropriate regulation and compliance in this area.

Senator XENOPHON (South Australia) (11:16): This bill introduced by Senator Cameron reminds me of a saying I quite like: 'Just as an oyster needs a grain of sand to grow a pearl, precious ideas might grow from vigorous argument. So we should probably value irritants in public debate, and welcome challenges to accepted norms.' In what Senator Cameron has done here—clearly he has irritated some in this chamber with this idea, saying that there is another way forward—he has actually dealt with an important issue that is affecting many thousands of Australians every day of every week and that has a profound impact on their financial welfare. In the absence of a better alternative, I have no choice but to support the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015, because what this bill is saying, effectively, is that we need to stop aiding and abetting practices where consumer leases are effectively ripping off some of the most marginal in our community. Senator Cameron's favourite economist, Joseph Stiglitz, in The Price of Inequality talks about these issues: about that entrenched inequality and those traps that people who are vulnerable, who are poor, simply cannot get out of. Senator Sinodinos made a point about the Grameen Bank. Muhummad Yunus won a Nobel Peace Prize for his microloans. What have microloans got to do with peace? If you give people economic security, if you give them economic stability, if you give them jobs and hope, that is one of the best ways to drive away the evil influences of terrorism, extremism and fundamentalism. Poverty is a factor in making people vulnerable to the evil of terrorist influences.

The reason why I support this bill is, I think, contained in a table that Senator Cameron has referred to and that has been provided in very useful briefing material—it comes not from him but from the Consumer Action Law Centre—on the hidden costs of rent-to-own in September 2013. I will give two examples. For a high-definition television with a retail price of $749 to $1,049, the rent-to-own price can be between $3,112 and $3,893. That is between 371 per cent and 415 per cent. For a mid-range stroller—this is what a young family puts their baby in—the retail price is between $100 and $300; the rent-to-own price is between $772 and $1,392—a 464 per cent to 772 per cent mark-up. We need to do something about this. I think that Senator Cameron's bill, being an irritant perhaps to those who think we should just have business as usual, will prompt change. I am not sure whether this bill in its current form will get through both houses of parliament but I can practically guarantee that, as a result of Senator Cameron's very fine work on this, we will see changes in the law that will achieve, if not all of what he wants, a significant amount of what he wants. I still think this bill is the best vehicle forward.

The system of automatic deductions from government payments via Centrepay has been around since 1998. It has been an effective budgeting mechanism whereby the costs of utilities and rent were deducted each fortnight before the balance was paid to the Centrelink client. But since the recent clampdown on unscrupulous payday lending providers there has been a massive expansion in the advertising and take-up of consumer lease agreements. Disturbingly consumer lease providers such as chain stores providing televisions, computers or stereos are approved for deductions from Centrepay. While utility bills account for about one-third of Centrepay deductions for 600,000 Centrelink clients, consumer leases have risen to account for 14 per cent of deductions. But the statistics mask the damage to people's lives brought about by these consumer lease payments, as their meagre government payments get eaten up by high interest payments which can make the price of goods being used more than double their retail price—or in fact seven, almost eight, times the retail price.

I acknowledge the concerns that have been expressed by government senators—including Senator Ruston, who is in the chamber—saying that we should not be treating Centrelink clients any differently to other Australians. I agree with Senator Ruston that Centrepay should not be used as a form of mandatory income management. Centrepay is voluntary and will continue to be so—but with a clear purpose. Centrepay was always designed to be an effective way to ensure that essential items like electricity and rent could be paid for by some of the poorest people in our community. This bill should be seen as a prudent measure to safeguard people's social security benefits—funds that should not be flowing in increasing amounts via exorbitant interest payments to consumer lease providers. I note that Centrepay cannot be used for the repayment of credit card debt or any other kind of consumer credit. But these rent-to-pay agreements are a loophole. They are a rort that is occurring. In the same way, I believe, consumer leases should also be excluded. This bill will ensure that it continues to be used for that purpose. That is why I will be supporting it. I commend Senator Cameron for bringing this bill. We need reform sooner rather than later, and this bill is a very good vehicle for that.

Senator BACK (Western Australia) (11:22): I want to comment on the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015 as proposed by Senator Cameron. And I want to record that I am in absolute lock step with Senator Cameron in his motivation behind presenting this bill before this chamber. I sense that the dialogue in the discussion by others is in accord with that. I say that because in this society people who would try to use their influence, their retail capacity, their expertise or their marketing to prey on those who simply cannot afford the type of product or service that these people are trying to peddle are parasites. If legislation needs to be put into place to exclude these people, to expose them, to out them, then I am absolutely in agreement with that. I am, as many in this chamber have been and maybe still are, associated with organisations such as St Vincent de Paul, Anglicare, the Salvation Army and other non-government organisations associated with people who are in need, often financial need. I say very strongly that the motivation behind Senator Cameron's bill is to be applauded.

However, as has been pointed out by my colleagues, and as I will in the brief time available to me point out, if by passing Senator Cameron's bill we actually place vulnerable people at greater risk rather than less risk, then Senator Cameron's noble objectives will not have been met. That is the concern I have. We know the objective of Centrepay. It is to assist customers in managing their expenses—expenses that are consistent with the purposes of their welfare payments—to reduce the financial risk to them, to provide them with a facility that will allow regular deductions to be made from their welfare payments that will still leave them with adequate resources to lead a fulfilling life, to look after their families and to look after their own wellbeing.

Whether Senator Cameron's bill has been the catalyst or not I do not know. As Senator Xenophon has just said, if the dialogue that we have in this place today leads to further improvements to make the administration of this process better, then I certainly concur that Senator Cameron's time will have been well spent. But, as has been pointed out, some of the elements within the bill will actually put these worthy people at greater risk rather than less risk. For example, if we exclude under the Centrepay arrangements the consumer lease for goods that are regulated now, what will probably happen is that people will go outside the system, where they will be vulnerable to these people whom I refer to as parasites—people who would prey on those whom they very well know are, for whatever reason, unable to afford what it is they are trying to sell them, often at inflated prices. Those who are on income management may use a cash component, for example, to purchase when they could have used, under a properly structured process, the Centrepay mechanism. If it encourages them to go and purchase unregulated goods, then nobody is better for this process.

Why do people often find themselves in these circumstances? I refer back to the comments of my colleague Senator Fawcett, and that is that we know there are instances in which adults are illiterate. Therefore, giving them written information about the risks or the opportunities associated with either lease or purchase or other means of acquiring products is meaningless, because they simply do not understand them. There are other people who, for whatever reason, may at some time in their past have had the necessary skills to manage their money but for various reasons may not now be in that position. I guess that is where the Centrepay system comes into its own.

What are some of the services that are included under the regulated category? Very briefly, they are accommodation services; education and employment; health; finance, particularly that associated with community group loans; legal and professional services, if they are required, such as court fines; travel and transport; motor vehicle registration, associated with the good conduct of their family and often used to obtain and then arrive for work; utilities; and the council services, such as electricity et cetera. And then there are of course these household goods that are more the subject of the consumer lease exclusion about which Senator Cameron spoke. I also want to talk about household goods lease and rental, which is the subject of our discussion, and provision of food, home care and trade services. What is excluded? Rental or lease payments for goods where the consumer lease is not regulated under the national Consumer Credit Protection Act. And then there are payments made to a broker, an arranger—a person who acts as a middleman, who, I say again, parasitises that process—rather than the provider of the Centrepay-approved good or service. Also excluded are short-term loan repayments to cash lenders, payday lenders and pawn brokers. These are excluded and of course unable to be used.

I want to refer for a moment to the relationship between the department that has oversight and ASIC. As we know, ASIC is the party responsible for the regulation of consumer leases. It falls then to ASIC to ensure the good and proper activity of retailers and others under the regulated process. As has been pointed out, it is ASIC's role to enforce compliance, for example. I am pleased to learn that even this year there have been retail organisations that have been named, shamed and, more importantly, excluded from offering the regulated products which in ASIC's view they have abused. They are excluded for periods of time, which are clearly punitive, and put on notice that if they were to continue that activity they would not be able to offer the regulated goods through this process.

It is my view that Senator Cameron's motivations are quite correct. But if his bill is enacted, it will be welfare recipients on income management who would not be able to pay for any consumer lease obligations, whether regulated or unregulated, using their income-managed funds. There is also the associated risk of them using the cash component to engage in the sorts of activities that Senator Cameron is alerting us to, placing vulnerable people in financial distress—which is exactly what income management was designed to avoid.

We know that there are mechanisms other than leasing. There may be no- or low-interest loans through philanthropic and other organisations. There may be lay-by. There may be the opportunity to obtain a necessary product by alternative means. It was interesting to listen to the comments made by Senator Sinodinos and Senator Xenophon in relation to the excellent work of Muhammad Yunus and others who have followed him in relation to microfinancing. It is worth recording that the bad-debt rate from microfinance loans to deserving people, particularly deserving women, in countries like Pakistan, India and Malaysia, is, as I understand it and in my experience, infinitely lower than in the wider banking system. These loans give these people the opportunity to improve their lot, to start a small business and to work their way out of that cycle of poverty.

I applaud Senator Cameron for his motivation in introducing this bill. I concur with him about the concern he raises about the most vulnerable people, who need to be protected from the activities of those who would undo them. But the measures that have been undertaken by the government and the department, with the involvement of ASIC and ACCC, are the way to go. We do not want to throw the baby out with the bathwater.

Senator CAMERON (New South Wales) (11:32): I must say that I am still trying to recover from some of the speeches this morning, where those opposite actually praised my motivation! It is a highly unusual approach from those opposite. But when you get the chance, you should take it the way it was meant!

I want to deal with some of the technical issues that have been raised in relation to my private senator's bill, the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015. One of the issues that this debate has clearly demonstrated is that there is no legislative base for Centrepay. Centrepay is regulated by the policy and terms determined by the Department of Human Services, and those policy and terms can be changed by the secretary—obviously in consultation with the minister. Given that a number of coalition senators who participated in the debate raised this issue, I want to place on record now that the opposition would be amenable and supportive of sitting down with the minister and the government to develop a proper legislative base for what is one of the most successful programs for many years. It is a successful program that does good things. What I am concerned about is the misuse of Centrepay by some of the most unscrupulous business people in the country.

I do not think the policy and terms of such a wide-ranging, important program, that is worth $3 billion—that is the amount of money going through this program—and which is accessed by 600,000 citizens, should simply be left to the secretary of the department to determine in consultation with the minister. There has always been a bipartisan approach to Centrepay, and I think that bipartisan approach should continue by sitting down and looking at the legislative base to see how we can protect all citizens who access Centrepay and make sure that the rip-off merchants do not get their claws into people who are doing it tough.

I might be one of the few sitting in the Senate who have used a consumer lease. Many years ago when I was involved in a pretty tough industrial scene in the Hunter Valley and at the electricity commission I had a single income. For one year I earned $8,000. That was my total income for the year. We were in all sorts of strife trying to pay our mortgage and put food on the table for our kids. We were desperate at the time for a fridge, I think it was. A leaflet came through that made it look so easy. I made a mistake: I got the fridge and I paid through the nose for it.

Again, I am one of the few here who has, from time to time, battled to put food on their family's table, because of having a single income, being a blue-collar worker and doing it really tough, so I know from personal experience what this means. At the end of a three-year or four-year lease, you think, 'Why did I do that? Why didn't someone advise me that this was the wrong thing to do? Why did I, in a moment of weakness, get caught up in this web of business process that leaves me much worse off at the end?' I do come to this from some experience. It would probably have been over 30 years ago when I was in that position. I understand that many people would be in that position.

A company, rent4keeps, sets up their pop-up business in the middle of a shopping centre in Penrith, where I still shop, targeting single mums and low-socioeconomic families. Surely the lessons that individuals like myself learnt all those years ago and the lessons that society should have learnt should be put in place and people should not be hunted down by these jackals in their smart suits who tell people on welfare that everything is okay if you pay four or five times the price for a consumer good. We have an obligation to expose that and we have an obligation to deal with it. I looked at this some time ago. Rent4keeps did not target me because I was not in the age demographic that they were looking for. I asked for the leaflet, got the leaflet and looked up their website. On the website I did the calculation for a couple of the goods that they had. One was, I think, a Hisense flat screen, fairly big television. You could pick it up for about 900 bucks. I did the calculation of what it would cost from rent4keeps over four years and it came to $5,700. This is a TV you could get for 900 bucks at Harvey Norman. You could probably get it cheaper if you went online.

There are a number of options for the young people who are getting caught up in this. Even credit cards, which are regulated, would be cheaper than rent4keeps, and we all know about the problems with getting into the credit card cycle of poverty, so that is even worse. We have regulated payday loans and payday lenders, and yet what we are finding now is that a lot of the payday lenders are moving from payday lending to consumer leasing, because consumer leasing is the next way that is unregulated to rip citizens of this country off, and I think the Senate has an obligation to deal with that.

I looked at the rent4keeps website, as I have indicated, and there were plenty of examples of why nobody should ever go near them. They are also letterboxing the Housing Commission areas in Penrith. Their stuff looks pretty flash. They have a happy, smiling family getting all the consumer goods that wealth brings, yet these people are not wealthy. It is not just in areas like Penrith; they are targeting Indigenous communities. We must say, 'Enough is enough.' We must do that. Why are some people doing this? On their website, rent4keeps say, 'Set a franchise up with us. We've got 100 operating franchises around the country'—and, remember, this is one of the minor players. They have 'numerous exciting and profitable "lifestyle friendly" franchise opportunities'. I will tell you: it is not lifestyle friendly if you are a citizen they have their claws in. There is no friendly lifestyle for them. They say:

If you enjoy being busy and having a business you can run, that does not run you, then maybe R4K is worth a look.

So they are saying, 'Hey, there's a great business opportunity here. Let's do it.' And they say:

The business model is very profitable

No wonder it is very profitable when they are getting four and sometimes five times the price of the consumer good, paid through some poor citizen who is being screwed by the company. They say:

Is easy to run from home

You have no big overheads like we hear in some of the arguments: 'You have to increase the cost of the consumer good because you've got overheads.' This company is saying, 'That ain't an issue. You can run this from home.' They go on to say:

Affordable initial outlay given the returns

Again, there is the argument: 'If you've got to invest in your business, you've got to get a return.' They are saying it is really affordable and that you could do it easily. Here are the kickers:

Huge customer demand

Very low overheads

Significant franchisor support

So it is all upside for the people who are getting their claws into the poorest people in this country and it is all downside once citizens have rent4keeps and Radio Rentals claws in them. This is a huge issue in my view that has to be dealt with.

Another argument that we have heard is that the government are moving on this issue. The government made an announcement back in May 2015 after this issue was becoming public and Labor had made some comments on it. The government said they would 'restrict the type of consumer leases that consumers can pay for using Centrepay payments.' They went on to say:

... leases that run for an indefinite period, or have a duration of four months or less, will be excluded from Centrepay ...

That did not deal with the fundamental issue that these consumer leases are still readily available under Centrepay. They said that the Department of Human Services would work with Treasury and key stakeholders to review the policy and whether you would disclose the effect of interest rate by Centrepay registered providers. If people in trouble think that Centrepay is available to do this, they will think that there is some government support for this.

I do not think that we should be giving any impression that we support Radio Rentals, rent4keeps or Rent the Roo. Some of these companies have been before ASIC and have been fined in the Federal Court and are then still part of Centrepay. Why should we be allowing that to happen? If there is one thing that this Senate should be doing it is protecting those that cannot protect themselves. That is what we should be doing.

Minister Payne said that there will be 'links to ASIC's MoneySmart website'. I can imagine the poor person down in the housing commission house will be thinking, 'I'd better go and have a look at the ASIC website to see what they say about this mob that are telling me I should pay four times the amount for the consumer goods.' Funeral insurance would be excluded, which has been a rip-off. Minister Payne also said that there would be:

…increased cooperation between the department and consumer protection regulators.

In my view—and I will not be unkind to Senator Payne—that was the smokescreen the government put up to try to avoid dealing with the fundamental issue that citizens in this country were mercilessly being ripped off, and the government at that stage was not prepared to do anything about it. That is why my bill was put forward, and I am glad to say that it was supported within the caucus of the Labor Party. It is an important way forward.

Then the kicker really comes in Senator Payne's press release. She says:

While customers may still use Centrepay for regulated consumer leases—

'regulated consumer leases'—there is no regulation on whether they charge you 400 or 500 or 600 per cent, so I do not know where this regulation comes in—

I would encourage people to carefully read the fine print and consider all of their options.

Senator Payne does recognise that there is a big problem here that should be fixed. That problem could easily have been fixed if the minister and the secretary of the department had sat down and changed the policy and terms to exclude the rip-off merchants using Centrepay—Radio Rentals, Rent the Roos, rent4keeps, and I could go on and on. All these people are making masses of profit at the expense of the poorest citizens in our country.

I say it is important that this bill passes in the Senate. It is important to send the message to the rip-off merchants in our community that this Senate does not support the rip-off of the poorest people in this country, and this bill is the first step. I would call on the government to look at the bill in the House of Representatives and pass the bill in the House of Representatives as well because that will send a clear and unequivocal message to the rip-off merchants in our community that we will not allow them to use a government department to facilitate their rip-offs, because that is what is happening. I have heard the arguments that people should have a choice. This bill does not stop anyone going into rent4keeps or Radio Rentals or Rent the Roo and getting a bank deduction and being ripped off. I say that should be looked at by Mr Frydenberg in the other place to make sure that we put a limit on those rip-offs and we stop these rip-offs, but my view is that we should pass this bill to send a clear message to the rip-off merchants that the game is up.

Radio Rentals run almost half of their consumer lease business through Centrepay. A recent analysis said that Radio Rental's business model was unsustainable because of its rip-off nature. It is a subprime approach to people in this country. When an analysis was done and when Radio Rentals made some comment to the stock exchange about what these Centrepay changes that the government had put in place would mean for them, they said that it would mean nothing to their profits, it would mean nothing for the business model. So the rip-offs continue. With all the arguments that we have heard from those opposite—that the government moved on this, that the government made these changes to stop poor people ripped off—Radio Rentals say that it did not have one effect on them at all. The rip-offs continue.

We need to be clear about what this bill is about: stopping the rip-offs and making sure that people are treated fairly. This is supported. I convened a round table of welfare groups back in March. At that round table there was overwhelming support to do something about this because the welfare groups—the St Vincent de Paul, the Smith Family and the various faith-based support groups—are the ones who are picking up the pieces on this. I did an interview this morning on FIVEaa with Leon Byner. He asked people to ring in after I had said we should stop this. Seven people rang in. Six of them gave practical examples of how their families had been left in a terrible position as a result of using consumer leases. Only one came in and said it was okay, and my view was that they were someone from the industry.

I commend this bill. I ask the Senate to support this bill. It is about protecting the most vulnerable in the community.

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

The DEPUTY PRESIDENT (11:58): Given that no amendments to the bill have been circulated, I shall call the minister to move the third reading unless any senator requires that the bill be considered in Committee of the Whole.

Senator CAMERON (New South Wales) (11:58): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator BUSHBY (Tasmania—Chief Government Whip in the Senate) (11:59): I present the 11th report for 2015 of the Selection of Bills Committee.

Ordered that the report be adopted.

Senator BUSHBY: I seek leave to have the report incorporated in Hansard.

Leave granted.

The report read as follows—

SELECTION OF BILLS COMMITTEE

REPORT NO. 11 OF 2015

1. The committee met in private session on Wednesday, 9 September 2015 at 7.12 pm.

2. The committee resolved to recommend—That:

(a) contingent upon its introduction in the House of Representatives, the provisions of the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015 be referred immediately to the Community Affairs Legislation Committee for inquiry and report by 9 November 2015 (see appendix 1 for a statement of reasons for referral);

(b) the provisions of the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015 be referred immediately to the Economics Legislation Committee for inquiry and report by 12 October 2015 (see appendix 2 for a statement of reasons for referral).

3. The committee resolved to recommend—That the following bills not be referred to committees:

•   Aged Care Amendment (Independent Complaints Arrangements) Bill 2015

•   Australian Centre for Social Cohesion Bill 2015

•   Banking Laws Amendment (Unclaimed Money) Bill 2015

•   Fair Work Amendment (Penalty Rates Exemption for Small Businesses) Bill 2015

•   Maritime Transport and Offshore Facilities Security Amendment (Inter-State Voyages) Bill 2015

•   Tax and Superannuation Laws Amendment (2015 Measures No. 4) Bill 2015.

The committee recommends accordingly.

4. The committee deferred consideration of the following bills to its next meeting:

•   Australian Immunisation Register Bill 2015

Australian Immunisation Register (Consequential and Transitional Provisions) Bill 2015

•   Competition and Consumer Amendment (Australian Country of Origin Food Labelling) Bill 2015

•   Corporations Amendment (Publish What You Pay) Bill 2014

•   Maritime Legislation Amendment Bill 2015

•   Marriage Equality Plebiscite Bill 2015

•   Social Security and Other Legislation Amendment (Caring for Single Parents) Bill 2014

•   Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015.

David Bushby

Chair

10 September 2015

APPENDIX 1

SELECTION OF BILLS COMMITTEE

Proposal to refer a bill to a committee:

Name of bill:

Social Services Legislation Amendment (More Generous Means Testing for youth Payments)

Reasons for referral/principal issues for consideration:

To better understand the implications and impacts of the proposed measure

Possible submissions or evidence from:

ACOSS

National Welfare Rights Network

Committee to which bill is to be referred:

Senate Community Affairs Legislation Committee

Possible hearing date(s):

To be determined by the committee

Possible reporting date:

9 November 2015

(signed)

Senator Anne McEwen

APPENDIX 2

SELECTION OF BILLS COMMITTEE

Proposal to refer a bill to a committee:

Name of bill:

Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015.

Reasons for referral/principal issues for consideration:

To determine whether the government's premise for introducing this legislation is based on evidence.

Possible submissions or evidence from:

Australian Federal Police

Australian Tax Office

Treasury

Tax Justice Network

Committee to which bill is to be referred:

Economics Legislation Committee

Possible hearing date(s):

22 September

Sitting days

Possible reporting date:

12 October 2015

(signed)

Senator Rachel Siewert

Senator FAWCETT (South Australia—Deputy Government Whip in the Senate) (12:39): The Water Amendment Bill 2015 is an important piece of legislation that will have a great impact on my home state of South Australia as well as the whole of the Murray-Darling Basin. A couple of weeks ago I had the pleasure of joining my colleague the Hon. Bob Baldwin, Parliamentary Secretary to the Minister for the Environment, when he was in Adelaide announcing the results of the independent stocktake of levels in the Murray-Darling Basin, which confirmed that we were on track to meet our environmental targets. The sustainable diversion limits stocktake showed the projects were on track to deliver the environmental targets that were outlined under the Basin Plan. The report showed that over 500 gigalitres less water is needed to meet the environmental targets in the plan, and that means that the Basin Plan continues to be on track to deliver a triple bottom line outcome. That means that we are not just looking after the environment but, importantly, we are looking after the communities that live and work in the Riverland and looking after the economic impact and benefit that those communities and the agricultural sectors they represent deliver.

It is important to canvass how did we get to this point. For more than a century Australia has struggled with its management of water. We all know the history. Despite the fact that we have had centenary droughts and we have had floods—everyone knows Dorothea Mackellar's poem—we have not managed water well. Various state governments have over allocated water to push development without due regard either to the environment or, importantly—and I speak as a South Australian—to the states who are downstream and suffer the consequences of inadequate flows. In 2007, when I was in the other place as the member for Wakefield—again representing communities in South Australia—it was fantastic to be part of a government that under the leadership of then Prime Minister Howard and environment minister Malcolm Turnbull put forward the National Plan for Water Security. This was not just a short-term, 'let's get to the next election' type plan. Abraham Lincoln said that a politician has an eye on the next election but a statesman has an eye on the next generation, and this was one of those times when finally Australian politicians, the parliament, came to the point of having a statesman-like plan that said, 'How do we try to fix a system that has been broken for over 100 years and make it work to the benefit of our communities, to the benefit of our environment and to the benefit of our economy in years to come?'

Under that plan some $10 billion was put forward—they put their money where their mouth was—to revolutionise the way water was managed. There were a couple of key elements. Traditionally, despite the hydrology of how waters run in catchment areas and usage, we had managed water according to lines that people had drawn on maps. Clearly that was foolish. The concept was to have a national authority and an independent expert body behind that. That was, of course, the Murray-Darling Basin Authority. I pause to note that my good friend the Hon. Neil Andrew, my predecessor in the seat of Wakefield, is currently the chair of the Murray-Darling Basin Authority, having himself, before his long career in Australia's parliament, been an irrigator from the Riverland. That group was given the task of setting sustainable limits on the extraction of surface and ground water based on what has become the CSIRO's analysis of environmentally sustainable diversions in each valley. That leads us to that stocktake that I just talked about.

The act expressly requires the authority and the minister to act on the basis of the best available scientific knowledge and socioeconomic analysis and consider the consumptive and other economic uses of basin water resources. We probably all remember the consultations that went on from there. There was a fairly turbulent period when government swapped sides, and Minister Burke had a pretty rough time—I will not say it was his fault; it was just this process of bringing a new system to a century's worth of management. A lot of people objected to what was being put forward and particularly to the simple solution from a bureaucratic perspective, which was to just go and buy water and throw it back at the environment.

The ACTING DEPUTY PRESIDENT ( Senator Smith ): Thank you, Senator Fawcett. The time allotted for the debate has expired.

Senator POLLEY (Tasmania) (12:45): The Aged Care Amendment (Independent Complaints Arrangements) Bill 2015 amends the Aged Care Act 1997 to reflect the 2015 budget measure to transfer the responsibility of aged care complaints from the Department of Social Services to an independent Aged Care Commissioner. From 1 January 2016 the Aged Care Commissioner will have full responsibility for the Aged Care Complaints Scheme. The measure has received sector-wide support, including from the Council on the Ageing, Leading Age Services Australia and Aged Care Services Australia. Labor certainly supports the idea of an independent complaints scheme and is pleased to take a bipartisan position on and approach to this. I like to give credit where credit is due, and in this case it is to the government.

Labor will always be a friend of the aged care services sector. We are committed to an aged care system built on the principles of respect, dignity and choice. That is why, when in government, we delivered the biggest reforms in aged care and ageing in a generation. Labor's Living Longer Living Better package provided a 10-year plan to build a better, fairer, sustainable and nationally consistent aged care system to meet the challenges of an ageing population. The measure before us today paves the way for an important change. Its importance is heightened due to a lack of leadership in rolling out Labor's Living Longer Living Better reforms. There has just been so much to complain about. There has been a long-running concern at both provider and consumer level that the complaints investigation process needed to be independent of the department. Strengthening the independence of the Aged Care Complaints Scheme is a natural progression. In 2009 a review of the then complaints investigation scheme by Professor Merrilyn Walton recommended an independent statutory authority. The review found that a body separate from the department was necessary to remove concerns about the impartiality of decisions.

As I have said, this is a progressive measure and should provide consumers with greater confidence and protection when making complaints. It should also limit unnecessary delays and duplication. But while we give it credit we also have some concerns. The concerns are in relation to how the measure will provide savings of $2.8 million over four years by simplifying the aged care complaints-handling process. Labor is concerned about where the savings are coming from. While we accept this $2.8 million in saving from efficiencies, we have concerns about whether the commissioner will have sufficient resources to handle 4,000-plus complaints each year. With so much to complain about and the massive increase in demand for aged care services over the next 30 years, complaints will no doubt keep increasing. It is vital that the Aged Care Commissioner is resourced appropriately. We certainly do not want to see the good work that they do undermined in the name of savings. While Labor supports a bipartisan approach, this needs to be more than a simple cost-saving exercise. The government has had a poor record of taking its eye off the ball since it took over in relation to aged care in Australia. I will continue to draw the eyes of the minister and the assistant minister back to aged care and I will continue, as Labor will, to keep them accountable.

Senator FIFIELD (Victoria—Manager of Government Business in the Senate and Assistant Minister for Social Services) (12:49): I thank colleagues across the chamber for what I expect will be unanimous support for the Aged Care Amendment (Independent Complaints Arrangements) Bill 2015, which, as my colleague opposite outlined, seeks to introduce a 2015 budget measure to increase the independence of aged care complaints handling from 1 January next year. What we are seeking to do here is to increase the independence of aged care complaints-handling arrangements by transferring the complaints powers to the Aged Care Commissioner from the Department of Social Services. From next year the Aged Care Commissioner will have complete responsibility for the Aged Care Complaints Scheme, which currently rests with the Department of Social Services. That will ensure the independence of this important protection.

This measure clearly separates complaints handling from the funding and regulatory functions undertaken by the Department of Social Services. I can assure colleagues that there will be continuity of service in the transition between the department and the commissioner, including maintenance of current staffing arrangements for a smooth transition from a client's perspective. The changes remove any perception of, or potential for, bias in the management of aged care complaints by the department, which also funds and regulates aged care services. Responsibility for the decisions made by the Aged Care Complaints Scheme will rest with the commissioner, whose decisions cannot be influenced by the funding body. The Aged Care Commissioner is a statutory office holder who has independent decision-making powers. All older Australians, we would agree, I am sure, have the right to feel safe and to receive care appropriate to their needs, and establishing an independent complaints mechanism will help ensure that people can have confidence that any complaints that they have will be appropriately managed and addressed.

In making these changes, the government recognises the recommendations of the 2009 review of the former Aged Care Complaints Investigation Scheme by Associate Professor Merrilyn Walton, and the Productivity Commission's 2011 report, Caring for older Australians. I will just cite for you, Mr Acting Deputy President Smith, the responses of the sector to the budget announcement. Alzheimer's Australia said:

This is a strong measure that will improve consumer protection and independent scrutiny …

Catholic Health Australia said it had been 'long recognised that good governance in public administration requires the separation of the regulatory arms of government from the policy and funding arms'. The press release from the Council of the Ageing said:

Mr Yates also welcomed moving the aged care complaints scheme out of the department to the Aged Care Commissioner. COTA has long called for a more independent complaints scheme.

'Having complaints managed by an independent umpire will give older people greater confidence in how complaints are handled,' he said.

Professor Walton herself is quoted as saying:

… the separation of complaints handling from the funder and regulator of aged care services--a key recommendation of the 2009 review—reflected best practice and would help restore public and industry confidence in the scheme.

So it has been universally welcomed.

When the commissioner does take responsibility for the complaints arrangements, the review of decisions will be integrated into those arrangements. Concerns regarding the processes of the commissioner and the Australian Aged Care Quality Agency can be raised with the Commonwealth Ombudsman. Existing legislative complaints management functions will be maintained and will continue to cover Australian government, residential and home based aged care. Aged-care regulatory policy, compliance and enforcement will remain the responsibility of the department of social services. The Aged Care Quality Agency will remain responsible for the accreditation and quality review of aged-care services.

Complaints handling is a vital cog in an effective, modern market quality assurance system. I should, just in passing, reference that in the budget we also touched on issues of quality more generally. I will not go further into those here, but I think we are all keen to have a more sophisticated definition of 'quality'. Safety should be taken as a bedrock, as a given. Quality is really what providers do above and beyond the basic safety standards. Quality is what providers do to exceed consumer expectations.

In conclusion, I think these improvements to the complaints arrangements and the quality arrangements, which I touched on briefly, do support the government's moves to put more choice and control in the hands of older Australians. We have made an important paradigm shift, I think, across the parliament and in the community as well in terms of recognising the consumer-centric view that will be dominant in the future of this sector. I thank my colleagues across the chamber, who are broadly supportive of that approach. With that, I commend the bill to my colleagues.

Question agreed to.

Bill read a second time.

Senator FIFIELD (Victoria—Manager of Government Business in the Senate and Assistant Minister for Social Services) (12:55): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator FAWCETT (South Australia—Deputy Government Whip in the Senate) (12:56): I am pleased to resume my speech. I was talking about the fact that the recent stock take of sustainable diversion limits has shown that we are on track to meet our environmental targets. This has been made possible by the long-term vision and the approach taken by the Howard government in 2007. One of the key elements of that was that, rather than buy back water to give to the environment, we were far better off in terms of achieving an outcome for communities, for the environment and for our economy to look at how we could use water more efficiently.

Speaking as a South Australian senator, I can say to the Senate that South Australia has led the way in Australia for many years in terms of efficient water use. We have had to. We are the driest state on the driest continent in the world. We are down the end of the river system. We have consistently made very good use of the water that has been available to us. I am pleased to see that, of the $10 billion that was put towards that 2007 plan, $6 billion was allocated to achieving efficiencies in water infrastructure so that the water that was available would be more effectively used. Whilst the approaches of different political parties have ebbed and flowed—pardon the pun—I particularly note the approach of the Greens, which is just to buy it all up. We cannot afford to do that. If there is a smart way that we can support our community, support our economy and support the environment, we should be doing that.

Some $2.1 billion of South Australia's $15 billion annual production comes from the Riverland and Murraylands region, from irrigation. Just to give you an idea—and these figures come from the Bureau of Stats agricultural commodities report of a couple of years ago—some 37 per cent of the state's vegetables come from that area, as well as 58 per cent of the state's fruit production, 52 per cent of the total value of grapes, 18 per cent of the total value of cereals and grains, 99.9 per cent of the total value of oranges, 58 per cent of the total value of potatoes, 28 per cent of milk, 89 per cent of almonds, and the list goes on.

In South Australia, we see the impact on our economy and our communities. From people like the Mitolo Group with the Comit Farm—large potato and onion producers—right through to the small family owned blocks, whether they are in traditional stone fruits, citrus or moving into things like almonds, it has a huge impact.

That brings us to this current legislation. Clearly the thing that our communities and particularly business people need is certainty. One of the ways we can give them certainty is to say that, if we can be smart about how we spend money and improve the efficiency of the system, we can achieve the target so we can cap what we will buy back for the environment. So the focus of this legislation is to impose the 1,500 gigalitre cap on water purchases in the basin.

There will still be the natural variability. There will still be droughts and floods. There will be times when we have more water than we need and times when we do not have enough water. But if we can mitigate the impact of those extremes, in terms of water catchment and efficient water use, then we increase certainty. If we want to remove the political uncertainty of having governments step in and buy water, which prevents irrigators from using it efficiently and puts it purely into the environmental system, then we are well-served to take the approach that supports all three elements: our environment, the communities that rely on the businesses and the environment there, and those businesses themselves. It is important to realise that the 1,500 gigalitre cap is not a target; it is a ceiling. It will be set in legislation, and we will stand by that.

Our approach is to be very transparent in that, so there will be reports on how much water is actually purchased. But what we have seen is that by applying the principles of the 2007 legislation—that long-term plan that Mr Howard and Mr Turnbull brought in at the time—we have been able to achieve significant savings for the environment and make water available for irrigators.

Recently, last month, Round 5 of the On-Farm Irrigation Efficiency Program looked at investing farm infrastructure in one of the basins. It returned 20 gigalitres of water to farmers, but 77 gigalitres of water to the environment. This approach is environmentally responsible and it is responsible in terms of supporting our economy. Most importantly, unlike the Greens, the coalition believes that our communities who live in the river basin are equally as deserving of our support and priority as the environment and every other aspect. We are part of this nation. I know the Greens tend to see us sometimes as some kind of an incursion that should be stamped out and removed from sections of our land, but we are part of this country. Our communities and our industries, well-managed, are a sustainable part. I am pleased to support this legislation which provides certainty for those communities and the people who want to invest in those businesses. Importantly, we have demonstrated as a result of the stocktake of the SDLs that reported just last month, that we are also providing a good outcome for the environment.

I see no reason to support the amendment from the Greens, when we have proven that we are on track to get that sustainable triple-bottom-line outcome for the environment, community and business. I support the bill. I will not be supporting the Greens amendment.

Senator O'NEILL (New South Wales) (13:02): I rise to make a contribution to the debate on the Water Amendment Bill 2015. This debate is one that has engaged the minds of many over many decades, in fact leading all the way back to 1863, which was when I understand the very first conference on the Murray was held. Thirty years later, the South Australian Premier, Charles Kingston, at the federation convention that was held in 1897 expressed the hope that a solution might be found and:

… that the Federal Parliament will be trusted with Federal questions of the gravity involved in the use of the waters of the Murray.

Following that hopeful commencement and plea for the federal parliament to be involved in making sure that the states share this amazing resource as an asset in their communities we saw more than 100 years of fractious debate.

I endorse many of the remarks of colleagues who spoke before me in this debate. It is quite a remarkable thing that in November 2012 the Basin Plan became law and had the effect of creating a coordinated approach to water use across the basin's four states and the ACT. Achieving an outcome like that involved an awful lot of give from many active participants in the debate. I am very well aware that the matter is still not settled in the community and that people look at this plan as it is exists at this time with ongoing interest. Hopes that a genuine triple-bottom-line benefit to the entire community, the environment and to business can be reached remain high.

But at tricky times, such as now with this legislation coming through this parliament, we are always going to be tested about how strong the bipartisan commitment to this can be. I am pleased on this occasion that Labor does recognise the importance of the Murray-Darling Basin in particular, not only as our nation's food bowl but as a vital piece of natural infrastructure that blesses this continent. We support the passage of this bill which seeks, in particular, to put on a cap of 1,500 gigalitres to make sure we return some of that water to the river.

I can remember doing a project about the Murray-Darling when I was in year 4. We are not all good spellers all of the time, and it is with some embarrassment that I put on the record that I spelt 'Murray' without an 'A'. In my year 4 spelling I missed the 'A'! It made me pay a lot more attention to the title of works that I put in after that day! I never made that mistake ever again, and it was a great learning experience for me. But for the people of the Murray-Darling Basin there has been a lot more than a missing 'A', in the sense of how much they have been consulted about what has been going on. There is a yearning in that community to continue to be at the heart of further consultation around this piece of legislation.

The Murray-Darling is a mighty river system that supports around 40 per cent of our agricultural production. I was in the chair yesterday when Senator Canavan made his remarks about the complexity of a river system. I think he might have said it was not simply a hose connected at one end, where water goes in one end and comes out the other end, in a way that some people from the city might expect water to flow. The complexity of the river is a vital consideration for anything that is to occur moving into the future. It is certainly the focus of life for communities that lie far from its banks and, of course, it is of deep cultural importance to the Aboriginal nations and the communities of the basin. The health of the river channels themselves, and the flora and fauna they support, are vital not only in their own right but for the economic and social wellbeing of basin communities that have been established in these regions over many years.

The so-called triple bottom line—the environmental, economic and cultural objectives—is sought by the Basin Plan, and Labor recognises the government's wish to provide the certainty that these basin communities require by placing a cap of 1,500 gigalitres on water purchases, and we will support the passage of this legislation. I am pleased to say that, in developing our response to the government's proposal around this legislation, Labor has consulted with various stakeholders. We note a continuing divergence of points of view about this issue and about other issues going forward in terms of the management of the river. We have carefully considered their advice and opinions, and at this point in time we do support the government's position. We have also given careful consideration to the position of the basin states—New South Wales, South Australia and Victoria—and it is important to note that, with their support, things could continue to move in the right direction.

The report into the Water Amendment Bill 2015 handed down by the Senate Environment and Communications Legislation Committee this week says:

... the 1500 GL per year limit ... will be of significant benefit to farming and irrigator communities in the ... Basin.

There are two key imperatives for the success of the Basin Plan and these imperatives are the same for our approach to the cap on water purchases. There is bipartisan support at the federal level and it has the support of all basin states. Given the support of those states for this reform, as was the progress that has been made to date in recovering water for the environment, Labor will not oppose the bill.

In short, Labor supports the people of the basin, the towns of the Riverina and the farmers and the growers of the Murrumbidgee. Labor supports the people on the land and recognises the issues at the heart of their community. For many Australians who live on the edge of this great continent, water is simply too often something that just comes out of a tap, but, in the Riverina, for which I am the duty senator, water is the lifeblood of the community. It is certainly the subject of pub talk and rumour. Comments such as, 'Did you know that so-and-so sold his water and he's taken a couple of years off?' is not an uncommon conversation; it has been happening over the years.

It was on a visit to Griffith early last month that I was able to learn firsthand of the myriad issues that affect our rural communities. I say once again that members of the community who came forward and spoke to me at a range of places over the course of that weekend continue to pay intensely close attention to the action of water flows in the river. They are certainly watching what we are doing here in the parliament today. I hope that, when I return to Griffith to speak with people, they will continue to provide me with the feedback that I need to understand better and better what they see happening as a result of the government's actions.

I do have to say, though, that, apart from the conversations which were frequently around water and the Murray-Darling scheme, I have also learnt that many people in the community of Griffith in particular feel that they do not have a voice and that what concerns them is falling on deaf ears. Many articulated very clearly that, after more than four decades of representation by the National Party, their ballot has been taken for granted. It is as if they say, 'Thanks for the vote. We'll see you again in three years.'

The Murray-Darling Basin Plan was a topic of discussion with just about everyone that I met, including the Mayor of Griffith, John Dal Broi. He spoke very passionately about the issue of water at the heart of his community. He is on the front line of debate that continues about the best way to manage the challenges of bringing this plan to fruition with that triple bottom line outcome being delivered. His conversations were a mixture of enthusiasm and frustration about the future of the town and the region. Like dedicated dwellers of Griffith, he envisions a thriving in community that is built on the confidence that what they do actually matters to the nation. He was incredibly proud, as were so many of the members of the community, of the produce that they give to the Australian nation and overseas through rice, cotton, wine and fruit. Indeed, they talked about the Orange Festival with glowing acclaim. I will have to put it on my bucket list of things to get back to, because it was such a place of pride for the community.

Mayor Dal Broi envisions a possibility for Griffith that, sadly, is clouded by the attitude of the federal government, not just with regard to water, where concerns continue to be expressed, but also with the fact that people in Griffith need access to a range of services and provision and certainty from this government. It is not just the water that is an issue in Griffith. Sadly, we have seen a very mean-spirited federal government that seems to think that the bush can afford incredible cuts. This is an insult to the community as they are undertaking a transition in their economy with this significant change to water that feeds the irrigation and wetland farming of that area. They are being asked to take more than their fair share of burden from government cutbacks.

Mayor Dal Broi presides over a council that will have $1,752,083 less in its coffers over the next four years, thanks to Prime Minister Abbotts ill-advised four-year freeze of the indexation of federal assistance grants. That is a significant amount of money into the community. Down the road, at Wagga Wagga, the council will be $3.66 million worse off and at West Wyalong, the Bland Shire Council will be short-changed $2.4 million by the freeze. For a community that is struggling with the transition that the water scheme is impacting on them, this is an insult added to considerable injury for many. In fact, the grants that have been cut will rip more than $18.9 million away from the Riverina electorate. In a committee of that size, where they are already concerned about the changing nature of the economy as the population moves to adjust to the changes that the water scheme has impacted, they are very concerned about seeing shops closing on the main street of Griffith and they are very concerned about the flow-on in terms of youth unemployment.

This is a community that is also seeking opportunities for education and employment, raising young people with a quality of life that is certainly guaranteed for many in the cities. So when you factor in other policies that have been advanced by Mr Abbott and Mr Pyne, you can pretty well drop the idea of a degree or any further education from plans for the future for many young people in this community. Many young people are devastated because they are fearful that they are going to end up with $100,000 worth of debt before they get out with their degrees—$100,000 millstones around their necks. If students had aspirations to go to one of the sandstone universities, it could be even more than that. This is a layering of impediment and disadvantage on the community of the Riverina and the bush. These sorts of opportunities need to be given more generously to people in the regions who are away and facing the challenge of trying to get to cities to go to university.

I had the pleasure of having a coffee with a number of high school students from the Griffith region and I felt with them the same enthusiasm and mix of hope that I felt with many of the students that I taught in my years as a teacher on the Central Coast. I met with Marian Catholic College's captain, Alanah Jeffrey, and vice captain, Francine Barbaro, Griffith High School captain, Vanessa Myers, and Rotaract director, Jenna Rogato. These are truly remarkable young women—very intelligence. They had pride in themselves and their schools, and they did their schools and the communities that they represent in their senior leadership roles great justice by raising a number of issues. Certainly, they talked about water and they will be very interested in this piece of legislation that is going through the House.

But this piece of legislation does not exist in isolation from other government policies. Students in the Riverina are very concerned about the impact of these cuts on their local community and the limitations on what their futures might hold, with the $100,000 debt sentences hanging over their heads. Alana Jeffrey has even taken it upon herself to establish—

Senator Canavan: Mr Acting Deputy President, on a point of order on relevance. I share with the senator the concern for the impact on basin communities, but if the senator really had their interests at heart, I think they would want to see this bill passed, so could I ask you to bring her to the question—

The ACTING DEPUTY PRESIDENT ( Senator Smith ): There is no point of order, Senator Canavan.

Senator O'NEILL: If that was not an effort to shut down, it looked an awful lot like it. In a way that exactly shows the contempt for the community that was expressed to me. They think: the Riverina, it is always on our side; we can count on those folks; it does not matter how much money we cut out of that community; we can take it away, and we could take it away from every council on the ground, and they are too dumb to even figure out that they have been cut. I have seen some of press releases that go out into the area, out in the seat of Farrer and out in the seat of Riverina. They try to pull the wool over people's eyes, but under this government they know that they are getting a dud deal that is ripping money right out of their community—

Opposition senators interjecting—

Government senators interjecting—

The DEPUTY PRESIDENT: Order on my right. Order on my left.

Senator O'NEILL: They know that they have been taken for granted. With the amounts of money that I have just articulated disappearing from the councils—I will state again, $1.7 million from the federal assistance grants gone from the seat of Griffith at this time of vital transformation in their local community—they will not forget that this government is trying to ignore them, take them granted and take money out of their communities. They will not forget that this is the government that is trying to put $100,000 worth of debt around the necks of young people in the community who have hopes and aspirations for a great education. They will also not forget, because students like Alanah Jeffrey, who has established a social justice league, have gathered together young people to discuss what matters in a way that is quite different from what was exposed in Senator Canavan's false point of order. It was about what they could to help others, not to shut down conversation but to liberate conversation, to generate ideas, to create a vision for the future for the people of that town.

One of the things that those students expressed to me as a very significant concern—it was not just the students, it was a number of employees in the town—was the impact of drug and alcohol abuse in the community, particularly at the moment ice, which is a discussion that is current in our communities. One of the things that they were very concerned about was people who are trying to get access, particularly in regional areas such as Wagga Wagga and the Riverina, to the sort of treatment that is necessary when somebody finds that they have an addiction. This community could actually be persuaded, if they were not paying very close attention, that the Abbott government intends to do something about that practical problem that they face. But, no, what they are actually getting is a lot of sound and fury, a lot of sound bites and media grabs that are talking about the 'ice crisis', and all while they are taking money away from the services that are provided. There are 16 services in the flexible funding pool, and all of them have been impacted by miserly decision making from this government.

While the Labor Party welcomed the National Ice Taskforce and the $20 million campaign for the National Drugs Campaign, we believe that people actually need to get the health services that they need. Fighting the ice epidemic while pulling money out of the very programs that aim to prevent drug use is not a response that is satisfactory for the people of the Riverina. This is the height of hypocrisy, and the Abbott government talk about so many of these matters but continue to pull money out of regional communities

In the time that remains to me this afternoon, I want to reiterate that we, the Labor Party, recognise the government's wish to provide certainty to the basin communities by placing a cap of 1,500 gigalitres on water purchases. I sincerely hope for the people of Griffith that this does ameliorate some of the concerns that they raised with me. I also want to acknowledge that in further visits to the region I hope to meet more extensively with the local Indigenous owners of the land. I know that Aboriginal people everywhere across this country feel a deep connection to the land and the waters that flow through it and across it, and this needs to be considered and provided for. Not by imperial patronage, in the way that the Liberal Party and the National Party does so often, but by actually ensuring that Aboriginal people are empowered through water rights and that they continue to be consulted as this program of change for the entire Murray-Darling system continues to be implemented. The voice of the Indigenous people across all of the lands that that covers is a vital part of the way we need to move forward together.

I will leave my remarks there and I thank you for the opportunity to be a voice for the people of the Riverina who have for too long been taken for granted by the National Party.

Senator MADIGAN (Victoria) (13:22): I rise today to speak in support of the Water Amendment Bill 2015. The Murray-Darling Basin is home to 2.1 million people, and a further 1.3 million people are dependent on its water supply. While nearly half the basin population live in urban centres, the vast majority of land use in the basin is for agriculture.

What we do as federal legislators has a disproportionate impact on the economic health and wellbeing of this country and on the social and economic wellbeing of basin communities. Part and parcel of this is giving people certainty.

Over the last 12 months, I have travelled more than 6,000 kilometres across the basin, from Yea and Molesworth in the upper Goulburn in Victoria to Goolwa and the Murray Mouth in South Australia—to Cohuna, Cobram, Seymour, Boort, Numurkah, Tongala, Yarrawonga, Kyabram, Lake Charm, Swan Hill, Mildura, Benjeroop, Stanhope, Murrabit, Deniliquin, Barham, Koondrook, Kyalite, Rochester, Tatura, Colbinabbin, Bridgewater, Serpentine, Kerang, Lake Meran, Shepparton, Collingullie, Wagga Wagga, Griffith, Leeton and Finley, just to name a few! I also went to many places that do not even show up on the view from a satellite passing overhead. But there are communities there, there are people, who are affected by our decisions—in this instance, notably, by the Murray-Darling Basin Plan.

I have heard stories of people walking off farms because they have become unsustainable. I have seen the subsequent collapse of small businesses and the effects on towns and communities. I have met with community leaders and school principals, and heard their concerns about the dwindling number of families and, most importantly, the effects on children in their schools, families and communities. But, over recent months, one message to me has been constant: please support the 1,500-gigalitre cap.

This cap was an election promise by the Abbott government, which is now more than two years through its term. This legislation has been a long time coming. Farmers need certainty. Our rural and regional communities need certainty.

There is of course much I disagree with about the so-called Murray-Darling Basin Plan. I was pleased to initiate a Senate inquiry into the plan earlier this year. I was even more pleased that Senator Leyonhjelm offered to be its chair. That committee is now underway. This legislation is a small, positive note in a sea of otherwise troubling developments related to the plan. It has my support. Thank you.

Senator XENOPHON (South Australia) (13:25): I indicate that I will be supporting the Water Amendment Bill 2015, with some reservations. In my first speech in this place, on 27 August 2008, in the middle of the 'drought of the century', I spoke about the crisis that the Murray-Darling Basin was facing, the crisis facing the Lower Lakes at that time, where some commentators declared the environmental disaster in the Coorong and Lower Lakes as reminiscent of the devastation of the Aral Sea in the former Soviet Union. I also talked about a 1999 report that Phillip Coorey, now Chief Political Correspondent for The Australian Financial Review, wrote about in the Advertiser—a leaked CSIRO report that said Adelaide's water would be too salty to drink on two days out of five by 2020 unless there was a major shift in water management along the Murray-Darling river system. I think it is fair to say that there has been a major shift in water management. It is not perfect, but I do not want the perfect to be the enemy of the good, and that is why I am supporting this bill.

I do indicate that I think that Senator Rhiannon's second reading amendment is not unreasonable—that you need to take into account the science and the evidence in terms of the impact of measures on sustainability of the river system, as well as climate change issues such as climate variability. All these matters need to be taken into account.

Back in 2009, I unambiguously supported reforms to the river system that, as a result of negotiations with the then Rudd government, led to a fast-tracking of $500 million in water buybacks, $200 million for river communities and $200 million for stormwater harvesting for urban areas, which I think was a very sensible and good move. And, in the end, I think both sides of the political fence as well as my crossbench colleagues thought that they were positive measures.

The Water Amendment Bill 2015 is yet another marker in the long, arduous and winding journey of water reform in Australia. It imposes a statutory cap of 1,500 gigalitres on Commonwealth purchases of surface water across the Murray-Darling Basin. The government's rationale for this measure is certainty—certainty for communities, certainty for farmers and irrigators, and certainty for the environment. By legislating a cap, any purchasing activity from the 1,500 gigalitres must be carefully planned and must be for strategic purposes. The government states that this cap on Commonwealth water purchases will bridge the gap under the Basin Plan to 1,500 gigalitres across the Murray-Darling Basin. The balance of water recovery measures will be focused on infrastructure upgrades, efficiency projects and environmental works and measures.

The issue of efficiency measures is a subject close to my heart. We know that, for over 100 years, before the earlier plan started by the Rudd government and continued by the Gillard and Abbott governments, there was not an adequate approach in terms of water reform and that there were some in upstream states who treated the basin as a bottomless well. With little or no thought for those upstream or downstream, some states appeared to simply take what they needed—

Senator Canavan interjecting—

Senator XENOPHON: Some states—let's not talk about Cubby Station, Senator Canavan!—took what they needed and exploited this natural resource in an unsustainable manner. South Australia, being at the end of the system, was the first state to become aware of the problem. Reduced water flows because of overuse upstream, particularly in a time of drought, meant that South Australian farmers had to invest in efficiency measures long before anyone else—as long as sixty years ago.

But this incredible foresight turned out to be many irrigators' Achilles heel. When the previous government announced measures to improve on-farm efficiency, many South Australian irrigators found they were ineligible because they were already too efficient. In effect, they were discriminated against because they took action long before anyone else to address unsustainable levels of water use. That is why it is important that the management of water use in the Murray-Darling Basin includes a number of measures.

The cap on Commonwealth purchases is one measure. But where the cap is concerned, and before any Commonwealth money is spent, this question must be asked: is this the most efficient use of government money in the context of the environment and river communities? In order to ensure spending efficiency is achieved, the cap must be monitored. We must ensure we are getting the most bang for our buck and that this 1,500 gigalitre limit on purchases is achieving its intended results, including environmental results. I therefore welcome the fact that the government will be providing regular updates about purchases made through the cap in the Water Recovery Strategy for the Murray-Darling Basin.

Another provision of this bill must also be subject to continued scrutiny: the proposed amendment to the Murray-Darling Basin Plan which aims to increase flexibility in the recovery of 450 gigalitres of water through efficiency measures. These efficiency measures will be funded through the Water for the Environment Special Account. Under the government's proposal, these efficiency measures must result in neutral or improved social and economic outcomes in order to receive funding. Describing the beneficial effect of investment in infrastructure projects, the Victorian Farmers Federation in its submission to the Senate inquiry into this bill stated:

Recovering water through infrastructure investment instead of buybacks also has positive impacts on the supply chain. Where farmers are able to maintain their productivity this helps to protect on-farm employment and jobs in milk factories, wineries, fruit and nut processing plants as well as sustaining jobs in transport and marketing. Keeping jobs in small and medium sized towns is critical to the economic and social survival of regional communities. These long term benefits are also supported by a short term boost to local economies as contractors are employed to construct the infrastructure projects.

Those sentiments from Victoria are very much mirrored by South Australian communities, particularly in the Riverland, who understand the benefits of certainty for their river communities.

The Australia Dairy Industry Council has quantified, in dollar terms, the benefits of water buyback versus investment in infrastructure. According to research it conducted in 2012, water buybacks can actually result in reduced economic activity in the area. Investment in infrastructure, on the other hand, increases economic activity. The one caveat I have in relation to what the dairy industry says is that you need to have a viable river system in the first place, which is why I will be supporting Senator Rhiannon's second reading amendment. You need to take into account the science, because unless you have a viable river system there will not be anything to build on in terms of viable economic communities. We know from the evidence given to this inquiry that economic activity with efficiency measures can make a real difference in sustaining populations and economic activities in communities.

The government must acknowledge and address concerns raised by the Murray Lower Darling Rivers Indigenous Nations that infrastructure upgrades impact on Aboriginal cultural heritage and important cultural landscapes. Many indigenous communities have a long history with the land around the Murray-Darling Basin—in fact, one that extends tens of thousands of years. They are particularly vulnerable to the encroachment of new infrastructure projects on culturally significant land. That is something that of course must be taken into account in the context of how this money is spent.

The Australian Dairy Industry Council has done an analysis of the multiplier effect of investment in infrastructure which shows that such measures can be more expensive per megalitre than buybacks. Furthermore, there are warnings that the aim of 450 gigalitres in water savings may not be met by infrastructure upgrades. The SDL—sustainable diversion limit—Adjustment Stocktake Report published in August this year warned that:

Better engagement is required between the Commonwealth and the states to resolve a number of issues where different views about the performance of various on-farm efficiency driven programs exist …

I therefore urge the government to carefully examine the uptake of infrastructure projects and to monitor not only the water savings but the cost effectiveness of those savings.

What tipped the balance in favour of my supporting this bill was the attitude of the South Australian government. I do not think they could ever be accused of being a natural friend or ally of the federal government, but Minister Ian Hunter and his office have been very helpful to my office in indicating that they do support these changes, that there are sufficient safeguards in these changes for South Australia, that they do strike an appropriate balance and that there are monitoring mechanisms in respect of this. The fact that the South Australian government, given the history of negotiating in respect of this, is satisfied that this bill has appropriate measures to safeguard the health of the river system, the environmental health of the river system and the economic welfare of river communities tipped the balance in favour of my supporting this legislation.

The Murray-Darling Basin is one of our most precious natural resources. It is also the food bowl of our nation and the lifeblood of hundreds of rural communities. It is incumbent upon us to ensure that we manage this precious resource in a responsible and sustainable way.

Senator BIRMINGHAM (South Australia—Assistant Minister for Education and Training) (13:35): I thank all of the contributors to the Water Amendment Bill 2015, which is focused on putting in place a statutory limit of 1,500 gigalitres on the Commonwealth purchase of surface water across the Murray-Darling Basin. The bill further amends the Murray-Darling Basin Plan 2012 to provide an increased level of flexibility in the means to recover the 450 gigalitres of water through efficiency measures that can be funded under the Water for the Environment Special Account.

If I were to leave this Senate tomorrow—which is not my intention, for the benefit of anybody listening; I am sorry to disappoint you, Mr Acting Deputy President Gallacher—I would say that one of my, if not proudest, achievements would be the role that I played, along with many, many others, in relation to water reform in Australia. This was particularly so in 2007, when I joined this place as a member of the then Howard government, when I saw the passage of the Water Act. This was a groundbreaking piece of legislation and a major reform initiative of the Howard government in its final year in office. Then, in 2012, as one of the then opposition spokespeople on water matters with particular responsibility for the Murray-Darling Basin, I saw the bipartisan support for the adoption of the Murray-Darling Basin Plan that the Water Act provided for. Similarly, we saw bipartisan support for the establishment of the Water for the Environment Special Account. Today we see yet another step in the progress around water reform in Australia with, once again, bipartisan support for this piece of legislation.

I thank the Labor Party for the constructive way in which they worked with the Howard government and have worked with the Abbott government in this important area, just as we were willing to work constructively with them on this important reform when they were in office. I also acknowledge the constructive approach that many on the crossbench take to this matter as well.

It stands as a permanent record of disappointment that when the Basin Plan was adopted, a plan for the first time ever for a national approach in law to the management of the Murray-Darling Basin with the setting of sustainable extraction limits, the only party that opposed that plan was the Australian Greens. That remains a blight on the record of the Greens, who were the enemy—and appear to remain so—of good policy. It may not have delivered all they wanted, but this was very good policy and it is making a marked difference to the environment.

It is important to remember that just what that Basin Plan provides for. The Basin Plan sets in place a long-term average sustainable diversion limit for extractions from the basin of 10,873 gigalitres per annum. That represents a reduction of some 2,750 gigalitres per year from the 2009 baseline diversion level. To convert that into English for anyone who is listening, it means that there will be a substantial reduction in magnitude of around 20 to 25 per cent of the water to be extracted from the Murray-Darling Basin in the future. That water will go back to preserve the environment and to ensure the overall health of the basin.

Our side of politics has always been particularly concerned about not just the delivery of a healthy river system but also ensuring the health of river communities and the economies that those communities rely upon. That is why the Water Act has as its object the optimisation of the social and economic impact on communities as well as the environmental impacts. That is why, in opposition, we devised a policy that would see a cap on the level of water recovery undertaken by buyback.

It is very important to recognise that you can recover water by different means. You can recover it by simply going into the market and buying it back. You can recover it by undertaking major infrastructure projects that upgrade river systems and make them more efficient. You can recover it by making environmental watering activities more efficient. You can recover it by investing with farmers on their farms to make their use of water more efficient. All of those ways will get you licensed water holdings or water offsets to go against the Basin Plan targets.

As a coalition of parties, it has firmly been a view of the Liberal Party and the National Party that the most economically and socially responsible way for those river communities to recover water against the Basin Plan targets is to invest in infrastructure wherever we can. That is why in opposition we came up with the policy for a cap on buybacks of water licences of 1,500 gigalitres. I am delighted that today the government will hopefully see that cap put into legislation. By putting it into legislation, river communities can have the confidence that governments will have to invest in infrastructure to meet the Basin Plan targets that have been set.

As a government, we are already doing that. We are pumping some $3.9 billion into the infrastructure of Murray-Darling Basin communities, investing around $2.5 million per day between now and 2019 to make farms, irrigation systems and environmental watering activities as water efficient as possible. Through all of that, we will be getting contributions that will get us towards the Basin Plan targets. I am very, very pleased that we are on track to see those Basin Plan targets met in full and on time by 2019, as was our election commitment.

There have been a number of contributions to the debate which I will touch on quickly. Firstly, there was the contribution by Senator Rhiannon, who seemed to suggest that somehow this legislation will undermine meeting the sustainable diversion limits. I want to be very clear that this legislation in no way changes the statutory responsibility the Commonwealth has under the Basin Plan to see those sustainable diversion limits achieved and enforced. This legislation is only about how we bridge the gap to those new sustainable diversion limits, not whether or not they exist or what they are. They exist in law. They are not being changed in law. We are simply looking at how they will be achieved.

Already around two-thirds of those targets have been secured. The government is committed to seeing the remainder secured in full and on time. The recent SDL adjustment mechanism stocktake report, which was released on 27 August, provides confidence that the gap to the Basin Plan targets can be bridged in full and on time without breaching this 1,500-gigalitre limit on buybacks. It found that a supply contribution of 508 gigalitres is plausible, and basin ministers remain committed to working towards a supply contribution of up to 650 gigalitres.

Senator Rhiannon also asked questions about some of the definitional aspects around long-term annual average quantities of water used and what that means. This issue has come up in Senate estimates a number of times. For the benefit of Senator Rhiannon and the Senate, the Department of the Environment calculates the amount of water taken or accessed under purchased entitlements or recovered entitlements as a long-term average annual yield at the time of purchase. This is used to translate entitlement volumes—the actual volume of water on a water licence or entitlement—into long-term diversion limit equivalents to allow for meeting the basin plan. Essentially, it is a calculation about the reliability of having water against that water licence. That is a sensible way of doing it because, as I am sure Senator Rhiannon understands, different water licences have different levels of reliability. Therefore, you cannot take a water licence at its face value. It is actually about assessing how much water you get back from that licence that matters most.

Senator Rhiannon also claimed that this legislation was contrary to the notion of open markets. I am very pleased and proud of the functioning water market that Australia has in the Murray-Darling Basin. Farmers are free to buy and sell entitlements within the limits of the cap at any time on an open market and trade them as such. The Commonwealth has entered that market at various times, but by having the cap in place and prioritising infrastructure investment we are ensuring that the Commonwealth is involved less in that market, distorting the market less and leaving it to function more fully for irrigators and that trading of licences.

Senator O'Neill, in her contribution, touched on many issues, many of which were not at all relevant to the topic before the chamber. She started by quoting Charles Cameron Kingston, a former premier of South Australia, on water management in the federation debates, as I also have done so many times in this place. The one thing I would say to Senator O'Neill is to be careful in talking about this topic. When I held responsibility for it I quickly learned that it was very important to make sure that you say the same thing to people downstream as you say to people upstream. It is very important to make sure that you have a consistent message on this topic because, as Mark Twain used to say, 'Whiskey is for drinking; water is for fighting over.' In this space we have seen that all too often. To take communities with you, you need to be consistent in your messages to them.

In closing, I want to pay tribute to the many members of the National Party and the Liberal Party representing Murray-Darling Basin seats who have lobbied to get this policy implemented. They have worked hard in that regard. They ensured that in opposition we committed to the 1,500 gigalitre cap and they have worked hard to ensure that legislation was brought forward. I acknowledge the support of many of the communities and irrigation stakeholders who have supported this, as well as the support of the state ministers, South Australia included, all of whom have worked together to ensure that they support this legislative package, just as they have done on other reforms previously.

In closing, I want to pay tribute to my successor in the water portfolio, Mr Baldwin, for securing that agreement of state ministers. It is to his credit that he brought them together and ensured that all were agreed and aligned around this important reform. I commend the bill to the Senate.

The ACTING DEPUTY PRESIDENT ( Senator Gallacher ): The question is that the second reading amendment by Senator Rhiannon be agreed.

Question agreed to.

Original question, as amended, agreed to.

Bill read a second time.

Senator LEYONHJELM (New South Wales) (13:49): by leave—I move Liberal Democratic Party amendments (1) and (2) on sheet 7752 together:

(1) Schedule 1, Part 1, page 5 (after line 12), at the end of the Part, add:

2A Subsection 86AE(2)

   Omit "Paragraphs 105(3)(b) and (4)(b)", substitute "Paragraphs 105(4)(b)".

2B Subsection 105(3)

   Repeal the subsection, substitute:

      (1) The functions of the Commonwealth Environmental Water Holder are to be performed for the purpose of achieving the objects of this Act.

2C At the end of subsection 105(4)

   Add:

      Note: This subsection is modified in relation to water access rights acquired by the Commonwealth with amounts debited from the Water for the Environment Special Account (see subsection 86AE(2)).

2D Subsection 106(1)

   Repeal the subsection, substitute:

      (1) The Commonwealth Environmental Water Holder must not dispose of water and Commonwealth environmental water holdings during a water accounting period unless the water or the water holdings are not required in the water accounting period to meet the objectives of:

         (a) if the water is in, or the water holdings relate to water in, the Murray‑Darling Basin—the environmental watering plan; or

         (b) if the water is in, or the water holdings relate to water in, an area outside the Murray‑Darling Basin—any plans specified in the regulations in relation to that area; or

         (c) any applicable environmental watering schedules.

(2) Schedule 1, Part 2, page 6 (before line 3), before item 3, insert:

3A Subsection 6.04(2) (note)

   Repeal the note.

3B Paragraph 6.05(3)(a)

   Omit "143 GL", substitute "128.7 GL".

3C Paragraph 6.05(3)(b)

   Omit "425.3 GL", substitute "382.8 GL".

3D Paragraph 6.05(3)(c)

   Omit "458 GL", substitute "412.2 GL".

3E Paragraph 6.05(3)(d)

   Omit "82.8 GL", substitute "74.5 GL".

3F Paragraph 6.05(3)(e)

   Omit "4.9 GL", substitute "4.4 GL".

In this bill the government is proposing some sensible amendments to the Water Act to cap buybacks from farmers to 1,500 gigalitres, which I support. The implementation of the Murray-Darling Basin Plan and its consequences are naturally of great concern to basin communities which produce so much of our agricultural output. As these issues also concern me, I agreed to chair the Select Committee on the Murray-Darling Basin Plan, which will hold its first hearing next week. I and several other senators attended a public meeting of a thousand people in Barham a few weeks ago and toured part of the local area looking at environmental works, irrigation farms and farms that had been dried off. We saw how projects funded by the Commonwealth, such as the Koondrook-Perricoota Forest watering scheme, enhance environmental watering with less water. We saw the improved infrastructure for delivering water to farms more efficiently and the newly lined channels to reduce water loss through seepage. We saw abundant bird life on irrigated farms, and it was pleasing to see. And we saw many farms in a sad state after the withdrawal of water entitlements. We saw too many vacant shops in a couple of towns we visited. These communities have encountered significant change in the last few years and are looking for certainty.

The reduction in available water is a big factor in the productivity of a region, and to a large extent the effects of this are already being felt. What is becoming more apparent is that the demand for the smaller pool of productive water available to producers is driving up prices as farmers compete with one another for water in the temporary market. Temporary market water has tripled in price in the last several years, with the result that it is not viable for some producers to enter the market and purchase water to finish their crops. This reluctant decision starts a downward spiral which ends with less output and less income.

I am proposing two amendments to the government's bill to address these problems in a modest way. The first amendment will counter water-hoarding by the Commonwealth Environmental Water Holder. As the law currently stands, the Commonwealth Environmental Water Holder is required to hold and store water, even when environmental watering plans have been fully satisfied. The amendment removes a ban on selling water that is excess to environmental needs by removing a requirement to retain water if it can be stored for a future accounting period.

The amendment will also improve the willingness of the Commonwealth to sell off excess water holdings by broadening the Commonwealth Environmental Water Holder's purpose beyond environment protection to include optimising economic and social outcomes. It is incredible that the current provision does not require optimisation of economic and social outcomes, as these are primary objects of the Water Act. The effect of this amendment will be to allow the Commonwealth Environmental Water Holder to sell excess water on the temporary market, thereby increasing the water available and driving prices down. This will mean that more water will be available for farmers to finish crops while not hindering the work of the Commonwealth Environmental Water Holder.

This solution was in fact supported in the media yesterday by Victorian Nationals leader and former water minister Peter Walsh, who was quoted as saying:

"The CEWH should have the option to sell water on the temporary market," …

The article said:

Mr Walsh suggested the money—

gained from such sales could—

be spent on projects such as pumping environmental water into the Hattah Lakes and Gunbower Forest.

Mr Walsh said that the use of such profits from water sales on environmental outcomes would be a win-win situation.

The second amendment that I am proposing increases the total water that can be used by farmers in the basin by around one per cent. This is a modest change that will benefit farmers and will not threaten the environment. The increased water for farmers is achieved by reducing water use reduction targets that are listed in the Basin Plan.

The government may argue that these sorts of amendments will fall out of their current review process and that we should not push ahead with these amendments now. But we have a responsibility in this parliament to promptly amend Commonwealth law when a clearly beneficial change is before us. We should not delay in the hope that bureaucratic committee processes will come up with something sensible in the future.

My amendments do not threaten environmental outcomes, and additional water will also be available to farmers who wish to purchase it at a reasonable price. These improvements to the Basin Plan will deliver practical benefits to basin communities and the environment. Adoption of the amendments will also signal to basin communities that we in this place feel their pain and are not indifferent to their trials.

The inquiry I am chairing may well recommend more substantial reform but, in the interim, these measured and modest amendments signal a resolve to improve outcomes and reduce the uncertainty of necessary water reforms.

Senator SINGH (Tasmania) (13:56): The Murray-Darling Basin Plan needs strong bipartisan support, which I outlined in the opposition's second reading contribution, and serious and robust consultation, of course, with those key basin states. As such, Labor will not support changes to the framework that have not been through a process with those key basin states.

These amendments, to be honest, are laughable because they effectively accuse the Commonwealth Environmental Water Holder of hoarding water, against the broad triple-bottom-line consensus achieved by the Murray-Darling Basin Plan, and change the rules of the Commonwealth Environmental Water Holder at the last moment to enable it to sell off excess water in the face of necessary and confidence-building accounting practices.

So the opposition does feel that these amendments have been sprung on the Senate at the final moment, without anything like the necessary consideration and consultation required. Consultation has already occurred to bring this bill to this place, with various stakeholders—including Indigenous stakeholders, as I referred to in my second reading contribution. They are key to ensuring that we have a robust outcome when we are talking about water in these key regions in these key states. So, because this is an amendment that has not gone through any of that process, the Labor Party will not support this amendment.

Senator BIRMINGHAM (South Australia—Assistant Minister for Education and Training) (13:58): The government will not be supporting the amendment. I do understand where Senator Leyonhjelm is coming from, though. These are issues that were canvassed by the Water Act review. The government is preparing its response to the review of the Water Act. We are cognisant of the concerns in communities that he is reflecting through this amendment, but it is appropriate, as Senator Singh alluded to, that any such amendments do need to be worked through with basin states before this chamber can seek to agree to them.

Senator LEYONHJELM (New South Wales) (13:58): Mr Temporary Chairman, I am assuming this debate is now going to be terminated for questions without notice?

The TEMPORARY CHAIRMAN ( Senator Gallacher ): I am going to put the amendments—

Senator LEYONHJELM: In that case, I have more to say.

The TEMPORARY CHAIRMAN: You have the floor.

Senator LEYONHJELM: I cannot allow Senator Singh's comments to pass unchallenged. The accusation that the Commonwealth Environmental Water Holder is hoarding water is indeed written into its charter. That is precisely what it is there for. That is precisely what it is doing. It is hoarding water that could be used productively for agriculture, and that water is not benefiting the environment. The objectives of the Commonwealth Environmental Water Holder do not include the triple bottom line—economic, social and environmental. It does not include all three of those. It has only one objective. That needs to change. This seeks to implement those changes. As for the final introduction—

The TEMPORARY CHAIRMAN: Order! I shall report progress.

Progress reported.

Senator RUSTON (South Australia—Deputy Government Whip in the Senate) (15:34): I present additional information received by the Education and Employment Legislation Committee relating to estimates.

Senator RUSTON (South Australia—Deputy Government Whip in the Senate) (15:34): On behalf of the Chair of the Senate Standing Committee on Regulations and Ordinances, I present the Delegated Legislation Monitor for No. 10 of 2015 of the Standing Committee on Regulation and Ordinances.

Ordered that the document be printed.

Senator GALLACHER (South Australia) (18:00): I rise to take note of the Select Committee report on Nauru. I rise in relation to a number of contributions made by government ministers and government senators in which they made remarks about the alleged witch-hunt and the alleged airing of allegations without substantial evidence. I want to touch on a couple of points that I think are really pertinent to this debate.

A submission came before the committee from the Hon. Geoffrey M Eames AM QC. Mr Eames submitted to the committee that, in December 2010, he was appointed Chief Justice of the Republic of Nauru by the President, Marcus Stephen. Mr Eames held that position until 13 March 2014. In his submission, Mr Eames states:

My resignation was forced, because the Nauru government of President Baron Waqa MP had revoked my visa, thus making it impossible for me to perform the role of Chief Justice. The actions of the Nauru government constituted a series of flagrant breaches of the Rule of Law. The fact that the government is not committed to the Rule of Law should be a matter of concern to the Australian government.

He goes on to say:

Resident Magistrate and Registrar of the Supreme Court, Peter Law, was arrested on 19 January 2014, forced on to an aeroplane and deported under police escort. No reasons were given to him by the government for this extraordinary action. The reasons, however, are now very clear – Mr Law had offended the Minister for Justice and Border Control, Mr David Adeang, by making interim orders, as Registrar, restraining the unlawful deportation of two expatriate businessmen, an Australian, Rod Henshaw, and a Fijian, Mohammed Haneef.

If that was not enough, Mr Richard Britten's appointment as commissioner of the Nauru Police Force was terminated on 19 July 2013. This is the evidence that this committee has taken. It has been publicised. It has not been rebutted. It is not unsubstantiated. It is a simple fact. People were arrested and deported—three people who, I would contend, were assisting the government of Nauru, the Republic of Nauru, in providing an independent police force and an independent judiciary. Any semblance of transparency, justice and accountability which the Australian government could rely on is now no longer there. This is the evidence that came to this committee.

We have had contributions in this chamber that said we dealt with 'unsubstantiated allegations' that have all been dealt with by other parties. I am sure that Senator Carr is in vehement agreement with me when I say that that is not the case. That is simply not the case. No-one has rebutted the contentions of Mr Law or Mr Eames. The Australian federal policeman has basically remained silent, as he probably needs to do in terms of his contract of employment.

We do know that there is an absence of ability to prosecute, to forensically evaluate, in the Nauruan police force. We know that because this minister has recognised it. He sent additional officers to Nauru to assist them in building their capacity. It is extraordinary and exceedingly strange that a minister can look one way and row another. He says that all of the Moss review allegations and all of the allegations that have been made before the four recent inquiries are all being capably dealt with by the responsible Republic of Nauru—who threw out the Australian Police Commissioner, threw out the Chief Justice and threw out the Chief Magistrate. They deported them—house arrest and on you go. Now we are expected to take from the minister and the minister representing the minister in the Senate that it is all okay and that these 'untested' allegations will all be handled competently by the government of Nauru.

We know that other nations have expressed concern about supporting funds that go to justice in Nauru. I think the New Zealand government is on the record as having expressed concern. I think our own foreign minister is actually on the record has having expressed some concern. But, no, people can come into this chamber and say that the evidence before the Nauru select committee was untested and basically not factual. I would like to see the evidence that was put before the committee that rebutted not claims, but facts. Where was the evidence that rebutted these facts?

If we are going to rely on the justice system in Nauru to provide good, humane, legally transparent treatment for people who may settle in Nauru from the RPC or who may be in the RPCs and have a complaint against someone, then the initial recommendation is that this government give back resourcing for the judiciary and the police force to get in place a proper and transparent police and judicial system that includes child protection legislation. Apparently child protection legislation does not exist in Nauru. It should have child protection laws.

We have the awful situation where the allegations have not been rebutted and people have endured awful criminality. The Nauruan police, whether because of a lack of training or a lack of resources, have not acted on those. People under the control and care of Australia are not being treated in the same way as they would be in this great country of ours. That is Australia's shame. We cannot allow this to go on. These people need to have access to a judicial system and the care and help of a police force that is adequately trained and resourced and capable of prosecuting. There is no evidence that that is the case.

One of the firmest recommendations the committee made was that the Australian government, if it wants to rely on the Republic of Nauru in these matters, should make sure Nauru have the wherewithal. It should make sure they have the competent people and the assistance to carry out prosecutions, to collect forensic evidence and to protect children in detention and in the community. There is no evidence that we have stepped to the plate in respect of that. That is the first recommendation that this government should take up.

The minister's responsibility is very, very clear. But he has done exactly the opposite of what he should have. He has labelled this inquiry a witch-hunt. He has labelled it a political stunt. But the awful reality is that the Nauruan police force is deficient in its prosecutorial capacity. It is deficient in its collection of forensic evidence. It is not through any great fault of theirs. There are only 100 people in the Nauruan police force. We cannot expect them to act with the capacity of the Australian Federal Police. But we can make sure they have resources, backup and training. We can provide that and we are not at the moment. We have some Australian police officers trying to do their best in Nauru as we speak. But it needs to be a continuous, reinforced, funded effort.

We really need to get serious about this. We cannot have Australia's reputation at risk because we have underresourced the police force and magisterial areas of the Republic of Nauru. They are making a lot of money out of Australia's efforts there. We need to get on the job here and fix a few things.

Senator IAN MACDONALD (Queensland) (18:10): Those in the chamber and those who might be listening to this on broadcast might almost agree with Senator Gallacher, but I will just remind people of the history. Senator Gallacher complains about a police commissioner who was sacked on 19 July 2013. I ask people to remember July 2013. That was the very time that Senator Gallacher, Senator Conroy, Senator Wong and Senator Carr were in a government that was doing a deal with the nation of Nauru. If it was so bad, why did Mr Rudd and Senator Conroy agree to the deal? They did. They sent these boat people to Nauru. The evidence at this and other inquiries has clearly shown that it was all done in such a rush because Mr Rudd, Senator Conroy and others realised the political and voting impact of their failure on border protection and so they grabbed at any straw to try to recover some political momentum. In doing that, they did the deal with Manus. According to Senator Gallacher, they did it at the time that the Nauruan government was actually sacking the police commissioner who Senator Gallacher is so worried about.

Senator Gallacher, if you are worried about it now, why weren't you worried about it then? Why didn't you say to Mr Rudd, 'Hang on. We can't do a deal with this country because they have just sacked the police commissioner and they don't want the judge to remain'? They made the arrangement. Senator Conroy was a senior member of the cabinet that made that deal. Yet those opposite have the hide to come in here now and complain about something that they put in place at the time that, according to them, the Nauruan government was wrongfully, illegally and undemocratically sacking their police commissioner. If it is bad now, it was bad when they did the deal.

The Greens political party are equally complicit because they supported the Labor Party in most of the decisions made at the time—

Senator Hanson-Young: Mr President, I rise on a point of order. That is misleading the chamber. The Australian Greens voted every single time against the establishment of Nauru and Manus Island—

The PRESIDENT: That is a debating point, Senator Hanson-Young. There is no point of order.

Senator IAN MACDONALD: As I was saying, the Greens political party voted with the government on almost every decision the Rudd and Gillard government made and had enormous influence on that government. They threatened to cross the floor and vote with us and bring the government down. When the government went ahead with the arrangement in Manus, of course they did not cross the floor. The hypocrisy of the Greens political party knows no bounds.

My concern with these reports is that they are always politically motivated. Senator Hanson-Young, with the support of the Australian Labor Party, has suggested and initiated so many inquiries into these things, but they are all politically motivated; they are all set up with committees that have a majority of Labor and Greens and Green Independent senators. They know the outcome before they go there, and it gives Senator Hanson-Young—with all due respect to you, Senator Hanson-Young; I do not want to belittle you—the opportunity to expose her expertise on this. She has looked at Sea Patrol episodes over many months, so she knows all about these things and how they work. The committee would rightly report before it had even had a hearing, and I suggest that that is what has happened now.

I simply cannot understand Senator Gallacher and other members from the Labor Party complaining about something that they set up. I am only going on your advice, Senator Gallacher, that it was on 19 July 2013. That was the very time that Mr Rudd and Senator Conroy were wining and dining these people from that country, making the deal. Why did they not say then, 'We're going to give you enough money, but we're only going to do this if you properly train your police, your judges and your parliamentarians. We'll only give you the money and do the deal with you if you do that.' Did they do that? No, of course they did not.

The Labor Party in government made this deal with a sovereign country. What does Senator Gallacher want us to do now? Perhaps, Senator Gallacher, we should mobilise the army and invade Nauru? We will teach them a lesson or two; we will invade the country and set up a democratic parliament, a proper judicial system and a proper police system! We will have Australian troops surrounding the place so that this little nation learns its lesson. Is that what you want? How else are you going to—

The PRESIDENT: Order, Senator Macdonald. Senator Gallacher, on a point of order?

Senator Gallacher: Mr President, I rise on a point of order. I am quite happy to engage in a debate across the chamber if he wants to waive standing orders.

Senator Hanson-Young interjecting—

The PRESIDENT: Order on both sides! Before I call Senator Macdonald back, I did note that in your contribution, Senator Gallacher, you were heard in silence and there were no interjections on my right. Could I indicate to senators that they should listen to senators in silence.

Senator IAN MACDONALD: Thank you, Mr President. I know you do not mean it in this way, but if they did listen to me in silence they might actually learn something and understand. The honourable senator who spoke before me, Senator Gallacher, wants us to do something about it. There are a lot of countries around the world that I think are deficient in the way they run their parliaments or their police, but what do we do? Do we send in Australia's army to overrun them? We will teach them how to do it properly, Senator Gallacher. We do not like the way they are running their government, but what can we do? Is that what you want us to do—invade the country? 'We'll show them a thing or two. We'll teach them how to run a democracy! We'll teach them how to run a police force.' How ludicrous! This is an independent country. They are carrying out an agreement with another sovereign nation, Australia—an agreement made by the Rudd Labor government, of which Senator Conroy was a senior member. They are discharging the agreement and the promises that were made at that time.

Since then there have been problems, but every person in the know who gave evidence agreed that the reason for the problems was that the deal done by Mr Rudd and Senator Conroy was done in such haste that none of this was looked at. None of the proper resourcing was done. They just had to do something to try to save their own political bacon. And yet now the Labor Party, having had a conversion to purity since the election, want us to go in, invade Nauru and teach them how to do it properly.

What the current government did, as best it could, dealing with the internal affairs of another country, was to set up an independent inquiry with the agreement of that country—not a political witch-hunt in which the Labor, Greens and Green Independents have a majority, but an inquiry by an independent, respected former public servant, Mr Moss, who went in with all the resources that were needed and made a sensible investigation. As well as that there were police investigations, to the best of our ability as a nation looking at what might have happened in another nation but confining ourselves to where we were invited or to offences that might have occurred within Australia's jurisdiction. These brought out recommendations. As I understand it the government's reply, which is later in the documents that we will be debating today, indicates that most of the recommendations of these independent inquiries—I think probably all of, although I cannot be precise on that—have been put into place by the government, so far as the government is able to do in another nation's jurisdiction.

So again I say to the Greens and the Labor Party: you complain loud and long now, but where were you when your government, the Greens-Labor government, put these arrangements into place? Where were you? When you can answer that question I will give this debate a little more credibility than anyone who is listening to it could possibly ever give to it at the present time.

Senator HANSON-YOUNG (South Australia) (18:21): I think it is appalling to hear the level of debate we just heard from the previous speaker on an issue that is incredibly serious: the abuse of children and the rape of women inside the Nauru detention camp, done at the hands of guards paid for by the Australian taxpayer, funded by the Australian taxpayer, overseen by the Australian government and managed by the Australian government's contractor, Transfield Services. If this place is not able to discuss the spending of $1.2 billion to run this camp and ensure that children are safe and that women are not being raped—if we are not going to take responsibility for it—who will?

It is precisely why, when the legislation was first drafted to re-establish Nauru and Manus Island, I stood with my Greens colleagues in this place and moved amendment after amendment after amendment to try to put in safeguards. And who voted against every single one of those amendments? Senator Macdonald, and every single member of the coalition—and, I might say, every member of the Labor Party in this place too.

So: the mistakes have now been realised. This camp is horrendous. It is shameful that we are leaving vulnerable people there who have committed no crime but to try to get themselves and their families out of a war zone. And today, of all days, when we are discussing Australia taking more people from the war zones in Syria and Iraq, you have got to wonder: where is the common sense and the debate about other people who have already tried to get here, for safety, and have been shipped off to be dumped and locked up on Nauru, and are being abused, harmed and hurt?

We hear from government members that that is all okay and we should not be asking any questions. No—not good enough; absolutely not good enough.

Thankfully, we have seen, particularly over the last few days but increasingly over the last weeks and months, an opening of heart and a compassion and a desire to welcome people who are in such desperate need of protection and safety. When they flee from war zones, families get torn apart; lives get destroyed. And, for the people who made their way to Australia in the vain hope that they might find protection and safety here, we now need to turn our generosity of heart and our compassion to what we can do for those people here as well, because they have fled the same wars. They are fleeing the same ogres.

My daughter said to me that she described what a refugee was to her class. We were talking about what 'refugees' meant and what they were. And she said, 'Mum, refugees are people who are fleeing ogres and hot lava, and they need help.' If an eight-year-old child can get it, and if the Australian community is starting to desire and call for a proper response from our government, the very least we can have is a bit more civilised debate in this chamber about the people who are being harmed in the places that we have locked them up in.

They will not be forgotten. They should not be forgotten. And I am never going to be in this place and let somebody stand there and laugh off the abuse and rape of children and women that is happening in Australian institutions. It is appalling.

I obviously have a lot more to say in relation to this report, and I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator RUSTON (South Australia—Deputy Government Whip in the Senate) (18:26): I rise to take note of the report of the Economics References Committee on the future of Australia's naval shipbuilding industry and seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator McEWEN (South Australia—Opposition Whip in the Senate) (18:26): I rise to take note of the report of the Environment and Communications References Committee on regulation of the fin-fish aquaculture industry in Tasmania, and seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator HANSON-YOUNG (South Australia) (18:27): I rise to take note of the 151st report of the Joint Standing Committee on Treaties and seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator McEWEN (South Australia—Opposition Whip in the Senate) (18:27): I rise to take note of the Parliamentary Joint Committee on Law Enforcement's inquiry into financial related crime and seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator McEWEN (South Australia—Opposition Whip in the Senate) (18:27): I rise to take note of the Economics References Committee's interim report on the future of Australia's automotive industry and seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator McEWEN (South Australia—Opposition Whip in the Senate) (18:27): I rise to take note of the report of the Community Affairs References Committee on out of home care and seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator GALLACHER (South Australia) (18:27): Mr President, I rise to take note of the initial report of the Select Committee on the Recent Allegations relating to Conditions and Circumstances at the Regional Processing Centre in Nauru—the first report to you. That report had one recommendation:

The committee draws the attention of the Standing Committee on Public Works to Commonwealth expenditure on public works in the Republic of Nauru, not confined to the Department of Immigration and Border Protection but across the Commonwealth, and recommends that the Department of Immigration and Border Protection ensures that all future public works in the Republic of Nauru are referred to the Standing Committee on Public Works in accordance with the Public Works Committee Act 1969 (Cth).

Senator Macdonald asked what we would like to do. His notion of invading Nauru will just go to the bin where it should be.

But what we do know is: there is an evidentiary and documentary trail showing that the Labor government completely honoured and followed the probity and scrutiny of the public works act. We know, because we have the two second reading speeches or the two contributions in the other place where exemptions were sought on the basis of expediency and urgency for urgent works on Nauru. And we know that there was commitment given by those respective ministers that the Public Works Committee would be kept fully informed as to expenditure and the like on Nauru.

We also know that the incoming Abbott government—the Hon. Tony Abbott, the Prime Minister, and his ministers—have not followed that seeking exemption or expediency motion. They have simply gone on to spend enormous amounts of public money without the proper scrutiny of the public works committee. We also know that the Minister for Finance in this place is the only one who can give an exemption. The Minister for Finance can give an exemption to a department. Then they need to go to the other place and seek an expediency or urgency motion, spell out the reasons and get on with it. They have not done that.

Under questioning during the inquiry process that we undertook they said, 'Don't worry about that because we keep the public works committee informed.' I have to tell you they have not. Every time they have informed the public works committee, the public works committee has said to me, 'We've told them to put some documentation to us.' You need to follow this through and the department has not done that. We know that when he was minister, Minister Morrison on water said, 'I don't talk to anybody. No information will be forthcoming.' This is not on water. This is on land. This is on Nauru. We know that a company called Canstruct has had two contracts—one for $36 million and another for $16 million, which, incidentally, met the threshold of the public works act scrutiny—which were never referred. These are the grown-ups in charge.

We know from the department's evidence that $1.3 billion has been spent in Nauru. We know that $450 million was spent in 10 months—$2,000 a day per asylum seeker; $1.3 million a day; $610,000 per asylum seeker to live in a mouldy tent. I will take that back; the evidence is that it is a marquee. But after 402 days a marquee is pretty well a tent. I have to tell you that after 402 days, the average length of time that they spend there, it is basically a tent. It is 10 by 12 metres and there can be six families in there. There is mould on the inside and that is in a climate the same as Darwin. The public works committee would have tested that for fit for purpose, in the public interest, value for money and the like. But it never came our way.

The department have the gall to say, 'We have received legal advice that this is aid to another country and does not have to come to the public works committee.' I am not able to provide that legal advice today, but there will be a point when I am. I have seen the legal advice and I have to say that the legal advice they have got does not say what they told us it said. It does not say that. The public works act has applied to every bit of construction on Nauru since this government took office and it has been cloaked in secrecy. It has not been subject to parliamentary scrutiny. There has been no transparency about it. It has been treated basically like the on-water matters: 'Don't you worry about that. We're not telling you.'

This culture of secrecy and lack of transparency has masked an appalling outcome. This is really bad public policy: $1.3 billion of taxpayers' money spent in an appalling way. Senator Macdonald says, 'What can we do with the tiny Republic of Nauru?' We have paid the Republic of Nauru $27 million, $1,000 a month for every asylum seeker, as a visa. We have paid the Republic of Nauru $8 a square metre for however many hectares the detention centre occupies. We have poured money into a country with a GDP of US$112 million, in addition to our foreign aid, which is about 25 million. We have poured money into that tiny republic. All I am saying is that we could have used that influx of money to turn Nauru into a much better republic.

We could have assisted, quite appropriately, with the refurbishment and improvement of their hospital and their school. But we have got a jail there, a detention centre, which has 800 guards. We are spending enormous sums of money on a very tiny tropical island as if it is them and us. These people are asylum seekers. I do not think there is any evidence that they are going to rise up and take over the community in Nauru. When they are in a situation requiring fair and just treatment they should be able to get it. All I am saying is that our incredible investment in this tiny republic should have got a better outcome.

The more we talk about it, we see that it is common sense. If we are investing huge sums of taxpayers' money then why can we not have a win-win? Why can the Republic of Nauru not win? Why can they not have a better trained police force? Why can they not have a better legislative and magistrates area? Why can they not have a better hospital and a better school? Why can we not do all of these things? Basically, we cannot do them because there is a culture of secrecy with the department knowing best and delivering appalling outcomes.

They had to do the Moss review. It was an independent inquiry. The department have picked up the 19 matters, but they are looking after themselves. There is no evidence that they are actually up for any accountability or scrutiny. You cannot get in as a journalist; it costs $8,000 and is non-refundable. You cannot get there to have a look at what is going on. Facebook has been closed down. All sorts of anti-democratic measures have been taken in that place and we are paying for it. If you look at $450 million over 10 months, that is four times their GDP.

And you are telling me that we cannot influence these people to provide better certainty of outcomes and that we cannot even get the processing of the refugee claims speeded up? That is absolute nonsense. We do not need to go to war with people, as Senator Macdonald alleges. We just need persistence and common sense: 'We are underpinning your economy. We want this to be a fair and just outcome for people.' They are people, after all. You might want to denigrate them and call them asylum seekers, but they are human beings. They are under our protection and control and we have a duty to do better, not to do worse.

Senator Macdonald decries the work of this committee, but all I can say is that I will just keep bringing the evidence to this place. I will use every opportunity to get on the public record all of the evidence about what we are doing wrong. All the department has to do is follow the rules of the parliament. If it is more than $15 million and it meets the criteria of the public works act, refer it. We do not travel to Nauru; we have a look at what is being done. If you put a contention up to us that you are going to put six families in a 10 by 12 marquee for two years and you are going to spend $36 million doing it, most people on the committee, of whatever political persuasion, would say, 'I think we need to think about that; that might not be the best use of taxpayers' money.'

Senator IAN MACDONALD (Queensland) (18:38): If we are to believe what Senator Gallacher has just said—and I almost believe half of it—again I have to ask Senator Gallacher why was he part of a government that set this up?

Senator McEwen: You are the government.

Senator IAN MACDONALD: It was the Rudd Labor government, supported by the Greens political party, that went into this arrangement. Those listening might say, 'Gee, that Senator Gallacher had some good points.' Yes, he did. But can I explain that these arrangements, these agreements, are made between one sovereign nation and another—and they are agreements that go for a long time. The government of Australia that made this deal, this agreement, with the Nauruan government that Senator Gallacher now criticises was the Rudd Labor government of which Senator Gallacher, Senator Conroy and the Greens political party were a part. Anyone could have said at the time that doing this as a pure political measure in the run-up to the 2013 election was fraught with danger. It was not clearly thought through, and the public servants who were trying to advise the government were given strict deadlines—'This has to be done tomorrow because we are going to an election and we need to pretend we have fixed the boat people problem.' Senator Gallacher made reference to 'asylum seekers' being a term of denigration. He might think it is a term of denigration but the Abbott government has just agreed to have 12,000 asylum seekers permanently settled in Australia and so 'asylum seekers' certainly is not a term of denigration as he was suggesting. But that is beside the point.

In defence of public servants who cannot themselves respond to the accusations of Senator Gallacher, the Department of Immigration and Border Protection, as it then was, was the most harassed and overworked department in the days of the previous Labor government. Many departmental officials were absent on stress leave because they were required to process the tens of thousands of people illegally arriving in Australia. They saw some horrendous, some horrific, situations. Public servants, politicians and anyone who had to deal with those horrendous situations day after day after day were being overworked, doing long hours to try to cope with the unregulated influx of people entering Australia in the wrong way. For a parliamentarian to criticise those people, then and now, is unfortunate. Senator Gallacher says the department says that they have legal advice that the Public Accounts Committee cannot go and look at a situation in another country, but Senator Gallacher does not believe that. I have to say, with respect to Senator Gallacher, give me a departmental official with the benefit of the best legal advice as opposed to Senator Gallacher's advice, based purely on politics—I will always take the public servant with good legal advice. Senator Gallacher says the department knows best. I make the same qualification: give me the department, with all their resources and expertise and professionalism, over the allegations of the likes of Senator Gallacher and Senator Hanson-Young. I will take the department's evidence any time.

Senator Gallacher, as I understood him, implied that Commissioner Moss was 'looking after themselves'. I think they were his words—if I have misquoted him in the Hansard I will withdraw that later. That is what I understood him to say. To suggest that someone as well respected as Mr Moss would be 'looking after themselves' is an awful accusation and should be withdrawn. Senator Gallacher also talked about this country having antidemocratic measures. Thanks, Senator Gallacher, it is nice of you to say that now—but where were you when your government entered into the arrangement with this government you are now referring to as antidemocratic?

Senator Hanson Young, in a previous debate we were having on a similar subject, made a big point about this being a serious subject because women and children are being raped—and it is a serious subject. You would think from Senator Hanson-Young's contribution that she was the only one in the whole of this parliament concerned about that. I would say that every other member of this parliament has the same concerns, and that is why the Abbott government has spent quite a lot of money in pursuing these issues, in trying to bring perpetrators to justice where the Australian government has jurisdiction to do so. That is why it has accepted most, if not all, of the recommendations of Mr Moss. Everybody is appalled by that sort of behaviour but it is a question of what Australia can do about it when it happens in another country. If you look around the world any day of the week you will find things happening in other countries that most Australians would find abhorrent. But there is not a lot Australians can do except what the Abbott government has done: within its jurisdiction to provide every assistance to bring criminals and perpetrators of injustice to account. Again I say to Senator Hanson-Young that I can see that the Greens political party did not support the Labor government on this particular issue, but they kept the Labor government there for six years. At any time they could have got rid of a government that was so awful that it made this rushed decision which results in all of the problems that have now been enumerated by Senator Gallacher and Senator Hanson-Young.

I assure senators and those who might be listening to this that the Abbott government will do everything within its power, regardless of cost, to try to look after the safety and welfare of anyone for whom this nation is responsible, wherever they are in the world. There is not always an easy one-liner to respond with, but that is happening and is what the department is very professionally doing. I thank the relevant department, now the Department of Immigration and Border Protection, for the work they continue to do in protecting Australia's borders and in stopping the sorts of mass drownings that we saw occur under the Labor government with the unregulated flow of people smugglers and their clients into this country. I thank those public servants for a job very well done. As a parliamentarian I apologise to them that some of their actions have been criticised by a fellow parliamentarian. They do a wonderful job. I thank them for what they have done for Australia. They deserve our thanks and credit. I seek leave to continue my remarks later.

Leave granted; debate adjourned.