Senator GALLACHER (South Australia) (10:02): I would like to speak on this very important piece of legislation—the Transport Security Legislation Amendment Bill 2016. It is probably widely known to, particularly, representatives in this chamber who move through airports on a regular basis—internationally and domestically—how important transport security is. Maintaining a modern system of transport security is a critical function of any government. Recent history illustrates the need for ongoing vigilance, especially in the aviation and airport sector. Labor has a very strong view that aviation security must always come before partisan politics. This legislation provides some simple but necessary changes that will ensure Australia is up to date with the modern system of transport security.

Australia is a signatory to the Convention on International Civil Aviation, also known as the Chicago Convention, which governs international aviation. Recently, ICAO—the body which is established under the Chicago Convention—increased standards for screening of persons, goods and vehicles in security controlled zones and airports, and there is a need for Australian legislation to be updated to reflect this higher standard. The important point is the increased security in cleared zones.

In a previous life plus one, I actually worked at an airport for over a decade, and I have to tell you that the security in those days was hit-and-miss and problematic, but we lived in a much more benign environment. It has improved strongly since the seventies. The introduction of the aviation security industry card was a very positive step, but what happened alongside the growth of the airline industry was the introduction of a much more competitive framework which meant that employment standards for people in the aviation industry changed—or, arguably, at least their take-home pay dropped. So you had much more part-time employment, much more casual employment and much more competition in the catering sector that supplied airlines. You had competition introduced into the baggage-handling sector of supply of airlines and competition introduced into the freight-forwarding sector. So a plane gets off the ground with a full complement of passengers sitting in seats, and below deck there is an enormous amount of cargo, mail and the like.

There are a number of disparate sectors that combine, if you like, to make that efficiency happen in the economy. Naturally enough, through a free and open market economy, competition to provide those services has increased, and, arguably, it has increased the number of people accessing secure zones at airports. In fact, that is not an argument—that is a fact. The number of people accessing secure zones at every airport in Australia has increased. What has not increased, in my view, is the level of scrutiny and insurance. To be perfectly frank, in the old days it was a great job and you did not stuff it up. These days, it is much more of a part-time—indeed even casual—type of employment. Unfortunately, that degree of competitive pressure increases the potential for risk.

I can remember when the ASIC was introduced. I can remember an actual case with an Australian soldier. He served in the Australian Army working for a freight-forwarding company. He had been working for the company for three years. He could not get an ASIC. It took an inordinate amount of time for him to get an ASIC clearance, and the reason, quite simply, was his surname. His surname was one that attracted the attention of the authorities who approved the ASICs, and they took an inordinate amount of time to approve it. In that time he was virtually denied the opportunity to work at the airport and in the secure areas.

This legislation will authorise the screening of persons, vehicles and goods which are already in the security zone at an airport. So you will have a card to say you are okay to access an airport, but on a regular basis you may well be scrutinised throughout the course of your duties. At the moment, if people leave Adelaide Airport to go for a break they go through a security section and they do not come back that way. So they take their boots off, go through screeners and, if they have gone outside for a medical appointment or to access the car park, they come back through a secure screening point. All visitors are obviously screened. These are critical functions undertaken very well.

At the moment when you are on the job around the airport unloading, loading, moving baggage and freight, and being a security officer you are not subject to scrutiny inside the airport. Recent events, including the bombing of a Metrojet flight in Egypt in October in 2015 and the attempted bombing of a Daallo Airlines flight in Somalia in February last year, underscore the potential threat. I think Australia is at of the same level of risk as anywhere else, but it would be prudent, given the discovery and prosecution of people who have smuggled drugs into Australia, to make the obvious conclusion that criminal activity may not be just related to those. There have been occasions around the airports of Australia where there has been inside knowledge and inside assistance, and people have been prosecuted for assisting in various nefarious activities—the smuggling in of drugs and the like. So obviously there is a need to increase and authorise the screening of persons.

How each airport will use this authority will be a matter between the airport and the Office of Transport Security. Security plans are approved for each airport, so naturally enough the office will go and have a look at the potential risk and they will come up with a security plan. That security plan will then be put in application. The government has indicated that these new arrangements will apply at nine airports—mainland capitals plus the Gold Coast and Cairns. So obviously someone has done a risk assessment of those airports and security plans will be put in place.

The legislation sits alongside enhanced security awareness training for employees and contractors who work in security zones. That training and awareness is probably where most of the good work that we do can be done—deterrence, deterrence, deterrence. People need to be aware that they need to be approved for entrance into an airport and that they need to qualify for their aviation security identification card. They then need to be absolutely aware that whatever facet of their employment they are undertaking in that secured area can also be security checked. I think this is useful and good legislation.

It is important to note, given developments in the current world environment, that the explanatory memorandum to this bill includes the following commitment in a formal statement of compatibility with human rights. On equality and nondiscrimination it says all people have the right to be treated equally and, in keeping with Australia’s egalitarian screening regime applied to aviation passengers, selection of airline or airport workers, visitors and contractors for screening inside the security restricted areas of airports will be purely random. Individuals will not be selected according to their race, religion, gender or other personal characteristics.

As I said earlier, I was aware of one particular case where a person did not get their ASIC for an inordinate period of time. It impacted on his employment. The person was Muslim. He had served in the Australian Army creditably. He was in the transport industry and when the initial ASIC came in he made representations. We were none the wiser. It was over a six-month period that he was seeking his clearance. No clearance was forthcoming. His job was under jeopardy and pressure.

It is extremely important that when this security checking is undertaken of security cleared people in an airport we do not have any stereotyping searches and we do not have anybody doing anything but introducing it purely at random. It should go across all categories, including management. Mine sites do this particularly well with their drug and alcohol policies. Their staff report to work on a day and if their number comes up they go and do the random relevant drug and alcohol testing. As a bit of advice to people: if you do it on a purely random basis it has an immense deterrent effect. No-one who works in that area can be sure that they are not going to be called up and security checked on that day. So a random basis is robust and effective. Labor is strongly of the view that random testing free of any focus on race, religion, gender or personal characteristics will underpin a much more secure Australian airport environment.

On privacy in a case where a frisk research is necessary, an individual may request that the procedure occur in a private room or within a screened area. A frisk search will always be undertaken by someone of the same gender as the person being searched. Airports and governments need to ensure that arrangements exist for this to occur on those occasions. Given our knowledge of various airports around the world, I am sure the facilities exist to be able to undertake those activities.

This bill, the Transport Security Legislation Amendment Bill 2016, also authorises greater delegation of powers under aviation and maritime security legislation, such as powers to approve security plans and variations to these plans. This will permit quicker responses—and I think this is absolutely to the heart of security, that we need to be able to respond efficiently, effectively and quickly. The last thing that operators of airports need is to know the challenge exists and not be able to deal with it quickly. This bill will authorise the greater delegation of powers and permit quicker responses.

While some of the language from the government is around removal of regulatory constraints—red tape removal—Labor believes that transport security is too important to be a mere exercise in extending light-handed regulation. While regulatory settings should always be reviewed, Labor supports this legislation first and foremost because it updates security measures to be consistent with world standards, and because it includes an additional and sensible option that enhances the object of removing threats to aviation security.

In Australia we have an enviable safety record. It is a credit to our existing system of regulation. It is a credit to our workforce in the aviation sector—diligent, hardworking, loyal, alert and aware participants in a vital sector of the economy. Having been a worker in that sector, I can attest to the fact that people are smart, they are alert, they are aware, they do look after their environment, and they do look after their industry as best as they possibly can. This legislation will simply build on that existing record. With more than 150 million passengers flying through Australians skies each year, Labor will always support sensible measures that protect Australian citizens and continue the nation's reputation for airline safety. I know in my own home port of Adelaide that we have seen the introduction of international carriers—I suppose the only nagging concern I have there is that the only international that does not fly out of Adelaide is Qantas: they do not take an international route out of Adelaide. But we know now that we are getting China Southern, and we have Cathay Pacific, Qatar Airways, Emirates, Malaysia Airlines and Singapore Airlines. It is one of life's great mysteries why the great name Qantas is not in that space, but perhaps that will fix itself over time.

We believe this bill is sensible, effective, efficient legislation, and we strongly support it. It is vital to the safety of the 150 million passengers flying through Australians skies each year. The legislation builds on what we believe is Labor's strong track record in aviation and airport security. When Labor was in government, we oversaw the strengthening of the security regime applying to air cargo, committing $54.2 million to install X-ray screening technology at freight depots. That is probably paying off as we speak, with the introduction of a lot of the new Middle Eastern carriers who are sourcing fresh fruit, meat and other produce out of Australia. That X-ray facility is probably eliminating a lot of red tape and a lot of hurdles to export for our primary producers. I have certainly seen and heard in the Middle East that they are very satisfied with some of the produce that they are able to airfreight out of our airports.

Labor invested an additional $200 million in the nation's aviation security funding which facilitated the introduction of the new and improved technologies at the airport, including the latest body scanners. Those are in effect at all of our airports—and I am not sure which came first, Australia or overseas, but I certainly had to pass through some scanners on a recent trip overseas. The next generation of multi-view X-ray machines and bottle scanners are capable of detecting liquid-based explosives. If we were able to get away without the 'take out your water bottle'—and we all know the case of someone who is in the queue in front of us, who happens to have transgressed most of the advice that they got before they got to the airport, and they go to the scanner with a bottle of water or oversized liquid containers—perhaps if we did have a proper X-ray proposal that picked up the dangerous things that we are looking for, there would be a couple of benefits there: we would get through the line more quickly, and there would be less waste at the various airports.

In relation to increased policing around airports—as we travel around Australia and the world and we see the additional presence at airports—it is an unfortunate necessity. It is not pretty to see people standing with guns at airports but, unfortunately, it seems to be the way of the world, as we speak. Improved security at regional airports is one area where we probably need to be very vigilant. The size of aircraft operating to some of our regional areas now is not insignificant; I know if they are over 30 tonnes, we need to have security facilities in place. If people are truly looking for a weakness in our system, then it probably is in our regional airports—and probably quite properly, given there have been no incidents and the number of passengers is relatively low. It could be an area of concern, but I am sure that those who own the airports will know to put in place good plans. I am sure that the workforces in those areas will recognise the need for those plans and, provided they are introduced with consultation and cooperation, I am sure that those security plans will be very good. They will continue to protect the 150-odd million passengers that are transported by our aviation industry. I support the legislation before the chamber.

Senator ROBERTS (Queensland) (10:21): As a servant to the people of Queensland and Australia, I rise to speak in support of the Transport Security Legislation Amendment Bill 2016. This bill will amend the Aviation Transport Security Act 2004 to allow people, vehicles and goods to undergo aviation security screening within an area or zone at a security controlled airport. The bill will also amend the Aviation Act and the Maritime Transport and Offshore Facilities Security Act 2003 to allow the secretary of the Department of Infrastructure and Regional Development to delegate his powers in the acts to more junior Australian Public Service employees.

The declared purpose of the aviation and maritime acts is to safeguard against unlawful interference with aviation, maritime transport and offshore oil and gas facilities. This bill seeks to introduce measures at Australia's major international airports and ports to mitigate what is known as 'the insider threat'. Airport workers such as baggage handlers, caterers, cleaners and engineers have special access to passenger aircraft so they can carry out their important and valuable roles. However, there is potential for this access to be exploited, either willingly or through coercion, to facilitate an attack against a passenger aircraft and its passengers and crew.

The Department of Infrastructure and Regional Development, in consultation with the aviation industry, has developed a new model for strengthening airside security at Australia's nine major international airports to address the insider threat and to ensure Australia meets its international civil aviation obligations for airside security. These measures, introduced through the bill, are part of a broader suite of regulatory amendments that give effect to the models three components: controls to ensure people, vehicles and goods entering airside areas at Australia's major international airports are authorised to do so; screening of people, vehicles and accompanying goods entering and within the airside areas of the major international airports to detect unauthorised weapons and explosives; and security awareness training for airport and airline employees, including contractors who regularly work within airside areas at the major international airports.

The bill will introduce regulation making powers into the Aviation Act that will enable people, vehicles and goods to be selected for security screening when they are inside an airside area or zone at security controlled airports. This complements existing provisions in the act that provide regulation making powers for the screening of people, vehicles and goods before they enter an airside security area or zone.

The underlying aim of this bill is sound in that it strengthens security measures regarding airport workers, a surprising number of whom are Muslims or other recently arrived immigrants. However, absurdly, this bill subordinates itself to political correctness by refusing to target profiled high-threat groups for screening, and instead boasts:

All people have the right to be treated equally. In keeping with Australia’s egalitarian screening regime applied to aviation passengers, selection of airport and airline workers, visitors and contractors for screening inside the security restricted areas (SRAs) of airports will be conducted on a purely random basis. Individuals will not be selected according to their race, religion, gender, or any other personal characteristic.

Note that screening is to be conducted not in accordance with the threat advice of the Australian Federal Police and ASIO but on a non-discriminatory basis. According to the government, it seems that being non-discriminatory is more important than complying with the advice of our security and intelligence agencies, more important than saving Australian lives. In other words, according to the government a law abiding Christian Aussie from Toowoomba is considered equally likely to be an airport security threat as the killer of Curtis Chang on the streets of Sydney or the Lindt Cafe killer Man Monis.

The fact is that the only way police or security services solve crimes is by targeting individuals with the most likely threat profiles as a first step. Given that screening resources are limited, preventing security screening on the basis of threat groups necessarily means that resources will be spread too thinly and some dangerous elements are likely to be missed. In other words, genuflecting to the politically correct nonsense that airport security screening must be carried out in a non-discriminatory way actually weakens our ability to identify threats to aircraft security. Given that this will mean that some potential threats to our air security will be missed, political correctness risks the lives of Australian travellers.

In the interests of our air travel safety and that of our children, I implore the government to stand up against political correctness and allow prioritisation of screening of those profiled as members of threat groups such as Islamists, particularly those born overseas. Political correctness does not unite; it separates, disrespects and devalues. Accordingly, I foreshadow that I will be moving an amendment to remove this politically correct limitation from the bill and allow our security services to use their finite resources to target individuals profiled as members of high-threat groups such as Islamist immigrants from the Middle East.

The effect of these proposed amendments will be to remove the requirements in the Aviation Transport Security Regulations 2005 for security screening to be conducted randomly and to then amend the Aviation Transport Security Act 2004 to require that screening of individuals be conducted prioritising individuals profiled as members of high-threat groups in accordance with the advice of the AFP and ASIO. One Nation's sensible and highly necessary amendments will allow our airport security personnel to focus their finite resources on the groups of greatest threat, in accordance with the advice of the Australian Federal Police and ASIO, leading to greatly enhanced security and safety for all law abiding Australians.

The fact is that current airport security laws and regulations suffer from divided aims. They try to provide for effective screening, but this aim is compromised by their efforts to also avoid offending vocal minorities. However, if we want to do everything possible to protect Australian families travelling by air, we need to have a single, clear objective untrammelled by fashionable left-wing deference to other political and control objectives.

The fact is that, however much some here may try to duck and weave, run and hide or try to obfuscate the real issue, politicians who support the politically correct goal of nondiscrimination over the safety of our airports are failing to protect Australian families from terrorists. Let us be clear: only Pauline Hanson's One Nation stands uncompromisingly for doing whatever is necessary to safeguard our families. Only One Nation has the guts to say the things that need to be said and to do the things that need to be done. These amendments are an important part of that commitment from us. Of course, I can see across the chamber increasingly red-faced Greens, on a daily basis already starting to fulminate with confected rage that anyone should dare to question their politically correct shibboleths. But let me be clear: Pauline Hanson's One Nation does not question the Greens' sacred politically correct beliefs at all; we refute them utterly. The very idea that anyone would rather risk the safety and security of Australians than admit that their absurdly naive, rose-tinted vision of the world is a child's fantasy is simply offensive. Actually, it is offensively stupid.

Then of course, there are those who do not actually believe in the Greens' 'kumbaya' nonsense but fear the raised voices and clenched fists of their rent-a-crowd supporter mob and their leftist media allies. Such people know that compromising our security is simply wrong, but they lack the courage to tell the truth for fear that the political correctness lynch mob will come for them. To those senators, for whom folding like umbrellas in the face of every squawking minority has become a way of life, we urge you to take the next evolutionary step and join the ranks of the vertebrates. Carpe diem. The time has come for all of us in this country to stand up against the politically correct nonsense that currently hamstrings our security procedures at all airports.

Senator NASH (New South Wales—Deputy Leader of The Nationals, Minister for Regional Development, Minister for Local Government and Territories and Minister for Regional Communications) (10:32): I thank all senators for their contribution to this debate. The Transport Security Legislation Amendment Bill 2016 will ensure that Australia's transport security framework remains responsive to the evolving security environment and efficient as the transport sector grows. The bill amends the Aviation Transport Security Act 2004 and the Maritime Transport and Offshore Facilities Security Act 2003 to introduce and strengthen airside security measures at Australia's major international airports and to increase the efficiency of government regulatory assessment processes.

A terrorist attack on Australian aviation could result in loss of life, severe economic consequences, public loss of confidence in both the government and the aviation sector and damage to Australia's reputation as a safe and secure destination for international air travel. The bill will strengthen Australia's already robust aviation security system by allowing the implementation of screening in airside areas. This security screening will be applied to airport workers who have access to passenger aircraft in the course of their employment as well as their vehicles and any items they carry.

This new airside security screening will form part of a package of measures to mitigate the insider threat to Australian aviation, which is planned to be rolled out at Australia's highest risk airports over the next year. Implementation of these measures will be progressive, allowing industry time to undertake any necessary capital works and to hire and train staff. Aviation workers who are subject to security screening under the new arrangements will be afforded the same protections as passengers to ensure they are not subject to racial or religious discrimination and that their privacy is protected. These measures will ensure Australians continue to enjoy safe and secure air travel and that Australia remains at the forefront of international best practice.

The bill also implements measures to allow the Secretary of the Department of Infrastructure and Regional Development to delegate his powers in the Aviation Transport Security Act 2004 and the Maritime Transport and Offshore Facilities Security Act 2003 to lower level Australian Public Service employees. Given the predicted growth in the transport sector and the evolving security environment, these amendments will give the government administrative flexibility. This will ensure that regulatory submissions can be effectively assessed in statutory time frames and that industry demands can continue to be met. The secretary remains responsible for determining which powers under the acts are appropriate to delegate. Significant and complex regulatory powers will remain at senior levels, while only simple regulatory decisions will be delegated to lower level employees.

I thank members for their very constructive contribution to this debate again and I commend this bill to the Senate.

Question agreed to.

Bill read a second time.

Senator NASH (New South Wales—Deputy Leader of The Nationals, Minister for Regional Development, Minister for Local Government and Territories and Minister for Regional Communications) (10:35): This bill will clearly contribute to the ongoing security measures we have as part of our transport system. I think, clearly, there are a number of measures in this bill which will enhance those operations and ensure that we have the security processes in place that we need in our aviation sector.

Senator ROBERTS (Queensland) (10:36): by leave—I move amendments (1) and (2) on sheet 8063 standing in my name.

(1) Schedule 1, page 3 (after line 11), after item 2, insert:

2A At the end of section 41

Add:

(6) Screening of individuals is to be conducted in accordance with the advice of the Australian Federal Police or the Australian Security Intelligence Organisation, in general prioritising individuals profiled as members of high threat groups.

(2) Schedule 1, page 4 (after line 3), after item 7, insert:

Aviation Transport Security Regulations 2005

7A Subregulation 3.16D(4)

Omit 'random'.

As set out in the circulated amendments, on behalf of Pauline Hanson's One Nation, our proposed changes to the Transport Security Legislation Amendment Bill 2016 will refocus security screening from its current deference to political correctness to the single goal of minimising risk to air travellers by responding to identified threats. Specifically, our amendments to the bill before the Senate seek, firstly, to delete the word 'random' from regulation 3.16D(4) of the Aviation Transport Security Regulations 2005; and, secondly, to add a subsection (6) to section 41 in part 4 of division 2 of the Aviation Transport Security Act 2004 to state:

Screening of individuals is to be conducted in accordance with the advice of the Australian Federal Police or the Australian Security Intelligence Organisation, in general prioritising individuals profiled as members of high threat groups.

Currently, airport screening is to be conducted not in accordance with the threat advice of the Australian Federal Police and ASIO but on a non-discriminatory, random basis. This ridiculous situation subordinates screening of the highest risk individuals to the political correct goal of being nondiscriminatory. In other words, this places politically correct ahead of the safety and security of Australian families. This left-wing control madness must end. These proposed amendments will remove the requirement in the Aviation Transport Security Regulations 2005 for security screening to be conducted randomly and then amend the Aviation Transport Security Act 2004 to require that screening of individuals be conducted whilst prioritising individuals profiled as members of high-threat groups in accordance with the advice of the AFP and ASIO.

One Nation implores other senators to put the safety of our loved ones first and support our efforts to align our security procedures with those of the Israelis and the Americans, for whom airport security is a non-negotiable priority. In that spirit I commend One Nation's amendments to the chamber.

Senator NASH (New South Wales—Deputy Leader of The Nationals, Minister for Regional Development, Minister for Local Government and Territories and Minister for Regional Communications) (10:39): I indicate to the chamber that the government will not be supporting the proposed One Nation amendments. As the minister in the other place said and as I stated here this morning, aviation workers who are subject to security screening under the new arrangements will be afforded the same protections as passengers to ensure that they are not subject to racial or religious discrimination and that their privacy is protected. The bill will provide airports with the flexibility to determine the best way to implement security-screening controls for the airside areas and submit their transport security plan to the Office of Transport Security for approval. The bill will also ensure that Australia is meeting its requirements under the Convention on International Civil Aviation.

Senator FARRELL (South Australia—Deputy Leader of the Opposition in the Senate) (10:39): I wish to advise Senator Roberts that the opposition will not be supporting these amendments. We believe they would allow racial profiling, pure and simple, an approach that law enforcement and national security organisations, both here and overseas, including the United States, are opposed to. When the police and national security agencies start targeting people based on their race it effectively puts a whole community under suspicion. What is more, it virtually guarantees that the innocent will regularly find themselves stopped for little reason beyond the colour of their skin. Racial profiling can also poison relations between authorities and the community. When minority groups feel they are under constant suspicion they are less likely to pass on information that could be vital to solving crimes and, more importantly, preventing terrorist attacks.

Lastly, as the bill's explanatory memorandum quite rightly states:

All people have the right to be treated equally. In keeping with Australia’s egalitarian screening regime applied to aviation passengers, selection of airport and airline workers, visitors and contractors for screening inside the security restricted areas … of airports will be conducted on a purely random basis. Individuals will not be selected according to their race, religion, gender, or any other personal characteristic.

That is the kind of Australia that the Labor Party wishes to continue to stand up for.

Senator RICE (Victoria) (10:42): The Greens are also opposed to Senator Roberts's amendments. We completely reject the hurtful, hateful racism and Islamophobia contained within the proposed amendments. We know that the so-called Christian Aussie that Senator Roberts referred to as being less likely to be a terrorist is in fact just as likely to be a terrorist as any other race of people in Australia. As the Prime Minister has reinforced today, we live in the most successful multicultural nation in the world. The reason we are the most successful multicultural nation is that we respect and celebrate difference and we know that people, regardless of their background and race, are free to be law-abiding Australian citizens.

If Senator Roberts's amendments were successful, everyone of Muslim background would be much more likely to be screened, regardless of there being no justification for that. We know that it would mean that people would be feeling that division. We know what breeds hatred in our community, and it is the racist, hateful and hurtful positions of One Nation. That is what is breeding hatred. It is, in fact, what is breeding unlawful activity in our community. We know that treating everyone equally, regardless of their background, and encouraging and supporting their sense of being valued by all Australians is what will keep us safe.

The Greens want to send the message to people from all backgrounds in Australia that we consider Australians all equal here. We want to keep everybody safe and we know the way to do that is to treat everybody equally. In measures like this, where we are concerned about the safety of Australians, every Australian has the right to be treated the same and treated as equally as other Australians.

Senator ROBERTS (Queensland) (10:44): I would like to know from the minister whether or not ASIO and the Australian Federal Police are considered to be incompetent or competent? If they are incompetent, why should we have them? I am reflecting a significant proportion of our community's concerns. I will speak up, no matter how I am denigrated, because I believe that I am a servant to the people of Queensland Australia and people have significant concerns. I want to know whether or not ASIO and the AFP are considered to be competent or incompetent.

Senator NASH (New South Wales—Deputy Leader of The Nationals, Minister for Regional Development, Minister for Local Government and Territories and Minister for Regional Communications) (10:44): Of course the government considers ASIO and the AFP to be competent. We have complete confidence in those agencies.

Senator ROBERTS (Queensland) (10:45): Minister, then why should we not follow their advice on particular groups and assess threats based on their competence?

Senator NASH (New South Wales—Deputy Leader of The Nationals, Minister for Regional Development, Minister for Local Government and Territories and Minister for Regional Communications) (10:45): I have outlined very clearly the government's position on this, and it remains the same.

The TEMPORARY CHAIR ( Senator Whish-Wilson ) (10:46): The question is that the amendments stand as printed.

Question negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

Senator NASH ( New South Wales — Deputy Leader of The Nationals, Minister for Regional Development, Minister for Local Government and Territories and Minister for Regional Communications ) ( 10:46 ): I move:

That these bills be now read a third time.

Question agreed to.

Bill read a third time.

Senator GALLAGHER (Australian Capital Territory—Manager of Opposition Business in the Senate) (10:47): Crowdsourced equity funding has been considered by parliament for quite some time, with both Labor and coalition governments progressing reform of the Corporations Act to allow for it to be introduced.

Equity crowdfunding allows start-ups or small businesses to raise capital over the internet. In return for that capital, online investors will get an equity stake in those start-ups and small businesses. It is a capital-raising platform that directly challenges the way in which the Corporations Act will operate, particularly when the number of investors exceeds the 50-shareholder mark, which would normally require a number of other legal obligations to be met. That is why Labor decided in 2013 when in government to ask the Corporations and Markets Advisory Committee—CAMAC—to consider the best regulatory framework that would allow for the operation of equity crowdfunding in Australia.

CAMAC looked at how other countries have introduced and operated equity crowdfunding within their jurisdictions. It is a very comprehensive and far-reaching report. Despite receiving CAMAC's recommendations in May 2014, the Abbott-Turnbull government dragged its feet and failed to rapidly consider and respond to this report and to do so by swiftly developing an effective viable framework for equity crowdfunding. Both the government and the opposition consulted separately with stakeholders about the equity crowdfunding framework CAMAC proposed. While very supportive of CAMAC's work, we on this side had some reservations about some of the things that were being put forward. We asked to see some refinements to CAMAC's approach and advocated for those through a discussion paper that Labor released. At the same time, the government said they had undertaken consultations that tested responses to three different scenarios: what CAMAC put forward; what New Zealand was operating as a crowdfunding framework; and the do-nothing option, which, frankly, was ridiculous, as no-one was seriously proposing that we do nothing.

We thought that New Zealand's arrangements were not suitable to overlay upon our current regulatory circumstances. We thought that elements of CAMAC's preferred approach were going to be difficult to enact because they would be cumbersome. Labor pushed for a midway point. When CAMAC brought down its report in May 2014, it took until December 2015 for the government to get its act together and unveil its legislation. On releasing their legislation, the government claimed they had consulted widely, had issued numerous discussion papers and undertaken rounds of stakeholder consultation. But, when legislation was suddenly put forward to the house in December 2015, they had not genuinely consulted with the opposition. It would become clear later that they had selectively listened to stakeholders or failed to take into account certain views.

We had previously worked in a bipartisan fashion with the Abbott government on this. We are just as keen as the government to see equity crowdfunding operate in Australia. We have a stake in this reform too because of the way we commissioned CAMAC to begin the groundwork for it. But the Turnbull government was not interested in this. They just chased the headlines, and what happened? Their 2015 legislation was roundly criticised for being cumbersome and costly and weighed down with red tape and restrictions. It was criticised because it contained a requirement that companies—small businesses and start-ups—would have to convert themselves into unlisted public companies. Again, it is worth remembering that the government told everyone it consulted it had a system that would receive widespread support and balance competing viewpoints. Labor expressed concerns about that unwieldy proposal, citing how it would impose larger costs on small businesses seeking equity crowdfunding. Despite the Abbott government's claims of being pro-business and anti red tape, it was Labor pointing out how the coalition were limiting the ability of small business to easily access capital or for investors to secure equity.

We believe a crowdsourcing funding resume needs to be easily accessible, fair and backed up with reasonable investor protection. Businesses should not be forced to change to public companies to access equity crowdfunding—simple as that. The decision to make a company publicly listed should be made by businesses when they are good and ready and not by the government. Why should smaller businesses spend a lot a money just to raise some money?

When the government's 2015 legislation was considered by a previous Senate inquiry, stakeholders indicated that putting this requirement in would limit, lower and prevent the number of businesses that would use this funding platform. Some said publicly that to go through the process of becoming an unlisted public company for the purposes of accessing this funding regime would be ridiculous. Off the back of the then Senate inquiry, the opposition made recommendations to liberalise the requirement to convert into unlisted public companies and lift the assets and turnover caps contained in the bill. We gave effect to these recommendations via amendments proposed at the time. The legislation lapsed due to the 2016 double dissolution election.

Following the election, the government reintroduced the bill in November 2016, but, while it heeded some of Labor's recommendations—specifically, those regarding the assets and turnover cap—it stubbornly clung to the demand for businesses to become unlisted public companies simply to access equity crowdfunding. When it released its new legislation, start-ups were quick to point out how unhelpful the legislation would be. Andy Giles, the co-founded of start-up Veromo, told the Financial Review:

Currently, the thought of switching to a public company to avail ourselves of a potential wider investor base is unthinkable.

On top of this, the government made other changes to its proposed bill that caused the opposition some concern. For instance, after all the public support for improving the rights and protections for mum-and-dad investors generally, the government decided to water down cooling-off protections in this bill. This is a matter I will return to later.

Not surprisingly, Labor referred this new bill to a Senate inquiry. During the second Senate inquiry, stakeholders raised precisely the same concerns about the public company requirement. References to this were common. Dr Marina Nehme, from the University of New South Wales law faculty, noted

Currently the Bill excludes over 99.7% of companies from accessing CSF. Such a reality defeats the purpose for introducing legislation to facilitate CSF as only a very small minority of companies will be able to raise funds through this mode of finance.

Another stand-out submission was from the Australian Small Business and Family Enterprise Ombudsman. What is remarkable is that the ombudsman, set up by this government to speak up for small business, could barely disguise its deep reservations about the bill. They submitted to the recent Senate inquiry, and the ombudsman's views massively undermined the government's position. The ombudsman commented:

As noted in the prior consultation papers around 99% of Australian companies are proprietary companies and a majority are small businesses.

They added:

This means that the vast majority of potential small business users of the new framework must wait for another, soon-to-be announced round of amendments and regulations before they can begin to make the necessary decisions and adaptions, including possibly taking the decision to switch legal structures and become a public company

Critically, the ombudsman said:

… we believe it would be more straightforward for small business if the current amendments were held off so that the full package of amendments were introduced at the same time.

That is the submission by the Australian Small Business and Family Enterprise Ombudsman, not an industry group or someone who could be dismissed by the government as a mere disgruntled stakeholder. This is a person empowered by the government to consider the impact of government legislation on small business, and that is the ombudsman telling the Turnbull government it can do better and that it should get it right the first time. We agree. You would think that the ombudsman, representing the kind of business eager to be involved in equity crowdfunding, would be listened to by the Turnbull government, but, unsurprisingly, no, it was not.

The ombudsman is not the only party raising concerns about the constraints contained in this bill. Note the remarks of Employee Ownership Australia and New Zealand to the inquiry:

Most companies only move themselves into the public company domain as a precursor to listing or when they reach a size that they are equivalent to a listed company. The key reason for this is the increased requirements on the company around reporting, disclosure, financials etc. and the costs associated with this. One of the key costs is the requirement to have an auditor and audited accountants (which smaller companies may not need). This can be significant costs for a smaller organisation, from $15,000 per annum.

They go on to say:

The financial statement and content requirements also may cause some concerns for entities that do not wish to give full disclosure for competitive advantage. The current transition period does not deal with the fundamental issue, which is the cost and complexity of this regime.

They have clearly outlined why it is unreasonable for the government to lump unnecessary regulatory and financial burdens onto the smart and entrepreneurial people Australia's economic future relies upon.

Concerns with the government's approach continue to mount rather than subside. In recent weeks, for instance, we had the following concerns levelled at this bill by VentureCrowd COO Sunny Yu:

We maintain that the public company requirement is unnecessary and creates significant burden and uncertainty for startup businesses looking to access this alternative and innovative source of funding. We need to be careful that the right approach is being taken and that the laws are effective to help startup businesses and achieve its objective of ultimately unlocking productivity and innovation in Australia.

The other aspects of this bill the opposition is concerned about relate to investor protections. Specifically, it has watered down the cooling-off period for investors from five to two days. Many of these investors will be mums and dads, grandparents, people trying to get ahead to retire and new investors using a new instrument platform. In other words, this new market may see retail investors put in tens of thousands of dollars and be told, 'You've only got two days to change your mind.'

Not keeping investor protections in this instance is one of our big concerns with the legislation. We do not think the bill strikes the right balance at all. The Treasurer twisted himself up when he tried to address this during consideration in detail in the other place. The Turnbull government had decided with business interests ahead of putting mum-and-dad investors first when he said:

We think it is better to design the regulation and the system in a way that will avoid gaming of the system, rather than to chew up endless resources in enforcement.

He simply lapped up the shaky logic of business interests that want to water down investor protection and potentially undermine confidence in this new, riskier fundraising platform.

Mum-and-dad investors should be protected so the pool of capital available to businesses expands as a consequence of new investors having confidence in the market. The protections are about building trust in the system. You cannot have a crowdsourced funding market without having the trust of the crowd. And, while talking about investor protection, we would like to see the government actually spell out how the $7.5 million allocated to ASIC for regulatory oversight would be used. The government often points to this money but rarely explains in clear terms how exactly the money will be expended.

During the recent Senate inquiry, stakeholders expressed concerns about the government's proposal to limit cooling-off rights for retail investors. For instance, I draw the Senate's attention to the submission of Chartered Accountants Australia and New Zealand, who said:

We also note the change to the cooling off period from 5 days to 48 hours for investors. Crowd-sourced funding is a new form of investment for many investors in Australia, we recommend the cooling off period is 5 days at this initial stage of adoption. Once crowd-sourced funding becomes more established, this cooling off period can then be reviewed and revised as appropriate.

Some potential crowdfunding platforms argue for the cooling-off period to be reduced from five days to two because they are worried about rivals gaming the system—signalling an intent to invest without following through with the investment. While we appreciate that concern, we do not support retail investors being made to shoulder greater risk instead of devising an appropriate market or regulatory measure to manage this type of event. ASIC, with enough guidance, could keep a close eye on frivolous or mischievous investors that pull funding as a disruptive mechanism against business rivals. We intend to move amendments to give effect to our view that the cooling-off period should be increased. We hope the Senate will back the call to support mum-and-dad investors.

There are other concerns we have with the bill—for instance, that it requires small business or start-ups to set up systems to individually respond to inquiries from a broad range of investors under the bill. They are meant to somehow field calls from any number of potential investors. How is a start-up supposed to have a sophisticated investor relations framework to do that? These are small outfits. Why wouldn't you compel them to field these inquiries individually, instead of allowing the platform, or the intermediary, to manage these inquiries? Having pointed that out, we will allow the government to demonstrate how its approach is more efficient and business friendly. We will simply coordinate our focus on the areas spelt out so far in this contribution to the debate: liberalising and freeing up the proposed equity crowdfunding framework while ensuring retail investors have enough time to contemplate a proposed investment.

The second point is easily addressed by simply increasing the cooling-off period to the five days originally envisaged by the government. The first point—liberalising the framework—can be done easily by one simple step. If a small business or start-up elects to use crowdfunding to raise capital, and it enters into an agreement with an intermediary to use their platform for this purpose, then the usual demands of the Corporations Act would be suspended other than for the other expectations triggered by the bill being debated. We put that forward by way of an amendment the last time and it has not been picked up this time. Apparently, the government thinks it is too hard to do. We think these are both reasonable propositions.

We would have hoped that the government would support these changes; however, it appears the government is not interested in bringing in an equity crowdfunding system that works. It just wants to introduce any system and then fix it up later. The Treasurer himself admitted in the other place that the government is working to bring in further legislation down the track that would do some of the things we have asked for, such as opening the crowdfunding market to privately held companies. This is because the government knows that the deficiencies in this bill may mean that the take-up of the new system might be low. He said:

As Treasurer, I will be bringing subsequent measures that build on this bill …

This sounds reasonable to start with, but those changes will also make this legislation pointless, because, if the government do indeed bring a second piece of legislation forward, we may have the problem of two systems operating at once, and we believe they should get this right from the beginning. Do not introduce a capital-raising platform for small business that 99 per cent of small businesses cannot access and then tell them, 'Don't worry, it will be fixed sometime down the track.'

We acknowledge that some stakeholders have expressed some support for this bill, but frankly that support is simply riding a sigh of resignation. These stakeholders gave up on the government bringing in a comprehensive framework. Remember, CAMAC brought down their recommendations nearly three years ago now, so some have been prepared to accept whatever the government dumps on the table. We do not agree with that position. We want to get this right the first time, not just chalk up a cheap win that needs to be undone later. Do not waste the parliament's time by coming along later in the year to fix the legislation. We know what is wrong with it now.

Again, we are just as keen as the government to see an equity crowdfunding platform or framework in place. It was Labor in government that tasked CAMAC to begin the job of developing an equity crowdfunding framework. We do support the government in progressing this further, and that is why we will not oppose the second reading; however, we will be putting forward amendments during the Committee of the Whole. We do not want to play games on this and we hope the government sees sense here.

To conclude, I will ask some questions I hope the government can adequately answer during this debate. Why is this half-baked bill being forced through? Why are we doing this in a two-step way instead of just doing this all at once? Why are you still insisting on the unlisted public company regime? Why are you reducing the cooling-off period and limiting the amount of time that new investors—retail investors, and mum-and-dad investors—have to consider whether or not they will go ahead with a considerable investment? Will the government spell out in very clear terms for the benefit of the Senate how exactly the $7.5 million allocation to ASIC for the introduction of equity crowdfunding is going to be expended? Which unit within ASIC will be responsible for providing oversight into the implementation and ongoing operation of crowdfunding in Australia, and how many ASIC officers will be assigned to this task? Further, how much money will the government be investing in boosting public awareness and understanding of equity crowdfunding? Can the government guarantee that by the end of this sitting it will have legislation to introduce that allows for a viable equity crowdfunding platform to work in this country?

We suspect the government will not be able to answer these questions in a meaningful way, although we do look forward to the minister's response. We will be, as I flagged earlier, prepared to move amendments to address some of the shortfalls that we have identified in this contribution today.

Senator XENOPHON (South Australia) (11:05): I rise to make a brief contribution to this debate and to outline my position and that of my colleagues on the amendments proposed by the opposition to this bill, the Corporations Amendment (Crowd-sourced Funding) Bill 2016.

I think the Economics Legislation Committee report gives a fairly neat summary of what crowdsourced funding is:

Crowd-sourced funding … also known as equity crowdfunding or investment-based crowdfunding, is an evolving concept in corporate capital-raising. Broadly, the term describes a company seeking funds—particularly start-up or early-stage capital—online from 'the crowd'. In exchange for cash, the company offers its equity. Equity offers are published through an online portal, also known as a funding portal; that is, a website.

That is a fairly neat summary in the economics committee's report on this bill.

I would like to start off by acknowledging the efforts of the member for Chifley, Ed Husic, who has devoted a lot of time and energy to this legislation. I also note and recognise the work of the government in responding to some of the concerns raised about the first version of the bill. This bill was previously debated in the 44th Parliament but lapsed on 9 May 2016. The main differences between the two versions of the bill are an increase in the assets and turnover thresholds of eligible companies from $5 million to $25 million and a reduction in the cooling-off period for retail investors from five business days to 48 hours. I welcome the increase in the turnover threshold but have some concerns about the reduction in the cooling-off period.

I note that the Senate Economics Legislation Committee in the majority report recommended that the cooling-off period remain at 48 hours. There were a range of views put forward by stakeholders. Equitise regarded them as 'one of the greatest potential threats to the fair and orderly operation of the market', while Chartered Accountants Australia and New Zealand recommended the five-day cooling-off period due to the fact that 'crowdsourced funding is a new form of investment'. The opposition's dissenting report expressed concerns at the higher risk that crowdsourced equity funding represents to mum-and-dad investors.

On balance, I think it is appropriate for the cooling-off period to remain at five days as originally proposed. The committee recommended that the government monitor carefully the implementation of the legislation and undertake a review of the legislation two years after its enactment. I would need to hear very firm undertakings from the government in relation to this review. The monitoring and review process as recommended by the committee is an appropriate and essential way to monitor the effectiveness of the cooling-off period, but I believe that cooling-off period ought to be five days, not two—not 48 hours. As crowdsourced funding becomes more established, the cooling-off period can be reviewed and, if appropriate, revised, but caution, a prudential approach, is to say that it ought to be five days for the sake of consumers for this new form of investment. So we will be supporting the opposition's proposed amendment to extend the cooling-off period to five days.

In relation to the issue of limiting access to crowdsourced funding to public companies, I note the concerns raised by the opposition and the Australian Greens. Excluding proprietary companies from the regime in the bill is concerning, but I note that the government has indicated its intention to develop and introduce a framework allowing proprietary companies to access crowdsourced funding 'as a priority' and introduce a bill in the 'near future'. I know that Senator Gallagher has been quite critical of that, and I can understand why she has. I am interested in hearing from the minister as to the time frame the government has in mind for introducing this framework, to fulfil the undertakings it has given, and when parliament can expect to see a bill reflecting this. I think the 'near future' is not specific enough. I think former Prime Minister Rudd used to say 'in due season', so at least it has not said that, but 'near future' does not seem to be specific enough. That is something that the government needs to address, I believe, in the committee stage.

Amending the Corporations Act to give effect to this policy objective is not a simple task, and it needs to be approached with caution and care. It should have been done by the government so that a complete crowdsourced-funding framework could be passed by the parliament. My concern with the amendment proposed by the opposition, as sympathetic as I am to it, is that it may have a whole range of unintended consequences in the sense that the legislative framework is not there to include proprietary companies and that the other consequential amendments that would need to apply in terms of probity and other prudential requirements for proprietary companies are not there for this. They are not there in this amendment. Even though I think that it is clear that this is the path that we need to go down sooner rather than later, we must have the right legislative framework.

However, the bill before the chamber should pass. I do have concerns, as I said, that the opposition's proposed amendment to allow for a wider range of start-ups to access the crowdsourced-funding regime may have unintended consequences at best or, at worst, jeopardise the passage of this legislation. So we are not inclined to support the opposition's proposed amendment (1) on sheet 8047 as circulated. While it would have made more sense to present a bill that does not exclude proprietary companies, this bill should pass, as it is an important step to open up early-stage capital markets, which will ultimately help businesses to grow and therefore create new employment opportunities.

In closing: we live in a fast-moving world. Through advancements in technology, the rapid exchange of ideas has opened up business opportunities that generations before us would never have believed possible. These are business opportunities that, if implemented properly, can support families and communities through the creation of jobs, but we must have an appropriate consumer protection framework. The importance of fostering potential small businesses must not be underestimated.

Going forward, crowdsourced equity funding will play an increasingly important role in small businesses realising their ideas and ambitions. It is encouraging to see that the government is taking action to help grow small businesses and start-ups in Australia. Crowdsourced equity funding is one part of this equation. I believe this bill ought to go further, but it needs to be done in a carefully considered and appropriate framework. It will be interesting to see the extent to which these provisions are taken up by companies and investors alike. However, we must remain vigilant and responsive to the needs of small businesses. After all, they are an integral part of our economy and society. If this bill achieves what it is meant to, that is unambiguously a good thing.

Senator McALLISTER (New South Wales—Deputy Opposition Whip in the Senate) (11:12): I rise to make a number of short remarks about the Corporations Amendment (Crowd-sourced Funding) Bill 2016 and to associate myself with the remarks made by our shadow minister Senator Gallagher. This is a really interesting area of business development. These are new models for small businesses and medium-sized enterprises to raise funds in ways that they have not been able to do previously. It does not mean, of course, though, that this sector is immune from exactly the kinds of problems and challenges that confront us in regulating all kinds of business enterprise. In this, as in all other things, we are looking to get the balance right between freeing up enterprises as far as is practical and possible to attract capital to get their ideas off the ground and protecting investors so that particularly retail investors, mum-and-dad investors, do not find themselves exposed to risks that they did not understand at the time when they placed their money in this company or find themselves exposed to legal constraints or problems that they did not anticipate.

In that regard, it is extremely frustrating that the bill that is before the Senate at this time presents only a partial response to the set of questions that we face for this sector. It is unbelievable, in fact, that this policy process was kicked off by Labor back in 2013, and here it is in 2017 and the government is proposing to establish a regime that, from the evidence given to the Senate committee, will only apply to perhaps one per cent of Australian companies. Doubtless, the government's response to this will be to say: 'Oh well, no matter. Those companies that are presently proprietary could convert themselves and become public companies.' But this is not real answer at all because, as Senator Gallagher and others have pointed out, that decision to translate your business operation to a public company is costly. Having made the transition, which is in itself costly, additional costs are brought in once you have converted to being a public company.

It is also the case that the government, having recognised that this is only a partial solution, has already signalled its intention to bring further legislation into the parliament to address the shortcomings of this legislation. It is an extraordinary situation where we are presented with a bill that is, by the government's own admission, imperfect and, in fact, incomplete. The practical consequence, one suspects, is that many businesses will just hold off engaging with this legislation at all until the second tranche of legislation is brought through. That raises the question: why wouldn't we defer it? Why wouldn't we have waited? Why wouldn't the government have completed its policy work and brought into this chamber a full package so that businesses and, indeed, senators could make a decision based on all of the facts and all of the policy propositions and not just on some of them.

I want to talk just a little bit about risks. I mentioned in my opening remarks that a key thing we need to do is make sure that investors—particularly retail investors—are not exposed to risks that are unexpected or unreasonable if they invest through this mechanism. This is a new market and investors are going to take a little time to work out what the risk profile is and what it means for them if they make an investment. It makes sense in that way to proceed cautiously. To that extent, the decision to reduce the cooling-off period seems a mistaken way to address some of the industry concerns raised through the consultation process. Reducing the cooling-off period to 48 hours seems to expose retail investors to a set of risks that are too great, given the fledgling nature of this industry.

That is, of course, a problem not just for retail investors but also for the sector itself. I want to point to some of the remarks made by the Australian Small Business and Family Enterprise Ombudsman about this because they talk about the need to promote confidence in the crowdsourced equity market. In their letter that came in in January this year the ombudsman says that they:

… emphasised the need to provide strong investor protections as part of the regulatory framework, noting that a crowd-sourced equity market can be expected to attract small, relatively unsophisticated and inexperienced investors to high-risk, generally illiquid venture capital-style projects.

It made the point that strong measures are needed not only to protect the investors individually, but also to maintain confidence in the crowd-sourced equity funding market and small business investing generally.

Their concern is that if the protections are not right and if we do have a series of big disasters it will take time for that market to recover, and that is why proceeding cautiously seems to me to be sensible. It is why I support the amendment signalled by Senator Gallagher to increase the cooling off period to the original proposal, which was five days. That seems to me a much more sensible way to deal with the risks associated in this sector.

I just want to conclude by emphasising how disappointing it is that we vote in this chamber on a partially developed policy proposal. If government has an intention to develop a whole package that deals with both private companies and public companies, why not present all of that together so that businesses can see how these two regimes will interact and so that senators can understand that that interaction will be a coherent response to the opportunities and the challenges posed by this sector? It is disappointing that we find ourselves in this situation. Of course, I should indicate that I will be supporting the amendments proposed by Senator Gallagher.

(Quorum formed)

Senator WHISH-WILSON (Tasmania) (11:21): Crowdsourcing finance is a very new and evolving space. It is exciting. It has developed to promote and facilitate innovation, which is something that we absolutely need and which, as a parliament, we have a responsibility to play a leadership role in. We have had a number of stakeholders consulting with us on the Corporations Amendment (Crowd-sourced Funding) Bill 2016. We have seen it go to committee. It has taken years to get to this point. As you may know, Mr Acting Deputy President Marshall, I have a background in finance and I have watched this develop over the years, with a lot of interest. I have seen an innovative group of people get together in Byron Bay and develop a system where anyone can produce their own honey from their own backyard, using a whole new technique that was pioneered through crowdsourced funding. I know those people. I know the guy who has been working for the company to promote this system.

The concept around crowdsourced funding is fairly simple. If you provide your own equity—that is, you put some money into a venture—you are given access to that technology. You are given a unit—that is, you can have your own honey-producing unit set up in your own backyard—and you can buy that unit at a good price. You are guaranteed access to that by having provided crowdsourced funding. We are looking at developing a legislative framework—that is, laws and regulations—around this issue. To this day, crowdsourced funding has not been regulated, so we need to be very careful about the risks and the unintended consequences that go with this. It appears that it is a simple thing for us to do; but, in reality, it is a lot more complicated than that, as we need to weigh up promoting and facilitating innovation in Australia versus putting in place investor protections that we have confidence will work.

The new platform that we are debating in this bill before us today and that, hopefully, we will pass presents us with lots of challenges. I have worked in finance. I have seen high-risk financing, even with proprietary limited companies and public companies listed on the stock market. I have seen promoters of publicly listed, small cap companies mining the shareholders for years, without producing anything. I have seen the human behaviour behind wanting to get a shareholding in companies that you think are winners—being on a good thing. We have here a new financing structure that has very little oversight but where there is easy access for small investors, especially in high-risk investments. Let's be honest, most technologies and ideas that have been associated with crowdfunding are high risk by nature. They are at an early stage of development. Normally, these high risk, early stage development investments are dealt with by what we call 'angel' investors or 'sophisticated' investors. They can have a portfolio of investments. They can say: 'I can take on 20 very high risk, early stage developments. If one of them comes off then I can stand to make a significant profit, but the other 19 might fail.' What we are dealing with here today is a structure that allows any Australian to put up $10,000 of their hard-earned money into a crowdsourced funding platform, into essentially what is a high-risk investment. Unfortunately, as much as there are a lot of really good people, and mostly honest people, who have used the crowdsourcing platform to date, a legislative structure that makes it easier for people to go out there and raise capital, promote capital, is going to be like throwing out berley for sharks. I am sorry, that is what I have seen in my experience. There will be unscrupulous people out there who will be quite happy to put up concepts that they know have very little chance of success. They will raise money. They will spend that money. They will live off that money. They will swindle investors. So, whatever we do today, we have to be very cognisant of the fact that we need to protect investors as much as we possibly can. That is why I think capping limits is a sensible thing to do. It may be that $10,000 or $5,000 is lot of money to some people and it may not be a lot to others; but, at the end of the day, it is still very important for us to look at how we can reduce risks to investors.

I accept a lot of the points that Labor have made here today. Investor protections are important, but I do not think the key investor protection is necessarily going to be around the cooling-off period. I do believe it is around transparency issues, with giving proprietary limited companies this structure at this point in time. There are a number of extra risks associated with the proprietary limited structure versus the publicly listed structure. I still have some concerns about publicly listed structures in this overall debate and how easily they may be manipulated by unscrupulous promoters—but at least they have reporting requirements. They can take a larger investment of $10,000. I welcome the government continuing to work on the issue of giving broader access to proprietary limited companies, but at this point in time I think that is even risker than the proposal that we have in front of us.

Risk and return are well-established principles that most of us understand, certainly most students of economics and finance understand, and that those two go hand in glove. I know that a lot of Labor people—and Senator Dastyari is in here—who initiated the FoFA laws are well aware of the asymmetry of information. Unfortunately, what we have seen over the years and what has been evident during the FoFA debate is how easy it is for investors to get caught up in these kinds of things. You hear about it at local barbecues. It is a horse that they have got to back. They have to get into some of this things. Before you know it, people who have not necessarily done their homework, who do not necessarily understand the risks and who are not necessarily financially literate are caught up in these things and end up losing their money.

The bill that we are proposing to pass today has liquidity risk. If I put in $10,000 of my money even into a publicly listed company to invest, for example, in a new technology or the manufacturing of a new product, what do I get out of the $10,000? What do I get out of that? If that company wants to go the next step beyond crowdsourced funding—for example, it may choose to become a publicly listed company—how do I get my equity in that company valued properly? Who does that valuation? If a company goes to the stock market, what is my initial contribution priced at? Then there are the owners of these technologies who are seeking crowdsourced funding. If I buy a $10,000 stake in a crowdsourced project, do I know what the equity component is of those who already own that company, and what they are going to be cashing in at if it goes to the next step? There are a lot of questions I have that still need to be answered. But at least the structure we have in place at the moment has a potential period of time in the future where we can assess this as a parliament after we see how it goes and come back and address some of these risks.

At the moment, I believe that there is a need to finance higher risk projects through crowdsourcing and have a proper regulatory structure around that. But I get a very strong sense that this is going to be adaptive, this is going to be a work in progress, and I for one will certainly be keeping a very close eye on how this progresses. I hope my cynicism about human nature proves to be incorrect and that actually a number of Australian companies are able to successfully crowdsource; get projects to fruition, which of course we all want to see; see wealth created for their investors; and employ Australians and generate futures. That is necessary and you need financing to do that, but we need to be very careful that we are protecting investors here today.

I note that my concerns have been shared by a number of submitters to the committee inquiry—that there is very little data for us to ascertain and measure these risks in the future, and, if I could use a scientific term, we need to use the precautionary principle as much as possible here today. That is we need to give this a go. We need to see how it goes. We need to revisit it. That is why the Greens will be happy to support this legislation.

In relation to Labor's amendments, I have not dealt with the cooling-off period yet. My understanding is there are risks either way with extending or shortening cooling-off periods. You may say that shortening a cooling-off period, from five days to two days, gives investors less time to withdraw from a process. For example, if I need to raise $1 million through crowdfunding, I have a certain period of time where I can raise that money if I am a company. But the longer you leave the crowdsourcing process open the more that process can be manipulated by investors.

I have seen this with what we call book-build processes in equity financing on the share market. You see it with trading on the share market. People put in bids at certain prices, they try and make it look like there is a huge demand for this crowdsourcing project and then they withdraw those bids further into the book-build process. That could be easily manipulated with a cooling-off period. Someone could say, 'Put your $10,000 into this. There's been enormous demand for it. Everybody's getting some. This is your chance to get in on the ground level.' The longer that process is open the more likely it is going to be manipulated. At least a shorter cooling-off period actually reduces that risk. I know there is a trade-off either way, but we need to be cognisant of the fact that there are risks for longer book-build processes. In fact, I understand some book-build processes, in Korea and other places, for this kind of high-risk financing go for the whole period—even up to six weeks, in the case of the prospectus time. So we are ambivalent on the cooling-off period, between two and five days. They are both, in my opinion, fairly short periods of time.

In relation to a proprietary limited company being included in this particular bill today, I am aware the chartered accountants have made a number of comments on why they do not want to see propriety limited companies introduced at this stage, as have a number of other stakeholders. I am concerned about phoenixing, as we have a lot of problems in this country with phoenixing already, and proprietary limited companies will introduce more risk in terms of these companies raising capital through this particular crowdsourcing platform. What do we do? At the moment a proprietary limited company is limited to 50 investors, but we are going to be talking about raising millions of dollars through issuing $10,000 allotments. If I need $1 million, how many investors am I going to have to have on board? More than 50. I do not see, and I certainly have not seen, anything from the Labor Party as to how we are going to solve that particular issue. If we are going to look at extending this to proprietary limited companies, these are the kinds of basic things that I do not believe I have seen information on yet that will allow me to support that. I understand the government is working on that.

Let us keep this really simple. This is high-risk financing. It is fine if people can afford to lose $10,000. We need to make sure that they are aware of the risks associated with this kind of investing. We need to have the best possible regulatory structure we can around this to protect investors, as well as facilitate that innovation that we desperately need in this country. This is a good place to start. We will be watching this very closely as it progresses over time, as I am sure will Labor, Liberal and crossbench senators. I say today that the Greens will be happy to support this bill.

Senator CORMANN (Western Australia—Minister for Finance and Deputy Leader of the Government in the Senate) (11:35): I would like to thank those senators who have contributed to this debate. This bill delivers on the government's ongoing commitment to support the transition of the Australian economy from the mining investment boom to a more diversified economy, through fostering innovation and entrepreneurship.

This bill introduces a legislative framework for crowdsourced equity funding which will make it easier for small businesses, particularly early stage businesses, to make use of equity finance. The government is also continuing to work on extending the regime to proprietary companies, which are generally prohibited from offering shares to the general public. The government has asked Treasury to develop a framework for proprietary companies as a key priority, and I would expect that an extension of the framework will be introduced through subsequent legislation in the near future.

The framework detailed in this bill will allow unlisted public companies with assets and turnover of less than $25 million to raise up to $5 million per annum through crowdsourced equity funding with reduced disclosure obligations. This framework will also provide a holiday for up to five years from the most onerous reporting and governance requirements for unlisted public companies. To ensure investors can make informed decisions and are not exposed to excessive risk, the framework sets out the minimum disclosure requirements and the retail investor cap of $10,000 per issuer per 12-month period. Online intermediaries will need to be licensed to perform certain gatekeeping obligations and ensure that certain disclosure and other requirements are met by issuers. The Australian Securities and Investments Commission will provide ongoing supervision of crowdsourced funding in Australia—in relation to the Senate Economics Legislation Committee's recommendation that the government closely monitor implementation of the legislation and consider the need for a potential review.

This bill is another example of how the government is supporting small and start-up businesses, which are critical to Australia's economic transition and delivering jobs and growth to all Australians. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.

Senator GALLAGHER (Australian Capital Territory—Manager of Opposition Business in the Senate) (11:38): In my speech in the second reading debate I flagged a number of questions and indicated that I would be moving two amendments. I seek leave to move the amendments on page 8047 together.

Leave granted.

Senator GALLAGHER: I move:

(1) Schedule 1, item 14, page 10 (line 17), omit paragraph 738H(1) (a), substitute:

(a) the company has an agreement with a CSF intermediary that is legally enforceable;

(2) Schedule 1, item 14, page 32 (line 27), omit "48 hours", substitute "5 business days".

I would also like to flag that I want the questions put separately when the time is appropriate. I will not delay the Senate further with the amendments I am moving. Amendment (1) on page 8047 would allow privately held companies access to this important capital market. I indicated in my speech that we are moving this amendment so small businesses and start-ups are not denied access to this important new capital-raising facility due to the onerous reporting burdens and regulations of becoming a public company. Amendment (2) simply increases the investor cooling off rights from two days to five days. I hope that I can get support from the Senate for both of these important amendments.

Senator CORMANN (Western Australia—Minister for Finance and Deputy Leader of the Government in the Senate) (11:39): The government will not be supporting these amendments today, although, in relation to the first issue that Senator Gallagher has raised, the government is entirely sympathetic to her position and what I believe Senator Whish-Wilson as well has been putting on the table. The issue is that extending crowdfunding to proprietary companies is not simple and would require significant changes to the law. It would represent a fundamental change to the traditional concept of a proprietary company. The opposition's amendment would be inconsistent with the current law, which prohibits a proprietary company from engaging in any public fundraising that would require disclosure to investors. Extending the crowdsourced funding regime to proprietary companies is a priority for the government. The government expects to consult on draft legislation in coming months. Consultation will be essential to ensure an appropriate balance between investor protection and opening up crowdfunding for innovative early stage companies. The overwhelming majority of stakeholders support proceeding with this current legislation to allow public companies to begin crowdfunding as soon as possible. As one submission to the Senate inquiry noted:

Australia will lose fast growth enterprises to jurisdictions with CSF if we delay much longer.

In relation to the second issue, the cooling off period, the government has reduced the cooling off period available for retail investors from five days to 48 hours in response to stakeholder concerns that a longer cooling off period would incentivise rivals to disrupt the crowdfunding offer by subscribing to the offer with the intention of withdrawing within the cooling off period. The 48-hour withdrawal period provided for in this bill presents a balanced approach. It reduces the risk of gaming by rivals and ensures investors have sufficient time to reconsider their investment decision. There is no international consensus on the need for a legislated cooling off period or on the optimal length of a cooling off period. For example, there are no legislated cooling off rights under the New Zealand crowdfunding model. In the government's judgement, the proposed cooling off period of 48 hours provides greater protection than that available for investors in public equity offers such as IPOs, who generally do not have access to cooling off periods at all. For these reasons we will not be supporting the amendments.

In response to some of the questions that were raised, implementing this framework will involve a range of areas across ASIC, including staff from the Corporations and the Investment Managers and Superannuation areas, the Registry and financial markets. ASIC will have a range of enforcement options available to address misconduct in the crowdfunding market. Specifically, crowdfunding intermediaries will be required to have an Australian financial services licence. Where there is misconduct, ASIC can impose conditions on a licence, suspend or cancel a licence or ban individuals from the industry. Where specific obligations of intermediaries or companies are breached, ASIC can issue an infringement notice or take a person to court to seek to impose a penalty.

Senator WHISH-WILSON (Tasmania) (11:43): I alluded to this question in my speech in the second reading debate. As you know, one of the key investment risks is liquidity risk. If I subscribe $10,000 under this legislation towards a crowdsourced project, has there been any work done on whether there will be an allowance for a secondary market for people to trade out of their investments? Are there any thoughts as to how those investments will be valued at a future period in time? I understand that this is a new, evolving area, but it is still to me very risky unless I understand how investors will be able to cash in, I suppose, on their investments in the future.

Senator CORMANN (Western Australia—Minister for Finance and Deputy Leader of the Government in the Senate) (11:44): The advice provided to the investor at the time of considering an investment under this process would make very clear that this is an illiquid investment. So, obviously, individual investors will have to make judgements in that context of being very explicitly advised that this is an illiquid investment.

Senator WHISH-WILSON (Tasmania) (11:44): Yes, it is an illiquid investment if there is no structure or secondary market. Will there be rights? Will ASIC, as part of their role, look at how the values of those investments may change over time and how they will relate to future capital raisings or listings on stock markets?

Senator CORMANN (Western Australia—Minister for Finance and Deputy Leader of the Government in the Senate) (11:45): As I said in response to the questions by Senator Gallagher on the intermediaries, in order to run a secondary market, which they could, they would have to be appropriately licensed with an Australian financial services licence, and they would have to comply with all of the relevant consumer protection requirements that come with that.

The TEMPORARY CHAIR ( Senator Marshall ) (11:45): The question is that amendment (1) on sheet 8047 be agreed to.

The TEMPORARY CHAIR ( Senator Marshall ) (11:53): The question now is that amendment (2) on sheet 8047 be agreed to.

Senator WHISH-WILSON (Tasmania) (11:53): I want to quickly address this. As I alluded to in my second reading debate contribution, we have considered the pros and cons of a two-day or a five-day cooling off period. We understand that there are risks either way. It is fair to say the Greens have come down in this debate on the side of protecting investors, and that we feel that the five-day cooling off period would be preferable to two days. This is a risky financing platform, and five days is a reasonable period of time for people to consider their investment in what is essentially a high-risk investment. It is potentially a high return on investment, Chair, but it is also certainly a high risk, and we do not believe the extra three days, the loss of three days, would be that significant.

I would just make one point, and Senator Cormann may wish to answer this, although he may not: I do not necessarily understand how competitors might game the system with the cooling off period. I understand how the promoters of the system themselves may game the system by getting in bids to make this look like it is a sure thing and everyone should get some. I do feel that the extra period of cooling off is an added investor protection, and that would outweigh any potential risk over that three days of gaming the system. So the Greens will be supporting Labor's second amendment.

The TEMPORARY CHAIR: The question is that amendment (2) on sheet 8047 be agreed to.

Senator CORMANN (Western Australia—Minister for Finance and Deputy Leader of the Government in the Senate) (12:02): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator McGRATH (Queensland—Assistant Minister to the Prime Minister) (12:03): I move:

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

Question agreed to.

Bill read a first time.

Senator McGRATH (Queensland—Assistant Minister to the Prime Minister) (12:03): I table a revised explanatory memorandum relating to the bill and I move:

That this bill be now read a second time.

Introduction

I am pleased to present this bill to the Senate. Before outlining the bill's provisions, I would first like to address the recommendations made by the Senate Foreign Affairs, Defence and Trade Committee in its report of 20 February 2017 into this bill.

The committee made four recommendations, including that the bill be passed. In addition to this, Labor and Nick Xenophon Team senators made additional comments, which the government has incorporated.

The government would like to thank the committee for its bipartisan contribution.

Recommendations of the Senate Foreign Affairs, Defence and Trade Committee, 20 February 2017 report

The committee's first recommendation was that the Department of Veterans' Affairs consult with the Commonwealth Ombudsman and the Office of the Australian Information Commissioner on the content of the minister's rules before they are finalised and introduced in the parliament.

I am pleased to advise the Senate that both the Privacy Commissioner and the Commonwealth Ombudsman have provided feedback on the public interest disclosure rules.

This has been taken into account, with changes made to the public interest disclosure rules.

The constructive suggestions made by the Privacy Commissioner and the Commonwealth Ombudsman have improved the draft public interest disclosure rules and improved the safeguards surrounding disclosure of information.

The committee's second recommendation was that the Department of Veterans' Affairs undertake a privacy impact assessment of the rules and that the completed assessment be made public.

DVA has undertaken the privacy impact assessment and an executive summary of the assessment was made publically available on DVA's website on 28 February 2017.

The Minister for Veterans' Affairs subsequently asked for an independent privacy impact assessment for the Digital Readiness Bill's public interest disclosure rules once they have been finalised.

Both privacy impact assessments will be released to the public along with the public interest disclosure rules.

The committee's third recommendation was that this bill be amended to include a mandatory review of the implementation of the legislation and accompanying rules two years from the commencement date.

As senators would be aware, the minister moved such amendments in the House, and these were passed on 2 March 2017 and incorporated into the bill.

These amendments are important for two reasons. Firstly, by making the creation of the public interest disclosure rules a mandatory rather than optional part of the provision, it will mean that should this bill pass the Senate the public interest disclosure provision will have no effect until the minister creates the rules and the parliament has consented to them.

Secondly, by placing a two-year review on the public interest disclosure provision, the government has accepted that this provision should be reviewed in order to ensure that the veteran community is being served appropriately by this provision.

For the sake of completeness, I also note that the minister moved, and the House agreed to, amendments to address comments made by the Senate Scrutiny of Bills Committee in its Scrutiny Digest No. 1 of 2017.

I turn now to the recommendations made by Labor senators. Senators Gallacher and Moore recommended that mistake of fact and misinformation be removed from the public interest disclosure provisions of the bill and instead preference be placed on parliamentary privilege to correct these issues. These provisions do not appear in the bill. They were two of the circumstances in which it was contemplated that a public interest disclosure might be made, and appeared in the draft public interest disclosure rules.

The government accepts Labor's recommendation in principle and I am informed that in consultation with the shadow opposition minister, mistake of fact has been removed from the draft rules. Further to this, the draft rules have been tightened around misinformation to make it clear that it refers only to misinformation detrimental to the veteran community.

Finally, Senator Kakoschke-Moore of the Nick Xenophon Team recommended that the minister's rules be made publically available prior to senators voting on them. This will happen. As the rules will be a disallowable instrument, they will be tabled in the parliament with a 15-sitting-day disallowance period. During that time, senators as well as members in the other house will be able to review the rules before voting on them. If the instrument is disallowed, the rules will not come in to effect.

Computerised decision-making (Schedule 1)

Turning now to the provisions of the Bill, the amendments made by schedule 1 would enable the secretary of DVA to arrange for computer programmes to:

make decisions and determinations,

exercise powers or comply with obligations, or

do anything else related to making decisions and determinations, or exercising powers or complying with obligations.

This last point is very important with respect to reducing time and resources allocated to administrative parts of DVA's business and improving outcomes for clients. For example, where a particular provision requires notice of a decision to be given, this new computerised decision-making provision will enable the computer program to make the decision.

The proposed computerised decision-making provisions are modelled on section 87 of the Australian National Registry of Emissions Units Act 2011.

I would note that in the department's submissions and in the minister's statements, the government has made clear that this provision is not to be applied to any decision which would require human discretion or any fact-finding. This would include medical liability, decisions with regards to claims, and collection of debts.

Information Sharing (Schedule 2)

Schedule 2 contains two types of information sharing provisions:

1. public interest disclosures, and

2. information sharing under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988, subject to it being enacted.

The Department of Veterans' Affairs has a duty of care in providing its services to veterans and clients. However, currently there are inconsistent provisions on providing information that might be necessary in fulfilling that duty of care.

The public interest disclosure provisions will help DVA address problems with an inability to share information that currently pose a threat to life, health or welfare; issues with the enforcement of laws; service provider abuse; misinformation detrimental to the veteran community; and APS Code of Conduct investigations.

Let me be clear, this section strengthens the protections around veterans' privacy.

The public interest disclosure provisions would enable the secretary of DVA to disclose information about a particular case or class of cases where the secretary certifies that it is necessary in the public interest to do so.

The Privacy Act 1988 legitimately limits the circumstances surrounding the handling and disclosure of a person's personal information, as set out in the Australian Privacy Principles. But there are no codified safeguards as to how this should be done. However, while the department would never seek to abuse the limited application of these principles, there are circumstances where the secretary has need to share information but as I mentioned there are currently no codified safeguards on how this is to be done.

This provision significantly strengthens veterans' privacy by putting in place stringent and concrete controls around how and when this is done both in the bill and in the Public Interest Disclosure Rules.

Firstly, in deciding whether to make a public interest disclosure, the secretary of DVA must follow rules set by the Minister for Veterans' Affairs and there are limits about disclosing personal information, which could result in the secretary committing a criminal offence.

Because this is a new power, safeguards have been incorporated to ensure that it is exercised appropriately. They are that:

the secretary must act in accordance with the rules that the Minister for Veterans' Affairs makes about how the power is to be exercised

the Minister for Veterans' Affairs cannot delegate his or her power to make rules about how the power is to be exercised to anyone

the secretary cannot delegate the public interest disclosure power to anyone

before disclosing personal information about a person, the secretary of DVA must notify the person in writing about his or her intention to disclose the information,

the secretary must give the person a reasonable opportunity to make written comments on the proposed disclosure of the information and consider any written comments made by the person

unless the secretary of DVA complies with the requirements I have just outlined before disclosing personal information, he or she will commit an offence, punishable by a fine of 60 penalty units—approximately $10,800 currently—and

the minister must arrange for a review of the public interest disclosure provisions, including the rules made under those provisions, to be undertaken two years after they commence. A report of the review must be prepared and tabled in each house of the parliament within 15 sitting days of that house after the report is completed.

Further to these safeguards, there are significant controls placed on the secretary by the Public Interest Disclosure Rules being drafted by the minister.

These include:

That an individual's entire record can never be released

The Secretary of the Department of Veterans' Affairs has to consider an individual's circumstances including age, health, disability, and social, cultural or family circumstances

The secretary has to consider any physical, psychological, national security or relevant circumstances about the individual

The secretary has to consider if anonymous or general information would achieve the same outcome

No individual's specific medical information can be used to correct misinformation

The secretary cannot compromise any individual's national security or service records

No individual's specific medical information can be used to correct misinformation

Only people who have a genuine and legitimate interest can be provided the information

The release of information has to be proportionate to the objective and to the outcome.

It is anticipated that the public interest disclosure provisions would only be used sparingly and in exceptional circumstances. However, by putting in place this provision the government is codifying when and how information is shared above and beyond the current arrangements under the Privacy Act. Let me say again, these codified safeguards will strengthen veterans' privacy.

Turning to the second provision, on information sharing with the Department of Defence, I would like to address a misconception appearing on social media that DVA is unable to otherwise share information, because that is inaccurate. The Veterans' Entitlements Act 1986, section 130; the Safety, Rehabilitation and Compensation Act 1988, section 151A; and the Military Rehabilitation and Compensation Act 2004, sections 346(2) and 409 contain express provisions that enable DVA to share clients' information with certain people for certain purposes. For example, the table at section 409(2) of the MRCA states that the Military Rehabilitation and Compensation Commission may provide information to the Chief of the Defence Force in relation to 'reconsideration or review of a determination about liability for a service injury, disease or death'.

The information-sharing provisions under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988, subject to it being enacted, are necessary to overcome an anomaly that currently exists between the Military Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation and Compensation Act 1988. The anomaly is that the Military Rehabilitation and Compensation Commission is currently limited in its ability to provide the same types of claims information to the Secretary of the Department of Defence or the Chief of the Defence Force under the Safety, Rehabilitation and Compensation Act 1988 about serving members as it is able to under the Military Rehabilitation and Compensation Act 2004.

It is important that the Secretary of the Department of Defence and the Chief of the Defence Force are able to receive information about serving Defence Force members, particularly in the context of monitoring occupational health and safety or for monitoring the cost to the Commonwealth of a service injury or a service disease, irrespective of which act the claim is made under. The amendments would achieve this by aligning information-sharing provisions under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 with those in the Military Rehabilitation and Compensation Act 2004.

The purpose of the statute update 2016 is to update provisions in the acts to take account of changes in drafting precedents and practices. In particular, that act updates references to penalties expressed as a number of dollars, with penalties expressed as a number of penalty units. Such changes enhance readability, facilitate interpretation and promote consistency across the Commonwealth statute book. The two technical amendments replace reference to specific dollar amounts and penalties under the Veterans' Entitlements Act 1986 with references to penalty units, which is the current Commonwealth drafting practice. There are no substantive changes to the law. This is a technical amendment only.

In conclusion, this bill provides an important plank for the foundation of veteran-centric reform in the Department of Veterans' Affairs. Without it, the Department of Veterans' Affairs will not be able to develop commonsense procedures that will allow the use of new technology. This is fundamental to providing the 21st century service that veterans expect from their government. I commend this bill to the House.

Senator FARRELL (South Australia—Deputy Leader of the Opposition in the Senate) (12:18): I rise to speak on the Veterans’ Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017.

Labor, as you know Mr Acting Deputy President, is always supportive of measures that will ease the claims process for veterans when dealing with the Department of Veterans' Affairs. As government agencies move closer to a wholly digital platform, it is appropriate to include measures that allow the Department of Veterans' Affairs to engage this platform. Sending the bill to committee assists the parliament to understand the circumstances for which this bill is necessary. Specifically, Labor sent the bill to the Senate Standing Committee on Foreign Affairs, Defence and Trade Legislation Committee to investigate schedule 2. Schedule 2 looks at what circumstances are necessary to allow the Secretary of the Department of Veterans' Affairs to make publicly available personal information of veterans and ex-service personnel. The concerns over provisions in schedule 2 of this bill were discussed during the Senate Standing Committee on Foreign Affairs Defence and Trade Legislation inquiry. To be clear, Labor will not support legislation which gives the department the power to disclose individual medical information, unless there is a threat to life, health or welfare.

We do not support the department using an individual's medical information to correct misinformation in the community and we have been working with the government on the rules which accompany this legislation. Labor also does not believe that if someone makes a genuine mistake about a claim in relation to the administration of the department that the department should respond in a public way. We believe that, if someone is genuinely mistaken, DVA should seek to resolve this matter with them directly and not in the public arena. When it comes to the release of personal information, Labor supports strict rules and enforceable penalties if these rules are breached.

I would like to talk about the Centrelink debt-automation issue. Significant concerns have been raised in light of the issues with Centrelink and the release of personal information by Minister Tudge. In relation to the debt-automation process, the department has assured us that the automation program will not be used in relation to debts. In terms of Minister Tudge and the rules that DHS have in relation to the release of personal information, Labor believes that Minister Tudge unethically leaked personal information as opposed to following his own department's rules. The public interest disclosure, or the rules which accompany the digital readiness legislation, were originally based on the Social Security Act. They have since been worked on tirelessly by Labor to ensure they are far tighter than the version the government first proposed. Due to Labor's intervention, we have been able to strengthen the rules with regard to medical information and the correcting of misinformation and mistake of fact. Labor has worked to ensure these rules are stronger than they were. Work on the rules is still continuing.

The rules are a disallowable instrument, and Labor has been clear that, if we are unhappy with the accompanying rules, we will move to disallow them. Should the rules be disallowed then the part of schedule 2 which would enable the release of information will not proceed. Schedule 2 includes important safeguards to ensure this power is exercised appropriately, including that the secretary must act in accordance with the rules and that the minister is unable to delegate the public interest disclosure power to anyone. Labor has sought to ensure the secretary must notify the person in writing about his or her intention to disclose the information and give the person a reasonable opportunity to make written comments on that disclosure. Finally, if, as the government has just indicated, these safeguards are not abided by, the secretary risks a fine of 60 penalty units, which equates to approximately $10,800.

Labor recognises that there are some circumstances outlined which we believe are appropriate for sharing personal information, especially in circumstances relating to health and wellbeing and with other federal and state agencies in circumstances relating to crime. It is important to recognise those veterans and ex-service personnel who engage the services of DVA do so knowing their information will be kept confidential.

Labor's shadow minister, Amanda Rishworth—and I have to say at this point what a terrific job she is doing in the role—will continue to negotiate the provisions of the rules to ensure these are in line with the expectations of the veterans and ex-service community.

Labor senators reported from the Senate inquiry that there are still serious concerns around the circumstances of mistakes of fact. They also mentioned misinformation in the community and questioned whether these provisions are necessary. Labor senators provided additional comments to the chair, recommending both misinformation and mistake of fact be removed from the rules.

The chair of the Senate inquiry made four significant recommendations. Recommendation No. 1 was that the Department of Veterans' Affairs consult with the Commonwealth Ombudsman and the Office of the Australian Information Commissioner on the content of the minister's regulations before they are finalised and introduced into the parliament. The second recommendation, which I am sure you would be familiar with, Acting Deputy President, was that the Department of Veterans' Affairs undertake a privacy impact assessment of the regulations and that the completed assessment be made public. The third recommendation was that the bill be amended to include a mandatory review of the implementation of the legislation and accompanying regulations two years from the commencement date. You will find that sort of proposal in a lot of legislation these days. Finally, in recommendation No. 4 the committee recommended that the bill be passed, so of course we are supporting the legislation.

By accepting these recommendations, the government will undertake consultation with the Commonwealth Ombudsman and Australian Information Commissioner on the content of the rules and provide further safeguards in the final instrument. Labor is comfortable with the consultation of the Commonwealth Ombudsman and the Australian Information Commissioner to finalise that instrument. Labor will continue to work with the minister to ensure these recommendations are adhered to.

Labor has been working tirelessly to strengthen the Government's Veterans' Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017 since it was introduced into the parliament and will continue to do so with the accompanying rules.

Senator LUDLAM (Western Australia—Co-Deputy Leader of the Australian Greens) (12:26): I rise to make some contributions on behalf of the Australian Greens today and also thank the minister for taking the slightly unusual step of reading the second reading contribution in so that we can have a bit of clarity about what has been going on behind the scenes.

According to the government, the Veterans' Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017 has the objective of improving services for veterans and speeding up the claims processing pipeline. The DVA is preparing for much-needed upgrades to its IT systems and processes, and this bill aims to set the legal pathway for these changes to take place. Currently, legislation governing veterans' affairs and particularly the Veterans' Entitlements Act is antiquated and needs updating to reflect more modern times. I think bringing it into the 20th century is certainly not a bad idea! Likewise, officers at the DVA are using technology of a bygone era. Maybe it is an exaggeration to say that they are still stuck with punch cards and faxes, but it is probably only just an exaggeration. Our understanding is obviously that it is not just a technical constraint; they are also constrained by legislation in that human interaction is required to make and check off really simple calculations that could easily be performed by modern technology.

Through its IT upgrades DVA wants to reduce the time that it takes to reimburse veterans their expenses and to streamline the claims processes, and I want to put on the record right at the outset that the Australian Greens are very supportive of this objective. The need to bring DVA up to date is obvious. Many veterans have to wait more than 100 days to get their money back for their claims. I am sure that Australians on lower incomes in particular can imagine the frustration and the difficulties posed by having to wait inordinate amounts of time to get really simple out-of-pocket expenses reimbursed, and veterans obviously face this systematically.

That is putting our support on the record, but, like others on the crossbench, we have real concerns about some aspects of the legislation, some of which were addressed by the minister and his shadow on the way through. Firstly, I address the byzantine system that is the current veterans' entitlements system. That it is a mess is something that I think all sides of politics probably agree on. Veterans not only face unreasonably long wait periods to be reimbursed the cost of their claims—this is stuff like taxi receipts that might take six months to be reimbursed—on top of this, rates of entitlement are inconsistent and arbitrary. Application and assessment processes are labyrinthine and circuitous. For many veterans, the bureaucracy at DVA is a barrier to getting what they are entitled to. All parties should be working together with the veterans community to create a better system for those who served this country.

In response to this mess, the Greens have consistently said that we support the undertaking of a root-and-branch review of the veterans' entitlements system. This review would determine whether current entitlements are sufficient, which is obviously important, as a separate question to the streamlining of the process. The review would determine whether the current eligibility criteria are fair, including access to health cards, disability pensions, housing and superannuation arrangements. One example that would probably be familiar to many—because I and others have been making this case for many, many years—is an automatic entitlement of atomic veterans to a gold healthcare card. It would be an automatic, as of right, entitlement for the harms to Australian service personnel by the British bombings in the 1950s and 1960s, given that, if those radiation exposures had occurred at the hands of an enemy power, these veterans would automatically be entitled to this highest degree of health care without having to prove that that particular radiation exposure was the cause of their illness and the illnesses of their children. But, because this exposure happened at the hands of an ally, they have been excluded, and they are dying one by one. I understand that that is one particular cohort of individuals that we have utterly failed, and they were harmed in the service, so they thought, of their country. We are very strongly supportive of an overhaul in this regard.

Complaints about DVA are on the rise, which is an indicator that the system is failing. The review of service delivery should consider assigning each veteran a liaison officer to act as a single point of contact to navigate the system. It is just one example.

I understand the government's motivation for bringing these amendments forward is to allow software to perform some of the mundane or repetitious tasks that would be better performed by automated systems in order to free up the human beings to deal face-to-face with the people that they are there to serve. We are obviously supportive of this objective.

In relation to this legislation, though, we believe amendments are necessary, and we have circulated a couple; I understand some of my crossbench colleagues will be doing the same. We believe that a couple of key aspects of the bill need to be changed before it proceeds into law. One is around computerised decision-making and the thresholds whereby we would delegate certain tasks to software as opposed to a human intervention, and the other is around disclosure of information. The recent Centrelink debacle has thrown into sharp relief the need to be hypervigilant with these powers. I do not think it would have escaped anybody's attention in this chamber, or anybody listening to this debate outside this building, the incredible debacle of the Centrelink robo-debt fiasco, which we are aware has cost at least one person his life. People have killed themselves because of the pressure that has been put on them when they have been told by a massive government bureaucracy that they owe significant amounts of money and that they will be pursued and hounded. As it has turned out—with an extraordinarily high failure rate—many of these debts do not exist. Under closer scrutiny they simply evaporate. Yet, the government, instead of acknowledging that its introduction of this automated debt recovery system has been an absolute debacle, have doubled down and have started effectively doxing people, disclosing people's private information, to journalists in an attempt have their side of the story heard. I would put it to you that this is a worst-case example.

Now we are proposing to, potentially, extend the reach of this kind of malpractice to veterans—to people whose health, in many cases, is fragile and whose mental health, in some cases, is fragile. The last thing they are going to need is this kind of treatment from the minister, sitting in the Ministerial Wing of Parliament House. Again, this is not implying bad faith on the part of the minister or his staff, but we are in here to assess what could happen under this government or a future government if good faith were not to be implied. I would assert very strongly that, in the case of the Centrelink example, there is no good faith at play. This is a government that is trying to do political damage control, and it is doing that at the expense of some pretty vulnerable people. The last thing we want to see is for veterans to be subjected to this kind of behaviour. We want to make sure that no government minister is being empowered with that kind of incredible asymmetry of access to a megaphone and that no-one else is put through that kind of horror.

Schedule 1 of the bill deals with computerised decision-making. As I have said already, we have no problem at all with the idea that some of the tasks that are presently, by the sounds of it, being done on punch cards and in paper filing cabinets should be automated to allow the DVA to step into the digital age. If it is the law preventing it, rather than any kind of technical question, then we should amend the law. We look forward to seeing this happening. It makes really good sense, we believe, for computers to determine low-value, high-volume claims like receipts for travel to medical appointments—taxi receipts, for example—and other claims that do not really require high-level human judgement calls. But we want to make sure that the government and the DVA get it right.

That is why we will be supporting an amendment that I understand Senator Lambie is moving to ensure that, at least initially, computer programs cannot be used to determine liability for injury. I want to quote briefly Federal Court of Australia Justice Melissa Perry, who highlighted the potential implications of the use of these pre-programmed systems in decision-making, where you need some nuance and, dare I say, humane judgement calls to be made. This is what she said in a speech that she gave not so long ago:

It is not difficult to envisage that the efficiencies which automated systems can achieve and the increasing demand for such efficiencies may overwhelm an appreciation of the value of achieving substantive justice for the individual. In turn this may have the consequence that rules-based laws and regulations are too readily substituted for discretions in order to facilitate the making of automated decisions in place of decisions by humans. The same risks exist with respect to decisions which ought properly to turn upon evaluative judgments.

I believe the amendment that Senator Lambie will no doubt speak to when she is given the chance to make a contribution is quite an effective way of making the distinction between a piece of software saying, 'Yes, you took that taxi on that day to that appointment; that should be reimbursed'—and it should not take six months to see the money—and the more nuanced decisions where you want human judgements to be brought to bear.

Schedule 2 of the bill is where we also have some real difficulty. That is a schedule that enables the secretary of the DVA to disclose information about a veteran's case or class of cases 'to such persons and for such purposes as the secretary determines, if he or she certifies that it is necessary in the public interest to do so'. That, by definition, is very, very broad in scope.

To pick this apart: at face value, it gives significant power to the secretary to disclose private information. 'Public interest' is an extremely amorphous term. We have tried to find legal definitions of what is considered to be the public interest, and often the public interest is interpreted to mean whatever the minister says on any given day. To add to our concerns, while the secretary must notify the person in writing about any intention to disclose that information, the secretary can still go ahead and disclose it even if the veteran has objected. So you tip off this person in writing that you are going to go them in some public way, and, if the veteran believes that that is unjust and writes back and says, 'Please, can you not?' the secretary can go ahead and do so anyway.

The DVA intends to disclose private information to correct the public record. That sounds familiar to me. I would have thought that the government would be a little bit more judicious, after the disaster that has unfolded with Centrelink, in choosing by way of defending itself to use the disclosure of veterans' private information to add to its talking points. If you believe that the government's decisions have been made correctly and that the government position is defensible, you should be able to make that case without disclosing people's personal information. We are not saying that the government should not have its say. You have access to the press gallery upstairs, but you should not be taking the low road, as Minister Tudge has done, and sacrificing people's privacy in order to make that public case. We do not think that is appropriate at all.

The DVA said in its submission to the Senate inquiry into the bill:

The Department is aware of instances where misinformation or claims that are not factual have damaged the integrity of programmes or prevented veterans from taking up assistance from the Department, often leading to wider spread distress among veterans.

I do have some sympathy with that point of view, and I understand why the government is proceeding this way. Make your case without breaching people's privacy. Surely it is no more complicated than that. During the Senate inquiry, the Office of the Australian Information Commissioner stated:

… I think any agency needs to be extraordinarily cautious when it is going to release information … particularly when it is sensitive information.

…   …   …

When you get to areas such as correcting factual information, it can get into an area where there is potential for an individual's extremely sensitive personal information to be made more widely known.

These are not abstract cases. These are men and women that this country has sent into harm's way, potentially damaged them, sometimes horrifically, in the line of serving their country, and then it brings them home and potentially has them subjected to the government using their personal trauma or background in order to win a public policy argument. It is completely out of line. The Office of the Australian Information Commissioner said:

… when you look at it overall, the initial disclosure process does seem—

too—

broad.

We will no doubt be hearing about the government's development of stringent rules—the minister addressed that issue briefly in his opening comments—and yet the Senate is being asked to pass this bill without any adequate consultation on those rules, so I am not sure that anybody outside this building has even seen them. If they are to be stringent, if they do have that kind of integrity, put them on the table, put out an exposure draft, so that we can analyse them. The minister and no doubt his colleagues will jump up and say, 'But they'll be disallowable.' The point is that, if you have confidence in them, the rules are the engine of this piece of law. They will describe how it is circumscribed and how it is going to operate. We think it is really inappropriate—just speaking on behalf of the Australian Greens, anyway—that we are being asked to effectively pass this bill with those rules sight unseen.

For these reasons, we will be supporting amendments to dramatically limit the disclosure provisions of the bill. We will speak more of that when we get to the committee stage, because there are a couple of different propositions afoot for how we can protect the privacy of veterans while still upholding the obligations of the government and its intentions to streamline the way that these claims are processed, about which I do not think you will find any disagreement with anyone in here. We are supportive of the steps that the government is trying to take to make life easier for veterans in their interactions with the DVA and to help those men and women within the bureaucracy who are trying to do a job and who are constrained at the moment by an extremely archaic act. But we do not support untested computerised decision-making power where human judgement should stay as a central part of the process, and we do not support excessive powers to publicly disclose information in order to win a political fight, which we have seen happen in the most degrading way here in the last couple of months. Without those adequate constraints on public disclosure in particular, we will not be in a position to support this bill.

We look forward to the debate unfolding. I look forward to the contributions of my crossbench colleagues. We hope that the government will see the light of reason and see that the amendments that are being circulated are being circulated in good faith by people who have longstanding history and direct personal experience of these issues. We hope that you will give the Senate the opportunity to do its job and improve this piece of law.

Senator BACK (Western Australia) (12:42): I rise to support the Veterans' Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017. I intend addressing firstly the question of the general thrust of the minister and the Department of Veterans' Affairs with regard to this IT upgrade. Secondly, I intend to comment on the objectives of the bill. Thirdly, I intend to address the very fair comments made by my colleague Senator Ludlam with regard to privacy. I want to use a couple of personal examples in relation to the need for digitisation as it is expressed in this bill. I want to briefly cover the amendments to the explanatory memorandum that have come about as a result of the Foreign Affairs, Defence and Trade Legislation Committee's deliberations. I also, of course, wish to speak to the recommendations of the chair's report on this particular legislation, since I was the chair.

I want particularly to commend all members of the committee and in general the chamber for the highly responsible and concerned way in which all of us are addressing issues associated with veterans, associated with the capacity of the department to do its job and associated with the willingness of the minister and indeed all sides of the chamber. We come at some of these questions from different perspectives. I accept that; that is the value of what we do in our Senate and in our democratic process. But I also want to say that it is critically important that we have and put veterans front and centre in terms of the objectives we have and the legislation that we are moving. It is very much in that direction that this bill has been presented to the parliament.

As Senator Ludlam has quite rightly said, manual cards are used in some circumstances within DVA to keep records of the applications of veterans in various areas for compensation. We know the secretary of the department, Mr Lewis, when questioned in Senate estimates about the IT capacity of his department at the moment said it was the equivalent of a Commodore 64 computer—which, if my memory serves me correctly, were being used in the 1980s. We have silos all over Australia. We have files that move physically between states for decision makers to make their contribution to this. This is unsatisfactory. It is unsatisfactory from everybody's point of view. I will be urging that the government continues the process of funding the very necessary upgrade to the IT systems so that we can break down those silos, so that we can achieve outcomes for veterans, so that we can make the task of those who have to deliberate upon their applications much easier and so that we can end up with an honour to the veteran community. As I say, on the committee and in this chamber there are many of us whose lives are touched by military veterans. Nobody has got a mortgage on that situation.

I go to comments made by the minister—I think they have been repeated by Minister McGrath—that the bill will make the Department of Veterans' Affairs digitally ready in line with the government's broad digital transformation agenda. I want to make this point very strongly: DVA is undertaking veteran-centric reform to significantly improve services for veterans and their families by re-engineering the DVA business processes. The role of the Committee on Foreign Affairs, Defence and Trade—be it the references committee chaired by Senator Gallacher or the legislation committee which I have the privilege to chair—and the activity of the members of that committee have got to be directed towards veteran centricity and that of their families.

The bill, if passed, will institute reforms that will reduce claims times for the processing of claims. We have a circumstance now in which we see figures of 150 days on average being mentioned. They are unsatisfactory. They do not deal with business days and they do not deal with times when an applicant may request a cessation or an interruption in that process. By anybody's standards, 150 days is unacceptable. Anything that this chamber or this parliament can do to reduce those times must surely be to everybody's benefit.

The bill also introduces amendments to information-sharing provisions and a couple of minor amendments. I am very pleased to be able to report to the Senate that the deliberations undertaken by the committee, as a result of submissions made and personal appearances by witnesses, have indeed led to amendments already being placed before this chamber with regard to this legislation. That speaks, in my view, very strongly of two things: first of all, the capacity of Senate committees to influence outcomes; and secondly, the willingness of the minister to listen, to act and to introduce those amendments as outlined in the amended explanatory memorandum.

So we see, as others have said before me, what the objectives in the whole process of computerising the decision making are. I will listen very carefully to the amendment which I understand my colleague Senator Lambie may move in relation to further restricting any situation in which a computer replaces a human being on important decisions associated with liability. I will listen very carefully to that type of amendment.

What we see associated with the computerised decision making, of course, are issues associated with public interest disclosures and information sharing under the Safety, Rehabilitation and Compensation Legislation Amendment Bill, should it be enacted. I want to make the point again, if I may, that the thrust of this legislation is veteran centric. My colleague Senator Ludlam made some comments about the need for privacy. I want the chamber and those listening to understand carefully and clearly just how this legislation strengthens the privacy factors for veterans. Under present guidelines which are in the Privacy Act 1989 there are certain precepts which I intend to contrast with the digital readiness legislation. We will see how this legislation strengthens, not weakens, the rights of the veteran.

First of all, under existing legislation the department does not need to contact an individual prior to releasing information. However, under digital readiness, when disclosing this information the secretary must contact the individual. That is the first point.

Under current existing legislation the department does not need to provide an opportunity for the individual to respond prior to release. By contrast, under the proposed digital readiness legislation, the secretary must give the person a reasonable opportunity to respond, including their circumstances relating to their age, health, disability, culture or family, and any circumstances which are physical or psychological, to do with national security or anything relevant. Remember: currently, the secretary does not have to alert the individual nor seek the individual's response.

Also, currently the department can release all—I repeat 'all'—of an individual's record. However, under the proposed legislation, an individual's entire record can never be released. Currently, the department can release details of an individual's medical condition. However, under the proposed legislation, no individual's specific medical information can be used to correct misinformation. Should this legislation be passed, the secretary has to consider the individual's circumstances—be that age, health or psychologically related or a national interest matter. Should this legislation be passed, the secretary can only release information proportionate to the objective in the outcome. They have to consider whether anonymous or general information would achieve the same outcome. None of this exists in the current act—the Privacy Act 1988. Only misinformation that is detrimental or harmful to the broader veteran community can be addressed. When addressing misinformation, the secretary has to use anonymous information in the first instance. Each of these points upgrades the privacy factors for military veterans. Only the amount of information required can be used. No individual's medical information can be used to correct misinformation. No individual's national security or service records will be compromised under these safeguards. Private information can never be released in order to argue medical liability. The secretary must take into account comments by the individual, which, if you recall, do not even have to be sought under the current legislation. I make this point: any failure to comply with the above will result in the secretary being subject to criminal penalty. The point is made with numbers of penalty units. Penalty units do not make much common sense to those who do not understand them, but we all understand criminal conviction. It would be a fairly career-limiting move for the secretary of a department of the Commonwealth to be found guilty of a criminal conviction. The penalty will apply to any number of failures. I ask people to reflect on each of those points.

There are five rules pertaining to this legislation for which I do not think I have seen equivalents under other legislation in other portfolios. Firstly, the Minister for Veterans' Affairs sets the rules for how the secretary will exercise his or her powers. Secondly, only the minister can set those rules. So accountability comes back to this place very directly. Thirdly, the secretary cannot delegate those powers given to he or she by the minister of the day. Fourthly, the secretary is personally accountable. The secretary is accountable to the minister and, ultimately, to the parliament. I say again: before disclosing any information, the secretary must notify the person in writing and give them an opportunity to make written comments on the proposed disclosure, and then they must consider those comments. The fifth of the five rules is that, if the secretary fails to comply with the requirements before disclosing personal information, they will commit the offence about which I have spoken.

There would not be anyone in the chamber or, I suspect, among most people listening to this debate who would not now be using the advantages of the digital world. We know when we are banking, for example, that we can use that IT 24 hours a day, seven days a week, from anywhere in the world. We know that we can pay our utility bills in advance, remotely, using electronic technology. We know that we all now have access to, for example, databases of information. What we do not often have is access to how accurate the information might be in a databank. We know that, from anywhere in the world, we can electronically use modern IT techniques. We can book airline tickets online. We can make automated payments. We can transfer money internationally from our device. We can pay our toll road fees electronically, if we happen to go to Sydney. Those of us who are not from the eastern states but are from WA do not experience toll roads, as my good friend Senator Dodson knows. Nevertheless, if you happen to go to Sydney, you can pay your toll electronically. This technology is there in abundance. We even submit our tax returns electronically, and we are told by our computer the amount of our refund or the amount that we have to pay.

I turn now to the strengthening of the protections that are in place in the legislation. There has been consultation on this issue with veterans communities, there has been the Senate process, there has been input by the Senate Scrutiny of Bills Committee, as well as our own Foreign Affairs, Defence and Trade Legislation Committee, and there have been amendments made as a result of those consultations. The amended explanatory memorandum speaks of the need for a positive duty on the minister to make rules regulating the exercise of the public interest disclosure power by the Secretary of the Department of Veterans' Affairs. We all take some credit for the introduction of that amendment. As a result of a recommendation, there will be an amendment to include a mandatory review of this legislation and its accompanying rules two years after the date of its commencement or proclamation.

In conclusion, I will speak to the recommendations of the committee. The committee agreed with the Privacy Commissioner's suggestion that DVA consult with the Ombudsman and the Office of the Australian Information Commissioner in relation to the drafting of the minister's regulations. That is the first recommendation of the committee—that the department consult with the Ombudsman and the commissioner so that the minister can be sure the regulations, before they are put before the parliament, have been observed and commented upon by those two.

Leading to the second recommendation is the Privacy Commissioner's suggestion that DVA undertake a privacy impact assessment to identify and manage privacy risks associated with the bill, and that the completed assessment be published, so that the public can view potential impacts arising from the proposal. That led to our second recommendation: we recommend the Department of Veterans' Affairs undertake that privacy impact assessment and that it be made public.

The third recommendation of the committee is that the bill be amended to include a mandatory review of the implementation of the legislation, and accompanying regulations, within two years. The fourth recommendation of the committee is that the bill be passed.

I wish to conclude my comments by reflecting on the enthusiasm of the minister, the Hon. Dan Tehan, for the way in which he is leading, and the department is responding to, the need to continue to put veterans first. But we must give them the tools. There is no point operating with the equivalent of a Commodore 64. There is no point trying to work with manual cards, sending them all around Australia. There is no value in that. There is no value for the veteran, there is no value for the staff, there is no value for the minister or the department and there is certainly no value for this chamber to see those constraints. I commend the bill to the Senate.

Senator KAKOSCHKE-MOORE (South Australia) (13:02): I rise to speak on the Veterans' Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2016. At the outset, I would like to express my sincere thanks to Minister Tehan's office, especially for the sincere, good-faith consultation he has conducted with me and my team. However, the Nick Xenophon Team does remain concerned about a number of aspects of this bill, in particular the public interest disclosure rules. I will turn to those concerns shortly.

The bill encompasses three schedules. The first inserts a provision into each of the Veterans' Entitlements Act, the Military Rehabilitation and Compensation Act and the Safety Rehabilitation and Compensation (Defence-related Claims) Act that seeks to make the Department of Veterans' Affairs digitally ready as part of the broader digital transformation agenda occurring across the government. The proposed changes will enable the secretary to authorise the use of computer programs to make decisions and determinations. They will also enable the secretary to exercise powers or comply with obligations, and do anything else, related to making decisions and determinations under those acts and legislative instruments made under those acts.

The second schedule of the bill inserts a provision into each of the VEA, the MRCA and the DRCA—once it is eventually called that. These provisions will enable the secretary to disclose information about a particular case, or class of cases, to persons for the purposes that the secretary determines, if the secretary certifies that it is necessary and in the public interest to do so.

The second schedule also inserts information-sharing provisions into the DRCA, subject to it being enacted, to correct an anomaly that currently exists between the MRCA and the Safety Rehabilitation and Compensation Act. Currently, the Military Rehabilitation and Compensation Commission is unable to provide information to the Secretary of the Department of Defence and the Chief of the Defence Force under the SRCA but is able to under the MRCA. The amendments will do this by aligning information-sharing provisions under the DRCA with the MRCA. The rationale is that the Secretary of the Department of Defence and the Chief of Defence are able to receive the same information about all serving members, particularly in the context of monitoring occupational health and safety, or for monitoring the cost to the Commonwealth of a service injury or service disease.

The proposed legislative changes in schedule 1 of the bill are designed to make the relevant Defence and veterans' agencies digitally ready in a legal sense and to support much-needed planned business and ICT reforms which we have been told will reduce processing times and automate and streamline existing processes. Inefficiencies within DVA processing claims are well documented in past Senate inquiries and the current Senate inquiry into suicide by veterans and ex-service personnel.

The Nick Xenophon Team is committed to improving outcomes for the veterans community and their families. We support the increased use of automated decision-making only when it achieves better outcomes for veterans, especially if it reduces claim-processing times. We do so, however, on the proviso that such technology significantly improves the quality, efficiency and accountability of public administration.

I note that my colleague Senator Lambie has amendments in relation to when and where automated decision-making processes can be used. I look forward to hearing more about those amendments during the committee stage of this bill.

The digital transformation project proposed by the minister, which this legislation will facilitate, would not normally be controversial, but the census failure and the Centrelink robo-debt disaster highlight the need to tread carefully.

The Commonwealth Ombudsman's submission to the inquiry into the bill highlighted a number of concerns in relation to the provisions of schedule 1. The Commonwealth Ombudsman, in his capacity as Defence Force Ombudsman—a function conferred on the Ombudsman since 1983—reported that, from 1 July 2016 to 31 December 2016, the DFO received 263 approaches about matters of administration in Defence agencies. Seventy-two of these were related to DVA specifically. Twenty-five per cent of approaches were investigated.

The Commonwealth Ombudsman has investigated a range of issues with computer automation, and highlighted that programming errors in automated systems can result in a range of unintended outcomes. These include multiple mail-outs of singular or conflicting correspondence, inaccurate calculations of financial data and the granting of entitlements where the criteria for the granting of entitlements were not met. System errors can and do occur. It is therefore necessary to have a robust quality assurance framework essential to any decision-making processing and to ensure that any automated system follows basic legal values of lawfulness, fairness, transparency and efficiency.

The Department of Veterans' Affairs in its submission to the Senate Foreign Affairs, Defence and Trade Legislation Committee's inquiry into the bill provided a number of examples of the sorts of decisions where computerised decision making would be suitable. These examples focused on where the decision making could be converted into an algorithm and on automatic granting of benefits in certain circumstances where the decision was based on information that was not subject to interpretation or discretion. The department provided an example of a travel reimbursement decision, which is currently calculated by a delegate based on the mode of transport and the number of kilometres travelled at a particular rate of reimbursement.

The department envisages that, under the proposed provisions, a computer program could make the calculation and decision and issue the reimbursement and advice accordingly. This would potentially provide the department capacity to allow clients to submit such claims online and have reimbursements transferred outside of business hours, with the ability for clients to digitally track their requests. This example would certainly alleviate the burden for veterans in the cumbersome paper-based and manual-centric processes that prevent DVA from being agile, client focused and efficient.

The department in its submission assured the committee that computerised decision making would not be used where fact finding and weighing of evidence was required, such as in the interpretation and evaluation of medical evidence. Matters that are subject to interpretation and discretion must remain matters for a human decision maker to determine based on all the evidence provided. During the committee stage, I will be very interested to hear how the government responds to the amendment that has been circulated by Senator Lambie in relation to the use of computerised decision making.

Schedule 1 of the bill makes provision for the MRCC to substitute a decision or determination made by a computer program if the MRCC is satisfied that the decision or determination is incorrect. The provision would enable a delegate of the MRCC to intervene and substitute a decision or determination where a computer program produced an incorrect outcome. Whilst the MRCC can do this on its own motion, without the need for a person to request a review of an incorrect decision made by a computer, it is unclear exactly how the MRCC would be alerted to an incorrect decision and when such a situation could arise. The same provision applies to the VEA, enabling the Repatriation Commission to substitute a decision made by a computer if the commission determined the decision was incorrect. I will be asking questions in the committee stage of this bill as to how DVA's own-motion review of claims subject to automated decision making will work in practice. Given the serious concerns that have been raised around Centrelink's debt recovery system, it is critical that the automated decision making proposal by DVA is subject to robust review.

Additionally, while DVA is gearing up to cater for clients that are tech savvy in a changing digital environment, it must also remain focused on ongoing service provision for vulnerable and elderly clients that do not have access to computers or do not have advanced computer skills. This would ensure that DVA can remain responsive to the needs of all veterans whilst also repositioning its services for changing client demographics in a digital age. On this point, the department in its submission assured the committee:

The ability to automate some aspects of DVA’s business does not mean that veterans would be left dealing with a machine rather than a person. Similarly, it will not mean that veterans would have to have a computer in order to be able to access DVA services. Where veterans would prefer, they will always be able to speak to a DVA staff member.

The department assured the committee that it does not intend to use computerised decision making provisions for automated debt collection. During the committee stage, I would like to seek an assurance from the senator representing the minister as to whether or not the government is committed to not using automated decision making to pursue debts. The department also advised that debt management and collection will remain a matter where the specific circumstances of the individual and the value of the debt are considered in what action is taken and how it is communicated. We cannot risk another Centrelink robo-debt disaster, which would only have catastrophic consequences for a very vulnerable cohort of Australians.

It is the proposed public interest disclosure provisions in schedule 2 of the bill, which would enable the Secretary of the DVA to disclose information about a particular case or class of cases, which have elicited the most concern and angst amongst the veteran community. Whilst the Privacy Act 1988 limits the circumstances surrounding the handling of a person's personal information, the proposed public disclosure provisions in the bill put beyond doubt that the secretary may in limited circumstances release information about a case or class of cases where the secretary certifies that it is necessary and in the public interest to do so. Whilst a number of safeguards have been put in place to protect the release of personal information, the Nick Xenophon Team remains very concerned about an eventual release of a person's personal information and the harm that can flow from that.

The safeguards that the government insists are included, include that 'the secretary must act in accordance with rules that the minister must make about how the power is to be exercised'; only the minister can set the rules, which power cannot be delegated; only the secretary can exercise the public interest disclosure power, which power cannot be delegated; and, before any disclosure, the secretary must notify the person in writing, give that person a reasonable opportunity to make written comments on the proposed disclosure and the secretary must consider those comments. Failure by the secretary to comply with the requirements prior to the disclosure will result in an offence that is punishable by a fine of 60 penalty units—that is about $10,800. The Secretary of DVA will be required to follow a set of rules set by the Minister for Veterans' Affairs, and there are limits about disclosing personal information which could result in the secretary committing an offence.

Further, the government has amended the legislation in the lower house, following a recommendation of the Scrutiny of Bills Committee, to place an obligation on the minister to make rules, where previously no obligation existed in the legislation. The rules in relation to the exercise of the secretary's power to give public interest disclosure certificates are due to be tabled by way of legislative instrument soon. The minister explained to the Scrutiny of Bills Committee that the rules have not been included in the primary legislation, so that should they need amending that can be done by way of disallowable instrument without the delays caused by the introduction of further legislation. The ministerial rules have been modelled on the rules currently in place for the Department of Human Services with many changes, following consultation with the shadow minister, ESORT, myself and others.

It was clear during the Senate Foreign Affairs, Defence and Trade Committee's inquiry into the bill that the Office of the Australian Information Commissioner and the Commonwealth Ombudsman had not been consulted, prior to the hearing, about the rules in order to provide even some broad guidance to DVA and the Department of Defence about what should be in the rules. Both offices stated that they would appreciate the opportunity to review the rules prior to them being tabled in parliament. I thank the minister's office for facilitating such consultation following the hearing.

Whilst I also thank the minister's office for consulting with me, the Nick Xenophon Team remains concerned that the government has not taken into consideration wider stakeholder engagement of rank and file members of the veteran community, many of whom have contacted my and my colleagues' offices to express their concerns with the public interest disclosure provisions. We have been frustrated by not being able to discuss the rules in any detail with veterans, as they were provided in confidence and have not been provided for public scrutiny.

The Andie Fox matter has highlighted the need for the government to be extremely careful when releasing personal information about a person, in that case to a journalist. Whilst no public interest disclosure certificate was issued in that particular case, the matter has backfired on the government and raised concerns in the community and amongst veterans about how a person's personal information could be disseminated by the government. The release of the information in that case has only served to further undermine public confidence, despite the Department of Human Services insisting it was proportionate and legal. It is important to note that the public interest disclosure provisions will have no effect until the rules are tabled in parliament by way of legislative instrument, which, in turn, could be the subject of a disallowance motion.

The rules provide examples of where it might be appropriate for the Secretary of the Department of Veterans' Affairs to disclose information about a case or class of cases, including: where there is a threat to life, health or welfare; for the enforcement of laws in relation to proceeds-of-crime orders; where there is misinformation detrimental to the veteran community; ministerial briefings; research and statistical analysis; APS Code of Conduct investigations; and provider appropriate practices.

The Nick Xenophon Team remains concerned about the secretary's broad power to certify that the disclosure of information is in the public interest and the secretary's ability to provide the information to a person who 'has a genuine and legitimate interest in the information', which could include a healthcare professional or, indeed, a journalist. The Nick Xenophon Team shares the concerns of the Commonwealth Ombudsman in relation to the public interest disclosure provisions that any measures that impact the trust and confidence of the veteran community will exacerbate the level of distrust and have the potential to jeopardise the uptake of services designed to help them.

The veteran community remains distrustful of the DVA, the government and Commonwealth agencies. The veteran community is shown to be a group at high risk of PTSD and other mental health concerns. DVA has already been found, via Senate inquiries, to use the FOI process against veterans in obtaining access to their own records. There is a fear in the veteran community that these measures will only serve to silence them from speaking out.

Given the disquiet about the public interest disclosure provisions in the bill, the minister recently announced an independent privacy impact assessment for the public interest disclosure rules, once they have been finalised, to be conducted by the Australian Government Solicitor in addition to the privacy impact assessment conducted by the DVA. The minister has also undertaken to publicly release both assessments prior to the rules being tabled. The Nick Xenophon Team does look forward to receiving the independent privacy impact assessment soon. However, we remain concerned by the lack of transparency in this process. Why can these draft rules not be made publicly available prior to us, as a Senate, being asked to vote on this bill? It is incumbent upon on us as parliamentarians to ensure that we are working in the bests interests of our veterans, and not simply acting to uphold the reputation of DVA.

Senator FAWCETT (South Australia—Chair of the Joint Standing Committee on Foreign Affairs, Defence and Trade and Deputy Government Whip in the Senate) (13:18): I rise to speak to the Veterans’ Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017. In doing so, I will go back to a paragraph—I will just take a few parts out—from my first speech in this place. Having served in Defence for over two decades, I believe it is important that we recognise that:

Inextricably linked to defence is our ongoing responsibility to those who have served this nation.

… … …

I am conscious, however, that with sustained operational commitments the number of people requiring support is increasing, and this parliament has a duty to ensure that the funding for support services increases at a rate that is at least commensurate with the need.

… … …

We expected the loyalty of service men and women when they enlisted and if they deployed; they have a right to expect ours now they have returned and retired.

And so it has been a focus of mine, both when I was in the other place and since election to the Senate, to work on committees which deal with issues that support our veterans and ex-service members. There have been a number of reports. There have probably been about five reports that I have been involved with during my time here. There are a number of themes that are very consistent. One of them is focus. The legislation, the process and the people who are working within the Department of Veterans' Affairs should be focused on veterans. It should seek to understand the veterans and their families and be empathetic to the things that have created the situation they find themselves in and to beneficially apply legislation to them.

There has been a consistent understanding—albeit there are some individual witnesses who have argued that individuals within DVA are not particularly empathetic. But there are many who have said, 'Look, we recognise that the staff are applying the legislation that they have been given.' In fact, in one recent inquiry last month, a witness said, 'The staff are handcuffed to the rules that they have been given.' So, there has been a call over many years now for us to look at ways where we can refine and improve the rule set to make it more focused on the veterans and more flexible so that it actually meets the needs of the veteran community, recognising that the unique nature of military service does not sit comfortably along some of the rule sets and procedures that we have put in place for looking after other Commonwealth public servants. Along with that also comes a long identified need to improve the tools that are available to the Department of Veterans' Affairs, and, most importantly, amongst those tools is the issue of information technology.

In the day where even one of my uncles in his 90s does his banking and orders his groceries and things on his iPad, and certainly where my generation and my children's generation live on their smartphones and tablets and other devices—we do banking, we register cars and we do all manner of things via mobile devices—it would shock many people to realise that the system that supports our veterans, ranging from the elderly and vulnerable widow of a veteran through to younger men and women who have families and who are seeking to re-engage in our community, is archaic. Much of it is paper based.

In fact, we have heard time and again in inquiries about the problems with the deep separation of functions within DVA. The fact that a paper file that is held on a veteran passes from state office to state office, depending on where a particular piece of work is done, means that not only is there a time delay from this particular file being passed around but there is also a danger of loss, something being misplaced or information that is submitted to one area not catching up with the file. There are a raft of reasons why the current secretary and minister are heavily committed to reinvesting in the Department of Veterans' Affairs in the space of information technology and to bring it, to drag it, into the current age in terms of the tools that are available to the staff within the Department of Veterans' Affairs to use. However, as the witness said earlier this month, if we are to free them from the handcuffs, if we are to give them these new tools, then we also need to give them the legislative basis, the permissions and the legal framework that they can use these tools within. So much of this discussion on this bill is around digital readiness, and I will address some of the concerns that have been raised, some of the issues that have come out of this bill.

The other part that I will touch on briefly is the issue of perception. Because of the flaws in the system, because of the numerous pieces of legislation, because of the people in some cases—I would not say all cases; in fact, I think the majority of staff within the Department of Veterans' Affairs work diligently to seek the best outcome for veterans—because of all of these things there have been times where veterans have been disadvantaged, where veterans have been disadvantaged to the point that we see veteran suicide as a significant issue. That is something that the Senate Foreign Affairs, Defence and Trade References Committee is dealing with as we speak.

Again in the inquiry we had just last week, one of the witnesses identified the fact that perception is incredibly important. He identified that many people do not have the time to locate and read through the details of legislation or new rule sets or even the correct details of cases that have occurred, and so the perception of what has occurred influences the approach and the attitude and, in some cases, the mental wellbeing of veterans who do not feel supported. One of the things this bill looks to do is to provide an opportunity for the minister to go into the public space and to correct the record where there is a perception that is not accurate and that perhaps is being fed by an email that has started doing the rounds of the various networks. We had one example last week of how these things can start. In some evidence that was given there was a reference made to a decrease, or a perceived decrease, in the level of hearing aid available to veterans. This actually occurred some time ago, but as presented in the inquiry the casual observer, listener or reader could very easily assume that it was applicable to this bill. We actually talked about it during the inquiry. We clarified exactly where that evidence had come from and what it applied to, but it is an example of how very quickly people can get a perception that there is a particular outcome that is going to result.

The minister needs the opportunity to correct the record for the sake of the people who are going to be affected by that, for the sake of those who are going to feel less supported or who are going to feel more under pressure or who are going to feel fearful that support may be taken away from them. When those facts are not true, for their sakes and for their health, let alone for the government and reputations and all those other things—for the sake of those in the veterans' community who are affected, it is important that the government has the legal framework and the opportunity to go out and correct that public record. There are a number of concerns that have been raised around that in terms of privacy, and so I will come to some of those points.

The bill itself, the Veterans' Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017, is very much driven by DVA's direction. The government have been very clear that we are seeking for them to reform their direction to one that is veterans' centric, that improves the services for veterans and their families by not only re-equipping DVA in terms of the tools but also their processes and, in this case, the legislation that empowers and allows that to occur. Some of those business tools are things like the ICT reforms that will reduce claims processing times and automate and streamline existing processes. So the bill inserts provision in each of the VEA, MRCA and the new DRCA that would enable the secretary to authorise the use of computer programs to make decisions and determinations to exercise powers, or comply with obligations to do anything else relating to making decisions and determinations or exercising powers or complying with obligations under those acts and legislative instruments made under those acts.

Some concerns have been raised around that, and I will go to the positives first. We have heard Senator Kakoschke-Moore rightly identify that there are many benefits to that. I think Senator Ludlam also recognised there were many benefits to automating decision-making. The case that the DVA and the minister's office have used in their briefings is one that is very straightforward: rather than having to do paperwork and wait weeks when processing transport claims, a claim can be submitted instead via a smartphone app and overnight the transaction is through and it is in the veteran's bank account. That frees up resources within the department; it gets a better outcome for the veteran.

In items 1 and 3 of this particular amendment you might notice that it talks about amending the bill so:

… the Secretary will be enabled to arrange for computer programmes to be used to:

make decisions or determinations

exercise powers or comply with obligations, or

do anything else related to the above two … points …

It is important to remember that this is not just about a computer that says 'yes' or 'no'. It is also about using IT to assemble the information that is required for a decision-maker. It is also about using IT to share information, for example between the Department of Defence and the Department of Veterans' Affairs. It is also about automating the process of advising people when a decision is imminent, or has been made, so that that occurs quickly and without delay.

In terms of the concerns that have been raised—I am aware Senator Lambie has some amendments that she is looking to put through—to my mind there is a very simple procedural check that would provide a good balance here. If we do eventually go down the path of having computers use algorithms to look at data and make decisions, to my mind the very simple premise would be that if that decision is beneficial to the veteran then you let it run. But any time there is a decision that is not beneficial to the veteran then that automatically flags it for human intervention so that the opportunity is there to consider the facts that have been provided, to look at the context and to do all the normal things that should be done for the benefit of the veteran. That would also allow people to review why the algorithm did not get that right and how you perhaps need to shape information. Whether it is the MRCC or others that are looking to actually make the final determination, this bill gives them that right.

I think that very simple step would mean that where it is to the benefit of the veteran, and where the algorithm has said yes, the veteran gets the benefit immediately. But if it is to the detriment of the veteran, or if the algorithm says no, then it automatically flags a human intervention. That means we have the same protections in whatever percentage of cases that currently exist and hopefully, with these bills and others that are looking at the creation of DRCA and other things, it will actually get better. It will certainly advantage those who get a quick decision and it would not disadvantage those who got a decision that said no from the computer. My view is that it is a very simple way to optimise the use of the technology and continue to evolve the decision-making algorithms; but the safety net would always be that if the answer was no, in terms of the benefit to the veteran, then it would automatically go for human intervention and review.

The other concern people have raised is around the privacy. This comes back to the issue of perception: if people perceive that benefits are being taken away or that there is something about to happen that will impact on them and their families, it causes stress and—as we have seen in evidence given to us during the current veteran suicide inquiry—the last thing this population needs is more stress, particularly if that stress is unfounded. If they are being fed information which is not true, that is something that we need to work on, as a parliament and as a broader community, with the individual to make to sure that veterans have accurate information so that they are given every support and not placed in positions where their situation is made even worse.

In terms of the privacy safeguards, this is an area where there has been a deal of concern and questions have been raised. There has been quite a bit of interaction between the minister, DVA and the Senate to look at what the public interest disclosure provisions in this bill actually mean. The intent is that it will help the department address problems that they currently have with their inability to share information where there is a threat to life, health or welfare so that they can actually inform people appropriately. The bill passed the House with bipartisan support after some months of public exposure, the scrutiny of two Senate committees, a public hearing and submissions, as well as consultation across parties and with the ex-service community.

There has also been a detailed privacy impact assessment. The assessment concluded that the public interest disclosure provisions contain detailed and stringent controls over the exercise of the disclosure power that reflect the importance of taking necessary and proportional considerations into account before relying on the provisions to make a disclosure. The bill consequently has several safeguards. The safeguards in this legislation include that the minister must make the rules about how the power is to be exercised. These rules, importantly, will be a disallowable instrument, which means that not only does the minister bear in mind his focus on saying that we should be veteran-centric, working for the benefit of veterans, and that he must make the rules but the parliament—importantly from a perspective of both transparency and accountability, because the rules are a disallowable instrument—still gets to the view those, scrutinise them and either approve or disallow them.

The secretary of the department must act in accordance with the rules. It is important to recognise that the legislation actually makes provision that if the secretary of the Department of Veterans' Affairs does not comply with the natural justice requirements before disclosing personal information then he or she will commit a criminal offence, punishable by a fine of 60 penalty units, which is currently over $10,000. Certainly, for a senior public servant to be convicted of a criminal offence is a significant power and disincentive for people to do the things that often they are accused of, such as working in an underhand manner. I do not believe they do, but that is often a perception. This is a very powerful legislative principle to stop that occurring.

The minister cannot delegate his or her power to make rules about how the power is to be exercised by the secretary of the department. The secretary cannot delegate the public interest disclosure power to anyone else. Before disclosing personal information about a person, the secretary must notify the person in writing about his or her intention to disclose the information, give that person a reasonable opportunity to make written comments on the proposed disclosure of the information and consider any written comments made by the person. Finally, after the public interest disclosure provisions and rules have been in operation for two years, there will be a review of the operation of those provisions with a report to be tabled in both houses of parliament. There are a number of significant checks and balances placed in the system. This is not something that can be used arbitrarily to the detriment of any particular veteran or person, but something where there is natural justice incorporated, there is transparency about what the rules are and there are legislative provisions to make sure that people apply them.

So, I do support the bill. I support it because after a number of inquiries in this place I have seen the consistent call for improving the legislative basis that constrains how people within the Department of Veterans' Affairs work. I have seen the consistent calls for them to have improved IT services, and we need to provide them the legislative permission to use those services. As I said, I think the simple catch-all to protect the veteran is that where a decision is made—if we actually do end up using computers to make decisions—if it is to the benefit of the veteran it goes ahead, and if a decision is not to the benefit of the veteran it is automatically is flagged for a human intervention. I commend the bill to the house.

Senator LAMBIE (Tasmania) (13:38): I rise to speak on the Veterans' Affairs Legislation Amendment (Digital Readiness and Other Measures) Bill 2017. I have to say that when I first got into parliament in 2014 I went to see Senator Ronaldson. Finally, three years later, the government has its act together.

If it has taken them three years to work this out and they still cannot connect the rules, or show the rules at the same time, then maybe they need to know about poll numbers today. But I am not talking about their poll numbers—the ones in their own parties. I am talking about 21 veterans who have taken their lives this year. I want to thank Ray Martin for those statistics this morning. That is where we are.

This bill would allow the Department of Veterans' Affairs to undertake business reforms and to implement new information and communications technology, otherwise known as ICT, to reduce time spent on claims and processing, and to improve services to veterans. The bill gives DVA's secretary the authority to use computer programs to make decisions in any claims over three separate acts, which include the Veterans Entitlement Act 1986, or the VEA; the Military Rehabilitation Compensation Act 2004, formerly known as MRCA; and the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988—the DRCA. The bill also significantly alters veterans' privacy in three pieces of veterans' legislation—the VEA, the MRCA and the SRCA, which may become known as the DRCA if it is enacted by this parliament.

Firstly, the bill would commit the Department of Defence and DVA to share personal and medical records—sending alarm bells already, I can assure you. Secondly, it permits the DVA secretary to disclose information about a particular case or class of cases if the secretary believes it is necessary and in the public interest to do so. And if that is not an alarm bell in itself for Simon Lewis, gee, shoot me down today! The bill's overall intent is good, particularly in making necessary reforms and introducing ICT, which will likely benefit veterans if their claims are processed more quickly and efficiently—they are the key words—and improve veterans' services by DVA overall.

However, schedule 2 of the bill, which deals with the privacy of veterans, has not undergone a robust and thorough independent privacy impact statement or assessment. This means that schedule 2 fails to comply with the PIA guidelines provided by the Office of the Australian Information Commissioner. In fact, just a few days after this bill was passed by the House the South Lake Macquarie sub-Branch of the Returned Services League of Australia in New South Wales started a change.org petition to urge this Senate to stop the bill, based upon serious privacy concerns by the veterans' community. In fewer than two weeks, the petition received over 10,000 electronic signatures.

The change.org petition received thousands of comments supporting the petition, including from the RSL New South Wales chief executive officer, Glenn Kolomeitz. He noted:

Veterans' entitlements and rights have been slowly eroded via the passage, over the last 30+ years, of a complex and inequitable legislative regime. It is time for the RSL to get its mongrel back and fight legislation of this nature lest it devolves into irrelevance.

The DVA and the Minister for Veterans' Affairs have stated in media releases, as well as on social media, that DVA had consulted the veterans' community on this bill and that it was developed in consultation with the veteran's community, including the RSL. That is absolute rubbish! Absolute rubbish! Basically, the Department of Veterans' Affairs stood in front of them and told them that this was what was going to happen—that it was all hunky-dunky and all good to go. They know what I do with these ESOs. They do not have barristers and lawyers to look after them because the government does not pay them enough! The government does not pay for that service for them.

Just last week it was revealed in a hearing into the different veterans' legislation and the DRCA bill by the Senate Foreign Affairs and Defence Legislation Committee that the committee is concerned with DVA's current consultation and engagement practices. In a report issued just today, it recommended a review of DVA's consultation and engagement practices. The change.org petition contained more than 10,000 signatures, and showed that the Senate committee's concern about DVA's inadequate consultation practices is more than valid. That the petition to stop the bill, based on veterans' privacy concerns, gained these signatures in fewer than two weeks suggested that the Minister for Veterans' Affairs' statements about consultation with the RSL are either lies or that the consultation did not go far enough. I can say to them: they might well have gone up by about 50,000 signatures if I had plugged it on my social media account.

The Senate Scrutiny of Bills Committee raised questions about why rules or guidance about the exercise of the secretary's disclosure power cannot be included in the primary legislation and asked why there is no duty on the minister to make rules regulating the exercise of the secretary's power, noting that this bill will provide the secretary with significant power. I would have thought that the secretary, Simon Lewis, has more than enough already that he cannot control.

In response to the Scrutiny of Bills Committee, on 12 December 2016 the Minister for Veterans' Affairs indicated that with respect to a veteran's privacy the proposed public interest provision was modelled on the Social Security (Administration) Act 1999, which had been in operation for 17 years and had never been a cause for concern. And what do you know? Here it comes! Two months later this statement by the Minister for Veterans' Affairs came back to haunt him, when in February 2017 Centrelink leaked personal information to a journalist after a Centrelink client had publicly claimed she was wrongly targeted by Centrelink over an unfair debt.

Basing veterans' privacy on social security law, given the Centrelink release of personal information, should give serious pause for thought to my fellow colleagues here in the Senate. Veterans deserve no less than robust protection of their privacy for their personal and medical files. Schedule 2 of this bill fails in providing strong privacy protection and, as such, I will introduce an amendment that will scrap schedule 2 from the veterans' digital readiness bill, for which I do believe I have support from the crossbenchers. However, Labor is still going to play the game, so while they are making up their rules—I think it was nine lots they have already done and they are now on their 10th or 11th—and mucking around with that, it will be interesting to see how many more veterans suicide over the next month while we are waiting for them to clear up this little matter. It is an embarrassment to the government that something so simple has been made into mincemeat and that more veterans' lives are being put on the line.

Once the Minister for Veterans' Affairs and the DVA undertake an independent PIA—privacy impact assessment—on veterans' privacy and then consult with all stakeholders, including the veterans' community, the minister is free to come back to parliament to introduce an amendment to the veterans' digital readiness bill that provides adequate privacy protections in dealing with veterans' records. Until this is done, this Senate should not authorise schedule 2 of this bill because it would be bad law and could have negative consequences for vulnerable veterans. I can assure you that, after 13 years of being in the Middle East on rotation after rotation after rotation, there are a lot of vulnerable veterans out there. We have only to see the vulnerability of our Vietnam veterans where most did one year in a war zone. These veterans have done nine, 10, 11 and 12 tours. Simply put, veterans' privacy should not be framed from social security law. Veterans make an enormous sacrifice to serve and protect our great nation and, as such, the very least we can do, as lawmakers, is to afford them a robust and independent privacy impact assessment and consultation process before we vote on something so important.

Automated decision-making will be useful to speed up claims processes; however, the DVA computer system and software have yet to be designed and built—that is the other issue. There is a lot of concern with regard to initial decisions related to a service injury or disease or reassessment of such. There is absolutely no computer program—if anyone can show me one or present different evidence, please do—that I am aware of, that is able to take into account High Court and Federal Court precedents in the decision of a claim for liability of an injury or disease—we just do not have the algorithms to do that.

Noting the recent serious concerns about the Centrelink debt-recovery data-matching system and the errors that have been reported about that system, it would be wise to only allow the legislation to make decisions on matters that do not involve initial decisions on liability of injuries or disease. To protect vulnerable veterans, I will be introducing an amendment to this bill which would limit decisions to those that do not involve claims for liability on an injury or disease which is service connected. This amendment will include reassessments of such claims. I do not see an issue with a computer program being able to make decisions on travel claims, reimbursement or expense-related claims and claims of a similar nature. For those who not know, this is actually already being done. I can submit a claim through the computer to DVA. The only thing that is holding them up is that it has to be signed off by a delegate, so I do not know why this has taken so long. I do not understand why it needs to be signed off by a delegate if you are already entering it into the computer system yourself.

Until DVA has a proven track record in the building and development of ICT, this Senate should not risk subjecting any veterans who defend our great country to a system where the computer says no to a legitimate compensation claim involving the initial liability determination or reassessment of injuries or diseases related to their Defence service. This parliament owes our veterans a duty of care in ensuring there are little to no errors in allowing DVA to make computer program decisions, especially with respect to first getting a veteran's foot into the door at DVA. After the Department of Veterans' Affairs has built and designed the computer system and the software and has developed a track record of success with decisions such as travel expenses, then it may come back to parliament to seek an amendment to broaden its computer program decision-making abilities.

Given the high number of veteran suicides—as I mentioned—and the present Senate inquiry into this most serious issue, we should not risk giving DVA free rein to make any and all decisions by computer program. If this Senate passes this bill as is, that is exactly what we will be doing: giving complete freedom to the executive branch of government, through the Minister for Veterans' Affairs and the Department of Veterans' Affairs, to make any and all decisions by computer program, before it is even designed, built and tested, with very little input and oversight by the legislative branch of government.

In a few years' time we do not want to find ourselves holding another Senate inquiry into veterans' suicides due to computers saying no to an initial liability claim for injury or disease that effectively seals off the door to DVA, absent an appeal. We, as lawmakers, need to get this right as there is far too much at risk to give the executive branch free rein to allow a computer program to make decisions, given the program has not even been designed, implemented or tested as yet. I think we are jumping the gun—you may want to start with the design. I understand this is based on money and that the government wants it to go through the budget. I think it is about $30 million. It is the same $30 million that former Senator Ronaldson spoke to me about—I am assuming it is in that same area. Until the computer program is out there and we can all see that it is working, why—in my own words—do we need to do this backwards? Because it is backwards. You are doing it the wrong way in an about face. I hope my Senate colleagues will support my amendments to this bill which will help to protect veterans' privacy and will prevent computer systems getting in error in DVA.

Before I sit down, I have some really serious concerns about giving so much more power to the Secretary of the Department of Veterans' Affairs. I do not know if people out there know that there have been recent cases where DVA delegates at level 4—they are not little delegates; they are advocates at level 4; they are about as high as they can go—have been told. They are out there putting their messages on social media and voicing their opinions. They are allowed to. It is a democracy. It is a free country. Simon Lewis does not like that. Simon Lewis does not like it when the truth is in his face. These level-4 advocates are now paying the price. One has 45 cases sitting on his desk and he has been told, in no uncertain terms, that he has to follow the rules; the rules that have been set by Simon Lewis. One of those rules is that he is allowed one email per week. How can he do that when he has 40 or 45 files on his desk, and I think there are about a dozen going through the AAT?

How does a secretary get so much power that he can shut down a level-4 advocate? He has put nothing in place to take over the veterans that this level-4 advocate has on his books. He has done nothing. He has left veterans out there sitting on the sidelines, wondering who the hell they go to next. This is the power already shown by Simon Lewis, and you want to give him more? Come on. He is already dictating to level-4 advocates how they are going to interact with DVA, because goodness forbid we put things on social media which are pretty much true. I will say they are true, and I have no problem putting it up there either when it comes to Simon Lewis and his lack of action or his inability to do his job. He does not like it? I say this to you, Lewis: here's a box of Kleenex. Suck it up. If you started doing the job properly, we would not be 'slandering' you all over social media with the facts coming back to bite you. That is how it operates.

As for checks, balances and all this sort of stuff: no, there are no checks and balances in DVA. That is why you have already had this many suicides this year. As a matter of fact, while we have been screaming for two years to have a royal commission into Veterans' Affairs, I think that, after the 500 or 600 submissions that have come through in the most recent inquiry and the one that was held into mental health in February-March last year, we have no other choice but to do the right thing as politicians and at least call for an independent forensic audit into the management and administration of Veterans' Affairs. We do not have a choice. There is something really wrong going on in that department. It stinks to high heaven and it is taking out veterans.

Before you vote for this bill—especially Labor—have a good think about what you are doing. I would hope that people are going to support my amendments.

Senator PATERSON (Victoria) (13:54): I want to begin by recognising Senator Lambie's evident passion and longstanding interest in this issue. She is a very sincere and genuine advocate for the interests of veterans, and I recognise her for that. But I also think that all of us in this place value our veterans. All of us should value our veterans. All of us want to take the absolute best care of them in recognition of the wonderful service that they have given throughout their careers representing our interests and our values overseas. I include in that the minister responsible for this legislation, Minister Dan Tehan. I do not think you will meet a more conscientious, caring, thoughtful or compassionate minister. He is very passionate about delivering the absolute best outcomes for our veterans. In this place we may disagree about the best means to deliver that, and that is well and good. We should have that debate. But I do not doubt for a second the genuine commitment that the minister has shown on this issue and any other issue in his portfolio when it comes to the interests of veterans.

I would like to focus for a moment on one of the positive aspects of this bill that perhaps has not had sufficient airing in this debate so far, and that is the potential for these reforms—the modernisation of these processes—to deliver much faster resolution of claims by our veterans with the department. There are veterans who wait up to 120 days to get an outcome for their applications to the department, and that is not good enough. Technology can and does allow us to really significantly improve that, and that is something that we should all welcome. Computerisation is not something to be afraid of; with the appropriate checks and balances, modern systems can ensure that we do deliver much better, more efficient service to veterans. I know one of the issues that they commonly raise is the length of time it takes to resolve their claims. They are right to be concerned about that, and this bill and the measures associated with it absolutely seek to address those concerns.

Obviously, Senator Lambie and others have raised concerns about the privacy safeguards in this bill, and they are right to be concerned about the privacy of our veterans. We are all concerned about that. But the truth is that this bill significantly improves in a number of key areas the protection of the privacy of our veterans. I will summarise a few of the key ones here for the benefit of the Senate and anyone watching, particularly veterans who may have concerns about their privacy.

Currently, the law which dictates how veterans' privacy should be dealt with is the Privacy Act 1988, and there are a number of inadequacies under it. Under this new policy, they will be addressed, and that will be improved. One example is that, under the Privacy Act, the department is not required to contact an individual prior to releasing their information. This bill, if passed, will require them to do that. It will require the secretary of the department to contact the individuals. Another weakness of the current law is that the department does not need to provide an opportunity for the individual to respond prior to the release of their information. Under this bill, if passed, the secretary must provide a person a reasonable opportunity to respond, including age, health, disability, social, cultural, family circumstances and any physical, psychological, national security or relevant circumstances. This is a much more extensive requirement than exists under the current act.

Currently under the law, the department can release all of an individual's record. Under the change that will be brought about if this bill passes, an individual's entire record can never be released. Under the current law, the department can release details on an individual's medical conditions. Under the proposed bill, no individual's specific medical information can be used even to correct misinformation. Under the current law, the department can provide information to anyone it believes should have it whether or not they have a need for it. Under this bill, only people who have a genuine and legitimate interest can be provided with that information.

Those are just some of the key safeguards that are being introduced by this bill and which are an improvement on the status quo. I recognise that they may not be sufficient to accommodate Senator Lambie's concerns, but I think they are a significant improvement on the status quo. The secretary also has to consider an individual's circumstances, as I mentioned before. They have to consider the physical, psychological, national security or relevant circumstances about the individual. The release of the information has to be proportionate to the objective of the outcome, which is not something that is required under the current law. The secretary has to consider whether anonymous or general information could achieve the same outcome.

Only misinformation that is detrimental or harmful to the broader veterans community can be addressed. When information is used to address misinformation, the secretary has to use anonymous information in the first instance. No individual's specific medical information can be used to correct misinformation. No individual's national security or service records will be compromised. An individual's private information can never be released in order to—

The PRESIDENT: Order! It being 2 pm, we now move to questions without notice.

Senator BUSHBY (Tasmania—Chief Government Whip in the Senate) (15:39): by leave—I move:

That the Joint Standing Committee on Migration be authorised to hold a public meeting during the sitting of the Senate today from 6 pm.

Question agreed to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (16:48): I move:

That the Senate take note of the document.

This document should send shivers up people's spines about the way government programs have been implemented. But I must admit it does not surprise me or, I am sure, anybody who has been paying attention to the Centrelink robo-debt debacle that is currently going on. This document looks at a number of the program's Centrelink-related compliance measures which were announced in relevant budgets and implemented in 2012-13 through to 2015-16.

When you look at the department's findings, the government must have known about at least some of these findings about the failures of their department, because the departments have not been reporting properly. Then the government, basically, wildly go off on another 'let's grab money back from the most vulnerable members of our community' exercise, knowing full well that their past measures have not been working, knowing that they are not getting adequate reports, knowing that they have not been getting the savings from there and knowing that the department has not been monitoring and reporting back. The report says:

Monitoring and oversight arrangements in place between the Department of Human Services and the Department of Social Services for the compliance measures were not effective. Requirements set out under the Bilateral Management Arrangement between the two entities were not met. In addition, the Department of Social Services as the relevant policy entity did not take responsibility for monitoring the achievements of the measures. The Department of Human Services' monitoring of savings and expenses associated with compliance measures could be improved. In the Department of Human Services' advice to its Minister on implementation progress, the department used a methodology that did not provide reliable advice on the (gross fiscal balance) savings achieved from the measures.

The report also says that the advice on the underlying cash savings realised, including debt recovery for the majority of the compliance measures, are key outcomes expected from the measures. The department did not look at compliance cost measures and consider whether the benefits outweighed the cost of monitoring. Internal reporting on the progress of the measures has not provided a consistent and reliable indication of where the key performance outcomes, including expected savings and levels of activity, were on track nor were the key risks were being identified. You get the picture. This is a litany of failures from the department. Is anybody surprised, therefore, that we are getting the same sorts of failures coming through from Centrelink and the Department of Human Services when they are trying to apply their so-called auto-debt recovery process?

The conclusion of the report says that three measures have not been effectively implemented; two measures implemented were partially effective, with one measure achieving the expected savings but not the expected level of compliance activity and the other measure achieving the expected level of compliance activity but not the expected savings. Two measures of seven, they say, were effectively implemented. What was the minister's response to the comment that the savings were not achieved? It was: 'We do different calculations, and we reckon we saved heaps.' Who are you going to believe, the Auditor-General; the department, which has not even been reporting the savings; or the government, which says, 'Just trust us. We think it's okay. We've made the savings. It's all there.'? I am sorry, it is not all there. They have not made the savings. They cannot justify it, because the information simply has not been reported.

This agency has been running flawed programs for a significant period of time. That is evident from this report. Now, like Dracula in charge of the blood bank, they are in charge of the auto-debt recovery process that is sending people false debt notices. The litany of mistakes goes on and on. Of course, there is a Senate inquiry that will try to get to the bottom just what has happened and report on some of those processes. It is obvious from this report that there are big problems in Centrelink and in the Department of Human Services. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator McKIM (Tasmania) (16:53): I move:

That the Senate take note of the document.

I rise to take note of the Audit Officer report on the Australian Border Force’s use of statutory powers. There is a pattern emerging here. We have another scathing report from the Australian National Audit Office into the Department of Immigration and Border Protection. To refresh people's memory, we have had two audits into matters associated with the way the department expends the public funds with which it is entrusted that have revealed a litany of deficiencies in expenditure and deficiencies in internal processes and a failure to comply with government procurement guidelines.

In this, the third scathing report by the ANAO into the Department of Immigration and Border Protection in about the last eight months, we have findings such as this one:

The department’s enterprise risk management framework does not adequately address the risk of officers exercising coercive powers unlawfully or inappropriately.

We have this finding:

The ANAO found instances of potentially unlawful searches and failure to comply with instructions under both the Customs Act and Migration Act …

There is this finding:

The department has not provided adequate instructions and guidance for officers exercising coercive powers.

And we have this supporting finding:

Many of the instructions that are provided to Border Force officers on the department’s intranet are out of date, incomplete, inaccurate and are not accessible to all officers.

I could go on, but in the short time remaining to me today I want to go to the response from the department, which was placed on the record by Secretary Pezzullo during the Senate Legal and Constitutional Affairs Legislation Committee hearings on 27 February this year when I asked him about this scathing report and read to him some of the findings that I have just read out to the Senate. Mr Pezzullo of course attacked the Audit Office. He said:

Again, the analysis … is not necessarily always in keeping with the standards that we would expect to see in an audit report.

He is not defending his department; he is going on the front foot and attacking the Audit Office. He goes on to say about the Audit Office:

Regrettably, it is becoming a bit of a recurring pattern with the Audit Office. We engaged with them very civilly and very professionally about how we can narrow some of these methodological and factual differences, but it seems to be a pattern and that is regrettable …

As I pointed out to Mr Pezzullo a little bit later in the day, I would take the word of the Audit Office, an independent assessor of the Department of Immigration and Border Protection, before I took the word of this secretary in the context of a self-assessment that he is conducting into the processes of his own department.

Again, this is the third scathing ANAO report into the Department of Immigration and Border Protection in eight months. It really does call into serious doubt the capacity of Minister Dutton to adequately oversee his department and, importantly, to fulfil his ministerial responsibility to ensure the reasonable and responsible expenditure of public funds. That is something that no minister should ever forget. The money they spend is not their money. They are temporary custodians of it. It is raised through the tax system but it is money that comes from the Australian people. I would not put Mr Dutton in charge of running a chook raffle in a bar. I would not put him in charge of organising a beer in a brewery. He is clearly incapable of the simplest organisational tasks. He has let his department run rogue and he has let his department get away with not only serious financial irregularities but a failure to comply with requirements around the use of force and the statutory powers associated with that. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator RICE (Victoria) (17:01): I move:

That the Senate take note of the document.

I take note of document No. 26, the Australia State of the Environment 2016. In summary, the state of the environment report shows that we have a dark stain of government mismanagement of our environment. It shows that over a period of time we have had state and federal governments, but particularly this federal government, continue to put the interests of donors and big polluters ahead of the public good and responsible environmental protection.

The state of the environment report shows that the trend continues to go down. Our environment is what we depend upon—our air, our water and our biodiversity. We need to reverse these trends. We need to improve the state of the environment. This state of the environment report puts the information on the table and shows that the trends are still going badly. We are experiencing record heatwaves. With regard to global warming, the report summarises the fact that our carbon emissions are continuing to rise, the fact that Australia has got the highest level of carbon emissions per person of any OECD country, and the fact that we have experienced our hottest year on record in Australia, and yet, we still have proposals for incredibly polluting developments like the Adani coalmine. We are experiencing record heatwaves. We are experiencing bushfires. We are experiencing coastal erosion. We are experiencing the impact of wheat yields, for example, already decreasing because of global warming. And yet, the response of this government is to come into the House of Representatives and wave lumps of coal around to try and convince us that clean coal is a reality when everyone knows that clean coal just does not exist. The evidence, rather than the rhetoric, is presented there very plainly and simply in the state of the environment report.

Moving on to biodiversity, we have a disastrous situation of ongoing extinctions. The poor state and declining trend of Australia's biodiversity is noted as a particular concern. The number of species that have been listed as threatened or endangered under the EPBC Act continues to rise. The state of the environment report notes that the number of species listed in the critically endangered category has increased by 31, and two species have been recorded as likely to be extinct. We know that this is happening all around the country. The list of nationally threatened species and ecological communities has increased, with the addition of 30 new ecological communities, 44 animal and five plant species listed as now being threatened. We have got land clearing continuing in Queensland. We have two more species reported as extinct: the Bramble Cay melomys and the Christmas Island Forest Skink.

What makes this very sad and what is very clear in the state of the environment report—which shows that the problem is not going away—is that we know in almost all of these instances what needs to happen. We know how to protect these species: it comes down to protecting habitat. It comes down to protecting species from feral animals. It comes down to doing things about invasive weed species and reducing the threats to these species. We know what to do. In the case of one of the species that has been declared critically endangered since this report came out, the Leadbeater's possums in Victoria's central highlands forests, we know what we need to do to protect the habitat of these possums and to send the trend the other way, to give the Leadbeater's possums a chance of survival. That is to stop the logging of their homes. Despite having this information, the state of the environment report shows a continuation of the trends that have been in place since these reports began to be produced. The bad news just keeps on coming, but instead of listening to that, instead of looking at it and instead of reading it and saying, 'It looks like we need to be changing the way we are doing things,' we have a government intent on continuing the pollution that causes global warming and on continuing the logging, the mining and the other extractive industries that are destroying the habitat. We have got a government that is intent on continuing to increase the amount of carbon pollution we are putting into our atmosphere.

The Greens have read of the state of the environment report, and we know that things need to change. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator RYAN (Victoria—Special Minister of State and Minister Assisting the Prime Minister for Cabinet) (17:10): These bills are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper. I move:

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

Question agreed to.

Bills read a first time.

Senator RYAN (Victoria—Special Minister of State and Minister Assisting the Prime Minister for Cabinet) (17:10): I move:

   That these bills be now read a second time.

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

Leave granted.

The speeches read as follows—

FARM HOUSEHOLD SUPPORT AMENDMENT BILL 2017

The Farm Household Support Amendment Bill 2017 is a Bill to amend the Farm Household Support Act 2014.

The Bill proposes to assist farmers in financial hardship by removing unnecessary waiting periods once they have been approved for payment of Farm Household Allowance. The Bill also resolves a technical anomaly in the definition of farm assets in the Farm Household Support Act whereby some types of assets used wholly or mainly for the purpose of a farm enterprise – such as water rights or shares in marketing co-operatives – are not assessed as farm assets.

The Farm Household Allowance Programme provides up to three years of income support paid at the same rate as Newstart Allowance, to farmers and their partners in hardship. Since its introduction in July 2014 over 7000 farmers have been granted access to the programme which allows them to access income support payments, case management services and improvement activity supplements. The safety net provided by this programme is essential to ensure the Government can appropriately support farmers in hardship.

The Government's general position is that conditions for receipt of Farm Household Allowance should be aligned with those for mainstream income support payments, unless there are good reasons for departure.

The programme settings recognise that farmers are often excluded from mainstream income support payments by the size of the assets they use in operating their farm, yet they cannot realise those assets for self-support without taking away some, or all of the income producing capacity of the farm enterprise.

Farm Household Allowance is therefore subject to a two-tiered asset test. The first, applied to non-farm assets, is the same as that applied to Newstart recipients. The second tier permits the farmer and their partner to hold up to $2.55 million in net farm assets.

The mutual obligation provisions for Farm Household Allowance also differ from those for Newstart Allowance, recognising that the aim is to provide income support for a limited time while the farm household seeks to move to a more sustainable financial position. To this end, recipients receive case management support and financial assistance to obtain advice or training to improve their situation.

When the Farm Household Allowance Programme was introduced in 2014, the same Ordinary Waiting Period and Liquid Asset Waiting Period that apply for other Australian Government income support programmes were retained. These are generally applied to ensure that social welfare applicants use their own readily available resources before drawing on public monies, and have incentives to continue to seek work.

Experience has shown that the normal considerations around waiting periods are no longer appropriate for Farm Household Allowance.

Farmers are an integral part of the farm business enterprise. If a farmer has qualified for Farm Household Allowance, this means they are experiencing hardship. Requiring this farmer, or their partner, as a Farm Household Allowance recipient, to wait additional time, notwithstanding they have been found eligible, could lead to additional hardship which risks a reduction in their capacity to operate the farm enterprise.

The Bill therefore proposes the removal of the requirements for recipients of Farm Household Allowance to serve an Ordinary Waiting Period or Liquid Assets Waiting Period.

Farm Household Allowance is also time limited, so removing the standard waiting periods generate no costs to the Budget.

The Bill also seeks to clarify the legislative treatment of certain assets necessary for the operation of the farm enterprise.

Under the Farm Household Support Act certain assets, which are necessary for the operation of the farm enterprise, are currently excluded from the definition of farm assets. Therefore they must be assessed as non-farm assets, and are subject to the lower tier one test that does not account for the illiquid nature of farm assets. Examples include water rights and shares in marketing cooperatives.

This is contrary to the intent of the Farm Household Allowance Programme in respect of the assessment of assets, and this Bill therefore provides for the definition of farm assets to include water rights and shares in marketing cooperatives used or held substantially for the purposes of operating the farm enterprise. This change will apply to new customers of the Farm Household Allowance Programme. It will not affect existing customers who may have been assessed under the current Minister's Rules applying to these assets.

The clarification of the treatment of assets will not change the maximum asset holding limits to be eligible for the Farm Household Allowance. It will therefore have minimal impact on the Budget.

In seeking to remove unnecessary waiting periods for farmers and their partners approved to receive Farm Household Allowance, and in clarifying the treatment of assets within the Farm Household Support Act, this Bill further demonstrates this Government's responsiveness to the needs of the farm community and rural and regional Australia as well as our willingness to streamline the assessment of Farm Household Allowance applications where appropriate and possible.

NATIONAL DISABILITY INSURANCE SCHEME SAVINGS FUND SPECIAL ACCOUNT BILL 2016

This Bill will establish a new ongoing special account that will assist the Commonwealth to meet future financial commitments to the National Disability Insurance Scheme. The special account will be known as the National Disability Insurance Scheme Savings Fund Special Account and was announced in the 2016‑17 Budget by the National Disability Insurance Scheme Savings Fund measure.

The National Disability Insurance Scheme (known as the NDIS) is one of the largest social and economic policy reforms in Australian history. The NDIS supports Australians who are born with, or acquire, a permanent and significant disability before the age of 65 to lead a more independent and inclusive life.

The NDIS provides this support by assisting people with disabilities to meet the costs associated with their conditions. Importantly, the scheme empowers people with disabilities to make their own decisions about how they are supported.

NDIS trials are well underway across Australia. At the completion of the trials in June 2016, there were around 30,000 people with disability participating in the scheme. On 1 July 2016 the NDIS commenced its transition phase, beginning a large-scale, staggered and well-managed expansion that will see it fully rolled out in every state and territory, with the exception of Western Australia, by 30 June 2019.

By 2019–20, the NDIS will be supporting around 460,000 Australians with disability. At that time, the NDIS will be injecting $22 billion each year into the Australian economy.

The NDIS provides the support directly to each eligible person, rather than to a service provider to then deliver the required support. As a result, the NDIS will also change the landscape of the disability sector. New opportunities will be created by empowering people with disability. A new source of demand will be created within the wider economy for disability support services. As the scheme grows, it will create a national market for care and support based on empowerment, choice and control – a market that drives innovation and creates greater efficiencies and effectiveness.

The Productivity Commission concluded that, over time, the economic benefits of the NDIS will outweigh its costs and will add close to one per cent to GDP. The NDIS is not only good for people with disability, it is good for the Australian economy and it will drive jobs growth over the long term.

In 2019–20, the NDIS reaches 'full scheme' with $22 billion of funding. The Commonwealth's share of the total funding will be around $11.2 billion per year. At that time, eligible people with disability who are currently receiving support through Commonwealth and state disability programs will be receiving support through the NDIS.

The Government is fully committed to properly, adequately and sustainably funding the NDIS. It is for these reasons that the Government is bringing forward the National Disability Insurance Scheme Savings Fund Special Account. The special account will give a clear line-of-sight of the funding set aside by Government for the NDIS.

It is critical that the Commonwealth manages its funding in a way that is transparent and quantifiable, and meets the Commonwealth's funding commitments to ensure the NDIS is fully funded.

The Government is 100 per cent committed to delivering and funding the NDIS in full. We have supported the NDIS from day one and this special account demonstrates that ongoing commitment.

In addition to this special account, the Commonwealth is redirecting existing disability-related spending and the DisabilityCare Australia Fund toward the cost of the NDIS. In 2019–20:

existing Commonwealth disability funding redirected to the NDIS is estimated to be $1.1 billion;

the Commonwealth share of the increase in the Medicare Levy through the DisabilityCare Australia Fund is estimated to be $3.9 billion; and

redirected funding, which is currently provided to the states for specialist disability services, is estimated to be $1.8 billion.

In total, the Commonwealth will direct $6.8 billion from these sources to the NDIS. Because of the failure of the previous Labor Government to specifically set aside funding for the NDIS, this will leave a funding shortfall of $4.4 billion from 2019–20 onwards, which this Government will meet.

While the Medicare levy is an important contribution to the NDIS, it only provides a portion of the Commonwealth's annual new contributions to the NDIS at full scheme.

It falls to this Government to set aside the remainder, which equates to $4.4 billion funding shortfall in 2019-20, and growing to over $5 billion in future years.

This special account is the mechanism for securing that funding shortfall. It's proof of the responsible and sustainable way that this Government follows through on its NDIS promises.

The National Disability Insurance Scheme Savings Fund Special Account, which will be created by this Bill, will be in the form of a special account. The special account will be administered by the Department of Social Services, with its funding sitting within the Consolidated Revenue Fund. This will ensure that savings deposited into the special account are not returned to the Consolidated Revenue Fund itself and effectively lost for NDIS purposes.

The special account will allow the Government, over future budgets, to identify savings from existing programmes and set aside those savings to assist in meeting the Commonwealth's future financial commitments to the NDIS. Effectively, the Government will, over successive years, put aside savings that are clearly identified, quantified and defined so that the annual funding gap from 2019–20 is met within existing funding.

By clearly identifying savings in the special account, it will provide an enduring response to the concerns raised by the disability sector in relation to how Government will fund the shortfall for the NDIS. The previous Government had identified savings to assist in meeting the funding requirements of the NDIS from 2019–20. However, those savings were not set aside to meet future NDIS costs and were effectively lost for NDIS purposes.

The special account provides a sustainable way to meet the funding gap from 2019‑20 onwards that does not require borrowings for the NDIS that would need to be paid back by future generations.

This Bill gives the Government the flexibility to identify savings from any portfolio, not just the Social Services portfolio. That approach will ensure that many areas of Government contribute to supporting people with disability.

There will be an upper limit on the balance of the special account – it will only hold enough money to fund the future value of the Commonwealth's NDIS commitment. Over the next few years, savings can accumulate in the special account to meet future funding commitments. From 2019-20, when the NDIS reaches full scheme, if the balance of the special account becomes greater than required, the excess will be returned to the Consolidated Revenue Fund. Further, a review of the special account will be conducted in 2026–27.

Identification of savings to be deposited into the special account will be a decision of Government. Those savings to be credited to the special account will be committed over a 10-year period. The quantum of individual savings will be consistent with the Budget Process Operational Rules. The Minister for Social Services will be the responsible Minister, with responsibility for the policy and management of the special account.

The Government will establish the special account with an opening balance of $343.7. million in 2016–17, from the Consolidated Revenue Fund and savings identified in the NationalDisability Insurance Scheme Savings Fund measure announced in the 2016-17 Budget. The Government will make further deposits into the special account over the coming financial years.

In bringing this Bill forward to create the National Disability Insurance Scheme Savings Fund Special Account, the Government is providing a robust and enduring solution to meeting the Commonwealth's funding commitments for the NDIS.

The Government urges passage of the National Disability Insurance Scheme Savings Fund Special Account Bill 2016, as recommended by the Senate Community Affairs Legislation Committee (the Committee) on 7 November 2016, following its inquiry into bill. In coming to this position, the Committee noted they were:

of the view that this legislation presents a significant step toward ensuring that NDIS funding is both adequate and sustainable.

The Committee also noted, that in their view:

concerns about where savings will be made, although important, do not reflect or address the purpose of the bill: namely, establishing a mechanism by which funding intended for the NDIS is secured to be available for that purpose, when and as needed.

______________

TREASURY LAWS AMENDMENT (2017 MEASURES NO. 1) BILL 2017

Today, I introduce a bill to implement two Government measures.

Schedule 1 of this Bill makes minor technical amendments to the income tax law to ensure that two National Innovation and Science Agenda (NISA) measures operate in accordance with their original policy intent.

These measures are the Tax Incentives for Early Stage Investors measure and the New Arrangements for Venture Capital Limited Partnerships measure. Together, they are designed to promote a culture of entrepreneurship by connecting start-up companies with investors who have both the requisite funds and business experience to assist entrepreneurs to build successful, innovative companies.

These two measures, together with the minor technical amendments in Schedule 1, demonstrate the Government's commitment to encouraging and supporting innovative new businesses.

The amendments will clarify the tax law to provide certainty for investors who are looking to invest in start-ups and certain venture capital arrangements through a single interposed trust and will ensure these investors are able to access the capital gains tax concessions provided by the Tax Incentives for Early Stage Investors and the New Arrangements for Venture Capital Limited Partnerships measures.

Schedule 2 of the Bill amends the Australian Securities and Investments Commission Act 2011 to streamline the process by which the Australian Securities and Investments Commission may share confidential information with the Australian Taxation Office for its use in the performance of its functions.

The amendment mirrors the existing arrangements in place for the Australian Securities and Investments Commission to share information with the Reserve Bank of Australia and the Australian Prudential Regulation Authority. It will enable more timely collaboration between the Australian Securities and Investments Commission and the Australian Taxation Office during investigations into illegal or high risk activities, for example, illegal phoenixing activity.

Full details of the two measures are contained in the explanatory memorandum.

Debate adjourned.

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

Senator RYAN (Victoria—Special Minister of State and Minister Assisting the Prime Minister for Cabinet) (17:11): I move:

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

Question agreed to.

Bill read a first time.

Senator RYAN (Victoria—Special Minister of State and Minister Assisting the Prime Minister for Cabinet) (17:12): I move:

That this bill be now read a second time.

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

Leave granted.

The speech read as follows—

SOCIAL SERVICES LEGISLATION AMENDMENT (OMNIBUS SAVINGS AND CHILD CARE REFORM) BILL 2017

This bill includes the Jobs for Families Child Care Package from the Education and Training portfolio, and a range of new and previously introduced social services measures to improve the fairness and sustainability of government payments. Together, the measures in this bill will help us:

- provide a fair and reasonable safety net for those who need it;

- encourage participation in work and study; and

- contribute to bringing the budget back to balance.

The government wants a welfare system that supports the most vulnerable, encourages those capable of work or study to do so, reduces intergenerational welfare dependency, and is sustainable for the future.

While the Australian welfare system is highly targeted, sensible changes that contribute to longer-term sustainability should be pursued given the budget context. Otherwise, the next generation of Australians will be left with more debt to repay and higher taxes.

Workforce participation and self-reliance are central to improving long-term wellbeing. This is why the government is committed to making changes that will encourage and support greater workforce participation for those who have the capacity to work.

Both the Education and Training and the Social Services components of this omnibus bill have been repeatedly examined by their respective Senate Legislation Committee. I thank the Senate Education and Employment Legislation Committee, the Senate Community Affairs Legislation Committee, as well as all those individuals and organisations who contributed to these inquiries. The government welcomes and accepts the recommendation from each of the committee's majority reports that the childcare bills be passed and looks forward to the report of the most recent Inquiry being tabled.

Jobs for Families and family payments structural reform and participation measures

The government remains committed to investing in child care to provide parents with more choice and opportunity to work, and to provide children with high-quality early education.

But the significant investment in child care must be fiscally sustainable. Combining fair and reasonable changes to the family tax benefit system and childcare reforms into a single bill enables the government to reduce spending and increase workforce participation through an affordable childcare system.

The Jobs for Families Child Care Package delivers genuine, much-needed reform for a simpler, more affordable, more accessible and more flexible early education and childcare system. In supporting around one million Australian families who are balancing work and parenting responsibilities, this package of measures is fundamentally fair—it will provide the greatest hours of support in child care to the families who work the longest hours, and the greatest financial support to the families who earn the least. Families on incomes of around $65,000 or less will receive the highest 85 per cent rate of subsidy, which is an increase on the current rate of about 72 per cent. It is estimated that our reforms will encourage more than 230,000 families to increase their involvement in paid employment.

New data released just yesterday showed that there are nearly 18,000 approved child care services nation-wide, caring for roughly 1.25 million children.

But the data also illustrates a broken early education and care system that is not working for Australian families who in the annual June 2016 quarter faced a fee spike of almost eight per cent. While the Turnbull Government has done everything it can to reduce fee increases in the current system, this latest 7.6 per cent increase in child care fees – including a 6.3 per cent increase in Long Day Care fees demonstrates that Australia's child care system needs to be reformed.

We need to fix this broken system with a complete overhaul.

The reforms will place downward pressure on what have been incessant child care fee increases through an hourly rate cap; abolish the current child care rebate cap for most families and increase it from $7,500 to $10,000 for those on higher incomes; introduce new compliance powers to further strengthen the government's efforts to clamp down on fraud; provide a child care safety net for the most vulnerable children and slash red tape so that services can offer more flexible hours.

The Jobs for Families Child Care Package also includes a number of other important measures that are not formally part of the bill being introduced today. This includes the Community Child Care Fund which will help new and existing services, particularly in rural, regional or vulnerable communities, increase the supply of places in areas of high, unmet demand.

Much has been said, in both the HoR debate and in the Senate Inquiry, about the transition of Budget Based Funded services under this package, otherwise known as BBFs, and the support they will receive from the Community Child Care Fund.

There are 300 BBF services nationwide, caring for around 22,000 children, amongst those are around 5,000 children in 45 mobile services.

In order to address concerns with the current block-funded program, which is capped and closed, this package brings BBFs that are delivering child care into the broader funding model. For the first time, families using these services will receive direct support from the government through the Child Care Subsidy and, for those requiring extra support, through the Additional Child Care Subsidy.

Recognising that many of these services go to great – and costly – lengths to travel to small communities with limited numbers of children, our third funding source for BBFs, including mobiles, is the Community Child Care Fund, which is an annual fund of $110 million a year. A significant portion of that fund will be provided as a supplementary funding stream to BBFs that need extra support in order to remain viable. As is the case for the BBF program, Community Child Care fund guidelines will not be legislated – this has the benefit of flexibility and the ability to tailor the program to meet emerging needs into the future. However, having listened to the need for certainty going forward, I can assure the Senate that these BBFs will benefit from longer term grants of between 3 and 5 years. Great care has been taken to support BBFs in the Jobs for Families child care package, including service based reports developed by PwC for each and every BBF. This careful work will continue after the Bill has been passed, particularly with regard to further consultation on the Guidelines governing the Community Child Care Fund, which will be published by July 2017. We will also examine this program, along with every other provision of the bill, as part of the Post Implementation Review scheduled to commence within one year of implementation.

I also note the government's ongoing engagement with both the child care sector and with the Senate cross-bench on a range of policy settings under the Jobs for Families Child Care Package.

The government is absolutely committed to the Jobs for Families Child Care Package, however the additional expenditure on child care must be paid for, and the family tax benefit measures in this bill are to offset this expense. A key component of reducing this expense is to phase-out both the family tax benefit part A and part B end-of-year supplements.

The family tax benefit supplements were announced in 2004 in response to high levels of reconciliation debt experienced by family tax benefit participants. This debt was often due to families not being able to accurately predict changes in income or changes in circumstances such as a return to work. The phasing out of the family tax benefit supplements recognises that the government's investment in service delivery reform improves the accuracy of income reporting and significantly reduces the need for supplements to off-set this type of debt.

While the changes to family payments in this bill will pay for the Jobs for Families Child Care Package, they will also simplify the family tax benefit system and enable us to provide more money on a fortnightly basis to those families who need it the most.

The government will increase the maximum fortnightly payment rates of family tax benefit part A by $20.02 for each child in a family aged up to 19. This represents a doubling of the government's previous proposal to increase family tax benefit part A fortnightly rates by $10.08. What this means in practice is that more than 1.2 million lower-income families (including income support families) who receive family tax benefit part A for around 2.2 million children will now receive higher fortnightly payments from 1 July 2018. The increase in fortnightly payments will help families better manage their day-to-day and week-to-week budgets by providing them with timely, regularised assistance at the times when they need it the most.

We will also provide an additional $19.37 per fortnight for under 18-year-old youth allowance recipients who are living at home, bringing the payments to the same standard rate as a family tax benefit part A child aged between 13 and 19.

Aligning these two rates of payment is in itself a much-needed part of the reform process to simplify payment systems where possible. Just as workforce participation is the key to growing wealth for families, educational attainment is the key to getting a job. The government understands this and increasing the fortnightly rates of these payments will encourage secondary students to stay in school. This is fundamental to giving children the best start in life so that they become productive, contributing members of the Australian society. Importantly this reform will also affect people who are on a disability support under the age of 18, special benefit and ABSTUDY.

To encourage greater workforce participation, single parent families with older children will only be able to receive family tax benefit part B until the end of the calendar year when their youngest child turns 16 years old. These families will still receive family tax benefit part A for each eligible child. The government, by this bill, will not proceed with a previous proposal to introduce a reduced standard rate for family tax benefit part B for single parent families with a youngest child between 13 and 16.

Single parents aged at least 60 years of age and grandparents and great-grandparents will continue to access family tax benefit part B at the current rate until the end of the calendar year their youngest child turns 18. This recognises that grandparent carers and single parents who are 60 and over perhaps take on a large responsibility when caring for children but also are somewhat less likely to be working and are more likely to be retired.

Budget repair measures

This omnibus bill also includes measures previously in the Social Services Legislation Amendment (Budget Repair) Bill 2016.

The measures in that bill will help to ensure Australia has a targeted income support system that provides financial assistance to those most in need, while encouraging self-provision. For this reason, and the reasons to follow on each measure, the government supports the measures previously introduced in that budget repair bill.

Tightening proportionality requirements

Under the current arrangements, age pension, wife pension, some widow B pension recipients, and disability support pension recipients with unlimited portability and whose continued inability to work occurred overseas rather than in Australia, have their rate of pension adjusted after 26 weeks overseas. This adjustment is based on their period of working-life residence in Australia.

The proposed measure would reduce from 26 to six weeks the length of time the age pension, and a small number of these other payments with unlimited portability, are paid at their normal means-tested rate of payment overseas before they are adjusted based on the person's working-life residence.

This change only affects pensioners who have spent less than 35 years of their working life in Australia. A pensioner who has resided in Australia for less than 35 years of their working life would have their pension rate adjusted at six weeks after being overseas. For example, a pensioner who has resided in Australia for 25 years of their working life would receive 25/35ths of the normal means-tested pension they would receive if they had stayed in Australia; after six weeks overseas.

It is not considered reasonable by the government, or indeed—we would suggest—by the community, for taxpayers to pay pensions indefinitely to people outside Australia, without regard to their period of residence in Australia, for anything other than relatively short absences. This measure will therefore reinforce and strengthen the residence-based nature of the Australian social security system.

I will outline further pension changes announced in the 2016-17 MYEFO later in this second reading speech.

Cessation of the Pensioner Education Supplement and the Education Entry Payment

With the cessation of the Pensioner Education Supplement and the Education Entry Payment, when the Pensioner Education Supplement and the Education Entry Payment were originally implemented, they aimed to give some assistance to long-term income support recipients who had been out of the workforce for a long period of time by helping them improve or rebuild skills to be more competitive in the labour market.

However, recent analysis of the outcomes for recipients of these payments demonstrates that these objectives are not being met. 93 per cent of recipients who moved off the Pensioner Education Supplement during 2015 remained on income support after 12 months.

Since the introduction of these payments, individuals wishing to undertake study also have access to more targeted support and financial assistance. For example, the HECS-HELP, FEE-HELP and VET student loans tuition loan programs all assist people to access education and training.

The removal of these supplements will assist with simplification of the income support system and help ensure its long-term sustainability.

Pause the indexation of income-free areas for working age payments, parenting payments, and student payments.

With respect to pausing the indexation of income-free areas for working age payments, parenting payments and student payments, this bill also reintroduces two elements of the 2014-15 budget measure, maintaining eligibility thresholds for Australian government payments for three years.

The first element is to maintain at level for three years the income-free areas for all working age allowances, other than student payments, and for parenting payment single from the first 1 July after the bill receives royal assent.

A further proposal is to maintain at level for three years the income-free areas and other means-test thresholds for student payments, including the student income bank limits, from the first 1 January after the bill receives royal assent.

Pausing indexation is a lever that has been used by successive governments to realise budget savings by slowing the growth in social security expenditure in a reasonable and fair way.

Youth employment measures

With respect to youth employment measures, this bill will reintroduce four measures previously introduced in the Social Services Legislation Amendment (Youth Employment) Bill 2016. With youth unemployment more than twice as high as the general unemployment rate at 13.3 per cent compared to 5.8 per cent as at December 2016, it is imperative that the income support system provide the greatest incentives for young people to find work and be self-sufficient where they are able to, or to undertake further education or training to increase their employability. The reintroduction of the measures in this bill is designed to achieve that end.

One-week ordinary waiting period

With respect to the one-week ordinary waiting period, this bill will make a number of changes to the existing one-week ordinary waiting period to ensure more consistent, targeted and effective operation of this waiting period. Waiting periods, including the one-week ordinary waiting period, are applied to ensure that people support themselves in the first instance, where they are able to, before receiving income support payments. This one-week waiting period is a longstanding feature of the income support payment system but currently applies only to new claimants of Newstart Allowance and sickness allowance.

Under this measure, the one-week ordinary waiting period would be extended to new claimants of youth allowance (other) and parenting payment.

This measure will also modify the current severe financial hardship exemption from the ordinary waiting period to better target this exemption to those who are most vulnerable and in need of immediate assistance, including those who have experienced domestic violence. It will also provide that the ordinary waiting period is served after any other waiting periods to ensure that it operates consistently and effectively in conjunction with all other waiting periods.

Increasing the age of eligibility for Newstart allowance and sickness allowance from 22 to 25 years

This bill contains a key measure designed to encourage more young people to pursue further education or training as a pathway to long-term, sustainable employment. It does this by increasing the minimum qualifying age for Newstart allowance and sickness allowance from the present 22 years to a proposed 25 years of age. Future young people aged between 22 to 24 years will be able to apply for and receive youth allowance (other) instead of Newstart.

This will align the age qualification requirements for youth allowance (other) with youth allowance (student) and will ensure that young people receive the same rates of payment, irrespective of whether they are studying full time or looking for work.

This will remove any perception that there is financial advantage in continuing to receiving unemployment payments rather than pursuing study or training.

Youth allowance also provides broader financial incentives for young people to take up paid work where they can. Youth allowance (other) has a more generous income free area than Newstart or sickness allowance which allows young people to retain more of their payment if they are working casually or part time while they look for full-time work

Those aged 22 to 24 and already receiving Newstart allowance or sickness allowance when the changes commence will be grandfathered and will not have their current payments reduced or otherwise affected.

Four-week waiting period for youth income support and rapid activation of jobseekers

This bill will introduce a new four-week waiting period for job ready young people aged under 25 years who are claiming youth allowance (other) or special benefit.

This measure is intended to set clear expectations that young people who are job ready should make every effort to look for work and maximise their chances of finding work before receiving income support. Critically, young people will have access to tailored support from their jobactive provider during the waiting period to assist them to look for, prepare for, find and transition into work. This measure is complemented by a fourth measure, called RapidConnect Plus, which will require job ready young people to complete pre-benefit activities during their four-week waiting period.

The four-week waiting period and RapidConnect Plus will only be served by those who have been assessed as being job ready, assessed as having no significant barriers to work and assessed as being in stream A of jobactive. An extensive range of exemptions will apply, including for jobseekers who are not job ready, who face additional barriers to work or who are in particularly vulnerable circumstances, including those young people placed in streams B or C of jobactive, those in disability employment services, those who are principal carer parents, and those with any form of temporary exemption from mutual obligations, for example, due to temporary incapacity or a major personal crisis.

The government is contributing to additional relief funding through the government's network of emergency relief providers to support any young people who may find themselves disadvantaged.

Close the energy supplement

Another important measure in this bill seeks to close the energy supplement to new welfare recipients, particularly new income support recipients from 20 September 2017. The energy supplement, or carbon tax compensation as it is commonly known, was introduced on 20 March 2013 as part of the household assistance package to compensate people for the introduction of the carbon tax—a tax which no longer exists.

The carbon tax was repealed from 1 July 2014. The government does not consider that it is reasonable to continue to compensate people in the form of a carbon tax compensation for a tax that no longer exists, particularly people who only started receiving income support after the carbon tax was abolished.

Fairer paid parental leave

Last year the government introduced a suite of measures designed to enhance and better target the Paid Parental Leave scheme—referred to here as the PPL scheme.

The government considers that all working parents should be entitled to paid leave to spend important bonding time with their newborn or newly adopted child in those important early months after birth. The government's commitment to supporting parents in caring for their children must of course be balanced with the responsibility to ensure that family assistance and social security payments are well targeted and sustainable for future generations.

Presently, mothers can access both 18 weeks of paid parental leave as well as any employer-provided parental leave pay. They can also choose to access parental leave pay at the same time as other paid leave if they wish, an approach that does not necessarily extend the time taken off after birth.

From 1 January 2018, the maximum number of weeks of government-provided parental leave pay will be increased from 18 to 20 weeks. This means that 53 per cent of eligible mothers who do not have access to employer-provided paid parental pay will receive an additional two weeks of leave or approximately $1,300 extra. Mothers who do have access to employer-provided paid primary carer pay will have their access to government-provided parental leave pay limited to 20 weeks when looking at the combination of their employer-provided and government-provided parental leave pay. This revised PPL scheme aims to provide fair and equitable support for all Australian working mothers, by ensuring the government funded safety net provides all mothers with an equitable amount of time off to spend with their newborn child.

In addition, this bill amends the work test for PPL eligibility to help employees such as casual teachers and mothers in physical professions such as building, horse racing and mining to join the system for the first time. In 2011, there were 1.23 million female employees in casual jobs, 30,798 women working in mining and 109,705 women working in construction that could potentially benefit from the government's proposed changes to the work test. To ease administrative burdens on business, we are also removing the requirement for employers to act as paymasters for the government's PPL payments. This is estimated to save Australian businesses $44 million a year in compliance costs.

New measures

In addition to consolidating measures previously introduced into the parliament, this bill will also introduce a small number of new measures aimed at strengthening and simplifying the government payment system.

Seasonal workers

As part of the 2016-17 Mid-Year Economic and Fiscal Outlook, the government announced a two-year trial of incentives aimed at increasing the number of eligible jobseekers who undertake horticultural seasonal work, such as fruit picking.

The measure responds to concerns about the ability of the Australian horticulture industry to attract sufficient numbers of seasonal workers by introducing three incentives aimed at increasing the number of jobseekers who undertake horticultural seasonal work.

The incentives will commence as a trial from 1 July 2017 for two years and will be capped at 7,600 participants. There are three incentives:

Newstart and youth allowance (other) recipients who have been receiving those payments continuously for at least three months will have access to a seasonal horticultural work income exemption under which they will be able to earn up to $5,000 each year without it being assessed under the social security income test. Qualification rules will be relaxed for this group so that they continue to qualify for Newstart and youth allowance (other) while undertaking eligible horticultural seasonal work. The amendments in this bill mainly relate to this incentive;

Newstart and youth allowance (other) recipients who have been receiving those payments continuously for at least three months would be eligible for a seasonal work living away and travel allowance of up to $300 each year, if they undertake horticultural seasonal work more than 120 kilometres from their home. This would not be assessed as income for income support purposes;

Employment providers, including jobactive, transition to work and disability employment services, would receive a provider seasonal work incentive payment of $100 a week for up to six weeks a year for each eligible jobseeker that they place with eligible farmers.

Ceasing the payment of the pension supplement after six weeks overseas

This bill will stop the payment of the pension supplement after six weeks overseas, as was announced in the 2016-17 Mid-Year Economic and Fiscal Outlook. The measure being introduced will stop the payment of the basic amount of the pension supplement outside of Australia after six weeks temporary absence from Australia or immediately if the recipient has permanently departed Australia.

As part of the pension reform package in September 2009, the pension supplement combined into a single payment the value of telephone allowance, utilities allowance, pharmaceutical allowance and the goods and services tax supplement.

Currently, the pension supplement does not cease but is reduced to the basic amount after six weeks temporary absence from Australia, or immediately for permanent departures.

Recipients of the basic amount of the pension supplement currently overseas permanently will no longer receive the pension supplement after the commencement date. Recipients who are currently overseas temporarily will be subject to the six-week rule from date of departure.

The basic amount of the pension supplement was designed to assist with the cost of living in Australia. There is no economic reason to continue to compensate recipients for the impact of the GST while they are overseas, for anytime longer than a short-term absence.

Income stream—automated reviews

This bill will also amend section 195 of the Social Security (Administration) Act 1999 to allow the Department of Human Services to automate the collection of information to support income stream review processes for income support recipients with income streams.

From 1 January 2018, there will be a staged introduction of a six-monthly electronic data collection process for income stream information from the income stream providers directly.

An income stream is a product that pays a regular income over a number of years. It can either be purchased with accumulated superannuation monies—for example, an account-based income stream or a lifetime annuity—or derived from a superannuation interest such as a defined benefit income stream.

The proposed system will replace the Department of Human Services' current administrative arrangements, whereby the department uses a dual system to collect information. This is inefficient and costly, and the proposed measure will reduce regulatory burdens for recipients and the industry and improve payment accuracy thereby reducing future recipient debts.

Conclusion

By way of conclusion, this bill provides a cohesive, singular statement on the government's intention to provide effective and sustainable supports for hardworking Australians and jobseekers.

The bill delivers on a core commitment of this government to deliver a more affordable, more flexible and more accessible child-care system.

Most of the measures in this bill have been before the parliament several times, and are being introduced to the Senate today as an example of this government's commitment to improve the efficiency of our payments system and bring the budget back to balance. The majority of these measures formed part of the government's election costings which were supported by the Australian people. In the best interests of Australians' finances and future generations of taxpayers, I would encourage the parliament to support these proposals to encourage workforce participation and ensure the long-term sustainability of our welfare system. I commend the bill to the Senate.

The ACTING DEPUTY PRESIDENT ( Senator Whish-Wilson ): In accordance with standing order 115(3), further consideration of this bill is now adjourned to 21 March 2017.

Senator O'NEILL (New South Wales) (17:16): I appreciate the opportunity to outline Labor's position on the government's Interactive Gambling Amendment Bill 2016. While Labor recognises well-regulated gambling has a place in Australian society and, indeed, that many Australians enjoy a responsible punt, the growth of illegal online gambling is of great concern to Labor. We are concerned because times have changed. The growth of digital technology, including smart phones, allows Australians to wager and gamble whenever and wherever they choose. We are in a digital age, an age of rapid change especially in relation to technology. Most of us have handheld devices—smart phones—that allow us to access a range of services, apps and information by simply swiping our screens. With this change in technology has come an increase in the number of offshore operators. We know that this has impacted on problem gamblers.

Labor believes that it is time to do more and to amend this act to prohibit these operators and stop the growth of illegal online gambling. Labor agrees that the government's Interactive Gambling Amendment Bill picks up on some of the concerns around the growth of illegal online gambling. It will also go some way to improving the protections for those who choose to wager within an online environment. The majority of people who bet do enjoy it and gamble in a responsible manner. However, Labor also knows that gambling our community can, in some cases, have devastating consequences—social, financial and emotional consequences. That is why we have always maintained a strong stance on ensuring appropriate harm minimisation measures are in place to protect and assist our community.

Labor broadly supports the bill's main focus, which sets out to bolster the enforcement of the Interactive Gambling Act 2001. What Labor wants to ensure is that these new reforms will be about protecting people and about mitigating the effects of problem gambling more broadly. Currently, illegal offshore providers can target Australian gamblers even though they operate outside the country. Labor recognises that this practice has to stop. We know that this bill will go some way to stopping these operators in the responsible jurisdictions from trading in Australia illegally, but we are not naive: illegal offshore gambling operators will still try to operate in Australia and we should continue to look at innovative ways and means to stop this from happening.

We agree with the reform in this bill that seeks to prohibit click-to-call in-play betting services. We have seen concerns in past years about the links between gambling and sporting incidents and the impact of such links on match outcomes. We also know that this type of click-to-call betting is linked with problem gambling. Placing numerous bets in a short period of time does have the capacity to lead to problem gambling. Evidence to date suggests that young men are particularly vulnerable to this type of wagering and the addiction that can arise from it. From a perspective of harm minimisation, what is proposed is a sensible way forward and we support the prohibition of click-to-call in-play betting.

One area that Labor will continue to watch very closely is the in-play betting in licensed venues and how the government continues to tackle this into the future. To be clear, Labor does not support a proliferation of in-play terminals in venues. We do not support a shift from tethered terminals in venues to electronic mobile services. However, as this is the government's bill and we cannot be certain of how the government will deal with this form of on-premise betting into the future, we are concerned about what this means. Within the explanatory memorandum, a new definition of place-based betting services clarifies that electronic betting terminals can continue to be provided in places where the provider is licensed under a law of a state or territory to provide such services. Labor will be watching very carefully to see if any expansion of these services does occur and what the government response is if this does happen. We assume that the government will act if proliferation of mobile devices in licensed premises does occur.

We know that the O'Farrell review highlighted that Australia's consumer protection was weak and inconsistent. As I have stated, Labor is supportive of harm minimisation and strengthening consumer protection when it comes to problem gambling. We think this bill, however, could be improved in some aspects. We have already acknowledged the gambling can—and in some cases has already has already—have devastating social, financial and emotional consequences for Australians. Problem gambling can and has ruined lives. We know that improving protections for consumers is a good thing.

While we welcome the government's response to the O'Farrell review, which stated it will aim to agree on a consumer protection model within 12 months, we welcome the commitment by the Commonwealth, state and territory ministers in November last year to work together to develop a national consumer protection framework and we are supportive of the establishment of the national consumer protection framework, what we do not want to do is wait for another three years for this important work to be completed. So, while we welcome progress, our message for the government today is that they really need to get on with the work that is required, without delay.

With regard to credit betting: Labor knows that gambling in our community, as I have said, can have devastating impacts. So we are a little surprised that in this bill the government has not included any reform around the banning of credit betting, especially when we consider the coalition's policy on problem gambling, where it flagged the prohibition of credit betting back in 2013. And here we are: it is 2017.

For the past three or four years, the coalition has had a policy position on this banning of credit betting, and yet in its first tranche of reform it does not seem to deal with this very issue. That begs the question: why has the government not dealt with credit betting within the reform of this Interactive Gambling Act? This is particularly so, given that the minister has asserted that he has been very keen to ban this type of betting. To strengthen harm minimisation for problem gamblers, I want to indicate that Labor would certainly support the government taking that direction.

To continue with the theme of protection, I wish to speak on a matter of significant and widespread public concern that has gone hand in hand with the growth of online betting in Australia. Many Australians continue to have concerns around the promotion of betting odds and gambling advertising, especially during live sporting broadcasts. I am sure, Mr Acting Deputy President Whish-Wilson, that you understand exactly what I am referring to. There are existing safeguards to restrict gambling advertising and betting odds on television and radio in Australia. But it is apparent that they do not go far enough to address community concerns.

In early February 2017, Labor moved a second reading amendment designed to protect Australians, including children, and calling for action to ensure that live sporting broadcasts are free from intrusive gambling advertising and betting odds promotion. Now, that motion was narrowly defeated in the House and, despite voting against Labor's motion, the responsible government minister did put it on the public record that the coalition does also share some of these concerns. He said that the Turnbull government 'certainly acknowledged the concerns which many Australians have in relation to gambling advertising.' Further, the Minister for Communications, Minister Fifield, was quoted in a Radio Australia news story recently as saying in a statement:

… the Government was aware of community concern about the issue, but … "Broadcasters have a responsibility under the co-regulatory framework to ensure that their advertising meets community expectations."

What is telling is that some of the insightful and community-minded players are speaking out on this issue themselves. In the same Radio Australia news story that I just referred to, Damian McIver mentioned two concerns that high-profile AFL players have about the prevalence of gambling—particularly gambling advertisements. The Geelong defender Harry Taylor is actually quoted as saying:

I've got three kids at home and when my eldest can name a lot of the ads on TV, that is a bit of a worry.

Indeed. Taylor's comments follow comments from Western Bulldogs defender Easton Wood, who posted his views on Twitter in February this year, saying:

Gambling advertising is out of control and I think it needs to change …

…   …   …

The obvious issue here is the effect this advertising has on children every time they watch us pull on our boots.

I think that sums up the community concern in a very clear and simple sentence.

In an article on the same topic, The Age recently published an article by Jon Pierik, reporting that the AFL commissioner Kim Williams had expressed concern at the level and nature of gambling advertising during match broadcasts, and that he is understood to be putting together a paper about his concerns.

In support of our second reading amendment, my Labor colleagues in the other place made reference to research that was undertaken to explain further this community concern around advertising for gambling during live broadcasts of sport. This research, undertaken by Deakin University, points out a number of very concerning issues with regard to children and gambling advertising on television. I just want to spend a little time this evening going through the findings of the research, because it is another piece of evidence to support Labor's concerns around the possibility of legislation to improve outcomes for Australians with regard to advertising of gambling.

The research from Deakin found that over 90 per cent of children—90 per cent!—can recall having seen an advertisement for sports betting. Three-quarters of children aged eight to 16 years can recall the name of at least one sports-betting brand and approximately a quarter can recall four brands or more. This is absolutely amazing evidence to indicate the impact of advertising on the scale that we are seeing it right now in our country. Seventy-five per cent of children think that gambling is a normal or common part of sport. Parents also conveyed concerns, including that gambling advertising is so prevalent that it is changing the way their kids think about and talk about sport.

This is what the kids communicated to researchers about gambling advertising. I will use their own words, because they are highly instructive. A 15-year-old boy: 'I don't think they're good for kids. They're trying to make it cool. They put them during sport, when kids are watching.' Another boy, 13 years old: 'They shouldn't be allowed during sport, because lots of kids watch it. Ads pull you in—it's bad.' A 15-year-old boy: 'Ads for sports betting tell you to bet with them and make it look like you're going to win. They make it look positive and fun.' And a 10-year-old boy: 'The advertisement convinces you to bet. You can get your money back if you lose by eight points.' Out of the mouths of babes we are getting serious instruction on the need for some serious change with regard to this problem in our community. When we look at these findings, we can understand why parents are worried about their kids being subjected to gambling advertising during live sporting events.

Labor understands that Australians want to keep broadcasts of live sport and gambling as separate things. It is in everyone's interests to ensure that children do not associate betting and gambling as a normal part of watching sport on television. And yet these commercials continue to intrude upon our nation's love of sport, and they cause significant public concern.

Following the leadership of and the intervention by the Labor government in 2013 in this area, the broadcast industry responded to address public concerns and develop rules set to restrict gambling advertising in live sports broadcasting and the promotion of betting odds in particular. While the new code of practice limits the promotion of live odds in particular and restricts gambling ads, it does continue to allow two important elements: firstly, the promotion of betting odds half an hour before play and in the half hour after play by clearly identified gambling representatives; and, secondly, commercials relating to betting or gambling before play has commenced, during scheduled breaks, during unscheduled breaks and after play has concluded. That is to say that the code of practice allows significant windows of opportunity for gambling advertising around the edges of live sports broadcasts.

The time has come for the government to change this reality. The broadcast industry and sporting codes need to accept that gambling advertising before and during live sports broadcasts is indeed contrary to community standards and they need to amend the broadcasting codes of practice accordingly. Current restrictions should be extended to ensure that there is no promotion of betting odds or gambling advertising at all in the 30 minutes before play and that there is no gambling advertising at all during scheduled breaks such as half-time or unscheduled breaks such as weather delays. It goes without saying that current exemptions for horseracing, harness racing and greyhound racing would continue to apply. The Melbourne Cup would not be affected, for example; that is to say that Labor does not propose to prohibit gambling advertising and betting-odds promotion around the broadcast of those forms of entertainment: horseracing, harness racing or greyhound racing.

In calling on the government to work with industry on a transition plan to phase out gambling advertising and betting-odds promotion over time, Labor adopts a pragmatic approach. Labor is conscious of the need to address public interest considerations in a way that does not impose unnecessary financial and administrative burdens on providers of broadcasting services. We are not proposing an immediate blanket ban on gambling advertising or betting-odds promotion in broadcasting. In calling for a transitional approach over time and a targeted approach in respect of live sporting broadcasts, Labor affords industry the time and flexibility needed to alter current business practices and contractual arrangements.

A consultative approach is part and parcel of Labor's approach. Our second reading amendment outlines and continues the conversation that was started with industry in 2013 by the Gillard government, and it supports a continuation of that consultative approach between government, broadcasters and sporting organisations to address community concerns. Labor's approach demonstrates an understanding of and a confidence in the co-regulatory system of broadcast regulation that was enshrined in the Broadcasting Services Act 1992. Under this system, industry has the opportunity to develop codes of practice to address matters of concern to the community and where a code of practice is not operating to provide appropriate community safeguards the government regulator, the ACMA, may step in and regulate by way of a program standard.

I note that some sectors of the industry disagree that there is a problem with the current level of gambling advertising. In their media release just last week, Free TV stated that Labor's proposals were 'unwarranted' and that 'commercial broadcasters already have the most comprehensive, targeted set of restrictions on the promotion of betting services of any media platform in Australia today' and they declared that 'complaints about betting are low'. Commercial Radio Australia described Labor's proposal as 'unnecessary and counterproductive' and stated that 'any further restrictions cannot be justified'. But Labor regards it as appropriate that the industry has the opportunity to amend their codes of practice to address genuine community concern. On this I note that Labor's proposal does not dictate the terms, the timing or the mechanisms by which the broadcasting industry might phase out gambling and betting promotion during live sports broadcasts.

Labor also regards the system of co-regulation as an effective mechanism for dealing with matters that the industry may find challenging to deal with. Labor understands that betting and gambling advertising represents a significant revenue stream to industry and that it may be challenging for industry to wean itself off such lucrative arrangements in the current media environment. On this matter, it is instructive to note the explanatory memorandum to the Broadcasting Services Act acknowledges:

Areas such as … advertising, are matters of community concern which could conflict with a service provider’s responsibility to its shareholders to maximise profits.

This part—that is, part 9 of the act—that empowers the ACMA to impose direct regulation by way of program standards code, where codes of practice have failed, aims to balance the costs and benefits of the community's regulatory needs with the profit based nature of commercial service providers.

Labor's approach is transitional and targeted and therefore responds to public concern while acknowledging the pressures the broadcasting sector is under. Labor wants to work towards a genuine solution. That is why we are calling on the government and on industry to step up and progress these important consumer safeguards and address this significant issue of community concern.

I move the second reading amendment on sheet 8048 standing in my name:

At the end of the motion, add:

", but the Senate calls on the Government to work with the broadcasting industry and national sporting organisations on a transition plan to phase out the promotion of betting odds and commercials relating to betting or gambling before and during live sporting broadcasts, with a view to their prohibition.".

I thank you, Mr Acting Deputy President, for time in the chamber to address this important community concern. I hope the government will be able to work to advance a response to those genuine concerns that are held by parents and sporting heroes alike.

Senator KAKOSCHKE-MOORE (South Australia) (17:36): I rise to speak on the Interactive Gambling Amendment Bill 2016. The bill contains proposed amendments to the Interactive Gambling Act, the Australian Communications and Media Authority Act and the regulations made under the Interactive Gambling Act. The bill contains a number of proposed amendments which seek to clarify legislation regarding illegal offshore gambling and seeks to strengthen the enforcement provisions under the Interactive Gambling Act.

The Interactive Gambling Act was introduced by the government following the findings of the Senate Select Committee on Information Technology's report into online gambling and the Productivity Commission report of 1999 into gambling industries and in response to concerns about the effects that online gambling has on Australians. The Productivity Commission report of 1999 found that problem gamblers comprise 15 per cent of regular, non-lottery gamblers and account for about $3.5 billion in expenditure annually. That is about one-third of the gambling industry's total market. They lose on average $12,000 per year, compared with just under $650 for other gamblers. That prevalence of problem gambling is related to the degree of accessibility of problem gambling.

Since the legislation was enacted, it has done little to prevent the spread of online gambling. The legislation is now 16 years old and has been outdated and outpaced by the rapid increase in online gambling and aggressive practices of the online gambling providers to entice customers. The proposed bill seeks to clarify that it is illegal for overseas gambling companies to offer gambling products to Australians unless they hold a licence issued by a state or territory. It will introduce a new civil penalty infringement notice regime to be administered by ACMA. The bill will also prohibit click-to-call in-play betting services by tightening the definition of a 'telephone betting service', with the effect that it will no longer be possible for a customer to place a bet during a sporting event without ever speaking to an operator. Instead, the bill would require dealings with customers to be entirely by way of spoken conversations between the customer and an operator.

The bill amends the complaint-handling process by providing that ACMA is responsible for all stages of the complaint-handling process, with the removal of current mandatory requirements for ACMA to refer matters to the AFP. It will also enable the minister to determine by way of legislative instrument for the purposes of the act whether a specific thing is or is not a sporting event. The bill will require ACMA to maintain a register of eligible, regulated interactive gambling services in an effort to raise awareness amongst customers about which services to avoid because of their exclusion from that register. It will introduce measures relating to illegal offshore gambling activity. These would allow ACMA to disclose information obtained through its powers under the IGA to the Department of Immigration and Border Protection and to foreign regulators. The bill will enable ACMA to notify the Department of Immigration and Border Protection of information relating to names of directors or principals of offending gambling services so that their names are placed on the movement alert list.

Finally, the bill will remove the requirement for a report on contraventions of part 7A of the act to be prepared and tabled in parliament each calendar year. The explanatory memorandum advises that this information will now be included in ACMA's annual report, which will be tabled in parliament. However, the amendments proposed in the bill represent only the first stage of the government's process to implement the recommendations of the 2015 Review of Illegal Offshore Wagering, led by the Hon. Barry O'Farrell.

The Nick Xenophon Team supports the bill. I want to make that clear. However, we remain concerned that the bill does not go far enough to keep pace with the explosion of online gambling and, in particular, online sports betting. Online gambling has grown to the point that the industry now outpaces other forms of gambling. People bet online using smartphones, tablets and other digital devices. Online gambling at the touch of a button anytime, anywhere poses risks to those battling gambling addictions and those who are vulnerable to developing gambling addiction. In 2014 $2.4 billion dollars was spent on online gambling by Australians. This is double the amount of 10 years earlier. The 2015 O'Farrell review found that the number of active online wagering accounts in Australia grew from 200,000 in 2010 to 800,000 in 2014.

The minister has foreshadowed there will be further bills which will seek to put in place some protection for gamblers. The government announced in April 2016 that it would implement 18 of the 19 recommendations in the 2015 O'Farrell review in a three-stage process. Whilst this news is welcome to the Nick Xenophon Team, we believe the government has missed an opportunity to debate a more comprehensive and more effective bill now. This is why my colleague Senator Xenophon will be moving amendments that incorporate many aspects of his private senator's bill, the Interactive Gambling Amendment (Sports Betting Reform) Bill 2015.

These amendments tackle many issues not addressed in the government's bill, including prohibitions on microbetting, prohibitions on offering credit and banning the broadcasting of sports betting ads during sports games and G-rated programs when children are watching. Importantly, these amendments also establish a National Self-Exclusion Register, which was recommended in the O'Farrell Review, as well as the establishment of an interactive gambling regulator.

The Nick Xenophon Team's position on gambling reform and curtailing predatory gambling is well known. We continue to push for reform in this area. I have seen firsthand the devastation that gambling addiction causes families though my work in Senator Xenophon's office and now in my own. Over many years I dealt with countless desperate constituents whose families have suffered emotionally and financially because of gambling addictions. It was the families' stories that propelled me to stand for the Senate as part of the Nick Xenophon Team.

In my first speech I spoke about the call that provided me with the impetus to drive change through policy as a senator. I had taken a call from a woman whose husband was addicted to online sports betting. She had just discovered they had lost hundreds of thousands of dollars and in the coming weeks they would also lose their home. She was desperate and she did not know where else to go for help. I stayed on the phone with her while she cried. I would meet her and her husband in person soon after, and with Nick we worked to do what we could to help them try to rebuild their lives. This call was one of many I answered about the devastating effects of online gambling.

The impact of gambling addiction is far reaching. It has devastating effects responsible for the loss of livelihoods, family homes and inheritances and for the destruction of families. Some gambling addictions are so fierce and the consequences so great that for some the burden is too heavy and results in the tragic loss of life. The Nick Xenophon Team's resolve on tackling predatory gambling is unwavering. We are committed to Australian communities. As long as gambling companies continue to prey on Australians, we will continue to push for much-needed sensible gambling reform.

There is no doubt that the Interactive Gambling Amendment Bill 2016 is a step in the right direction, and I commend the government for these measures. For too long the Interactive Gambling Act has been weak when it came to dealing with overseas online gambling organisations providing services within Australia. These organisations operated freely within our borders and caused immeasurable harm to Australian citizens. However, I remain concerned as to how the government will be able to enforce penalties against these companies, who may continue to disregard the measures in this bill and which operate in overseas jurisdictions.

The Nick Xenophon Team wants to see a requirement on internet service providers to block access to websites operated by those who continue to operate within Australian borders without permission to do so. During the committee stage of this debate, Senator Xenophon will be moving such an amendment to prevent access to illegal offshore operators. We believe this bill must go further to protect vulnerable Australian families from predatory gambling organisations. Senator Xenophon and I will be moving amendments to do just that.

Specifically, I will move an amendment during the committee stage that restricts the government's proposed meaning of 'electronic equipment'. The Nick Xenophon Team is very concerned about the loophole in the legislation that, if allowed to remain as currently drafted, would allow in-play betting from venue-provided smart devices in retail place betting venues, pubs and clubs. Section 8BA of the proposed bill provides for venues to loan customers electronic equipment for gambling use. The Nick Xenophon Team is deeply concerned that this bill appears to allow for place-based electronic betting through the introduction or expansion of electronic devices such as tablets and smartphones which provide for in-play betting, and circumvent the need to deal with a person or use a fixed betting terminal.

The definition of 'electronic equipment' referred to in the bill includes 'an electronic apparatus' or 'electronic device'. The bill's explanatory memorandum provides no guidance or explanation as to what these terms mean. This definition currently includes venue kiosks but is not restricted to such services. During the Senate inquiry into the bill, submitters raised concerns that these terms allow for the expansion of the use of electronic devices, including tablets and smartphones with an in-play betting function, within licensed betting venues.

In response to our question on notice regarding concerns about continued availability of in-play betting, the department responded:

The 'place-based betting service' exemption in proposed Section 8BA is intended to permit betting services, including potentially in-play betting services, to be provided on electronic equipment (which may include easy betting terminals and/or tablets) made available to customers in places such as TABs, casinos and clubs.

The department admitted, when I questioned them, that they had not done any modelling on whether this provision would lead to an uptake in betting services in venues due to increased availability of these electronic devices. The Nick Xenophon Team is concerned that this provision will expand the opportunities for in-play betting without addressing any of the concerns highlighted in the inquiry that this may increase opportunities for gambling and create faster, more instantaneous betting options.

If the government's aim is to reduce in-play betting, I fail to see how this bill helps. In-play betting is only supposed to be performed in person or over the phone. These measures will allow gambling operators to potentially expand their operations within licensed venues. This loophole goes against the intention of this bill.

I will be moving an amendment that narrows the definition and makes it clear that 'electronic equipment' will instead be defined as an 'electronic betting terminal' which is installed on a permanent or fixed basis at a place where gambling services are provided under supervision. It will be unable to connect to the internet and will be available for use only by customers using cash or a card issued by the provider. This definition will limit in-play betting to electronic betting terminals to ensure that gambling operators do not seek to expand their operations by allowing people to place in-play bets using tablets or smartphones provided by the venue at the bar. These terminals are permanent installations located in a specific area set aside for gambling and are unable to connect to the internet. This is the sort of protective measure we need.

In my opinion, the bill as it is currently drafted will increase the opportunities for in-play betting without addressing the very serious concern that this could increase opportunities for gambling. In-play betting is especially dangerous, as it gives a person an immediate opportunity to win their money back, which also heightens the potential for bigger losses. These are spur-of-the-moment decisions people make when they are swayed by emotions and possibly under the influence of alcohol.

If the government are going to introduce legislation on gambling reform, they must also consider the issue of harm minimisation. I fear that the current harm minimisation tactics used within bars and gambling venues are inadequate. During the Senate inquiry into this bill, I questioned the department as to whether they thought the current harm minimisation strategies were working. Their response was that harm minimisation was a matter for the states. But harm minimisation and problem gambling affects all Australians, and I want to see the federal government take more responsibility for this area and work more closely with the states to improve harm minimisation.

Given that this bill will see an increase in betting devices within licensed venues, it cannot be argued that the expansion of the gambling market would not result in harm. The Nick Xenophon Team will continue to hold the government to account and keep the pressure on to ensure that harm minimisation strategies are considered and implemented as we continue the fight against predatory gambling. Thank you.

Senator CHISHOLM (Queensland) (17:50): I rise to speak on this issue which, no doubt, is of increasing community concern around Australia. Gambling is an industry that is growing rapidly in this country. We have seen growth in the number of local companies that are involved. We have seen international outfits come onto the scene that are active in this area. A number of speakers have talked about the offshore gambling companies as well, which is obviously a concern for legislators. With the offshore companies, it is very hard to track how much money local Australians are gambling through those companies, and then there are the associated parts of that in terms of how much tax those companies are paying if they are taking the money offshore. There is also the issue, for those offshore companies, of harm minimisation. Obviously, any regulation that we bring in from an Australian point of view does not apply to those offshore companies. That is a concern from a level playing field point of view.

In terms of the legislation that is before us, it goes some way towards tightening the restrictions around these organisations. Obviously, with the proliferation of these companies we have also seen an increase in promotion and advertising from betting companies. I think that what has come with that is increasing community concern around that advertising. I know that Senator O'Neill has foreshadowed that Labor will be moving an amendment, and that amendment says:

The Senate calls on the government to work with the broadcasting industry and national sporting organisations on a transition plan to phase out the promotion of betting odds and commercials relating to betting or gambling before and during live sporting broadcasts, with a view to their prohibition.

I think that is something that would be welcomed by the community.

I am sure many people across Australia feel this when they sit down to watch their favourite team play or their favourite sport on TV, particularly with young children. You get concerned about the focus on live gambling and the ability or the encouragement or giving people the option to gamble on sporting matches. I know myself, as someone who has been a long-term season ticket holder of the Broncos, that, when I first started going to games as a season ticket holder, which would be about 10 years ago now, you did not see or were not encouraged to partake in gambling. But now and increasingly you see the sponsors on the jerseys and you see the sponsors on the ground, and indeed the opportunity to gamble within the sporting stadium is increasingly being promoted. When you see the mix of people who attend those football matches and understand the mix that would be watching at home on TV as well, you understand that traditionally, from an Australian point of view, partaking of or viewing sporting activities has increasingly been a family affair, so I think that, when we look at the potential damage that gambling can cause, we always need to look at it from that point of view.

The other thing I have noticed—and through the committee process I have had the opportunity to ask questions of the companies involved in these outfits—is that increasingly people who gamble are doing it through the apps on their phone or online. A good example of that was on Boxing Day. I went to my local club with some friends to watch the Boxing Day test. We were sitting at the TAB inside the RSL club, and there were a lot of people gambling, but not many people were getting up and using the terminal at the club. Increasingly, people are using their phone to gamble and not using the machines.

When it comes to looking at harm minimisation and what that means, if I am sitting there at a club and just gambling on my phone, there is no way that anyone inside that club is actually going to know what I am doing. Obviously, you could have a number of mobile phone apps on your phone and use any one of those to gamble. I think that, when you look at the proliferation of the companies involved and the fact that you can open an account with any of them, we need to constantly look at ensuring that we have the best practice possible to ensure that the harm minimisation policies are effective in this regard.

When we had the opportunity to question some of the companies recently, they attempted to put the argument that the focus for that effort should go on the financial institutions, so they are the ones who should bear the responsibility for identifying problem gamblers and be the ones to report that or potentially put a freeze on that person's account. I do not think it is good enough on the part of the companies to effectively pass the buck to the financial institutions. There obviously needs to be a lot more pressure put on those companies as this issue continues to develop and the community and therefore governments and parliaments have to respond to that challenge.

In terms of the proposed Labor amendment, I think it is appropriate for us to signal that this is something that we would pursue in government as well. We are really sending a message to the industry—and that is the broader industry, those gambling companies but also those people who benefit in a financial sense from the advertising—so that they know that Labor are determined to act in this regard, and we will continue to pursue that both in opposition and potentially in government as well.

Just further to my point about the offshore operators, who obviously do not currently pay tax in Australia: in the 2015 review of the impact of illegal offshore wagering, stakeholders highlighted that the current mechanisms for enforcement within the existing framework were insufficient and that they were no longer competing on a level playing field. Again, through the committee process, this has been raised by a number of the companies. Despite the large number of complaints that have been raised since the Interactive Gambling Act was established in 2001, there have not been any prosecutions, so I think that, with any changes to the Interactive Gambling Act, we need to look at the enforcement as well to ensure that we are doing our utmost to hold those companies to account.

But at the heart of this bill is the creation of a legal framework that is suitable for the industry and, importantly, empowers the Australian Communications and Media Authority with enforcement powers and the relevant authority under the act by ensuring that the Australian Communications and Media Authority becomes an efficient regulator with powers to issue informal warnings, infringement notices, civil penalties and injunctions. That aspect of the bill is certainly welcomed by Labor and, I think, as we have seen through the evidence process in the committees, is much needed. In particular, I welcome the creation of an offence and a civil penalty for a person who provides a regulated interactive gambling service to a person in Australia who does not possess a relevant licence from the state or territory government. This is inherently simple in its intent. There is now a clear framework for ACMA to investigate and take action against unlicensed services.

Another tool for ACMA's enforcement is the use of a civil penalty regime to encourage and support improved compliance with the Interactive Gambling Act. This will ensure that ACMA will be able to properly investigate and respond to breaches of the new regulatory regime. Frequently, under the current framework, that was unable to occur, due to other agencies not regarding these breaches as a priority and acting on them. This includes provisions for ACMA to refer complaints to the Australian Federal Police if they believe it is warranted. We also welcome the amendments to notify international regulators about their licensees who have been found to have broken provisions of the IGA. Previously, the offshore locations of a number of companies has made it very difficult to enforce current provisions of the Interactive Gambling Act. However, providing ACMA with relevant powers to help build those relationships with foreign regulators is a good start and no doubt will provide a framework for ACMA to enforce these new provisions. Certainly, from the evidence that we had from the department they are determined to work with international bodies to ensure that they make progress in this respect to ensure that there is more stringent accountability on an international level to those offshore gambling companies from an Australian point of view.

In terms of the proliferation of gambling, it is something that is of concern to me. It is something I intend to continue to keep a close eye on. I have enjoyed the role I have played in the committee in the short time I have been on it. I think that it is obviously something that is a constant feature of parliament, whether it be looking at pokies or looking at interactive gambling. I think it is something that is moving very fast, particularly with the availability online these days and moving into an international phase. Therefore, it is something that governments will continue to deal with. I am pleased to support the Interactive Gambling Act and I am pleased to advocate for the amendment that Senator O'Neill moved. It is an issue that I will continue to deal with as a senator.

Senator DI NATALE (Victoria—Leader of the Australian Greens) (18:01): I rise to speak on the Interactive Gambling Amendment Bill 2016. This is a small step toward the goal of getting rid of the corrosive, corrupting influence of gambling in sport—a very small step. It clarifies the fact that wagering websites, services and products are illegal. It goes on to put some restrictions around in-play betting. It also strengthens the power of ACMA.

So it does some positive things, but there is also a huge catch. The government has decided through this legislation to include a special carve out for its big gambling mates who donate so handsomely to both of the major parties during election campaigns. The special exemption they have created would effectively allow online in-play sports betting from a tablet on the counter of every pub and club in Australia. Live in-play betting is hugely problematic. It is also known as in-the-run betting. It is an activity that makes gambling much more seductive. It is more likely for people involved in watching a game of footy to continue to bet, to double up, to chase their losses and ultimately to lose more than they would have otherwise lost. Because of this exemption there is going to be a massive expansion of in-play betting at a moment when the government is rightly saying, at least quietly, that we should be outlawing similar services provided online.

Why restrict in-play betting to services provided online and at the same time give this exemption that allows basically every pub and club in Australia to continue to do it? One has to ask oneself: why has the government decided to go down that path? The Tatts Group, whose subsidiary UBET is going to exploit this loophole, donated $139,000 to the two old parties, Labor and Liberal, in the last three years. So one has to ask oneself whether this is a loophole created by the government for its big gambling mates. We know, whether or not that is true, the perception that that might be true should be enough to give the government pause for thought. What we have is a problem with policy in this country being made on the back of big donations that come from big money interests. We Greens are going to be supporting amendments that close this outrageous little sweetheart deal for the Tatts Group and the big gambling mates of the old parties.

Despite the loophole, on balance I think the bill does deserve support. It does implement recommendations 18 and 19 of last year's O'Farrell Review of Illegal Offshore Wagering. The former New South Wales Premier's report made it crystal clear that online games and wagering are the fastest growing segments of the global gambling market. They are exploding in terms of market share. Products are being marketed largely to young men. They are causing a range of harms. We know and speak a lot about the harms associated with poker machines. We know and speak a lot about the harms associated with poker machines, and we are now learning in more detail about the harms that excessive gambling online causes to individuals, families and communities. Often these are young men who are isolated or living in regional communities, and they are losing big.

The Interactive Gambling Act is the main source of prohibition regulation that will attach to online gambling. We do acknowledge that it is a very difficult regulatory environment. This is a tough environment because you have a lot of this activity being conducted offshore. Whilst this act makes it illegal to offer online gambling products from offshore locations, we know that that prohibition is very difficult to enforce, so we are doing a balancing act between the prohibition and being able to enforce it. It is in everyone's interest to bring those offshore operators here onshore and to make sure that they are captured by the Australian regulatory environment. That is the balancing act.

Of course, the gambling lobby has a very powerful argument against what it calls over-regulation. It says the regulations are too restrictive and there is no incentive for operators to come here onshore. Surprise, surprise: big business does not like regulation that might restrict its profits. Ultimately, this is about finding the best way to reduce the huge harm that these predatory pushers of online gambling products do cause our communities. We just do not have the balance right at the moment. We have not got the balance right. You just need to sit down and watch a major sporting event with young kids to see what it is like. Every time you sit down with a kid to watch the footy, the cricket or the tennis, they are being bombard with odds, websites and famous faces pushing online gambling down their throats. The marketing of these products, as Senator Chisholm said previously, is relentless. It is having a significant impact on young kids and creating the problem gamblers of tomorrow.

When I sat down with my kids to watch the cricket over the summer, as I occasionally do, I was dumbstruck by one freeze frame. There was a fielder sliding along the grass towards the boundary rope. The rope was clad with the URL of a major online gambling website. The fence behind the rope also displayed the same website. And then running across the bottom of the screen was a paid banner ad for—yes, you guess it—the same online gambling website. It has become absolutely relentless. This stuff is everywhere. You cannot escape it. There is an irony here when you see some young sportsman having to confess to having gambled illegally and consider that they are bathed in it. They are surrounded by it. They are wearing this stuff on their jumpers. The sponsors are everywhere. The ground is covered in it. TV is shoving this stuff down people's throats. Is it any wonder that some people make bad decisions? It is damaging the brand and integrity of many of the sporting codes that we love. It is so insidious now. Just listen to young kids talk about their favourite sporting code. They might talk about a game of AFL footy. In the old days they would be swapping footy cards. Now it is a discussion about what are the odds of Cyril Rioli kicking the next goal, or of David Warner making a tonne in the cricket. Their experience of the game is no longer an experience shaped around the game itself; it is an experience where gambling is enmeshed in the sport. For young people, the line between gambling and sport is not a clear one. They have become one and the same. These are very clever marketing tactics by the gambling industry. I am really concerned about what this will do to those young children in the future. Are we creating another generation of problem gamblers?

So, of course we welcome any effort to try to curb the pernicious influence of online betting and gambling, but that does not mean the activity should be illegal. People should be able to gamble if they want to, but we need some restrictions around what is appropriate, and we absolutely need to ensure that there are restrictions around the way this stuff is marketed and promoted. It is why we are going to vote in favour of some of the amendments on the table that will close the loophole which I talked about earlier. I would like to think that we could also vote to support a bill like my Broadcasting Services Amendment (Advertising for Sports Betting) Bill 2013. What that bill would do is ban radio and TV licence holders from broadcasting any ads or information about sports betting or odds. If people want to gamble that is their right, but just don't shove it down our throats. Let a young child watch a sporting broadcast, without having to be bombarded with betting advertising. I do hope that there will be an appetite to return to that bill at some stage in the near future.

I do, however, know that we will be facing an uphill battle if we are to get some restriction on sports advertising. The influence of the gambling lobby on the old parties, as I said, does not just extend to donations. There is now a revolving door between the gambling industry and political office. I want to say a few words here about the role that the Labor Party has played in ensuring that the gambling industry has the contacts and the networks it needs to be able to scuttle any legislation when it comes to restrictions on gambling. Senator Conroy could not wait to leave the Senate to join Responsible Wagering Australia. You would think that that was an organisation whose focus was on ensuring that people wager responsibly—no, how wrong you are. That Orwellian sounding title is the name of an organisation that represents the big gambling industry. It is not just Senator Conroy; it seems to be that the Right of the Labor Party has this revolving door between itself and the gambling industry. We saw this with former Senator Mark Arbib. He could not wait to leave the Senate so that he could become part of the Packer gambling empire. Indeed, the former National Secretary of the Labor Party Karl Bitar is another graduate of the Labor Right moving into the gambling industry. They are hired guns who are used by the industry because they have the contacts and networks necessary to be able to scuttle reform. They are working for an industry that preys on some of the most vulnerable people in the country. No wonder people have had a gutful of politics. When they see people in senior positions leave this place and, within the blink of an eye, stand up and start spruiking for an industry that they once had responsibility for regulating, it does more than just raise a few eyebrows. It means that people whose faith in their democratic institutions is already at an all-time low say, 'What is the point?' The time is long overdue for us to put a code of conduct in place that prevents that activity from taking place into the future.

Let me go to some of the detail of what this bill does. As I said earlier, it clarifies that offshore wagering websites, services and products are made illegal. It clarifies that Australian operators can no longer operate click-to-call services like the ones they currently operate, which allow betters to place in-play bets over their mobile phones and tablets, without even needing to speak to an operator. These are important developments. It also strengthens the power of the Australian Communications and Media Authority and creates a civil penalty regime which targets, in particular, operators of offshore wagering websites and services. However, the government has failed in this bill to commit to one of the essential recommendations of the O'Farrell report, and that is that, until a national framework is established and operating, consideration of additional in-play betting products should be deferred and legislative steps taken to respect the original intent of the Interactive Gambling Act. In this bill the government have ignored that recommendation. Instead of considering additional in-play betting products only at the point at which legislative steps have been taken, they have decided to carve out in-play betting for what are euphemistically called 'place-based betting services', defined in clause 8B(a) as involving electronic equipment.

In other words, what the bill does is exempts the practice already engaged in by some clubs and pubs of offering tethered online electronic betting terminals. So you can do in-play betting—when the whole point of this is to restrict it—providing that you are in a pub or club and you are using one of their tethered online electronic betting terminals.

What this exemption would do is dramatically expand the scope of in-play betting. That is in direct contradiction to the O'Farrell recommendation. I will get to it in a moment, as to how that would happen. The Uniting Church, Responsible Wagering Australia and other Australian providers agree that this is a sweetheart deal which hands over, to operators like the Tatts Group, access to physical premises like pubs and clubs.

As I said earlier, former senator Stephen Conroy has become a spruiker for the gambling industry. Not even his factional clout and political connections could compete with the hundreds of thousands of dollars that are flowing into the ALP coffers from the gambling industry. On this occasion, it seemed that they were at odds—and I use that pun intentionally.

Experts warn that this sweetheart exemption could lead to pubs and clubs offering in-play sports betting via tethered tablets, which are more attractive than the large cumbersome machines that are in use.

Let us look at what Tatts Group's UBET said recently. They intend to offer a digital in-play sports betting solution that will allow punters to bet through a customised app on a tablet service. In other words, they are getting ready for in-play betting to occur through their tablets, and they are hoping that one day they will have a monopoly on in-play betting, through their customised app on their tablet devices.

There are some amendments to this legislation which would help close this little sweetheart loophole, and I am talking specifically about Senator Xenophon's amendments. We the Greens will be supporting those amendments. The amendments will tighten up the definition of 'placed-based betting service' to more accurately reflect the reality of current practice and prevent the expansion of in-play sports betting that I have just described. For those reasons, we will support them. They would also strengthen the principal act by introducing an interactive gambling regulator and a national self-exclusion register. We also support those amendments. The amendments would also strengthen the act by banning wagering services from offering credit, or microbetting; by allowing gamblers to set personal betting limits; and by strengthening regulatory powers. We support that amendment too.

There is one aspect of the circulated amendments that we do not support. That is the provision that would require the minister to regulate to require internet service providers to block access to illegal overseas gambling websites. We do not think that is an effective solution, and so we will not support that specific amendment.

I conclude by saying this bill does go some small way in the direction that we need to go, and it is just insane that this glaring loophole has been left open for a particular segment of the industry. If we do not address this issue, we are looking at creating another generation of problem gamblers. This is an industry that has shown itself as wanting to prey on some of the most vulnerable people in our community, and it is governments that have been complicit with the industry every step of the way. Regulation of the industry is absolutely critical, not just in terms of in-play betting but also in terms of the promotion, advertising and sponsorship of gambling products. If we do not deal with this issue now, we risk repeating the mistakes that we made when it comes to poker machines. We risk making the same mistakes within the online betting environment, and that is a cost that is far too high for our society to bear.

Senator LEYONHJELM (New South Wales) (18:20): I oppose the Interactive Gambling Amendment Bill 2016. It is paternalistic, nanny-state legislation based on the assumption that prohibition is an effective regulatory response to something of which the government disapproves. The intention of the bill it to make it impossible for Australians to bet on sporting matches while they are in play. There is already legislation that seeks to make this illegal, but it has some loopholes. This bill seeks to remove those loopholes.

Why does the government want to ban in-play gambling? Why should some forms of gambling be legal, even encouraged, while another form is prohibited? The justification we are given is that in-play gambling leads to match-fixing. There have been examples of that in the past. So there is an assumption that the only way to prevent such match-fixing is to ban in-play gambling. I am not discounting the fact that match-fixing or spot-fixing might sometimes be a problem. In recent years, we have seen examples of this in some sports, such as cricket and tennis, but this legislation is no solution. Banning live betting on the internet in this country will have no more impact on match-fixing than banning the production of pornography in Australia would have on the availability of porn. The internet just does not work that way. The only winners will be unregulated, untrustworthy offshore operations, and punters will have no protection if they get ripped off. And when those unregulated, untrustworthy offshore operations play host to punters engaged in match fixing or spot fixing, nobody in Australia will be able to follow the money trail. It will all be invisible.

The United Kingdom has taken a better approach. The UK's Gambling Commission is authorised to manage gambling licences and to monitor betting to ensure everything is run in a safe and efficient manner. They understand that banning betting will not stop dodgy practices. Instead, they concentrate on monitoring the integrity of sports betting and looking after the interests of punters. They can look for signs of match fixing, act on tip-offs and follow the money trail. If they find evidence of match fixing they can deal with the individuals at fault, including cancelling licences and launching prosecutions, while leaving all the innocent punters alone. So instead of collectively treating gamblers like naughty schoolchildren, they treat them individually as adults whose pastimes are a legitimate form of entertainment and whose interests are worth protecting. What a novel attitude.

Australia loves to ban things. This ban on live betting adds to the nanny state nonsense and it will not stop match fixing. It could also turn hundreds of Australians who have been betting online without harming anyone else into our latest class of criminals.

Also caught up in this bad legislation are hundreds of Australians who enjoy a flutter on online poker. Online poker is not a spectator sport. Nobody tries to fix a cricket match as part of an online poker game. There is no public interest in banning it as part of interactive gambling laws. I have an amendment to exempt online poker and blackjack from the bill. It is insane that they were ever caught up in it. But ultimately, I don't want the bill to pass. I believe individuals have a right to make decisions for themselves, no matter whether we would make the same decisions ourselves.

Finally, if the legislation passes, I would like to take this opportunity to give some advice to online poker players. Notwithstanding the risk of offshore hosts, screw the government: get yourself a VPN and an offshore account and carry on as you were. And I wish all of you the best of luck.

Senator XENOPHON (South Australia) (18:25): I support this bill, the Interactive Gambling Amendment Bill 2016, but I believe it ought to go much further because the issue of online gambling has become increasingly prevalent in Australia. It is impacting on many more people. We have seen an exponential increase in online gambling, in particular in sports betting. As my colleague Senator Kakoschke-Moore indicated, the 2015 O'Farrell review found that the number of active online wagering accounts grew from 200,000 to 800,000 between 2010 and 2014—that is for legal online accounts for legal sports betting agencies. That indicates to me that that there is a significant issue, and the bigger the boom in online gambling the bigger the bust for individuals who are caught up in it and who suffer from gambling addiction.

This bill will go some small way in dealing with the issues—it acknowledges the impact of in-play betting—as imperfect as it is, but there needs to be consideration of why this bill needs to go further. It needs to go further because it is not a case in Australia of enough is enough; it is a case of enough is much. We in this nation lose more in gambling per capita than any other nation in the world. It is a significant social problem, and it is being made worse by the biggest growth area—that is, sports betting.

In 2015, I was part of the launch of Financial Counselling Australia's report Duds, mugs and the A-list. That report looked at the impact of sports betting, particularly on young men around the country. It was published by an organisation that knows better than most what it means to be affected by gambling addiction, because Financial Counselling Australia represents financial counsellors who assist consumers in financial difficulty. They see, on the front line, at the coal face, the impact of gambling addiction. They have been seeing more and more people in recent years in relation to the effects of sports betting, and in-play betting was a significant driver in gambling addiction. In-play betting had a significant impact on young men chasing their losses, because they could gamble in play. It is a more addictive form of gambling. It is more pernicious and leads to greater problems.

That is why we need to support this bill, but I believe the way that this bill has been drafted by the government allows for a number of loopholes to allow some organisations to circumvent that. Reference was made by Senator Di Natale in respect of that. We must oppose that circumvention by strengthening the bill.

Financial Counselling Australia in its landmark report Duds, mugs and the A-list: the impact of uncontrolled sports betting said that urgent action is needed:

Betting on the pokies is relatively small fry in comparison – you can’t put $250,000 into slot machines in one sitting, but you can do that with sports betting with the click of a mouse. If this is the future of gambling, it is indeed frightening. Urgent action is needed.

As bad as things are with poker machines they can get much, much worse with online gambling. This is the new frontier for gambling expansion. We are already the worst in the world for per-capita gambling losses and, dare I say, gambling addiction per capita. This bill at least opens up the debate in relation to these issues.

I will address shortly, perhaps after the dinner break, a number of the measures in the bill. The bill needs to go further, but it is important that it be put into context about the seriousness of the problem we now fact in relation to this.

Sitting suspended from 18:30 to 19:30

Senator XENOPHON: The issue of online gambling is one of critical importance. More and more Australians are falling prey to gambling addiction because of online gambling and because of sports betting. There is nothing like the pernicious advertising of sports betting; it is in your face at sporting games and during sporting broadcasts. That is why it is important that we also reform the issue of online gambling advertising for sports betting advertising. It does seem incongruous, it does seem like a loophole and it does seem unacceptable that there is one exemption to the situation where, in the ordinary course of events, the current ACMA rules say you cannot have gambling advertising during a G-rated time. There is one exemption to that and that exemption relates to sports broadcasts.

If you are broadcasting a game, you can advertise gambling products during that game. I would have thought that is the one particular event watched by families and watched by young children that ought to be the subject of a ban not an exemption of a ban during G-rated times. It is very disturbing that eight-, 10- and 12-year-olds—according to the many parents I speak to with young children—tell their parents about the odds of a game. It is very concerning that gambling behaviour is normalised amongst children in that way. I do not want the kids of today to become the gambling addicts of tomorrow. This bill at least opens up a debate and at least tries to restrict the issue of in-play betting. As imperfect as this bill is, at least it means that we are actually beginning to grapple with this problem.

This is an issue that goes back many years. Back in 2001 I was a member of the Parliament of South Australian and I was here lobbying members of this chamber to have the interactive gambling bill passed by the Senate. It was touch and go. I remember seeing: the late Senator Brian Harradine; the One Nation senator, Senator Len Harris; the then communications minister, Senator Richard Alston; and the many others that I spoke to in the course of the week that I was in Canberra. I was doing my bit, along with supporting the Reverend Tim Costello, to ensure that the bill was passed. It was certainly an improvement on what we had before, which was not much at all.

But, whilst that bill was passed 16 years ago, it may as well have been passed 160 years ago, because so much has happened in the online gambling space since that time. This bill, at least, is an update of sorts, but I think it is interesting to reflect that back in December 2011 the Joint Select Committee on Gambling Reform during the period of the Gillard government prepared its second report on interactive and online gambling and gambling advertising. Back then, it was clear that overseas gambling websites were a real problem that needed to be addressed.

I referred in my additional comments to that report to one particular case of a constituent that had serious problems with Casino.com, a site hosted in Singapore but licensed in Gibraltar. It has an Australian flag in the background and lists of Australian winners and it takes bets in Australian currency. This individual, and of course I will do nothing to identify him—my colleague Senator Kakoschke-Moore worked on this particular case, advocating for him as a constituent—initially appeared to win thousands of dollars. He tried to withdraw it, but he could not withdraw it. He got free credit, $250, on condition that he play certain games, which he did not wish to play. Within about two months, he was up $90,000. He seemed to win the money very easily with the casino games he was playing, but then he started to lose. At one point he lost $50,000 in a day. He was given free gifts: an iPod; a laptop; an iPhone 4, back then; a free trip to anywhere in the world plus $5,000 spending money. He was a VIP customer. The website then made $90,000 of unauthorised transactions from his credit cards. He made official complaints to three banks which have now reversed the transaction, but his total still stood at $120,000.

This case illustrates that the potential for harm with overseas sites is great, and the regulatory framework in some of these countries is grossly inadequate. Try writing to the regulator in Gibraltar, and good luck to you. I have, and you are lucky to get a response in any form of timeliness. I think that it indicates that we ought to be able to tackle these overseas sites. That is why I will be moving an amendment in relation to that.

We have heard from a Canadian based company called Netsweeper, which says that you can block these sites. You can take action in respect of these sites. They say there is a way to do so. I will refer to that in the context of this amendment when I move it, but there are arguments that should be counted. There is an argument that an offshore, unlicensed, online gambling company can simply change their domain, the URL, to avoid blocking from Australia, and so accept Australian customers.

Netsweeper is one of many on the market that are dealing with these issues The Netsweeper policy server and technology crawls through the internet daily for online gambling keywords. If an unlicensed company attempts to change its URL to avoid blocking, then Netsweeper will simply crawl, locate and categorise the new URL and therefore block it. The argument given is one that I think Senator Leyonhjelm referred to when he actually advised people what to do, to use a VPN to avoid website blocking. What Netsweeper, and I believe others, would say is that the KYC documentation of online gambling firms states that any customer who attempts to make a deposit with an Australian credit card, e-wallet or bank wire service must be registered with an Australian IP address or the deposit will be voided. Furthermore, if a customer attempts to withdraw funds, then a copy of the player's passport and a utility bill must be provided. If this documentation does not correspond with the Australian IP, then the customer's account will be suspended and the funds will not be dispersed. The online gambling industry has numerous security measures in place to avoid fraud and bonus abuse, often focusing on ensuring country identity. So you can deal with that argument.

The other argument is that blocking gambling websites will inadvertently also block gambling websites that may be properly licensed in Australia or that may have no relationship to gambling at all. The websites of all gambling companies that are properly licenced in Australia would be added to a whitelist of allowed sites with a deployed Netsweeper filtering system—or, indeed, other filtering systems—and using artificial intelligence engines to ensure that non-gambling websites are not blocked, with a final human review element used if required. So we can attempt to do this. When you consider the level of harm caused by online gambling, particularly from these unlawful sites, it is worth giving it a go.

During the joint select committee inquiry back in 2011, evidence was given by the Australian Bankers Association. I remember asking questions of then CEO Steven Munchenberg, the outgoing head of the ABA, who essentially said, 'Yes, we can cooperate in relation to this in terms of the big banks to block those sites.' They were already blocking other sites for various purposes, such as terrorist related purposes. It can be done if there is political will to do so. Considering that hundreds of millions of dollars are being lost to these unlawful sites, that is something we should attempt to do with alacrity. We need to tackle that.

It is also worth referring to the issue of domestic online sports betting websites. Back in 2011 the University of Sydney Gambling Treatment Clinic—the GTC—gave evidence saying that only five per cent of their clients in the 2006-07 financial year were reporting problem gamblers with sports betting. Problem gamblers with sports betting represented 15 per cent to 20 per cent in 2010-11. That was five years ago. I suggest that figure is now much higher. There has been an exponential increase in the growth of sports betting. There are now greater opportunities to gamble—every mobile phone can be turned into a betting terminal—and there is now the ability to cause much more harm, much more quickly. That is why this bill is welcomed, but it needs to go much further.

It is also worth reflecting on the research of Associate Professor Samantha Thomas and Dr Charles Livingstone, who have done terrific work in relation to online betting. Associate Professor Thomas did work on this a number of years ago. She found that young men in particular felt ostracised and felt isolated from their peer group if they did not gamble, such was the pressure to be part of a gambling culture. That is something that is very concerning and it is something that can drive levels of gambling addiction. Associate Professor Thomas has also done work on the number of young children who can recognise a sports betting operator, and the figures are staggering. Something like half of the young children she spoke to could recognise at least one sports betting agency—or an even greater amount. I do not have the figures in front of me, but it is a very significant number of young people who recognise it. We are talking about children.

Associate Professor Thomas has also made the point that schemes like Mad Bookie offer sponsorship to community sports clubs, which I think is quite pernicious. They offer clubs cashback if members sign up and bet on their website, and clubs are promised a 25 per cent cash rebate from members' losses each month. That raises very serious ethical issues—that is, to draw in a local club, a community club, into these sorts of schemes and arrangements. She says that schemes like Mad Bookie promote risk taking because there is perceived reward, even with gambling losses. Associate Professor Thomas said that the concern is that we will have a generation of kids who will are naturally transitioning to betting because it is in that club environment that kids are exposed to. Associate Professor Thomas said, 'Given our research, and considering how much kids are absorbing, having gambling sponsorship at a community sports club would not be consistent with a health promotion environment for kids.' She says that sports betting is being normalised for young children. She says: 'Kids tell us that they see gambling ads everywhere; they cannot escape them. You can't watch a game of footy or go to a sporting event without seeing them. Signage can appear to be quite harmless, but when you talk to kids, it is those kinds of things they see regularly and it becomes a natural part of their environment.' That is something that is very disturbing.

In fact, it was a 2016 study co-authored by Associate Professor Thomas that found that 75 per cent of children aged eight to 16 years believed wagering was a normal or common part of sport, and could name at least one gambling brand. One-quarter of the children could recall four or more betting brands, and three in four children could recall at least one. Many could quote specific promotional offers and could talk in terms of cashback or refund promotions and bonus bets. This was in an article in QWeekend not so long ago.

I just would reflect on another issue based on a discussion that I had with Senator Hanson and her colleagues earlier this evening. They indicated that they will be seeking to move another amendment on those online betting services that offer you the chance to bet on the outcome of those megalotteries overseas. Lottoland.com is a prime example of that, but there are others. This is an important issue, and that sort of betting ought to be prohibited. I understand that Senator Hanson and her colleagues are looking at moving an amendment in relation to that. I absolutely commend her for doing so, if that is what she will be doing in expressing those concerns. I share those concerns. It is absolutely important that we grapple with this because this bill should be the beginning of a series of legislative measures to deal with the impact of sports betting and the impact it is having on young people in particular around the country. I know from the work I have done with my colleague Senator Kakoschke-Moore that our current regulatory frameworks are pathetic. Our current regulatory frameworks are woefully inadequate.

The Northern Territory regulator, in dealing with online betting, have let down so many people. They do not appear to be a regulator with any degree of rigour. They are not a regulator that can be respected. They are a regulator that have ignored serious issues in terms of problem gambling behaviour and breaches of codes, and have been completely or largely ineffective. That is why a national response, in the absence of a strong state or territory based response, is important. That is why I see this bill as a first step to many other steps that must be taken.

Too many young people and too many members of the community are being bitten by the gambling bug because of online gambling. Too many young men in particular are missing out on a deposit for a first home, buying their first car or planning that overseas trip because they have blown it on online gambling. It causes huge scars for them emotionally, as well as the financial scars it causes. That is why this legislation should be seen as the beginning of the debate and not the end of the debate for the reforms that we so sorely need in terms of online gambling in this country.

Senator ROBERTS (Queensland) (19:45): As a servant to the people of Queensland and Australia, I rise to speak about the Interactive Gambling Amendment Bill 2016. To be frank, I am feeling tentative and uncertain. I am in two minds: is this yet another nanny state intrusion to control people's lives or is technology moving far more quickly than society's ability to adapt? Coming to the first question of whether is this yet another nanny state intrusion to control people's lives: at Pauline Hanson's One Nation Party, we value individual freedom. Individual freedom is essential for responsibility, as our party leader has said for 20 years in politics. Individual freedom is very important for long-term personal security. Quite frankly, we could say—which is pervasive now; the ads are pervasive during sports broadcasts—why not let sports rip and why not let the gambling industry drag itself into destruction so that people could see the damage it is doing to our communities? But would that be fair?

On the other hand, the argument could be that the technology is moving much quicker than our society's ability to adapt. Sure, we could let people go through a lot of pain and eventually realise that gambling is an ill that needs to be treated very, very seriously and people would take responsibility for their own lives. But how many people would be able to come through that in a reasonable amount of time without continuing suicides? People rack up big losses. It is just a small number of people who rack up huge losses because of the compulsion and the addiction, but they have very big consequences on families.

There is plenty of gambling right now. It does not matter where one goes, one can see gambling available. It is easy. We can go to the trots, we can go to the horses, we could get the pokies, we can gamble with our mates or we can gamble on the dogs. We can gamble on any number of things, so there is plenty of gambling. Why do we need internet gambling? Do we need internet gambling? Another thing to consider is that internet gambling is essentially dirty profits going overseas. Companies that are taking money overseas are set up in the Northern Territory, with very little regulation. There is very little in the way of impediments to control them, to oversee the damage that they are doing and to the rein that in. There are very serious questions.

I would like to refer to a report of August 2015 from Financial Counselling Australia, which is entitled Duds, mugs and the A-list. Why do I refer to a Financial Counselling Australia report? Financial counsellors assist consumers in financial difficulty; they know about financial difficulty and people in financial difficulty. They provide information, support and advocacy to help consumers deal with their immediate financial situation and minimise the risk of future financial problems. The majority of financial counsellors work in community organisations, although some are employed by government. Their services are free, confidential and independent. So financial counsellors have extensive knowledge in a range of areas: consumer credit law, debt enforcement practices, the budgetary regime, industry hardship policies and government concession frameworks.

Around Australia, there are a number of financial counsellors who specialise in gambling financial counselling and helping people repair their lives after the damage. Financial counsellors are assisting an increasing number of clients, we are told, who have experienced staggering sports betting losses. People are losing their own money as well as money provided as credit by the sports betting companies. As a result, clients are losing their savings, homes, redundancies and superannuation payments, and they are losing their families. There is anecdotal evidence, according to Financial Counselling Australia, that some so-called accidental deaths—such as single vehicle accidents—may in fact be people who are escaping gambling debts.

Looking at some insights into the industry, sports betting companies actively encourage customers to bet using credit provided by the gambling companies. They are foreign companies who may not be able to, or may not want to, pay off on winnings. It seems amounts ranging from $200 to many tens of thousands of dollars are loaned. In some cases, the lure is initial free bets. They are free bets to get people hooked. It familiarises consumers with the game before inducing them to take further credit. These so-called free bets can be provided unethically and in a misleading fashion.

Whether a particular person is given credit or not, or has an existing credit limit increased, is based on an assessment of whether the company is likely to be repaid rather than whether the customer would experience undue hardship in making repayments. For example, some clients, to continue gambling, will take the money from household living expenses. The sports betting company knows that they will always come good with the money. Debt collection in the sports betting industry is swift and brutal. Customers can lose assets, such as the family home, in very short spaces of time. Debt collection charges and the fees for a bankruptcy trustee can significantly increase the amount owed.

According to Financial Counselling Australia:

We were also told by a former employee that sports betting companies swap customer account data, contrary to privacy legislation. When a gambler 'goes cold' and stops betting with one company, the company swaps lists with another company, which then entices the person to resume gambling. The recipient can receive a fully functioning account populated with their private financial data, plus some 'free money'—

It sounds like a Greens exercise here! They receive free money or credit to welcome them into the fold. Then we look at the pain this causes. Here are some cases studies; people losing huge amounts that they cannot afford.

Peter, for example, a 40-something male, received a redundancy payment of approximately $60,000. Sitting at home, with no risk, he became depressed. With no work, he became depressed. There was also a death in the family. Now, at that time Peter started gambling online with two different online sports betting companies, and lost his entire redundancy payout within just two months—two months! He also took out payday loans and pawned most of the household goods at this time. When he came to see a financial counsellor, his family had no money for food or to pay bills. He was not eligible for Newstart allowance as the retrenchment payout is counted as income. Peter appeared depressed and deeply affected. His family had no income and their savings were long gone. He has a wife and child.

Another financial counsellor saw Alex, who lost $90,000 in one week on sports betting. Alex had amassed a staggering $300,000 in debt due to sports betting, primarily over the past three years. And things have not changed in the last 1½ years. Richard opened an online betting account with a sports betting company at the start of the AFL season. As part of this new account he received inducements of $100 to $500 in free bets. Similar inducements were offered at other points in the AFL season. What we are seeing here are individuals, vulnerable—sometimes depressed, but highly vulnerable—and maybe suffering an addiction to gambling, preyed upon by company after company, many of them from overseas.

Richard, in this case, had some mental health difficulties and his parents helped him to sell his home and move back in with them so that they could assist him. He finally sold his house and the proceeds of the sale were sitting in his bank account. In the process of setting up the bank account, he linked the sports betting account to that bank account. He initially played with the 'free' money and learned how to play. Isn't that wonderful? Make it easy for them to learn how to play! A month later he bet $20,000 on a drawn game and lost close to $10,000. Two weeks on, he transferred $50,000 from his linked bank account to his sports betting account and wagered the whole amount on three games of that round. He won $35,000. Richard then placed the entire $85,000 in his sports betting account on the following week's games and lost it all. The following week he transferred the remaining $90,000, and that he lost quickly.

Each time it took just one click—one click!—to transfer funds from his bank account to his sports betting account. Just one click. Richard ended up losing the entire proceeds of his house sale in a few weeks, and his future changed course. In his mid 30s he had lost everything. His parents told how they cried for their son.

It is not just junior people. Max was a senior employee in a large finance company. You would think that if anyone could understand it would be Max. He was spending $2,000 per bet on weekend sporting games through online sports betting. He was sent incentives to entice him to gamble more, and his bets went up to $5,000 per bet. And this man was the employee of a large finance company. This pattern continued for a long time. One weekend, Max's gambling became erratic, and he bet $250,000—a quarter of a million dollars—on a single game and lost. He placed a second quarter-of-a-million-dollar bet that same weekend, losing the entire half a million dollars. In total, he had lost $670,000 to the sports betting company. The sports betting company then froze his account.

On the Monday morning Max told company management about his losses and that he had embezzled the money from them. He no longer had assets, he has filed for bankruptcy and is now in prison. The financial counsellor discovered that he had a further $200,000 of unsecured debt on credit cards, also spent on funding his sports betting.

Max reflects on how easy it was to gamble this large amount. There were no safeguards when his behaviour became erratic. He was amazed at the ease with which he could increase his bets without any questioning or intervention. We understand, though, that betting companies use complex algorithms to detect gambling patterns in real time. They would have picked up Max's atypical bets, but chose to accept them from someone vulnerable.

Some people are borrowing from payday lenders to fund their sports betting debts. Marco, for example, came to the financial counsellor with significant online payday lending debts due to funding his own online gambling. He had lost the money on online sports betting and indicated his surprise at the ease at which he was both able to gamble and to fund his gambling addiction through online payday lenders. He did not need to leave the house to set up any of this; he could do it from the comfort of his own house. The financial counsellor negotiated settlements with the payday lenders based on legislated consumer protections. But the man was already in trouble.

Jack is on a disability support pension. Jack and his mother had joint title on the home. Jack received a phone call from a sports-betting company representative, who offered three $1,000 free bets so that he could 'get a feel for the service'. He then got an email saying, 'I have set up your account. I have put the free bets in.' Another phone call informed him, 'Are you aware that our company offers credit and could put some dollars into your account?' He initially declined the offer of credit, but about two weeks later he discovered $10,000 in credit in his account. He used it.

One month later, two unsolicited credit limit increases were applied, upping his first limit to $30,000 and then to $40,000. Eight days after that, the limit on his betting company account was increased to $60,000 and later to $80,000. And Jack used the money and lost it. The betting company and its legal representatives then dodged a creditors' petition to bankrupt Jack. They also issued a warrant of possession for the house and demanded that he vacate the property within 14 days. The financial counsellor said that this was a frightening time for Jack and his mother. He said, 'They called me often and asked, "What do we do now?"'

The trustee fees and bankruptcy came to $50,000 and the case was resolved out of court. The financial counsellor helped them stay in their house but their losses were still substantial.

What about suicide and sports betting debts? Tim had huge debts from sports betting. He had embezzled funds from his employer to fund his addiction. At one point he attempted suicide. After Tim came out of hospital he found emails in his inbox inviting him to come to a big boxing match. He went to a financial counsellor, seeking assistance to deal with his debts. An employee of the sports betting company described his conversation with the court bailiff about the success of serving court orders on an indebted gambler.

Another example is Pete, a young adult living at home. He used his parents credit card one weekend and lost a few thousand dollars through online sports betting. He knew his parents would find out when they checked their account. He committed suicide, leaving an explanatory note apologising and explaining his shame. The parents met with a financial counsellor to work out how they could repay the credit card debt.

A gambling counsellor who was interviewed said that her agency asked every new gambling client two questions as part of the intake process: 'Have you ever thought of suicide?' Most say, 'Yes.' And, 'Have you ever actually attempted it?' One in 10—10 per cent—say, 'Yes'. A gambling counsellor said: 'The gamblers see no way out. One client told me, "I just wanted to drive straight off that bridge so I wouldn't have to face up to what I've done."' Most do not do it because things do get better with help, and families do not know because of the shame.

I cannot finish without saying something about another big gambling exercise. A few weeks ago, I was listening to people across south-west Queensland and I got wind of a town by the name Dirranbandi while I was in Balonne Shire Council offices in the town of St George near Dirranbandi. They told me that there are 100 vacant houses in Dirranbandi, a once thriving community. I said, 'How many houses are in Dirranbandi?' They said, 'We estimate around 300.' One-third of the houses are vacant, and the school enrolments have dropped by 50 per cent in just five years. The reason? As a parliament, we are gambling with taxpayer funds on the Murray-Darling Basin water buyback, destroying southern Queensland and northern New South Wales. People down the road at Goondiwindi, who have operations in Queensland and in New South Wales, told me the devastation in Dirranbandi is not as bad as the devastation in Collarenebri. Collarenebri and two other towns—give me a minute to think of the names—have also been devastated by this taxpayer funded federal government initiative.

We are also gambling with the sovereignty and the governance of this country. This country's Constitution depends on competitive federalism, and there is a very, very good reason for that. Sir Joh Bjelke-Petersen highlighted this when he abandoned and abolished estate duties—death duties. And what happened? Because of that, and his pro-business stance, his balancing of the budget and his support for infrastructure, people from the south flocked to the Gold Coast and now we see the miracle that is the Gold Coast. When Queensland took funding from investors from the south and retirees from the south, southern governments also abolished death duties. That is why we must restore competitive federalism.

We also see the federal government gambling with innovation, as they say. What a lovely word—a catchphrase; a buzzword. I was asking Senator Sinodinos a couple of weeks ago in Senate estimates about the hundreds of millions of dollars being flung around in one program after another. The really sad thing is that the highly paid federal public servants actually believe it is going to work. History shows—cursory examples are an iPhone, a computer or a car—that all significant inventions and improvements come from someone who has skin in the game, someone who depends on his idea working. We know that for every one invention that works there are sometimes thousands of inventors who have not succeeded but who have plucked up the courage to do something. We also know that of the one inventor who succeeds, sometimes, he or she might go through hundreds of iterations before they succeed. This is hardly a gamble and yet our federal government is not leading by example. It is gambling; it is gambling with taxpayer funds.

I hope I have conveyed to you the misery that is being caused by unregulated gambling. I hope I have conveyed that I am torn, in some ways, because— (Time expired)

Senator BERNARDI (South Australia) (20:05): I do not mind admitting that I was not intending to speak on this bill until I was in the position a little bit earlier that you are in now when a number of the contributions made by other senators discussed the impact of problem gambling. It caused me to have another look at the Interactive Gambling Amendment Bill 2016. No matter how you might like to dress it up, this bill is not about dealing with problem gambling, save for perhaps one clause in relation to the call-to-bet or click-to-call procedures.

This is really more about tax revenue for the government and they are dressing it up as purporting to solve a problem gambling issue because there are unregulated gambling operations that are taking bets from Australians. They can do it very easily, and they essentially pay no licence fees, turnover taxes or anything else that is attached to it. I am not standing in the way of that, but what I have listened to is people coming out with sob-story after sob-story about individuals who have been impacted by gambling. I will have a bet with anyone in this place that no-one is closer to the issue of problem gambling destroying individuals' lives than me, not because I have a problem with gambling but because someone very close to me does. I have seen millions of dollars disappear. I have seen families get destroyed. I have seen businesses get destroyed. I have seen people at the pits of despair as a result of gambling. And yet I do not blame the gambling operators; I blame the individuals for making those determinations themselves.

Having said that, there are things we can do, and this is where I am going to depart from the bill a little bit. There are things we can do and that we should be doing to ensure the integrity, the efficacy and the ethical conduct of gambling operators in this country. That is why I support this bill and I told the minister that. At least if you are dealing with a licensed and regulated gambling operator in this country, you can be sure that they are subject to Australian laws. You cannot guarantee you are going to be remunerated. If you are dealing with an overseas operator, you do not know about the transparency or accountability of it. Your money could be just disappearing into a black hole.

And yet there is a part of me that heard Senator Leyonhjelm's speech earlier and thought, 'We cannot be there to protect everyone from making dumb decisions themselves.' No matter how many times you have warnings from ASIC or one of the other regulators that you should not send money to unscrupulous cold callers in investments or any other form, people still do it. Then, when they lose their money, they come back and say the government should do something about it. I do not always subscribe to that. I think that ultimately people are making these decisions for themselves. Our job and the education system's job is to make sure that people are equipped to deal with the issues they are going to face in life, and that is something we have walked away from as the nanny state seeks to take away any risk from any individual.

But I do not think this legislation is going to be effective in stopping problem gambling or stopping people developing gambling habits that lead to catastrophic consequences in some areas. I wanted to speak a little bit from experience. One of the problems we have got with domestic operators is the fact that there are a lot of young people—14, 15 and 16—who have seen the odds on the screen about sports betting in particular and are lured to the websites. They input their details at a website and, although they do not have a verified account, they can go in and look at the odds on the next no-ball being bowled or who is going to kick the first goal and things like that. Children today are interested in that and go and register on it.

But imagine my surprise when I found out from some of my son's friends that, when they do this online, they suddenly get a phone call from their new friend 'Bill' or 'Bob' at one of the sporting agencies, asking them why they have not funded their account yet, never verifying that they are actually of legal age. They just ring up and say: 'Hello, John. Thanks for putting your name in. We noticed you haven't made a bet or sent any money through yet. It might be a good idea to.' The only reason I found out about this was that I was in the car when one of my son's friends took that phone call. I said, 'Who was that?' 'Oh, that was my mate at XYZ Betting agency.' You can imagine a couple of days later I rang XYZ Betting Agency, asked to speak to the general manager and told him that what they were doing was thoroughly unethical and inappropriate. I received assurances that that would not continue and they would amend their programs, but I would lay London to a brick that that same sort of marketing and online campaigning is happening at many of the regulated gambling firms in this country. It is not right. That is one way you can get it fixed.

The other aspect of regulated gambling, bet-takers and sports bookmakers was raised with me by a constituent just the other day. They said, 'The problem is they only want to deal with losers.' I can understand that: you want to make sure you are making a profit. But, if you are actually a successful punter and you ring XYZ Betting Agency, they look at your track record and they do not offer you the same odds. They say, 'No, we're not taking your money.' You no longer get the accelerated bet or the other benefits, perks and accoutrements that they advertise as a way of getting ahead. And we all see those ads on television. And so they are allowing losers to get the benefits because the chances are they are not going to win, but, if you are actually a winner, their business model says, no, you are no longer allowed to deal with them or you are going to deal on such unfavourable terms that it is unscrupulous. It is not even adhering to or providing the odds and the services that they market so readily.

The third aspect if you want to clean up problem gambling in particular in the sports arena but also in any regulated arena is to outlaw credit betting. People cannot borrow money through any regular financial agency, whether it be shares, a bank or anywhere else, without going through a plethora of checks. We say this all the time to the banking industry. You want to have a royal commission into banking because of lending practices, but you ought to look at the lending practices of some of these online gambling agencies. They do not care. 'Yeah, sure, we'll lend you $100. We'll lend you $1,000. We'll lend you $20,000, $30,000, $50,000'—until they send the bailiffs in because they know that, chances are, you are going to lose that. And so, if you said no, there is no longer credit betting for 'unsophisticated' punters, if you want to put it in the investment parlance, where people have to meet a minimum criteria where they are meant to be adult enough to look after themselves—if you said there is no more credit betting available to individuals that did not meet those criteria, you would limit the ability for individuals to get involved in gambling out of their financial depth.

This brings me to the fourth point. If you think gambling is becoming a compulsion and people are just chasing from one bet to the next to the next, the only thing that allows them to do that is either the instant transfer of money into the bookmaker's account or the ability to access credit from that bookmaker. If you have outlawed or prohibited the provision of credit to non-sophisticated or non-professional punters, however you want to describe them, and then say it is going to be a 72-hour waiting period or thereabout—48 hours or whatever you want—you are breaking that ability to cycle from one bet to another and continue to chase your losses. That is the same principle that is attached to how we deal with people who have gambling addictions, or addictions of any nature, in fact. You take away the ability for them to participate in that addictive behaviour, and you give them a chance to gather their thoughts and have a sleep on it. As our mothers always said, 'It will feel better in the morning.' Generally, it does feel better in the morning, after you have had a good night's sleep. You say, 'Okay, I have a problem. I have got to confront that. How am I going to deal with it?'

If we are serious about dealing with problem gambling in this country, and particularly online gambling, those are practical steps that perhaps this Senate and the government should consider. But the bill before us is not about problem gambling. It is about tax revenue and, in some ways, giving some level of confidence to the Australian people who want to gamble online that they are doing it with a 'reputable operator'. Once again, I put air quotes around 'reputable operator', because the problem with parts of this legislation is that ACMA is going to be providing a list of licensed bookmakers, or licensed or approved gambling service providers. I think that is fraught with danger, quite frankly. I am not sure that anyone is going to go to the ACMA website and say, 'Who can I place my Melbourne Cup bet with today?' What they will do is a Google search, and whoever has paid for the highest ranking on Google will probably get their business, if they have not already got an account.

I think it opens up the government to a bit of a problem. What if one of those gambling operators does the wrong thing? Yes, they will be held to account for it, and other things, but will the government be blamed by the punter who will say, 'This is one of your approved service providers'? I wonder about the wisdom of that intervention. I do not think it is necessary. It probably will not do any harm, but, nonetheless, if you are thinking that is a way of stamping out the problems involved with sports betting, I think it is paying lip-service to it, quite frankly.

I do support the click-to-call provision, because there is clearly a loophole. The intention is that you cannot place in-play bets online, for the reason that you could do it very, very quickly as you did not have to speak with an operator, and it led people into what could be a cycle of addiction. This provision is designed to circumvent that, because the call comes from a robot which repeats the information that you have already put into your betting app, and the bet takes place in a very short space of time. If people want to bet in-play, I do think it is reasonable for them to be in a place of gambling frequency. If they are in their local TAB, or their local pub, watching a game on TV and they want to go and place a bet on it, I really do not see a problem with that. People who are in licensed premises should have the ability to do that. If individuals want to call up and place bets, it is another way of circumventing or delaying the instant gratification response of putting a bet on, getting an immediate result and then waiting for the next one. It is that intervention period, which I talked about earlier, and how that can help break the cycle of addiction.

In the end, I will support this legislation, but I do not want it to pretend to be something that it is not. That is why I have put on the record tonight my thoughts about how, if we want to tackle problem gambling, we have to start to approach it in a better way than, and in a different way from, this bill and what it is supposed to deal with or has been characterised as dealing with. Let us see how the amendments play out. I am not sure about which amendments, if any, I will be supporting. I do want to put on the record that I am absolutely mindful of the potentially catastrophic consequences of problem gambling and what it does to individuals and families, but I am also mindful that it is not our responsibility here to protect everyone from their own inanity and foolish behaviour, and that extends to not only the process of placing bets but who they can place bets with. This bill does not really deal with any of the substantive problem-gambling issues. I do believe it is a revenue bill, albeit one dressed up in some moral guidance.

Senator BURSTON (New South Wales) (20:19): Different sectors of the community have differing opinions about the virtues of gambling. Regardless of your views on the topic, it is a reality and it is here to stay, for the foreseeable future at least.

Gamblers will tell you that there is nothing like the thrill of the win, and they downplay the losses, preferring to look forward to the next big win. Detractors will tell you that the act of gambling in any form is a sin and has no redeeming qualities, and neither do the gamblers who engage in it.

Whatever your opinion, we have to deal with what we have and manage the market so that those who engage in gambling are, in some cases, protected from themselves. We must also ensure that the organisations that enter the market conduct themselves in a manner that does as little harm to the gamblers as possible in the context of their interaction with them.

Traditionally, punters would go to the racetrack and place a bet with a bookie, or go to the TAB and bet on a horserace, a dog race or, more recently, some other sporting event. Now gambling has taken on a whole new complexion. If you want, you can bet on who kicks the first goal, who runs last, who is first to touch the ball and so on. We have grown to accept this myriad of options available to us, and gambling companies have grown with it.

Most of the types of gambling I just mentioned went into overdrive with the advent of online gambling. The combination of a gambler, an internet connection and an account with a gambling provider means you can bet on a football match in the USA, a horserace in Happy Valley in Hong Kong and a soccer match in the UK all from the comfort of your phone while you sit at home in downtown Newcastle.

Offshore companies that come to Australia to sell their services to punters generally register in the Northern Territory, paying $550,000 a year in licensing fees and taking approximately $8.6 billion from the community, while paying only $6.5 million in tax for the privilege. Their revenues go offshore and do not contribute to Australian society. The taxes stay in the Northern Territory, despite the revenue being gained from across Australia.

Add to this a new company from Gibraltar that allow punters to bet on the outcome of a lottery. They are registered in the Northern Territory, and their revenues are unknown at this stage, but all those revenues leave this country and put the livelihoods of 4½ thousand independent newsagents who rely on gambling revenues at risk. The company do not add value to the gambling process. They are truly parasites, who offset their risk by insuring against a punter having a win. There is no guarantee that they have the capacity if a punter should make a big win. There is no way of knowing if they will conduct themselves ethically in any situation they are not prepared to embrace.

One Nation's proposed amendment to the Interactive Gambling Amendment Bill 2016 calls for the banning of this particular type of operator in the gambling industry that allows punters to bet on the outcome of other lotteries or events, but it does not have any impact on other foreign companies registered in the Northern Territory.

Be under no illusion: this is a multibillion-dollar industry. The foreign companies make an absolute fortune from operations all around the world. We are not against free enterprise, nor are we against entrepreneurs making an honest dollar. I emphasise the 'honest dollar' and leave it up to you to decide what that might be. We believe that the companies that allow punters to bet on the outcome of another company's lottery are not making an honest dollar. They do not add value and are parasites on the industry, which probably does not have a whole lot of saving graces to begin with. I commend One Nation's amendment, which Senator Hanson will be introducing, to the Senate.

Senator HANSON (Queensland) (20:23): I have been listening to some of the speeches here tonight, and gambling is a huge issue. Senator Bernardi commented on friends that he has seen involved in gambling and on the repercussions that it has had on them. I too have known people where gambling has affected them, so I am sure we have all been touched by it. But I also agree with Senator Bernardi that gambling is a part of life. I cannot see it being wiped out at all, and I do not believe that we should. People have to be responsible for their own actions, and I would not like to see us become a nanny state. I support this bill from the government, the Interactive Gambling Amendment Bill 2016, and I will be moving an amendment.

The gambling industry is flourishing, and we ask: where does the money go? There are a few international corporate bookmakers in Australia, and they rake in $8.6 billion from sports and racing betting, yet they only contribute back to the Northern Territory government $6.5 million in tax. Licences can be bought from the Northern Territory for $550,000 a licence per annum.

Another foreign entity that is working in Australia and buys a licence from the Northern Territory is called Lottoland. Lottoland, I have been told, have a contract with a Gibraltar company. They buy a licence for $550,000 in the Northern Territory, and what they offer Australians is the ability to bet on the outcome of megalotteries around the world. It is unknown what they rake in in their turnover, but the thing is that they do not pay tax. They pay no tax in this country whatsoever. Unlike the international corporate bookmakers, Lottoland pay no tax, but what must be also considered is: can they pay on a win if there is a win?

Lottoland is jeopardising the 4½ thousand newsagents who rely on lotteries. They contribute $1.4 billion across the nation in taxes that are paid and a further $150 million in GST. Lottoland, you might think, is a big organisation, employs people and brings a lot to the country, but it does not. It only employs six people. And yet I am sure we have seen, if not hundreds of thousands, possibly even millions of dollars leaving the country, tax free.

What we have to consider and what I will be moving today is an amendment. I am led to believe that Lottoland have been shut down in France and Italy, and the UK is now looking at shutting them down. The amendment that I will move here today to part of this bill is basically to put a stop to organisations like Lottoland that provide a service relating to betting on the outcome of a lottery. Hence, what we will be doing, if my colleagues in this place support my amendment, is to stop people like the organisation Lottoland—plus a couple of others who are possibly eyeing off coming over here to do the same—ripping off, as I said, hundreds of thousands if not millions of dollars out of our economy. They do not pay tax, and there is no guarantee that they will be able to pay up if anyone does have a win. I hope that people will support this amendment, because, at the end of the day, we will be looking after Australian businesses who rely on lotteries for that extra little bit of cream, because that helps keep them profitable, and probably helping Australians who may not have been paid by these organisations that may be questionable. So I hope that I get support on this amendment.

Senator FIFIELD (Victoria—Manager of Government Business in the Senate, Minister for Communications and Minister for the Arts) (20:29): Unless there are any other colleagues who want to contribute, I will close the debate on the second reading of the Interactive Gambling Amendment Bill 2016. I thank colleagues for their contributions and for the spirit in which they have been made. I know this is an area that is of concern to most colleagues.

As colleagues know, the government is committed to strengthening the regulatory enforcement of the Interactive Gambling Act 2001 and protecting Australian interests from illegal offshore gambling operators. This bill is the first stage of a three-stage process aimed at protecting Australia's wagering, racing and sporting industries, problem and at-risk gamblers, consumers and the integrity of Australian sport. I do not think anyone here pretends that we can stop 100 per cent of money going offshore, but the government is confident that the measures in this bill will have a significant disruptive impact on illegal offshore wagering. That is the aim of this legislation—to stop as much of the illegal offshore wagering activity as we can so that where wagering by Australians takes place it does so with properly licenced onshore operators with stronger consumer protections.

The legislative amendments will prohibit a person providing regulated interactive gambling services to Australians unless the person holds a licence under the law of an Australian state or territory. The bill will clarify the licensing requirements for interactive gambling services in Australia and will provide a simple-to-establish key criterion for enforcement agencies when investigating whether to take action against unlicensed services. This bill will introduce a civil penalty regime which will be enforced by the Australian Communications and Media Authority. This amendment will allow for a quicker and more focused response as formal investigation or prosecution will not depend upon the priorities of other agencies. Civil remedies for the provision of prohibited or unlicensed interactive gambling services to Australians will carry a maximum penalty of $1.35 million per day for individuals and $6.75 million per day for organisations. The criminal provisions of the act will be maintained for more serious offences and now carry a maximum penalty of $900,000 per day for individuals and $4.5 billion per day for organisations. The reforms will enable the ACMA to notify the Department of Immigration and Border Protection of the names of directors or principals of offending gambling services so that they can be placed on the movement alert list and any travel to Australia can be disrupted.

These enforcement actions will be combined with a number of measures to build relationships with international regulators and raise awareness of Australian gambling laws and the risks associated with illegal gambling services. The bill will also, importantly, prohibit click-to-call in-play betting services. The government is committed to closing down these services, as they undermine the intent of the Interactive Gambling Act to limit the scope of problem gambling in Australia.

In addition to the bill and at the core of the government's response to the O'Farrell review is the development of a national consumer protection framework for online wagering in Australia. Can I take the opportunity of again thanking Mr O'Farrell for his work. This is indeed one of the largest reforms to the online wagering industry since the introduction of the Interactive Gambling Act in 2001. On 25 November last year Commonwealth, state and territory ministers gave in-principle agreement to key aspects of the national consumer protection framework. This includes a national self-exclusion register for online wagering, a voluntary opt-out pre-commitment scheme for online wagering and prohibition of lines of credit being offered by online wagering providers. This government will continue to work with the states and territories to develop the framework to ensure that there is a strong, robust set of national standards for online wagering that will provide greater protection for Australian consumers. The government will also be consulting with internet service and financial payment providers around disruption measures to further reduce illegal offshore gambling activity.

I would like to turn briefly to some of the issues that senators have raised in this debate so far, some of which will no doubt be the subject of amendments moved in the committee stage. Firstly, I will turn to Labor's second reading amendment that has been circulated. The government certainly does acknowledge that there is a level of community concern in relation to gambling advertising. This is something I have raised with the broadcasters. It is important for the broadcasters to ensure that their advertising is conducted in a way that reflects community standards. Indeed, this is the objective of the co-regulatory framework of codes of practice that is in place and which the government supports. I note that the opposition also supports the co-regulatory framework. Suffice to say in relation to Labor's second reading amendment, we do not agree with making policy by way of second reading amendments, so we will not be supporting that put forward by the opposition.

I will turn now to the Greens' amendments. The amendment in Senator Di Natale's name is in relation to gambling advertising. For similar reasons, the government will not be supporting Senator Di Natale's amendment. Senator Rhiannon's amendment was on expansion of gambling. The government will not be supporting Senator Rhiannon's amendment. It is not correct to allege that this bill will lead to an expansion of the Australian gambling market as the amendment suggests. The bill only preserves the status quo and clarifies the act; it does not enable activities that were not previously permitted. Far from leading to an expansion of the gambling market, the bill in fact achieves the opposite through its closing of the click-to-call in-play betting loophole. The government also rejects the slur in the second part of the amendment.

I will turn now to the NXT amendments. NXT colleagues have raised a number of issues in their contributions. I think it is fair to characterise many of the NXT amendments as foreshadowed as largely seeking to implement elements of the government's response to the O'Farrell review, which we are seeking to implement as part of the national consumer protection framework with the states and territories. The government believes that it is important that we work with the states and territories, as much of the regulation of wagering is in state and territory legislation. It is states and territories that license wagering operators, and it is state and territory regulators that are largely responsible for compliance and enforcement. The government is absolutely committed to implementing the national framework. There has already been a meeting of the Commonwealth with state and territory gaming ministers and in-principle agreement was reached to implement the elements of the framework. So, while the government agrees with much of the substance of the NXT amendments, we will not be supporting them, as we feel it is more appropriate to pursue those elements through the process that is already well underway with our state and territory counterparts.

In terms of Senator Kakoschke-Moore's amendment in relation to place-based betting services, there has already been some concern expressed around the bill's clarification of in-play betting being permitted in licensed retail venues on electronic terminals. The bill that is before the Senate seeks to do nothing more than preserve the status quo. The Interactive Gambling Act was not intended to regulate activities in retail venues. It is about regulating the online space. In-play betting is currently permitted and takes place in retail venues on electronic betting terminals. In some venues, these are fixed terminals; in others, customers can load money onto a tablet. As I said, the bill seeks to do nothing more than preserve the status quo. It will not be permitted to offer in-play betting on personal devices—I should make that very clear. Nor will it be permitted to offer in-play betting by electronic means via a customer's online account. The establishments that we are talking about here are monitored by staff trained in the responsible service of gaming and alcohol. These establishments can only be accessed by adults. They do not permit intoxicated persons to remain on the premises. They have set opening and closing times and only accept cash payments. These elements provide a level of harm minimisation that would not be available in a private dwelling, using a personal device.

The bill reflects an important distinction between equipment that is provided in a regulated environment, which is available to all customers, and gambling on personal devices used in the home or other private places which would not be subject to harm minimisation controls. As stated in our government response to the illegal offshore wagering review, we are not expanding the range of gambling products in Australia. The bill is simply clarifying the services that are currently permitted under Commonwealth, state and territory laws. Further, the Commonwealth's legislation only deals with devices on which in-play betting is permitted. Other than for the issue of in-play betting, the legislative framework and regulations for betting on in-venue devices is a matter for each state and territory. If there are concerns about portable devices, it is open to each state and territory to limit their use or prohibit them in retail venues, if they see fit.

I turn now to Senator Leyonhjelm's amendment relating to online poker—a further matter which has been raised in the context of this bill. The government is aware that a number of Australians currently access online poker sites. Online poker is and always has been a prohibited service under the IGA. It has always been the intent of the IGA to prohibit this service being offered to Australians. That is why there are no Australian licensed operators of online poker, but because the law has been ambiguous overseas operators have been freely offering these services to Australians. With the law being clarified, it is evident that a number of these operators have begun withdrawing their services from Australians. Whilst I appreciate that this is not welcomed by those individuals who have been using these services, it is a fact that online poker has always been a prohibited service under the act. It is not something that this bill is enacting. Whether online poker should be legal in Australia or not is a separate debate. I indicate that the government has no plans to liberalise online poker, and in terms of this bill the government has merely sought to ensure that the original intent of the legislation is upheld.

I should also acknowledge that One Nation have flagged an intention to move an amendment in relation to Lottoland. I thank One Nation for making contact during the second reading debate to indicate that they would be doing this. Let me just say at this point that, in relation to that foreshadowed amendment, the bill before us is intended to tackle illegal offshore wagering. Lottoland is, at present, neither illegal nor offshore. It is a licensed service in the Northern Territory. So it would be fair to say that that foreshadowed amendment is beyond the intended scope of this bill, but, as always, when colleagues put a proposition before us, we will always take on board what is put before us. But I think on this occasion, in the time available to us and given the scope of this bill, it is not possible for us to examine it and to support it in the context of this legislation.

In conclusion, since the introduction of the bill in November last year, a number of major offshore gambling operators have ceased providing or indicated that they will withdraw their prohibited services as Australia will no longer be a grey market when it comes to gambling laws. This bill does send a clear message to overseas operators and regulators that Australia is serious about compliance with its online gambling laws. International experience has shown that illegal offshore betting cannot be eradicated in its entirety. However, a combination of clearer laws, an active regulator, stronger enforcement measures and awareness activities can significantly reduce illegal gambling activity.

The bill has been developed in consultation with many stakeholders across the wagering, racing and sporting industries, academia, responsible gambling organisations, consumers and governments. I look forward to continuing to work with stakeholders to progress the National Consumer Protection Framework.

I should indicate that I will be working closely with my ministerial colleague Mr Tudge, who has put a tremendous effort into this area, and it is appropriate that I acknowledge that. There is more work to be done. As indicated, it is a three-stage process. I commend the bill to my colleagues.

The PRESIDENT: The question is that the second reading amendment moved by Senator O'Neill be agreed to.

Senator DI NATALE (Victoria—Leader of the Australian Greens) (20:52): I move Greens second reading amendment on sheet 8059 standing in my name:

At the end of the motion, add:

", but the Senate supports a complete prohibition of all gambling advertising, including but not limited to all television and venue advertising."

Question negatived.

Senator RHIANNON (New South Wales) (20:53): I move Greens amendment on sheet 8056 standing in my name:

At the end of the motion, add:

", but the Senate notes this Bill is likely to lead to an expansion of the Australian gambling market through in-play betting in TABs, clubs and licenced premises and questions the rationale for such an approach in light of Labor and Liberal parties having received $10,460,819 in political donations from gambling interests over the past ten years.".

Question negatived.

Original question, as amended, agreed to.

Bill read a second time.

Senator FAWCETT (South Australia—Chair of the Joint Standing Committee on Foreign Affairs, Defence and Trade and Deputy Government Whip in the Senate) (20:54): On behalf of the chair of the Legal and Constitutional Affairs Legislation Committee, I present the report of the committee on the provisions of the Native Title Amendment (Indigenous Land Use Agreements) Bill 2017, together with the Hansard record of proceedings and documents presented to the committee. I move:

That the report be printed.

Senator DASTYARI (New South Wales—Deputy Opposition Whip in the Senate) (20:55): Can I just ask for a point of clarification? This is the report that, earlier, when we got to business of the Senate, was not yet physically printed to be able to be tabled. Is that correct?