The PRESIDENT (Senator the Hon. Stephen Parry) took the chair at 09:30, read prayers and made an acknowledgement of country.
Clean Energy Legislation (Carbon Tax Repeal) Bill 2014
True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2014
True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2014
Customs Tariff Amendment (Carbon Tax Repeal) Bill 2014
Excise Tariff Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2014
I will also be announcing a 'cap and trade' emissions trading system that will help Australia substantially lower our domestic greenhouse gas emissions at the lowest cost.
Stabilising atmospheric concentrations of greenhouse gases will be difficult, but not impossible. We do not have to sacrifice our economic prosperity to tackle the problem.
Australia will more than play its part to address climate change, but we will do it in a practical and balanced way, in full knowledge of the economic consequences for our nation.
Hi Senator,
Can you advise me how much I can expect to save this financial year by the abolition of the carbon tax.
I have heard that the Government has stated it should be on average $550 however Aurora Energy today advised me that their power charges will not reduce as a result of the carbon tax being taken away. I do recall this being a reason used by them for the increase in the market wholesale price of electricity.
Dear Customer
YOUR AURORA ENERGY CONTRACT PRICES FROM 1 JULY 2014
We write to you with regard to the prices in your Aurora Energy electricity supply contract that will apply from 1 July 2014, in light of the likely repeal by the Australian Government of the carbon pricing scheme.
As of 1 July 2014, there will be no change in the price of your supply contract, as the wholesale energy purchasing arrangements which underpin the provision of electricity to you have not changed. There will also be no change to prices in the event of the carbon tax being repealed, as the costs of providing energy to you will remain unchanged with the wholesale energy market having already factored in the probability of the carbon tax being repealed.
When the time comes to sign a new supply contract with Aurora Energy, the cost of carbon, if there is any, will be captured in the energy pricing that we quote you in your next contract. There will be no separate rate for carbon.
Should you have any questions relating to your contract and the impact of carbon, please do not hesitate to call our Business Sales Team … and we will be able to answer any questions you may have.
The committee divided. [09:57]
(The Chairman—Senator Marshall)
(1) Schedule 2, item 3, page 75 (line 33), omit "electricity; or", substitute "electricity.".
(2) Schedule 2, item 3, page 75 (line 34), omit paragraph (f) of the definition of electricity retailer in section 60A.
Martijn Wilder, a partner at Baker & McKenzie, said that “on a plain reading, the law does apply to power sold from solar roof panels” and the letter of the law did not reflect the assurances the minister had given. “At best, it is legally ambiguous,” he said.
The committee divided. [10:14]
(The Chairman—Senator Marshall)
(4) Schedule 2, page 71 (line 1) to page 101 (line 20), to be opposed.
(5) Schedule 3, page 102 (lines 1 to 26), to be opposed.
(6) Schedule 4, page 103 (lines 1 to 29), to be opposed.
The committee divided. [10:24]
(The Chairman—Senator Marshall)
(7) Schedule 5, page 104 (line 1) to page 105 (line 4), to be opposed.
(7) Schedule 5, page 104 (line 1) to page 105 (line 4), to be opposed.
The committee divided. [10:41]
(The Chairman—Senator Marshall)
The committee divided. [10:46]
(The Chairman—Senator Marshall)
That the report from the committee be adopted.
The Senate divided. [10:51]
(The President—Senator Parry)
That these bills be now read a third time.
The Senate divided. [11:10]
(The President—Senator Parry)
Asset Recycling Fund Bill 2014
Asset Recycling Fund (Consequential Amendments) Bill 2014
EIF funding has been used to develop new research and education infrastructure across universities, VET institutions, research centres and institutes and the CSIRO.
To date 71 infrastructure projects have been funded by EIF to the sum of $2.4 billion.
Without systematic and sustainable funding for research infrastructure, Australia will not be able to attract the best and brightest researchers in the world, nor commit to significant long term research and commercialisation projects as is done in our competitor economies.
Transfers of ownership are not without cost. Transaction costs include the costs of legislation, legal advice, due diligence, brokerage and underwriting fees. The fees can easily reach 2-3 per cent of the value of the enterprise and are not irrelevant to the excitement privatisation generates among the legal and stockbroking industries—and the uncritical support they offer for it.
To this must be added the tendency to underprice the asset to ensure that the privatisation is a 'success'. Politicians pushing privatisation are less concerned that the price be maximised than that the sale go through. In this they will be aided and abetted by the underwriters who want to minimise their own risk.
SELECTION OF BILLS COMMITTEE
REPORT NO. 9 of 2014
1. The committee met in private session on Wednesday, 16 July 2014 at 7.25 pm.
2. The committee resolved to recommend:
That—
(a) contingent upon its introduction in the House of Representatives, the provisions of the Crimes Legislation Amendment (Psychoactive Substances and Other Measures) Bill 2014 bereferred immediately to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 2 September 2014 (see appendix 1 for a statement of reasons for referral).
3. The committee resolved to recommend—That the following bills not be referred to committees:
True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2014
True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2014
Customs Tariff Amendment (Carbon Tax Repeal) Bill 2014
Excise Tariff Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2014
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2014
The committee recommends accordingly.
4. The committee considered the following bill but was unable to reach agreement:
5. The committee deferred consideration of the following bills to its next meeting:
(David Bushby)
Chair
17 July 2014
APPENDIX 1
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee:
Name of bill:
Crimes Legislation Amendment (Psychoactive Substances and Other Measures) Bill 2014
Reasons for referral/principal issues for consideration:
Concerns about unintended consequences and to look at alternative models.
Possible submissions or evidence from:
Key stakeholders in drug and alcohol sector.
Committee to which bill is to be referred:
Legal and Constitutional Affairs Legislation Committee
Possible hearing date(s):
Late August / September
Possible reporting date:
September/October 2014
(signed)
Whip/Selection of Bills Committee Member
That the report be adopted.
That at the end of the motion, add, "and, in respect of the National Security Legislation Amendment Bill (No. 1) 2014, the bill be referred immediately to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 8 November 2014".
That leave of absence be granted to Senator Ronaldson from 14 to 18 July 2014, on account of ministerial business.
That leave of absence be granted to Senator Xenophon for today, for personal reasons.
(1) That the following matter be referred to the Committee of Privileges for inquiry and report:
In the context of an inquiry by the Rural and Regional Affairs and Transport References Committee into aviation accident investigations and Budget estimates hearings of the Rural and Regional Affairs and Transport Legislation Committee in May 2013:
(a) whether disciplinary action was taken against either a witness before the committee or a person providing information to the committee; and
(b) if so, whether any contempt was committed in respect of those matters.
(2) That, for the purpose of providing further information to the Committee of Privileges, the Standing Committees on Rural and Regional Affairs and Transport have access to the records of the committee in the previous Parliament.
That the following matter be referred to the Community Affairs References Committee for inquiry and report by the second sitting week in February 2015:
Out of home care, including;
(a) drivers of the increase in the number of children placed in out of home care, types of care that are increasing and demographics of the children in care,
(b) the outcomes for children in out of home care (including kinship care, foster care and residential care) versus staying in the home;
(c) current models for out of home care, including kinship care, foster care and residential care;
(d) current cost of Australia's approach to care and protection;
(e) consistency of approach to out of home care around Australia;
(f) what are the supports available for relative/kinship care, foster care and residential care;
(g) best practice in out of home care in Australia and internationally;
(h) consultation with individuals, families and communities affected by removal of children from the home;
(i) extent of children in out of home care remaining connected to their family of origin; and
(j) best practice solutions for supporting children in vulnerable family situations including early intervention.
That the Senate—
(a) notes:
(i) water is one of our most important resources and is critical to Australia's economic growth,
(ii) the National Water Commission (the Commission) plays a crucial role in monitoring, auditing and assessing water policy,
(iii) the independence of the Commission is vital to its effectiveness, and
(iv) the 2011 Council of Australian Governments review of the Commission stated that it should continue 'for the lifetime of the NWI' and 'without sunset provision until the NWI is substantially replaced'; and
The Senate divided. [12:07]
(The Deputy President—Senator Marshall)
That the time for the presentation of the report of the Community Affairs Legislation Committee on the Aboriginal and Torres Strait Islander Amendment (A Stronger Land Account) Bill 2014 be extended to 29 October 2014.
Defence Legislation Amendment (Parliamentary Approval of Overseas Service) Bill 2014
That the following bill be introduced: A Bill for an Act to amend the law relating to defence to provide for parliamentary approval of overseas service by members of the Defence Force, and for related purposes.
That this bill may proceed without formalities and be now read a first time.
That this bill be now read a second time.
DEFENCE LEGISLATION AMENDMENT (PARLIAMENTARY APPROVAL OF OVERSEAS SERVICE) BILL 2014
Australia is one of the few remaining democracies that can legally deploy its defence forces into conflict zones without recourse to the Parliament: the decision is reserved to the executive alone. As kindred democracies around the world have enacted reforms to vest the so-called 'War Power' in elected Parliaments, Australia has remained anchored to a pre-democratic tradition founded in hereditary monarchies and feudal states.
If this anachronism had served Australia well, it might be possible to mount an argument that "if it isn't broken, it doesn't need fixing."
If the horror unfolding in Iraq does not comprehensively put this view to rest, it is difficult to imagine what would. On the basis of fabricated and wilfully misinterpreted intelligence, Prime Minister John Howard followed the United States and the United Kingdom into an illegal and open-ended war in Iraq. Our Parliament, and by extension the voting public of Australia, were cut out of the decision, despite the fact that hundreds of millions of people around the world organised and campaigned against the decision to go to war.
There are few credible analysts left anywhere who do not regard the decision by hardliners within the Bush Administration to invade Iraq as one of the most grievous strategic disasters in modern history. The vast majority of Australians were right, and the executive authorities in the US, the UK and Australia, were wrong. No inquiry into the decision to go to war has ever been held in Australia, only a handful of piecemeal attempts to pin the blame on intelligence services and shift focus away from the actions of the Howard Government.
At the time, Iraq was not threatening war. There was no connection or allegiance between the secular Baathist regime that ruled Iraq and the fundamentalist Al Qaeda networks responsible for the 9/11 attacks. There were no weapons of mass destruction in Iraq, and hadn't been since 1991. Intelligence agencies within the US, the UK and Australia understood these facts, but inflexible groupthink prevailed within the White House, Downing Street and the Prime Minister's office here in Australia. It was rumoured at the time that Australian Special Forces units were among the very first on the ground inside Iraq, even before President Bush went on live television to announce that Operation Iraqi Freedom had commenced.
Australia is entirely complicit in the violent, decade-long occupation that shattered Iraq's social and economic structures, and ignited long-dormant sectarian tensions that now threaten to plunge the crippled country into full-blown civil war.
At the time of speaking, Sunni fundamentalists considered too extreme to remain part of Al Qaeda have established a new Caliphate in territory carved out of Syria and Iraq. The brittle institutions of Iraqi governance, bombed into existence by the United States, now threaten to collapse entirely.
If there is a strategic policy failure more complete than the catastrophic invasion of Iraq, it is difficult to recall it. This dismal outcome was predicted at the time by many of those who opposed the war, but the executive's lock on the process means that the normal Parliamentary processes of critique and accountability were bypassed. Somewhere between 100,000 and one million Iraqis have paid for this obscene oversight with their lives.
Should Prime Minister Abbott decide to compound the strategic incompetence of 2003 with a further deployment as the security environment in Iraq deteriorates, the Australian Parliament, and the Australian people, would be cut out of the decision again.
Concurrently with the Iraq deployment, Australia has also fought a long, costly, and ultimately futile war in Afghanistan. The heaviest cost was carried by the Afghan people: tens of thousands of civilians killed, maimed and traumatised as the US Government's saturation bombing campaign transitioned into a long, untenable occupation. Forty one Australian soldiers have lost their lives in Afghanistan. Out of respect to them and their families, Parliament pauses to acknowledge their sacrifice when news breaks of another death. No such respects are paid to those Afghans who also paid the ultimate price; no-one even appears to be keeping count.
It is no longer tenable that the decision to deploy into conflict zones should be left to the executive alone. Our current Defence Act does not allow for any level of transparent decision making, scrutiny and debate, but this is an artefact of legislation, not the natural order of things.
The Defence Legislation Amendment (Parliamentary Approval of Overseas Service) Bill 2014 inserts a new section 50C into the Defence Act to require that decisions to deploy members of the Australian Defence Force beyond the territorial limits be made not by the executive alone but by Parliament as a whole. This means debate in both houses, followed by a vote.
This Bill was initiated by the Australian Democrats and supported by the Australian Greens, who took carriage of the Bill after 2007. It is the latest iteration of a Bill introduced into the Senate in 1985. In 2015 it will mark its 30th year of languishing in plain sight while Liberal and Labor Prime Ministers alike reserve this power to themselves, plunging Australia into a tragic series of overseas expeditionary wars that have had little or nothing to do with the defence of Australia or collective security.
In August 2009, I referred the Bill to the Senate Standing Committee on Foreign Affairs, Defence and Trade. The majority of the committee resolved to refuse to take evidence in a hearing. Nonetheless, the Committee made a useful critique of the Bill without undermining its essential purpose, in its report of February 2010.
My dissenting report into the Bill provided the transcript of an informal hearing that we held, after the majority committee's short-sighted decision not to take evidence directly from witnesses.
This Bill would bring Australia into conformity with principles and practices utilised in other democracies including Denmark, Finland, Germany, Ireland, Slovakia, South Korea, Spain, Sweden, Switzerland and Turkey, where troop deployment is set down in constitutional or legislative provisions. Some form of parliamentary approval or consultation is also routinely undertaken in Austria, the Czech Republic, Italy, Japan, Luxembourg, the Netherlands and Norway. Our ally the United States has a similar provision that subjects the decision to go to war to a broader forum—section 8 of Article I of the US Constitution quite clearly says, "Congress shall have power to declare war". In the wake of the disaster in Iraq, the Westminster Parliament now holds the de-facto war power, a new convention that prevented a rushed deployment into Syria earlier in 2014.
Arguments against vesting the power over troop deployment to Parliament include that it would be impractical, restrictive and inefficient. Such arguments ignore the fact that parliaments can and do make complex and nuanced decisions, rapidly when necessary. As we have seen, decisions about war and peace made in undue haste that do not enjoy the mandate of the population – expressed through the Parliament, if nowhere else – have no legitimacy.
There are appropriate exemptions made in this Bill to avoid interfering with the non-warlike overseas service with which Australian troops are engaged – referring in particular to new subsection 50C(11). There are also appropriate exemptions in the Bill to provide for the practicalities of situations where Parliament cannot immediately meet – referring to subsections 50(3) and (7), which provide for the Governor-General to be able to make a proclamation regarding the declaration of war, provided that Parliament is then recalled within a period of two days.
It is time that Australia joined its closest allies and like-minded democratic states by involving the Parliament in the decision to deploy the ADF. The entwined tragedies of our recent military misadventures, and the threat that history may soon repeat, make passage of this Bill more urgent than ever.
Once again, I commend the Bill to the Senate.
That there be laid on the table by the Minister for Defence, no later than 4 pm on Friday, 18 July 2014, a document providing the following information:
(a) the name of the successful tenderer for Australian Defence Force boots, Tender DMOLSD/RFT0129/2012; and
(b) the price differential of the winning tenderer compared to that of the closest Australian tenderer as per one of the following ranges:
(i) less than 10 per cent,
(ii) between 10 per cent and 20 per cent,
(iii) between 20 per cent and 30 per cent,
(iv) between 30 per cent and 40 per cent, and
(v) 50 per cent and over.
That the Senate—
(a) notes that:
(i) over the past 6 years electricity prices have more than doubled for average households, with the carbon tax being one of the elements of that price increase, and
(b) network charges have been responsible for approximately two-thirds of this rise in power prices; and
(b) calls on the Government to urgently review the National Electricity Rules governing the setting of network prices by taking a leadership role in the Council of Australian Governments to ensure a review of the rules by the Australian Energy Market Commission.
That the Senate—
(a) notes the findings of the Connetica Budget 2014 Policy Briefing Papers which outline:
(i) the disproportionate burden the 2014-15 budget cuts will place on young people,
(ii) the potential for an increase in suicides and mental ill-health among young Australians as a result of harsh budget measures, including changes to Newstart, increases to university fees, cutting the Tools for your Trade program, and ending support programs like Youth Connections, and
(iii) that isolation, dislocation, loneliness, hopelessness and unemployment can increase anxiety, despair and depression;
(b) recognises that public policy has a direct impact on the mental health and wellbeing of the community; and
(c) urges the Government to reverse budget decisions which will adversely affect the mental health of young Australians.
The Senate divided. [12:19]
(The Deputy President—Senator Marshall)
The Senate divided. [12:27]
(The Deputy President—Senator Marshall)
(1) That there be laid on the table by the Minister representing the Minister for the Environment, no later than noon on 26 August 2014, any document in relation to the water quality offset imposed on the Abbot Point dredging and dumping approvals in December 2013 that discusses or assesses:
(a) the likely costs of offsetting 150 per cent of fine sediments 'potentially available for resuspension';
(b) the contributions of North Queensland Bulk Ports, Adani or GVK to accomplishing this offset; and
(c) contributions from the Queensland or Federal governments to accomplishing this offset.
(2) Documents previously released publicly pursuant to freedom of information or Senate orders for production of documents need not be included.
The Senate divided. [12:33]
(The Deputy President—Senator Marshall)
That further consideration of the National Security Legislation Amendment Bill (No. 1) 2014 be postponed and made an order of the day for the later of:
(a) 8 September 2014; or
(b) the next day of sitting after the Government complies with Recommendation 41 of the report of the Parliamentary Joint Committee on Intelligence and Security, Report of the inquiry into potential reforms of Australia's National Security Legislation , at least, by seeking the views of the Independent National Security Legislation Monitor and the Inspector-General of Intelligence and Security on the bill, and tabling a copy of those views in the Senate.
That the Senate notes:
(a) That the 20th International AIDS Conference is being held in Melbourne from 20 July to 25 July 2014, and will be attended by about 12 000 delegates from nearly 200 countries representing science, civil society, politics and the private sector;
(b) that this biennial conference is the premier international gathering for those working in the field of HIV, policy makers and people living with HIV;
(c) Australia's resolve to work with governments, the business community and civil society across the region to reach the goals That the international community has set – zero new infections, zero AIDS related deaths and zero discrimination;
(d) that while HIV/AIDS in Australia is lower than in many comparable nations, around 5 million people in our region are living with HIV/AIDS;
(e) that Australia has spent A$1billion combatting HIV/AIDS in our region over the past decade and has committed $200 million over 3 years to support the Global Fund to Fight AIDS, Tuberculosis and Malaria, and That the Global Fund has already invested around $US6.8billion in the Indo Pacific region delivering HIV treatment to over 700 000 people; and
(f) the Australian Government's release on 7 July 2014 of the 7th National HIV Strategy and its commitment to reverse the increasing trend of new HIV diagnosis and work towards the virtual elimination of HIV transmission by 2020.
That the Senate—
(a) notes:
(i) the launch of the Roadmap to Close the Gap for Vision by the University of Melbourne released in July 2014,
(ii) that Aboriginal adults are 6 times more likely to become blind than non-Aboriginal Australians, and
(iii) that 94 per cent of vision loss in Aboriginal adult Australians is preventable or treatable; and
(b) urges the Federal Government to:
(i) review the report and provide national leadership on eye health, and
(ii) address the gap between Aboriginal and non-Aboriginal eye health as a matter of priority.
That the Senate take note of the report.
We are not just talking about one or two jobs; we think that 15 to 20 direct production jobs were triggered by the loss of this contract, and it is a situation representing literally hundreds of thousands of dollars, if not millions of dollars in lost taxpayer revenue in the short, medium and longer term just for the $8,000 benefit.
Australian Paper also provides significant revenue to all levels of Government; equivalent to $1.81 for each and every A4 ream of copy paper that we make and totalling $432 Million in 2012.
… it is not an even playing field … over there; it just isn't … So we—
follow the rules with the free trade agreement, but the US do not do that. They are fiercely parochial. Each state and procurement body that you deal with over there asks you: 'Who is your local partner?
Asset Recycling Fund Bill 2014
Asset Recycling Fund (Consequential Amendments) Bill 2014
The question is whether they want to be a professional government or they want to pork-barrel, and whether we'll forge the idea of trying to be professional about how we manage resources or just do it on a political basis.
I don't think that's how a country should be run.
To ignore regional Australia’s need for investment and growth is to turn our backs on the opportunities for the future.
Short-term gains of maximising the up-front price received by the government is short-term gain increased and encouraged by the federal government and will have long-term costs in reduced competition and higher costs to consumers and damage to Australian businesses.
The ACCC is becoming aware of an increasing level of concern among businesses that are most directly affected by the sale of upstream monopoly assets to downstream competitors. The trade-off here is short-sighted and the costs in terms of productivity and investment are likely to be significant
Privatising in ways that limit competition in order to maximise the sale proceeds is the wrong way.
I take this opportunity to express my serious concerns about the impact and long-term consequences of the privatisation of state assets.
I acknowledge the intent of this bill is to encourage states to invest in infrastructure projects by way of incentive payments from the Commonwealth upon the sale of state assets. I question whether this plan is short sighted and not in the interests of Australia's competition policy.
In June this year Mr Rod Sims, Chairman of the Australian Competition and Consumer Commission expressed concerns that competition has taken a back seat in the recent wave of state-owned asset sales.
He pointed to the ACCC's recent rejection of AGL's application to acquire Macquarie Generation, Australia's largest electricity generator, as an example. In a media release dated 4 March 2014, Mr Sims said:
The proposed acquisition would result in the largest source of generation capacity in NSW being owned by one of the three largest retailers in NSW. Indeed, with this acquisition, the three largest retailers in NSW would own a combined share of 70 to 80 per cent of electricity generation capacity or output. This is likely to raise barriers to entry and expansion for other electricity retailers in NSW and therefore reduce competition compared to the situation if the proposed acquisition does not proceed.
The Australian Competition Tribunal approved AGL's application to acquire Macquarie Generation's assets, despite the ACCC's warnings that 'the proposed acquisition is likely to mean that consumers will ultimately pay more for electricity, receive lower quality service and be offered less choice.'
Time will tell whether the ACCC's warnings should have been heeded. Unfortunately it will be consumers who will be the first to feel the pain if the ACCC's predictions about electricity price rises are correct.
Mr Sims has also stressed that it is vital state governments must be 'vigilant in setting up competitive structures when they privatise their assets.' The recent sales of some ports have seen the ACCC receive complaints that these ports have been privatised without appropriate open access regimes.
As a member of the South Australian parliament in the late 1990s, I vehemently opposed the privatisation of the then Electricity Trust of South Australia (ETSA). Not only because it was a broken promise of the then Olsen government but because it was also a bad deal for consumers.
I believe the privatisation of ETSA was structured in such a way as to maximise value of the state's assets, thereby reducing a greater amount of state debt (a legacy of the former Labor State Government), but by doing so it shifted the burden onto households and businesses with dramatically higher power prices post-privatisation. I received very sound advice back in the late 1990s from Danny Price, then at London Economics, who is now Managing Director of Frontier Economics. He was vilified by the state Liberal government at the time for his modelling and predictions of power price rises with the privatisation model adopted, and sadly his predictions were uncannily accurate. I should add, the accuracy of his modelling and predictions has not changed over the years given his concerns over the carbon tax and the CPRS legislation introduced by the former government.
If all the privatisation is doing is shifting public debt onto households and businesses then it seems to be a foolish and counterproductive exercise.
However, in the event that this bill does pass, I would like to see it passed with material improvements and for that reason I put on notice I support the amendments proposed by the opposition in this regard.
If taxpayer money is being used to encourage the privatisation of state assets, we have a duty to ensure the public—especially, families and small businesses—do not end up footing the bill by way of higher prices.
(1) Clause 2, page 1 (line 9), omit "1 July 2014", substitute "the day after this Act receives the Royal Assent".
(2) Clause 4, page 3 (lines 30 and 31), omit " Financial Management and Accountability Act 1997 ", substitute "Public Governance, Performance and Accountability Act 2013 ".
(3) Clause 4, page 4 (lines 24 and 25), omit " Financial Management and Accountability Act 1997 ", substitute "Public Governance, Performance and Accountability Act 2013 ".
(4) Clause 8, page 9 (line 1), omit "appropriate", substitute "permissible".
(5) Clause 8, page 9 (line 3), omit "powers", substitute "power".
(6) Clause 12, page 11 (lines 10 to 12), omit "Special Account for the purposes of the Financial Management and Accountability Act 1997 ", substitute "special account for the purposes of thePublic Governance, Performance and Accountability Act 2013 ".
(7) Clause 12, page 11 (lines 13 to 17), omit "Special Account" (wherever occurring), substitute "special account".
(8) Clause 13, page 12 (line 5), omit "On the commencement of this section", substitute "At the start of the 28th day after this section commences".
(9) Clause 13, page 12 (line 17), omit "On the commencement of this section", substitute "At the start of the 28th day after this section commences".
(10) Clause 16, page 15 (lines 16 and 17), omit the note, substitute:
Note: See section 80 of the Public Governance, Performance and Accountability Act 2013 (which deals with special accounts).
(11) Clause 17, page 17 (lines 13 and 14), omit the note, substitute:
Note: See section 80 of the Public Governance, Performance and Accountability Act 2013 (which deals with special accounts).
(12) Clause 21, page 19 (line 22), at the end of subclause (2), add "The State or Territory must comply with any such terms and conditions.".
(13) Clause 22, page 20 (lines 2 and 3), omit "Special Account for the purposes of the Financial Management and Accountability Act 1997 ", substitute "special account for the purposes of thePublic Governance, Performance and Accountability Act 2013 ".
(14) Clause 22, page 20 (lines 4 to 8), omit "Special Account" (wherever occurring), substitute "special account".
(15) Clause 23, page 20 (lines 14 and 15), omit the note, substitute:
Note: See section 80 of the Public Governance, Performance and Accountability Act 2013 (which deals with special accounts).
(16) Clause 27, page 22 (line 12), at the end of subclause (2), add "The person must comply with any such terms and conditions.".
(17) Clause 28, page 22 (line 26), at the end of subclause (2), add "The person must comply with any such terms and conditions.".
(18) Clause 34, page 26 (line 23), omit "On the day that this section commences", substitute "On the 28th day after this section commences".
(19) Clause 34, page 27 (line 14), omit "On the day that this section commences", substitute "On the 28th day after this section commences".
(20) Clause 35, page 28 (lines 17 and 18), omit "Section 39 of the Financial Management and Accountability Act 1997 ", substitute "Section 58 of thePublic Governance, Performance and Accountability Act 2013 (which deals with investment by the Commonwealth)".
(21) Clause 47, page 36 (lines 26 to 28), to be opposed.
(1) Clause 4, page 4 (lines 16 to 18), omit the definition of Education Investment Fund.
(2) Clause 4, page 4 (lines 19 to 21), omit the definition of Education Investment Fund Special Account .
(3) Heading to subclause 13(1), page 12 (line 4), omit the heading.
(4) Clause 13, page 12 (line 5), omit "(1)".
(5) Clause 13, page 12 (line 14), omit "subsection 34(1)", substitute "section 34".
(14) Heading to subclause 34(1), page 26 (line 19), omit the heading.
(15) Clause 34, page 26 (line 21), omit "subsection 13(1)", substitute "section 13".
(16) Clause 34, page 26 (line 26), omit "subsection 13(1)", substitute "section 13".
(6) Clause 13, page 12 (lines 16 to 28), subclause (2), to be opposed.
(17) Clause 34, page 27 (lines 10 to 31), subclauses (4) to (6), to be opposed.
We would seek to reinvest and rebuild EIF back to its former state wants the budget is back in surplus. This is a nation-building fund and the coalition intends to restore it as such.
The ATN is concerned about the continuation of research infrastructure funding from 2015 and the lack of guidance in the Bill as to how future research related infrastructure projects will be prioritised for funding via the ARF.
… building a world-class Education and Research sector
… encourage modernisation and the development of world-class Education and Research capabilities and support the use of new technologies, particularly digital and IT.
The provision of modern research capabilities comes at a cost. To date 71 infrastructure projects have been funded by EIF to the sum of $2.4 billion. This included $643m in funding for pure research infrastructure …
Therefore following the removal of EIF the remaining research funding mechanisms, including research block grant funding, are not sufficient to create world class research infrastructure.
Australian scientists have snared two world-leading contracts to make astronomical instruments which will further consolidate Australia’s reputation for global innovation, Minister for Industry Ian Macfarlane said today. The Australian National University’s Advanced Instrumentation and Technology Centre at Mount Stromlo has been contracted to design one of the first instruments for the Giant Magellan Telescope (GMT), a super-giant earth-based telescope being built in Chile that is set to revolutionise our view and understanding of the universe.
The Committee divided. [14:01]
(The Chairman—Senator Marshall)
Is anyone seriously suggesting that, in the circumstance you're talking about, where there is the possibility of breast cancer, that is going to stop them going to the doctor? I mean, that is emotionalism being played at the lowest level.
I certainly agree that there are long-term structural issues in the budget, absolutely.
If governments flip-flop with policy to the extent that they drive the renewable energy sector out of this country and foreign investors away from this country, don’t expect to be able to attract them back in a hurry.
I've no doubt there is a budget crisis. We're accumulating debt as a higher share of GDP and of course in absolute terms, [it's] absolutely astronomical …
… compared to far more serious episodes in Australian history, including recoveries from serious recessions.
… the GST should be broadened to cover everything—and it should also be increased to 15 per cent.
That the Senate take note of the answers given by the Minister for Employment (Senator Abetz) to questions without notice asked by Senators Urquhart and Singh today relating to employment in Tasmania and to the Renewable Energy Target.
James, along with Sarah Jones from Enterprise Connect, has been a catalyst for change in the region. In my experience, they are the two best operators in terms of helping to transform our regional economies. He has been able to build relationships with all tiers of government and the key employers and industry groups.
Jobs Services agencies operate under a competitive model and it is impossible for councils to work collaboratively to help improved employment outcomes without someone likes James acting as the point of contact.
He has the ability and relationships to cut across the silos and other boundaries to help create a more co-ordinated approach to identifying and addressing challenges.
At the request of the state government, I have committed to working closely with my good friend Adam Brooks MP, who is leading the group to an outcome that results in this region restored as the economic powerhouse of Tasmania as it once was.
The funding will ensure there is a person on the ground in the Geelong region who can look at opportunities across our region to promote employment growth and better link job seekers and employers.
That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Rhiannon today relating to overseas development aid.
… the most significant individual item in the Budget is a savings measure, it's a reduction in foreign aid.
Australian Government response to the Joint Standing Committee on Treaties' report: Report 130
Malaysia — Australia Free Trade Agreement done at Kuala Lumpur on 22 May 2012
June 2014
Recommendation 1: That prior to commencing negotiations for a new agreement, the Government table in Parliament a document setting out its priorities and objectives including independent analysis of the anticipated costs and benefits of the agreement. Such analysis should be reflected in the National Interest Analysis accompanying the treaty text.
The Government does not accept this recommendation.
The powers to negotiate and enter into treaties are executive powers within section 61 of the Australian Constitution. Accordingly, formal responsibility for treaty making and negotiation lies with the Executive. The Government nevertheless considers that the Parliament has a significant role in scrutinising treaties prior to binding treaty action being taken and in passing legislation to give effect to them where necessary. The Joint Standing Committee on Treaties (JSCOT) plays an important part in fulfilling Parliament's role in this respect. The Government remains of the view that its capacity to effectively pursue the national interest while allowing for appropriate public consultation is best met by current parliamentary and consultation processes.
The Government currently provides information about treaties under consideration or negotiation in a variety of ways. The nature and extent of public consultation is determined by the scope and importance of the proposed treaty and can include statements to the Parliament, press releases, information published on agency websites, calls for public submissions and face-to-face consultations with industry and civil society representatives. The purpose of such consultations is to inform the public about the Government's priorities and objectives and to afford an opportunity for comment. In addition, regular consultations are conducted with the States and Territories through the Standing Committee on Treaties.
Notwithstanding its commitment to stakeholder consultation, the Government is constrained in what it can disclose about prospective and ongoing treaty negotiations. Making detailed information about Australia's negotiating position publicly available prior to the commencement of negotiations would limit Australia's room for manoeuvre in the negotiations. Adopting the Committee's recommendation could circumscribe the capacity of Australia's negotiators to secure the best possible outcomes for Australia in the treaty negotiations.
Any statement of negotiating priorities and objectives made at the outset of treaty negotiations would be of limited value in assessing the eventual treaty outcomes. Negotiating priorities commonly develop over the course of negotiations, and eventual treaty outcomes reflect compromises acceptable to all Parties. While negotiators operate within defined parameters, it is generally not possible to predict accurately the full range of commitments which will be incorporated into the final agreement until negotiations are concluded. Similarly, any advance assessment of costs and benefits would necessarily be based on a range of assumptions which may or may not prove correct. The Government considers the current practice of tabling treaties after they are concluded enables the Parliament to make a more meaningful assessment of their impact on the national interest, based on the actual rights and obligations they contain.
Treaties do not become legally binding on Australia until the Government formally undertakes to perform the obligations set out in the treaty by taking binding treaty action (ratification, acceptance, approval or other formal mechanism provided for in the treaty). Until binding treaty action is taken, Australia is only obliged to refrain from acts which would defeat the object and purpose of the treaty1. Other than in exceptional circumstances, the Government does not take binding treaty action, or introduce legislation to give legal effect to treaty provisions in Australia, until after JSCOT has reviewed and reported on the treaty and its advice has been taken into account. Existing treaty tabling arrangements therefore afford ample opportunity for the Parliament to express its views on treaties well before a final decision is made on whether they become binding on Australia.
The Government notes Recommendation 1 does not state what would constitute 'independent analysis' of the anticipated costs and benefits of the agreement. If it is intended that the Government commission econometric or other modelling on proposed treaty negotiations prior to their commencement, this could delay the start of negotiations and further impinge on the Government's negotiating flexibility. The Government further notes the recommendation does not make any allowance for urgent or sensitive treaties. Finally, adding another step to the treaty process would have resource implications for the responsible agencies, which the Government does not consider to be justified.
Recommendation 2: That after 24 months of the treaty coming into effect, an independent review of MAFTA be conducted to assess actual outcomes of the treaty against the claimed benefits and potential negative consequences noted in this report. The review should consider the economic, regional, social, cultural, regulatory, labour and environmental impacts. Such a review should serve as a model for future free trade agreements.
A period of 24 months after the entry into force of MAFTA is brief in the context of the implementation of such a treaty. Any conclusions drawn from such a review would necessarily be limited in terms of the overall assessment envisaged by this recommendation. A longer period following MAFTA's entry into force would allow for a more insightful review of the agreement. It would also be important for any review to take into account the fact that MAFTA was concluded in the context of the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), and that MAFTA complements and builds on the commitments applying to trade and investment between Australia and Malaysia in AANZFTA.
In addition, the Government considers that it is important that a review of the type proposed in the recommendation is used to provide input into the general review of the Agreement mandated by MAFTA within five years of entry into force and at least every five years thereafter unless otherwise agreed by the parties (Chapter 21—Final Provisions). This general review provides an avenue to identify and address any problems experienced by business in taking advantage of the Agreement and to seek to enhance MAFTA's contribution to increased economic integration of our two economies.
The Government will, therefore, undertake a review through the general review process provided for in the Agreement. The first general review of MAFTA will provide a basis for an initial assessment of the Agreement's implementation, which could be followed up at the subsequent five‑yearly reviews. The Government will seek the views and input of stakeholders independent of the Government ahead of those reviews on the extent to which MAFTA is delivering expected outcomes, and seek input on areas where the Agreement's provisions could be enhanced. The nature of the review undertaken at each of these periods will be subject to discussion with Malaysia.
In addition to the general review, MAFTA contains other review mechanisms. For instance, MAFTA incorporates a requirement to establish an FTA Joint Commission. The FTA Joint Commission will meet annually, or as otherwise determined by the Parties, to review implementation and operation of MAFTA and, inter alia , to explore measures to improve MAFTA and to expand trade and investment between the two parties (Chapter 19—Institutional Provisions). Certain chapters in the Agreement also contain their own specific review provisions. For example, the Rules of Origin Chapter provides for review of the provisions of that Chapter within three years of the entry into force of the Agreement. The Services Chapter provides for a review of commitments on trade in services to be undertaken within three years of entry into force and thereafter every five years.
Additional review provisions are contained in side letters to the Agreement that provide for reviews on the inclusion of labour and environment provisions and on customs duties and other charges applied to certain alcoholic beverages no later than two years after the entry into force of the Agreement.
Recommendation 3: The Committee supports the Malaysia-Australia Free Trade Agreement done at Kuala Lumpur on 22 May 2012 and recommends that binding treaty action be taken.
This recommendation was implemented by the former Government and MAFTA entered into force on 1 January 2013.
1 Vienna Convention on the Law of Treaties (Vienna, 23 May 1969), Article 18
Additional estimates 2013-14—
Economics Legislation Committee—Additional information received between 15 May and 16 July 2014—Treasury portfolio.
Education and Employment Legislation Committee—Additional information received between 18 June and 17 July 2014—Education portfolio.
Foreign Affairs, Defence and Trade Legislation Committee—Additional information received between 15 May and 16 July 2014—Defence portfolio.
Budget estimates 2014-15—
Economics Legislation Committee—Additional information received between 24 June and 16 July 2014—Industry portfolio.
Education and Employment Legislation Committee—Additional information received between 25 June and 16 July 2014—
Education portfolio.
Employment portfolio.
Environment and Communications Legislation Committee—Additional information received between 27 June and 16 July 2014—Environment portfolio.
Foreign Affairs, Defence and Trade Legislation Committee—Additional information received between 25 June and 16 July 2014—Defence portfolio.
That senators be discharged from and appointed to committees as follows:
Abbott Government’s Budget Cuts —Select Committee
Appointed—Senators Canavan, McGrath and Smith
Legal and Constitutional Affairs Legislation Committee
Appointed—
Substitute member: Senator Di Natale to replace Senator Wright for the committee’s inquiry into the exposure draft of the Medical Services (Dying with Dignity) Bill 2014
Participating member: Senator Wright.
Defence Legislation Amendment (Woomera Prohibited Area) Bill 2014
Corporations Amendment (Simple Corporate Bonds and Other Measures) Bill 2014
Fair Work (Registered Organisations) Amendment Bill 2014
Meteorology Amendment (Online Advertising) Bill 2014
National Health Amendment (Pharmaceutical Benefits) Bill 2014
Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014
That these bills may proceed without formalities, may be taken together and be now read a first time.
That these bills be now read a second time.
CORPORATIONS AMENDMENTS (SIMPLE CORPORATE BONDS AND OTHER MEASURES) 2013
The establishment of a deep and liquid retail corporate bond market in Australia is a key priority for the Gillard Government. A well performing and efficient retail corporate bond market will provide an alternative funding source for Australian companies and increase competitive pressure on lending rates to businesses.
The bond market is a significant source of funds for many Australian financial and non-financial corporations. Correspondingly, this financing activity provides investment opportunities for both Australians and non-residents.
The Johnson Report, Australia as a Financial Centre: building on our strengths, examined the lack of liquidity and diversity in Australia's corporate bond market. It also discussed why this lack of liquidity was a significant weakness in the overall assessment of Australia's financial system. At the retail level, it was considered that one action the Government could take to overcome this weakness was to introduce regulatory changes that could assist with developing the market.
The Bill that is before the House today seeks to reduce the regulatory burden on issuers of corporate bonds, while at the same time ensuring that appropriate standards of consumer protection are maintained.
The introduction of Schedule 1 of the Bill follows the passage of the Government's legislation to facilitate retail trading in Commonwealth Securities (CGS) late last year. Having an active retail CGS is an important step in establishing a wider retail corporate bonds market by providing a visible pricing benchmark for retail investors in corporate bonds.
Schedule 1 to the Bill, delivers on the Government's commitment to reduce regulatory burdens and barriers for offers of corporate bonds to retail investors.
The measures in Schedule 1 enable companies to offer simple corporate bonds by releasing a shorter offer-specific prospectus as long as they have lodged a base prospectus with ASIC for the purpose of making an offer under the new 2-part simple corporate bond prospectus regime.
Schedule 1 of the Bill removes the civil liability that applies to directors and proposed directors for the offer of simple corporate bonds and provides clarification around the due diligence defence in respect to directors' criminal liability in offering corporate bonds.
Schedule 1 to the Bill also contains amendments to the Corporations Act to enable parallel trading of simple corporate bonds in the wholesale and retail markets.
The measures in Schedule 1 are another major initiative that the Government has delivered on in its long term commitment to encourage the development of a deep and liquid bond market in Australia. The measures provide companies with another source of fundraising and signal that it is their time to contribute to the development of Australia's corporate bond market.
The other measures in the Bill, contained in Schedule 2, amend the Corporations Act 2001 to define in the law terms 'financial planner' and 'financial adviser'. These amendments make it an offence for anyone to call themselves a financial planner or financial adviser, unless they are appropriately authorised under the Australian financial services licensing regime.
The amendments contained in Schedule 2 follow the passage of the Future of Financial Advice (FOFA) legislation last year. Key elements of the FOFA reforms include the imposition of a statutory best interests duty on financial advisers, two-yearly opt-in arrangements and annual fee disclosure statements, and a ban on the receipt of conflicted remuneration arrangements, including commissions.
The Government is committed to increasing investor protection and improving consumer confidence in the financial advice industry. This will provide the financial advice industry with a strong foundation for growth, as well as empowering Australians to obtain good quality advice about managing their wealth. The Government has delivered on its commitment through the FOFA reforms, and continues to deliver on its commitment with the Bill before the House today.
On 22 March 2012, I announced to Parliament that the Government intended to introduce legislation enshrining the terms 'financial adviser' and 'financial planner' in law by 1 July 2013. These amendments deliver on my earlier commitment. Schedule 2 to the Bill will commence on 1 July 2013 (or after the Royal Assent, if that occurs later), concurrently with the FOFA reforms.
By legislatively defining the terms 'financial planner' and 'financial adviser', the amendments enable consumers to be able to easily identify genuine financial product advice providers. By preventing anyone who is not a qualified financial planner or financial adviser from telling consumers that they are, the amendments make it easier for consumers to know who to trust with their financial affairs. The measures contained in Schedule 2 of the Bill strengthen protections for consumers.
Importantly, the amendments will help protect consumers from unlicensed persons such as 'property spruikers' who hold themselves out to be genuine providers of financial advice when they are not.
The amendments will ensure that the regulation of financial advisers and planners is consistent with other professions such as stockbrokers, where similar restrictions already exist.
Schedule 2 to the Bill makes it an offence for a person to hold themselves out to be a financial planner or a financial adviser unless they are authorised to provide financial product advice under the Australian financial services licence (AFSL) regime. Schedule 2 also makes it an offence to use terms of similar importance, so that unlicensed persons will not be able to get around the legislation by using similar terms.
Schedule 2 also allows the Government to make regulations prescribing other terms that a person must have an AFSL to use. This means that if individuals or companies start using particular terms to mislead consumers, the Government will be able to respond quickly by restricting the use of these terms.
People acting in breach of these requirements face penalties of up to 10 penalty units for individuals for every day the contravention occurs, and 50 penalty units per day for corporations.
I note that the measures in Schedule 2 have been developed in consultation with the financial services industry. Key industry bodies are supportive of the amendments. For example, the Financial Planning Association of Australia is of the view that the amendments "will provide greater consumer certainty and protection and further enable the transition of financial planning into a universally respected profession". The Association of Financial Advisers has said that they believe that this legislation "is good for financial advisers and also for the consumers who rely on financial advice", because "consumers deserve to have clarity with respect to who they are seeking advice from".
I note that there are separate, though related, amendments that are being made to the Tax Agent Services Act 2009.
In summary, the amendments contained in Schedule 2 will improve consumer trust and confidence in the financial advice industry. Australian consumers are entitled to be able to easily distinguish between genuine, authorised providers of financial product advice and unlicensed persons such as 'property spruikers' who do not have their clients' best interests at heart. The measures contained in Schedule 2 of the Bill empower consumers to make that distinction.
I commend the Bill to the Senate.
FAIR WORK (REGISTERED ORGANISATIONS) AMENDMENT BILL 2014
The Government remains staunchly committed to improving protections for members of registered organisations by implementing the comprehensive plan to enhance the governance and accountability of registered organisations. To be very clear, this Bill enacts a Coalition policy that was first released in April 2012—more than two years ago.
This is why we are reintroducing the Fair Work (Registered Organisations) Amendment Bill that was voted down by Labor Party and the Greens in the Senate a month ago. By voting against the legislation, they have demonstrated a refusal to support greater accountability and transparency for registered organisations. They have voted against improved protection for union members and have thereby given the green light to more exploitation of honest union members by dishonest union officials. They have also voted against a clearer and simpler reporting framework that would assist both unions and employer associations to comply with the framework.
The absolute need for this legislation almost goes without saying—the rorts, the rackets and the rip-offs have been in the media on an almost daily basis and the wider community is strongly in favour of these reforms.
Until this Parliament acts, Australia won't have a sufficiently robust system to ensure that the sort of corruption that was revealed during the numerous scandals can be uncovered and eradicated before it becomes systemic as it did in the infamous HSU case. It is simply no longer tenable to argue that the present system is adequate to deal with or discourage this kind of behaviour.
Unions and employer associations play a critical role in the workplace relations system and the economy more broadly, and their members invest a great deal of trust in them. The community expectation is that these registered organisations will operate to the highest of standards. These organisations are given special legislated rights. With rights come responsibilities.
The government believes that the majority of registered organisations do the right thing and in many cases maintain higher standards than those that are currently required. However, the investigations into the Health Services Union and the allegations that are coming to light through the Royal Commission illustrate that, unfortunately, financial impropriety can and does occur under the current governance regime and indeed that there is a rotten underbelly in some of these organisations. Let's be clear—loopholes have been identified and they need to be closed.
The Fair Work (Registered Organisations) Amendment Bill will provide the certainty and high standards of operation that members of registered organisations and the broader community rightfully expect.
The Bill introduces a suite of legislative measures designed to see governance of registered organisations lifted to a consistently high standard across the board. A more robust compliance regime will deter wrongdoing and promote first-class governance of registered organisations.
Members of unions and the community not only want a strong regulatory regime but also want swift action taken when standards are breached. In order to do this, it is necessary to have a robust regulator in place with appropriate powers and resources, together with meaningful sanctions that can be applied when wrongdoing is revealed.
To improve oversight of registered organisations, the Bill will establish the Registered Organisations Commission, a dedicated independent watchdog with enhanced investigation and information-gathering powers to monitor and regulate registered organisations. The new commission will have the necessary independence and the powers it needs to regulate registered organisations effectively, efficiently and transparently.
The Commission will have stronger investigation and information-gathering powers than those that currently apply. These will be modelled on those available to the Australian Securities and Investments Commission. The Commission will have the power to commence legal proceedings and refer possible criminal offences to the Director of Public Prosecutions or law enforcement agencies.
The Commission will also educate, assist and advise registered organisations and their members in relation
to the new obligations and ensure members are aware of their rights.
The Commission will be established within the Office of the Fair Work Ombudsman. While located within this Office, the Commissioner will have independence in the exercise of the relevant functions and powers under the law, and the authority to direct staff in relation to the performance of those functions. A special financial account will also be established for the Commission to ensure financial independence, and the Commissioner will have responsibility for day-to-day management of the account. The special account cannot be used, as has been suggested by some parties, to raise revenue through collection of monies related to penalties applied to registered organisations and their officers.
The Commission will be required to report to the Minister for Employment annually on its activities, and that report will be tabled in Parliament. The Commissioner will appear at Senate estimates. The activities of the Commission will also be subject to the same oversight by the Commonwealth Ombudsman as Commonwealth agencies. This will ensure the appropriate level of transparency and public accountability.
The bill also provides for information sharing between the Fair Work Commission and the Registered
Organisations Commission to the extent that is required for both organisations to do their job effectively and efficiently. This is required, as several administrative tasks relating to registered organisations will continue to be the responsibility of the General Manager of the Fair Work Commission.
Transitional arrangements have been included in the Bill to ensure any ongoing matters being dealt with by the Fair Work Commission relating to registered organisations can be transferred to the Registered Organisations Commission.
This Bill will also strengthen existing financial transparency obligations for registered organisations and officers. It is entirely appropriate to expect a high standard of financial reporting from our registered organisations, given the trust members place in their unions and employer associations to operate honestly and to use the funds derived from their membership fees to represent their interests rather than for ulterior purposes. Registered organisations have substantial economic, legal and political influence. It is clearly inconsistent with community expectations for such organisations to operate to lower standards than those that apply to corporations or other comparable bodies.
Mr Thomson, Mr Williamson and the unfolding allegations arising out of the Royal Commission have shown us that the existing regulation does not sufficiently protect members' interests. Unfortunately, there will always be less scrupulous individuals who will seek to take advantage of their positions when standards of accountability and the risk of getting caught are too low. In the face of this kind of behaviour, a strong message needs to be sent to discourage wrongdoing by officers and to rebuild the confidence of members and the community. These measures, however, will have little impact if the penalties for wrongdoing are not high enough to act as a deterrent.
Currently, registered organisations and officers do not face the same consequences as companies and directors for wrongdoing. That is why the government is introducing higher civil penalties and a range of criminal penalties for organisations and officials who are found by courts of law to have done the wrong thing. These penalties are consistent with those faced by companies and directors who break the law. In relation to civil penalty breaches, the maximum penalty for serious contraventions will be $204,000 for an individual or $1,020,000 for a body corporate. This will apply to serious contraventions. What will constitute a serious contravention is defined in the Bill. Other breaches will face a maximum civil penalty of $17,000 for an individual or $85,000 for a body corporate. By way of comparison, the current maximum penalties for even the worst misbehaviour are only $10,200 for individuals.
Let me be very clear, it is the Government's expectation that the highest of penalties will be rarely be handed out but it is important that the Courts have the ability to hand down strong penalties should the crime deserve it. We know that the Courts have had an issue with the current framework with Federal Court Judge Anthony North making almost unprecedented comments last year, saying:
" The penalties [under the current Act] are rather beneficially low…beneficial to wrongdoers. "
This Bill will also give the Federal Court the power to disqualify an officer from holding office where a civil penalty provision has been contravened and the court is satisfied that disqualification is justified.
Criminal penalties are being introduced for serious breaches of officers' duties as well as offences in relation to the conduct of investigations under the Registered Organisations Act. The maximum penalties in these areas are $340,000 or five years imprisonment or both and again will be handed down by a court which will use its discretion.
Broadly, these offences relate to officers and employees of registered organisations who fail to exercise their powers or discharge duties in good faith and for a proper purpose. They also apply where an officer uses their position to gain advantage for themselves or someone else or uses information gained while an officer or employee to gain an advantage for themselves or someone else.
Some registered organisations have indicated concern that the new penalties will mean that they will have difficulty persuading people to take on official responsibilities. The government does not agree. The only people who have anything to fear are those who do the wrong thing. Officers who are operating within the law, which is the overwhelming majority of them, will have no reason to fear taking on official responsibilities. The overwhelming number of officers who are already doing the right thing should be comforted in knowing that the unlawful behaviour will be dealt with, thus ensuring ongoing member confidence in registered organisations as a whole. There should be no difference between the penalties levied against a company director who misuses shareholders' funds and a registered organisations boss who misuses members' money.
I recognise the broad community consensus for the government's amendments, including from one of Australia's most prominent union bosses, Mr Paul Howes, the outgoing head of the Australian Workers Union, who told the ABC on 26 November 2012:
I actually believe there is a higher responsibility for us as guardians of workers ' money to protect that money and to act diligently and honestly. The reality is I do not have any issue with increasing the level of requirements and penalties on trade unions for breaching basic ethics like misappropriation of funds.
Anyone in this place who has regard for the best interests of members of registered organisations and the protection of their hard-earned contributions will support this Bill. The refusal of the Labor Party and Greens to support the Bill as introduced in November 2013 is delaying the government's attempts to protect honest union members.
The government believes the Bill sets an appropriately high standard for the governance and regulation of registered organisations. It responds to the legitimate concerns of members of registered organisations and the community as a result of the shocking behaviour of certain Health Services Union officials and allegations arising out of the Royal Commission into Trade Union Governance and Corruption. Only those officers who do the wrong thing have anything to lose from these changes. Members of registered organisations and the community have everything to gain.
METEOROLOGY AMENDMENT (ONLINE ADVERTISING) BILL 2014
The Meteorology Amendment (Online Advertising) Bill 2014 (the Bill) amends the Meteorology Act 1955 (Cth) to provide certainty in relation to the Director of Meteorology's powers to include advertising in connection with the Bureau of Meteorology's services and determine the types of advertising that the Bureau displays.
The Bureau of Meteorology is relied upon everyday by the Australian community to deliver accurate and timely information, particularly during events where life and property are at risk. The introduction of online advertising followed the 2011 Munro Review of the Bureau's capacity to respond to future extreme weather and natural disaster events and to provide seasonal forecasting services. The Review recommended that options be explored to obtain revenue from advertising on the Bureau's highly popular website.
Advertising on the Bureau's website was trialled for 12-months in 2012-13, and became a permanent measure from 1 July 2013, after being announced in the 2013-14 Budget.
This amendment to the Meteorology Act will remove any doubt to make it explicitly clear that the Bureau of Meteorology can accept paid advertising, allowing the Bureau to further diversify its sources of funding.
It will also require the Director of Meteorology to develop and publish guidelines on the types of advertising that the Bureau will display. This will allow the Director to prohibit advertising that is considered to not be in the Commonwealth's or the Bureau's interests. It is expected that the Director's guidelines will be based on the Bureau's existing Online Advertising Policy, which was developed and published during the advertising trial and is founded on existing industry advertising laws, regulations and codes of conduct.
NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS) BILL 2014
The National Health Amendment (Pharmaceutical Benefits) Bill 2014 implements the decision announced in the 2014-15 Budget to increase patient co payments and safety net thresholds for the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS).
It is another example of this Government protecting the best interests of Australians and making the decisions necessary to improve Australia's budget position into the future.
The PBS and RPBS are key components of our health services and are a major investment in the health of Australians. In the ten years to 2012 13, the cost of the PBS has increased by 80 per cent. At a current cost of around $9 billion per year, and with annual growth over the longer term expected to be between four and five per cent, these Schemes won't be sustainable without responsible management.
Why the changes are need ed—PBS costs and new listings
Australia's health system is demand driven. The pressure to provide access to more services, more medicines and more expensive technologies is always increasing.
There is a continual pipeline of complex and expensive new medicines delivering more targeted and more personalised treatments. Since coming to Government, the Coalition has listed or expanded the listings of 181 medicines on the PBS. Medicines are being listed twice as fast as under the former Labor government.
The additional cost of advances in treatment, together with the ongoing cost of medicines for chronic conditions, means expenditure for our health system is growing faster than Government and tax-payers can sustain.
If the PBS is to grow in a sustainable way, we need a whole-of-community approach and we all need to contribute—something successive governments have recognised since co-payments for the PBS were first introduced in 1960.
Earlier this year, this Government approved new listings for medicines with an expected cost to the PBS of $436 million. These listings include treatments for breast cancer, melanoma and multiple sclerosis, some of which cost tens of thousands of dollars per patient.
At its March 2014 meeting, the Pharmaceutical Benefits Advisory Committee (PBAC) recommended a further $550 million in new listings. In July this year, the PBAC will consider applications for new PBS listings worth up to a further $3.6 billion. Funding for new listings is not factored into the forward estimates. It is new money that this Government must find every four months to provide access to those medicines, something we have committed to do.
But we cannot do that and contain spending without more help, a greater contribution from all Australians who benefit from the PBS.
The changes proposed in the Bill are expected to contribute savings to the Government for the PBS and RPBS of around $1.3 billion over four years. They will provide a check on the rate of growth in PBS expenditure. They do not cut funding for the PBS.
We still expect that the PBS will grow, but more sustainably, from $9.2 billion in 2013 14 to $10.2 billion in 2017 18.
Changes to co-payments—general patients
Under the changes commencing 1 January 2015, there will be a one-off increase in patient co payment amounts for pharmaceutical benefits prescriptions. This increase will apply in addition to the usual annual Consumer Price Index (CPI) adjustment which occurs on 1 January each year.
The co-payment for general patients, which is currently $36.90, will increase by $5 in addition to CPI. On average, general patients use two PBS-subsidised prescriptions per year. So, for an average user, the additional cost from 2015 would be $10 per year.
Under co-paymen t general patient prescriptions
The increase in the general co payment will not affect the cost to consumers for many commonly used medicines. Because the co payment amount is the maximum that a person needs to pay under the PBS, when the price of a prescription is less than the co payment, the consumer pays the lesser amount.
Medicines priced at less than the general co-payment already account for more than 40 per cent of PBS listings, and over 70 per cent of general patient PBS prescriptions. By the time the co-payment changes come into effect, more than 55 per cent of listings are expected to be below the general co payment amount. These listings include medicines used to treat high blood pressure, high cholesterol, type 2 diabetes, gastric ulceration, and skin conditions. As competition in the market continues to bring prices down, those reductions are reflected in the prices paid by consumers, as well as by Government.
Changes to co-payments— concessional
For individuals and families who access pharmaceutical benefits at the concessional level, including veterans and their dependents under the RPBS, the co payment, which is currently $6, will increase by 80 cents in addition to CPI.
People with concessional benefits use, on average, 17 prescriptions each year. So under these new arrangements, they will pay an extra $13.60 per year for their subsidised medicines.
The Government is asking concessional patients to contribute an extra 80 cents for prescriptions which cost on average $43.50. It will also be only an extra 80 cents for medicines such as the cancer treatments, everolimus and dabrafenib, that cost over $5,500, and $8,700 per prescription respectively.
PBS and RPBS safety nets
Along with the co payment changes, there will be parallel changes in PBS safety nets.
Safety net arrangements help to protect people who require a lot of medicines from high out-of-pocket costs. For all users of the PBS and RPBS, once the safety net threshold is reached, the co payment amount is reduced for prescriptions required for the rest of the calendar year. For general patients, the co-payment reduces to the concessional amount, and for concessional patients, the co payment is reduced to zero.
Changes to safety nets— general
Under the proposed changes, the general safety net, which is currently $1,421.20, will increase by ten per cent of the safety net plus annual CPI indexation, on 1 January each year from 2015 until 2018. From 1 January 2019, only annual CPI indexation will apply.
General patients who are high medicine users will pay around $145.30 more in 2015 before reaching the new safety net threshold—and thereafter will only pay the concessional co-payment to access subsidised medicines for the remainder of the calendar year.
Changes to safety nets— concessional
The concessional safety net, which is currently equivalent to co payments for 60 prescriptions ($360), will increase by two prescriptions on 1 January each year from 2015 to 2018. The resulting concessional safety net thresholds will be 62 prescriptions in 2015; 64 in 2016; 66 in 2017; and 68 in 2018.
Concessional patients who are high medicine users will pay around $61.80 more in 2015 before reaching the new safety net threshold—and thereafter will receive all their PBS and RPBS subsidised medicines for free for the remainder of the calendar year.
Operation of safety nets— and family example
Importantly, the same general or concessional safety net applies to individuals, couples and families. The safety net can be tallied separately for an individual or combined where the cost of medicines for couples or family members needs to be met from the same household budget.
For example, in 2015, a low income family of two adults and two children, who hold a concession card and obtain 72 prescriptions per year between them, will pay $61.80 more than in 2014 before they reach the safety net threshold. But once they reach the safety net, they will get the rest of their PBS prescriptions for that calendar year for free—that's 10 scripts for free—whether it be the $43.50 medicine or the $5,500 medicine or the $8,700 medicine, it will be provided to them at no cost.
Changes to concessional co ntributions for Closing the Gap
The changes in the Bill will also apply for patient contributions charged at the concessional rate for the Closing the Gap PBS Co payment Measure. Under the Closing the Gap arrangements, eligible Aboriginal and Torres Strait Islander consumers who would otherwise pay the general co-payment for PBS prescriptions, pay at the concessional rate. Eligible concessional patients receive their PBS medicines for free.
Patient contributions as one elem ent of effective PBS management
The Government has inherited an enormous debt from the former Labor Government and is determined to ensure that health services are sustainable, are used efficiently, and are available for future generations.
The PBS model requires that medicines undergo evidence-based assessment of clinical and cost effectiveness, be listed only on the recommendation of our expert advisory committee, and be subject to comparative and competitive pricing.
Good management of the Scheme also relies on the innovative products supplied by a strong medicines industry, and the quality care provided by Australia's wide network of community pharmacies.
And since 1960, successive governments have continued to recognise that patient contributions are part of responsible management of the PBS. Indeed it was a Labor Government that introduced a $2.50 patient contribution for pensioners in 1991 and a Labor Government that increased the co-payment for general payments by 100%, from $5 to $10 in 1985.
It has been fair in the past, and it is fair now, to slightly increase the cost for consumers, given the increase in the cost of the PBS over the last 10 to 15 years and the number of very expensive drugs which will be listed in the future.
Conclusion—Savings for new listings and t he medical research future fund
Demand for the PBS will continue to grow, and we want to list medicines quickly. The expense of the latest treatments is a major cost driver for the PBS. Recent PBS listings include medicines with a cost per patient per year of up to $110,000 for the treatment of melanoma; around $38,000 for advanced breast cancer; $27,000 for prostate cancer; and up to $17,000 for macular degeneration. As more high cost medicines are listed, and more patients require access to these treatments, the cost to taxpayers will increase.
By asking consumers to share in that cost, we can build a sustainable PBS that can continue to make otherwise prohibitively expensive treatments affordable for all Australians.
Importantly, this measure will also help to support future development of the types of innovative medicines people are seeking today. We will always be looking to prevent and treat illness and manage conditions that challenge us now.
And our medical researchers have led the way, from Howard Florey to Sir Gustav Nossal and from Fiona Stanley to Ian Frazer. Australians have, through research and innovation, saved millions of lives, not just here but around the world.
Savings will contribute to the $20 billion capital protected Medical Research Future Fund. When fully mature, it will add $1 billion to the resources available for medical research every year and for generations to come. The fund will provide more opportunities for world class Australian researchers to undertake basic and applied research and to test their results in clinical trials in this country. This investment is a huge step forward for Australia and will bring considerable health and economic benefits to our nation.
The changes in this Bill will strengthen the PBS while preserving all the features that make it such a valued part of Australia's health system.
SOCIAL SECURITY LEGISLATION AMENDMENT (STRONGER PENALTIES FOR SERIOUS FAILURES) BILL 2014
Today I introduce the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 to strengthen the job seeker compliance framework.
It has long been a feature of our welfare system that job seekers in receipt of income support are asked to do certain activities in return for that taxpayer-funded benefit.
This includes actively looking for work, undertaking activities to improve their job prospects and taking up a suitable job offer.
The Coalition Government firmly believes in the importance of this mutual obligation.
Our recent Budget contained a number of measures to strengthen the mutual obligation and job seeker compliance frameworks.
The Bill I present today gives effect to the Budget measure to tighten the rules for job seekers who refuse a job, or persistently fail to meet their requirements.
This Bill will help to restore the integrity of our welfare system and ensure that available resources are used efficiently and effectively.
The Coalition understands that most job seekers in receipt of income support do the right thing by the taxpayer.
Most job seekers want to work and make the effort to find and keep a job.
However, there are some job seekers who do not meet their mutual obligation requirements and are abusing the system.
The former Labor Government encouraged this poor behaviour by weakening the rules regarding the application of penalties for serious failures.
Serious failures include refusing a job or persistent non-compliance in meeting participation requirements.
Currently, a non-payment period of eight weeks may be applied in cases of a serious failure.
However, the changes introduced by Labor allowed people to waive the penalties for a serious failure simply by doing additional activities, such as more intensive job search.
In 2012-13, there were 1,718 serious failures for refusing a job and of these, the penalty was waived in 68 per cent of cases.
In that same year, there were 25,286 serious failures for repeated non-compliance and of these, the penalty was waived in 73 per cent of cases.
And of those waived, nearly one-third were for a job seeker's second or third episode of non-compliance.
These penalties were waived not because the job seekers were vulnerable or the jobs were unsuitable, but simply because the job seeker elected to do an intensive activity instead.
The Coalition believes that the changes introduced by Labor have undermined the integrity of the job seeker compliance system.
The ability to continually waive the penalty means that job seekers who commit a serious failure can avoid the financial consequences of their actions, and continue to receive income support, despite their poor behaviour.
This is not right.
It is important there are stronger deterrents in our system for those job seekers who abuse the system.
As I said, most job seekers do the right thing but some job seekers deliberately choose to avoid their responsibilities.
This Bill will ensure that the existing financial penalties for more serious failures are applied more rigorously and in keeping with community expectations.
The Government does not believe it is appropriate for a job seeker to refuse a suitable job and remain on welfare.
Anyone in receipt of a taxpayer-funded income support payment should be prepared to accept any legitimate, suitable work that they are capable of doing.
This Bill will ensure that all job seekers who refuse an offer of suitable work - or fail to accept a suitable job - are required to serve their eight week non-payment period.
Job seekers in these cases will not be permitted to have their penalty waived through participation in intensive activities.
It will remain the case that job seekers will not be forced to take work that is clearly beyond their work capacity and that individual circumstances, such homelessness, will still be taken into account.
Some job seekers also fail to meet expectations with regard to participating in activities designed to improve their job prospects, such as meeting with their employment service providers or participating in activities.
Where a person is persistently and wilfully non-compliant in meeting these requirements then a non-payment penalty of eight weeks may be applied.
Unfortunately, the changes introduced by Labor also allowed this penalty to be waived through participation in intensive activities.
This means that there is now no meaningful consequence for people who are repeatedly non-compliant.
The absence of a real financial penalty for this group of
job seekers means that people have no real incentive to change their behaviour for the better.
This Bill limits the number of times a job seeker may have the penalty for persistent non-compliance waived.
In the future, job seekers will only be allowed to have this penalty waived once through participation in an intensive activity.
This is consistent with the original intent of the waiver provisions which was to encourage job seekers to re-engage with their employment services provider and resume their participation activities.
By limiting this waiver to one occasion only, job seekers will be provided with a clearer incentive to fully meet their participation requirements into the future.
Conclusion
The Government knows that there is little tolerance in the broader community for job seekers who repeatedly flout the rules.
Stakeholders, including social welfare groups, have been clear in their dealings with me that resources must be directed to those job seekers who do the right thing.
There are simply not enough resources to allow money to be provided to those job seekers who are not prepared to help themselves.
The changes I have outlined today will save $20.5 million over five years.
This is money that is better spent on repairing Labor's Budget mess and meeting other priorities.
The changes in this Bill are only targeted at that cohort of job seekers who refuse a suitable job without reasonable grounds and those who are wilfully and persistently non-compliant.
Those job seekers who do the right thing have nothing to worry about.
I trust that that those opposite will support this Bill.
After all, it was the Member for Adelaide, as Minister for Employment Participation, who said:
"A strengthening of the compliance system will mean that more job seekers are actively engaging in work experience activities, in training and in participation programs, so that they can find and keep a decent job…"
This is exactly what our Bill seeks to achieve: more job seekers meeting their mutual obligation requirements and moving from welfare to work.
This Bill will assist the Government to ensure the integrity of our income support system by ensuring that the penalties for serious failures are applied more rigorously.
The Bill underscores this Government's commitment to reinvigorating mutual obligation, consistent with taxpayer expectations.
Asset Recycling Fund Bill 2014
Asset Recycling Fund (Consequential Amendments) Bill 2014
The committee divided. [15:54]
(The Chairman—Senator Marshall)
(7) Clause 18, page 17 (after line 23), at the end of subclause (1), add:
Note: See also section 21A.
(10) Page 19 (after line 24), at the end of Subdivision B, add:
21A Cost benefit analyses to be made public
If a direction is made under subsection 18(1) in relation to a grant for an infrastructure project, the Infrastructure Minister must:
(a) table in each House of the Parliament, within 14 sitting days of that House after the direction is made, a copy of the evaluation by Infrastructure Australia provided to the Minister under section 19; and
(b) within 14 days of the direction being made, ensure that the following information about the project is made available on the Infrastructure Department's website:
(i) a description of the project;
(ii) when the project is to start and is likely to be completed.
(11) Clause 24, page 20 (after line 26), at the end of subclause (1), add:
Note: See also section 28A.
(13) Page 22 (after line 28), at the end of Subdivision C, add:
28A Cost benefit analyses to be made public
If a direction is made under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project, the Infrastructure Minister must:
(a) table in each House of the Parliament, within 14 sitting days of that House after the direction is made, a copy of the evaluation by Infrastructure Australia provided to the Minister under section 25; and
(b) within 14 days of the direction being made, ensure that the following information about the project is made available on the Infrastructure Department's website:
(i) a description of the project;
(ii) when the project is to start and is likely to be completed.
The committee divided. [16:07]
(The Chairman—Senator Marshall)
(8) Clause 18, page 18 (lines 5 and 6), omit "Minister who recommended the specification of the grant (see section 19)", substitute "Infrastructure Minister".
The committee divided. [16:17]
(The Chairman—Senator Marshall)
(9) Clause 19, page 18 (lines 7 to 16), omit the clause, substitute:
19 Recommendations about grants payments
(1) The Finance Minister must not make a direction under subsection 18(1) in relation to a grant for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.
(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant for an infrastructure project if:
(a) capital expenditure on the project is $100 million or more; and
(b) Infrastructure Australia has not done both of the following:
(i) given the Minister an evaluation of the project (see subsection (3));
(ii) advised that there are likely to be productivity gains from the project.
(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subsection (2) must:
(a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and
(b) set out any other matter that Infrastructure Australia considers relevant to the project.
(4) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant for an infrastructure project if:
(a) the grant is for expenditure incurred under the National Partnership Agreement on Asset Recycling; and
(b) the grant does not relate to a transaction that the Treasurer has approved by legislative instrument.
(5) An approval under paragraph (4)(b) must specify the State-owned assets, or the parts of State-owned assets, to the sale of which the transaction relates.
(12) Clause 25, page 21 (lines 4 to 7), omit the clause, substitute:
25 Recommendations about payments
(1) The Finance Minister must not make a direction under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.
(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to infrastructure payments for an infrastructure project if:
(a) capital expenditure on the project is $100 million or more; and
(b) Infrastructure Australia has not done both of the following:
(i) given the Minister an evaluation of the project (see subsection (3)); and
(ii) advised that there are likely to be productivity gains from the project.
(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subsection (2) must:
(a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and
(b) set out any other matter that Infrastructure Australia considers relevant to the project.
(4) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to infrastructure payments for an infrastructure project if:
(a) the payments are for expenditure incurred under the National Partnership Agreement on Asset Recycling; and
(b) the payments do not relate to a transaction that the Treasurer has approved by legislative instrument.
(5) An approval under paragraph (4)(b) must specify the State-owned assets, or the parts of State-owned assets, to the sale of which the transaction relates.
The overriding message of this draft report is the need for a comprehensive overhaul of processes in the assessment and development of public infrastructure projects.
(1) Amendment (9), subclauses 19(4) and (5), omit the subclauses.
(2) Amendment (12), subclauses 25(4) and (5), omit the subclauses.
(3) Page 23 (after line 10), after Division 4, insert:
Division 4A—State-owned essential services
29A State-owned essential services
A grant or payment mentioned in this Part must not relate to a transaction that relates to the sale of State-owned assets that provide essential services.
A grant or payment mentioned in this Part must not relate to a transaction that relates to the sale of State-owned assets that provide essential services.
(4) Page 24 (after line 12), at the end of Part 2, add:
Division 6—Toll roads
30A Toll roads
Financial assistance granted as mentioned in this Part must not be expended on toll roads.
Financial assistance granted as mentioned in this Part must not be expended on toll roads.
This is a classic case of a failed public-private partnership which was based on an anti-public transport, an anti-alternative transport model which was never going to be sustainable.
The committee divided. [16:57]
(The Chairman—Senator Marshall)
(1) Title, page 1 (line 1), before "establish the Asset Recycling Fund", insert "encourage privatisation and".
(2) Clause 1, page 1 (line 7), omit " Asset Recycling Fund ", substitute "Encouraging Privatisation (Asset Recycling Fund) ".
(1) Clause 1, page 1 (line 6), omit "Asset Recycling Fund", substitute "Encouraging Privatisation (Asset Recycling Fund)".
(2) Entire Bill: Omit " Asset Recycling Fund Act 2014 " (wherever occurring), substitute "Encouraging Privatisation (Asset Recycling Fund) Act 2014 ".
That these bills be now read a third time.
Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2]
Debate resumed on the motion:
That this bill be now read a second time.
to which the following amendment was moved:
At the end of the motion, add "but the Senate is of the opinion that the repeal of the Low Income Superannuation Contribution should not be concealed in this legislation as it will:
(a) diminish, by around $27 000, the retirement savings of one in three Australians;
(b) negatively impact on almost one in two working women and 80 per cent of women who work part time; and
(c) place further pressures on future governments due to increased costs to the aged pension".
The Senate divided. [21:36]
(The President—Senator Parry)
The Senate divided. [21:40]
(The President—Senator Parry)
The Senate divided. [21:45]
(The President—Senator Parry)
(2) Schedule 2, page 21 (line 1) to page 27 (line 8), to be opposed.
(3) Schedule 3, page 28 (line 1) to page 29 (line 25), to be opposed.
(4) Schedule 4, page 30 (lines 1 to 27), to be opposed.
(5) Schedule 5, page 31 (line 1) to page 35 (line 28), to be opposed.
The committee divided. [22.01]
(The Chairman—Senator Marshall)
(1) Schedule 6, item 1, page 36 (lines 5 to 9), omit the item, substitute:
1 Subsection 19(2)
Repeal the subsection, substitute:
The committee divided. [22:10]
(The Chairman—Senator Marshall)
(1) Schedule 6, page 36 (lines 1 to 13), to be opposed.
(2) Schedule 7, page 37 (line 1) to page 39 (line 3), to be opposed.
The committee divided. [22:18]
(The Chairman—Senator Marshall)
(1) Schedule 7, page 37 (line 1) to page 39 (line 3), to be opposed.
The committee divided. [22:30]
(The Chairman—Senator Marshall)
(4) Schedule 8, page 40 (line 1) to page 45 (line 9), to be opposed.
(5) Schedule 9, page 46 (line 1) to page 49 (line 24), to be opposed.
The government was also hampered by its foolish, over-egged rhetoric of a “budget emergency”. The prime issue was always a structural fiscal deficit, which needed to be fixed over the medium term.
The removal of this measure will improve the budget position by $950 million by 30 June 2017.
The repeal of the MRRT will restore confidence and promote activity in the mining industry, creating jobs and contributing to the prosperity of all Australians. It sends a clear signal that Australia is determined to remain a premier destination for mining investment, and is once again open for business.
Mining companies in Australia will continue to pay their fair share of tax through state royalties and company tax.
The mining tax is also a fiscal disaster.
The repeal of the mining tax and associated measures will improve the budget's bottom line by over $12.6 billion by 30 June 2017—
And I think the Government’s approach with the mining tax and making sure the benefits of that flow through to families, particularly low and middle income families through the School Kids Bonus, where people get assistance for kids’ education …
(1) Clause 2, page 2 (table item 3, column headed "Provision(s)"), omit "9", substitute "6".
That this bill be now read a third time.
The Senate divided. [22:59]
(The President—Senator Parry)
That—
(a) the Joint Standing Committee on the National Capital and External Territories be authorised to hold a public meeting during the sitting of the Senate today, from 9 am to 11 am, followed by an in camera hearing;
(b) the Parliamentary Standing Committee on Public Works be authorised to hold a public meeting during the sitting of the Senate today, from 9 am to 11.30 am, followed by an in camera hearing.
Social Services and Other Legislation Amendment (Seniors Health Card and Other Measures) Bill 2014
Bill received from the House of Representatives.
That this bill be now read a second time.
This Bill will implement the Government's election commitment to index income thresholds for the Commonwealth Seniors Health Card.
The seniors health card is available to people who are of age pension age but who do not qualify for the age pension – typically, self-funded retirees.
Qualification for the seniors health card depends partly on a person satisfying the seniors health card taxable income test. Under that test, the person's adjusted taxable income must not exceed the taxable income limit that applies to the person's family situation.
Those income limits are currently set at $50,000 for singles and $80,000 for couples.
The taxable income limits are not currently indexed, and have not increased since 2001.
Introducing indexation means more people will satisfy the seniors health card taxable income test and therefore qualify for the seniors health card.
The Government recognises that self-funded retirees, after a lifetime of hard work, have made a significant contribution to our nation's success. They are entitled to a safe and secure retirement.
We also recognise that, by looking after their own retirement needs, self-funded retirees save the Commonwealth Budget considerable pension costs.
However, we know that many self-funded retirees are not wealthy and face financial pressures. Those who meet the current income test and therefore hold a seniors health card are rightly concerned about modest changes in retirement income potentially causing them to lose their entitlement to the card.
Unexpected medical bills can be a significant worry for many seniors in that position.
Indexing the current income thresholds so they do not erode in real terms will allow more self-funded retirees to qualify for a seniors health card – or to keep their card despite small increases in their income beyond the current limits.
This means more seniors will be able to access the concessions that come with the card – including medicines listed in the Pharmaceutical Benefits Scheme at the concessional rate.
Indexation of the income thresholds will occur annually, starting on 20 September 2014, and will be based on movements in the Consumer Price Index.
This measure applies to the seniors health card under either the Social Security Act 1991 or the Veterans' Entitlements Act 1986.
The Bill will also make minor and technical amendments to portfolio Acts, including reflecting changed public service administrative arrangements.
Qantas Sale Amendment Bill 2014
Loss of effective Australian control could leave Australia without an airline primarily committed to our interests. What safeguards will be put in place for the Australian flying public, particularly those in regional areas?
If some jobs have to go offshore … it may be regrettable but nevertheless it is the best way to guarantee Australian jobs for the long term.
The current QANTAS crisis is clearly attributable to the senior management and board who have caused the present crisis by a range of inappropriate policies. These policy failures have included narrowing the customer base by abandoning key overseas destinations … unwisely establishing loss-making Asian Jetstar airlines; reducing confidence in service standards by outsourcing much of the aircraft maintenance …
If the government believes its own prospectus, it should certainly not be selling.
… when you look at the strength of the Australian dollar, it reflects the strength of our domestic growth relative to other developed economies, it reflects the fact that our terms of trade are still very high and it reflects that fact that many people and investors around the world now see Australia as a safe haven.
1. The Committee must consider what initiatives can be taken by Government to ensure Qantas remains a strong national carrier supporting aviation jobs in Australia, including:
(a) a debt guarantee;
(b) an equity stake; and
(c) other forms of support consistent with wider policy settings.
2. That, in conducting the inquiry, the committee should consider:
(a) any national security, skills, marketing, tourism, emergency assistance or other benefits provided by a majority Australian-owned Qantas;
(b) the level and forms of government support received by other international airlines operating to and from Australia;
(c) the ownership structures of other international airlines operating to and from Australia;
(d) the potential impact on Australian jobs arising from the Government's plan to repeal Part 3 of the Qantas Sale Act 1992; and
(e) any related matter.
At the outset I wish to express my deepest sympathies and condolences for all the families and friends who lost their loved ones in the unfolding tragedy of MH17, including a number of Australians on that flight.
I oppose this bill in the strongest possible terms.
One of the reasons I do so can best be summed up by the iconic and controversial Labor figure Jack Lang, who once said: "if you nurse a mug for long enough, he's bound to die in your arms".
This bill will simply prolong nursing of the incompetent and disastrous Qantas management team lead by CEO Alan Joyce and Chairman Leigh Clifford.
Further, this bill, through the changes it seeks to the Air Navigation Act to purportedly 'level the playing field' with Virgin Australia will pave the way for effective foreign control of Qantas.
The proposed changes to the Air Navigation Act could well facilitate up to 100% foreign control of Qantas' domestic operations, and just like Virgin, allow for a foreign carrier to have effective control of Qantas' international operations, with a sham arrangement that on the surface seems to be 51% Australian owned, but is anything but.
We need to put this bill, this debate, to be put in perspective. The Qantas Sale Act came into being in 1992 as a result of the Keating Government privatising Qantas. The Act contains a safeguard to protect what is our de facto national flag carrier – although there is nothing de facto about the way Qantas is seen around the world representing Australia, and its importance in marketing our nation as a tourist destination.
Taxpayer funds of up to a billion dollars were tipped into Qantas to sweeten the privatisation offer. The Qantas Sale Act, even with its existing flaws, acknowledges the strategic importance of Qantas calling Australia home, both in terms of our international reputation, tourism, jobs and strategic national interest considerations.
This bill seeks to trash that once and for all.
And sadly, some of the Opposition's amendments will weaken the safeguards in the Qantas Sale Act, although the ALP's opposition to the Air Navigation Act changes is of course welcome. I urge my colleagues to support the amendments I have co-sponsored with Senators Madigan and Rhiannon to strengthen the existing safeguards in the Qantas Sale Act which I understand my colleagues will speak to shortly.
This bill has come about because of the frantic and desperate lobbying of Mr Joyce, his Chairman and the Board. If you look at the history of Mr Joyce's comments how can you believe anything this man says.
On 17 February 2011 Mr Joyce stated:
"Qantas achieved an Underlying EBIT of $165 million for the half-year. The result is 175 per cent above the prior corresponding period, driven by a $411 million, or 8 per cent, increase in total revenue. Qantas improved yield by 9 per cent and increased capacity by 3.3 per cent demonstrating a strong revenue recovery across both international and domestic business. "
However just four months later on 22 June 2011 Mr Joyce stated:
"In FY11, Qantas International is forecast to generate a loss before interest and tax of approximately $200 million, on invested capital of over $5 billion, with a weaker result expected next year. Qantas International is the Group's weakest business – it has achieved required returns only three times in the past 15 years. Clearly the situation is not sustainable. However, we are developing a long-term strategy aimed at restoring competitiveness and profitability".
Between February and June 2011 no additional market supplementary statements were made by Qantas, yet during this time its share price dropped by 27%.
On the 7th of September 2012 Qantas made an application to the ACCC for an authorisation for its alliance with Emirates, with Qantas asserting that approval of its application was necessary because of the 'terminal decline' of the Qantas International segment, stating in its submission to the ACCC:
"For many years, Qantas International has been in terminal decline and has been supported by the other profitable Qantas businesses (Qantas Domestic, Qantas Frequent Flyer (QFF) and Jetstar) but its losses have continued to grow, with a $450 million loss in fiscal year 2012."
And Qantas also stated:
"…unless Qantas has the ability to recover its cost of capital over an appropriate period, it will not be possible to invest in new aircraft for Qantas International. If Qantas International can no longer sustain its network because of low returns, then this has the potential to undermine its ability to compete as a legitimate network airline."
However, telling, in its final determination in relation to Qantas' application for an alliance with Emirates the ACCC rejected Mr Joyce's "terminal decline" assertions. The ACCC stated:
"The ACCC does not accept or rely on Qantas' claim that Qantas International is in 'terminal decline' and unable to compete effectively or operate profitably. The ACCC considers that the scope of Qantas' International operations in the likely future without the proposed conduct would not be materially different to the likely future with the proposed conduct."
The alliance with Emirates was supposed to be Qantas' saviour, and well after a year into that alliance Qantas is going backwards.
It is going backwards because of a series of disastrous decisions made by Alan Joyce and the management. Due diligence demands a close look at the 129 companies that form the Qantas Group.
In the month before he was made CEO in 2008, Qantas shares were then more than double their price now.
Joyce's promotion over John Borghetti was based on his seemingly spectacular implementation of former boss Geoff Dixon's plans for Jetstar as a low -cost offshoot.
Has it become a noxious weed sapping life from the Qantas tree?
The labyrinthine accounts of Jetstar Asia, Jetstar Pacific and Jetstar Airways need to be looked at by Joe Hockey before any decision is made to bail out Qantas.
Here's an example. In 2009, Qantas paid $60 million for
Singapore -based Jetstar Asia's assets - on the books valued at a bit over $3 million - as well as $200 million in accumulated losses. Is Jetstar Asia only flying because
Qantas still foots the bill, despite being a minority shareholder?
Here's another. Jetstar Pacific is majority owned by a Vietnamese government entity and its audited accounts are not made public. The reported $24 million in losses from 2009 to 2011 may be understated.
I suggest that Jetstar Hong Kong is another failed enterprise with a number of A320 aircraft parked in France costing the Qantas Group millions each month. I predict that Qantas will bail out of Jetstar Hong Kong sooner rather than later.
Qantas and Jetstar employees have told me many times that they believe Qantas International looks much sicker than it is because of cost shifting from Jetstar, something perfectly legal under current Australian accounting rules.
Yet Mr Joyce and Mr Clifford continue to pedal a line that they themselves contradict within weeks.
On 18 October 2013, during Qantas' Annual General Meeting Qantas' chairman, Mr Leigh Clifford, made the following series of comments:
"For a second consecutive year, the Group ended the reporting period with positive net free cash flow. This will remain a focus in the current financial year."
"Total liquidity at 30 June was $3.4 billion, comprising $2.8 billion in cash and $630 million in undrawn debt facilities."
"Thanks to this disciplined financial management, the Group has been able to return value to shareholders through the ongoing share buy-back program."
"Strong earnings in the competitive domestic market."
"Qantas is becoming more efficient and productive, as we permanently remove costs from the business."
During the 2013 AGM Mr Joyce made a series of statements, including:
"As Leigh said, this has been a year of progress and achievement for the Qantas Group – amid tough market conditions and persistently high fuel prices."
"With a global network, a modern fleet and the best ever Qantas service, I believe we are entering a new era for this great Australian brand."
"As Leigh said, we are in a stronger financial position thanks to the steps we have taken."
"We have lowered debt levels and extended the Group's debt maturity profile, while reducing capital expenditure to ensure we retain a healthy balance sheet with strong liquidity."
Any investor hearing those comments from both the chairman and CEO of Qantas on the 18th of October 2013 could have assumed that Qantas was on the road to fiscal recovery. However, on 5 December 2013 – some seven weeks later - 1000 job losses were announced by Qantas. On 27 February 2014 a further round of job cuts was announced, bringing the total to 5000. My understanding is that the share price dropped some 25 percent from the 18th of October 2013 to the 5th of December that year – a similar decline to that observed between 17 February and 22 June 2011.
These inconsistent and apparently contrasting statements are confusing to follow. A reasonable person relying on the statements at the 2013 AGM would not have anticipated an announcement of such magnitude on 5 December 2013, in the absence of any market update. In fact, on the 29th of November 2013 Qantas released its 'Preliminary Monthly Traffic and Capacity Statistics' for the month of October 2013. This announcement contained no updated financial guidance. For a reasonable person entirely reliant upon public information and timely disclosures from Qantas such announcements on 22 June 2011 and the 5th December 2013 would have been a surprise. I query whether sections 674 and 184 of the Corporations Act were complied with given the magnitude of the drop in the Qantas share price in those periods. It also raises the question which institutional investors were briefed selectively during these periods. Qantas, in answers to questions on notice to a recent Senate Economics Committee inquiry made reference to confidential briefings which they were not prepared to elaborate on as they were 'commercial in confidence'. It seems reasonable to ask whether some participants in the market, having been selectively briefed by Qantas, were responsible, in part, for the share price decline for both periods referred to.
Under the leadership of Joyce and Clifford Qantas has lurched from one failed strategy to the next. For about a year from mid-2011 Joyce was hell bent on setting up a premium Asian airline – referred to by some as Red Q, by critics as Far Q. First, it was to be based in Singapore, then Kuala Lumpur, before being abandoned. Joyce seems increasingly like a desperate gambler chasing his Jetstar Asia losses.
The underlying premise of this bill, that Qantas needs foreign ownership restrictions to be lifted is deeply flawed.
Interestingly, the total foreign ownership of the airline rests, as at last disclosure at 39.8% - March 2013 - I am informed that the level presently rests around 42%. This means in simple maths that there is 7% of the airline's listed capital available to any airline that should wish to purchase the stock. There does not seem to be a line out the front of Qantas' HQ in Coward Street, Sydney wanting to do so.
There are two possible reasons for this: Firstly, the price isn't low enough. Secondly, the strategy is extremely poor.
With reference to the second point it is worth noting that as other airlines have been profitable, Qantas under the stewardship of Leigh Clifford and Alan Joyce has descended further into the red.
The share price has declined dramatically from the 28 November 2008, when Joyce became CEO. Shareholders have lost out; the various ruses pulled to change the structure of the business from the grounding in 2011, to the ill-fated Emirates alliance have not provided any consistent return to profitability. What has been consistent is poor strategy in Asia, bad investments and divisive management.
The Qantas Sale Act is not responsible for the predicament Qantas finds itself in - the management is.
To go back to where it began with Jack Lang, if the Government cradles Qantas with Joyce and his Board by pushing through these changes, it could well be that Australian tax payers will end up being the mugs.
I've been to cities that never close down, from New York to Rio and old London town.
But no matter how far or how wide I roam, I still call Australia home.
The Government’s decision to allow a single foreign investor to own 49 per cent of Qantas would deliver effective control to a foreign investor, including possibly a competitor airline. Loss of effective Australian control could leave Australia without an airline primarily committed to our interests. What safeguards will be put in place for the Australian flying public, particularly those in regional areas?
Qantas has, over the years, tried to increase foreign investment in the airline. We have been very concerned for a number of reasons. First and foremost, Qantas is an Australian icon and Qantas undertakes significant tasks in the national interest and there have been numerous examples where Qantas—an Australian-owned airline and an airline that relies heavily on government regulation—has undertaken tasks in the national interest. Our experience has been that when companies have majority foreign ownership or majority foreign control—not necessarily the same thing—but when they have majority foreign control, then it actually has an impact on the social responsibilities of those companies here in Australia.
The Senate divided. [11:38]
(The Acting Deputy President—Senator Peris)
(2) Schedule 1, page 3 (lines 1 to 5), omit the Schedule, substitute:
Schedule 1—Amendments
Qantas Sale Act 1992
1 Paragraphs 7(1)(aa) and (b)
Repeal the paragraphs.
2 Paragraph 7(1)(d)
Omit ", (b)".
This reform will ensure that Qantas will remain majority Australian owned
While removing all restrictions that apply only to Qantas remains our preference for levelling the playing field, changing the 25 and 35 per cent limits would represent an improvement on the status quo.
The committee divided. [11:58]
(The Chairman—Senator Marshall)
(3) Schedule 1, page 3 (lines 1 to 5), to be opposed.
(4) Schedule 2, page 4 (lines 1 to 16), to be opposed.
(1) Clause 2, page 2 (table item 2, column headed "Provision(s)"), omit "Schedules 1 and 2", substitute "Schedule 1".
(2) Clause 2, page 2 (at the end of the table), add:
(5) Page 4 (after line 16), at the end of the bill, add:
Schedule 3—Facilities
Qantas Sale Act 1992
1 Subsection 3(1) (definition of mandatory article )
Repeal the definition, substitute:
mandatory article means:
(a) a provision included in Qantas' articles of association in accordance with subsection 7(1); or
(b) a provision included in a Qantas subsidiary's articles of association in accordance with subsection 7(1A).
2 Part 3 (heading)
Omit "Qantas'".
3 Section 7 (heading)
Omit "Qantas' articles", substitute "Articles".
4 After paragraph 7(1)(h)
Insert:
(ha) for each of the following classes of facilities:
(i) facilities for the maintenance and housing of aircraft;
(ii) facilities for catering;
(iii) facilities for flight operations;
(iv) facilities for training;
(v) facilities for administration;
(vi) all other facilities which Qantas uses in the provision of scheduled international air transport services;
require that of the facilities of that class which Qantas uses in the provision of scheduled international air transport services, the facilities located in Australia, when compared with those located in any other country, must represent the principal centre of the relevant operations for Qantas; and
5 After subsection 7(1)
Insert:
(1A) The articles of association of a Qantas subsidiary must, on and from the commencement of this subsection, for each of the following classes of facilities:
(a) facilities for the maintenance and housing of aircraft;
(b) facilities for catering;
(c) facilities for flight operations;
(d) facilities for training;
(e) facilities for administration;
(f) all other facilities which the subsidiary uses in the provision of scheduled international air transport services;
require that of the facilities of that class which the subsidiary uses in the provision of scheduled international air transport services, the facilities located in Australia, when compared with those located in any other country, must represent the principal centre of the relevant operations for the subsidiary.
6 Section 8 (heading)
Omit "Qantas'".
7 Subsection 8(1)
After "Qantas", insert "or a Qantas subsidiary".
8 Subsection 8(1)
After "Qantas'", insert "or the subsidiary's".
9 Subsection 8(2)
After "Qantas", insert "or a Qantas subsidiary".
10 Subsection 10(1)
After "Qantas" (first occurring), insert ", a Qantas subsidiary".
11 Subsection 10(1)
After "Qantas" (second and third occurring), insert ", the subsidiary".
12 Subsection 10(2)
After "Qantas" (first occurring), insert ", a Qantas subsidiary".
13 Subsection 10(2)
After "Qantas" (second and third occurring), insert ", the subsidiary".
14 Subsection 10(6)
After "Qantas" (first occurring), insert ", a Qantas subsidiary".
15 Paragraphs 10(6)(a), (b) and (c)
After "Qantas", insert ", the subsidiary".
16 Subsection 10(7)
After "Qantas" (first occurring), insert ", a Qantas subsidiary".
17 Paragraphs 10(7)(a), (b) and (c)
After "Qantas", insert ", the subsidiary".
18 Subsection 10(9)
After "Qantas" (first and second occurring), insert ", a Qantas subsidiary".
19 Subsection 10(9)
After "Qantas" (third occurring), insert ", the subsidiary".
20 Application of amendments
(1) The amendments made by this Schedule (other than item 4) apply to a body corporate that becomes a Qantas subsidiary after 17 July 2014.
(2) The amendments made by items 4 and 5 apply to facilities that Qantas or a Qantas subsidiary first use in the provision of scheduled international air transport services after 17 July 2014.
The committee divided. [12:24]
(The Chairman—Senator Marshall)
The committee divided. [12:29]
(The Chairman—Senator Marshall)
That this bill be now read a third time.
The Senate divided. [12:34]
(The President—Senator Parry)
That consideration of government business order of the day no. 5 (Land Transport Infrastructure Amendment Bill 2014) not be proceeded with.
Asset Recycling Fund Bill 2014
Asset Recycling Fund (Consequential Amendments) Bill 2014
That the committee does not insist on its amendments to which the House of Representatives has disagreed.
How could Labor stand in the way of billions, tens of billions, being spent on productive infrastructure?
… if the amendments don't get up, we've said we're not going to stand in the way of this bill.
The committee divided. [12:49]
(The Chairman—Senator Marshall)
Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2]
That the committee does not insist on its amendments to which the House of Representatives has disagreed.
The committee divided. [13.28]
(The Chairman—Senator Marshall)
That business of the Senate notice of motion standing in the name of Senator Hanson-Young proposing the disallowance of the Migration Amendment (2014 Measures No.1) Regulation 2014 be called on immediately and considered for not more than 60 minutes, at which time the question on the motion shall be put.
That the Migration Amendment (2014 Measures No. 1) Regulation 2014, as contained in Select Legislative Instrument 2014 No. 32 and made under the Migration Act 1958 , be disallowed.
The Senate divided. [14:21]
(The President—Senator Parry)
That the Senate, at its rising, adjourn till Tuesday, 26 August 2014, at 12.30 pm, or such other time as may be fixed by the President or, in the event of the President being unavailable, by the Deputy President, and that the time of meeting so determined shall be notified to each senator.
That leave of absence be granted to every member of the Senate from the end of the sitting today to the day on which the Senate next meets.