The SPEAKER ( Hon. Tony Smith ) took the chair at 09:30, made an acknowledgement of country and read prayers.
BILLS
Great Barrier Reef Marine Park Amendment Bill 2017
First Reading
Bill and explanatory memorandum presented by Mr Frydenberg.
Bill read a first time.
Second Reading
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (09:31): I move:
That this bill be now read a second time.
This bill makes minor technical amendments to the Great Barrier Reef Marine Park Act 1975 to rectify an unintended consequence of the sunsetting regime established under the Legislation Act 2003.
The Great Barrier Reef Marine Park Act provides for the protection and conservation of the environment, biodiversity and heritage values through zoning, issuing of permissions and implementation of plans of management in the Great Barrier Reef Marine Park. The amendments made by this bill will prevent plans of management made under the Great Barrier Reef Marine Park Act from being revoked if regulations giving effect to these plans are repealed and remade to address sunsetting. Plans of management are an important environmental management tool for managing activities within the Great Barrier Reef Marine Park on the basis of ecological sustainable use. There are no policy or budgetary implications associated with this bill. It will simply allow the protective measures in the plans to continue uninterrupted.
Plans of management are prepared for intensively used or particularly vulnerable groups of islands and reefs and for the protection of vulnerable species or ecological communities. There are currently four plans of management in place in Cairns, Hinchinbrook Island, Shoalwater Bay and the Whitsundays. The Australian and Queensland governments have been working together for the long-term management of the Great Barrier Reef Marine Park for over 40 years. It is the world's largest coral reef ecosystem and includes around 2,900 coral reefs, 600 continental islands, 300 coral cays and about 150 inshore mangrove islands.
The Great Barrier Reef Marine Park Authority and the Queensland Department of National Parks, Sport and Racing, through the Queensland Parks and Wildlife Service, operate a joint field management program for the marine and island national parks. Amongst other management tools, the field management program uses management plans to deliver practical, on-ground actions to protect and maintain well-functioning marine and island ecosystems that support economic, traditional and recreational uses of the Great Barrier Reef.
Debate adjourned.
Liquid Fuel Emergency Amendment Bill 2017
First Reading
Bill and explanatory memorandum presented by Mr Frydenberg.
Bill read a first time.
Second Reading
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (09:34): I move:
That this bill be now read a second time.
This bill will enable the Australian government to enter into commercial oil stock ticket contracts, assisting Australia in meeting its obligations as a member of the International Energy Agency.
The Agreement on an International Energy Program, the founding treaty of the International Energy Agency, requires members to hold stocks equivalent to 90 days of the previous year's net oil imports. Australia has not been compliant with this obligation since 2012, due to both decreasing domestic oil production and increasing fuel consumption.
The government have developed a plan for returning to compliance with our obligations as a member of the International Energy Agency. As part of this plan, the Australian government will initially purchase 400 kilotonnes worth of oil stock tickets in the 2018-19 and 2019-20 financial years. This bill will give the Australian government the legislative authority to purchase ticket contracts.
A ticket is a type of commercial oil contract, where oil stock is reserved for the buyer who is able to purchase the stock at the market based price or release the stock back into the global oil market to increase supply, throughout the contract period. An oil ticket market has existed in Europe for decades. Tickets are generally purchased from overseas entities, but, under certain market conditions, tickets could be purchased from Australian companies as well.
Ticketed stock counts towards the International Energy Agency's 90-day oil-stockholding obligation and can also be used by Australia to contribute stock in the event of a declared collective action event. A collective action is declared by the International Energy Agency when there is an actual or potentially severe oil supply disruption in the global market. After an assessment of the situation, the International Energy Agency may need to coordinate a specific drawdown of stock from the emergency reserves of its members to help diminish associated economic damage.
The government is committed to ensuring it achieves value for money when it purchases tickets. Extensive engagement with the International Energy Agency and our international partners is underway to expand the ticket market to increase competitiveness. The measures in this bill demonstrate Australia's ongoing commitment to international oil security cooperation.
Debate adjourned.
Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017
First Reading
Bill and explanatory memorandum presented by Mr Fletcher.
Bill read a first time.
Second Reading
Mr FLETCHER (Bradfield—Minister for Urban Infrastructure) (09:38): I move:
That this bill be now read a second time.
Australian media organisations play a pivotal role in our society, reflecting and representing Australian culture, informing local communities and supporting our democratic processes. We have come to expect a lot of our media outlets, and the mastheads and networks we have grown up with are ingrained in our daily lives: at work, at home and on the go.
But these organisations are under real pressure. Broadcasters and publishers are operating in an increasingly challenging environment, with intense competition for audiences and advertising revenue from other media companies, including online and on-demand operators and foreign technology companies.
The regulations governing our media companies do not allow them to meet these challenges on a level playing field. Figuratively speaking, they are in a fight with one hand tied behind their backs. Reform is essential if these companies are to have a future, and the government is committed to implementing the necessary change.
The Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 contains a number of key elements of the government's Broadcasting and Content Reform Package, which was announced on 6 May 2017. The package represents an integrated set of reforms intended to modernise media regulation and help position the Australian media industry to deal with existing and future challenges more effectively.
The package has the unanimous support of all sectors of the media industry and they consider it to be vital to their longevity and viability. It upholds important policy objectives, including protecting children from exposure to gambling advertising, supporting the creation of high-quality Australian content and ensuring that the value of spectrum—an important public resource—is realised. However, it also removes regulatory barriers and burdens that achieve little from a public policy perspective and undermine the sustainability of Australian media organisations.
The bill is being introduced today alongside the Commercial Broadcasting (Tax) Bill 2017, which will introduce a tax on the use of broadcasting spectrum. The commencement of the tax bill will be contingent upon the enactment of this bill to ensure that these important reforms are implemented as a cohesive package.
A number of other measures forming part of the package will be implemented through their own legislation and processes, including further restrictions on gambling advertising in live sporting events across all platforms, a comprehensive review of Australian and children's content, and funding to support the broadcasting of underrepresented, niche and women's sports. They are nonetheless an important part of the government's overall reform agenda being put before the parliament today with this bill.
I now turn to the substantive measures in the bill.
Broadcasting licence fees are a relic of an era of analog media regulation. They were introduced when commercial broadcasters were in a privileged position to provide media content and there was limited demand for spectrum.
Today the opposite is true. Commercial television and radio broadcasters compete with a range of subscription and digital providers for audiences and advertising dollars.
Broadcasting revenues are flat or declining in real terms as online and on-demand services draw audiences away from traditional broadcast content. Simultaneously, costs are rising, and the capacity of broadcasters to contain further cost growth will be limited given the need to invest in programming and technology across multiple media platforms.
Licence fees and datacasting charges have no place in a modern regulatory framework for our media. The bill will repeal these unwarranted taxes, starting with the payments that would otherwise be due in December 2017. In their place, the government will introduce a transmitter licence tax for the spectrum in the broadcasting services bands to better reflect its use through the Commercial Broadcasting (Tax) Bill 2017.
The introduction of a transmitter licence tax and the abolition of broadcasting licence fees and datacasting charges will result in the vast majority of broadcasters paying considerably less in terms of their overall fee and tax burden. This relief will enable broadcasters to better compete with online competitors, invest in their businesses and produce Australian content.
However, a small number of broadcasters will face a net increase in overall charges. The government will support these broadcasters to ensure that they are no worse off by providing a five-year transitional support package.
The five-year transitional support package will provide financial relief up to 30 June 2022. It supports 19 individual commercial broadcasters to transition to the new spectrum tax model and help optimise their business structures and support growth over the medium to long term.
Funding for the transitional support package has been set aside in the budget. The proposed legislation identifies these particular broadcasters and establishes an annual entitlement to payment of a set amount subject to straightforward spend and reporting conditions and the company not having opted out. Identifying these broadcasters provides certainty of the support. The support package totals $4.6 million a year.
As a part of this package, the legislation will require the Australian Communications and Media Authority after 30 June 2019 to undertake a review and report on whether the new tax law should be repealed or amended on or before 1 July 2022. ACMA will consult on the review, enabling broadcasters to input into the development of future tax arrangements. The report would be tabled in parliament.
This review will be a valuable input into future spectrum taxing arrangements. In the meantime, the government's policy is that broadcast spectrum taxes remain stable for the next five years to provide certainty. The government acknowledges industry's desire for certainty beyond this period. While the broader spectrum management framework may change, this government does not expect large increases in taxes for broadcast spectrum.
As I mentioned previously, it is important for all of the government's media reforms to progress as a unified package. Only together can these reforms provide greater freedom and flexibility to the Australian media, so that they can configure their businesses in ways that support their ongoing viability. That is why this bill includes the changes to the media control and ownership rules that are currently before the Senate in the Broadcasting Legislation Amendment (Media Reform) Bill 2016.
Our media ownership laws are outdated and need to be reformed in order to unshackle Australia's media industry and enable it to respond to intensifying competition. The bill will repeal two control and ownership rules that no longer make sense in the digital media environment: the '75 per cent audience reach rule' and the 'two-out-of-three cross-media control rule'.
The '75 per cent audience reach' rule prohibits a person, either in their own right or as a director of one or more companies, from being in a position to exercise control of commercial television broadcasting licences whose combined reach exceeds 75 per cent of the Australian population. The rule is redundant and does little to support media diversity. Audiences across the country receive essentially the same broadcast content due to affiliation agreements between the metropolitan and regional networks, and all three metropolitan television broadcasters and the ABC stream some or all of their channels online to 100 per cent of the population. A merger between a metropolitan and regional commercial television network would effectively result in the replacement of one media 'voice' with another, with no diminution of diversity in these areas.
The bill also abolishes the 'two-out-of-three cross-media control rule' that prevents a person being in a position to exercise control of more than two of the three regulated traditional platforms in any one commercial radio licence area.
The rule has little impact in terms of supporting diversity in regional and remote markets as there is no associated newspaper operating in the majority of these areas, and many cross-media transactions would be prevented by the 'five-four rule'. This rule provides that at least five independent media groups must at all times be present in metropolitan commercial licence areas, and four such groups in regional commercial radio licence areas, and will not be altered by this bill. Any consolidation that may arise from the removal of the 'two-out-of-three rule' would therefore be limited to the metropolitan and larger regional markets, where diversity issues are unlikely to arise given the greater numbers of media outlets in operation.
It needs to be remembered that online media is no longer viewed as something distinct from the more traditional media platforms. Audiences in Australia and overseas now discover and access news from multiple sources across a range of media platforms, including online, social media, television, radio and newspapers. It is no longer appropriate that commercial television, commercial radio and associated newspapers be restricted by this rule when unregulated platforms are free to consolidate and adapt their businesses as much as they see fit, subject to wider considerations like competition rules.
Removing these rules will enable media companies to consolidate and build integrated media companies on a larger scale. This reality is widely acknowledged across the media industry and the bill has been developed following extensive consultations with these parties, including regional and metropolitan broadcasters, who strongly support the package.
The remaining media control rules: the five-four rule, and the one-to-a-market rule and two-to-a-market rules (which provide that a person, either in their own right or as a director of one or more companies, must not be in a position to exercise control of more than one commercial television licence in a licence area, or more than two commercial radio licences in a licence area) will be retained. Media transactions will also continue to be subject to scrutiny under the Competition and Consumer Act 2010 and the Foreign Acquisitions and Takeovers Act 1975.
These two ownership and control rules are working as handbrakes on the ability of Australian media companies to remain viable and competitive. A failure by the parliament to support their repeal would leave our local media companies hamstrung by redundant rules from a pre-internet era.
The bill also includes a range of measures to ensure the availability of local content in regional areas and strengthen links between local content and the communities it is broadcast to. In the absence of regulation, the high costs of local content production and the structural changes underway in the media more broadly will create incentives for broadcasters to achieve efficiencies, placing pressure on the continued supply of local programming at current levels.
Currently, the Broadcasting Services Act 1992 requires regional commercial television licensees in certain types of markets to provide local content—termed 'material of local significance' in the Act—within specified areas. Under the current arrangements, regional commercial television licensees in aggregated markets and Tasmania are required to provide approximately 120 points of material of local significance per week to local areas within the licence areas.
Material of local significance is material that is broadcast to a local area and relates directly to either the local area or the licence area. The aggregated markets comprise northern New South Wales, southern New South Wales, regional Victoria and regional Queensland.
The bill will extend and increase local content obligations for regional commercial television licensees where there is a 'trigger event'. The new obligations will apply to regional commercial television broadcasting licences which, as a result of a change in control, become part of a group of commercial television broadcasting licences whose combined licence area populations exceed 75 per cent of the Australian population. The additional local content obligations will commence six months after the bill receives royal assent.
The requirement for the licensee to be part of a commercial television group that reaches over 75 per cent of the population ensures that the additional local content obligations are only 'triggered' after the licensee is in a position to benefit from the additional scale and efficiency that the media reforms will allow.
Under the Broadcasting Services Act and Broadcasting Services (Additional Television Licence Condition) Notice 2014, local programming targets are currently expressed as 'points' where each minute of material of local significance is worth one point, and each minute of news that relates directly to the local area is worth two points.
Where a trigger event takes place, the bill will:
increase local programming requirements for regional commercial television licensees in aggregated markets and Tasmania that are subject to a trigger event by 30 points per week;
introduce new local programming requirements for regional commercial television licences in non-aggregated markets that are subject to a trigger event. The bill will require licensees to provide approximately 60 points of material of local significance per week to each local area; and
introduce an incentive for local news to be filmed in the local area. To achieve this, the bill introduces a new three point category under the local programming points system for licences affected by a trigger event.
The additional obligations are aimed at ensuring that there is a local content obligation in nearly all regional licence areas following a change in control, including those where there is none currently. Where there is no trigger event, existing local content obligations for aggregated markets will continue to apply.
Anti-siphoning
The effects of Australia's outdated legislative framework for media extend to the regulation of broadcasting through the anti-siphoning scheme. The anti-siphoning scheme was established in 1994, and regulates the acquisition of broadcast rights for sporting and other events of cultural significance or national importance.
It seeks to ensure that events on the 'anti-siphoning list' remain freely available to Australian viewers. While the government continues to support the principle that nationally significant events should be available on free-to-air television, the anti-siphoning scheme is outdated and needs reform to better reflect today's media environment.
The bills will remove the 'multichannelling rule', which prevents free-to-air broadcasters from televising events first, or exclusively, on their digital multichannels. The rationale behind the introduction of the rule in 2006 was to prevent consumers who had yet to make the switch to digital television, or those living in areas where digital television was yet to be rolled out, from being disenfranchised by events being televised on digital-only channels which they were unable to receive.
With the completion of digital switchover in 2013, this rule is now redundant. Repealing the multichannelling rule will provide flexibility for free-to-air television broadcasters to optimise television coverage of listed events to the benefit of audiences across the country.
The period from which events are automatically removed—or delisted—from the anti-siphoning list will be extended from 12 to 26 weeks. This will ensure the automatic delisting period is better aligned with the commercial reality of rights acquisition, where the bulk of major sports rights contracts are settled between six months and two years from the commencement of the first event to be played as part of a competition or tournament.
This will still ensure that free-to-air broadcasters retain the opportunity to acquire sports rights first, while providing greater opportunities for subscription broadcasters to acquire rights where free-to-air broadcasters do not intend to do so.
The bill will also rationalise the number of events contained in the current anti-siphoning list through amendments to the Broadcasting Services (Events) Notice (No. 1) 2010.
The current list is excessively long, encompassing between 1,200 and 1,300 events per year. The bills will remove those events where the history of rights acquisition by broadcasters and audience viewing patterns no longer warrant their inclusion on the list.
Most of those events coming off the list are those which are no longer broadcast on free-to-air television, garner small audiences, or are events where the relationship to Australia is remote or non-existent, such as the FA Cup Final or the US Masters golf.
Iconic events such as the Olympics, the Commonwealth Games, all AFL and NRL Premiership matches (including finals), the Bledisloe Cup, international cricket matches played in Australia along with Ashes test cricket matches, the Australian Formula One Grand Prix, the Australian Open tennis, the Melbourne Cup, the semifinals and finals of the Netball World Cup involving the senior Australian representative team and the Bathurst 1000, will remain on the list.
Importantly, this does not mean that events that are not on the list will necessarily end up on subscription television. There are currently events that are broadcast on free-to-air television that are not, and have never been, on the anti-siphoning list.
The suite of changes to the anti-siphoning scheme will enable it to operate more effectively in a digital media environment while ensuring that events of national and cultural significance continue to be available on free-to-air television.
As I have mentioned, the Australian media industry is at a crossroad. It is incumbent upon the parliament to ensure the industry is not tethered to an outdated analogue regulatory framework that no longer serves a policy purpose and does nothing other than hold this important Australian industry back.
The measures contained in this bill represent a comprehensive set of reforms. They give our traditional media operators the flexibility to grow and adapt in the changing media landscape, invest in their businesses and in Australian content, and better compete with online providers.
These reforms have the unanimous support of industry and are the end result of extensive consultation with the sector. It is a package that is unabashedly and unashamedly pro-Australian media.
The government has done its part by taking media reform out of the long grass and bringing forward a comprehensive and holistic package. The industry has done its part by engaging constructively and in good faith to help shape this package. Each part of the industry has shown leadership by putting their own legitimate commercial self-interest to one side to come together in recognition that this package as a whole delivers substantial and important benefits to the entire sector.
It is now time for the parliament to do its part: to put an Australian industry and Australian jobs above partisanship and politics; to secure a strong and viable future for an industry that not only makes an important economic and cultural contribution but serves as a vital underpinning of our democracy; and to seize this historic opportunity to deliver comprehensive and holistic reform for the Australian media industry to ensure that those strong Australian voices continue.
I commend the bill to the chamber.
Debate adjourned.
Commercial Broadcasting (Tax) Bill 2017
First Reading
Bill and explanatory memorandum presented by Mr Fletcher.
Bill read a first time.
Second Reading
Mr FLETCHER (Bradfield—Minister for Urban Infrastructure) (10:01): I move:
That this bill be now read a second time.
The Commercial Broadcasting (Tax) Bill 2017 implements a key component of the government's Broadcast and Content Reform Package—the introduction of tax on the use of broadcasting spectrum. Along with the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 (the Broadcasting Reform Bill), this bill will help to modernise media regulation and position the Australian media industry to deal with existing and future challenges more effectively.
With the abolition of broadcasting licence fees and datacasting charges contained in the Broadcasting Reform Bill, the new taxation arrangements in this bill will provide significant overall fee relief for broadcasters as part of an integrated package of reforms. This relief will enable broadcasters to better compete with online competitors, invest in their businesses and produce Australian content.
The bill recognises that spectrum is a valuable resource, essential to a digitally networked economy and a critical enabler of services. Like all scarce public resources, it needs to be managed and its commercial value recognised. The bill balances industry concern about remaining competitive, the obligations placed on them by government, and the need to value spectrum appropriately. These tax arrangements complement the longer term reform to the spectrum management framework the government committed to in the 2015 Spectrum Review.
Importantly, the government's Broadcast and Content Reform package—including the new spectrum tax—has the unanimous support of all sectors of the media industry. To ensure these important reforms are implemented as a cohesive package, the commencement of this bill will be contingent upon the enactment of the Broadcasting Reform Bill.
I now turn to the substantive measures in this bill.
Spectrum tax
The new tax structure set out in this bill is intended to provide certainty to broadcasters while the government implements longer-term reform to the spectrum management framework. The bill is intended to implement key reforms in the overall media package. As such, the tax, as proposed under this bill, would come into legal operation on 1 July 2017, but only if the Broadcasting Reform Bill is also passed and receives the royal assent. In the event the bill is not enacted by 1 July 2017, the tax will come into effect from that date on a retrospective basis. The retrospectivity of the tax in that event ensures that it is payable from the commencement of the 2017-18 financial year and is consistent with the removal of the existing apparatus tax imposed on broadcasters and the abolition of broadcasting licence fees and datacasting charges, as proposed by the Broadcasting Reform Bill. This is intended to provide for a clean switchover from the old fee and tax arrangements to the new tax structure.
The bill sets out upper caps for the tax which are based on classes of transmitters, and also includes a ministerial determination power to set lower tax amounts and provide for rebates.
The new spectrum tax for television and radio is expected to raise a total of around $40 million in revenue per annum. Unlike the antiquated broadcasting licence fees, the spectrum tax is not based on revenue. Rather, the amount takes account of the power level of the transmitter, the particular band of spectrum used and the amount of spectrum used. The use of parameters to determine a tax is a similar approach to that which applies to a number of other spectrum users, such as land mobile operators.
The tax methodology also supports regional broadcasters with the use of the power parameter. Generally, lower powered transmitters are situated in regional Australia, as distinct from high powered transmitters in metropolitan areas. Given that there is less demand for spectrum in regional Australia, use of this spectrum attracts a significantly lower fee. For example, a broadcaster in regional Queensland would pay 99 per cent lower taxes for their use of the same amount of spectrum than a broadcaster in Brisbane.
Overall, the vast majority of broadcasters will pay considerably less in spectrum tax than they currently pay in broadcasting licence fees and charges. This fee relief will enable broadcasters to better manage their business operations and compete in this rapidly evolving market.
However, a small number of broadcasters will face a net increase in overall charges. Through the broadcasting reform bill, the government will support these broadcasters to ensure that they are no worse off by providing a five-year transitional support package ending 30 June 2022.
This bill is an essential plank in the government's overall media reform package, unabashedly designed to support the Australian media industry. The government has also kept its eye on the long game, making sure spectrum is recognised as a valuable resource. As technology advances we will no doubt draw more heavily on this resource.
Changing taxation arrangements is rarely an easy path, yet industry has done its part by engaging constructively and in good faith to help shape this package. These reforms have the unanimous support of industry and are the end result of extensive consultation with the sector. The package provides certainty for five years on the taxation arrangements, and beyond that this government does not expect large increases in taxes for broadcast spectrum.
Together with the broadcasting reform bill, this bill will secure a strong and viable future for the media industry in Australia. Parliament has before it an historic opportunity to deliver comprehensive and holistic reform for the Australian media to ensure that strong Australian voices continue to be heard.
I commend this bill to the chamber.
Debate adjourned.
Australian Citizenship Legislation Amendment (Strengthening the Requirements for Australian Citizenship and Other Measures) Bill 2017
First Reading
Bill and explanatory memorandum presented by Mr Dutton.
Bill read a first time.
Second Reading
Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (10:08): I move:
That this bill be now read a second time.
The Australian Citizenship Legislation Amendment (Strengthening the Requirements for Australian Citizenship and Other Measures) Bill 2017implements the commitment this government made on 20 April 2017 to strengthen the requirements for Australian citizenship. It also incorporates a number of integrity measures introduced into the last parliament.
Australian citizenship is an extraordinary privilege. Pathways to citizenship give new migrants the opportunity to be full and active members and participants in Australian society.
Citizenship was first defined in Australian law in the Nationality and Citizenship Act 1948 and came into force on Australia Day 1949. Since then, more than five million people have chosen to become Australian citizens.
Australians come from every culture, every race, every faith and every nation. Together we have built a modern and prosperous Australia. The success of our nation is based on our shared values, rights and responsibilities.
The measures contained in this bill will help us build on this success. It will ensure that we continue to welcome new Australians committed to making a positive contribution through the many opportunities our country affords.
As a government, we are committed to maintaining strong public confidence and support for our migration and citizenship programs—through an assurance of integrity to the Australian public.
We are proud of our heritage and our generosity as a nation. We look forward to continuing to welcome new migrants—irrespective of race, of religion, of nationality or of ethnic origin—who embrace our Australian laws and our values and who seek to contribute to, rather than undermine, our society.
The measures in this bill, commencing from 20 April 2017, are the government's response to the 2015 National consultation on citizenship: your right, your responsibility, which indicated strong community support for strengthening the test for Australian citizenship. The Australian community expects that aspiring citizens demonstrate their allegiance to our country, their commitment to live in accordance with Australian laws and values, and be willing to integrate into and become contributing members of the Australian community.
In accordance with the announced measures, there will be an increase in the general residence requirement. An applicant for Australian citizenship will need to demonstrate a minimum of four years of permanent residence immediately prior to their application for citizenship, with a maximum of 12 months outside of Australia over the period of that time. This represents a change from the current requirement of a minimum of 12 months as a permanent resident. Strengthening the residency requirement is intended to support integration and facilitate a more thorough evaluation of a person's commitment to Australia, our values and adherence to our laws. It also brings Australia more into line with the general requirements of other nations.
National c onsultation found:
A residence requirement in citizenship law is an objective measure of a person's association with Australia. It also serves as a probationary period, so that a person's word and deeds across this time can be considered should the person apply for Australian citizenship. Increasing the value and integrity of citizenship by changing the residence requirement from four years lawful stay to four years permanent residence is appropriate …
The government is also introducing a requirement to have competent English language through listening, speaking, reading and writing skills.
English language is essential for economic participation and social cohesion. The Productivity Commission in 2016 highlighted the importance of English language proficiency for integration and settlement outcomes. There is also strong public support to ensure that aspiring citizens are fully able to participate in Australian life, by speaking English, our national language.
Aspiring citizens are currently required to possess a level of 'basic' English. This is indirectly assessed when an applicant sits the citizenship test. Aspiring citizens will now be required to undertake a separate up-front English language test with an accredited provider and achieve a level of 'competent'. There will be exemptions, such as for applicants over 60 years of age or under 16 years of age at the time they applied for citizenship or those with an enduring or permanent mental or physical incapacity. There will be other exemptions from testing, as is currently the case for skilled migration assessments, such as for citizens of the United Kingdom, the Republic of Ireland, Canada, the United States of America or New Zealand who hold a valid passport or for applicants who have undertaken specified English language studies at a recognised Australian education institution.
Applicants will be required to sign an Australian Values Statement in order to make a valid application for citizenship. It will require applicants to make an undertaking to integrate into and contribute to the Australian community. The current Australian Values Statement includes an understanding of:
respect for the freedom and dignity of the individual;
freedom of religion;
commitment to the rule of law;
parliamentary democracy;
equality of men and women;
equality of opportunity for individuals, regardless of their race, religion or ethnic background; and
English language, as the national language, is an important unifying element of Australian society.
Applicants will be required to demonstrate their integration into the Australian community in accordance with Australian values.
For example, this may include:
abiding by Australian laws;
attaining competent English;
ensuring eligible children attend school;
seeking employment rather than relying on welfare where there is capacity to do so; or
being involved with community groups.
The bill provides that the minister may determine changes to the text and requirements in relation to the Australian Values Statement by legislative instrument. Values based questions will also be added to the citizenship test.
The Department of Immigration and Border Protection will assess this information based on documents provided as part of an aspiring citizen's application and may also assess this at interview.
In addition to existing police checks which are undertaken as part of an application for citizenship, an applicant will also be assessed for specified conduct that is inconsistent with Australian values—such as domestic or family violence and criminality, including female genital mutilation and involvement in gangs and organised crime.
The pledge will be extended to all streams of citizenship by application, including citizenship by descent, adoption and resumption. Applicants over 16 years of age will need to make the pledge before they can become a citizen. Applicants for citizenship by conferral on the grounds of being born in Papua, born to a former citizen or under statelessness provisions will no longer be exempt from making the pledge. Exemptions will include permanent or enduring physical or mental incapacity.
The pledge will also refer to allegiance to Australia. The government has separately passed legislation to provide for the loss of citizenship of dual nationals who betray their allegiance through involvement in terrorist related activity.
Consistent with measures introduced in the last parliament by the former minister, the bill contains additional measures to improve the integrity of the citizenship program.
Currently, only aspiring citizens aged 18 years and over are required to meet the 'good character' requirement—which involves criminal history checks. There is a small minority of people under 18 who clearly do not meet community expectations of good character and have been involved in serious or violent crime such as gang violence. The bill amends these provisions to require all applicants, including those under 18, to be of good character.
The bill also amends the offence provisions to reflect modern sentencing practices, including where a person is subject to a court order for home detention or where they have not been sentenced to prison but are nonetheless under obligations to a court.
The bill provides that approval must be cancelled if the minister is no longer satisfied of the applicant's identity or if they have become a risk to national security. The minister may also cancel approval if satisfied that the person no longer meets other eligibility requirements. The bill extends the maximum period of time where the minister can delay an applicant making the pledge of allegiance from 12 months to two years to better align with time frames of some complex investigations.
The bill provides for the revocation of citizenship where a person became a citizen as a result of fraud or misrepresentation. The minister must be satisfied that it would be contrary to the public interest for the person to remain a citizen. While law enforcement agencies, for a range of reasons, may not be in a position to prosecute all forms of fraud and misrepresentation in the citizenship process, the government is committed to providing the highest levels of integrity where possible. Each person being considered for revocation of their Australian citizenship would be given natural justice before the minister makes a decision. A decision to revoke citizenship on these grounds would of course be open to judicial review.
Currently the act provides that a person is deemed never to have been an Australian citizen where they attained citizenship by descent but were later found not to have had an Australian parent at the time of birth. There have been difficult cases in recent times in relation to this. There have been people who were registered as Australian citizens by descent and thought they were Australian all their lives but have been found later in life not to have been eligible in the first place and consequently deemed to have never been a citizen.
The proposed amendments repeal the operation of law provision and insert a discretionary power. This will allow the circumstances of a particular case to be taken into account when deciding if citizenship by descent should be revoked.
Currently under the act children acquire citizenship automatically if they are born in Australia to an Australian citizen or permanent resident parent or if they are ordinarily resident in Australia until their 10th birthday. The bill specifies that the automatic acquisition of citizenship on a person's 10th birthday applies to those persons who have maintained lawful residence in Australia throughout the 10 years, including maintaining a right to return if they travel outside Australia during those years. These amendments will not affect access to citizenship by children born in Australia to New Zealand citizens or children who are stateless. The changes also remove the automatic acquisition of citizenship on the 10th birthday of a child in Australia born to a parent with diplomatic or consular privileges and immunities.
The provision giving citizenship to children found abandoned in Australia is also amended to be consistent with the original policy intent, which is to reflect Australia's international obligations under the 1961 Convention on the Reduction of Statelessness.
The bill also amends the definition of 'spouse' and 'de facto partner' to be consistent with the Migration Act and to reflect the policy position that the relationship between the applicant and their Australian citizen spouse or partner must be genuine and continuing.
The majority of applicants for citizenship have come to Australia originally on a visa in accordance with the Migration Act. Personal information is collected through the visa process and is relevant when the person applies for citizenship. Likewise, personal information collected about a person under the Citizenship Act can be relevant if the Department is considering whether to cancel a person's visa after a citizenship application has been refused. The bill provides that personal information collected under one act and associated regulations may be used and disclosed for the purposes of the other.
We have seen in recent times a number of Administrative Appeals Tribunal (AAT) migration decisions that are outside community standards. This has also occurred in relation to citizenship decisions. Specifically, the AAT has found that people were of good character despite having been convicted of child sexual offences, manslaughter, people smuggling or domestic violence.
The bill seeks to better align the powers in the Citizenship Actwith the Migration Act to remedy decisions that may be made outside of community standards. The provisions will allow the minister to personally set aside certain decisions of the AAT if it is in the public interest to do so. Consistent with the Migration Act, personal decisions of the minister will not be subject to merits review. However, such decisions would still be subject to judicial review in the Federal Court or High Court. The new provision does not propose to exclude or limit judicial review.
The bill makes a range of other and consequential amendments to support the integrity of the citizenship program, and the measures in this bill enhance the institution of citizenship.
As many have rightly acknowledged, we are one of the most successful migrant nations in the world today.
We have prospered and forged a secure and harmonious society. This has been built by people of every possible background, united by common values that include a commitment to the rule of law; freedom—including of religion and speech; support for Parliamentary democracy; equality of men and women; equality of opportunity for individuals; community involvement; and the pursuit of opportunity through education, employment and entrepreneurship.
We should never take our success for granted.
This bill reinforces the integrity of our citizenship program. This will help maintain strong public support for migration and the value of Australian citizenship in what is an increasingly challenging national security environment and complex global security situation.
The measures in this bill will ensure we continue to welcome people committed to the success of our great nation--enriching our society and building our economic prosperity.
I commend the bill to the House.
Debate adjourned.
COMMITTEES
Corporations and Financial Services Committee
Reporting Date
The DEPUTY SPEAKER ( Mr Rob Mitchell ) (10:23): I have received a message from the Senate informing the House of a resolution agreed to by the Senate extending the time of presentation of the report of the Parliamentary Joint Committee on Corporations and Financial Services on whistleblower protections to 17 August 2017.
Joint Standing Committee on Treaties
Membership
The DEPUTY SPEAKER ( Mr Rob Mitchell ) (10:24): I have received a message from the Senate informing the House that Senator Hanson-Young has been discharged from the Joint Standing Committee on Treaties, and Senator Ludlam has been appointed a member of the committee.
BILLS
Therapeutic Goods Amendment (2016 Measures No. 1) Bill 2016
Returned from Senate
Message received from the Senate returning the bill without amendment or request.
Health Insurance Amendment (National Rural Health Commissioner) Bill 2017
Consideration of Senate Message
Bill returned from the Senate with amendments.
Ordered that the amendments be considered at a later hour this day.
Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017
Second Reading
Consideration resumed of the motion:
That this bill be now read a second time.
to which the following amendment was moved:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House condemns the Government for giving a tax increase to low and middle income families, and giving a tax cut to millionaires".
Ms RYAN (Lalor—Opposition Whip) (10:26): I rise to agree to the amendment moved by the member for Fenner. In doing so I want to welcome the indexation of the threshold below which hardworking people in the electorate of Lalor do not pay the Medicare levy or Medicare levy surcharge. These changes will mean that people will not have to pay the Medicare levy before they have to pay income tax, and the Medicare levy surcharge will be increased in line with movements in CPI—both of which are good things.
It is a shame, however, that this government's only healthcare legislation coming before us worth celebrating is process legislation to ensure that the levies that are currently in place are not charged to those who are not paying income tax, and the surcharge is going to go up with CPI when people are required to pay it. It is a reality in this place that our world-class universal healthcare system, which this legislation seeks to amend, is under attack by this government. Bills like this process bill should not blind us to the reality that the government's Medicare guarantee, which we have heard so much about, is not worth the paper it is written on.
The debate on the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017 provides an opportunity to highlight the attacks on Medicare that we have seen since the election of the LNP government in 2013. Those attacks began with the former Minister for Health, Mr Dutton. His first attack was the GP tax. The former minister twice tried to attack Medicare by imposing a charge to be paid to doctors by members of the public when they were seeking to see a doctor. We lived through the AMA's responsible airing of their concerns around that GP tax and what it would mean to the system, to health provision and to access to health services for our communities, particularly communities like mine where bulk-billing rates were some of the highest in the country when this process began in 2013.
We saw a committed campaign from doctors around the country who responsibly aired their concerns. They were concerned that this would mean people would stop going to see the doctor. It was a huge issue in my electorate and in a lot of other electorates in the country, where people felt that this cost would mean that families would have to make choices between kids going on excursions, playing sport or going to see the doctor, and that, while the government would have made some savings by putting this impost on the public, the long-term costs to the health system would have skyrocketed.
This government, since coming to office, has shown its absolute commitment to undermining our universal healthcare system. It has consistently come up with policy ideas that seek to exclude low-income and middle-income families and the most disadvantaged from accessing our universal health care. Those policies only highlight the differences between those opposite and Labor in terms of support for Medicare, because, as we all know, the Labor Party created Medicare and the Labor Party will stand to defend Medicare at every turn, as we have done since 2013—since I joined this parliament.
The Turnbull government wants to slug everyone with a tax hike, and they come fast and furious into this chamber under many different guises. In health, under the Turnbull government's plan, someone earning $55,000 will pay $275 more tax with a levy increase that those opposite wish to put across the entire country. Someone earning $80,000 will pay $400 more on their Medicare levy. Under Labor's fair alternative, 80 per cent of Australians would be protected from a tax increase on the levy that the government would like to introduce into this parliament, and the budget would be $4.5 billion better off over the next decade. It says everything about this government's priorities that it is giving a $65 billion tax cut to millionaires and multinationals but is looking to increase taxes for ordinary workers. It is looking to give a tax cut to millionaires, while working-class Australians—middle-income Australians—will be asked to increase their tax burden through a new Medicare levy. This means that the difference could not be sharper. The Labor government will protect 10 million working Australians—many of whom are in my electorate.
The Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017 also works to remind us of the Medicare freeze that currently we are supposedly lifting, when in fact it is being pushed off for another two to three years, depending on the specific details. Those things, again, are putting pressure on our universal healthcare system. So, although we welcome the changes that this bill introduces, we are concerned about further changes that this government wants to make in the health space. I am reminded of my local GPs and the conversations that I have had with them about the importance of access to universal health—about the importance of ensuring that the most vulnerable can access health care and can see a GP. To do that, we need to ensure universal access.
While on the one hand this legislation ensures access for the most vulnerable in my electorate without increases to a levy, on the other hand we know what is coming. We know that there is going to be an increase. Those who are eligible to pay that levy will be hit with a hike in that levy. We know that the cost of seeing a doctor, if you are not in a bulk-billing situation, has gone up under this government. Having this opportunity to speak about health is very important, particularly for my electorate. People are in constant contact with me about the local health services. When they talk to their doctors, they are fearful that not unfreezing the Medicare rebates will put the business models of local GPs under particular pressure. They are worried that there will come a time when their bulk-billing GP will choose to change their business model to take cash and to put on charges, like charges we have seen across the country. In fact, out-of-pocket costs for non-referred GP attendances have gone up under this government across the last four years. We have seen the data on those things. In Victoria, the cost to see a doctor has gone up an average of $8. Of course, we heard from GPs what they thought an $8 impost would mean for low- and middle-income families and their ability to access health. So, in an electorate like mine, people are concerned about how long their local doctors will be able to continue bulk billing until they have to change their practice and put in a cost and follow the bulk of Australian doctors into a situation where universal health care is no longer something that everybody can take for granted.
On the other side of the health debate, I have conversations with people in my electorate on the cost of their health insurance. We have seen that private health insurance is the most expensive cost to 27 per cent of households, and this goes to the whole question of this government's handling of the health portfolio, how we are going to ensure universal access and how we are going to ensure that those families who choose to have private health insurance are not being locked out of the health insurance market system and are getting value for the money that they are spending on that private health insurance. I have sat with people in my electorate who have told me that they thought they were covered for things only to find that they had enormous out-of-pocket expenses—when they had to have certain medical procedures or tests done, they were not being covered by their private health insurance.
The whole area of health under this government is a concern—it is certainly a concern in my electorate. This process piece of legislation will go some way to protecting those in my community who have an individual income threshold that means that they do not pay income tax and therefore will not face the Medicare levy. It gives increases where that levy would kick in, and the individual income threshold for 2016-17 is $21,655, whereas in 2015-16 that income was $21,335. That will make it easier for those individuals in my electorate who are under that rate. The family income threshold for 2016-17 will now be $36,541, going up from $36,001. I am sure there are families in my electorate who will welcome that. The other side of that is that the income threshold for families eligible for the SAPTO for the 2016-17 income year will be at $47,670, up from $46,966.
Those things will be welcomed in the electorate of Lalor but there are still ongoing concerns in my electorate about this government's handling of the health portfolio, and their intentions have been made clear by their own actions in this parliament since 2013. That continues to be a worry for the people in my electorate—they are continually concerned that their neighbours, or their family, may be thinking twice about taking a sick relative or child to see a GP because they are worried about this government's intent, about this government's track record in wanting to undermine Medicare, which of course is at the core of our health system in this country.
Mr TEHAN (Wannon—Minister for Veterans' Affairs, Minister Assisting the Prime Minister for the Centenary of ANZAC, Minister Assisting the Prime Minister for Cyber Security and Minister for Defence Personnel) (10:38): I thank those members who have contributed to this debate. The Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017 amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 to increase the Medicare levy low-income thresholds for singles, families and seniors and pensioners in line with increases in the consumer price index. The bill provides certainty that low-income earners will continue to receive relief from the Medicare levy through the low-income thresholds. The bill demonstrates that the Medicare levy is already designed to ensure that vulnerable people in our community are in a position to receive relief from how the Medicare levy is imposed. This is a fair way to give the guarantee on Medicare, and it is a fair way to give the guarantee of fully funding the National Disability Insurance Scheme.
These changes will ensure that low-income households who do not pay the Medicare levy in the 2015-16 income year will generally continue to be exempt in the 2016-17 income year if their income has risen in line with or by less than the consumer price index. For individual taxpayers, no Medicare levy will be payable for those with income up to $21,655 in 2016-17. Single seniors and pensioners with no dependants who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their income is up to $34,244 in 2016-17. Couples and families not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy for 2016-17 if their combined income is up to $36,541 plus $3,356 for each dependent child or student. Couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy for 2016-17 if their combined income is up to $47,670 plus $3,356 for each dependent child or student. The Medicare levy phase is at 10c for each dollar in excess of the relevant low-income threshold until it is paid in full. Around an estimated one million individuals will benefit in 2016-17 from this bill from the increase in the low-income thresholds, including individuals who receive a concession as part of a family. The amendments to the Medicare levy low-income thresholds apply from the 2016-17 year of income.
I would also like to take the opportunity to correct the record in relation to two examples used in the second reading speech for this bill. The second reading speech stated that someone currently earning $80,000 pays $1,699 a year in Medicare levy. The actual amount is $1,600. The speech also stated that someone on a taxable income of $250,000 a year already pays $4,800 in Medicare levy. The actual taxable income is $240,000.
I trust that all members of this House not only will support this bill but also will respond positively to the forthcoming bill to help ensure the Commonwealth's National Disability Insurance Scheme contribution is fully funded. I commend this bill to the House.
The DEPUTY SPEAKER ( Mr Rob Mitchell ): The original question was that this bill be now read a second time. To this the honourable member for Fenner has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the amendment be agreed to.
Question negatived.
Original question agreed to.
Bill read a second time.
Third Reading
Mr TEHAN (Wannon—Minister for Veterans' Affairs, Minister Assisting the Prime Minister for the Centenary of ANZAC, Minister Assisting the Prime Minister for Cyber Security and Minister for Defence Personnel) (10:43): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Treasury Laws Amendment (2017 Measures No. 2) Bill 2017
Second Reading
Consideration resumed of the motion:
That this bill be now read a second time.
Dr LEIGH (Fenner) (10:44): The Treasury Laws Amendment (2017 Measures No. 2) Bill 2017 makes changes to the measures enacted through the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016. The changes are technical in nature and aim to support the integrity of last year's superannuation measures and to ensure the law operates as intended. As such, Labor will be supporting the bill.
The changes include amendments, first, to ensure that self-managed superannuation fund members cannot circumvent the use of the new cap on tax-free retirement phase assets through the use of limited recourse borrowing arrangements; second, to ensure people who receive compensation orders as a result of suffering a serious or catastrophic injury do not have their structured settlement or personal injury order, or the earnings on those, counted towards the transfer balance cap, regardless of when the contribution is made; and, third, to clarify arrangements in relation to the transition to retirement income streams. We understand that many of the changes in the bill are to address issues raised by the superannuation sector following the changes introduced last year and that they have support within the sector.
The bill also amends the Bankruptcy Act 1966 and the Corporations Act 2001 to address two issues arising from the Insolvency Law Reform Bill 2015, which the parliament passed with Labor's support in early 2016. Those two issues are, first, to allow a single approval from creditors to cover a profit or advantage received by an external administrator or trustee, even when they are received by multiple related entities, where currently an approval would be needed for each of the relevant entities; and, second, to require annual and end-of-control returns by controllers to continue to be included on ASIC's public register. Under the Insolvency Law Reform Bill 2015, this requirement would have ceased on 1 September 2017. This bill reinstates this requirement, as the Fair Entitlements Guarantee Recovery Program relies on access to controller records to determine whether controllers have complied with their statutory obligations. These changes to the Corporations Act and the Bankruptcy Act will reduce legal complexity, increase certainty for insolvency practitioners and remove unnecessary costs from insolvency proceedings. The amendments also assist the Fair Entitlements Guarantee Recovery Program in its work reclaiming funds paid out under the program.
While this bill is technical in nature, it is worth noting that its effect is to clean up the mess of the government rushing its superannuation changes through last year. While Labor has had a clear and considered position on superannuation changes, the government has flipped and flopped, at one point arguing that no changes to our superannuation tax concessions system were required, then ultimately giving in to community pressure to adopt the view—which had long been taken by Labor—that our superannuation tax concessions are not fair and not sustainable.
When we look at the poor economic record of the Howard-Costello government, we see one of the reasons for that record was the structural deficit, which the IMF has noted, that was run in the later period of the Howard-Costello government. That structural deficit was in part due to overgenerous and unsustainable superannuation tax concessions given disproportionately to high-income Australians. The decisions made by John Howard and Peter Costello were fiscally reckless and utterly unsustainable, and it is those reckless decisions by a previous coalition government which this parliament has had to wind back.
When those opposite talk about the extraordinary economic achievements of the Howard-Costello era, they frequently refer to the razor-thin surpluses that were run in those years. But when you look at the structural budget position, it was significantly worse. As the IMF has noted, this was a period of particularly poor financial management. Reining in those superannuation tax breaks required significant public debate. Of course, somebody who enjoys a tax concession is often reluctant to give it up. But it simply was not sustainable to continue in a situation in which our superannuation tax breaks were so skewed to the top of the distribution.
The principal purpose of superannuation must be to reduce the chances that Australians end up on the pension. The benefit to the community of building a large pool of national savings when the owners of those savings are well ahead of pension eligibility stage is fairly limited. Superannuation should not be used to try somehow to address housing affordability, as the government has done in this budget through the notion that young Australians, if they want to get into the housing market, should have to raid their superannuation. Superannuation needs to be about maintaining the sustainability of the pension. Superannuation tax breaks going disproportionately to the top end are not in accord with fundamental principle of superannuation. So we are pleased that the government has steadily come towards Labor's view on superannuation, but because so much this was done in a hurry and done without consultation, because the government's proposed lifetime cap on non-concessional contributions raised significant concerns in the community about retrospective changes, then the government got it wrong. That is why we are debating this bill today—because it is cleaning up the mess of the superannuation changes last year.
In substantive terms, Labor has called for additional changes to improve the fairness of our superannuation system. Bill Shorten spoke to the National Press Club last August—
The DEPUTY SPEAKER ( Mr Rob Mitchell ): The member for Fenner can refer to members by their correct titles.
Dr LEIGH: I thank you for that wise correction, Mr Deputy Speaker. The Leader of the Opposition spoke to the National Press Club last August, making clear that Labor will not tie the $500,000 lifetime cap back to 2007, but our changes would apply from budget night. That means that Australians who had invested in good faith based on clear rules would not be punished after the fact, nor would they have to go back through the laborious process of piecing together financial decisions. He also said that Labor would lower the threshold for high income superannuation contributions from $250,000 to $200,000. Those measures, at the time the Leader of the Opposition addressed the National Press Club in August last year, were costed by the Parliamentary Budget Office to improve the budget by $238 million over the forward estimates and by $4.4 billion over the decade, delivering more budget savings but no retrospectivity.
That again is an indication of Labor's strong support for sensible superannuation reforms. Labor engages with the community. We consult carefully and we do not put forward the sort of rushed and haphazard changes that the government has done, which have led to this cleaning-up bill that the House is debating today.
Mr KEOGH (Burt) (10:52): As the member for Fenner has just explained, Labor will be supporting the Treasury Laws Amendment (2017 Measures No. 2) Bill 2017. It is largely technical in nature. The clear thing that comes from this legislation is that the reason it is here today is to clean up the mess that this government had already made last year when rushing through its changes to superannuation law. The government has clearly been a disaster when it comes to superannuation. In last year's budget are the government announced its planned changes to superannuation. 'Planned' is probably a bit euphemistic here. They included tax breaks which we were told would reduce reliance on the age pension. It was, in a way, another example of what has been dubbed 'Labor light'—a good Labor idea, but under this government it did not go far enough and was badly implemented.
However, half of those superannuation tax breaks would still go to the top 20 per cent. The government's Financial System Inquiry found they were unlikely to be relying on the age pension. So the government's backbench and its donor base opposed the measures put forward, such as a $1.6 million transfer cap, the $500,000 lifetime non-concessional cap and the $25,000 concessional cap that they believed would have had adverse effects. These changes were announced in the 2016 budget with no consultation. There was no prior conversation about what government intended to change and how. Implementing these proposed changes was done in a hurry. Even the superannuation industry had serious concerns that the number of people affected by the transition to retirement changes could be five times larger than the estimates that the government had given. The coalition faced the consequences of bringing forward proposed changes to people's retirement savings without having done any proper consultation whatsoever.
After months of internal division—it sounds pretty similar to now—and debate the government eventually had to revise its package. Lo and behold—the damage had already been done, and confidence in the superannuation system had been undermined because of the way this government had handled changes it wanted to make to superannuation. In November last year the government did eventually pass a watered-down version of its proposed changes. After its own budget a significant backlash was heard, not just from a broad cross-section of Australia, but from its own base as well. So the government has been especially cautious now in its treatment of superannuation. But, of course, having lacked a consultative process in bringing forth changes to superannuation and rushing through legislation to try to make it happen, once its party room had sort of agreed on where it was going to end up, they botched it. So we find ourselves here today having to deal with some technical changes to make sure that we can fix up the problems that they created in their own 'plan' because they rushed it through.
I think this is something that we must take note of in this chamber, because at the moment we see a government going through the throes of the same things again when it comes to energy and climate change policy in this country—marathon party room meetings, big debate across the party room, clear divisions emerging, multiple views being expressed on different television channels and interviews, and concerns about leaking from the government and the party room. We have seen this before. We saw it only a few months ago in reality when it came to superannuation. It does cause us quite a degree of alarm because, at the end of the day, we are having a discussion about the complete lack of policy focus on the other side when it comes to energy and climate change, and the lack of certainty that is currently being provided to industry as a result of the lack of policy focus of this government.
It is as a consequence of that that we have seen underinvestment in energy in this country, which is causing a large number of the problems which the government are complaining about. They are driving themselves into exactly the same problem now in the area of energy and climate change that they did under superannuation. We could see it writ large in the behaviour of this government only a few short months ago. Certainty is such a critical factor in the area of climate change and energy policy in this country that we do not want to have the government bring forward some rushed version of legislation after having not properly consulted, after having division in their party room, and then months later having to come back again only to fix it all because they botched it the first time. It is writ large from the behaviour of this government through all of their activity to date, and I think the Australian people need to take note that those on the Treasury benches right now cannot be trusted when it comes to technical reform, whether it is on superannuation or whether it is on energy and climate change policy. It is of grave concern to people on this side of the chamber, and it should be of grave concern to the Australian people. That is why, as a responsible party, the Labor Party will support this legislation to make sure that the system that the government have proposed to introduce works properly. But let us take note: we need to make sure that we do not see these problems manifest again in other areas of law reform such as we can see unravelling right now before our very eyes when it comes to things like a CET.
Mr HAMMOND (Perth) (10:57): I rise, firstly, to wholeheartedly endorse the previous comments of my good friends, the member for Burt and the member for Fenner. I also rise to agree to support this bill, the Treasury Laws Amendment (2017 Measures No. 2) Bill 2017, as is made clear by Labor's position. But I would also like to unpack a couple of key themes that we see that are symptomatic in relation to not only this bill but also the conduct of this current government insofar as seeking to fix up mistakes that could have easily been avoided and which, quite frankly, do not do service to fundamentally important parts of policy that shape the way we as everyday Australians go about our lives these days.
I cannot help but note that I was only in this chamber last night speaking on amendments to the Native Title Act. We see key themes as to what went on in relation to the Native Title Act as we do in this bill—on simply groundbreaking pieces of legislation that fundamentally shifted the dial in the way in which government has the potential to shape and mould community expectations and community standards. I start with the Native Title Act, a landmark piece of legislation introduced by a Keating Labor government in 1993 which saw for the first time the appropriate level of recognition to Indigenous Australians in relation to officially setting aside the concept of terra nullius, as the court did in the Mabo decision, and creating a framework in which we recognise in this place rights and entitlements of Indigenous Australians over land with which they have an ongoing connection.
What we saw in relation to the amendments to the Native Title Act was a cack-handed, ham-fisted, rushed attempt to try to cure an issue that anyone could have seen coming well before the crystallisation of the judgement of the full Federal Court in the McGlade decision. It came in here too quickly. It came in here under the guise of appropriate consultation when that was clearly not the case. Then when it went up to the other place it took four attempts to shape that legislation into something that was actually going to be not only workable but acceptable to Indigenous Australians in terms of giving them stability insofar as upholding pre-existing ILUAs.
What do we see from this government in relation to the Native Title Act? We see the theme of a fundamental reform introduced by a Labor government back in the day. We see from this government a lack of consultation and a rushed attempt to try to fix up something which could have been remedied if the proper level of thought and consultation had gone into it in the first place. Then there is a clumsy attempt to play catch-up football in relation to simply getting it right, particularly in the context where we see a proposition which fundamentally has bipartisan support.
Here I am, not 24 hours later, standing to make the same observations in relation to this bill. What do we see here? Back in 1992 a Keating Labor government introduced groundbreaking reforms which for the first time created a framework of compulsory superannuation contributions. We saw a Labor government, or good government done well, responding to the needs of the community to try to future-proof the standard of living to make sure that mums and dads all around this country had a reasonable base level of financial security upon retirement. It was a fundamental and groundbreaking reform. What we see here is, again, a patch-up job of which the fundamental substance is noncontentious. This does sound familiar. But I am rising to reflect the fact that what we have here is an endemic problem with this government in terms of its ability to deliver something right the first time that has been properly thought through and that does not require us to run around chasing our tails in order to remedy a situation which was clearly capable of resolution if done properly the first time.
In relation to those key themes, I would like to touch upon a topic that is the subject of this amendment that might not otherwise be so apparent when you look at the fact that what we are dealing with here is fundamentally a financial services bill—the Treasury Laws Amendment (2017 Measures No. 2) Bill 2017—seeking to make changes in the area of sustainable superannuation. It is an area that is fundamentally important, and I commend the government for doing so. I say that in relation to the way in which this bill treats lump-sum payments that are awarded to victims of catastrophic injuries. This is a really good thing that we see here in that the government has taken steps with which we agree to make sure that those people, men and women, who have catastrophic injuries have their compensation orders that are awarded to them as a result of those injuries not counted towards the transfer balance cap regardless of when the contribution is made. What we see here is to make sure that the lump sum or the structured settlement payment awarded to a victim of catastrophic injury is not subject to further instability in relation to the treatment of that award insofar as a superannuation component is dealt with.
I take this opportunity to echo the statements of the member for Riverina in the second reading speech on this bill in relation to changes to the treatment of structured settlements and personal injury orders under the transfer balance cap to make sure with these amendments that people who receive compensation orders of this nature as a result of suffering a serious or catastrophic injury are exempted from the transfer balance cap as intended. This will ensure that those who need access to large amounts of funds to meet their daily healthcare and living needs will not face a faster depletion of their lump sum.
And I will just pause there to lay out to this House from firsthand experience how important that amendment is and why, in this case, the department and the government are doing good work. I know they are doing good work because in a life before this life I spent much of my time representing victims of catastrophic injury. To look on a firsthand basis at how irrevocable the life changes are for these people, imagine going from a life of ability, a life of mobility, a life of independence to a place where all of those things are either impaired or taken away altogether. There are very few things in this life as dramatic as the impact of a catastrophic injury, not only on that person but also on their family.
Just imagine a situation in which one day you are at the breakfast table with your family, going about your daily business, with thoughts on your mind about how the day will unfold, how you are interacting with your community, what is going to be for dinner, who is looking after the kids, what is happening on the weekend, who is taking the kids to the local sporting events and who is on for birthday parties, and all of a sudden—in the blink of an eye—that is taken away, by a motor vehicle accident or a public liability accident, or an accident that is entirely unforeseen. Imagine that perfectly able, functioning individual literally lying flat on their back without any ability to move their limbs, without any ability to do anything for themselves anymore, as a result of medical negligence or medical misadventure, a motor vehicle accident or a workplace injury. The result is horrendous.
There is very little in this world that has the ability to shift the dial on one's hopes and dreams like a catastrophic injury does. And if that were not bad enough—if living with the impact of having all of that independence taken away were not enough—the question then becomes a rather clinical and grim analysis of what that is actually worth. For someone who is cut down in the prime of their earning life with a catastrophic injury that leaves them completely immobile, that can be worth millions and millions of dollars in terms of an appropriate level of compensation that goes some way—but never far enough—towards putting that person back in the position they would otherwise be in but for that catastrophic injury. For someone in the prime of their earning life who would otherwise be required to run a busy household as well, it is quite foreseeable that that amount of money could be in the range of $10 million to $15 million.
The issue in relation to that, and the reason we join the government in agreeing with the substance of this bill—particularly as far as its catastrophic injuries provisions are concerned—is that that amount of money has to last these victims for the rest of their lives. And it is not only for their own lives; it also needs to last long enough to in some way compensate for the lack of earnings coming in to the entire family—leaving aside the pain and suffering and loss of enjoyment of life. Life has changed enough for these people; life is unstable enough for these victims. They do not need the uncertainty of knowing that this nest egg—which, if they are injured in their 30s or 40s, quite foreseeably has to last them for another 30 years—could be eroded or the subject of instability if this amount of money was not ring fenced from the transfer balance cap.
So, for the sake of certainty and for the sake of stability for those who have had their lives irrevocably altered, these changes are so important. These changes—which may in one sense seem somewhat benign or somewhat technical in nature—will make a difference. These changes will add at least some degree of comfort and certainty for those who are catastrophically injured, when so much of their life is anything but comfortable or certain, and that is important. That is why, for many reasons, this bill should be agreed to.
But in my remaining time speaking on this bill, let me complete the circle, if I may, with a concern. The concern relates to the pattern of conduct that we have seen, and that I have raised at the start of my remarks, in relation to both native title and superannuation. I hope and pray we do not see in this place from this government any further rushed, ill-conceived or ill thought out amendments or changes to groundbreaking, reforming, community-building legislation that makes a difference to people's lives. The subject matter of this bill segues into that type of reform in relation to the certainty created for those who have significant disabilities or catastrophic injuries, who are otherwise protected by the National Disability Insurance Scheme. Again, this place saw a degree of bipartisanship in relation to the implementation of the National Disability Insurance Scheme, but, like the compulsory superannuation and native title reforms of the Keating Labor government, the National Disability Insurance Scheme was fundamentally a creature of Labor government. That is important to all of those who suffer significant physical or mental impairments and who need and deserve support in relation to simply managing those impairments, which almost exclusively have occurred through no fault of those victims.
I would hate to see this government make any alterations, or do anything, without an appropriate level of deliberation and forethought as to how it may affect stability and certainty for those who suffer significant and permanent physical and mental impairment. Labor has always been the party of big reform, big change and big ideas. We have seen it with native title, we have seen it with superannuation and we have seen it with the NDIS. As long as improvements are practical and sensible then we will back them, but we will not support rushed legislation which will not benefit this community.
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (11:12): Firstly, I would like to thank those members who have contributed to this debate.
Schedule 1 of this bill introduces changes to support the integrity of the superannuation taxation reform package and ensure that it operates as intended. The superannuation taxation reform package was passed by parliament in November 2016. It is the most comprehensive suite of superannuation taxation reforms in a decade, delivering on our commitment to improve the fairness, sustainability, flexibility and integrity of the superannuation system. In the process of implementing the superannuation taxation reform package, concerns were identified about the ability of self-managed superannuation fund members to circumvent the new cap on tax-free retirement-phase assets through borrowings. From 1 July 2017 a transfer balance credit will arise where there is a repayment of the principal and interest of a limited recourse borrowing arrangement that has the effect of shifting value from the accumulation phase into the tax-free retirement phase. This will support the integrity of the superannuation tax reform package by ensuring that the targeting of tax concessions is not undermined. The changes affect the ability of SMSFs to enter into an LRBA where the member has already reached their transfer balance cap and wishes to finance the LRBA through a transfer of accumulation funds to the pension phase.
Schedule 1 also makes a number of minor and technical amendments that will ensure that the package operates as intended. These changes will be welcomed by industry. With changes to clarify that pooled superannuation trusts that are eligible for superannuation relief to improve outcomes for recipients of a structured settlement or personal injury order as a result of a serious or catastrophic injury, and to clarify the treatment of transition to retirement income streams when a member has satisfied a nil condition of release, these measures will improve the operation of the superannuation tax reform package to ensure it achieves its objective of a fair, more sustainable and more flexible superannuation system.
Schedule 2 of the bill refines changes made to personal and corporate insolvency law by the Insolvency Law Reform Act 2016. The passage of this schedule will lower compliance costs for insolvency practitioners and companies under administration and ensure that the Fair Entitlements Guarantee Recovery Program can access the information it needs to reclaim funds paid out under the program. This schedule amends a prohibition introduced by the Insolvency Reform Act which may be interpreted as creating unnecessarily high compliance costs. The prohibition prevents insolvency practitioners deriving a profit except as approved by the Corporations Act 2001 or the Bankruptcy Act 1966. This schedule clarifies the operation of the prohibition and removes the requirement for creditors to approve a single profit or advantage each time it is on-paid to a related entity of the practitioner—including, for example, payments made to the practitioner's employees in the ordinary course of their employment. These amendments will reduce costs without weakening the prohibition's intended protective purpose. The schedule also repeals a provision inserted by the Reform Act that would inhibit the Fair Entitlements Guarantee Recovery Program's work of reclaiming funds owed by insolvent companies to their employees. The amendments in the schedule present refinements to existing law. Though minor, the amendments will be welcomed by insolvency practitioners, creating certainty and efficiency while maintaining the positive effect of previous reforms to insolvency law.
I commend the bill to the House.
Question agreed to.
Bill read a second time.
Third Reading
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (11:17): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Treasury Laws Amendment (GST Integrity) Bill 2017
Second Reading
Consideration resumed of the motion:
That this bill be now read a second time.
Dr LEIGH (Fenner) (11:18): Since at least 2011, Australia has seen a scam taking place in the gold market. That scam trades on the fact that the Goods and Services Tax applies to scrap gold but not to gold bullion. Exploiting this loophole, there have been gold dealers who, in an unscrupulous manner, have turned gold bullion into scrap. Through a sale, the seller is then able to pocket the Goods and Services Tax and the buyer is able to claim a GST input credit. Since there is no licence required to trade in gold, and transactions below $5,000 do not require the production of identification, it has been possible for unscrupulous dealers to claim a tax benefit through this. Because bullion can be turned into scrap and then back into bullion, the same gold, in certain instances, has simply been on a carousel, allowing unscrupulous dealers to make considerable amounts of money. This was estimated to come at a cost of $65 million in 2013, an estimate that was revised up to $550 million in 2016—and might now involve some $700 million of tax being lost in 2017. That would be consistent with the increased turnover in the scrap gold market, which rose from $150 million in 2011 to $1.8 billion last year. A more than tenfold increase in the scrap gold market is a clear mark of problems going on.
If this were to be a cost of some $700 million to the taxpayer, it would make it one of Australia's biggest ever tax scams. I commend the work of the Australian Taxation Office and the Australian Federal Police through Operation Nosean and subsequent actions. Labor also extends its bipartisan support to changing the GST laws to close this particular loophole.
This bill amends the A New Tax System (Goods and Services Tax) Act 1999 to introduce a reverse charge for business-to-business transactions between suppliers and purchasers of gold, silver and platinum to remove the opportunity for a supplier to avoid paying GST to the Commissioner of Taxation by liquidating. The amendments also clarify the law to ensure that entities cannot exploit the special GST treatment for second-hand goods to claim input tax credits by changing the form of a precious metal they acquire. These amendments will apply in relation to supplies made on or after 1 April 2017, having been announced by the Minister for Revenue and Financial Services the previous day, 31 March 2017.
The bill creates a new division—division 86-Valuable metals—within the GST act. As I have said, that consists of gold, silver and platinum. Division 86 provides that, generally, the GST on such taxable supplies is reverse charged, such that the recipient of a supply is liable for the GST on the supply in place of the supplier. The amendments also establish a framework for parties to voluntarily reverse charge their supplies of valuable metals, whether or not the mandatory reverse charge applies to the supply. The bill also amends the definition of second-hand goods in section 195-1 to clarify that, generally, goods, to the extent that they consist of gold, silver or platinum, are not second-hand goods. Labor will, therefore, be supporting the bill.
May I also use this opportunity to make a brief remark in relation to an earlier bill that was before the House—the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. The minister, in summing up, corrected two erroneous examples that had been made in the ministerial second reading speech. May I also use the opportunity to correct a remark that I made in my second reading speech yesterday. I referred at one point to changes in the bill as an increase in the Medicare levy on middle-income Australians. Of course what I intended to say was that changes in the budget affected the Medicare levy on middle-income Australians. The bill itself simply implements an uncontroversial change to the threshold at which the Medicare levy applies.
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (11:23): Firstly I would like to thank those members who have contributed to this debate. The Treasury Laws Amendment (GST Integrity) Bill 2017 amends the GST law to give effect to changes that were announced on 31 March 2017 by the Minister for Revenue and Financial Services, the Hon. Kelly O'Dwyer MP, and which apply from 1 April 2017.
The bill provides that entities buying gold, silver and platinum that have been supplied as a taxable supply for GST purposes will be required to apply a reverse charge. This means that the purchasers of these goods will remit the GST to the ATO instead of the seller. The bill further clarifies that precious metals are not second-hand goods. The bill is targeted to address the mischief of tax avoidance and fraud and contains provisions and protections to ensure that the effect on business activity is minimised. By making these changes to the GST treatment of precious metals the government is securing additional funding for states and territories, which provide the crucial services, such as hospitals and schools, that Australians rely on. I commend this bill to the House.
Question agreed to.
Bill read a second time.
The DEPUTY SPEAKER: I have received a message from His Excellency the Governor General, recommending in accordance with section 56 of the Constitution an appropriation for the purpose of this bill.
Third Reading
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (11:25): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017
Consideration resumed of the motion:
That this bill be now read a second time.
Dr LEIGH (Fenner) (11:25): I move the second reading amendment that has been circulated in my name:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes the Government's failure to deliver any meaningful measures to deal with housing affordability".
Labor will agree to support the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017 in the House and to refer the bill to a short Senate committee inquiry. The bill make some changes to the foreign resident capital gains tax regime announced in this year's budget. It is legislation that is billed as action on housing affordability, but let's be honest: these changes are not going to go to the heart of the housing affordability problem in Australia. In Australia now we have a home ownership rate that is the lowest it has been in 60 years. We have seen a collapse in the share of young Australians who can buy their own homes. We have seen household debt at historic highs, suggesting that those who have been able to buy into the market are more burdened by debt than any previous generation. Yet, the government is failing to act on negative gearing and capital gains tax reforms, which have been backed by experts across the board.
Going to the measures in the bill, there are amendments that increase the CGT withholding rate for foreign tax residents from 10 per cent to 12.5 per cent and reduce the capital gains tax withholding threshold for foreign tax residents from $2 million to $750,000. Both changes are to occur from 1 July 2017. There are other measures, which were foreshadowed in the 2017 budget, relating to foreign resident capital gains tax changes—namely, ensuring that only Australian tax residents can access the CGT main residence exemption, and applying the principal asset test on an associate-inclusive basis for the purposes of determining the market value of a taxable Australian real property for foreign residents. They, apparently, are to be included in a future piece of legislation.
It is, however, worth making a particular comment on those measures. There had been prior concerns that those measures would include certain New Zealand constituencies, and the New Zealand constituencies would be denied access to the capital gains tax main residence exemption. It is important that that issue be fully canvassed in a Senate inquiry. The government has made some noises in the right direction, but a Senate inquiry on this is appropriate.
The government's changes increase the 10 per cent of the first element of the cost base required to be paid to 12 per cent and lower the threshold for the market value of the relevant asset from $2 million to $750,000. This is a measure that is effectively just tinkering around the edges when it comes to the challenge in housing affordability. You can see that if you look at the list of experts who call for action on negative gearing and the capital gains tax discount. They now include the International Monetary Fund, the OECD, the government's own Financial System Inquiry, the Grattan Institute, ACOSS, the Committee for Economic Development of Australia, the Australian Institute of Company Directors, Saul Eslake, and former Reserve Bank governor Glenn Stevens.
We have had plenty of Liberals, among them former Victorian Premier Jeff Kennett and former New South Wales Premier Mike Baird. Indeed, members will remember being in this very place when the former member for North Sydney, Joe Hockey, stood over there and in his final speech to parliament called for action on negative gearing and called for negative gearing to be restricted to new-built homes. That is what Labor has proposed, yet his successors in this place are unwilling to heed Joe Hockey's advice.
We know that it is important to get action on housing affordability because access to a home provides stability in retirement and a sense of grounding in one's community. We know that the government has spoken about the excesses in negative gearing. Those were the Treasurer's own words: 'the excesses in negative gearing'. Yet the government is unwilling to take serious action. Instead they are suggesting that they will put in place a first home super saver scheme, effectively saying to young Australians that the only way of getting a home is to dip into their retirement account. There is not an expert around that believes that that ought to be the top solution to housing affordability.
Sure, Labor supports measures such as introducing a bond aggregator and walking back some of the attack on housing supply that we saw in the first budget, with the abolition of the National Housing Supply Council being one of the early acts of the Abbott government. But it is critical that we have real action on housing affordability because it is at the heart of much of the rise in economic inequality in Australia. We have inequality now at a 75-year high, with earnings for the top 10th having risen three times as much as earnings for the bottom 10th. We see now in Australia house prices rising extraordinarily quickly. Over the past decade house prices in capital cities have risen 72 per cent. In Sydney and Melbourne house prices have risen 94 per cent and 95 per cent respectively. That represents an increase, just last year, of $300 a day. You cannot save for a deposit by forgoing a few smashed avocado breakfasts when house prices are rising at $300 a day. That is more than a few lattes and smashed avocados.
We know that the tax settings that we have at the moment are the product of a quirk of history. Negative gearing came into the tax code in 1936 as a Depression-era stimulus for the economy. The capital gains tax discount emerged out of the 1999 Ralph review. It was not directed towards housing; indeed, that review did not even mention housing. The purpose of the capital gains tax discount at the time was that a lower capital gains tax rate would spur investment in high-tech firms. But when you put these two policies together, the confluence of negative gearing, which does not exist in countries such as Britain and the United States, and the capital gains tax discount, which was new to the Australian system, together they acted to reverse the total taxation we saw from landlords. Previously, landlords had been net tax payers. After 1999 landlords quickly became net recipients of tax. Landlords moved from buying a house in order to make a recurrent return to buying a house to make a recurrent loss which could be written off on their taxes in the hope of making a capital gain.
That is bad investment advice. If you were advising a young person as to how to invest their money, you would say, 'Don't put all your eggs in one basket.' But negative gearing and the capital gains tax discount do exactly the opposite. They tell young people, 'Get into housing, because that is the best way of minimising your taxes.' Good investment advice says, 'Don't speculate—buy assets that produce a recurrent return.' Again, negative gearing and the capital gains tax discount create the opposite incentive: an incentive to buy speculatively, hoping for a gain when you sell and willing to take a loss as you go. You see that in the taxation statistics.
The result is that investors have nudged out first home buyers in auctions across Australia. Home ownership rates, as I have mentioned, have crashed, falling for young people aged 25 to 34 from 60 per cent down to 48 per cent. At the same time, we have seen the share of the population who are renting a home increase from 20 per cent to 26 per cent. So we have seen a significant increase in the share of Australians who are renters and a significant fall in the share of young Australians who own their own home.
By closing tax loopholes, Labor is pursuing one of the most sensible principles that underlies tax reform. One of my Harvard lecturers, Martin Feldstein, who was previously Ronald Reagan's chair of the Council of Economic Advisers, has spoken about the importance of closing tax loopholes. As he puts it: 'It's vital to focus on tax expenditures because they raise revenue more efficiently than increasing tax rates, and they have a lower deadweight loss than raising rates. It's a way of ensuring progressivity and efficiency at the same time.' Martin Feldstein has argued, in the United States context:
Congress should review these tax expenditures and eliminate those that the country cannot afford.
Here he is talking about the mortgage interest deduction—one of US academic economists' favourite targets for economic reform. But the argument applies equally in Australia. We need to look rigorously at our tax expenditures. I commend the work of Treasury in regularly producing a tax expenditure statement, which allows us to look at where tax expenditures are going and has informed work by Labor in spearheading the debate over curtailing superannuation and tax concessions.
This issue, as I have noted, is one which the government's own reports have highlighted. The Financial System Inquiry's final report—the Murray review—stated:
For assets that generate capital gains, the tax treatment encourages leveraged investment, which is a potential source of financial system instability. Investors are attracted by the asymmetry in the tax treatment of expenses and capital gains, where individuals can deduct the full interest costs of borrowing (and other expenses) from taxable income, but only half of their long-term capital gains are taxed. The tax treatment of investor housing, in particular, tends to encourage leveraged and speculative investment in housing.
The shadow Treasurer, who has led this debate, has made the point that we need to reform negative gearing and the capital gains tax discount because it is a financial stability issue for Australia. While we have these risks to financial stability, the Australian economy is imperilled by the government's failure to tackle housing affordability and sensible tax reform.
You will hear the usual canards from those opposite, claiming that 67 per cent of those who claim negative gearing earn a taxable income of less than $80,000. But the point here is taxable income. That includes the millionaires who manage to pay no tax by claiming excessive tax deductions. Those millionaires are among the people who have a taxable income of less than $80,000. The point is that you cannot simply look at taxable income; you have to look at income before tax. Take a very simple question, and ask, 'Where do the benefits of negative gearing and the capital gains tax discount go?' Well, more than half of the benefits of those two tax breaks go to the top 10th of Australians. Look at the average benefits claimed by surgeons and cleaners. Surgeons claim 100 times the average negative gearing benefit that cleaners do. And the average surgeon claims 16 times the average benefit that a nurse receives. So the suggestion that negative gearing and the capital gains tax discount are principally used by those at the bottom is completely false.
Indeed, inequality has continued to grow as a result of this. If you look at the mid-1970s, home ownership rates for the lowest-income quartile of Australians and the highest-income quartile of Australians were the same. Those lower-income Australians back in the 1970s lived in smaller homes, but the odds that a low-income Australian owned a home in the 1970s were the same as the odds that a high-income Australian owned a home. That is not true any longer. Now the most affluent are 15 per cent more likely to own their home than the least well off. We will also hear the canard from those opposite that negative gearing keeps rents lower than they would otherwise be, but, as analysis from Saul Eslake and the Grattan Institute has shown, in the years from 1985 to 1987, when negative gearing was stopped by the Hawke government, rents rose in Sydney and Perth, but the growth in rents slowed in Melbourne, and all the other capital cities had no change in the growth of rental prices. The rent rise in Sydney and Perth, according to the experts, is much more likely to be attributable to unusually low vacancy rates in those cities prior to the implementation of the policy.
Negative gearing does not boost housing supply, because, under the current policy, 93 per cent of negative gearing is going to existing homes. If it were aimed at boosting housing supply, it would be akin to the way in which we structure our policies around first home owner grants. First home owner grants in all states and territories go disproportionately or only to newly-built homes. Our rules around foreign investment work in the same way. Foreign investors are mostly barred from buying established real estate and are directed towards newly-built homes, again because we want them to add to housing supply. Labor take the same bipartisan principle that applies to first home owners and to foreign investors and we apply it to negative gearing: so that negative gearing should only be applied to purchases of newly-built homes after the policy comes into effect.
We provide our support to this bill in the House, subject to a short Senate inquiry, but we reject any suggestion by the government that this is a serious plan to tackle housing affordability in Australia. It is nothing of the sort.
Mr GILES (Scullin) (11:41): I second the amendment and reserve my right to speak.
The DEPUTY SPEAKER ( Mr Brian Mitchell ): The original question was that this bill be now read a second time. To this, the honourable member for Fenner has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the amendment be agreed to.
Mr VAN MANEN (Forde—Government Whip) (11:42): It is always a pleasure to sit in this House and listen to the contributions from the member for Fenner. I look at his pious amendment. That is the only way I can explain it. It adds nothing to the debate—nothing of substance, nothing of value whatsoever. But that is typical of those opposite. The member for Fenner, given his experience prior to being in this place, should really know better. But I do have a lot of time for the member for Fenner because he has had some good things to say over the years. It just appears that, now that he has come into this place, they have gone somewhat on the backburner and have been filed in the 'Do not pull out the file anymore' file, somewhere in the archives.
It is pleasing to be able to speak on another piece of legislation that the government is introducing in order to deal with the issue of ensuring that foreign investors, whether they be individuals or companies or multinationals, as we have seen with other pieces of legislation, pay their fair share of tax in this country. This bill deals with the issue of foreign resident capital gains withholding tax. As part of our 2017-18 budget, we announced a range of reforms to lessen the pressure on housing affordability in this country. This particular measure seeks to address capital gains tax outcomes for foreign investors and, importantly, address the low levels of tax compliance that plague this sector and is a key part of this reform.
The government understands that the issue of housing affordability is very topical at this point in time. We see a wide range of statistics bandied around, and the member for Fenner outlined a number. We accept that, over the past 20 or 30 years, the affordability of housing for many people has decreased. But it is also important to look at different markets around Australia. In Sydney and Melbourne and in parts of Brisbane there are issues with housing affordability, but in my electorate of Forde that is not the case. I was talking to one of our real estate agents only yesterday, and he said to me that he has done an exercise which shows that it is actually cheaper for somebody to buy a house in my electorate than it is to rent. But we never hear that discussed, and I am sure, if it is occurring in my electorate, that it is occurring in other electorates around this country.
The issue, as this real estate agent pointed out to me, is that the high cost of rent means people do not have the capacity to accumulate and save a deposit. Even if they can get a 10 per cent deposit there is the cost of mortgage insurance. So it is not necessarily about the price of the house per se but about some of the other on-costs. Part of that could be offset by ensuring that first home buyers have access to the first home buyers grant whether the property is a new property or an existing property so that they have proper choice. I know there is the argument that first home buyers grants are directed at new property to increase supply, but supply will increase anyway because that is what the market requires; it requires new houses. But it is not just new houses that first home buyers are looking to buy. Sometimes they are looking to buy established houses, and that creates turnover in the established housing market as well. So there are a number of inefficiencies and inequities in the system that make housing affordability an issue.
This bill, the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017, obviously does not deal with those issues, and some of those issues are state-level issues for state governments to look at. Importantly, this bill seeks to deal with the issue of investors buying property and not paying the appropriate level of taxation. Whether it is through our multinational tax avoidance bills—which, interestingly, those on the other side of the House voted against—or this piece of legislation, or our changes to foreign investment rules, we on this side of the House are constantly seeking ways to ensure that those investors from overseas, whether they be individuals or multinationals, pay their fair share of tax in this country.
This bill, dealing with the capital gains tax withholding regime, is one part of a range of solutions that we are applying. It is designed to help to turn around some of the statistics I have outlined. Expanding the regime as outlined in this bill aims to improve its integrity by capturing more property transactions and encouraging greater compliance with our capital gains tax rules. The changes to the withholding tax rate will see it rise from 10 per cent to 12½ per cent, and it will apply to assets with a market value of $750,000, down from some $2 million. The changes in this bill will affect a wide range of foreign purchasers in Australia, but I do not have an issue with that because I want to see them pay their fair share of tax.
I commend the bill to the House in its original form. As I said in my opening remarks, it is disappointing to see that, rather than add to the bill, all those opposite can do is move some pious amendment that does nothing for the substance of this debate. I commend the original bill to the House.
Mr HILL (Bruce) (11:49): I would say at the outset, as a little disclaimer, that this is the first time I have risen in the House with a terrible cold. It is ironic that today, in Men's Health Week, I am brought to you by cold and flu tablets and that I have discovered Lemsip is in fact a food group. So we will see how we go.
With regard to the bill, the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017, Labor has said we will support these changes. They are sensible. They will not have a noticeable impact on the market. But it is a complete nonsense to describe this as a housing affordability measure. In fact, only this morning the Senate committee looking at this legislation handed down its report. It was made very clear that this is an integrity measure. That is fine as far as it goes: make it easier and more likely that people will pay the capital gains tax they owe. There is no problem with that. But it does not change the tax level. It has nothing to do with housing affordability. To say that it does is a scam, a sham, and it is clutching at straws.
I will focus my remarks on Labor's second reading amendment: '…the House notes the government’s failure to deliver any meaningful measures to deal with housing affordability.' This is not the first and not the last time I will talk on housing affordability, because Australia is in the middle of a housing affordability crisis for people wanting to buy houses and people wanting to rent houses. It affects all parts of society, but especially, I believe, young people have every right to be angry at how they are being treated by this government. It is getting to the point where waffle words and weasel words from the government are not enough. We need effective action.
The government has clearly failed. They have no minister for housing, not in cabinet, no assistant minister—nothing. You do not see 'housing' in the title of anyone on the front bench in this government. They have no housing strategy. We heard the previous speaker say 'The states should do something about that' as if there is no national responsibility in a federation to bring the states and territories together with the Commonwealth and come up with a strategy. All three levels of government have a role to play and have different levers. That is the point in being a national government: you bring the other levels of government together and develop a strategy to work together. They have no solutions; but even worse, they defend to the death policies that make housing affordability worse and advantage the wealthiest in our society.
There is a trifecta of problems, or rather a trilemma. Let me paint the trilemma. House prices to buy or rent in major cities have skyrocketed. The second leg of the trilemma is that home ownership rates have plummeted. The third leg of the trilemma is that many vulnerable Australians have limited or no access to housing. On any given night in this country—we will wait and see what the census figures says soon—there are over 100,000 people with nowhere to sleep—not a roof over their head.
Home ownership rates are at 60-year lows. Rates for 25- to 34-year-olds have collapsed from around 60 per cent to under 40 per cent in the last 30 years. In the last 10 years, the median house price in Australia has risen by 60 per cent; in Melbourne it has risen by 90 per cent; and in my electorate of Bruce in the south-east of Melbourne it has risen by 150 per cent in 10 years. It now costs 10 times the Australian median income to buy a house in the middle of Melbourne's suburbs. Rental stress is on the rise, with the proportion of low-income households in rental stress now at more than 40 per cent. Of course, this alone does not define housing affordability. As I said, at the sharpest end of the spectrum there are those who have no housing.
What is the government's response? Nothing. Big talk from the Treasurer—he says, 'I'm very interested and understanding of the frustration of young Australians trying to buy their first home.' That is great, isn't it? He is very interested and understanding. Here is an idea: do something! Have a look at the policy propositions we have heard from the government. You can guess who this one is. This is the get rich parents policy proposition. I quote: 'You should shell out for them; you should support them—a wealthy man like you.' Who said that? That was the Prime Minister. Then we have the get-a-rich-job policy. I quote: 'We are also enabling young people to get highly paid jobs in the first step to buying a house.' That was the member for Deakin, the Assistant Treasurer. Then of course the previous Treasurer, Joe Hockey, probably with cigar in his mouth, said: 'The starting point for a first home buyer is to get a good job that pays good money.' Or the Deputy Prime Minister's policy: 'Move to where there are no jobs. If you have the gumption in you and you decide to move to Charleville, you can have very affordable house.'
The 2017 budget, of course, as we heard in the lead-up, was going to solve the problem. Remember those headlines? Housing was going to be the centrepiece of the budget. We were going to see radical policies that were going to transform the ability of people to buy a house and were going to deal with the problem. There was profound disappointment: absolutely nothing effective and, worse, some of the measures that are billed as housing affordability measures are actually damaging—they are not just a smokescreen like this bill, which has nothing to do with affordability, but they are actually damaging.
Take the rubbish super savings scheme. It is the centrepiece, you know? It is a truly ridiculous scheme to give people a tax break to save up to $30,000 for a house. It is complex. It mucks around with the fundamental purpose of superannuation, which is to allow people to save for their retirement. It is a camel by committee. It is regressive, as you would expect from this government and those opposite. Those who benefit most from this rubbish scheme are high income earners, because it is a regressive tax concession. You get a bit of a tax break on your savings, but if you earn a lot more, you get a bigger tax break; if you do not earn much, you do not get much. It is expensive and ineffective. This is the fundamental problem with it. If anything, it would just add to demand and put more fuel on a hot housing fire. It does not put the fire out. It will have negligible impact on affordability. At best you would need a microscope to see the impact. We are still waiting for the modelling. We have not seen any modelling as to what you think that will do for house prices. On top of this, the scheme proposes to allow for the release of all funds, I am told, on 1 July every year, which floods the market with people all at the same time.
But fundamentally my biggest problem with this is it is offensive to young people. The government's answer to the housing crisis is to blame young people for not saving enough. At the same time they are trying to lower the HECS repayment threshold from 56 grand to $42,000. If you are a young person in your late 20s who has finished university, somehow you are supposed to repay your uni debt when you earn 42 grand, save to buy a house while house prices are going up faster than the savings, and save to start a family. Meanwhile they want to maintain tax breaks on superannuation, capital gains tax and negative gearing, which go to those who have most.
We are high income earners in this place. We are all getting a tax cut on 1 July, thanks to the Prime Minister. No-one else in Australia does but the top tax bracket. We get a tax cut. If you are a high income earner, have done well in life and are lucky enough to have a bit of spare cash in your pocket, the current tax system says the most rational thing to do is to walk down the street one Saturday morning and bid up the cost of an existing house at an auction, because you get all these tax breaks for it. That is perverse. Aren't there more productive uses we would want to encourage for spare capital in our economy, like—I don't know—building a business that employs someone? You would reckon. Maybe adding to housing supply by putting negative gearing on new housing—oh, that's Labor's policy, isn't it. But no: apparently the priority is to protect tax breaks which go to the wealthy and push up the cost of housing. This saver account will save you $30,000 over two years if you are lucky enough to be able to save $30,000 despite all the other stuff. The median increase in Melbourne's housing market in one quarter, in three months, was $30,000. It does not even keep up with the increase in prices. The government has not introduced its legislation, so who knows how it will really work?
I will make a brief comment in passing on perhaps the silliest idea in the budget. The government is going to release Defence land to add supply. That is fine in theory, but the centrepiece of this is the Maribyrnong Defence Site in Melbourne, which is going to be the sites for 6,000 new houses. Okay, that is good—except it was released 10 years ago. The master plans for this site were done 10 years ago while I was working for the Victorian government. It has not been developed not because no-one had released it or the government had not put it in the budget but because it is full of explosives, it is contaminated and they have only just started decontamination. It is a scam and a sham. There is nothing wrong with more supply, but to say that this is somehow an answer to housing affordability is a joke.
If we want to talk about supply, one of the government's first actions when they were elected was to abolish the National Housing Supply Council, which brought states and territories together and had a coordinated national look at the supply problem. Here is an idea: you could put that back in. Housing markets have two fundamental elements, on which the member for Fenner would be much better versed than most people on this chamber, but it boils down to supply and demand. You have to look at both, but this government, pig-headed and obstinate, idiotically refuses to look at the demand side. It flies in the face of all reason and all evidence.
I will now turn to the tax policies which I have touched on that advantage investors and fuel demand. Negative gearing and the capital gains tax arrangements in the budget now push up the cost of housing. They add to demand. They are regressive. The benefits overwhelming go to the top income earners. About 70 per cent of the benefits of capital gains tax go to the top 10 per cent of income earners, so the government comes in here with policy by anecdote and says, 'Oh, but there was a nurse who negatively geared something.'
Mr Howarth: There are thousands of them.
Mr HILL: Sure; there are thousands, but look where the dollar value goes. It is a regressive tax concession. This is not a leftie socialist plot from us opposite. It is economics. It is advice from the Reserve Bank, from the IMF, from economists, from academics and from all the sensible parts of the property industry.
There is the untruth perpetuated that Labor proposes to abolish negative gearing. That is not the case. Our policy is sensible, it is simple, it is costed, it is clear and it is responsible in saying we need to refocus negative gearing. So, for anyone in Australia who has a negatively geared property now, nothing changes. There is no shock to the housing market. Your tax arrangements do not change. Rents do not go up. At best, the independent modelling I saw said property prices might go down by two per cent. Our view is they will moderate the rate of increase due to the other fundamentals in the market. But housing markets do go up and down by a bit. I know a lot of young people who think that, if house prices went down by five or 10 per cent, that would be a great thing for people, given they have gone up by 30 per cent in the last year. But to refocus negative gearing and put it to work properly—so after the date it was introduced—you could still negatively gear a property. You just have to make it a new property that someone has just built, which adds to supply and has a downward impact on housing prices. I thought that was what the government was saying was important—adding to supply.
This is the party of Menzies. We heard about the 'forgotten people' a few weeks ago. It is 75 years since Menzies' seminal 'forgotten people' speech—ironically given when he was in the wilderness trying not to be forgotten before his second coming. Back then, one of the aspirations of the Liberal Party was home ownership for the masses. This was a central policy goal of those opposite; it was a reason for being. Under this mob, the emphasis is on helping people buy their fifth house, their sixth house, their seventh house or their 10th house. If my daughter, who is 21, went to an auction in the next few years and said, 'I want to buy a house', how much help would she get from those opposite, not being in the housing market, to buy a house to live in? Absolutely none. Yet if I or anyone in this chamber went to an auction, we would get a great big set of tax concessions.
You hear that when old people retire they need about $50,000 a year to live with dignity, if they own their own house. Fair enough—that sounds reasonable. Yet young people have to start repaying their HECS debt at $42,000. We have to be real about this stuff. We have a government that gives itself a tax cut, that is giving big business a tax cut, that is not having the gumption to make huge multinationals pay their fair share, and the only advice for young people is to be ripped off by 'Captain Obvious' over there, who said, 'Get rich parents and get a better job.' So I dare those opposite to try going to a university campus or a TAFE campus and use their so-called pub test and ask young people what they really think of the current system which is stacked against them. Then they should be shocked, but not surprised, if they get what is coming to them at the next election.
Mr HOWARTH (Petrie) (12:03): We live in the best country in the world here in Australia, and the things that make it so great are the very things that this coalition government is working to nurture, grow and protect. 'Fairness', 'security', 'opportunity', 'reward for effort'—we heard those words many times on budget night and have done since. They are great things to keep top of mind as we work through the budget bills.
We have the chance to usher in a comprehensive solution to the legacy of a decade of Labor deficits. The opposition leader must be so pleased to have this opportunity to right the wrongs of his predecessors. Fairness, security, opportunity: they are the great things to remember as we work to repave the future path for the coming generations of younger people. We have a responsibility to relieve them from the burden those Labor deficits present—big debts on lots of little shoulders. A comprehensive solution to debt, the rising cost of living, hardship and lazy loopholes left over from Labor's regretful reign—that is what the coalition government are committed to and what the 2017 budget is delivering.
It is great to be able to speak here on the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017. The bill offers some important savings, safeguards and provisions: it gives effect to changes to the foreign resident capital gains tax withholding regime; it expands the existing regime for new acquisitions, increasing the withholding rate from 10 per cent to 12½ per cent; and it reduces the withholding threshold from $2 million down to $750,000, making it applicable to an increased number of foreign residents—which is good. These reforms are necessary in order to assist with the collection of capital gains tax liabilities owed by foreign residents, to address low levels of compliance by foreign residents with their Australian tax obligations and to capture more property transactions.
If foreign investors wish to acquire Australian residential property, they will need to comply with our stringent capital gains tax rules. In addition to the measures contained in this bill, the housing affordability package outlined as part of the budget contains further reforms to capital gains tax for foreign investors. Foreign or temporary tax residents will no longer have access to the main residence capital gains tax exemption—which is great. At the moment, most Australians live in their home and they have the advantage of that exemption; foreign residents will not.
Importantly, the housing affordability package furthers the goal of ensuring Australian homes are within the reach of Australians. The provisions that bolster affordability include limiting foreign ownership in new developments and charging foreign owners who leave their residential properties vacant. An annual charge will be imposed on foreign owners of residential properties if the property is not occupied, or available to rent, for at least six months in each year—which is a good thing. This discourages foreign investors from buying Australian homes and just letting them sit vacant. The charge provides an incentive for the foreign owner to make their property available on the rental market if they do not intend to live there, which increases the number of homes available to Australia's who wish to rent—and having more supply is very important.
This bill will ensure Australians homes are available for Australians, which will be well supported by the full scope of budget measures that keep the Australian dream alive. From first home owners, to those looking to downsize, to Australians in need of support and social housing, the coalition's government commitment to housing affordability is part of our promise to Australians first and foremost. We will work to make housing affordable, we will work to bring down the cost of living and we will work to protect Australians and the values we hold dear—and that includes ensuring a roof over their heads.
The coalition government is making housing more affordable, ensuring Australian homes are available for Australians and supporting the Australian dream. We are backing first home buyers, enabling them to use their superannuation to save for a deposit, with the savings attracting generous tax concessions. The negative Labor member opposite, the member for Bruce, basically just said, 'We won't vote for that; that's no good' He has discounted the whole thing. This is on top of superannuation. If a young Australian is earning a wage or salary, they are receiving a minimum of 9½ per cent of their income in superannuation on top of their wage. At the moment, if they want to put $30,000 into a savings account, they are going to lose a third of it; they will end up with $20,000. This will enable them to put that money into their super scheme on top of their current super contributions and end up with more money in the hand—probably an extra $5,000—so they will get around $25,000 of the $30,000. This makes sense. The government is giving young people the opportunity to do that, and the Labor Party will vote against it. I will be reminding every young person in my electorate that Labor will vote against it. For a young couple, the savings are even greater if they can both put away a little bit of extra money. But those opposite just want to ridicule all at.
We are providing superannuation incentives for older Australians who are looking to downsize into a home that best suits their lifestyle. Baby boomers might want to retire. The kids have moved out of home and their grandkids have grown up. They are in four- or five-bedroom homes and they want might something smaller that is easier to clean and look after. There are incentives to sell the home, downsize and put money into their super on top of what they are normally allowed to do—a very, very good policy.
We are investing in housing to tackle homelessness, in social housing and in triaging the accommodation needs of domestic violence victims and our young people. We are increasing the capital gains tax discount to 60 per cent for affordable and social housing investment to stimulate supply. There is nothing from those opposite on that. It is a great policy. We are securing new state agreements to require planning reform and encourage the delivery of additional affordable housing. A national housing infrastructure fund and Commonwealth land bank will unlock land and infrastructure barriers.
It is only those on this side of the House who are protecting negative gearing for mum-and-dad investors, securing their future and increasing rental housing stock. It is not rocket science to know that if an investor cannot negative gear they are going to positively gear, and that means they need to make a profit, which means rents will go up. In areas like my electorate, that will have a big impact. The member for Fenner spoke before about how the Keating government reversed all this. But guess what? They changed their mind because they realised it was not working. With this bill we are introducing tougher real estate rules for foreign investors to make sure they pay their share of tax and do not leave properties empty.
I said at the start that we live in the best country in the world. Australia certainly is the best country. The things that make it so great are the very things that this coalition government is working to nurture, grow and protect. I mentioned fairness, security, opportunity and reward for effort. These are fair and sensible measures that help to ensure that all Australians have affordable housing. They contribute to the big picture solution of reducing the cost of living and they return savings to the public purse. They help to reduce debt accumulated through a decade of Labor deficits and ensure that future generations—like the young people up in the gallery—do not carry the weight of their economic failure. They acknowledge the important role that foreign investment plays, yet at the same time protect and prioritise the interests of Australia above all, as they should.
Mr DICK (Oxley) (12:12): Listening to the member for Petrie, it is little wonder that most people in his electorate think that he is living in an alternative universe, because he thinks this is as good as it gets. He thinks that the Australian dream is to own a house, but not because of any incentives that the government will give to first homeowners. The member for Petrie, just like his government, believes that the only way you get a house is to have rich parents. Remember that great advice? Who can forget the budget a couple of years ago, when the then Treasurer and finance minister were chomping on their cigars as they lectured everyone about tightening their belts. Those opposite were cranking up the music on the night of the first Abbott-Turnbull budget, cranking up 'The Best Night of My Life', and meanwhile giving up on housing affordability.
I rise to speak on the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017 and to support the amendment, which notes 'the government's failure to deliver any meaningful measures to deal with housing affordability'. This bill gives effect to some of the government's proposed changes to the foreign resident capital gains tax regime announced in the 2017-18 budget. We know that the bill contains amendments that will increase the capital gains tax withholding rate for foreign taxed residents from 10 per cent to 12½ per cent and that will reduce the capital gains tax withholding threshold for foreign taxed residents from $2 million to $750,000. We know that the government has announced this as one of their 'measures to reduce the pressure on housing affordability'. Labor will be agreeing to this bill, but, when we look at this government's record on housing affordability, we hear a lot of platitudes but do not see a lot of action when it comes to getting young people into the housing market.
Under the current regime there is a non-final withholding payments obligation imposed on a purchase of certain Australian real property and related interests where it is required from a foreign resident vendor. The purchaser is required to pay 10 per cent of the first element of the cost base, usually the purchase price, to the ATO. This amount may be withheld from the payment the purchaser makes to the vendor. Such an obligation does not arise if the market value of the asset is less than $2 million and the asset is taxable Australian real property or an indirect taxable Australian real property interest the holding of which causes a company title interest to arise. So the government changes will increase the 10 per cent of the first element of the cost base required to 12 per cent and lower the threshold for the market value from $2 million to $750,000.
While this is a minor step, we know that there is much, much more that this government should and must be doing to help housing affordability. We only need to look at the UBS report last week which showed first home buyers in Sydney need 40 years worth of savings for a deposit. This is a common theme we hear when we are out in our communities. It beggars belief that the member for Petrie does not see this as a serious issue and believes that his measures are even going remotely close to dealing with housing affordability.
We know from the latest data that the price of housing is going through the roof. We know from the data that owning your home in Australia is becoming unattainable for many in the community. We hear a lot from the government talking about the great Australian dream. Well, it is becoming a great Australian nightmare. We have long enjoyed the highest rates of home ownership in the world, but, sadly, no longer. From 1971 until 2001, 68 to 70 per cent of all Australians owned their own home, according to the ABS stats. But we know economists have now demonstrated that there has been a real decline in home ownership rates since then. A study by the Melbourne Institute predicted that sometime this year we will see a tipping point reached and fewer than 50 per cent of Australians will own their own home. We will have gone from 68 to 70 per cent from 1971 until 2001 to now in 2017 down to 50 per cent of Australians owning their own home.
The typical Australian house now costs 5.6 times the median household income, meaning Australia is one of the world's least affordable countries according to the list put out by the US urban policy consultant demographer. Prior to Australia's property boom in the late 1980s, most Australian cities, including my home state's capital of Brisbane, had ratios of house prices to incomes of around three or less, which had been classed as affordable.
We know in looking at their record in the four years that they have been on the Treasury benches that the Abbott and Turnbull governments have closed the National Rental Affordability Scheme. This is the scheme which provided 38,000 new affordable housing units. We know it was on track to achieve a target of 50,000. They refused to provide funding certainty through the national partnership agreement. They cut $44 million per year in capital funding for emergency accommodation for women and children escaping domestic and family violence. They also cut funding to homelessness Australia, National Shelter and the Community Housing Federation of Australia, reducing the effectiveness of their advocacy and policy functions.
A little earlier this year I did an affordable housing and homelessness roundtable in my electorate with Senator Doug Cameron and a number of key stakeholders and community organisations. This was the message delivered loud and clear. And it would not just be in my electorate; it would be in every electorate in Australia. Those people dealing with housing and homelessness and the crisis that we see across this nation are saying the same thing: the direct negative result of the coalition government under Prime Minister Malcolm Turnbull scrapping the first home saver accounts scheme and cutting capital funding for emergency accommodation is pushing some of these groups to the absolute limit and having a huge impact. It is not just about people getting into the housing market but about people even having a roof over their head.
We on this side take a different view. We on this side understand the issues facing those in Australia who simply are at breaking point when it comes to crisis accommodation, and young people wishing to get into the housing market. Under the Leader of the Opposition, Bill Shorten; and the shadow Treasurer, we know that tax reform could include increasing the supply of affordable and social housing, improving rights for private rental tenants, inclusionary zoning for affordable and social housing, adequacy of income support measures, a focus on those groups that are really supporting vulnerable Australians and housing for people with disabilities. These are all issues that this government chooses not to engage in and areas this government chooses to remove funding from. All of this means a lot of stress for people looking to get into the housing market, but also, even before they are able to scrape enough money together for a purchase, the pressures they are under in rental accommodation at the moment.
We know the government's record has been pretty much divided, just like most things that the government does as an increasingly right-wing, divided government. We are seeing a crazy—and that is the only word I can use—proposal to allow early access to superannuation for housing deposits. We know that, when push came to shove, the biggest policy announcements in the lead-up to the budget were 'maybe you should get rich parents', 'find a better paid job' or, as some of the National party members indicated, move to the bush. When it comes to the government's record, they have failed to deliver any meaningful measures, just as the amendment moved by the shadow minister indicated today, to deal with housing affordability.
In my home state of Queensland, what the state government has announced this week, which I am fully supportive of, is 5,000 social housing homes being built. That is a demonstration of what governments can do to deal with the issue of housing and housing affordability—a $1½ billion plan to create 4,000 jobs. We know that the state Labor government in my home state of Queensland, the Palaszczuk government, will seek to partner with the private sector and aim to target vacant and underused properties already owned by the state as development sites. We know that the plan has been welcomed by the construction sector. We know that we are seeing a huge uplift in the economy in Queensland by investing in the construction of housing. By investing in real homes, in real affordability, you are going to see the largest investment in housing that this nation has seen.
Mr Deputy Speaker Vasta, when you look at what the government has delivered, while the bill today will be supported by both sides of the chamber, we as the opposition say that the opportunity has been lost—all of the opportunities where this government has basically run up the white flag. I noticed the minister before. He is not the housing minister, because this is a government that refuses point-blank to have a housing minister; it is not interested in actually appointing someone with portfolio experience or capabilities. A media report says:
Industry Super Australia has warned the scheme will hurt returns by requiring funds to 'maintain more liquid asset allocations to deal with unpredictable withdrawals'. This means funds may have to invest more in cash and short-maturity securities, which carry lower returns.
The government has this crazy scheme of raiding superannuation, which we know will put the cost of housing up, not down.
What have expert economists said about the government's so-called affordability measures? Economists have questioned whether this package of measures will have a significant impact. The Grattan Institute described the package as 'a grab-bag of easy "solutions"'. They said:
A few of them sound good; fewer still will make much difference.
KPMG's chief economist said that it is not enough and argued that other tax changes would be more effective.
The Australian Council of Social Service welcomed what it called 'the first steps to address housing affordability' but argued that 'the extension of super tax breaks to people buying a first home or downsizing is a backward step that will increase house prices and waste public revenue'. The Property Council of Australia supported the package in general but argued that 'the initiatives targeting foreigners will damage Australia's reputation and will do nothing to help housing affordability'. These are experts in the field commenting on this government's performance when it comes to housing affordability.
On the day before we see the net debt blow out to an absolute all-time record we know that we are going to be paying the highest amount of net debt since World War II. Simply, without negative gearing and supply-side reform we know that what the government is proposing could ultimately lead to price increases. They are not flatlining. The government is not doing anything about putting downward pressure on prices. The measures that it wants to support, as part of its so-called reform, will actually increase the costs for Australians when they want to buy a house.
Labor will be standing firm on the announcements that we have made to date about reforming negative gearing and capital gains tax concessions, limiting direct borrowing by self-managed super funds, facilitating a COAG process to introduce a uniform vacant property tax across all major cities, increasing foreign investor fees and penalties, and establishing a bond aggregator to increase investment in affordable housing. We know that this package of measures will assist many young Australians, including in my electorate, where we are seeing young families moving to the south-west of Brisbane, a high-growth corridor, doing everything they can to try and get into the housing market. What they need is a government that is prepared to make the tough decisions. They need a government that will stand with them and help them to enter the housing market—to do everything that it can to give them the opportunity of achieving the great Australian dream. Sadly, under this government we are seeing a nightmare unfold, and I only hope that the government will start listening to Labor's sensible proposals to deal with housing affordability.
Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (12:27): Firstly can I thank all members who have contributed to the debate. If you were listening to members opposite you may not have gathered that they are actually supporting this bill, but we thank them, nonetheless, for that support.
The government's 2017-18 budget measures represent our commitment to reducing pressure on housing affordability and ensuring that home ownership is more achievable for all Australians. The budget measures contain changes which, in this respect, ensure that foreign residents disposing of Australian property comply with their Australian tax obligations. With the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017 the government is introducing changes to the existing foreign resident capital gains tax withholding regime. The first change increases the withholding rate from 10 per cent to 12½ per cent. The second change reduces the threshold, as it currently stands, from property with a market value of $2 million or more to property with a market value of $750,000 or more, thereby capturing vastly more properties.
From 1 July 2017 a purchaser of certain Australian property that has a market value of $750,000 or more will have to withhold that 12½ per cent of the purchase price and pay it to the Commissioner of Taxation if they purchased the property from a foreign resident. Combined with other integrity measures announced in this year's budget relating to the taxation of foreign investors in residential housing, this bill will contribute a gain to revenue over the forward estimates period of $570 million. The other associated capital gains tax changes will be introduced later as part of a separate bill to enable consultation on those aspects of policy to occur.
An education campaign is being undertaken by the Australian Taxation Office to raise awareness of the changes. The campaign includes presentations in major Australian cities, an online webinar and collaboration with stakeholders that assisted in raising awareness when the regime was introduced, including the Real Estate Institute of Australia, the Australian Institute of Conveyancers, law societies, and various state and territory regulators.
These changes have been designed to encourage more foreign residents to comply with their tax obligations and lodge tax returns. They are an important step for Australia in improving housing affordability and strengthening the integrity of Australia's tax system. I therefore commend the bill to the House.
The DEPUTY SPEAKER: The original question was that this bill be now read a second time, to which the honourable member for Fenner has moved an amendment that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.
Question negatived.
The DEPUTY SPEAKER: The question now is that the bill now be read a second time.
Question agreed to.
Bill read a second time.
The DEPUTY SPEAKER: I have received a message from His Excellency the Governor General, recommending in accordance with section 56 of the Constitution an appropriation for the purpose of this bill.
Third Reading
Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (12:31): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Major Bank Levy Bill 2017
Second Reading
Consideration resumed of the motion:
That this bill be now read a second time.
Mr BOWEN (McMahon) (12:32): There is a little bit of a pattern here. Today, the parliament is dealing with a number of matters where the opposition has tried to give the government bipartisan support, yet the government is bungling the implementation as we go. In the other place we are dealing with the GST threshold issue and in this place now we are dealing with the major bank levy. Let me be clear that the Labor Party will support this legislation in this House and in the other place. But I take the opportunity to remind the House of some of the difficulties, and the Treasurer's incompetence, in dealing with this matter.
Firstly, there is history here. There are two people in this building who know how to introduce a bank tax: me and the Treasurer. We have both done it. When I was Treasurer I introduced a bank levy. The now government, the then opposition, said it would end Western civilisation, bring hordes of locusts upon us, wreck our economy and affect households. They did not proceed with that bank levy and a deal of revenue has been lost in the meantime. Now, lo and behold, the budget brings in a bank levy and the Treasurer says that it is different. Well, it is different, I will grant him that. It is 10 times bigger, in terms of revenue, than the levy I introduced as Treasurer. So, a levy that was 10 times smaller was terrible for the economy but a levy that is 10 times bigger is somehow fine, according to this Treasurer's way of thinking. So there is a lot of hypocrisy going on here on the part of the government when it comes to the bank levy, and it needs to be called out.
But what we will not do his behave like they did. They opposed the bank levy when we introduced it. They were obstructionist. They said that they could not support it, but we are not going to play that game. We will support the legislation. It is very important for the budget that we do. But we are not going to give this Treasurer a leave pass for his incompetence. It all started even before it was announced in the budget, when it was leaked. There are leaks out of budgets—of course there are. There are intentional leaks and unintentional leaks and all the time things are announced before they are announced in the budget speech. But rarely is it something as market sensitive and important as this. This was a very big leak from the budget and it moved the stock market as a result. The fact of the matter is that when the stock market moves so substantially some people make money and some people lose money, and this is what happened as a result of this leak. There are serious questions that continue to be asked about this and need to be answered. We asked the secretary of the Treasury at Treasury estimates. He said:
… on the basis of what we have been told by our staff, on the basis of informed discussion with my senior executives as to who knew what and when, I would be devastated … if I thought that one of my staff had been responsible for this. I have seen nothing in the time I have been secretary to make me think that it came from Treasury.
He said that there was only a small number of people at the Treasury who knew about this—five or so Treasury officials who would have been in a position to do this. How and when it was leaked is a very serious matter. It will continue to be assessed and probed. I note that there is an ongoing ASIC investigation into this matter, as there should be.
Then I move to the matter of the government denying reality about it being passed on to bank customers. Again I go back to when we introduced a bank levy when I was Treasurer. This Treasurer says, 'You said it would be passed onto customers'—referring to me. I was honest about it. I was prepared to tell the Australian people the truth and say: 'Banks will consider passing this on—it is a modest levy and may be added to some transactions that banks put on it.' I was prepared to call it how it was. This Treasurer cannot find it within himself to be honest with the Australian people about this matter. He says, 'It won't be passed on and the ACCC will make sure it is not passed on.' The ACCC has been given the grand total of $1.2 million to monitor the situation. That is not going to do very much.
The fact of the matter is that when a bank is faced with a levy like this it has the choice of absorbing it and reducing profits—that is what absorbing means: reducing profits and returns to shareholders—or passing it on. Banks have shown in the past that they are certainly prepared to do that. I thought it was interesting that not only do I say that, but the government's own documents say that. After a whole series of denials, once the legislation was released we saw the regulatory impact statement. It says:
…it can be passed through to those the banks lend to (in respect of residential mortgages, business lending and personal credit), deal with or provide services to, or their non-equity funding sources (wholesale capital markets, depositors) or be borne by the banks themselves (through reduced profits, or via increased efficiency or other cost-cutting measures).
When the government's own regulatory impact statement says it will be passed on, and the Treasurer denies it, I think we have a very serious problem.
Finally I come to the matter of the black hole in the government's figures here. It is a very big one. The Treasurer brought down the budget on budget day and said it would raise an amount over the forward estimates. We took that in good faith. There was no reason to dispute it. But then, of course, the banks are required under law to make a disclosure to the Australian stock exchange about their liabilities and material changes to their financial situation. They have done that. One after another the big banks made their disclosures to the Australian Stock Exchange and, lo and behold, it fell short. There were five banks affected. Four have disclosed to the stock exchange, and we are looking at a very significant shortfall. Macquarie is the only bank yet to disclose to the stock exchange. They are taking their time, as is their right. But anybody who thinks that Macquarie is going to make up the shortfall is whistling Dixie, because they are the smallest of the banks affected and their liability is going to be less than the others. To suggest that they are going to make up the shortfall is nonsense.
So less than a fortnight after the budget was brought down we had a $2 billion black hole over the forward estimates in the Treasurer's numbers. That is a shortfall of $2 billion. This is a significant issue. The reason I raise this as a significant issue is that it goes to the Treasurer's competence. It also goes to the fact that they will need to make the $2 billion up. Will they make it up through further cuts? Will they make it up through tax increases? Will they change the definition of the banks liable to get more banks in the net? They have told us about competition. Will they actually get some of the smaller banks in the net to make up the shortfall or will they simply see the deficit blow out by a further $2 billion over the next four years? Time will tell, but we know that there is a $2 billion shortfall in the Treasurer's figuring. The situation is that the government has refused to acknowledge this fact. In fact, I am obliged to say that they are being fundamentally misleading about this. The Treasurer stood there and said, 'You're using the wrong figures. You should be using cash, not fiscal balance.' He thought he was very clever at question time. He said, 'You should be using cash, not fiscal balance.' The problem is: the Treasurer was wrong. Either he misunderstands his own budget or he chose to mislead the House. That is the choice that we are faced with when we look at what the Treasurer said. The cash figure was different to the underlying fiscal balance figure for one reason and one reason alone: this tax is paid quarterly in arrears, so one of the quarters was not counted and the banks reported to the Australian Stock Exchange their full four quarters. That is the difference. So the Treasurer was wrong and he owes this House an apology for what he said in that question time, but I do not hold my breath that we will get it any time soon.
There is the final nail in the coffin for the Treasurer's competence when it comes to the bank tax. I made mention of Macquarie Bank and the fact that they have not yet disclosed their liabilities under the tax to the Australian Stock Exchange. They can choose when to do that. But we see the speculation that they will leave Australia. I do not know whether they will or they will not, but it is quite clear that this was put together so quickly, it was so rushed, because the Treasurer had a black hole in his budget that he needed to fill and he did not think through all of the ramifications. If Macquarie Bank is not domiciled in Australia, they will not be paying the tax in Australia. We know that the Treasurer had other ideas and they all fell apart at the last minute, so he had to come up with the bank tax at the last minute. That is why this has been so significantly botched by the Treasurer. I must say, I am not surprised. Most things that he touches manage to get botched.
I emphasise that we support the legislation because we are prepared to help the government in budget repair, but they make it hard sometimes. Gee, they make it difficult. You try to give them support and yet they manage to bungle the implementation so comprehensively. It is for that reason that I move the second reading movement, which has been circulated in my name, to allow the House to fully aerate these issues and debate the government's competence when it comes to this. Notwithstanding the second reading amendment, I commend the bill to the House. I move:
That all words after “That” be omitted with a view to substituting the following words:
“whilst not declining to give the bill a second reading, the House notes:
(1) there is support in the Parliament for the major bank levy;
(2) the big four banks have made legal disclosures to the ASX that suggests there is a $2 billion Budget black hole in the major bank levy forecasts;
(3) the consultation process leading up to the tabling of this legislation was badly mishandled by the Treasurer;
(4) the Government should come clean on the potential impact that the levy will have on consumers;
(5) the Government has instituted at least 12 Government reviews and measures relating to the banks, doing everything other than institute a Royal Commission; and
(6) only a Royal Commission into the banks will deliver the systematic, structural and cultural change that the banking and financial services sector needs”.
Ms RISHWORTH (Kingston) (12:42): I second the amendment.
The DEPUTY SPEAKER ( Mr Vasta ): The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.
I also understand it is the wish of the House to debate this order of the day concurrently with the Treasury Laws Amendment (Major Bank Levy) Bill 2017. As there is no objection, the chair will allow that course to be followed. The question now is that the amendment be agreed to.
Mr BROAD (Mallee) (12:43): It gives me pleasure to talk about the Major Bank Levy Bill 2017 and the Treasury Laws Amendment (Major Bank Levy) Bill 2017. Let's begin by saying that banks are a partner to Australians reaching their aspiration. As a young, hardworking tradie, when I was 22 I managed to convince the bank to loan me $400,000 so I could buy my first farm. I would not have been able to buy my first farm if the bank had not loaned me the money, so I was able to turn a dream into a reality through the help of finance. So banks are a partner to us. This is not about bagging the banks, this is not about being overly critical of the banks; this is actually about them being a partner back to the Australian people. I also remember the wise words of a guy called John Fox who came to see me as a 22-year-old with a massive debt. He said, 'If you get yourself in trouble, son, come and talk to us.' Agriculture, which was the field that I had invested in, was one of those things where the wind can blow against your face and it does not work for you. He said, 'Just come and talk to us.' And I think that is what people are looking for in our banking sector. They want a bank that is a partner. To achieve their dreams and aspirations, they want to make repayments and pay off that investment they have bought or that house they have dreamed of owning, but they see the bank as a partner.
But we—the Australian people and the Australian government—are also a partner to the banks. In the global financial crisis the banks came to us and said, 'Would you be our guarantor?' And we did that, not only because we believe in a strong and stable financial system; we also wanted to give confidence to Australians that had money in the bank. So now, as we find ourselves in a situation where, as a country, we have national debts to pay back, it is fair and reasonable that the banking sector should contribute to returning the balance sheet of the Australian people to a healthy position.
I find it fascinating that for a long time the opposition was critical of us, saying we were too close to the banks—we were friends with the banks. Now that we bring in what is essentially a levy, they are looking for a point of difference instead of just embracing it. I think they do need to embrace it, and I am pleased that they are getting there, even if it is through gritted teeth.
I believe that the big four Australian banks need to show more of a partnership with regional Australia. What I am increasingly seeing is the likes of Bendigo Bank—some of the smaller tier, second banks—opening community banking branch models in our regions. But, as an MP representing one-third of the state of Victoria—a profitable third, I have to say, if you look at the $5.3 billion worth of economic activity in my patch—it saddens me that the big four banks are still shutting down branches in our country towns. They are arguing that people are accessing their finances online. That is true to an extent, but you still have to go somewhere to open an account, and, when you are dealing with substantial payments going into your bank account from suppliers, you want to have someone you can talk to.
To conclude my remarks, can I say that we are a partner to the banks. We have been their guarantor. We are surprised at any push back on us, the Australian people, asking them to contribute. I think this contribution is fair, reasonable and measured, and I commend the Treasurer for it. But I also ask for their ongoing partnership with regional Australia in providing the services that regional Australia requires so that people can maximise their opportunities and their dreams. They cannot do that if the branch is shut. I would say to the big four: 'You're making plenty of money. Provide the service to regional Australia.' That is my plea, and it is my sincere belief that it is their obligation as responsible financial lenders.
Dr CHALMERS (Rankin) (12:48): Thank you for the opportunity to speak on the Major Bank Levy Bill, also known as the bank tax, and not just to offer the support of this side of the House for the bill in principle but also to talk about some of the things which are concerning when it comes to the way the government has gone about devising and trying to implement this bill.
We make it clear from the outset that we support the cognate bills; we support the measure. But our job on this side of the House is to hold the government to account on the implementation of the policy, and there are a range of reasons why we are a bit concerned about the way the government has gone about what should be a good initiative. Given the state of the budget, the state of the books, we should be looking for ways to repair the budget in a way that does not ask the most vulnerable people to carry the can, but there are still concerns about how the government has gone about implementing this bank tax.
The banks themselves have claimed that there is something like a $2 billion hole in the government's costings. Obviously that would be a very troubling development if it were true. We have sought assurance from the government that that is not the case, but unfortunately the Treasurer's answers have made us more worried about the costing of this initiative rather than less worried. That is not an uncommon thing when it comes to the Treasurer, but it remains the case that we have been given no confidence that the costing of the bank tax is appropriate and is right.
We have also been given no assurance around the passing of the bank tax on to consumers. Those opposite say they have funded the ACCC to do that task, but it has been funded for only a year—I think $1 million in total—which is insufficient to do that important policing task. The banks themselves say they will pass it on, and nobody on that side of the House has given the people I represent, the people we represent, the assurance they need that this will not be just another pressure on household budgets. Another concern: unfortunately in the comments by the member for Mallee I thought there was a bit of a sense that this somehow excuses those opposite for the protection racket they are running on the royal commission we should have into our financial system, to get to the bottom of some of this injustice and poor treatment of customers. We need to get to the bottom of it so we can have confidence in our system, which is otherwise strong but has fallen down badly when it comes to the treatment of ordinary Australians in this country.
The fourth main thing that concerns us about the bank tax is that at the same time as they want a pat on the back and want this kudos for instituting a bank levy they are giving something like $10 billion out of the $65 billion company tax to just four companies—the four big banks. They want us to say, 'Oh, well done; you're taxing the big banks and recognising their power in the market by instituting a bank levy,' but at the same time they are giving them, with the other hand, something like $10 billion over the medium term. It is pretty extraordinary to think that almost a sixth of that really big company tax cut will go to just four companies, and they will be the four big banks.
So I think what we have seen here is a rushed policy. I think what happened was that it got quite late in the budget process and the government had run out of options, so they put this on the table. They had not done enough of the thinking or enough of the work to make sure they got it right—again. Unfortunately, that is a characteristic of this Treasurer in particular but indeed of the whole government. That is why we on this side call the Treasurer 'Butterfingers'.
Ms Rishworth: That is not the only thing!
Dr CHALMERS: No, that is not the only thing, as the member for Kingston reminds me. But 'Butterfingers' is really just a summary: with all of these things that the Treasurer has been called to do, he generally makes a mess of them. Even with something that seems as simple as instituting a bank levy on five companies in the economy, the Treasurer has managed to make a mess of it. And when we look more broadly across the Treasury portfolio it should not surprise us to see the Treasurer make a mess of the bank tax. He has made a mess of the whole 'jobs and growth' agenda in the budget that was handed down a few weeks ago from that dispatch box. We had a budget that anticipates, for example, 95,000 fewer jobs in the economy than were anticipated just a year ago, in the budget before. We have wages growth at record lows, but the budget miraculously assumes we will get back to wages growth not at 1.9 per cent—which is where it is now, which is a real wages cut—but at 3.75 per cent by the end of the forwards.
This is the sort of incompetence, the sort of unreliability that we get from this Treasurer when it comes to jobs and growth. On jobs, we have record high underemployment. People do not get the hours they need at work. We have those low wages, with real wages going backwards—all of these things. And really that is just the broader context for this particular stuff-up on the bank levy: generally, right across the portfolio, we have big problems under this Treasurer's watch.
Fiscally, we have had a bit to say today, and there will be a bit to say tomorrow, as well, about the fact that these sorts of measures are necessary because the budget has deteriorated quite substantially on the watch of those opposite. And this is not an opinion; the numbers in the government's own budget papers show that we have had an extraordinary blowout in deficits, that we have had an extraordinary blowout in debt, whether you measure that in net terms or gross terms.
Tomorrow, unfortunately, for the very first time in our history, Australia will break through half a trillion dollars in gross debt. Under those opposite, we have record net debt as well. In this budget, the deficit for the coming year is more than 10 times bigger than it was projected to be in Joe Hockey's first budget. That is an extraordinary blow-out. That then flows through to the debt figures. It is worth reminding the House that, when those opposite say that they are the party that will pay down debt and deficit, they are accumulating debt in this country at a faster pace per month than happened under Labor—and Labor had a global financial crisis to deal with. This Treasurer has relatively rosy economic conditions, at least globally, and he is accumulating debt at a faster rate than Labor did. Labor had to deal with the sharpest synchronised downturn in the global economy since the Great Depression. That gives you a bit of a sense of the situation.
There are those people who say, 'There is good and bad debt' and all of those sorts of things, and people will make good arguments about the level of sustainable debt in this country. But the one thing that those opposite cannot explain is why they have failed the test that they set for themselves. Paying down debt was supposed to be their reason for being—not just under the former regime, under the member for Warringah's government, but under the member for Wentworth's government. We get all this rubbish about how they are superior economic managers: 'We are going to pay down the debt.' Debt is blowing out at a faster rate now than it was under the Labor government during the global financial crisis. That is a pretty stunning thing. And we have got all of these blow-outs. That is why the government finds it necessary to try to implement the bank tax that we are talking about right now.
The first bill, the Major Bank Levy Bill 2017, gives effect to the budget measure. It applies to the big four banks, as I said, but also to the Macquarie Bank. It sets out the rate that entities with more than $100 billion in total liabilities have to pay—0.015 per cent of applicable liabilities per quarter, which is 0.06 per cent annually. It also sets out what liabilities are applicable for the purposes of the levy. The second bill, the Treasury Laws Amendment (Major Bank Levy) Bill 2017, makes a series of consequential amendments to legislation in connection with the introduction of the bank levy.
As I have already said, we will not stand in the way, but nor will we be silent when it comes to the committee process of getting to the bottom of some of these implementation issues around the costing and around the pass-through. Also, of course, we will take every opportunity to say that action on the banks will never be complete unless it includes a royal commission, which the Australian people desperately want to see so that they can have confidence in their banks and in the way they treat their customers.
The government want the Australian people to think that the centrepiece of the budget was the bank tax. They want us to think: 'We have changed; we have learnt. We know that you were not really keen on the approach we have been taking for the past three years, so we are going to be like a leopard which can change its spots, and all of a sudden we're for the little guy.' That is designed to camouflage the real centrepiece of this budget: the way that all the benefits get showered on the top end of town at the expense of people who work and people who struggle. Whether that is the tax cut for millionaires, which comes in on the same weekend as the pay cuts for people who work and get penalty rates, or whether it is the $65 billion tax cut for the biggest businesses in this country, we see these really warped priorities. No bank tax will properly camouflage or obscure a government which governs every day for the top end of town at the expense of people who work and struggle.
The Australian people are not fooled. The truth of it is that they are quite keen on a bank levy, but they know that that does not best symbolise what this government is about, which is that it goes after the most vulnerable people in our community, taking money out of schools and hospitals and out of the pockets of vulnerable people and giving it to the most powerful people in our economy. That is why the government has fallen so far in the esteem of the Australian people—and that is before we get to some of the things that it will not do. It will not crack down on tax breaks for wealthy property speculators. It will not crack down on capital gains tax concessions. It will not take real action on multinational tax avoidance. These are all the sorts of things that the Australian people need and deserve if they want their budget to be improved in a way that is fair, which is what we are all on about.
We do have concerns about the bill. We do not oppose it in principle and we will not stand in its way, but we will take every opportunity to point out the deficiencies in the way the government have gone about it, the deficiencies in their broader approach to tax, their warped priorities in the budget more generally and the causes and consequences of what will be half a trillion dollars in gross debt, which we will see tomorrow, which is a shameful figure from a government who pretend to be superior economic managers.
Mr HOWARTH (Petrie) (13:00): 'Labor will not stop the Liberals' levy on the banks.' Hallelujah! That was one of my favourite lines from the opposition leader's budget reply speech, given he was responsible, as part of the previous government, for the deficits that the member for Rankin, who is opposite me, was just speaking about. When common sense prevails, it is a beautiful thing. If only we saw more of it from those opposite—from the negative Labor Party opposite that oppose everything and that created the mess that we are in with these massive deficits, since John Howard left, and compound interest that many of them might not understand. That has created the problem we are in today.
The major bank levy is common sense. It is a fair call for Australian banks, which are the second most profitable in the world. Australian banks outperformed their international peers during the GFC. They work hard, work smart and do well. The member for Mallee made a great point in his speech before about how the banks were supported during the GFC as well. The major banks are also major corporate citizens with a major social responsibility that flows as a result of their major market interest.
We want our major banks to be the most profitable in the world. We want that. It is a good thing. That is why the coalition government supports their success. We are also committed to reducing the debt that accumulated during Labor's decade of deficits, and we all have a role to play in that—the major banks included. The five majors together account for more than 80 per cent of lending for housing, gross loans and advances. Reporting total profits of more than $30 billion after tax, their dominance and success is a result of more than just their strategy and savvy. They occupy, of course, a privileged position as providers of essential financial services and enjoy enviable success, which, by anyone's measure, represents an excellent return on investment.
This bill requires of them a fair additional contribution, given their concentration. The major bank levy will apply to authorised deposit-taking institutions with liabilities of more than $100 billion and will tip $1.5 billion a year into the public kitty. Estimates are that the levy will pluck roughly four per cent from the banks' bottom line. That is something I urge them to consider as an investment. Australians are fortunate to have many banking options, and I am inspired by the success of some of the smaller banks, community banks, credit unions and building societies. It is great to see some energy in that sector. The Treasury Laws Amendment (Major Bank Levy) Bill will contribute to meaningful budget repair and address the debt accumulated by a decade of Labor deficits. We have a responsibility to reduce this debt now so as to avoid it becoming our children's unfortunate inheritance.
The coalition government is committed to the responsible financial management of our nation's affairs. Budget 2017 represents a comprehensive solution to debt racked up under Labor. It addresses the rising cost of living, increasing energy prices and supply and housing affordability. It eases the pressure on hardworking Australians and their families. It tightens the safety net that supports Australians in tough times and guarantees essentials—schools, pensions, infrastructure and health care. It provides relief for small and medium businesses and drives job creation.
But the essentials cost money, and we cannot continue to live beyond our means. Those opposite, we know, have learnt nothing when it comes to that. At the last election they promised $16 billion in additional debt after the havoc they unleashed on the nation during the Rudd-Gillard-Rudd years. That is why, along with providing necessary funding, budget 2017 finds savings elsewhere, including the $6.2 billion over the forward estimates as a result of the major bank levy. The levy is set in legislation at a rate of 6c of every $100 of specified liabilities and only applies to the big four banks and Macquarie Bank, each of which currently has liabilities greater than $100 billion. It includes other bank brands operating under the same licence as the principal bank as well. It will be deductible for corporate tax purposes and, consistent with ordinary expenses, does not generate franking credits. The levy, of course, does not apply to deposits protected by the Financial Claims Scheme, which applies to protected deposit accounts of up to $250,000 per account holder. It also does not apply to mortgages. It also does not apply to additional tier 1 capital held by the banks to help meet their capital requirements, which protects the stability of the financial system, or to a bank group's nonbank businesses—for example, insurance or superannuation.
The introduction of the major bank levy is just one way the coalition government is securing brighter days for all Australians, and that includes the banks as they stand to benefit as result of the retention of our outstanding credit rating. Bankers historically have had a reputation for trust. In the generation before mine, and even now in some cases, the bank manager was an influential and highly respected member of the community. It would be good to see that same sense of community from the major banks, who might use this as an opportunity to build loyalty with customers, to boost customer satisfaction and to do the right thing. Customers have tolerated increased fees, streamlining of services, cost-cutting measures and disappearing branches, as well. The Deception Bay community in the Petrie electorate, home to more than 20,000 people, does not even have a bank. I have written to some of the banks on several occasions and asked them to set up a bank in Deception Bay for the Deception Bay community. We cannot convince one of them to set up shop. It is a high-growth area and home to hardworking Australians, to young people, to retirees—they all bank their money but cannot do so locally. With Deception Bay's 13,634 square metre shopping centre currently undergoing significant refurbishment, I hope they will consider moving into the neighbourhood.
Many major bank customers have been banking with the same bank all their life—it is a common thing. They signed up for the old coin-in-the-envelope primary school savings bank schemes and have remained loyal ever since. I would say to the major banks, it is easier than ever to switch. You can switch to the Bank of Queensland, Bendigo Bank, Suncorp-Metway or whoever it is locally. Banks invest good money in actively working to communicate with and retain their customers. Absorbing the bank levy rather than handballing the cost to your customers would be an excellent relationship builder and an exercise likely to pay dividends. Ensuring a strong financial position is in the financial interests of all of us.
Mr BANDT (Melbourne) (13:09): Six years ago, in June 2011, I gave a speech to the Australian Bankers Association. They are not necessarily good friends of the Greens, but it was a speech I gave in the context of the world responding to the GFC and the growing revenue problems that were facing the government. I said that there was one thing we could do that would help level the playing field between bigger banks, which get the benefit of a big, implicitly 'too big to fail', subsidy from the public purse, and their smaller competitors, which would also generate some money for the public purse. Back in 2011, on behalf of the Greens, I called for a levy to be imposed on the big banks. We said: if we impose a levy on the big banks only, and do not make it an across-the-board levy that applies to every bank, we will limit the ability of the big banks to pass it on to customers—because if they try to do that people can just walk down the road to another bank or credit union that has not had the levy put on them—as well as generate a return to the public purse. At a time when government had been saying that the only way to get the budget back into balance was to attack people on welfare or perhaps cut funding from schools, we said: 'No. There is a better way of doing it. Stand up to those big banks that are making world-leading record profits.'
Why do the big banks make world-leading record profits? There are a number of reasons. One is the oligopoly that exists in Australia. The second, and most important, is the four pillars policy, which is effectively a too big to fail policy. What that means is that the government says: if any of the big four banks get into trouble, we will step in and bail them out. It means that the big four get to go overseas and borrow money more cheaply than their smaller counterparts because they know they have got government standing behind them, and that helps entrench their market dominance.
We saw this in practice during the GFC. When all of a sudden no-one could borrow money from anywhere, what did the government do? The government said to the banks, 'We'll stand behind you and guarantee your wholesale funding.' But they actually gave the big four banks a cheaper rate than everyone else. The big four banks during the GFC—everyone will remember who was in government then—got a cheaper rate than everyone else. As a result, the big four came through the GFC with a greater market share than when they went into it. They were able to take over a couple of smaller players. They came through with a greater market share and barely registered a blip on their profitability. The government stood behind them when times got tough and proved that in this country we have de facto public subsidies of the big four banks. The big four banks make a motza because the government, whether they are Labor or Liberal, stand behind them as a way of helping out.
Wouldn't every business in this country love to have the government standing behind them as guarantor every time they go and seek funds to expand their business? You do not get this in tourism. You do not get the government willing to help you out if you find yourself in a tight spot when there is a financial crisis or things get tough. You do not get it in manufacturing. But you do get it in the finance sector, for some reason. You do get it if you are one of the big four banks. That is why they have such a stranglehold on this place and that is why back in 2011 the Greens were the first to propose that we put a levy on the major banks.
At the time, we tried to get the other parties to agree to it. We tried to get Labor, who were in government at the time, to agree to it and they said no. They said they would only consider levies that applied across the board, to which we said: 'That way you can just pass it on to the customer. What is going to stop them passing it on to the customer?' We tried to get the Liberals interested in it, and they said: 'The Greens always want to go and tax the big banks. We need to do other things to balance the budget. We can't keep attacking the big banks.' They did not mention that, on the side, the big four banks were some of the biggest donors to their electoral campaigns and that also there was a revolving door between members of government, their staff and the big banks themselves—a practice that continues to this day.
But a good thing about this place is that a good idea will always have its time, because the pressures of declining revenue for the government have been too big to ignore. The government told us for a couple of years that there was no revenue problem; there was only a spending problem. But anyone can see that if we are to fund the services that Australians rightly expect we are going to need to deal with the revenue side.
In exactly the same way, before the last election the Greens were the only ones calling for legislation to protect penalty rates in law, in the event that the Fair Work Commission cut them. We were howled down by Labor and Liberal at that stage. We were told, 'Don't move to protect penalty rates in law, because it's not going to happen; you're not going to get a cut in penalty rates from the Fair Work Commission.' According to the Leader of the Opposition aliens might land from outer space sooner than penalty rates being cut. But we said, 'No, there is a need to protect penalty rates in law.' We were howled down at the time, but it turned out that we were right and that people's pay in this country was under attack.
Then, as it became apparent that parliament had to do something, Labor came in behind the Greens' position. I welcome that. It was not the position they took to the election, but it is good to change your mind when it means you can protect workers, especially when you can protect young workers. So I am equally pleased that the government has finally been mugged by reality and has seen the light and realised that there is a case for standing up to the big banks. There is a case for saying, 'You're making world-leading record profits; you're making them in part off the back of public support; the public is entitled to a little bit back.' There are fairer ways of balancing the budget than what the former Prime Minister did at the time that we were arguing for the bank levy. The former Prime Minister, the member for Warringah, said, 'No, I am not going to have a bank levy—I am going to increase the cost of people going to see the doctor; I am going to put up the cost of going to university; and I am going to cut funding to schools and hospitals.'
That was there alternative back then. The people and the parliament stood up to him and his government then, and said, 'Go back to the drawing board—there is a better way of doing this.' We changed the Prime Minister, and it took a little while but we changed some of their policies as well. Some of those measures to try and balance the budget and raise the revenue that is needed continue, unfortunately, and in this budget, of which this bill is a part, we are having to fight with the government deciding that they will attack universities and students to try and raise revenue.
This bill is an admission that the Greens were right. This bill is an admission that you can stand up to the big banks and ask them to pay a little bit more, and the world will not end. In fact, it will mean that there is a bit more space in the budget for to pay for schools and hospitals, and you do not need to take the axe to the young, the old, the sick and the poor. We are disappointed that the government has not adopted our original proposal, because our original proposal would have raised significantly more than what is being proposed here. Our original proposal would have brought in around $2 billion to $3 billion a year. Our original proposal was based on what those arch-Marxists, the IMF, thought was a fair place to set the bank levy. The IMF said, 'Yes, there are these things called too-big-to-fail banks; yes, they do deserve to have to pay a bit more. Set a levy at around two-thirds of the implicit subsidy they get, and you will not only level the playing field, you will make sure that the banks don't engage in risky behaviour because they know, or they think they know, that they have the government standing there behind them.'
If we had set the levy on the basis of a bit of rigour and logic and guidance from the likes of the IMF, we would be raising substantially more, and it would put us in line, on average, with the kind of levies that are in place elsewhere around the world. It would not have been that big a stretch. If we are going to stand up to the big banks, let's do it properly; let's do it at the level that others have recommended. If we had done that—if this bill had taken the full Greens proposal and run with it, instead of just half picking it up—you find that we probably would not have to be cutting university funding in this budget. We would not have to have a Medicare freeze that continues for a fair bit longer than the government would have us believe. We would not have to have people on Newstart continuing to live below the poverty line. We could give people on Newstart the pay boost that they deserve rather than leaving them in a poverty trap. Had the government had the courage to do that, not only would the budget be in a better position but everyone in this country would be.
As I say, the government has been mugged by reality. They have been mugged by the budget reality. They have been mugged by the reality that the big banks are in an incredibly privileged position. But they have also been mugged by another reality, which is that the public has decided enough is enough. The public is crying out for politicians who will stand up to powerful interests and make them contribute their fair share. Again, it is clear in this respect that the banks have been getting away with murder, financially speaking, and that they have been making massive profits off the back of public subsidies, and people have said it is about time that they paid a bit of a contribution. So the government has had to have a nod towards that. They have not gone the full way by putting in place a levy that would be meaningful and would address to a fuller level the support they are getting, but at least they have gone some way.
What that leaves is a gap. This levy does not fully cover the implicit subsidy that the big four banks, and potentially Macquarie Bank, get. This levy does not fully recoup the implicit too big to fail guarantee, and that is something that we should remember the next time a financial crisis hits. No-one within this place or within the banking sector predicted the GFC, but the banks were very quick to come out and say, 'We'd like a bit of support, otherwise the whole financial system in Australia is going to freeze.' This levy does not fully account for the support they have been given or the support they are going to continue to receive. That is important because there is every chance that, if there is a crash in the housing market, the banks will come cap in hand again to this place and say: 'We are in trouble because we have written so much of our loan book for mortgages that have now helped push prices up beyond the reach of most young people and many people generally. We are in all sorts of financial trouble. We need your help.' We should remember when that moment comes that this levy does not fully account for all the public support that those banks get. Some of those banks have said, 'We'll never come back asking for help, and we didn't ask for it the first time around,' but they did not turn it away when it was offered. They quite happily took up those generous rates of the wholesale funding guarantee and allowed themselves to come out the other end of the GFC in rude health.
Hopefully, this is the start of government being a bit more suspicious next time one of those big four banks comes along, because we have admitted by this bill that they do enjoy a subsidy. We have not recouped the full amount of that. If we are going to have a four pillars policy in this country, then at least what this bill does is start to call a spade a spade and say, 'It is time for you to pay some of it back.' But there is a lot more that needs to be paid back. People rightly know the big banks have been making world-leading record profits. They can afford to pay a bit more, and, until we fully account for the subsidy that they have been getting, there is no case for the government to ask students to pay more, there is no case for the government to ask people to pay more to go and see their doctor and there is no case for keeping people in poverty by keeping Newstart so low while the banks still get away with not fully paying their fair share of tax.
Ms PRICE (Durack) (13:24): It is pleasing to see the Greens' support for this very important legislation that we are debating here today. The Treasury Laws Amendment (Major Bank Levy) Bill 2017 will introduce the major bank levy for all banks with liabilities of at least $100 billion, raising around $1.5 billion per year. This is a great arrow in the quiver for the Australian taxpayer to use against the banks that have unquestionably had an armchair ride in Australia, and have had for some time. This represents a fair additional contribution from our major banks in recognition that their size and scale poses a structural risk to the economy. Banks, as we know, hold a very special social licence in our community. Compensation to the community through this government bank levy is, I believe, appropriate.
This measure provides a more level playing field for smaller banks and non-bank competitors. It is not unique. In fact, many other advanced economies, including the United Kingdom, have a bank levy. The United Kingdom has a bank levy several basis points higher than what is being proposed in this bill—and their financial sector is undoubtedly one of the strongest in the world. With that in mind, it is appropriate to note that Australian banks are the second most profitable in the world.
This measure contributes to budget repair in the short term but is a permanent structural change to the way major banks will be taxed. This is a very small levy by the banks' standards, at only six basis points. Debt funding costs for the major banks are estimated to have fallen by around 35 basis points over 2016. So, by comparison, this levy is a drop in the ocean. It is entirely possible for these large banks to absorb these changes without having to offload even one mortgage or one staff member or raise interest rates by even one basis point. Any argument from the bank that they will have to raise interest rates in order to recoup the cost of the debt levy is blatantly false—and it should be called out whenever it is repeated.
But it appears that those opposite are only interested in parroting the talking points provided to them by the banking sector. How unbelievable is it that we have the opposition front bench, and also the Leader of the Opposition, using the same rhetoric that the banks have been using when obviously, by any measure, they can afford to pay this levy. We on this side thought that those opposite were interested in actually tackling the issues with the banks; but it would appear that, when it comes to how much money the banks contribute to our economy, their voices are silent.
The banking sector has made hay in this country for years. Following the GFC, there was a belief in the financial sector—appropriately—that these banks, which place systemic risk in our financial system, would be backed by the taxpayer in the event of their collapse. That policy support has allowed the banks to borrow at a far lower rate than their small and medium-sized competitors. That lower borrowing rate has allowed them to muscle even further into the heart of our economy and increase their market share. In doing so, they have increased the risk they pose to the economy should they collapse.
The levy is set in legislation at a rate of six basis points and will apply only to the big four banks and Macquarie Bank, with each currently having liabilities greater than $100 billion. But there are exceptions. We know that the large banks are highly profitable, earning total profits of over $30 billion a year after tax, benefiting from their dominant position in providing essential financial services. The levy will raise around $1.5 billion annually, or some $6.2 billion over the forward estimates. It is in the interests of the banks, the government, the opposition and, most importantly, the taxpayers of this country for the banks to accept this levy and simply move on.
The banks can choose to absorb the cost of the levy in the same way that small businesses around the country, and also families, absorb the increased costs they may face from time to time. To guard against the banks trying to use the levy as an excuse for significant changes in mortgage interest rates, the ACCC will undertake an inquiry into residential mortgage pricing. The Turnbull government has fully resourced the ACCC to undertake that inquiry, which I fully support.
Consumers have a choice as to who they bank with, and would I certainly encourage them to consider that if they do find that their costs are increasing as a result of the banking levy. We know that banks in other countries were able to absorb the cost, and this is ultimately in the best interests of the corporate citizens of the country.
I commend the bill to the House.
The DEPUTY SPEAKER ( Mr Coulton ): The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.
STATEMENTS BY MEMBERS
Hirst, Mr Greg
Ms OWENS (Parramatta) (13:29): I rise today to pay tribute to the life of Greg Hirst. He was a husband and father, a media personality, a pillar of the motorcycle community and a fierce advocate for the vulnerable. There were many, like me, who called him a friend. Greg was never far from his motorbike. If you saw Greg, there was a bike. He co-founded the Brotherhood Christian Motorcycle Club in 1979. He organised motorcycling events, including the Silverwater Motor Festival and the Bathurst Bike Show, and as chairman of the Motorcycle Council of New South Wales he advocated for motorcycle safety and the civil rights of motorcyclists. For several years I jumped on the back of Greg's bike at Krispy Kreme in Penrith and joined hundreds of bike riders on the annual Bikers Australia Blanket Run, bringing warmth to the homeless of Parramatta. But we are talking about Greg Hirst. He did not just participate in the ride; he organised it, as he organised many other events during Homelessness Week.
Greg was a man of great heart, and as a devout Christian his life's work was to minister to some of the most vulnerable people through the Street Level Ministry. You could get a sense of Greg's generosity through his writing for The Daily Telegraph, the Parramatta Advertiser and the motorcycling pressand through his radio show RIDE on Alive, as well as his television show Temporary Australians,co-hosted by WSFM's Jonesy, that is now in its fifth season on 7mate. Greg showed us how large life could be. He is survived by his wife of 37 years, Colleen, and their children. On Monday the Brotherhood Christian Motorcycle Club and many others will join Greg for one last ride as they escort him to the funeral service in Penrith, coming together for one last ride for Greg. Farewell, Hirsty.
Menzies Electorate: Roads
Mr ANDREWS (Menzies) (13:31): The inadequacy of public transport and roads in my electorate, lying between the Yarra River and the Eastern Freeway is an ongoing concern. The rapid growth of the area in the 1960s, 1970s and 1980s led to the replacement of orchards and market gardens by housing. As a consequence, a semirural area was transformed into suburbia in a relatively short period of time. While this is a desirable place to live, it has meant that transport remains a problem. Major roads, the responsibility of the state government, remain underdeveloped despite significant increases in the number of cars in the electorate. As a consequence there are two major transport links and two major transport needs, and both relate to easing the congestion on the roads.
Firstly, the two major road links that need to be constructed are, obviously, the East West Link, which is an ongoing concern to my constituents, and also the North East Link—a crossing of the Yarra River, of which there are very few. I am pleased that the Commonwealth has provided funding for the feasibility study for this link in this year's budget. Secondly, public transport needs to be enhanced. In particular, the existing park-and-ride facilities need to be expanded, particularly the one at the corner of Doncaster Road and High Street but at other areas in the electorate as well.
Fremantle Electorate: Queen's Birthday 2017 Honours List
Mr JOSH WILSON (Fremantle) (13:33): The Queen's Birthday Honours have recognised some significant contributions from within the Fremantle electorate community. Les Lauder has been made a Member of the Order of Australia for his work to protect and enhance Fremantle's extraordinary character and built heritage. Les was a driving force within the Fremantle Society from its inception in the 1970s and gave years of service as a councillor in the City of Fremantle.
It is wonderful and right that Kay Cleak has been honoured with an Order of Australia Medal. For decades, Kay has applied her energy, creativity and enormous compassion in supporting Cockburn's local veteran community and by engaging young Australians in schools and through the annual Anzac and Vietnam memorial services. Kay and her husband, Digger Cleak, a Vietnam veteran who served in the Australian Navy, are treasures of our community. They are much loved.
I also want to acknowledge, with great affection and respect, the writer, poet, editor and activist Wendy Jenkins, who has been honoured with an AM for her contribution to the great cause of Australian literature. As an editor at Fremantle Press, Wendy has mentored and enabled countless Australian writers. As a writer deeply invested in her community, with a fierce commitment to the environment and social justice, Wendy has done what activist writers always do: speak truth to power, speak for those without a voice and tell unflinchingly the stories of who we are at our worst and at our best. I congratulate Les, Kay and Wendy for being honoured in this way.
Men's Health Week
Mrs SUDMALIS (Gilmore) (13:34): This week, Men's Health Week was launched, which is a timely reminder that we need to address the health concerns of everyone. Recently in Gilmore we launched an awareness-raising campaign for prostate cancer. Professor John Macdonald, His Excellency General Sir Peter Cosgrove and the Minister for Health spoke about men's health—in particular, mental health. They mentioned that we need to recognise the excellent contribution that Men's Sheds around Australia make in this area. Often this is a way to reduce depression. We have some great advocacy for our men, but right now the issue of male suicide worries us all. As Professor Macdonald said:
Many suicides are about situational distress, the signs of which may be missed or overlooked if we are too intent on identifying depression or other so called “mental disorders”
There is something we need to examine more closely. Adopting a situational suicide prevention model requires a new approach to data collection, integration, and cross-referencing. Suicide prevention activities can be wasteful if they are simply targeted on high-risk issues or at-risk subgroups in a general way. The scattergun approach can skew evaluation of program effectiveness and great community social support networks become invisible. However, events like industry closures or farms suffering from drought or regions trying to pick up the pieces after a cyclone can cause all sorts of situational distress which may lead to escalated suicide risk. It is time to look more carefully at men's health and perhaps for longer than a week. (Time expired)
Lyons Electorate: Centrelink
Mr BRIAN MITCHELL (Lyons) (13:36): This week we saw the Minister for Human Services release the top 100 suburbs for Centrelink non-compliance—'the list of shame', as the Murdoch press has so eloquently dubbed it. Bridgewater, where my office has the pleasure of being located, has hit the list, with 86 people not meeting their requirements. I know that Bridgwater has a population of just over 4,000 people. What I do not know is how many Bridgewater people are on Centrelink. Eighty-six people out of 4,000—is that really enough to shame an entire suburb? What is that—just over two per cent. I have spent all morning chasing information from the minister's office and getting nothing but the run-around. Why is it so hard to get information from this minister when he hands it out so freely to the Murdoch press? He has shown that he is even not averse to handing out citizens' private details, but apparently only when it suits him and his grubby political agenda. This minister is a bad fit in a critical portfolio. His job should be to lift people up, but he kicks them when they are down. The minister has released his 'list of shame'. How about the hottest 100 suburbs of Cayman Island account holders, unsafe building sites or superannuation non-payment? How about the hottest 100 suburbs of tax evaders? I will not hold my breath to see these lists of shame from the minister's office any time soon in the Murdoch press.
Chisholm Electorate: Queen's Birthday Honours
Ms BANKS (Chisholm) (13:37): I rise today as I am very proud to congratulate the following Chisholm residents who were acknowledged as part of our nation's honour system and were awarded Queen's Birthday honours. Professor Andrew Gleadow of Surrey Hills was made an Officer of the Order of Australia for his service to the earth sciences as an academic and researcher in the field of thermochronology and landscape evolution. Mr Paul Bonsak of Blackburn South received the Medal of the Order of Australia and was recognised for his service to children, having fostered more than 26 children between 1980 and 1998. Mr Bonsak's compassion for children was jointly acknowledged with his service to business, particularly in the water and gas sectors. Mr Norman Fettell of Burwood, who is known as Rex, received the Medal of the Order of Australia for his service to sailing, having designed the Minnow and Sabre class dinghies in the 1970s. Rex is a proud member of the Carrum Sailing Club and Black Rock Yacht Club and his innovation in sailboat design is evident as thousands of sailors worldwide continue to sail in his designs. They are three extremely deserving recipients—wonderful Australian citizens who contribute to our society and live in the Chisholm electorate.
Corio Electorate: Geelong
Mr MARLES (Corio) (13:39): The member for Corangamite spoke in this chamber on the need for investment in the Geelong convention centre, fast rail to Melbourne and tourism. She did that on 20 March. She talked about how hard she was lobbying the Prime Minister for a city deal for Geelong. Let's be clear—this government has neglected Australian cities in its 2017 budget with no real investment for policies or programs.
The Prime Minister and his parliamentary secretary for cities have spoken a lot about expanding the City Deals program, but not a single extra dollar has been allocated in this year's budget to make it a reality. That means there is no funding for a Geelong city deal. The government has made no announcements about a city deal for Geelong. Indeed, at this stage, there is no Geelong city deal. The fact is Geelong has experienced significant growth in its population, and this will only continue. By 2036, the population of the City of Greater Geelong is expected to increase by another 100,000 people. The member for Corangamite needs to avoid a repeat of her Land 400 performance—all talk and no action. Geelong needs more than just the member for Corangamite's rhetoric. We need real leadership from the Commonwealth government and real investment.
Mallee Electorate: Pensions and Benefits
Mr BROAD (Mallee) (13:40): Recently the township of Mildura, which is the biggest town in the electorate of Mallee, was in the media—for all the wrong reasons—for having a high level of people who are avoiding their obligations when it comes to unemployment benefits. What I want to say is that it was only 300 people out of 55,000. That means there are a lot of Australians in my patch who have got up and gone to work and are contributing to Australia.
But it is not unreasonable, I must say, that we work with people who are avoiding the system. Frankly, those 300 people—we give them one opportunity, a second opportunity, a third opportunity and then a fourth opportunity. If at that point they still have not fulfilled their obligations, we will sit down with them. If they are victims of family violence, or if there is a reason, we will try and give them some assistance. But if they are just avoiding going to work to fulfil their mutual obligations for getting unemployment benefits then the payment should be cut off. I think that is fair and reasonable.
Our patch is a patch we can be proud of. We should be in the paper for all the right reasons, not for the wrong reasons. My people are very, very proud of the community that exists there. We contribute $5.3 billion to the Australian economy. We have a community that we are really proud of. One of our councillors is in the gallery here today. I just want to say that our town, our community, is a town you want to live in; it is a town you want to visit. It is not a town full of bludgers; it is town full of very hard workers.
Workplace Relations
Ms MADELEINE KING (Brand) (13:42): I rise today to stand up for the nearly 10,000 retail, hospitality and pharmacy workers across the cities of Rockingham and Kwinana in my electorate who, from Sunday, 2 July, will face a very real cut to their take-home pay. One year ago on 2 July, the voters of Brand elected me into this parliament to represent them. I could not have imagined then that I would witness a government in this place failing to protect the take-home pay of ordinary Australian workers.
Earlier this week, the Turnbull Liberal government had the chance in this chamber to do the right thing by working Australians and join with the Labor Party to protect the penalty rates of 700,000 workers across this country. This vapid, incompetent and, frankly, mean Liberal government could have supported thousands of people in my electorate and across the whole country—thousands of people and families who rely on penalty rates to get by. The Liberals and the Nationals could have put a stop to cutting penalty rates and lowering wages, but they have failed to do so.
Now, one in seven workers across Rockingham and Kwinana are facing cuts to their take-home pay. Workers in Wellard, Calista, Orelia, Cooloongup, Hillman and Secret Harbour will be paid less. It is a disgrace that this government sees fit to grant the richest among us $65 billion worth of tax cuts while at the same time allowing wages to decrease for ordinary working Australians. This government's refusal to protect these workers and their pay is a disgrace. I want to assure my community that Labor will continue to stand up for them.
Blackmores
Mr FALINSKI (Mackellar) (13:43): There is much to say about how we, as a nation, have succeeded on the global stage. We think about sporting achievements and great moments in history that have hinged on the involvement of Australians. Recently I spoke about how General Monash changed the course of World War I. Because so many of us were born here or grew up here, too often we underestimate the importance of our ideas and ideals in the world. We take for granted those things that just happen. We take our social norms and regulations for granted. Yet now we are seeing that one of our most important exports is our ideas.
Just today a company in my electorate that is better known for providing health supplements to millions of Australians, that has in recent times made itself a household name in China, had a glorious honour bestowed upon it: Blackmores has been announced today as vice president company of the China Quality Inspection Association, the first foreign company to be appointed to such a role in China. While some will see this primarily as a victory for Blackmores and their dedicated team led by Christine Holgate, others may see it as just a recognition of the Northern Beaches business community. I prefer to see it as an affirmation that we live in one of the great countries of the world. I wish Peter Osborne from Blackmores, who has been appointed personally to the association, the best of luck in his new role.
Budget
Workplace Relations
Mrs ELLIOT (Richmond) (13:45): This is a government that is absolutely committed to cutting penalty rates and to cutting workers' pay packets. This is a government that is unfair and so out of touch. The fact is that under this Prime Minister, on 1 July, while millionaires get a tax cut of more $16,000, on the very next day, on Sunday, 2 July, nearly 700,000 workers will have their penalty rates cut. This really shows where this government's priorities are. It shows how harsh and cruel their choices are. These penalty rates cuts will be devastating throughout the nation, but they will especially hit hard in regional and rural areas. It will hit workers who rely on penalty rates to pay their bills and to put food on the table. It will also hurt local economies as there will be less money spent as workers will have their take-home pay slashed.
The penalty rate cuts that will hurt Australian workers on 1 July can be stopped in this place today. We on this side want to stop those cuts; those on the other side don't want to stop the cuts to penalty rates. They own these cuts and they will be responsible for them, and in the regions it is the Nationals who will be held responsible for the cuts to penalty rates, because yesterday we saw all the Liberal and Nationals members in the Turnbull government voting to support cutting penalty rates. This is despite Labor handing the government an opportunity to stop the cuts to penalty rates by supporting the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017. They refused to support it—all of them. They refused to support the workers in their communities. Only Labor will defend penalty rates and only Labor will defend regional and rural communities.
Wright Electorate: Boonah Show
Mr BUCHHOLZ (Wright) (13:46): As the House would be well aware, and of course you, Mr Deputy Speaker Coulton, in our electorates it is the show circuit time. In regional Queensland seats the show circuit is alive and well. Recently in my electorate we had the Boonah Show—its 109th year. I want to congratulate the entire committee of the Boonah Show Society, led by the able Jim Harvey. Jim has his name associated with the president, but the real work is done by his good wife, Marg, and I acknowledge her for her contribution.
Mr Deputy Speaker, you better than most would understand that in small regional communities the president of the show society will also often take on a role in the Lions den, or the Rotary club or the Menshed. These are extremely hardworking people. I want to acknowledge them and just give a quick overview of how successful the show was this year.
I was fortunate to have had the opportunity to be the celebrity judge for the cook-off this year. A man of my 'attributes' was amply capable of being a judge of the stir-fry, with the prize going to Jim, who is an excellent cook in his own right. Queensland Miss Showgirl Kaitlyn Schultz and Queensland Rural Ambassador Justin Matthews both participated. It was an excellent show and I encourage all members to get their constituents out into the local show circuit.
Kingsford Smith Electorate: South Eastern Rugby League Football Club
Mr THISTLETHWAITE (Kingsford Smith) (13:48): On Saturday evening I was fortunate to attend the 60th anniversary dinner of the South Eastern Rugby League Football Club, which plays in the South Sydney competition in the electorate of Kingston Smith. The club was founded in 1957 by William Ward. After William moved from Bondi to Matraville, the Seagulls were created as a combination of East Juniors and Souths Juniors, in deference to William's old team and his new home. The team proudly wears the Roosters' logo and South's colours. Since its establishment the club, based at Pioneers Park in Malabar, has grown from two sides to over 350 players in 2017, including the women's teams. It is now the second-biggest club in the local competition. Over the years the Seagulls have produced a number of outstanding players who have gone on to professional careers in the NRL and beyond. They include Willie Peters, Craig Wing, Braith Anasta, Todd Burn and many more.
The club has grown to be a local powerhouse and is currently sitting atop of the club championship. I wish to congratulate the club on reaching this important milestone and I thank all of the players, the mums and dads, the special volunteers who give their time week in, week out to ensure that the teams are on the field, who have made South Eastern the wonderful community club that it is today.
Energy
Mr CHRISTENSEN (Dawson) (13:49): Australia has many resources in abundance and one of the greatest is coal. Coal and iron ore helped make this country what it is today. Given our abundant coal reserves, we should also have cheap energy for all Australians. Plentiful coal and affordable energy are competitive advantages that can help us maintain our standing in the increasingly competitive global economy. If we have no competitive advantage, we have nothing—no industry, no business, no jobs, no ability to maintain our standard of living. Without competitive advantages, we have only decline. Families must have reliable and affordable energy. And for those families to have jobs, industry must also have reliable and affordable energy.
State governments have failed to deliver so it is time the federal government ignored the ideological squealing of the anticapitalists who want to kill off industry and boldly back what Australians really need. Coal-fired power generation is the cheapest means of delivering reliable and affordable energy, and the new technology can deliver the same power with 40 per cent—possibly up to 50 per cent—fewer emissions. If we really wanted to lower emissions, why wouldn't we support this technology? We should be willing to invest directly in low-emissions technology that can replace current baseload generators. After all, we invested money in renewables to provide occasional power. When the Greens and their Labor mates come into this place and argue against lower emissions with coal, they expose themselves for the frauds they are on the issue of climate, which they keep bleating about all the time.
Broadband
Ms BRODTMANN (Canberra) (13:51): I want to thank all the Canberrans who have taken part in my Send Me Your Speeds Campaign.
Our combined efforts mean that we are finally, finally on the rollout map. But we need to maintain the pressure to get the rollout prioritised, particularly in those suburbs with appalling speeds. We need to ensure we avoid a patchwork of technologies—some slated for the same street.
So, Canberra, keep sending me your speeds because, as this rollcall will show, we have some of the worst internet speeds in the country, if not the world—and this in the nation's capital, this in 2017.
From Balaji in Yarralumla, download speeds 3.62 megabits per second, upload 0.31; Matthew in Bonython, download 2.57, upload 0.62; Steve in Isaacs, download 0.78—0.78 for poor old Steve; Terry in Bonython, download 0.71, upload 0.17; Romeo in Banks, download 1.33, upload 0.48; Noel in Theodore, download 0.52, upload 0.46.
Canberra, keep sending me your speeds—send a message to the Turnbull government that this is unacceptable in the nation's capital in 2017. Let's call on the Turnbull government to end the digital divide in Canberra.
Banks Electorate: Beverly Hills Parking
Mr COLEMAN (Banks) (13:52): There was great news in the Banks electorate over the weekend, with the state government confirming that it will be building a new car park in Beverly Hills. Last year we secured $2.5 million of federal funding for this much-needed car park, and the state government has now confirmed that that car park will be going ahead. I want to thank everyone in the community who has supported my campaign on this issue over the past two years, in particular Cliff Yung at D to D cafe on King Georges Road in Beverly Hills who has really galvanised and led the small business community in coming together to say we need this car park to be built.
For far too long at Beverly Hills when you try to get a parking spot particularly on the weekend when people are going out to restaurants or to the movies it has been an absolute mess and an absolute nightmare, and that issue will now be fixed. Shortly the state government will be releasing the timetable for the new car park. It will include a substantial number of additional parking spaces, and it is going to mean that the hundreds of people who are employed in the small businesses in Beverly Hills, the thousands of residents who go to Beverly Hills to shop and to eat, go to the movies and do a whole range of other things, will be able to get parking so much more easily than they can now. This is a great result for our community and I do commend the state government on taking action on this.
Parliament House: Cleaners
Ms CHESTERS (Bendigo) (13:54): Today is International Cleaners Day. It is a day when, around the world, we stop to acknowledge the hard work of our cleaners. They are quite often a hidden workforce, a workforce that is working when the rest of us are at home. Today, however, our cleaners here in Parliament House launched a new company: We Clean the People's House, a not-for-profit company. They are calling on us, MPs and senators, to make donations to this company to help pay them a living wage.
Our cleaners here at Parliament House have not received a pay rise for over five years. The last time they received a pay rise was when Labor was in government. This is a big place. There are over 5,000 people here during a sitting week. There are more than 1 million visitors to Parliament House. On 1 July 2012, cleaners' wages increased to $21.17 an hour, and they have not increased since. Yet, whilst the cleaners, who are the lowest paid in this building, have not received a pay rise, if the government gets its way, many of them will be whacked with a tax increase on 1 July this year. We, the politicians, will receive a tax cut. We have also received pay rises.
If the Prime Minister does not increase their pay, they ask all of us to make a donation to this not-for-profit company. We could donate our pay rise. We could donate our tax cut. But do something to support the cleaners today.
Dunkley Electorate: Queen's Birthday Honours
Mr CREWTHER (Dunkley) (13:56): The Dunkley community has so many fantastic people. Today I acknowledge the remarkable Dunkley constituents who this week were recognised in the Queen's Birthday Honours. In total, five Dunkley locals were recognised for their contributions and achievements and awarded with Order of Australia Medals.
Mr Robert Bolch of Langwarrin, a JP in Victoria since 2004, was recognised for his service to the Mornington Peninsula, including setting up the Frankston Police Document Signing Station in 2005 and then stations at Mornington, Rosebud and Carrum Downs. Mrs Sandra McKay of Frankston South was acknowledged for her service to performing arts, having founded Rosebud Ballet School—now Peninsula School of Dance—and also teaching at dance schools in Mornington, Somerville and Langwarrin. Mrs Kathleen Hassell of Frankston South, who is energetic in her continuous work and advocacy, was recognised for her service to conservation and the environment. Associate Professor David Langton of Frankston was recognised for his service to thoracic and sleep medicine. Professor Langton performed groundbreaking surgery to ease the suffering of long-term asthma sufferers for the first time in 2014. And, last but not least, Mrs Margaret McLean of Mornington was recognised for her service to masters sport and the community, having represented Australia in the 1956 Olympic Games and then at the Masters Games. We are very lucky to have such noteworthy people living in the electorate of Dunkley.
Ms O'NEIL (Hotham) (13:57): I want to talk to the House today about one of my constituents, Rebecca, who asked me to deliver a message to our national leaders on her behalf. Rebecca is a young mum from Dingley Village. Like thousands of other Australians, she is suffering from brain cancer. It is a heartbreaking diagnosis, a horrible disease, and Rebecca is facing the horrifying possibility that her time with her family and with her young child is going to be cut short. My own family faced such a situation. My father was diagnosed with terminal cancer when I was about five, and he passed away when I was 11. So Rebecca's story is one that has touched me very deeply.
Mr Speaker, Rebecca wants to see more funding directed towards brain cancer. She wants me to tell you, and the other leaders of our country gathered here, that we are not doing enough to fight this terrible illness. I would like to seek the health minister's view on current levels of funding for brain cancer and his response to Rebecca's very passionate request for further support. I would like to understand what the government is doing to support people with a brain cancer diagnosis.
Rebecca knows that further medical research into brain cancer is not going to help her situation, but she is waging this fight to ensure that the next generation of people who are diagnosed with this illness are able to access better treatments. I am sure I speak for everyone in this parliament when I wish Rebecca courage and our thoughts and prayers as she continues her treatment.
Murray Electorate: National Disability Insurance Scheme
Mr DRUM (Murray—Chief Nationals Whip) (13:59): I rise to talk about the importance of the NDIS in my electorate of Murray, where more than 3,800 people will have access to the NDIS. Disability support providers such as ConnectGV in Shepparton are eager to use this service when it comes on stream in 2019. Just this morning I was talking to Caroline Young, who is CEO of ConnectGV. She has a long list of disability support advocates who are calling for the NDIS to be fully funded.
We know that those opposite have no plan and never have had a plan to fully fund the NDIS since its inception. Former Treasurer Wayne Swan admitted it himself in his book, where he said in chapter 20: 'More savings were required to fund the NDIS, but by May we effectively had to rule out every other option. An addition to the Medicare levy was the only—
The SPEAKER: I remind the member for Murray that he must refer to members by their correct titles. I have been quite harsh on this.
Mr DRUM: 'We needed to ensure the long-term sustainable funding for the scheme. There was no other workable option. There was broad community acceptance that the NDIS was a worthwhile investment. It was less than $1 a day for someone on an average wage.' The former Treasurer himself admitted that an increase in the Medicare levy is the best way to fund the NDIS, yet the Labor Party refused to help people who need access to this service. When it comes to doing what it once preached to everyone in Australia, the Labor Party is choosing politics over people, instead of supporting them when they have a disability.
The SPEAKER: In accordance with standing order 43, the time for members' statements has concluded.
MINISTERIAL ARRANGEMENTS
Mr TURNBULL (Wentworth—Prime Minister) (14:00): Mr Speaker, the Minister for Small Business will be absent from question time today as he is representing Australia at the Asian Infrastructure Investment Bank annual meeting of the board of governors in the Republic of Korea. The Treasurer will answer questions on his behalf.
QUESTIONS WITHOUT NOTICE
Budget
Mr SHORTEN (Maribyrnong—Leader of the Opposition) (14:01): My question is to the Prime Minister. Tomorrow, for the first time in Australia's history, gross debt will crash through half a trillion dollars. So how can the Prime Minister possibly justify giving millionaires a tax cut—
Honourable members interjecting—
The SPEAKER: The Leader of the Opposition will resume his seat. Members on both sides will cease interjecting.
Mr Dutton interjecting—
The SPEAKER: The Minister for Immigration and Border Protection will not interject loudly as questions are asked or, for that matter, at any time. I am cautioning him right now, at the start of question time. I cannot hear the question.
Mr Christensen interjecting—
The SPEAKER: The member for Dawson is warned! The Leader of the Opposition will begin his question again.
Mr SHORTEN: My question is to the Prime Minister. Tomorrow, for the first time in Australia's history, gross debt will crash through half a trillion dollars. So how can the Prime Minister possibly justify giving millionaires a $16,400 tax cut in just 16 days time?
Mr TURNBULL (Wentworth—Prime Minister) (14:02): Few people are less qualified to give lectures on debt than the Leader of the Opposition. He went to an election and he promised more debt—$16½ billion more debt. Not content with leaving the coalition with unsustainable spending—and then in opposition opposing almost every attempt to rein it back—he then goes into an election campaign and says he will have higher taxes, higher spending and more debt. And now he appears to be shocked and surprised by the fact that debt is growing. Well, what is his plan for it? More debt. That is what the Leader of the Opposition says. No doubt, he is concerned that the debt is not growing fast enough—because everything he did was to make it grow. He added to the debt and he went to an election—
Ms Owens interjecting—
The SPEAKER: The member for Parramatta is warned!
Mr TURNBULL: He opposed the company tax cut and he spent all the proceeds. We have seen today great figures in terms of jobs growth. What is driving that? It is investment, it is confidence, it is firms hiring Australians to get to work to build their businesses. And that is being encouraged by our company tax cuts. The Labor Party oppose all of that. They oppose that growth. They sneer at jobs and growth—it is just a slogan, they say. Well, I will tell you what: it is an outcome; that is what we are seeing. It is what my government is delivering. What Labor delivered was unsustainable debt. We continue to clean up the mess Labor left us. And the Leader of the Opposition—fresh from the drawing rooms of Toorak and Sandringham, fresh from tucking his knees under the table of all his rich mates, fresh from selling out the members of the AWU and selling out their penalty rates, fresh, glowing in hypocrisy as this champion of the poor and oppressed—then complains about tax cuts for millionaires. Anyone who earns over $180,000 is a millionaire—is that right? It was not so long ago he said on Melbourne radio that people who earn over $180,000 are middle income. They are the people he wants to keep on taxing. He has no plan for jobs and no plan for growth, just higher taxes, more debt, less investment and less employment.
Citizenship
Mr VASTA (Bonner) (14:05): My question is to the Prime Minister. Will the Prime Minister update the House on the steps the government is taking to ensure that residents seeking to become Australian citizens share our values of freedom, equality and mutual respect, including in my electorate of Bonner?
Mr TURNBULL (Wentworth—Prime Minister) (14:05): I thank the honourable member for his question. We are the most successful multicultural society in the world. It is a remarkable achievement, of which every Australian can be proud. It has been built on an orderly and stable migration program over many years and over generations. We have seen what happens in other countries where migration is not controlled. In Europe we have seen, literally, existential threats to nation states—to their political stability and to their harmony. We have seen uncontrolled and irregular migration flows threaten the very existence of nations in the world today.
We have restored the integrity of our borders. There has not been a successful people-smuggling operation seeking to come to Australia for over 1,000 days. We have a migration program that has the people's confidence, because they know that their government, and their government alone, determine who comes to Australia. What unites us as Australians is our commitment to shared values: democracy, freedom, the rule of law, mutual respect and equal rights for men and women—fundamental Australian values which are acceptable to everybody, regardless of their religion and regardless of their ethnic background. We should be reinforcing that, and we make no apologies for ensuring that those who seek to join our Australian family are committed to the values that define us and which unite us.
Earlier today, the minister introduced legislation to put Australian values at the heart of our citizenship process. It is something that should be welcomed by everyone in this chamber, yet the opposition has failed to support this principle. They are unable to support strengthened English language requirements. I heard the member for Watson criticising that on the radio this morning. They are unable to support the need to demonstrate integration into the Australian community. They are unable to support a requirement to commit to our values and pledge allegiance to Australia. The Labor Party has failed to learn from its mistakes. They are divided on the need for strong borders and on the need for an orderly immigration system. Ten Labor members and senators have publicly questioned the need for our citizenship changes, while the member for Watson—a former immigration minister, no less—has again questioned whether a strong immigration and citizenship policy is important for security. Nothing is more important to secure our future than maintaining our successful multicultural nation, united by a commitment to our Australian values. (Time expired)
Budget
Mr BOWEN (McMahon) (14:09): My question is to the Prime Minister. Tomorrow, for the first time in Australia's history, gross debt will crash through half a trillion dollars, so how can the Prime Minister possibly justify giving big business a $65 billion tax cut?
Mr MORRISON (Cook—Treasurer) (14:09): If the shadow Treasurer is concerned about the level of debt in this country, he should apologise. He should apologise with all the spivs on that side of the chamber who, over so many years, racked up the debt in this country and set fire to the nation's finances. This government inherited from those opposite gross debt that was increasing at an average rate of 33.9 per cent per year. Do you know what the debt would be today in the budget for 2017-18 if we had carried on Labor's reckless spending approach and its approach to debt? It would not be $500 billion; it would be $1 trillion—$1 trillion, if we had not taken the decision to take that average rate of growth in debt that occurred under the Labor Party and reduce it down to now less than 10 per cent a year.
The other difference between those on that side of the House, the Labor Party, and this side of the House is: what did they raise that debt for? How did they rack up all that expenditure? It was not just that they could not control their expenditure, and their expenditure grew at twice the rate that has occurred under this government. What did they spend it on? On overpriced school halls; on setting fire to people's roofs with their pink batts program. They sent it out in cheques to dead people and pets—their cash splash. On top of that, there was around $12 billion in blowouts on border protection for which the shadow Treasurer was more responsible than was any other minister in the previous government—but plenty of them had a good go at it.
What is this side of the House investing in over the next 10 years? From 2018-19, this will be the first time that we are issuing Commonwealth government securities not to pay for everyday expenses. They borrowed to pay the grocery bill, not to build a house or buy a house. We invest, and we are raising the gross debt to build airports, to build railways, to build infrastructure, to build submarines—the ones they would not build—to build the things that are going to grow our economy. The other thing we are doing, when it comes to the Commonwealth government security issuance, is not raiding the Future Fund.
So I ask those opposite: will they commit not to raid the Future Fund if they are ever elected to this side of the House? Will they say to this House, 'No, we will not see gross debt rise, because we will not build the Western Sydney Airport'—or not build the Inland Rail project, not do any of this? (Time expired)
Employment
Ms FLINT (Boothby) (14:12): My question is to the Treasurer. Will the Treasurer update the House on the release of today's employment figures? How is the government's budget generating stronger economic growth to create more and better-paid jobs?
Mr MORRISON (Cook—Treasurer) (14:12): I thank the member for Boothby for her question. She has a keen interest in economic issues in this parliament, and I thank her for her input to the government's strong economic plan, which is driving jobs and growth. More than 50,000 Australians went out in May to seek a full-time job under the Turnbull government and got one—50,000 Australians, under the economic policies of the Turnbull government.
The unemployment rate now has fallen to 5.5 per cent, which is lower than what we inherited from the Labor Party back in 2013. And it is not just that. More Australians have expressed confidence in the Australian economy by going back in and joining the labour force; we have seen the labour force participation rate rise to almost 65 per cent. And it is not just that. Australian workers got more hours. The shadow Treasurer may not be interested in this. He is very quick to come out with commentary on a number that may not be as good. But, when there is a good number, his back is turned to the Australian economy. His back is turned to Australian workers when they are getting more hours, when they are getting more jobs. When young people are finding jobs, the Labor Party's back is turned, and in this parliament they say no to doing things that will grow our economy and ensure that those jobs and those wages can flow.
We congratulate those Australians who went out and got those jobs in the month of May and the months leading up to May, as we saw the lift in employment growth. The rate of jobs growth has increased to two per cent through the year. That is 10 times the level of jobs growth we saw under the Labor Party. The budget I handed down a month ago was all about making the right choices to support more and better paid jobs, and that is what we need to do if we are not going to be complacent about securing better days ahead. What we know about the Australian economy is this: when Australian businesses are providing Australians with jobs, they are expressing confidence in the future of the Australian economy. They can see those better opportunities and they are seeking to seize them, and I commend the Australian businesses who have been creating jobs for Australians in this country and giving their families a sense of confidence and certainty.
The Turnbull government is on the side of Australians who want to get a job or who want to create a job, and that is what these figures demonstrate today. The Labor Party, by contrast, is standing in the way of the Turnbull government's economic plans that will generate more and better paid jobs, and seeking to play the politics of opposition, with the cynicism that defines this Leader of the Opposition.
Economy
Dr CHALMERS (Rankin) (14:15): My question is to the Prime Minister. Tomorrow, for the first time in Australia's history, gross debt will crash through half a trillion dollars. Does the Prime Minister agree with the Assistant Minister to the Treasurer, who said earlier today that under this government there is 'a truckload of debt' and 'an absolutely extraordinary amount of debt'?
Mr TURNBULL (Wentworth—Prime Minister) (14:16): I thank the member for Rankin for his question, because it gives us the opportunity to reflect on the work he did when he was working for the member for Lilley, then Treasurer. One of my colleagues has said he was the member for Lilley's brain. Now, I think that is harsh. That reflects poorly on each of them, so I dissociate myself from that.
This is how Labor was responsible for running up that debt: failed border protection policies, abandoning the security of our borders—a $14 billion blowout.
Government members interjecting—
Mr TURNBULL: Yes, the member for Rankin was there. The member for Rankin was there. A school halls program, another great idea that came out of the member for Lilley's office, wasted $8 billion; a pink batts program, $2½ million; sending 16,000 Kevin Rudd stimulus cheques to dead people and 27,000 to people living overseas; laptops in schools, $1½ million blown out; solar homes programs, an $850 million blowout; the Green Loans Program, $300 million wasted. It is a very long list.
Labor ran up a huge debt, a structural debt, a structural deficit, and then left that to the coalition—left us with the task of fixing it. And we are. We are bringing the budget back into balance. And we are genuinely doing that, unlike the Labor Party, who always claimed they were hitting a surplus. Indeed, it was only a few years ago, in 2011, that the Leader of the Opposition said, on the ABC:
I look at the rigour with which the Treasurer, the Prime Minister, indeed the Cabinet approached getting the government budget into surplus—
it was not very rigorous!—
I don't doubt that every day that is the guiding principle to push this Government to make sure that we are able to achieve being in surplus by 2012-2013.
That is quite a long time ago. Labor left us with debt and, since losing government, have done everything they can to prevent us getting the budget back into balance.
The Leader of the Opposition talks about 'tax cuts for millionaires'. He loves that, the old champion of the poor and oppressed there—storming the barricades, red flag flying. He is such a hero of the people! But the reality is: why are we getting the budget back into balance? Because we are making tough decisions. We are cutting spending and we are imposing a levy on the major banks, raising $6 billion over the forwards. We are raising that money. (Time expired)
DISTINGUISHED VISITORS
The SPEAKER (14:19): I am pleased to inform the House that we have present in the gallery today the Attorney-General of New Zealand, the Hon. Christopher Finlayson, and the High Commissioner, His Excellency Mr Chris Seed. On behalf of the House I extend a very warm welcome to you and to your delegation.
Honourable members: Hear, hear!
QUESTIONS WITHOUT NOTICE
Citizenship Applications
Mr BANDT (Melbourne) (14:20): My question is to the Minister for Immigration. How many coalition or Labor Party politicians, or Liberal Party members, including but not limited to John Caputo, have approached you or the department to facilitate or inquire after the status of efforts by Huang Xiangmo to obtain Australian citizenship?
Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (14:20): I thank the member for Melbourne for his question. I asked for some work to be done in relation to the number of letters of support, for example, that have been provided by members of this House, perhaps anticipating a question of this nature. I do not have a comprehensive list, and sadly I have not included representations from the Greens. It is the case for me as immigration minister and for all of my colleagues past in this portfolio that we do receive a number of letters of support and special pleadings from members of parliament, because that is their job. Their job is to represent their constituents, and particularly where those constituents have difficulties with the nuance of a particular case—if there is a sick child or somebody has an unnecessary bureaucratic burden in their way in moving towards a permanent residency or citizenship outcome, or they might have a problem with a visa.
The honourable member may be interested to know that, in terms of correspondence from MPs, in the period 1 July 2016 to the close of business 14 June 2017, I received 2,875 such requests. Since October 2014—just before I came into this portfolio—we have received about 7,500 requests. I can give some breakdown of that in relation to those opposite. For example, the very honourable—as I pointed out yesterday—member for McMahon sent 183 letters of support between 2014 and now, the member for Watson sent 21 over that period and the member for Grayndler sent 25. Some members, depending on their electorate, will have additional contributions to make because they have a higher proportion of people from different backgrounds and different communities who will make representations. I think that is entirely appropriate and as it should be, and I commend members for representing their constituents.
Mr Bandt: Mr Speaker—
The SPEAKER: No, the member for Melbourne does not have the call. Has the minister concluded his answer? The minister has concluded his answer.
Citizenship
Mr MORTON (Tangney) (14:22): My question is to the Minister for Immigration and Border Protection. Will the minister update the House on steps the government is taking to strengthen the requirements for obtaining Australian citizenship? What are the benefits of having a strong and consistent approach to national security?
Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (14:22): I thank the member for Tangney for the work he is doing not only in this place but also in his electorate. In fact, he was one of the members who came to see me today on behalf of constituents they were representing, and we were talking about the strengthening of the citizenship provisions because we do believe it is important at this point in time that we modernise the citizenship arrangements in this country. We want to make sure that we provide citizenship to those people who are most deserving, who want to abide by Australian laws and by Australian values, and to those people who will want to work hard, will want to send their kids to school and will take the opportunity afforded to them by a new start in our country. He, like all members in this House, will applaud those five million people who since 1949 have taken up Australian citizenship to make our country the great country that it is today.
It is quite astounding that when the government puts forward changes to strengthen the citizenship arrangements in this country those opposite come out in opposition to those very necessary changes. I think there is a complete lack of leadership from the Leader of the Opposition. At the moment, various members from presumably the left of the Labor Party are out there criticising what are sensible changes that will strengthen the citizenship laws in this country. And, do you know what? Most of them are the same people who opposed us in relation to Operation Sovereign Borders, which was to stop the boats, stop drownings at sea and get children out of detention. It is quite amazing, nonetheless not surprising, that the Leader of the Opposition did not show leadership then and he is not showing the leadership now to pull those people into line. So why did Labor fail? Why did they allow in 50,000 people on 800 boats? Because this Leader of the Opposition does not have the mettle or the determination to be the leader of this country. That is the reality, and he is demonstrating it again today, because he has not had one word of criticism in relation to those that sit behind him that have come out to criticise.
There is a very special contributor to this debate—that is, the member for Scullin. Not many people will know who he is, but he sits far away from most of these people because, frankly, I think they are embarrassed by some of the comments that he has made. In relation to the citizenship changes, I see that he has tweeted:
This is a shameful abdication of responsibility.
What, the government of the day making sure that we are allowing the right people to become citizens of this country? That is an abdication, somehow, of our responsibility?
Mr Giles interjecting—
Mr DUTTON: But he also said, as it turns out, at the ALP conference—listen to this—in relation to boats:
… I do disagree with you when it comes to turn-backs and I'll say very briefly why, comrades. I am unconvinced by their effectiveness.
He is one of the clueless many on the opposite side. He is off running around with these dangerous lines. This is what gets people smugglers back into business, these sorts of irresponsible lines, and if this Leader of the Opposition is ever elected the boats will restart. (Time expired)
The SPEAKER: The Leader of the House.
Mr Pyne: The member for Scullin made very unparliamentary remarks about the Minister for Immigration and Border Protection.
Opposition members interjecting—
The SPEAKER: Members on my left will not interject.
Mr Pyne: He should be required to withdraw them—and he was not in his seat when he was making them either.
Mr Giles: I withdraw.
Energy
Mr SHORTEN (Maribyrnong—Leader of the Opposition) (14:26): My question is to the Prime Minister. It is reported today that the Business Council of Australia has said that if there is not a clean energy target, what is the alternative? They have said that if Australia continues to do nothing we will continue to pay higher prices and have a less secure electricity supply. Does the Prime Minister agree, and will the Prime Minister now commit to work with Labor in the national interest to end the policy paralysis which has led to higher electricity prices and instability in the energy market? (Time expired)
Mr Tim Wilson: And why do you think this country faces that?
The SPEAKER: The member for Goldstein will cease interjecting.
Mr TURNBULL (Wentworth—Prime Minister) (14:27): The Leader of the Opposition's smirk gave the bipartisanship away very eloquently. When he stands up and invites us to bipartisanship, he is smirking away. He cannot even keep a straight face. He would be well advised to stay out of poker games, I think, with a face like that.
We have received a report from the Chief Scientist and his panel. We thank him and the panel for it and we are carefully considering it, but the fact of the matter is this: unlike the Labor Party, we are focused on ensuring that Australians have affordable and secure energy—electricity and gas—and that we meet our emissions reduction commitments. That is our commitment. That is our objective. The Labor Party, I hope, would agree with that, at least at a principle level, but what did they do about it? Everything they have done in government and everything they have said in opposition is calculated to make energy less affordable and less reliable.
We know at the moment we are facing a genuine crisis on the east coast of Australia due to the shortage of gas. That has driven gas prices up. It has threatened tens of thousands of jobs in the manufacturing industry—the jobs that the Leader of the Opposition claims to want to protect—and, of course, it has put very significant upward pressure on wholesale electricity prices. This has been caused by more gas being exported than can be done consistently with keeping the domestic market supplied—all done under the Labor Party. They knew. In 2012 in their energy paper it was stated expressly that the export deals from Queensland, which Labor approved, were going to put at risk the domestic market. In the previous year AEMO gave exactly the same warning about those deals, and so the Labor Party knew the risk they were taking when they licensed all those exports.
Now it falls to us in the coalition to take the tough decisions to fix it. By imposing the export controls that we foreshadowed, we have already seen a reduction in wholesale gas prices on the east coast. We have secured supply of gas for peaking power during the summer. We have done those things. We are taking the practical steps grounded in economics and engineering, not ideological, partisan and political slogans. We are doing the hard work—the grind of government—to get the job done and secure Australians energy and gas that is affordable and secure while meeting our emissions reduction commitments. (Time expired)
DISTINGUISHED VISITORS
The SPEAKER ( 14:30 ): I would like to welcome to the gallery this afternoon two members of the New South Wales Legislative Assembly: the Hon. Ron Hoenig, the member for Heffron, and Mr Nick Lalich, the member for Cabramatta. On behalf of the House, I extend a very warm welcome to you both.
Honourable members: Hear, hear!
QUESTIONS WITHOUT NOTICE
National Security
Mr COLEMAN (Banks) (14:30): My question is to the Minister for Justice and the Minister Assisting the Prime Minister for Counter-Terrorism. Will the minister update the House on today's arrest of a man in relation to a counterterrorism operation? What is the government doing to protect Australians from the threat of terrorism?
Mr KEENAN (Stirling—Minister for Justice and Minister Assisting the Prime Minister for Counter-Terrorism) (14:31): I thank the member for Banks for that question. Today, the New South Wales Joint Counter Terrorism Team has arrested a 22-year-old man at Sydney Airport for the alleged crime of attempting to travel to Syria to fight alongside the Islamic State. Once again, we are required to thank our law enforcement and intelligence community for the work that they do to keep Australians safe. This is another example of the close work done between the Commonwealth and the states—in this case, the New South Wales Joint Counter Terrorism Team, made up of the Australian Federal Police, ASIO and the New South Wales Police Force.
The man, a 22-year-old from Sydney's south, is expected to be charged with preparations for a foreign incursion. This man had been under the watch of our law enforcement agencies for the past five months, and he was known, as is often the case, to our law enforcement agencies for other criminal matters. At this stage, it is believed that he has acted alone, self-radicalising online, but been in contact with terrorists overseas. The police have advised me that there is no current or impending threat to the Australian community.
Because of this government's tougher terrorism laws, the penalty for this offence—preparing to travel illegally to a conflict zone—is now life imprisonment. This is part of the eight tranches of legislation that the government has passed to enhance our national security over the past two years. These law reforms give our agencies unprecedented power to prevent terrorist attacks.
The arrest today is a reminder that we have a small group of radicalised people in Australia who continue to threaten our national security. Since 2012, around 200 Australians have travelled to the conflict zone in the Middle East. As many as 76 of these people have been killed. Through the reforms that we have made, the Australian Defence Force now has greater power to eliminate terrorists in the Middle East whether they are involved in a combative role or not. As part of a broad coalition, we are destroying ISIL in the Middle East. They are losing territory, they are losing money and their soldiers are either being killed or deserting. Domestically, we have invested $1.5 billion in the ability of our law enforcement and intelligence community to combat terrorism, most recently an extra $321 million to the Australian Federal Police in the budget that has just been brought down.
But we need to continue to evolve law enforcement response in relation to the threat of terrorism. Just last week in Hobart, the Prime Minister secured agreement from the states and territories to have a presumption against bail or parole for people who have supported or have links to terrorism. This government will remain at the forefront of efforts to battle the evolving menace of terrorism, including travelling to Indonesia next month to deal with our regional counterparts on coordinating our counterterrorism efforts in the region. We will continue to do whatever is required, in conjunction with our agencies, to keep the Australian people safe. (Time expired)
Energy
Ms PLIBERSEK (Sydney—Deputy Leader of the Opposition) (14:34): My question is to the Prime Minister. Is the government considering adopting a threshold that would subsidise new coal-fired power stations to be built under its clean energy target? Under this Prime Minister, is coal now clean energy? As a matter of government policy, are there any forms of energy that are not considered clean energy?
Mr Falinski interjecting—
The SPEAKER: The member for Mackellar will cease interjecting.
Mr TURNBULL (Wentworth—Prime Minister) (14:34): I thank the honourable member for her question on the subject of coal. It gives me the opportunity of recalling some memorable remarks by her leader, the member for Maribyrnong, who said on the ABC some years back: 'We are going to keep a coal industry. For some people who believe the way to solve climate change is to shut down coal, that answer is not going to give you any joy at all.' It does not seem to be giving the member for Sydney any joy!
The member for Maribyrnong went on, 'We're also supporting clean coal technology.' Whilst people have fierce and competing ideas, the member for Maribyrnong observes—showing he has the makings of a geologist—'Australia does have a lot of coal.' Simply saying you are not going to dig that up any more as of tomorrow is not the way to run the economy. It is however apparently the way to run the Labor Party.
The honourable member's question completely fails to understand the objective of the government's energy policy. It is, as I have said, to ensure that energy is affordable, that it is secure and reliable, and that we meet our emission reduction commitments—meaning, addressing the trilemma. As far as ensuring that it is secure and affordable we need to have an all-of-the-above approach.
As I said at the Press Club at the beginning of the year, and as Labor member after Labor member have said—and there is a long list with quotes similar to those I just read out—coal will be part of Australia's and the world's energy mix for many, many years to come. In fact, Penny Wong, accurately quoting the International Energy Agency, said some years back that it will be part of the world's mix, playing a big role, until past the 2050s. And she is right. She is absolutely right. They also made a great commitment to carbon capture and storage, which now apparently they have abandoned. The important thing is to get the mix right to ensure that energy is affordable.
Mr Perrett interjecting—
The SPEAKER: The member for Moreton is now warned.
Mr TURNBULL: We are making the biggest commitment to pumped hydro—which makes renewables reliable, I should add, for the benefit of the member for Sydney—in Australia's history. That is our initiative. That is our commitment. That is the leadership we are providing to ensure Australia's energy future. Labor has ideology. It has politics. It has slogans. It has partisanship. It even has fake offers of bipartisanship. But what it does not have is a plan, because it ignores economics; it ignores engineering.
Finally, I would remind the member for Sydney that if you want to meet your emissions reduction obligations you have to reduce emissions. How you do that is, of course, of less concern than meeting the commitments. (Time expired)
National Security
Mrs SUDMALIS (Gilmore) (14:37): My question is to the Minister for Foreign Affairs. Will the minister update the House on the importance of maintaining public trust and confidence in our government's management of national security issues? Is the minister aware of other approaches that may have different outcomes?
Ms JULIE BISHOP (Curtin—Minister for Foreign Affairs) (14:38): I thank the member for Gilmore for her question. It should be evident that the standing and legitimacy of democratic governments depend on the extent that its ministers can advance the national interest without fear or favour. The Turnbull government has single-mindedly advanced Australia's national interest, including through clear and consistent foreign policy.
Mr Watts interjecting—
The SPEAKER: The member for Gellibrand is warned.
Ms JULIE BISHOP: I contrast that with the Labor Party's approach and the examples we have seen in recent times where the Labor Party, at the behest of personal benefactors or foreign states, have changed longstanding foreign policy positions without explanation. Indeed, we have the infamous example of Senator Sam Dastyari—
Mr Morrison interjecting—
Ms JULIE BISHOP: at his press conference where he was publicly contradicting both government and opposition policy—
The SPEAKER: The Manager of Opposition Business on a point of order.
Mr Burke: Mr Speaker, you gave a clear direction yesterday on members being referred to by their title. The Treasurer was the person you gave that warning to yesterday. He has just made the exact same comment, and he is trying to say that because it was not from the dispatch box he is somehow not within parliament.
The SPEAKER: The Manager of Opposition Business will resume his seat. I will address this matter. Members need to refer to other members and senators by their correct titles—that is true. All interjections are disorderly and I do not like them at all. They come from all parts of the chamber and, unfortunately, those interjections make it into Hansard when attention is drawn to them. If I were picking up every interjection, you would not get through many questions. And they did not have the call.
Ms JULIE BISHOP: I was referring to the example of Senator Sam Dastyari, who publicly contradicted both government and opposition longstanding foreign policy on the South China Sea at the behest of his personal benefactor.
We have now learned that the member for Hunter, when Minister for Defence and a member of the National Security Committee of a Labor government, had a personal benefactor whom it is alleged had close links with the Chinese intelligence service. That now brings to mind a very disturbing incident that occurred when Labor did a sudden about-face on an important foreign policy position and abruptly announced Australia's withdrawal from a quadrilateral security dialogue between Australia, the United States, Japan and India at the behest of China. It begs the question: what role did the member for Hunter play as a member of the National Security Committee and the Minister for Defence in that extraordinary about-face and backflip on the part of the Labor government with no explanation?
It gets murkier, because earlier—I think it was last week—the Fairfax media put a series of questions to the member for Hunter, and in response he said unequivocally, 'I have never written to a Chinese official.' That is what he said. I would invite the member for Hunter to repeat that statement in this House, but then how would he explain his sworn affidavit to the ACT Supreme Court where he lists letter after letter from him to various Chinese officials, members of the politburo, senior members of the Chinese Communist Party, governors and vice- governors? What is it, Member for Hunter—no correspondence with Chinese officials or letter after letter? It is this kind of behaviour that destroys public confidence. (Time expired)
Minister for Foreign Affairs
Mr KEOGH (Burt) (14:42): My question is to the Minister for Foreign Affairs. Yesterday in question time, when asked about the Julie Bishop Glorious Foundation which had been established by one of the Liberal Party's biggest donors, mining magnate Sally Zou, the minister said that she had never stood next to a Chinese benefactor. Does the minister stand by that answer? Is the fact that there are photos of her standing next to Chinese benefactors another coincidence, just like how we were told yesterday the naming of the Julie Bishop Glorious Foundation had nothing to do with her and it was just a coincidence?
Ms JULIE BISHOP (Curtin—Minister for Foreign Affairs) (14:43): If one thing is certain, it is that the word 'glorious' will never be in the same sentence as the name of the member for Burt! What is disturbing about this question is that it goes to show that Labor has no understanding of what the difference is when you are attending a Chinese banquet and lining up for a selfie or photo after photo. I assume that members opposite are asked for photographs at banquets and public events. There is a vast difference between standing and having your photograph taken—whether it is at a public event, at a Chinese banquet or walking through the airport—and standing at the Commonwealth Parliamentary Offices in Sydney with the Australian flag and a lectern with the Commonwealth coat of arms on it behind you and publicly, in the presence of your personal benefactor, opposing longstanding public policy of both the opposition and the government. The fact that Labor cannot tell the difference goes to show why we have such a national security crisis in the Labor ranks. There will be no public confidence in the Labor Party until such time as Senator Sam Dastyari and the member for Hunter are called upon by the Leader of the Opposition to explain their circumstances.
Workplace Relations
Mr HASTIE (Canning) (14:44): My question is to the Minister for Defence Industry, representing the Minister for Employment. Will the minister outline to the House why it is important for employer and employee organisations to act in a way that promotes transparency and manages the potential for conflict of interest? Is the minister aware of any alternative approaches?
Mr PYNE (Sturt—Leader of the House and Minister for Defence Industry) (14:45): I thank the member for Canning for his very important question. Yesterday in the House I referred to a $27½ thousand payment made from AustralianSuper to the AWU in 2006-07, when the Leader of the Opposition was the national secretary of the AWU as well as a member of the board of AustralianSuper. The Leader of the Opposition made a personal explanation after question time in which he stated that no conflict existed. But I can reveal that the APRA rules state quite clearly that a director who is nominated by a different body—in other words, a union—to a superannuation fund has the strong possibility of a conflict between the interests of beneficiaries and the interests of the nominating or appointing body, and the director must avoid, if not manage, any resulting actual or perceived conflict. In other words, being a member of the board and the national secretary of the AWU was, under the law, a conflict of interest that needed to be managed. So, the Leader of the Opposition was badly advised yesterday and should correct the record in this House to say that he did in fact have a conflict of interest.
But the substantive issue remains: when AustralianSuper gave $27½ thousand to the AWU, did the Leader of the Opposition take any steps to manage his conflict of interest? Did he, for example, disclose a conflict of interest? Did he disqualify himself, or did he participate in the deliberations when he should not have? Did he act in his own interests in preference to the interests of the beneficiaries of the superannuation entity? They are the tests required under the APRA guidelines.
The Leader of the Opposition is very quick to demand that the Prime Minister stand up in the House and explain his financial arrangements since being a member of parliament. And the Prime Minister has never hesitated to do so. He has stood up and taken the House and the press gallery through his financial arrangements that prove that he does not have a conflict of interest. So the Leader of the Opposition has a responsibility—if what is good for the goose is good for the gander—to explain to the press gallery and to this House how he managed his conflict of interest as national secretary to the AWU and a director of AustralianSuper. If he does not do so, in the end it goes to his character: not only did he sell out the workers at Cleanevent and not only did he sell out the workers at Chiquita Mushrooms but he also sold out the beneficiaries of the AustralianSuper fund. He needs to explain his position.
Donations to Political Parties
Mr CLARE (Blaxland) (14:47): My question is to the Prime Minister. Media reports state that a trust linked to a Chinese donor made a $50,000 donation to former trade and investment minister Andrew Robb's fundraising vehicle, the Bayside Forum, on the exact same day that Mr Robb finalised the China-Australia Free Trade Agreement. Does the Prime Minister seriously expect the Australian people to believe that it was just a coincidence that a Chinese donor paid $50,000 to Mr Robb's fundraising vehicle on the exact same day that he finalised the China-Australia FTA?
The SPEAKER: The Leader of the House on a point of order.
Mr Pyne: Mr Speaker, I simply ask you the question: how is this within the responsibility of the Prime Minister? He was not asked a question—
Opposition members interjecting—
The SPEAKER: Members on my left!
Mr Pyne: The Prime Minister was not asked a question about the ministerial code of conduct; he was asked an entirely separate question that does not bear on his responsibilities whatsoever.
The SPEAKER: Does the Manager of Opposition Business wish to make a contribution?
Mr Burke: Yes, I do, Mr Speaker. The question goes to the free trade agreement.
Mr Pyne: No, it does not.
The SPEAKER: The Leader of the House has had his say. He will now listen in silence. The Manager of Opposition Business.
Mr Burke: The question goes directly to the free trade agreement—a major agreement signed between Australia and China—and the circumstances under which it was signed. That is what the question goes very directly to, and to the motivations of the government at that time.
The SPEAKER: I listened to the question very carefully. Yesterday I made it very clear that questions needed to go to the Prime Minister's direct responsibility. I do appreciate the point the Manager of Opposition Business makes about the Australia-China Free Trade Agreement, but the question did not go to the Prime Minister's responsibility. The question was about whether this was a coincidence or not. That is just, I think, a fishing trip that means it is out of order on this occasion.
National Disability Insurance Scheme
Ms PRICE (Durack) (14:50): My question is to the Minister for Social Services. Will the minister update the House on the release of the Productivity Commission review of the National Disability Insurance Scheme costs. Why, more than ever, is it important that the National Disability Insurance Scheme is fully funded, and is the minister aware of any alternatives?
Mr PORTER (Pearce—Minister for Social Services) (14:50): I thank the member for her question and for her interest in this area. As the member is aware, there were three very important events that occurred in the development of the NDIS this week. The first event was that there was a very strong delegation of disability advocates who came here to try and persuade the Labor Party to fully fund the NDIS. What John Della Bosca from Every Australian Counts said was:
… the increase to the Medicare levy must happen, in order to secure a consistent, sustainable funding stream for the NDIS. That's what we're telling everybody. That’s what we’ll keep telling everybody until we get a result.
The second very important event was—as was noted—the release of the Productivity Commission interim report of its inquiry into the NDIS. That interim report asked and answered a very critical question, which is: is the rollout of the NDIS on track and within budget? And it concluded that it is.
The third very important event this week, and possibly the most remarkable event—in fact, as far as I am aware, it is an astonishing development totally without precedent—is a press release from the member for Jagajaga which is not entirely, 100 per cent, negative in its appraisal of the government. Members, it is utterly true. I can table it if need be. The press release is actually entitled 'NDIS on track'. It goes on to say:
The Productivity Commission has found that the NDIS is 'broadly on track' …
So what a remarkable event!
I am asked about alternatives, and sadly the remarkable events stop there. What we do not have is the Labor Party on track for fully funding the NDIS. When the Leader of the Opposition was asked about divisions in his shadow cabinet with respect to the 0.5 per cent increase in the Medicare levy, what he said was, 'We are all on the same page.' I find that claim vague and unconvincing, and it is worth some scrutiny. In 2013 the entirety of Labor thought it was fair. In 2017 three-quarters of the shadow cabinet still think it is the fairest way to fund the NDIS. The Leader of the Opposition is one of the few in shadow cabinet that opposes the increase as being unfair—although he previously argued it was fair—and the shadow Treasurer agrees to a full increase in the Medicare levy but does not want the money spent on the NDIS. So they are all on the same page! I am reliably informed that the largest piece of paper ever created in the world was created by students in Paraguay on 7 August 2015. That measured 15 metres by 10 metres, so about half a basketball court. If that is the paper we are talking about, then maybe Labor are all on that same massive page.
But the big problem is: whatever page Labor are on, it is the wrong page. What each and every one of the disability advocates who visited Parliament House this week want—what they all ask for—is to convince Labor to get off the page that says they will not fully fund the NDIS and get on the page that says they actually care about the future of Australians with a disability and will fully fund this scheme. (Time expired)
Ministerial Conduct
Mr CLARE (Blaxland) (14:53): My question is again to the Prime Minister. I refer to the bid by the Chinese company Landbridge to operate the port of Darwin. I also refer to the fact that, subsequently, Landbridge gave former minister for trade Andrew Robb a part-time position, paying $880,000 a year. Has the Prime Minister asked his department to investigate whether there is a link between these two events, and has he asked them to investigate whether there has been any breach of the Ministerial Code of Conduct?
Mr TURNBULL (Wentworth—Prime Minister) (14:54): I have discussed these matters with the secretary of my department, Dr Parkinson, and he confirmed that in a letter to me, dated today, which reads: 'As you know, I have twice discussed with Mr Andrew Robb the obligations placed on former ministers by the Statement of Ministerial Standards. On both occasions, 28 February and 31 May 2017, Mr Robb has assured me he fully understands the obligations of the statement. He has also assured me he has complied with the statement, in particular paragraph 2.24, in terms of his post-cabinet and post-parliament activities and has reiterated that commitment in writing on 1 June 2017.' I will table that letter.
Economy
Mr LITTLEPROUD (Maranoa) (14:54): My question is to the Deputy Prime Minister and Minister for Agriculture and Water Resources. Will the Deputy Prime Minister outline to the House the steps the government is taking to grow the economy through investments in the agriculture sector? Is the Deputy Prime Minister aware of any barriers to unlocking the potential of the agricultural sector, particularly in my home state of Queensland?
Mr JOYCE (New England—Deputy Prime Minister and Minister for Agriculture and Water Resources) (14:55): I thank the honourable member for his question, and I thank him for the honourable way in which he conducts his job in his electorate and how hard he works for his electorate: 2,563 kilometres of pest control fencing out in the Paroo; bringing back the sheep industry; making sure that we get the benefits of the employment in places like Cunnamulla. I thank the honourable member for the hard work he is doing in the Mobile Black Spot Program, with 35 new and upgraded mobile phone towers, and how he continues to work so diligently for his electorate. I want to thank him also for the work he is doing with the Bridges Renewal Program and the $2.5 million to replace the Lemontree Bostock Road bridge; or the Roads to Recovery, with $35.6 million for councils such as Balonne—my old council—Barcaldine, Bulloo and Longreach. I thank him for the work he is doing in the Community Development Grants Program, to make sure that we get the Waltzing Matilda Centre up and running again.
These are all part of delivery, delivery that also goes hand in glove with the infrastructure requirements to build a stronger agricultural sector. Right now he is working with so many others for the Inland Rail, the $8,400 million project, a corridor of commerce which will connect the seat of Maranoa to Victoria through western New South Wales. This is incredibly hard work. As recently as yesterday he has been in my office with the Minister for Infrastructure and Transport making sure that this project is completed soon so that we can get that agricultural product moving, products such as cotton, beef and coal. It is very important that we move products such as coal, because that is how we actually balance the books and make money. In the budget in Queensland the other day, it was interesting to note them spruiking their budget surplus because an extra $1½ billion came from coal royalties. That was an extra $1½ billion—it was in excess of $3 billion in royalties all up.
That is very important, because we believe that there is the capacity for us to use these resources that we always have to make sure that we fix our power problems. Power is a big issue in the agricultural sector. I was listening to the Prime Minister before when he was talking about peaking power. For a moment there he was talking about the Labor Party frontbench. It was very important that we make sure that we keep the capacity to keep power affordable. It would be interesting if the member for Shortland were interested in making sure that the coal industry kept going and supported the coalminers in the Hunter Valley. Instead of yawning, he should be supporting them. He should be standing up for those coalminers and for those AWU workers and CFMEU workers. It will be interesting to see if the member for Hunter wants to stand up for the coalminers of the Hunter Valley. I suppose he might. The member for Shortland just sits there. He used to say so much, but now he has gone mute. He has gone quiet on his people. He does not have the ticker to stand up.
We are going to continue to turn around the agricultural sector. We have had the biggest turnaround in the history of our nation in this sector, bringing real wealth back to our nation. (Time expired)
Energy
Mr BUTLER (Port Adelaide) (14:58): My question is to the Prime Minister. I refer to the Prime Minister's answer to the member for Sydney. Is the Prime Minister aware that modelling in the Finkel report concludes that no new coal-fired power stations will be built under a clean energy target, and the Chief Scientist has said about new coal-fired power stations: 'It would be surprising if governments were to endorse a scheme that incentivised them.' Does the Prime Minister agree with Chief Scientist?
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (14:58): I thank the member for Port Adelaide for his question. He knows that Dr Finkel and his expert panel have produced a comprehensive report. In that report their preferences is for the clean energy target over the Labor Party's emissions intensity scheme. The reason for that is that it will lower prices more than an EIS would. He also makes it very clear that when it comes to coal, under the clean energy target it will stay in the system longer, and that by creating a level of regulatory certainty you are more likely, as an existing coal operator, to be able to go to your financiers and get the money to do an upgrade or the maintenance that is required.
The Chief Scientist was asked whether a new coal-fired power station could be built, and he said, 'Absolutely; it is conceivable that it could be built.' And that is the key point: the market will determine these matters. But the Labor Party is in denial about the importance of coal as a form of base load power. It might be surprising to them to know that in South Australia, when the Northern Power Station closed and they lost all the coal-fired power in South Australia, prices went up and the system became less stable, because the Premier of South Australia, Jay Weatherill, was conducting a big experiment. Adelaide Brighton, in the member for Port Adelaide's own electorate, an employer of 450, lost its power for 36 hours. So, what does the member for Port Adelaide say to the 450 workers in his own electorate? He does not want to answer that question. He does not want to take responsibility for his left-wing caucus mate, the Premier of South Australia.
The reality is that under the Prime Minister's leadership we have put storage front and centre of the government's agenda: our announcement around Snowy Hydro 2.0; the work the Australian National University is doing to map out other pumped hydro facilities throughout the country; what we did in Tasmania and the work we are doing there to investigate, again, hydro facilities and expansion in Tasmania, which will be of great help in providing a battery to the mainland; the work we are doing with ARENA in Cultana in South Australia, in the Upper Spencer Gulf; and the work we are doing to create a virtual power plant throughout South Australia—1,000 homes and businesses connected in order to provide battery storage.
That is what the coalition is doing. Our primary objective is the stability of the system so that we do not see a repeat of the madness that occurred under the Labor Party. And our other key objective is affordability, because we on this side of the House care about jobs and investment, unlike the reckless Labor Party.
Energy
Ms MARINO (Forrest—Chief Government Whip) (15:01): My question is to the Minister for the Environment and Energy. Will the minister update the House on how the government is taking a technology-neutral approach to energy policy that will allow carbon capture and storage to play a bigger role in the transition to a lower-emissions future? Is the minister aware of any obstacles?
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (15:02): I thank the member for Forrest for her question and know that she is very concerned about the future of industry in the south-west of her state. She is concerned about not only the affordability of power but also its sustainability and ensuring that it is low-emissions technology. That is why she and other coalition members on this side of the House welcome our announcement that we are seeking to amend the legislation of the Clean Energy Finance Corporation to enable it to invest in carbon capture and storage.
Back in 2011-12 there was a political fix, and the political fix was between the Labor Party and their alliance partners, the Greens. They ruled out carbon capture and storage as one of the prohibited technologies that could be funded under the CEFC. This is despite the fact that the International Energy Agency says it is not optional, when it comes to reducing emissions, to rule out CCS. And it is despite the Intergovernmental Panel on Climate Change saying that the cost of meeting Paris commitments would be double if you did not have CCS. It is despite the fact that you can get a 90 per cent emissions reduction by using CCS, not just for thermal generation—gas and coal—but also, importantly, for industrial processes: chemicals, steel, cement.
That is why the coalition's announcement was welcomed by the likes of BHP, BlueScope, the Business Council of Australia, Energy Networks Australia and Shell. And indeed it was entirely consistent with the comments of the member for Corio, the member for McMahon, the opposition leader in the Senate, the member for Lilley and indeed the member for Port Adelaide.
Opposition members interjecting—
Government members interjecting—
The SPEAKER: Members on my right will cease interjecting.
Mr FRYDENBERG: All the members opposite have supported carbon capture and storage.
The SPEAKER: The Manager of Opposition Business?
Mr Burke: Mr Speaker, on your earlier ruling, where you drew attention to all interjections being disorderly and members being referred to by their title, the Treasurer has just done the exact same thing, in defiance of your ruling—and he knows he is in defiance.
The SPEAKER: The Manager of Opposition Business will resume his seat. I urge the Manager of Opposition Business, if he would like—given it is Thursday, and with five minutes to go—to perhaps, with respect, review everything I said when I addressed his last point of order. I do again say to members interjecting that all interjections are disorderly, and they should bear that in mind particularly when it comes to referring to members by their correct titles.
Mr FRYDENBERG: The Labor Party went to the Australian people in 2016 ahead of the election with a specific policy proposal, which was to broaden the investment of the CEFC. The member for Port Adelaide went to the Press Club and said he wanted to get rid of the ridiculous restrictions on the mandate of the CEFC. So you could imagine our surprise when the Labor Party announced that it would not support our legislative change to the CEFC. We know that the Labor Party will say one thing—it does not matter if it is on company tax, it does not matter if it is on the Medicare levy, it does not matter if it is on Gonski school funding and now it does not matter if it is on energy policy—they will say one thing to the Australian people and do another thing in this place. We all know on this side of the House that, when it comes to hypocrisy, thy name is Labor.
Energy
Mr BUTLER (Port Adelaide) (15:06): My question is to the Prime Minister. The Finkel review concluded that a clean energy target, accompanied by other reforms, would lower prices, lower emissions and ensure reliability without new coal power stations. But it is reported today that the government is considering throwing more than $1 billion of taxpayers' money at a new coal-fired power station. How can the Prime Minister possibly justify throwing $1 billion of taxpayers' money at a new coal-fired power station?
Mr FRYDENBERG (Kooyong—Minister for the Environment and Energy) (15:06): We know that the member for Lilley supports coal, because he commissioned a report into a new coal-fired power station in Northern Queensland. The member for Lilley—the second most famous boy to come out of Nambour High, the second most famous graduate out of Nambour High—
A government member: The Treasurer of the millennia.
Mr FRYDENBERG: the Treasurer of the millennia, and Euromoney's Treasurer of the Year. The reality when it comes to coal is that it is a critical part of our energy mix. The Leader of the Opposition said this in 2007:
We believe completely that coal is part of Australia's energy future … We also need to be at the forefront of ensuring that the processes, which we adopt to use coal, are as clean and as efficient as can possibly be made.
So the reality is that, under Prime Minister Malcolm Turnbull, we want an energy mix which is technology neutral, which is focused on the trifecta of affordability, stability and meeting our international commitments. Only we on this side of the House can do that and only Labor will drive up electricity prices and lead to a more unstable electricity system.
Rural and Regional Media
Mr LLEW O'BRIEN (Wide Bay) (15:08): My question is to the Minister for Urban Infrastructure representing the Minister for Communications. Will the minister update the House on steps the government is taking to protect local jobs in the media industry, particularly in regional Australia, and are there any alternative approaches?
Mr FLETCHER (Bradfield—Minister for Urban Infrastructure) (15:08): I thank the member for Wide Bay, who fights very strongly for his electorate. He fights very strongly for regional jobs in Wide Bay and all around regional Australia, because he knows that the coalition stands up for regional and rural and remote Australia, whereas Labor is completely indifferent to regional and rural and remote Australia. The Turnbull government is fighting to protect jobs in the media industry, and that is why the Turnbull government has today introduced into parliament legislation to give effect to our comprehensive media reform package.
Australian media business is exposed to fierce competition from global media payers and from social media giants thanks to internet driven disruption. These huge global companies are not subject to arcane, out-of-date restrictions, like the two-out-of-three rule and the 75-per-cent-audience-reach rule. Australian industry players want to respond, but they are blocked by arcane laws and by Labor's head-in-the-sand attitude. What is it that the chief executives of the regional broadcasters have to say? This is a joint comment from the chief executives of three regional broadcasters: Prime, WIN and Southern Cross Austereo. They say:
Surely the evidence is clear … We doubt there is a politician in Canberra who wants to say they presided over an outdated regulatory regime that held back regional media.
There is a politician in Canberra who apparently wants to say exactly that—the shadow minister for communications, who is continuing to argue for the retention of the outdated two-out-of-three rule; never mind the rise of global internet based competition. She does not care about that. She put out a media release yesterday saying:
To date, Labor’s Shadow Communications Minister has not received a briefing …
Curiously, she is referring to herself in the third person, which always raises suspicion. She said:
Not once in over a year has—
the minister—
consulted with Labor …
She criticised Senator Fifield, the minister, for referring to the fact that 1,400 jobs at Network Ten are at risk. I have news for the shadow minister: it is not about you. It is about 1,400 jobs at Network Ten that are at risk. It is about jobs in regional Australia that are at risk. It is about the Turnbull government's plan to protect jobs in regional Australia. In the media sector, we have a plan, because we care about jobs, we care about people in regional Australia and we care about a diverse, active and vigorous media sector—an important part of a democracy and an important part of our society. The Turnbull government has a plan. Labor needs to get its head out of the sand, realise that times have changed and support our legislation.
Mr Turnbull: I ask that further questions be placed on the Notice Paper.
PERSONAL EXPLANATIONS
Mr FITZGIBBON (Hunter) (15:11): Mr Speaker, I seek leave to make a personal explanation.
The SPEAKER: Does the member claim to have been misrepresented?
Mr FITZGIBBON: I do indeed—
The SPEAKER: The member for Hunter may proceed.
Mr FITZGIBBON: on a number of occasions by the Minister for Foreign Affairs during question time today and yesterday, under the cover of privilege, and by the Deputy Prime Minister during an interview on Sky News this afternoon, outside the cover of privilege. Statements from both ministers were based on articles which appeared earlier in the week in Fairfax Media newspapers. The articles revisited stories going back almost a decade—stories which forced me to satisfactorily pursue action for defamation. But, importantly, the articles said:
Fairfax Media makes no accusation of wrongdoing or impropriety against Joel Fitzgibbon in this report. No evidence has emerged to suggest he knew of Helen Liu’s links to Liu Chaoying.
The ministerial contributions from both the Deputy Prime Minister and the Minister for Foreign Affairs yesterday and today were unfounded, reckless and, in the case of the Deputy Prime Minister, defamatory, and I reserve my rights.
DOCUMENTS
Presentation
Mr PYNE (Sturt—Leader of the House and Minister for Defence Industry) (15:13): Documents are tabled in accordance with the list circulated to honourable members earlier today. Full details of the documents will be recorded in the Votes and Proceedings.
MATTERS OF PUBLIC IMPORTANCE
Workplace Relations
The SPEAKER (15:13): I have received a letter from the honourable member for Gorton proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government's failure to protect the wages of Australians.
I call upon those honourable members who approve of the proposed discussion to rise in their places. As the member for Gorton is not present, the matter will not be proceeded with.
COMMITTEES
Membership
The SPEAKER (15:14): I have received advice from the Chief Government Whip and the Chief Opposition Whip nominating members to be members of certain committees.
Mr PYNE (Sturt—Leader of the House and Minister for Defence Industry) (15:14): by leave—I move that members be appointed as members of certain committees in accordance with the list which has been placed on the table. As the list is a lengthy one, I do not propose to read the list to the House. Details will be recorded in the Votes and Proceedings.
Opposition members interjecting—
Mr PYNE: But, if you prefer, I am happy to read the list to the House. Mr Swanson—Ms Swanson. Sorry. I can usually get through this. I apologise to Ms Swanson. I move:
That:
Ms Swanson be discharged from the Standing Committee on Agriculture and Water Resources and that, in her place, Mr Fitzgibbon be appointed a member of the committee.
Mr Hayes be discharged from the Parliamentary Joint Committee on Law Enforcement and that, in his place, Ms O'Neil be appointed a member of the committee.
Mr Pasin be discharged from the Committee of Privileges and Members' Interests and that, in his place, Mr Vasta be appointed a member of the committee.
Mr L. S. O'Brien be discharged from the Standing Committee on Infrastructure, Transport and Cities and that, in his place, Mr Gee be appointed a member of the committee, and Mrs Sudmalis be appointed a supplementary member of the committee for the purpose of the committee's inquiry into the development of cities.
He is a friend of the member for Scullin, Mr Speaker.
Question agreed to.
Economics Committee
Report
Mr COLEMAN (Banks) (15:16): On behalf of the Standing Committee on Economics, I present the committee's report, incorporating a dissenting report, on the inquiry into tax deductibility, together with the minutes of proceedings. I ask leave of the House to make a short statement in connection with the report.
The SPEAKER: Is leave granted?
Mr Burke: Leave to make a short statement is granted.
The SPEAKER: The member for Banks will have leave, I think, for the normal period of time.
Mr COLEMAN: I will now make a short statement in relation to this important report. The committee's review on tax deductibility focused on enhancing compliance in relation to tax deductions. The committee noted that $100 million of abuse was identified in a single year by the ATO through a review of work related expenses and claims of about one in 1,000 taxpayers. The committee sees considerable scope for improvement in this area and has recommended the ATO review its compliance activity in relation to workplace related expenses.
The committee's view is that the ATO should remain proactive in identifying areas that are at risk of systemic abuse. Accordingly, the committee recommended that the ATO be instructed to analyse each detailed subcategory of tax deductions and identify areas that it believes are particularly open to systemic abuse and overclaiming. The ATO should then rank these subcategories in order of the size of the financial risk they represent to government revenue and recommend amendments to law or policy where appropriate.
The committee also considered options to simplify the personal and company income tax systems and examined options to broaden the base of these taxes in order to fund reductions in marginal rates. In particular, the committee's review examined the areas of workplace related expenses and interest deductibility. While the committee sees opportunities to improve the operation of the tax system and has recommended changes to strengthen compliance, the committee supports the ongoing ability of Australians to claim legitimate deductions.
In relation to workplace expenses, the committee saw little rationale for altering existing arrangements that allow Australians to claim personal income tax deductions for valid WREs. WRE deductions represent only four per cent of individual and other withholding tax revenue. This means that even the complete abolition of workplace related expenses deductions would only cover the cost of a very modest reduction in personal income tax rates.
Figures currently provided by the Treasury show that in 2014-15 there were $21.8 billion in WRE deductions claimed, comprising almost two-thirds of total deductions. However, this is not an indicative cost to the budget of WREs, because the amount a person received is calculated based on their taxable income. It is for this reason that the PBO was asked to provide the total value of selected income tax deductions and estimates of the revenue forgone. While the PBO provided a general estimate of the cost to government revenue WREs, the Treasury was unable to provide a confirmed figure. In the committee's view, it is important that the actual cost to government revenue of WREs is clearly understood in order to inform budget planning. It is for this reason that the committee recommends that Treasury provide a clear estimate of the actual cost to government revenue of WREs so as to properly inform policy in this area.
The committee heard that, while significant compliance burdens are associated with Australia's personal income tax system, technological advancements and assisting with simplifying taxpayers' experience with claiming deductions and lodging their tax returns are improving. The committee has recommended that the ATO continue with this work, which shows promise in utilising technology to streamline tax processes. In relation to company income tax deductions, the committee saw no evidence for change.
I commend the report to the House.
Mr THISTLETHWAITE (Kingsford Smith) (15:20): Mr Speaker, I seek leave to make some comments in respect of this report.
Leave not granted.
Mr THISTLETHWAITE: Mr Speaker—
The SPEAKER: I have sympathy for the member for Kingsford Smith—
Mr Thistlethwaite: Mr Speaker, on a point of order—
The SPEAKER: There is no point of order. Leave needs to be sought and it is either granted or not. There is no sort of High Court of appeal to me.
Honourable members interjecting—
The SPEAKER: Members will cease interjecting. I am trying to be as direct as I can. Leave needs to be sought. On this occasion, it was not granted.
BILLS
Appropriation Bill (No. 1) 2017-2018
Report from Federation Chamber
Bill returned from Federation Chamber without amendment; certified copy of bill presented.
Bill agreed to.
Third Reading
Mr PYNE (Sturt—Leader of the House and Minister for Defence Industry) (15:21): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Appropriation Bill (No. 2) 2017-2018
Report from Federation Chamber
Bill returned from Federation Chamber without amendment; certified copy of bill presented.
Bill agreed to.
Third Reading
Mr HAWKE (Mitchell—Assistant Minister for Immigration and Border Protection) (15:22): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Appropriation (Parliamentary Departments) Bill (No. 1) 2017-2018
Report from Federation Chamber
Bill returned from Federation Chamber without amendment; certified copy of bill presented.
Bill agreed to.
Third Reading
Mr HAWKE (Mitchell—Assistant Minister for Immigration and Border Protection) (15:24): by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Banking and Financial Services Commission of Inquiry Bill 2017
First Reading
Bill received from the Senate and read a first time.
Second Reading
Mr BANDT (Melbourne) (15:25): I move:
That this bill be now read a second time.
We need a royal commission into the big banks, and the best way to make this happen is to vote for this bill, because we will either then get a royal commission, when the government realises that there is support both in the Senate and in this House for a royal commission into the big banks, or we will get the next best thing, which is a parliamentary commission of inquiry that will have the power to do what a royal commission can.
This bill is very similar in its terms to that moved by my colleague the member for Kennedy and seconded by the member for Denison. There is a broad-based support for this approach in this chamber. There is a broad-based support for this in the Senate. That is why this bill that the Greens have drafted was co-sponsored and moved by a broad cross-section of the Senate. Too many people have lost too much money. There have been homes that have been lost, there have been farms that have been lost, and there have been lives that have been wrecked. At its core, the problem is that within the banks there is a conflict in their business model. Part of their business model takes people's money and invests it, but the other part of their business model is about making as much money as they possibly can. Those two often come into conflict.
This parliament has tried its best to inquire into what is going on in the big banks and whether we can fix it. There have been Senate inquiries. The House economics committee has looked into this. Each time, what we find is that the CEOs of the banks front up to parliament and wring their hands and say, 'We're sorry that we've done the wrong thing.' But we find out that back at the ranch—when they leave parliament and go back to running their businesses—nothing, fundamentally, changes. We found out that no-one lost their job, even though people were fleeced and lost enormous amounts of money and lives were ruined. There were no substantive changes to the people who were running this, suggesting that the slap on the wrist that they were getting when they appeared in front of the parliament was not reflected when they turned up back at the banks.
We are also finding that this parliament itself, through its committees, does not have the power to find out what is going on behind closed doors—to ask for the documents and to get in and do the investigations that are required in a way that a royal commission or a parliamentary commission of inquiry would. The Senate has tried its best. The House of Representatives economics committee was always a sideshow to cover up for the growing clamour for the royal commission. That has tried its best. And what is clear is that these parliamentary committees are not enough. That is why the Greens have been pushing, for some time, for a properly constituted parliamentary commission. That is also why, I suspect, the member for Kennedy has moved, together with others, for the parliament to now say, 'If we are not going to have a royal commission, let's do the next best thing.'
We now have an opportunity, and I to say to members in this place—not only to my colleagues on the cross bench but to members on the government back bench—this is a bill that just passed through the Senate with many people from many different political persuasions throwing their weight behind it, because it is what the Australian people want. This is probably your best chance of making it happen, because if a loud and clear message is sent from this place that there is support not only in the Senate but in this chamber as well, then the government will have to act. If the government will not act, then the parliament will do the job for it. So for all those members who have spoken up before and have said to their constituents, 'We hear your legitimate concerns about what is happening to your farms, about what is happening to your businesses and about what is happening to your livelihoods,' now is the chance to do something about it. This is going to be one of the most significant votes that happens over this coming fortnight. This is a real opportunity to stand up and make sure a clear signal is sent.
The arguments as to why we need this bill have been well and truly canvassed in the Senate by my Greens colleagues, including Senator Peter Whish-Wilson, as well as by all of the other members of the crossbench and the opposition who spoke in favour of it there. I do not intend to repeat all of them here and now, other than to ask: why would the Prime Minister have tasked the House of Representatives Standing Committee on Economics with inquiring into the banks unless he knew there was a problem? Why would the Prime Minister have said, 'We're going to create a tribunal,' unless the government knew there was a problem? Why is it that, time and time again, when you go the Australian people and ask, 'Do you think the big banks, which are getting a big prop-up from the government and getting support because they are treated as too big to fail, are treating you fairly,' the answer is always no? When you ask, 'Do you think it is right that the big banks at their core are able to make money off you and to sell you financial products that might be in their interests but might not be in your interests,' everyone, to a person, says, 'Yes, there is a problem.'
We have sat and watched the banks make world-leading, record profits. Just before this we were debating a bill to impose a levy on the big four banks. Why would we be putting a levy on the big four banks? It is because everyone, from the IMF to the Greens and everyone in between, has said that in this country we have a situation where the big four banks enjoy a very, very cosy relationship with the government. We have an unstated four-pillars policy in this country. As a result, the big four banks are able to go offshore and borrow as much as they like, knowing that they will get it at cheaper rates than their smaller colleagues simply because the lenders know the government is going to stand behind them. And the government have acknowledged that, in part, because they have brought in a bill for a bank levy.
What we saw during the global financial crisis was not the government saying—and it was the previous government at that stage—'Now is the chance to inquire into the practices of the big four banks, now is potentially a chance to crack down on them, now is potentially a chance to ask them to give a fair return to the Australian people.' No, during the GFC the big four banks were backed to the hilt. They were encouraged and, in fact, allowed to swallow up some of their smaller colleagues, and they came out of the GFC with a greater market share than when they went into it, thanks to government help.
So, not only have the people of Australia been paying record amounts in fees and been slugged with high mortgages as housing prices continue to grow and you have to borrow more and more, and not only is household debt increasing, but governments of both persuasions over the last decade have helped the big four banks consolidate.
It is time now that this parliament stood up in the interests of not the big banks but the public. Now is the opportunity for this parliament to say, ' Let's have a look into the banks. Let's have a look at whether or not there is a problem with the wealth creation arms of the banks existing in the same portion as their deposit arms. Let's look at whether or not that drives an inherent conflict that means many people get fleeced and are going to continue to get fleeced until it is fixed. Let's have a look at whether or not the implicit support and the explicit support that I just referred to that has been given to the big four banks that have allowed them to make world-leading, record profits has given the public good bang for its buck.'
What the IMF has said about that is that it is a drain on the public purse, it is also allowing the big four banks to obtain a competitive advantage over their smaller rivals and it is encouraging risky behaviour. When the big four banks know that they have the public and the government to fall back on whenever times get tough, then they are being encouraged to engage in risky behaviour. That is why in other places, when you look around the world, some of the responses to the GFC, to report after report of people getting fleeced and to these wealth management arms that grow within these banks—to the point where they even, potentially, contributed to the global financial crisis itself—were pretty radical.
For example, they have said, 'Maybe we have to split the investment and wealth creation arms away from the deposit-taking arms.' You have no choice now in modern Australian society other than to have a bank account. It provides these banks with a steady stream of people's money. Other countries, when they have inquired into it, have said that perhaps there is a good case for splitting the wealth creation arms from the deposit-taking arms. It is a move towards saying that banks ought to be treated a bit like an essential service. Given that you have no choice other than to have your money deposited in a bank account, whether it is a salary, welfare or any other form of payment if you are an independent contractor, perhaps all of that should be segmented and separated from the wealth creation arms.
In places like the UK they have gone further down that road than we have here. The IMF has also said that there are other ways you could deal with the fact that the big four banks are running rampant and are systemically important but, in effect, are taking the public for mugs. One of them might be to ask them to pay a contribution towards the implicit subsidy they receive, acknowledging that they are too big to fail. Maybe at the end of a royal commission, the royal commission would say, 'Yes, we have a four pillars policy in this country; let's call a spade a spade; but let's make sure that those big four banks pay an appropriate return to the public purse.' Not the comparatively small bank levy that the government has proposed, which is worth supporting but is much smaller than what the IMF has recommended. If we did what the IMF has recommended, you would find there would be an extra $2 billion to $3 billion a year coming into government revenue. We would not need to say to universities that they have to be cut by $2.8 billion just to make the budget balance. We would not have to say to people that they have to pay more to go to the doctor just to try and balance the budget. It would be much, much fairer way of balancing the budget. That is something that might come out of a royal commission.
What might also come out of a royal commission is an examination of whether it is right that bank staff get rewarded, not so much by an hourly rate for their work, but are tied so much to incentive payments and these so-called balanced scorecards that ultimately boil down to how many products they have sold. Maybe a royal commission would say that that is not actually good for the customer. What happens time after time is that you go to a bank or you call them up on the phone, and how long is it before someone says to you, 'Have you thought about your insurance?' It is not 'Is there anything else I can help you with today?'—it is 'What about your superannuation? Can I talk to you about that? Can I talk to about switching over your income that might be sitting in some other deposit account earning money—can I get you over into something else?' What we hear from the admissions that have been made to the House Economics Committee and elsewhere is that this is systemic. It is not just the senior staff, who manage to get away without a slap on the wrist. Their CEO fronts up and apologises, then goes back the ranch and the executives in charge continue to be allowed to run the show. It is not just them. This impacts at a branch level. Every one of us knows it. Every time we have tried to have a teller or someone on the end of the phone upsell us, not only is it annoying, but we know that the staff themselves are suffering because they get hauled in front of these regular meetings and performance views where they suffer if they have not met their targets.
What we have heard from bank manager after bank manager, and from staff and their unions, is that although it might supposedly be a balanced scorecard, what counts at the end of the day is how much you have sold. It is that conflict of interest that goes right the way from the teller and the person who answers the phone right up to the CEO, that encourages them to make money at the expense of everyday Australians. It is that conflict at its core that needs to be probed by a royal commission. What we have done so far is examine them the best we can, but it is flogging them with a wet lettuce, because they know that they get to go back afterwards and continue making money in exactly the same way.
One of the most worrying things I have seen in recent times is that when you plot household income against household debt you see debt is going through the roof in this country. Households are being put under increasing pressure. With house prices going up you have to write bigger and bigger mortgages and people are getting under increasing pressure and are finding it harder to make ends meet.
You would think it is time for government to step in and ask how we right this wrong, but what we have is a system where the big four banks make money out of it. The big four banks make money out of households and individuals in this country going into record levels of debt. The CEOs' bonuses are based on how big a mortgage book they can write, so we are putting people under further and further pressure and creating this bubble that is about to burst. The system collapse at some point and we need a the royal commission to get to the bottom of it and work out how we can fix this so that we do not have an economy that is based purely on speculation and we do not have banks lending not to productive businesses but just to property, because that is the cheapest way of making a buck. It is saying that it does not matter if people lose their homes or their livelihoods. That is why we need a royal commission and, if not that, a parliamentary commission of inquiry. Now is the chance for people to vote for it.
The SPEAKER: Is the motion seconded?
Mr KATTER (Kennedy) (15:42): I second the motion. There is a very great quote from Henry Bournes Higgins, the father of the Commonwealth Court of Conciliation and Arbitration in Australia. He said—and it was often quoted by Kevin Rudd in this place—that a contact made by one person is not a contract. If you look at every single contract, such as when you buy a house, the contract actually says that they can do anything they like and you have no rights at all. That is not a contract at all—Henry Bournes Higgins was dead right. A contract made by one person, by definition, is not a contract. Every time we take a loan, whether it is for a house, a business venture, a factory or a farm, the bank can do what it likes. If they decide that your industry—whether it is manufacturing of farming—is in trouble they can therefore depreciate the value of your asset and when you go below a certain level on their computer they foreclose—unilaterally, at their discretion.
To me, clearly there should be a common contract that gives rights to the people who are borrowing the money and does not leave all of the rights with the banks. This would be a proper banking system for this country. If you think that there are no problems, well, look no further than the housing industry. In Newcastle, Sydney and Wollongong, which have almost a quarter of Australia's population, the average price of a house is $900,000. The average after-tax income of an Australian is $50,000, so even if there were two people working and living together their combined income would be $100,000 and they would have $90,000 to meet on the house repayments. Clearly, as the honourable member moving this resolution said, something is going to break very shortly, and people close to the banking industry know that there is impending doom out there.
We have people that are supposed to oversight the prudential banking and financial arrangements in this country. I do not know about other members of parliament, but I have never in 43 years as a member of parliament submitted a single complaint concerning a bank to ASIC, the ACCC, the banking ombudsman or all these other people and received satisfaction. The other grave deficiency in the system was realised right at the start in 1903 or 1904 by the founder of the Commonwealth Bank. We had a people's bank. When a market collapse, a drought, a disease outbreak or something occurs—and this is particular true of farming industries—the banks hit the panic button and immediately apply a 2½ per cent endangered area overrider, a 2½ per cent endangered industry overrider and a 2½ per cent endangered person overrider, so instead of paying six per cent, as was agreed upon, you were suddenly paying 12 or 15 per cent. In all of Australian history since 1903 we had a government bank that in that situation accepted there is a roller-coaster and carried the industry through the down cycle.
I speak with authority, because I was the minister that had primary responsibility for the state bank in Queensland. It was decided by the great Sir Leo Hielscher, whose name everybody knows, the Treasurer, William Gunn, and myself, as minister with primary responsibility for the bank, that we would bail out the sugar industry. We had a look at the sugar industry in southern Brazil, and our cost structures were lower, so we knew that in the end we would always win. If the worst came to worst and we had to foreclose, it is valuable land, so we were not going to take losses. We went in and rescued it. The head of the state bank had told me that 30 per cent of the sugar industry, a mainstay of the Queensland economy, had to go. We were under attack from beet sugar from Europe. He knew all about it. Anyway, two weeks later, let us just say he resigned. There may have been some compulsion. The money went out, approximately $800 million, and we, the government, made $250 million profit out of that. If that had been the banks, they would have taken a loss of $100 million, the farmers would have taken a loss of over $1,000 million, and Queensland would have lost something like 15 per cent of its economy, as well as about 20,000 jobs. That is the necessity for a properly operating bank that is not interested in short-term profits but in the long-term interests of the Australian nation and people.
There was a most intriguing occurrence when the banking tax was announced—and we thank the government for the banking tax. The banks said, 'No problem; we'll just pass it on to the consumer.' There is a thing called collusion, and what they have actually admitted is that they collude on pricing. How can they say, 'We can just pass it on to the consumer'? This place is shot to pieces with free marketeers on both sides of the House. I must say my colleagues in the centre here do not subscribe to such stupidities, but if a free market is operating then the banks cannot just say, 'We're going to pass it on.' That can only occur if there is no free market operating. Clearly the statement by the bank means that what we have here is an oligopoly. We do not have a free market system. This is just another reason that we need to have a royal commission, or its equivalent, into the banks.
Without a banking system that can ride this roller-coaster one would be seeing sugar mills in Queensland closing. As we do not have a state bank, we did see a sugar mill closing every two years, taking 700 or 800 employees for each one that closed. Nine meatworks closed in a similar downturn in North Queensland, each one of them taking down 500 or 600 jobs with it. They have never reopened. Then there are dairy factories. I think there are three out of 50 dairy factories left in Queensland thanks to the free marketeers and their work. But, all the same, they would have been able to survive if there had been a properly operating government bank—and similarly for the wool industry.
There is another issue which very few people take up in this place. When the GFC hit, our prudential regulators said, 'We have magnificent prudential oversight. We have the best banking system in the world.' I think the history books will say that we can thank Kevin Rudd and Wayne Swan for rescuing this nation from the GFC. But the banks were congratulating themselves. They did not have a problem because, unlike almost every other country on earth, Australia is the only country with non-recourse lending.
In America if the banks are going to foreclose they, as well as the borrower, take the loss. They call it 'jingle mail'. If you are in trouble and you cannot make your repayments, you toss the keys to the bank and say, 'It's yours now! Ta-ta! Bye-bye!' In Australia there is no 'Ta-ta! Bye-bye!' The debt follows you. You are a debt slave till the day you die. The bank keeps that debt alive and adds interest to it until the day that you are pushing up daisies—unless you choose bankruptcy.
The only reason that the banks, whose performance in Australia has, quite frankly, been utterly and abominably disgraceful, got out of trouble was that in Australia you take the full blame for the default. In every other country on earth—most certainly in the United States—that default loss is shared by the banks. There is no continuing debt. When they foreclose on the house the debt that you owe the bank is extinguished.
Storm Financial was to some degree a North Queensland phenomenon. The losses were Australia wide, of course, but the epicentre was in North Queensland. At the meeting, Mr Scattini, the lawyer from Slater and Gordon, representing the people who had the losses, said, 'It is in my opinion that the banks made advances to people who could never ever repay them, and the people never had pointed out to them the dangers of the investment.' The investments were made on the basis that housing prices would forever rise, and if housing prices did not forever rise then you all went bankrupt. You all went belly up.
Now who would know this? A bloke working as a fitter and turner in the minefields, doing fly-in mining out of Townsville? Would he know that? Or would the bank know that? Of course the bank would know that, and he wouldn't. So who is more culpable here—the bank or the borrower? Clearly the bank was. Yet, in the Storm Financial case, the banks took negligible pain whereas the people lost hundreds of millions of dollars. And the banks got clean away with it. As the proposer of this inquiry pointed out, they can act in the most irresponsible manner and get away with it. There is no punishment meted out to them.
One of the most important factors here is that both the opposition and the government have said that they will stand behind the majors. They have a government guarantee. Tell me any business in Australia that enjoys a government guarantee outside of the banks. So invest your money in banks, because you know you are never going to lose it—because the government is going to stand behind them. What have the banks given us by way of payment? I would submit that they have repaid us with the most irresponsible behaviour—to quote the bankers themselves when they went before the Senate inquiry, each of them said: 'Mea culpa. I am sorry for what I have done.' Each of them admitted that they had been acting improperly, but what did we do to punish them? Absolutely nothing! In fact, we have given them a government guarantee and rewarded them with the highest interest rates in the world as well.
I had a very lucrative insurance agency in my younger days; I worked very hard and built up a very big business. With the AMP Society, if you had three per cent defaults you lost the agency because it was your job to assess that the person signing the contract could keep up the repayments on the savings plan. It was your responsibility as the agent to see that they could afford it. There is no responsibility, as the proposer has said again and again, on Australian banks to act in a responsible manner. (Time expired)
Mr Pyne: Mr Speaker, I move:
That the debate be now adjourned.
Mr Burke: Mr Speaker, I ask that a separate question be put on the resumption of the debate.
The SPEAKER: Under the standing orders it is very clear that the debate must be adjourned, and so I will put that question first. The question is that the debate be adjourned.
Question agreed to.
The SPEAKER: The question now is that the resumption of the debate be made an order of the day for the next sitting.
Mr BURKE (Watson—Manager of Opposition Business) (15:58): I move as an amendment:
That the words 'the next sitting' be omitted with a view to substituting the following words: 7 August 2017, where it shall be the first item of Private Members Business, and if the second reading debate has concluded on 7 August 2017 the bill be called on immediately for its third reading as the first item of Private Members Business on 14 August 2017, and on each day it shall be permitted for the debate to conclude and the question to be put.
The SPEAKER (15:59): Standing order 41 makes very clear that the Selection Committee determines dates for matters, and the Selection Committee is formed and the standing orders give it that power. As I understand it, because the Selection Committee has not made a determination the Manager of Opposition Business by way of amendment is seeking that the House agree to a resolution for 7 August. I am prepared to allow that, but members need to be aware that that does not detract from the power of the Selection Committee, under the standing orders, to ultimately determine this matter and, indeed, every other matter of private members' business. I hope that is clear.
Mr BURKE (Watson—Manager of Opposition Business) (16:00): Thank you, Mr Speaker. You asked me to give you the chance before I spoke on the amendment itself, so that is why I moved to one side. I want to make clear to the members of the House a few things about this amendment. In the first instance, this amendment does not commit anyone to the bill itself, but what it does commit the House to is giving the bill the opportunity to be considered and voted on. It also guarantees that this House will have told the Selection Committee exactly what it believes should happen. I do think it would be extraordinary—possibly the first time—if there were a resolution of the House for a bill to be brought on and then the Selection Committee made a different determination later. That would be an extraordinary outcome, but we do not deal with that today. What we deal with today is: what is the view of the House? Should we allow the opportunity for a bill on a banking commission to be considered by the House and voted on by the House?
The SPEAKER (16:01): I thank the Manager of Opposition Business for that. Having listened to him, let me say I will call for a seconder in a second. I have heard what the Manager of Opposition Business has said. Obviously, as Speaker, I need to enforce the standing orders. The Manager of Opposition Business and all members are welcome to make whatever points they want—that is what the chamber is about—and to pass resolutions, but ultimately the House has passed a resolution in the form of the standing orders, and those standing orders apply. What the amendment says is that because the Selection Committee essentially has not determined a date—in fact, could not have determined a date and could not have met in the period since the message arrived here, in which we have had this debate—you are seeking that the House make a resolution. But I am just making very clear that, under standing order 41, it is very black and white that the Selection Committee determines timings, and it does so on all matters. If the House, in the future, does not want that system to operate then the standing orders need to be changed.
I will call for a seconder for the motion.
Mr ALBANESE (Grayndler) (16:02): I second the motion, Mr Speaker. Very clearly, you have a responsibility to uphold the standing orders, as is consistent with the way in which you have indicated, quite correctly, the way that they are. Of course, I was either Leader of the House or Manager of Opposition Business during the time in which the Selection Committee played a different role in terms of private members' business. But certainly it is the case also, Mr Speaker—you will not be surprised—that we had a view that, whilst the Selection Committee was an opportunity for people in a smaller gathering to make sure that there was proper representation of different views and an opportunity for different private members' motions and bills to come forward, at the same time we never envisaged the possibility that somehow this Selection Committee—which, to be frank, most of the members of this House probably did not know existed, let alone who is on it and how it functions—would override the power of this House to determine what happens in the proceedings of this House.
We have had the other place determine a clear view on this legislation that is before the parliament, and I would hate to see a circumstance whereby the other place was able to make decisions but somehow we were not able to have a debate.
Mr Burke: Mr Speaker—
The SPEAKER: I can't have both of you at once.
Mr BURKE (Watson—Manager of Opposition Business) (16:04): I apologise. There was a variance of the dates. Because the amendment has not been stated to the House yet, I want to withdraw it in the form it was given. I now move:
That the words 'the next sitting' be omitted with a view to substituting the following words: 14 August 2017, where it shall be the first item of Private Members Business, and if the second reading debate has concluded on 14 August 2017 the bill be called on immediately for its third reading as the first item of Private Members Business on 4 September 2017, and on each day it shall be permitted for the debate to conclude and the question to be put.
The SPEAKER: Is the motion seconded?
Mr ALBANESE (Grayndler) (16:04): I second the motion.
Mr PYNE (Sturt—Leader of the House and Minister for Defence Industry) (16:05): What we have just seen from the opposition, of course, is that they are an absolute shambles. They moved a motion, which they thought was the cleverest ploy they had ever seen in this parliament—a very clever ploy, apparently, by this undergraduate debating level Manager of Opposition Business—which had the wrong date. It suggested that the House debate this matter on 7 August, a date on which we are not sitting.
Mr Dreyfus interjecting—
The SPEAKER: The member for Isaacs has already been warned today.
Mr PYNE: Was that your idea, member for Isaacs? It would have been the member for Isaacs' idea—Rumpole's idea—to put 7 August in.
But I digress, Mr Speaker. What we have here is a clear political stunt on behalf of the Labor Party, and what a sad day when the Labor Party are reduced to political stunts in support of One Nation, the Greens and the Nick Xenophon Team in the Senate. That is what they have been reduced to—lining up with the Greens, One Nation and the NXT. They will not preference One Nation, apparently, but they are quite happy to adopt their bills and support them in this place.
So what we have is a shambles on the opposition side, where they have their motion wrong. They are trying to get around the question of acquiring 76 votes to suspend the standing orders in order to take a measure in this House. I would put it to you, Mr Speaker, and I seek your clarification at the end of my remarks: how is it, under the Selection Committee requirements, under standing order 41, that a motion that effectively suspends standing order 41 and tries to take out of the hands of the Selection Committee the power on private members' business, which is specifically provided for in the standing orders, does not require an absolute majority to be carried, as opposed to a simple majority? An absolute majority is required to suspend the standing orders, and what the Manager of Opposition Business has tried to do is get around the requirement of the standing orders that when there is a motion to suspend the standing orders—to set aside a particular standing order, in this case standing order 41—76 votes are required. As the Leader of the House, I would put it to you that it is a very dangerous precedent to allow an amendment to a motion which, in its effect, seeks to change the application of the standing orders. It is a very serious precedent to allow that to be a simple majority. I would put it to you that it should be a 76-vote majority required, therefore an absolute majority.
Even if that were not the case, members of the government side should not vote for this motion, because it is a political stunt. I can understand groups like the NXT, the Greens, the Katter party and One Nation engaging in these kinds of political stunts, but there is a process. The member for Kennedy has his own private member's bill to deal with the banks, which is going through the normal processes, and the government has allowed that to happen. Therefore, the normal processes of the parliament should be respected. When the parliament starts to undermine the standing orders and the processes of this place, it is a very long road to chaos in this place indeed. How long would a piece of string look on that basis? If we allowed the normal processes of this place, which have been in place for 117 years—for 117 years clerks and speakers have been interpreting the law of the parliament—
The SPEAKER: The Leader of the House will just resume his seat for a second. The Manager of Opposition Business on a point of order?
Mr BURKE (Watson—Manager of Opposition Business) (16:09): No, not on a point of order. I move:
That the question be now put.
The SPEAKER (16:09): I would say to the Manager of Opposition Business before I do that—and the standing orders compel me to—that I would like the opportunity, as I had with him, given the territory that we are in and the nature of this, to at least be able to respond to the Leader of the House. I think that is only fair. The Leader of the House, as you did, wanted to get clarification about the approach. I gave that to you, and I would like to give the Leader of the House that clarification now, if the Leader of the House would like. To the Leader of the House: I think it is only fair that I give clarification, given the points that you have raised, and I will be as clear as I possibly can without repeating everything I said earlier.
The Leader of the House made the point that this amendment seeks to get around the standing orders. That was a very serious concern for me in considering this matter, but, ultimately, it does not get around the standing orders. The Selection Committee is solidified in the standing orders as the body that determines when matters of private members' business come on. This amendment is possible because the Selection Committee has not made a determination. But let me be very blunt about it so there is no confusion: the Selection Committee is not bound by this resolution. The Selection Committee loses no power under the standing orders as a result of this. The Selection Committee may decide to agree or to disagree. It makes its own decisions. In no way is the Selection Committee weakened, because this House has decided that it is the Selection Committee that determines these matters. This matter is not a matter that is seeking to amend those standing orders. That would require the absolute majority. So I make it clear to all members that this House has voted for these standing orders. The House is entitled to pass resolutions calling on the Selection Committee to do certain things, but what it cannot do is enforce those on the Selection Committee—it really cannot. The only way it can do that—and it has the power to—is to change standing order 41. The Leader of the House has been—
Mr Katter interjecting—
The SPEAKER: No, the member for Kennedy will resume his seat. We are not going into question time on the matter. I am required to put the question. The question is that the motion be put.
The House divided. [16:17]
(The Speaker—Hon. Tony Smith)
The SPEAKER ( 16:22 ): I remind the House of the principles that apply to the practice of the Speaker exercising a casting vote, of which there are three. In this case, it is the first one that is applicable. That is, that the Speaker should vote to allow further discussion where this is possible. So I gave my vote to the noes to allow continued debate. The question is that the amendment be agreed to.
Mr SHORTEN ( Maribyrnong — Leader of the Opposition ) ( 16:22 ): Every time the nation and its representatives seek to have a vote to introduce a banking royal commission, the member for Dawson goes missing—every time. Today we saw the vaguely comical scenes of poor old member for Dawson bracketed by the Treasurer and bracketed by the Leader of the National Party in a witness protection program that would do the FBI proud. But the problem is that the member for Dawson talks a big game up in Mackay. He talks a big game up in South Townsville, but he plays very poorly down here. Stand up, member for Dawson, and do the right thing by all of the people who have been ripped off by the banks. We know you want to.
Mr Christensen: I have a point of order. If the opposition leader got his date right—not a non-sitting date—I might vote—
The SPEAKER: The member for Dawson will resume his seat.
Mr SHORTEN: The member for Dawson—a lion in Mackay and a mouse in Canberra. We know, deep down, that the member for Dawson knows that having a banking royal commission is the right thing. I think the member for Dawson knows what he should do, but, for whatever reason, just as we get to the opportunity to vote for that royal commission, there is a new excuse every time.
We know that the member for Dawson actually wants a banking royal commission and, to be fair to him, I suspect there are plenty more in the ranks of the government who do. But when your Prime Minister is an investment banker, who is from the banks, of the banks and for the banks, you will never in Australia get a royal commission while this country is run by the banks. Too many people have been ripped off too often. If there had been just one or two—or three, four, five or six—financial scandals then maybe you would say other measures worked. And, heaven knows, governments of all persuasions have looked at all the options. But there is a pathology in the banking system—
The SPEAKER: The Leader of the Opposition will resume his seat. The Leader of the House on a point of order.
Mr Pyne: Mr Speaker, I think we are being very generous. The Leader of the Opposition is not actually speaking to the motion—or, now, the amendment moved by the Manager of Opposition Business because he made such a mess of it the first time and tried to get us to have a debate on a day we when we are not sitting. The Leader of the Opposition is not actually talking to the amendment; he is actually talking to the substance of the bill.
Ms Macklin interjecting—
The SPEAKER: The member for Jagajaga will not interject.
Mr PYNE: The point of order is that he needs to speak to the substantive motion before the House, which is the amendment—because the Manager of Opposition Business made a mess of it the first time—to the original motion that we debate this on 7 August.
The SPEAKER: The Leader of the House makes a fair point. This is an amendment that seeks to have the House make a resolution and we are in different territory from a general suspension. So all speakers, including the Leader of the Opposition, need to address the substance of the amendment moved by the Manager of Opposition Business. The Leader of the Opposition has the call.
Mr SHORTEN: I thank your gentle hand on the tiller of this parliament, Mr Speaker! We must bring this amendment to a vote because this country needs a banking royal commission. No more excuses. Look at the protection racket that this government are running for the big banks. We have had old Foghorn Leghorn, the Treasurer, saying he is tough on banks. If he were really tough on banks, he would do the one thing the banks do not really want—give them a royal commission.
Mr Morrison interjecting—
Mr SHORTEN: We've got Chavez over there saying he will put a tax on them. Well, you may well put a tax on them in this budget, but you are going to hand a lot back to them with the corporate tax cut. A Claytons banking tax cut is when you give them a tax levy in one year and hand it all back to them in corporate tax cuts over the next decade. The second best friend the banks have ever had is the Treasurer of Australia, but the best friend the banks have ever had is the Prime Minister. You have to ask yourself—and this is why we need to bring this on for a vote: why does the government fight so hard to protect the banks from a royal commission? What do they know that they do not want uncovered? Why is it that they will not have a royal commission into the banks?
I get to meet, sadly, with the victims of financial malfeasance. We, including members on the other side, get to meet all the time with them—farmers, small businesses, individuals and retirees. The banks will not correct their culture until they have a royal commission. On every issue, the banks will not correct their culture until they have a royal commission.
Mr Morrison interjecting—
Mr SHORTEN: While the Treasurer yells and bellows, we will never give up on having a banking royal commission. And maybe one day the member for Dawson might just do the right thing in Canberra rather than talking about it in Mackay and South Townsville.
Mr HAWKE (Mitchell—Assistant Minister for Immigration and Border Protection) (16:28): I want to take the House through what has just happened because we only have a short period of time and we have been joined by many members who were not here during this debate. I just want to remind the House that the member for Watson started this amendment debate today by suggesting that we debate this issue. This issue is so important to the Leader of the Opposition that the member for Watson tried to bring on a debate on a non-sitting day! So the contention of the opposition was that we would all come here to Canberra and have a debate—
Government members interjecting—
Mr HAWKE: I don't know! Where would we have that debate, member for Watson? At Aussies? In the gym? Where would the meeting of the House take place? This is another reason why we have a selection committee—a wise committee of eminent members of this House who decide when we discuss important matters because they know when the House is actually sitting. They know the dates that are appointed for the sitting of the House. If we try to pass motions like this on the run—and I have to confess: I still do not know what the amendment says.
The SPEAKER: The assistant minister will resume his seat.
ADJOURNMENT
The SPEAKER (16:30): I propose the question:
That the House do now adjourn.
Mackellar Electorate: Champions of Mackellar Awards
Mr FALINSKI (Mackellar) (16:30): This is a place of robust debate, apparently. While there is often disagreement on opposing sides of this House, we could all agree that we live in the greatest country on earth. Thoroughly undeserving, I am blessed to live in and represent in this parliament the greatest part of the greatest country on earth: the Northern Beaches of Sydney. The Northern Beaches community is not one of apathy or helplessness. We are a community of lifters, not leaners. When we see something which needs fixing, we do not expect others to fix it; we roll up our sleeves, get involved, volunteer and help make our community a better place. We pay 50 per cent more personal income tax than the average electorate. A recent community survey showed that 50 per cent of my community actively volunteers. This is 40 per cent higher than the national average. My community gives so much and asks for so little.
I represent a community of champions. Last Thursday, I hosted my inaugural Champions of Mackellar awards night. I thanked our volunteers, congratulated volunteer and local sporting champion grants recipients and announced the winner of the inaugural Champion of Mackellar award. I thank the Sands Hotel in Narrabeen and the ALH Group for sponsoring the night and hosting a packed venue of over 200 locals. Each year, the Turnbull government awards volunteer organisations grants of up to $5,000 to help with their work.
Belrose Rotary Club, with their work with Peak Hill Central School in New South Wales, their community renowned annual Easter egg hunt and their support of Bear Cottage, is a deserving recipient of this grant to help cover fuel costs. Well done to the president, Jeff Banks, and Belrose Rotary Club.
Congratulations to the mighty Narraweena Hawks on their volunteer grant. Founded in 1956 and with over 200 players today, the Narraweena Hawks are one of the biggest and oldest rugby league clubs on the Northern Beaches. The benefits of sport to our young people are clear and the Hawks are worthy recipients. The volunteer grant will provide support to cover necessary hiring costs, training costs and the purchase of major appliances. Congratulations to the president, David Mastroianni, and the Narraweena Hawks.
My electorate is home to one of the largest Tibetan communities in Australia, with over 2,000 local Tibetans. The Tibetan Community of Australia, New South Wales, provides much support and their grant will help in the purchase of computer equipment and will assist with other costs. Congratulations to the president, Tsering Dorjee, and the Tibetan Community of Australia, New South Wales.
Each year, under the Turnbull government's Local Sporting Champions program, I am able to present 36 $500 grants to elite junior sports people to help them and their family cover the cost of them travelling to and competing at a sporting event. In the last six months, I have presented 22 of these grants and, at Champions of Mackellar, I was proud to be able to recognise Mia Rolfe, an upcoming swimmer, Nanki Soin, an ascendant sport climber, and Liam Spinks, an elite junior baseball player. Congratulations, Mia, Nanki and Liam.
In mid-May, I called for nominations from my community for my inaugural Champions of Mackellar award. I was inundated with over 100 nominations. When poring over all nominations, there was one particular nomination which stood out, not because you would read about it in the paper but because you would not. Our Champion of Mackellar is a volunteer for Easylink, which is a not-for-profit community service keeping the vulnerable and potentially isolated connected. Working from a run list, our champion routinely picks up an average of 15 passengers from their homes, plans a scenic drive, arranges a picnic afternoon tea, and then returns them home. Our champion is committed to building the capacity of Easylink for the benefit of customers and others. Congratulations John Wilson from Beacon Hill.
Calwell Electorate: Brite Services
Ms VAMVAKINOU (Calwell) (16:35): I want to speak on the fantastic milestone reached by one of the most extraordinary organisations I have in my electorate, Brite Services. Last week I had the pleasure of attending Brite Services' 40th anniversary morning tea. I did so with my Labor colleague the member for Wills and the Governor of Victoria, the Hon. Linda Dessau, who is also the patron of Brite Services. The morning tea gave us all an opportunity to celebrate Brite's ongoing service to the community and to also reflect on the history of Brite Services, a 40-year history that began in 1969 with a group of northern suburbs parents who were looking to establish a facility and services for their children with disabilities. That journey resulted in the creation of Brite Services, and organisation with a strong sense of family that is still very prevalent today and continues to be nurtured throughout its staff, people and its volunteers.
Brite Services has a person-centred approach to their service and delivery. They treat everyone as part of their family. They understand their specific needs, all the while giving people with a disability a job, people who might not get employment otherwise in any mainstream business or any other employment setting.
Today, Brite Services employs more than 143 people in supported employment in their warehouses, their packing division, their wholesale nursery and their infamous herb farm. But it does not just employ people. It also offers social activities that encourage participation, learning, employment, and education that includes fully accredited certificates, pathway courses and skill sets.
At the morning tea last week, six very special ladies were honoured for their services at Brite Services: Moira Chisholm; Deborah Jones; Brenda Mitchell; Patricia Meli; Eileen Gavaghan; and Pamela Stevens. All six started in Brite in 1976. For 40 years they have been working for the same company and five of them are still current employees. When I spoke to these ladies, each of their stories were the same. It was a story of how much they have enjoyed their time at Brite, how much they have enjoyed the variety of work given to them and how much they have enjoyed the community and friendships they have made along the way.
On the day, another special award was handed out to Chris Jones, who runs the wonderful nursery at Brite. It was the Jonathan Moore Brite Employee of the Year Award for 2016. The inaugural award was named after a former employee of Brite who sadly passed away just two years ago. Jonathan worked from 1979 to 1994 and then again from 1998 to 2014—all up, 31 years of employment at Brite. As a person with Down syndrome, Jonathan really thrived at Brite. It is Jonathan's mother, Betty, whose tireless efforts as a community activist for the rights and dignity of disabled people, and the legacy left behind by her son, that I want to reflect on for a moment. Betty Moore has not only made a valuable contribution to life at Brite, firstly as a parent to Jonathan, a past director of the board, and as a member and life member of the organisation, but she too, in her own way, fought to change the way society views people with a disability. In fact, I remember Betty from when I first became the Member for Calwell, when she literally stormed into my office and asked me in a very matter-of-fact way if I knew just how much she and other carers like her were saving the government financially.
Betty was a mother, doing all the heavy lifting. She did not ask for much but she wanted it known that she was doing us a favour by doing that heavy lifting. Betty's tireless advocacy for the rights of people living with a disability is the key to Labor developing the National Disability Insurance Scheme. This very Labor initiative was established to provide the security and purpose for organisations such as Brite, and for the people they serve. Paras Christou, the community development officer at Brite Services, said: 'Brite Services makes sure that everyone gets an opportunity to have dignity in employment and feel part of a community, and it allows that person to have choice and control over their life. The NDIS is heralding a change in how we think about disability, and it is allowing the whole sector and society to become more inclusive.' When the NDIS rolls out in the Hume Moreland local government area in March 2018, it will be Brite Services who will be taking a lead role in assisting other organisations with the transition.
South Australia: Roads
Ms FLINT (Boothby) (16:40): One of the great privileges of being a member of parliament is making a real difference to people's lives. We do this in many different ways, but one of them is fixing long-term infrastructure problems. For the past 40 or so years, residents in my electorate of Boothby have had to suffer delays and bottlenecks at the Oaklands rail crossing. There are daily traffic delays on Morphett Road and Diagonal Road. Traffic volumes are currently 42,000 vehicles per day and are expected to grow to 66,000 vehicles per day by 2031, making matters much worse.
Those who can avoid these roads and the crossing do so, which puts pressure on surrounding streets and diverts traffic to Marion Road and Brighton Road, which are just as busy. I have residents who cannot access their driveways during peak hour traffic simply because they live too close to the intersection. I have small businesses who say that the lack of access to their premises is hurting them and their customers. Every day is a battle for parents trying to get to work or taking their kids to nearby schools, such as Christ the King School, Warradale Primary School and Paringa Park Primary School.
The Office of the National Rail Safety Regulator lists Oaklands crossing as Adelaide's fifth most dangerous. From 2010 to 2015, there were over 100 collisions at the crossing, including two that involved pedestrians. As developments have increased in the area, so too has traffic. Immediately adjacent to the crossing is Westfield Marion, Adelaide's biggest suburban shopping centre, which attracts an average of 40,000 visitors per day and employs many local residents. Each day elite athletes, swimmers of all abilities, mums, dads and kids go to the South Australian Aquatic and Leisure Centre, which hosted our Olympic trials recently. The aquatic and leisure centre, managed by Mr Adam Luscombe, who hosted me on a tour of the amazing community facility, attracts up to 4,000 patrons a day and around 1.1 million patrons a year.
I was delighted when I was able to join the Prime Minister during the election campaign to announce that our government would be the first to ever provide funding to fix Oaklands crossing permanently by pledging $40 million to the upgrade. I am grateful to my state colleagues Corey Wingard MP and David Speirs MP and to so many people in the community who worked with us to make this happen. I remember doorknocking homes in the last week of my campaign to tell people the good news, which was welcomed but met with scepticism. Some residents did not believe the upgrade would ever happen, even with our historic $40 million commitment. These are all the reasons why I have been working very closely since the election with the Minister for Urban Infrastructure to see this project commence.
I am grateful to the minister and his office for making this project happen and for travelling to Adelaide last week to announce that the Turnbull government has agreed to provide an additional $55 million investment, bringing the total federal commitment to $95 million, so that this vital road and rail separation can commence. Our additional $55 million contribution combines with the state government's $74.3 million contribution and the City of Marion's $5 million contribution to form a total investment of $174 million for an underpass, pedestrian and bike access and improved traffic flows on Morphett Road and Diagonal Road.
This project is yet another example of the very best kind of infrastructure investment by a government. I really wish that the incompetent state Weatherill Labor government would take note of our federal example. Where they spend billions of dollars on infrastructure, it usually does not earn a cent of revenue for my home state, such as the $1.8 billion desal plant that is still mothballed or the $2.2 billion Royal Adelaide Hospital that still has not opened its doors.
In comparison, the infrastructure announcements I have worked hard for will also work for my residents and businesses in Boothby and for my wonderful state of South Australia that is in such desperate need of more jobs. The Oaklands crossing upgrade will enable people to access local businesses, including those at Westfield Marion, more easily, meaning more economic activity and growth. It will help people get to our Olympic standard aquatic centre, and it will mean my local residents do not waste time in traffic each and every day.
There may also be further scope for residential or hotel developments around the crossing and potentially for more businesses, as we have seen in places like Sydney. Although, I know the state Labor government are, again, doing their best to run a scare campaign against more jobs and growth in the area, which is really quite bizarre. They seem to enjoy South Australia's status as the nation leader in unemployment, unfortunately. In comparison, I could not be more pleased at the benefits and opportunities that the Oakland crossing rail and road separation presents, and I am so proud to have fought for this for my community.
Workplace Relations
Ms HUSAR (Lindsay) (16:45): I rise today to talk about the Turnbull government's fundamental refusal to acknowledge the importance of wages as the driver of economic growth. People on low- and middle-incomes spending money in their local shops, bars, restaurants, sports clubs, gyms, hair salons and beauticians is what drives local economies. It is vital that people have money to spend. One of the most important functions of government is ensuring workers have got money to spend and ensuring that wage rises keep pace with inflation. But this government's track record on wages is simply appalling. They are standing by while real wages stagnate. They actively campaigned for a reduction in penalty rates. Their response to wage scandals covered by Fairfax at 7-Eleven was absolutely pitiful. Despite evidence that underpayment of superannuation, which is a worker's delayed wage, is much higher than previously thought, this government have barely lifted a finger. Under the Turnbull government, wage growth in Australia is stagnant. Wages are falling in real terms whilst the cost of living is rising. Workers are simply struggling to make ends meet. Company profits have risen 40 per cent over the last year, while wages are declining in real terms. Wages growth remains at the lowest level since the Australian Bureau of Statistics started keeping records in 1997.
People in my electorate who I represent are feeling it. They are frustrated and they are reining in their spending. After rent, mortgage, food and rising power bills, which are also set to go up another 16 per cent, more than ever they are weighing up whether to spend what is left over in High Street or Queen Street or in fact on other things such as undertaking renovations, which would employ local tradies. I want all the workers of Western Sydney, all of our 12,000 people affected, to know that Malcolm Turnbull and his ministers actively campaigned for the Fair Work Commission to cut penalty rates. It shows absolute contempt for the people in my electorate. The census—that is, the one that actually worked in 2011—data actually shows that the residents of Lindsay will be hit hard by the Turnbull government's refusal to stop the Fair Work Commission cutting penalty rates. More than 12,000 people who I represent in the retail, food and accommodation industries will be affected by these cuts. That is one in six workers in our local community who stand to lose up to $77 per week.
Again according to the 2011 census—and I would refer to the more current one if it were available; however, we do not really need to digress and go there—retail is the second largest industry in Lindsay, employing 8,093. Food and hospitality is the eighth biggest industry, employing 3,987 workers. The lives of 12,080 people and their families will be impacted by this decision. Cuts to penalty rates are bad news for our local economy, too. Workers will have even less money to spend locally, and our local economy could face having up to $48 million absolutely ripped out of it over the next year.
Labor is determined to stop this damage being inflicted on our local workers and our local economies. We know that this decision will affect more women and young people and hurt our local economies. It is bizarre, but not unsurprising, that the member for Moncrieff, who has the highest number of people who are affected by this, also voted to cut penalty rates for so many people in his own electorate. In a bizarre attempt, the Liberals have attempted to blame Labor for their poor decision. Federal Labor and various state Labor governments and oppositions were the only ones to make clear and unequivocal submissions against cutting penalty rates.
On Monday Labor brought forward a private member's bill to prevent the wages of workers relying on the award from being cut. Labor's bill would stop the cut to penalty rates from taking effect, which would have a major impact in my electorate. This would ensure that penalty rates would not be cut in the future if it resulted in a reduction in workers' take-home pay. Members opposite, members of this Liberal government, are expected next week to block the introduction of the bill to protect penalty rates. I say shame on them. With this government holding a one-seat majority, a single Liberal or National MP—it is a shame there are not more of them here—could cross the floor on this issue and vote with Labor and the crossbenches to stop penalty rates being cut. I urge all of them to do that in the interests of every single worker in this country who is affected by this decision. Turnbull's Liberal-National government is absolutely out of touch.
The DEPUTY SPEAKER ( Mr Coulton ): The member will refer to other members by their correct title.
Ms HUSAR: The Prime Minister—whichever Prime Minister is running the country at the time—and his Liberal-National government is seriously out of touch by voting against protecting workers and saving them an average of $77 in their weekly pay but voting for a $65 billion corporate tax cut. (Time expired)
Calare Electorate: Community Groups
Mr GEE (Calare) (16:50): Volunteers are the backbone of every country community, and Calare is no exception. Twenty-two groups in Calare have recently received funding under the federal government's 2017 community volunteer grants program and I would like to take this opportunity to mention just a few of them and their great work. Firstly, the Wellington Multi Service Centre, which is best known for its meals on wheels service, has been a part of the Wellington community and surrounding districts for many years. The centre is receiving $5,000 for the reimbursement of fuel costs and volunteer training. I would like to make particular mention in this House tonight of manager Claire Manning, chair Judy Scott, vice chair Lisa Bennett, secretary Lyn Beggs, treasurer Judy Grasnick, board members Lorna Carpenter, Lyn Munro and Michael Brian, administrative assistant and bookkeeper Sharon Doherty, and general assistant Christine Oldfield.
The Wellington and District Cricket Association has a long and distinguished history, and they have been awarded $3,000 for kitchen appliances, whitegoods and major appliances. I would like to make special mention of president Jason Ryan, vice president Noel Phoebe, secretary and treasurer Marie Cornish, junior cricket manager Lauren Douglas and publicity officer Kate Kiss.
Also, $5,000 has been granted to the Wellington Golf Club—and this will go towards electronics, outdoor furniture and equipment· The club are very excited about the grant, and I would like to mention president Barry Jeffrey, who does a great job, vice president Mitch Spradbrow, captain Rod Irwin, treasurer Marilyn Watts, secretary Marie Cornish, and committee members Doug Ney, Mac Harvey, Rod Cunnynghame and Rex England.
The Wellington Town Band has received $4,900 for the reimbursement of fuel costs and for new office equipment. I would I like to mention the bandmaster with the mostest, Eric Smith, assistant bandmaster Rebecca Brine, president Wade Smith and also Barry Jenkins, who is a hardworking volunteer with the band.
Mid Macquarie Landcare in Wellington were also thrilled to receive just over $2,000, which will go towards volunteer training costs and kitchen appliances.· I would like to mention secretary and administrative assistant Jean Ellis, chair and public officer Cameron Tomkins—good on you Cameron—vice chair Danny Hawke, treasurer and project officer Debbie Wynne, local Landcare coordinator John Ryan, and committee members Mike Augee, who is an old friend, Frank Barker and another old friend, Marion Jarrett, who has done some wonderful work with the arboretum. She is particularly fond of the Mallee section of the arboretum. Well done Marion.
The Geurie Lions Club will use their grant of $2,800 for power and construction tools. I make special mention of president John Mills, treasurer Ann Jones—who is soon to be inducted as District Governor of Lions District 201N4—secretary Peter Perry—good on you, Peter, ably assisting Ann—Malcolm McLeod, Michael Sitard, Paul White, Neil Baker, Rod Althofer, Jim O'Brian, Ron 'Tiger' Paxton—good on you Tiger—Noel Parkes, David Hearn and Geoff Perry.
I recently travelled to Mudgee to present the local public school with $2,500 in funding. They are doing wonderful work there, with a growing school, and I have to mention the principal of Mudgee Public School, Alan Kerr, and the P&C: president Sacha Etherington, secretary Elizabeth Halbisch, treasurer Emma Turnbull, vice president Jemma Williams, vice president Donna Consadine, and general member Sonja Lunn.
Pay It Forward Community Shed in Orange are providing assistance to the most vulnerable members of our community, and they will be receiving a grant of $5,000. I would like to acknowledge Karlene Irwin, and I am looking forward to visiting the Pay It Forward shed very soon.
I would also like to mention Little River Landcare Group, who have been doing fantastic work in our local community for a long time: CEO Tracey Potts, chair Claire Osborn Booth, vice chair Don Bruce, treasurer Ian Knox, secretary Kim Job, and also Allan Nicholson, Nigel Kerin, Rebecca Staines, Tom Tourle and David Stewart, and project officer Melanie Kiel.
Congratulations to all of those community groups. We in this House tonight thank them for their wonderful community work.
Budget
Ms O'TOOLE (Herbert) (16:55): I rise to stand against the Turnbull government's relentless attack on our health sector. I believe, as do many Australians, that when you are sick you should be able to visit your GP, health professional or specialist. It is not possible to be a productive and contributing member of society if you are unwell and not able to afford medical assistance. Regardless of whether you are a millionaire living in Sydney or a diesel fitter living in Kelso, Townsville, you should have access to affordable and quality healthcare services.
Australia is the nation of mateship, and of that we should be very proud. Australians believe in the code of mateship. In many ways, it defines our culture. Australians have a culture of going above and beyond in assisting someone in need, all in the name of mateship. The Turnbull government seems to have absolutely no understanding of the principle of mateship. Surely, if the government had an iota of understanding of mateship, they would not be making savage cuts to hospitals; it would be investing in the health sector, ensuring that all Australians get a helping hand when they need it most.
Instead, the Turnbull government is behaving in an un-Australian manner, and it should be ashamed of that. It is delivering massive cuts to health and hospitals, and education. It could be argued that health and education are a high priority and should receive bipartisan support in the parliament. But, with the Turnbull government's $22 billion cut to schools and its $2.2 billion cut to GP, specialist and allied health services, there is no way that I can lend my support to these cuts. I am sure that the people of Herbert would not want me to support devastating cuts of this nature.
The people of Herbert do not want millionaires to receive a $16,400 tax cut whilst ordinary hardworking Australians will have their taxes increased. Under Malcolm Turnbull's plans, someone earning $55,000 will pay an extra $275 in tax, and someone earning $80,000 will pay $400 more in tax. This speaks to the DNA of the Turnbull government. This government is creating an environment where the rich are getting richer and the poor are simply getting poorer.
What is totally confusing in this government's attack is its attack on doctors with the unfair GP rebate freeze. Since the government introduced the freeze in December 2014, Australians have been paying an average of $7 more per visit to the GP, which is exactly the amount the government proposed with their GP tax. An official health department document lists 113 Medicare items which will stay frozen for another three years, including consultations for mental health plans, and chronic disease assessments. Despite the government boasting they were unfreezing diagnostic imaging, only seven per cent of items will actually have their rebates indexed.
In Queensland, out-of-pocket costs for non-referred GP attendance have risen from $29.55 to $37.24. At a time when unemployment is high and wages growth is minimal, our most vulnerable citizens are expected to pay more. The 2017 budget failure follows the disastrous 2014 budget, where the Liberals cut $368 million from Labor's investment in preventative health and abolish the Australian National Preventive Health Agency. The Chief Health Officer Queensland states in her annual report that 30.7 per cent of Townsville's children are overweight or obese, which is six percentage points higher than the state average of 24.3 per cent. Therefore, it is vital that early intervention and preventive health measures are put in place to ensure that our children's health does not escalate out of control into high-risk illnesses and chronic disease. Programs such as Life Education and Healthy Harold must be continued to teach our youth the importance of good nutrition and a balanced diet.
This government has also made a complete mess of the GP after-hours service. The Turnbull government have done nothing to help families access quality health care after-hours, breaking their election promise to keep Medicare Locals and, in turn, cutting access to the GP after-hours service that Medicare Locals provided. People are desperate to access GP after-hours care so that they do not present to emergency departments when it is not required.
The DEPUTY SPEAKER ( Mr Coulton ): Order! It being 5 pm, the debate is interrupted.
House adjourned at 17:00
NOTICES
The following notice was given:
Mr Perrett to move:
That this House:
(1) notes that:
(a) August 6 and 9 are the 72nd anniversaries of the atomic bombings of Hiroshima and Nagasaki, respectively;
(b) at Hiroshima, approximately 80,000 people died immediately, and at Nagasaki approximately 40,000 died immediately;
(c) by the end of 1945, approximately 200,000 people had died from the effects of these two bombs, including from radiation sickness;
(d) in 2015, the Red Cross hospitals in Hiroshima and Nagasaki reported that they are still treating many thousands of people suffering from the long term effects of radiation exposure;
(e) childhood survivors of the bombings have experienced ‘multiple types of cancer over decades’, and the health consequences of genetic damage are an ongoing concern;
(f) there are currently 15,000 nuclear weapons in the world;
(g) in 2013 and 2014 a series of three intergovernmental and civil society conferences concluded that any use of nuclear weapons would be utterly catastrophic and that they threaten the very survival of humanity;
(h) other indiscriminate weapons of mass destruction—chemical and biological weapons, as well as landmines and cluster munitions—are explicitly prohibited by treaty;
(i) the United Nations has convened a conference for 15 June to 8 July 2017 to negotiate a legally binding instrument to prohibit nuclear weapons, leading towards their total elimination;
(j) the United Nations General Assembly has encouraged all United Nations member states to participate in the conference; and
(k) the Australian Government did not participate in the conference held between 27 and 31 March 2017; and
(2) noting the Japanese Government’s approach to this conference, urges the Australian Government to participate constructively in the conference.
The ACTING DEPUTY SPEAKER ( Ms Vamvakinou ) took the chair at 10:00.
CONSTITUENCY STATEMENTS
Banks Electorate: Community Groups
Mr COLEMAN (Banks) (10:00): Last Wednesday, 7 June, I attended the Lions Club International's 100th anniversary celebration. It was organised by St George Lions, but it was great to also see Lugarno Lions and Oatley Lions there, and a whole range of other Lions clubs from the electorate. In Banks we have a particularly strong Lions community, with the annual Oatley Lions and Lugarno Lions spring festivals, which both raise tens of thousands of dollars for charity. Lions has been around for 100 years, and that does not happen by accident. It is an extraordinary organisation that has achieved an immense amount, right around the world, and it has achieved a great deal in my electorate. I would like to acknowledge Bryan Pirie, the president of Oatley Lions, who does so much for our community; Greg English from Lugarno Lions; and John Harrison from St George Lions, who put on the event. Thank you to all the people who came from outside of our area to celebrate the 100th anniversary at Conca D'oro in Riverwood.
On 8 June I visited Christ Church in Mortdale and met with the senior minister, Denis Oliver. Christ Church is a really important institution in the Mortdale area. Each year they run a particularly moving and impressive Anzac service which brings together our local community, with the local Girl Guides, the RSL sub-branches, and many other local community groups participating. The church also runs the annual Carols in the Carpark event, which is always well attended, and does a lot of work with some of the less fortunate in our community. To Minister Denis Oliver and to everyone who is involved in Christ Church at Mortdale: thank you so much for all of your efforts.
On 5 May I visited Panania North Public School P&C, a really vibrant and active P&C. It was good to speak to the school about a range of matters, including the need for enhanced sporting surfaces at the school. There is a particular need for the installation of synthetic turf, which will help the kids to train for various sporting events and so on, and lighting is an important part of that project as well. It was good to discuss those issues and to discuss with the P&C the educational support provided by the federal government. I would like to thank Rachel McClelland, the P&C president, and also Chada Zoabi, the treasurer, for inviting me along. It was great to visit again, and I look forward to working closely with the Panania North P&C in the months and years ahead.
National Men's Health Week
Mr GOSLING (Solomon) (10:03): This week marks National Men's Health Week. I was honoured to attend the launch with Sir Peter Cosgrove, the Governor-General, and even more honoured to have been appointed as Labor's men's health ambassador. And I have not been taking this role lightly: earlier this year I was proud to host a national men's health forum here in Canberra with men's health experts from all around the country, I have run a male health forum in my electorate of Solomon, and this week I helped to organise a male health expo in Darwin, which was very well attended. I want to thank all my co-organisers and all of those who had stalls. We had an 80 per cent increase in the number of men coming to the expo and having a Pit Stop health check, so that is a great result. I want to thank the Department of Veterans' Affairs for that great initiative as part of the expo. I also want to thank Jason Bonson, the principal organiser; my staff, Sharon and Dom, for their work; and the volunteers, especially Kirby Stocks, an ex-soldier who recently walked from Darwin down to Katherine over a number of days to raise some money for PTSD.
The theme of this year's Men's Health Week is 'Healthy body, healthy mind: keeping the balance'. It is something I know we all struggle to do, but it is very important. I mentioned those veterans. All 50 veterans came back to Darwin from Iraq today. It is very important that we have those services there to support them. I want to acknowledge the work of the Department of Veterans' Affairs and the ESOs that are working in our communities with our veterans.
As well as the veterans community, we also have lots of young males in the construction industry—in particular, a lot of FIFOs. Only this week, we have been shocked and saddened that another FIFO worker in Darwin has taken his life. Suicide is a massive problem and it is something that we need to be more focused on. I know there is some good work going on, but it is the leading cause of death for men under the age of 54. It exceeds the national road toll. So we need to redouble our efforts.
Obviously, blokes do not like going to the GP as much as women. As a result, our health is not as good in general, and I think that is something we can all focus on. But, in the national Men's Health Week, I want to congratulate all of those leaders out there, like Professor John Macdonald from Western Sydney University, who are working to make sure that blokes get healthier in Australia.
Canning Electorate: Rail
Mr HASTIE (Canning) (10:06): This morning I rise to speak about people who live in the suburb of Lakelands, an Australian catchment of Madora Bay, San Remo, Meadow Springs and Parklands, all of which are located in north Mandurah, which is the heart of my electorate. Lakelands is home to more than 5,000 people, mostly young families. It also has a number of schools including Lakelands Primary School, Lakelands Senior High School and Mandurah Baptist College. There is also a Catholic school that is set to open in 2019 in Madora Bay, and we are just about to celebrate the opening of a new shopping centre.
With the population expected to grow by about 112 per cent over the next 20 years, it is critical we get the planning right and that the infrastructure meets the needs of the population growth. Central to this vision is the Lakelands train station. When the suburb was developed more than a decade ago, residents were sold lots on the promise of a train station. They were told they would have access to public transport at their fingertips, meaning no sitting in traffic at peak hour or having to put up with the hustle and bustle of a congested train station down south, which is Mandurah train station. Getting to work would be as simple as getting on a bus or a bike or even walking to the train station. They were sold this promise by the developers, the City of Mandurah and local politicians. But still, more than a decade later, there is no train station in Lakelands.
Why is a train station important? Every morning, a large number of constituents from Lakelands head to Mandurah station, which is 50 minutes from the Perth CBD. They have to find parking. They have to compete with other commuters for parking. They then have to get on the train for 15 minutes to the north. They have to go south before they can go north. The burden of parking tickets, the burden of running a vehicle in addition to catching a train and the opportunity cost that comes with an extra 15 minutes on your commute, which could be time spent with family or indeed just walking, is lost.
It is not the City of Mandurah's fault. They approved the plans about a decade ago in 2006. Under state Labor in 2008, the then Minister for Planning and Infrastructure, Alannah MacTiernan, said:
We made it very clear in the master plan that future stations would be built and that one of the stations would be Lakelands. We stand by that.
She then went on to say:
I agree absolutely—I can understand that the communities of Lakelands and Madora would like a new railway station. It would be very good for them.
Indeed in the same year, the member for Mandurah, David Templeman, said:
Frankly, Mandurah needs a new train station. My preferred location is the locality of Lakelands …
Now WA Labor wants to put a train station in Karnup, which is 10 minutes to the north and less than half the population of Lakelands, without any of the density of Lakelands and the surrounding areas. So I am calling on WA state Labor to fund the Lakelands train station and to do it now and live up to the promise they made to the people 10 years ago.
Greenway Electorate: Queen's Birthday Awards
Ms ROWLAND (Greenway) (10:09): I rise today to recognise recipients of the Order of Australia resident in Greenway. Guruswamy Jayaraman, commonly known as Jay Raman, and Elston Hynd were recognised with Queen's Birthday honours on Monday for their services to our local community.
Elston Hynd, a resident of Kings Langley, has been appointed a Member of the Order of Australia for his decades of service to youth and scouting and also for the fact that his scouting services have taken him global. Mr Hynd is typical of so many deserving recipients. He is reported to have described this honour as a 'humbling surprise'.
Jay Raman, of Glenwood, has been awarded a Medal of the Order of Australia in recognition of his services to our local subcontinent community. Jay Raman has been involved in community work since he migrated to Australia in 1991. He is truly a migrant success story. He has been active in the Hindu community for over three decades, working to support the elderly with culturally specific heath care, as well as advancing the wellbeing of the Hindu community generally across Australia. Jay Raman founded the Sri Om foundation in 2008, a not-for-profit group focused on delivering culturally relevant aged care and health support. In his work with the foundation, in which he has been active over many years, he has been very successful at highlighting the growing needs of ageing seniors within our community who come from the subcontinent.
There is indeed a real need for culturally specific aged care in multicultural communities across Australia, particularly in my electorate of Greenway. Unfortunately, this need has not been filled. Jay Raman has been instrumental in not only highlighting this issue but also working towards meeting that need through the Sri Om foundation. He has dedicated an enormous amount of his own time, raising money to facilitate activities and day programs for seniors and, in the longer term, residential aged care.
Jay Raman also holds various positions within the subcontinent community in Sydney, serving on the executive committee of the Hindu Council of Australia. As I noted, there is an increasing growth in the subcontinent population of Western Sydney, and within that community Jay Raman is very widely respected for his dedication to these pursuits. Indeed, his work has not only been in our local area but right across Western Sydney, including in his role as chair of Auburn Diversity Services since 2008.
In addition to his community work, Jay Raman, like Elston Hynd, still manages to work a full-time job—yet another wonderful example of the commitment to our community that embodies, as I said, the migrant story in Australia. It is truly fitting that someone who has devoted so much time to supporting his community has been honoured with such an accolade. He has been a tireless advocate, and I am very pleased to see his passion recognised.
I warmly congratulate Elston Hynd and Jay Raman on their Queen's Birthday honours. I also give a notable mention to John Kinsela, a resident of Blacktown who has been recognised with a Medal of the Order of Australia for his service to youth and wrestling in Western Sydney. Congratulations to them all.
Corangamite Electorate: City Deals
Ms HENDERSON (Corangamite) (10:12): Tomorrow with great pleasure I will be welcoming the Assistant Minister for Cities and Digital Transformation, the member for Hume, to Geelong. We are going to visit a wonderful company which really typifies the way in which Geelong's economy is growing and becoming more diversified. It is the Cotton On Group, which is an extraordinary global empire. It is headquartered in Geelong. It now has some 1,400 stores around the world, employing some 22,000 people. There are nearly 1,600 people working at Cotton On Group's headquarters in North Geelong and a further 600 or so people working at its distribution centre in Lara.
We are incredibly proud of the way in which Geelong is supporting the growth of these sorts of industries. Geelong, to a large degree, was built on the sheep's back, as they say, and after a significant time of downturn in the textile industry we are now seeing a vibrant re-emergence of the textiles industry in Geelong, albeit in a very new and exciting way. This is all part of the very strong advocacy that we are putting forward for a city deal for the Greater Geelong and Great Ocean Road region. There is a lot of very important work being done to secure a city deal by many levels of government, including some wonderful stakeholder groups in the region and across the Corangamite electorate. This City Deals process brings together all three levels of government to create a strong investment plan really centred around action and long-term thinking. It is a very competitive process. We have got a number of city deals underway, including in Townsville, Launceston and Western Sydney, and there is a lot of competition, but we are really, I think, punching above our weight.
Tomorrow we will be turning the sod for the construction of a new $40 million global distribution centre at Avalon Airport. Avalon is Department of Defence land, leased by Avalon Airport, of course, and this is the first major development in their industry precinct. It has been made possible because the department has amended its master plan to allow a whole range of new development. It is absolutely wonderful that, with the support of the Turnbull government, the new Avalon Airport master plan is allowing this sort of development, and we think this is an absolute game changer for the region. This will really give other companies the incentive to come and look at Avalon and consider setting up there. So it is really a very exciting day tomorrow. As I say, we are working very, very hard to secure a city deal for our great region.
Blaxland Electorate: Bankstown
Mr CLARE (Blaxland) (10:15): There was a story in The Daily Telegraph this week that said that the New South Wales government is going to put money into roads in the state budget which will be delivered next week. I hope that this includes funding for Stacey Street in Bankstown. As I have said before in this place, Stacey Street is the slowest road in Sydney outside the CBD. This week the Canterbury-Bankstown Express newspaper reported that Roads and Maritime Services is now doing drilling and coring as well as survey work to determine what the fix needs to be to make this road work better. At peak hour it is a car park. The solution here is three lanes in each direction from the M5 Motorway through to the Hume Highway, and real money needs to be allocated in this budget to make sure that we fix Stacey Street.
We also need real money to fix Bankstown-Lidcombe Hospital. Bankstown hospital has been in the media recently for all the wrong reasons. Almost a year ago nitrous oxide was incorrectly administered to newborn babies instead of oxygen. One child, tragically, passed away. Another child has been left with permanent brain damage. As someone who has just become a parent in the last couple of months, I cannot imagine the grief and the pain that the parents of those little babies must be going through. We have got to get to the bottom of this and make sure that these sorts of mistakes never happen again.
There are other things that also have to happen at Bankstown hospital. Anyone who has ever visited the hospital will know that parking is a nightmare. There are not enough parking spaces—nowhere near enough. What it means is that all the local streets around the hospital are always chock-a-block with cars, from people parking there to get to the hospital. People are also having to walk a long way to get to the hospital, which means that sometimes people are late for appointments or outpatients sometimes decide not to keep their appointments.
The emergency department also needs a major overhaul. It is bursting at the seams. The waiting area is always full. There are not enough beds in the emergency department, and it is only getting busier. This means that ambulances are often redirected to other hospitals. The emergency department needs to be expanded and reconfigured.
The city of Bankstown is not shrinking. Like most of Sydney and most of Australia, it is only getting bigger, and the state government has said that, over the next 20 years, Bankstown's population will increase by 50 per cent. If that is going to happen then we do need to expand our hospital to meet growing demand and need.
The state budget is next Tuesday, and I call on the state government of New South Wales to fix Stacey Street and to fix Bankstown hospital. If you are serious about helping the people of Bankstown then you need to make sure that we have got the services we need and deserve. That means fixing Stacey Street and fixing Bankstown hospital.
McMillan Electorate: Aged Care
Mr BROADBENT (McMillan) (10:18): Aged care is the most difficult area of our life. It goes from wonderful care to incontinence pads. I ask the question then: when the small community aged-care provider Hillview, who asked for 14 beds worth approximately $917,000, were given nil in the last aged-care round, why is it that Lendlease were given 756 beds at $65,500 each, worth $41,958,000, when they actually do not deliver aged care? They are an ASX-listed construction company. Signature Care or Innovative Care, which may be called ICL Operations or ICL Operations Two, since 2013 have been given $137,026,000 towards aged-care beds. They do not deliver aged care, to my knowledge—I could be enlightened on that—whereas Hillview at Bunyip, which needs 14 beds, had nil allocation.
I asked Hillview to work closely with the department for 12 months to make sure that their application was correct and appropriate. I found out, after asking them yesterday to give me the names they are working with, that, 'Oh, no, we only get to talk to an 1800 number.' An 1800 number—that is all they are allowed to talk to in our department. Do you think that Lendlease, Signature Care or Innovative Care, or ICL Operations or ICL Operations Two, who were given $137 million of public money—our money, delivered from the public sector to the private sector for aged-care beds, which are messy, to say the least, yet have wonderful care—would not have a name in the department they are dealing with? Lendlease, who sold out of their aged-care beds some years ago because it was not their core product and who have now drifted back into the market because they may need beds, get 756 beds, and Hillview aged care at Bunyip, who need 14 beds, get nil.
This is a very short address—we have three minutes—but I have just started. Who is it that is deciding on these beds? Who is it that leaves people like Hillview—the tiny people in Australia, the little people who deliver the service and get into the messy part of aged care—on the starting blocks with nowhere to go compared to Lendlease? Do Lendlease deal with incontinence pads? Do Signature Care deal with incontinence pads? It is messy when we come into this world; it is messy when we go out of this world. It is appropriate that this government spends its time looking at how it has allocated this money and if it is appropriate.
Elections
Dr FREELANDER (Macarthur) (10:22): I want to say a few words about elections. Elections are strange and marvellous things. They go beyond winners and losers. They are about much more than turnover at the top or the fate of those who lead. Elections can change the focus and momentum of politics. They can realign the electorate and reset attitudes and voting habits for many years. Elections are about ideas and values, even if we do not always realise it. They are instructive. They can remake the collective mindset of a nation. Their strangeness can extend to winners being losers and losers being winners. They allow the reassertion of hope, the renewal of purpose and a reinvigoration of public life. Elections can warn and they can offer catharsis. Although they are an endpoint of sorts, they are not the end of the political process, nor are they an end in themselves.
For many of my generation, their first election memory is of Gough Whitlam's triumph in 1972. It was inspiring. It was inspiring to me and it was inspiring to my generation. It renewed the way we thought about public life and it helped liberate the thinking of the next generation of Australians. It broke the mould. Between 1964 and 1972, when the Whitlam government suspended the scheme, over 800,000 20-year-olds registered for national service. Some 200 national servicemen died in the Vietnam War. Whitlam's victory not only ended conscription and Australia's involvement in Vietnam but hastened the overdue extension of the franchise to 18- to 21-year-olds. Never again would 20-year-old Australians be obliged to fight in a war before they could exercise the right to choose their government. Others of a similar vintage may remember Harold Wilson's shock election loss to Edward Heath in 1970, where a prepoll lead of close to eight percent and an over-100-seat majority in the House of Commons evaporated overnight.
Every election allows the disenfranchised the chance to demonstrate that they too have a place in the light. In choosing hope, they reassert a much broader faith in a free and open society. Against the backdrop of the terrorist atrocities in Manchester and London, two suspensions in election campaigning and the very real possibility that the election might be deferred, a higher proportion of Brits voted than in any election since 1992 and a good many before then. Many voted for the first time.
By most accounts, younger UK voters hold similar concerns to many 18- to 24-year-olds here. Never accept that your vote does not matter. Two of the UK seats were decided by incredibly slim margins. And never accept that the system cannot be reinvigorated or rejuvenated. Never, never accept that there is no place for idealism in politics. Idealism is its lifeblood. Politics without idealism or hope is, even at its best, administration masquerading as leadership. It is Hamlet without the prince.
Petrie Electorate
Mr HOWARTH (Petrie) (10:25): I want people to consider how well they know their local area. How does its past play a role in the present and hint at the future? I know the electorate of Petrie very well, having grown up within its borders and having spent every available minute out and about, knocking around, as a kid. It is something that I still try to do today—get out and about. From Aspley, Carseldine and Bridgeman Downs in the south to Deception Bay and Burpengary East in the north, out to the Redcliffe peninsula in the east, including Griffin, Mango Hill and North Lakes, it is certainly a great electorate, and I know it well, but still the odd refresher course never goes astray.
So, when I stopped in at the Redcliffe Museum a couple of weekends ago with my three sons, I wondered why I do not do so more often. It was a great trip down memory lane and a reminder of the characters and events that have shaped the community. The traditional lands of the Ningy Ningy, Redcliffe was the site of the first European settlement. On 14 September 1824, the Amity arrived with officials, soldiers and their families and 29 convicts, and they formed a convict settlement near the mouth of Humpybong Creek. This settlement was relocated to Brisbane a year later, and the peninsula plodded long, largely as a result of its reputation as a seaside holiday destination. It was pretty isolated, with Hays Inlet separating it from Brisbane.
But in 1935 the longest bridge in Australia was built, connecting the peninsula with Redcliffe courtesy of the work of 500 men and 2½ million superfeet of timber. The Hornibrook Highway Bridge spanned 2.74 kilometres and provided an important link. It was Queensland's first toll bridge. According to Terry White, a former state member for Redcliffe and well-known chemist, it was quite the revenue raiser. He says that by the time the toll came off in 1975, three years after I was born, someone calculated that the toll money raised for the bridge had paid for the bridge a number of times over. Nevertheless, the bridge transformed the area and offered an easy commute to Brisbane—except, of course, when there were king tides, when cars would be sprayed with sea spray. I remember well travelling it as a kid. It was a catalyst for population growth and increased visitors in the area.
The bridge has since been duplicated twice with the Houghton Highway and the Ted Smout Memorial Bridge, but the Hornibrook bridge has now been demolished except for its north and south portals, which on Australia Day still fly the Australian flag. These now serve as great-looking jetties and are well used by locals.
The history of the Hornibrook Highway Bridge is a good example of the way infrastructure transforms communities. It boosted jobs and injected life into the local community. When I visited the Redcliffe Museum, I realised that, despite the fast pace of change, some things never do change. (Time expired)
Dobell Electorate: Wyong Hospital
Ms McBRIDE (Dobell) (10:28): International Nurses Day is celebrated each year on 12 May, marking the birth of Florence Nightingale, whose vision and values serve as a model for nurses around the world. It was a privilege to join nurses at Wyong Hospital this year to mark the occasion and to present the Nurse of the Year awards. The Wyong Hospital Nurse of the Year for 2017 is Michelle Remaili—
Honourable members interjecting—
The DEPUTY SPEAKER ( Ms Vamvakinou ): Order! The level of noise in the chamber is too high. I cannot hear the speaker.
Ms McBRIDE: The Wyong Hospital Nurse of the Year for 2017 is Michelle Remaili, from the Medical Assessment Unit. Michelle's peers nominated her for going above and beyond, for building team morale and advocating for patient safety. Michelle has been active in Essentials of Care quality improvement activities and is a driving force in motivating staff and team building. Her colleagues say she makes quality improvement fun. Michelle has a keen interest in preventative medicine. Her colleagues appreciate her high standards of care, her critical thinking and her evidence based practice.
Runner-up for 2017 is Sonia Rankin, from Wyong's Rehabilitation Unit. Sonia is a pressure injury champion, currently working on the quality improvement project relating to pressure injuries. She is an Essentials of Care facilitator, working towards improvements in care and culture. Sonia has taken on the nursing unit manager role, where her calm and capable manner has proved invaluable in carrying out her leadership duties. Team of the Year is the Wyong emergency department, led by Mark Constable. The Wyong ED consistently ranks as one of the busiest emergency departments in New South Wales, with over 60,000 presentations each year. The ED team does an extraordinary job every day, often in confronting and, at times, violent circumstances. They are always professional and caring, and consistently deliver a high standard of safety and quality patient care.
The community recognition the ED team receives is a testament to their skills and knowledge and, most importantly, to the cornerstone of nursing—care and compassion. They exemplify caring for the coast—every patient, every time. I would like to personally thank each of the award winners for their contribution to our community's hospital. As a pharmacist at Wyong Hospital for almost 10 years, I worked side by side with outstanding nurses who work hard in life and death situations, caring for patients and their loved ones. I commend these outstanding nurses on their achievement, and express gratitude on behalf of the community for all the hard work our nurses do.
Tonight, I will be standing side by side with our nurses and our community at a forum to stop the privatisation of Wyong Hospital. As someone who worked at Wyong Hospital for 10 years and who knows the care that the hospital provides to our community, I am deeply concerned about the slated privatisation, and I call on the New South Wales government in their state budget next week to stand up to properly fund public health services and save Wyong Hospital.
The DEPUTY SPEAKER ( Ms Vamvakinou ): In accordance with standing order 193, the time for members' constituency statements has concluded.
BILLS
Appropriation Bill (No. 1) 2017-2018
Consideration in Detail
Finance P ortfolio
Proposed expenditure, $720,416,000
Consideration resumed.
Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (10:31): I rise to address the chamber on the 2017-18 budget appropriation bills, particularly those in the Finance portfolio. The main purpose of the 2017-18 budget appropriation bills is to make appropriations from the consolidated revenue fund of specified amounts for expenditure by various government bodies. The total appropriation being sought by the bills is just under $105 billion. Appropriation Bill (No. 1) provides for the ordinary annual services of the government, and Appropriation Bill (No. 2) provides for matters other than ordinary annual services of government such as capital works and services and payment to or for the states, territories and local government authorities.
These appropriation bills reflect some of the government's key expenditure priorities which are not funded on a standing basis by special appropriations. The appropriation bills reflect some of the government's key expenditure priorities in addition to that. Appropriation (Parliamentary Departments) Bill (No. 1) also provides for the services of the parliamentary departments. The government has committed to fund significant items, including $9 billion to the Department of Communications and the Arts to provide NBN Co. with a government loan—on commercial terms, it is important to note; $2 billion to the Department of Defence for the purchase of military equipment and the construction of support facilities; $162 million to the Department of Human Services, including an additional $24 million for capital investments in information and communications technology to support the Veteran Centric Reform measure; and $124 million to the Department of Parliamentary Services to maintain the integrity and amenity of this Parliament House.
Appropriation Bill (No. 2) also provides debit limits under the Nation-building Funds Act for the Education Investment Fund, as well as general purpose financial assistance and national partnership payments under the Federal Financial Relations Act 2009. The Department of Defence will receive just over $32 billion from Appropriation Bill (No. 2) to keep our nation safe and pursue our national interests. This includes over $900 million for major defence operations, including a number of significant overseas operations. In the same bill, the Health portfolio will receive just over $11 billion, which includes around $3 billion for the Home Support and Care Program to provide support for older people to remain living at home and connected to their communities for longer; about $1 billion to ensure Australia has the workforce necessary to meet the needs of a sustainable health system under the health workforce program; and just under $1 billion to continue the delivery of health services under the Aboriginal and Torres Strait Islander health program, including the Indigenous Australians' Health Program.
The Department of Social Services will separately receive over $5 billion. This includes approximately $840 million for the provision of demand-driven disability employment services, about $225 million for other disability and carer services, and around $51 million for community organisations to develop and maintain a cohesive Australian community with improved independence and self-sufficiency. The Department of Human Services will receive just under $5 billion, as noted, which includes a specific amount of around $68 million to continue income management in all current locations.
Appropriation Bill (No. 2) 2017-2018 also provides debit limits under the Nation-building Funds Act 2008 for the Education Investment Fund, as well as general-purpose financial assistance and national partnership payments under the Federal Financial Relations Act 2009. Appropriation Bill (No. 1) 2017-2018 outlines expenditure in the Finance portfolio worth just over $720 million in departmental and other administered funding, and Appropriation Bill (No. 2) outlines appropriations of just over $575 million for the Finance portfolio. This amount reflects equity injections and net administered assets and liabilities. Therefore, I welcome questions from honourable members in the chamber.
Mr CHAMPION (Wakefield) (10:36): I have some questions to the government about naval shipbuilding in my home state and, in particular, the breaking up of ASC into three companies, one being for submarine sustainment, one being for the end of the air warfare destroyer contract and the last one being for naval infrastructure at Osborne. In particular, the creation of Australian Naval Infrastructure Pty Ltd, which I think is a government corporation, was announced yesterday by the Minister for Finance and the Minister for Defence Industry. My question to the government would be: are they considering privatising any one of those companies or any part thereof? What is their long-term intention regarding the ownership of ASC?
I would also be very interested to hear the minister's views on not necessarily the liabilities to the Commonwealth but the risk to the Commonwealth from the creation of a naval shipbuilding workforce in South Australia. I note from the government's own Naval Shipbuilding Plan—in particular chapter 4 of that plan—that they identify workforce development as potentially a very large driver in cost and lost productivity if it is not done properly. I point the minister to paragraph 4.4 of that plan:
Leaving workforce development solely to industry could result in multiple different approaches to workforce skilling with little or no coordination at the national level, and little consideration to meeting the skilled workforce needs of the broader naval shipbuilding enterprise …
Paragraph 4.9 also outlines the potential cost, which would be to the Commonwealth at the end of the day, of failure to produce that workforce. That plan outlines further on, in paragraphs 4.16, 4.17 and 4.18, that in 2021 we will have to increase the naval shipbuilding staff to 3,600, with a strong concentration on skilled trades, particularly fabricators and welders but also electricians, carpenters and pipe welders. Further on, it talks about the workforce in construction for future frigates reaching a peak of 5,200 in 2026. It talks about the types of skills that are needed: general management and technical skills—again, structural steelworkers, shipwrights, outfitting, electricians, joiners, pipe welders, crane operators, stores, quality assurance and the like.
My point to the minister is that all of those occupations require significant training—four-year apprenticeships plus one year in advanced skills to be able to work in naval shipbuilding. The plan goes on to talk about rehiring naval shipbuilding workers. I know one electrician who has left the shipyards—he has been made redundant. He has had two jobs since that time, both of them fairly intermittent. His skills are declining. There is obviously a problem there. If people leave the shipyards, they are obviously going to need some further training when they go back. There is some intimation that we might be able to source a workforce from the mining, oil and gas production industries.
Finally, on the automotive manufacturing industry, most of the people exiting the automotive industry from Holden might be very skilled individuals, but not many of them are skilled tradespeople. They are production line workers. Potentially they could be retrained, but it would take a four-year apprenticeship. It would seem to me that there are significant risks to the Commonwealth in a failure to have an available workforce from 2021. I am wondering what the government is doing about the creation of that workforce. Interestingly, I note that the government has undertaken to meet with the ACTU. I would be interested to know if that has been done—with all of the relevant unions—to help create a naval shipbuilding workforce. Can the minister enlighten the House as to what is happening in terms of privatisation and what is happening in terms of the workforce? My great fear is that we will turn up in 2021 and this workforce will not have materialised out of thin air, and the government will be scratching its head as to how to drive productivity and limit risk in the shipyards. (Time expired)
Ms FLINT (Boothby) (10:41): Before I get to my question for the minister, I would like to talk about how very important our investment in shipbuilding and defence is not just for our nation but also particularly for my home state of South Australia. I am very proud of our record and announcements on this issue. Our investment will not just create thousands of jobs for Australians and South Australians and increase our ability to defend our nation but correct six long years of Labor mismanagement and neglect. We are spending $195 billion on defence procurement over the next decade. This will help keep Australians safe and help keep the wonderful people of our Defence forces as safe as they can be when they put their lives on the line to defend our nation. Our defence investment will also secure our economic future, because defence industries involve the very best of science, technology and manufacturing. My home state of South Australia will particularly benefit from our Defence shipbuilding project and I know the minister will elaborate upon this further in answer to my question.
Our government has commissioned 54 vessels to be built for the Navy over the next several decades. We are doing the sustainment and maintenance of these vessels here. We have opened the Centre for Defence Industry Capability and we have launched the Defence Innovation Hub. We have launched the Naval Shipbuilding College because we have to provide 5,000 workers by the mid-2020s for naval shipbuilding because we need to fill all of the work that will be created in naval shipbuilding in South Australia and around Australia. We need to find those skilled people apprenticeships in welding, fitting and turning because we are building the defence industry in this country like it has never been built before. We are upgrading infrastructure to allow these builds, including the 12 submarines. We are beginning our shipbuilding program with the offshore patrol vessels in 2018. These are the real results a Liberal coalition government delivers for Australia, and for South Australia in particular. We are delivering jobs, we are delivering training, we are building our technical expertise and we are enhancing our national security and that of our Defence forces. This stands in stark contrast to the Labor Party's actions, or inaction, when in government. Those opposite failed to commission a single naval vessel from an Australian shipyard during their entire time in office. This led to the downturn in our shipbuilding industry. It saw the industry lose not only hundreds of jobs but also skills and experience.
During their time in government, Labor cut $18.8 billion from the defence budget. Those opposite delayed 119 Defence capability projects. They reduced 43 projects in scope and they outright cancelled another eight, risking critical security and creating capability gaps. Spending on defence fell to 1.56 per cent of GDP under Labor, the lowest level since 1938. This is not a record of which they should or can be proud. This led to the downturn in our shipbuilding industry—the so-called valley of death, which we have obviously felt significantly in South Australia—and it saw the industry lose hundreds of jobs and the loss of skills and experience, particularly in my home state.
What I am particularly excited about is not just the jobs that will flow from the actual Defence work but the flow-on effect and benefits that private companies gain from doing this sort of work for Defence. There are so many examples of companies in South Australia that do the Defence work but then use the skills that they and their workforce gain from that work to apply to other private sector investments and new industries, new technologies and new products. It is not just the Defence build that is really important to my home state; it is the flow-on effects—the new products and the new skills that those companies gain from this work that they then apply to other economic activity.
Can the minister update members on the significant investments being made in shipbuilding infrastructure that will support the government's naval shipbuilding plan and secure thousands of jobs in my home state of South Australia that are so desperately needed, mainly because of the terrible mismanagement by the state Labor government? I am just so grateful that we are in government federally so we can do what we can to help my home state and my electors and my constituents in my seat of Boothby.
Dr CHALMERS (Rankin) (10:46): It is a big day tomorrow; it is not a good day but it is a big day. Tomorrow, for the first time in the history of the Commonwealth, Australia will rack up more than half a trillion dollars in gross debt, which is a damning indictment of those opposite not just of their fiscal failures but also of their failure to meet the standards that they set for themselves, the test that they set for themselves. They told us that their reason for being was that they will pay down debt. Instead, we have skyrocketing debt not just gross debt but net debt, and we have deficits bigger than when they came to office—all of these sorts of things wrapped in together which give you a factual sense from the budget papers that we are discussing today of the depths of their incompetence and their mismanagement.
On that half a trillion dollars of debt tomorrow: we have $499.3 billion today and I am told there is an $800 million issuance tomorrow. So we will push through that $500 billion figure. It is worth remembering when you think about that $500 billion figure is that back when the member for Wentworth was the temporary leader of the Liberal Party he described projected gross debt of $300 billion—and let me get this right—as 'frightening', he described it as 'gigantic', he described it as 'an almost inconceivable level of debt'. Now we have a much, much bigger level of debt that we will reach tomorrow. The bad news for the Australian people is not just the interest payments that they have to pay on this debt but also the fact that half a trillion tomorrow is really just the beginning under those opposite. It will hit $606 billion by the end of the forwards. It will hit $725 billion at the end of 10 years. There is not even a peak in these budget papers over the 10-year horizon. It hits 725 and it keeps on rising. You hear those opposite bang-on all the time about debt and deficit disasters and all that sort of stuff. But they have been a bit quiet this week when it comes to debt because they own this problem that we have tomorrow.
Mr Perrett: They are laughing at it.
Dr CHALMERS: They are having a chuckle about it, and nothing makes them chuckle more than lying to the Australian people about the culprits. Whether it is the gross debt number that I have been mentioning or net debt, which is at record levels for another three years, whether it is the fact that under the current Treasurer's budget the deficit for the coming year is more than 10 times bigger than it was projected under Joe Hockey's budget, the former Treasurer, in 2014, all of these numbers paint a really damning picture of the failures of those opposite. They start chuckling and shuffling through their notes—which have probably been ably prepared by their colleagues behind them—but what they will not mention, what they will not acknowledge, is that debt under this government, whether it is net debt or gross debt, is accumulating at a faster pace per month under this government than it did under the former government, which is especially revealing when you consider that the former government had a global financial crisis to deal with. Those opposite have pretty good global conditions to deal with and still they are racking up net debt and gross debt faster than the former Labor government.
Government members interjecting—
The DEPUTY SPEAKER ( Ms Vamvakinou ): Order! The minister will have an opportunity to respond. I cannot hear the honourable member for Rankin.
Dr CHALMERS: You have to feel sorry for that member opposite—he has never been described as the brains behind anything. You can understand why he is getting a bit chippy over there. Gross debt is being accumulated $1.65 billion a month faster in the Abbott-Turnbull period than it was in the Rudd-Gillard period, so before they start pointing the finger and pretending it is somebody else's fault they should at least acknowledge that.
In addition to the very good questions that the member for Wakefield asked about the ASC workforce, in particular, which we are very keen to get some answers to, I have some additional questions for the assistant minister. If projected debt at $300 billion was frightening and gigantic and almost inconceivable, what words would he use to describe half a trillion dollars of debt? How much interest will the Australian people be paying on this skyrocketing level of debt? How does he explain the fact that debt is accumulating much faster under them, without a global financial crisis, than it did under us? Will he acknowledge that, when it comes to gross debt, there is not even a peak insight in these budget papers that we are discussing?
Mr COLEMAN (Banks) (10:51): I would like to make some remarks on the important issue in my electorate of housing affordability. I do want to address some questions to the minister in a moment, but first I would like to make some observations. In my electorate the median house price appears to be in the range of about $1.15 million. That is a very substantial amount. The Sydney property market has obviously increased significantly in recent years, and people do want government to take sensible measures on the issue of housing affordability. Very importantly, people in my electorate want government to take sensible, carefully calibrated measures that assist first home buyers but also do not undermine the stability of the housing market—because, after all, the housing market represents the majority of the wealth of the average Australian household and it is incumbent upon governments to be very thoughtful and cautious when making changes to any policy in this area.
In that vein, I was particularly pleased to see in the budget, in the housing affordability package, two particular policies. Firstly, there is the First Home Super Saver Scheme. This has been very well received in my electorate. It is a very sensible policy that allows individuals to save up to $30,000 towards the value of a home deposit through their superannuation scheme. Before people say that super is sacrosanct and you can't touch super, it is important to understand that this does not allow people to touch their super—it is only able to be accessed above and beyond the superannuation guarantee requirement. It gives people an opportunity to make use of a tax incentive to save for a first home. It is extraordinary that those opposite oppose this, because basically what they are saying is that government should not provide any tax incentive to first home buyers who are doing the hard yards, working the long hours, striving to save for that deposit—which of course is the most critical thing in getting into your first home. So the government has said, 'Let's provide a tax incentive to those hardworking families' but those opposite say it is a bad idea and cannot be done. That is a very foolish approach by those opposite.
The other policy I want to highlight which I think is particularly notable from the housing package is the policy in relation to reducing barriers to downsizing. For a lot of older people in my electorate, and there are literally thousands of older people in my electorate who are sitting on housing assets of very substantial value, they are often reluctant to sell those assets because of tax and other consequences. The government is saying that from 1 July next year people over 65 will be able to take $300,000 of proceeds from the sale of a home and make a non-concessional contribution to super. That is going to encourage people to be more relaxed about selling those homes that are perhaps too big for them. And that is a good thing because it brings more supply onto the market and, in a sensible, calibrated way, assists first home buyers who are looking for opportunities to enter. So these are very thoughtful and sensible policies.
Those opposite have some particularly bad policies in this area. They want to abolish negative gearing, which has been around for 100 years, and they also want to increase capital gains tax by 50 per cent on everything. As part of their so-called housing affordability policy, they say: 'Let's increase capital gains tax by 50 per cent on everything.' And that includes farms, factories, commercial properties, cafes—so, under the guise of a housing affordability policy, they say: 'Increase the investment tax by 50 per cent on everything and everyone.' And do you know why they are doing that, Acting Deputy Speaker Vamvakinou? Because it involves additional tax revenue. That is what it is about. It is about a tax increase, as opposed to housing affordability—a very poorly thought-through policy. Minister, my question is: could you please update the chamber on the government's progress in surplus property divestment? Can you please advise if there has been any improvement in public availability of data on Commonwealth leases? And could you also please touch on the government's approach to property divestment and the relationship to housing affordability? What else is the government doing to assist young Australians looking to buy their first homes?
Dr CHALMERS (Rankin) (10:57): I will resist the urge to point out that there are $21 billion of new taxes in the budget that we talking about today. I want to go to the macro-economic forecasts in the budget, and to ask some questions about the nature of those forecasts. As context, I point out that right now in this country we have wages growth at record lows; we have underemployment at record highs; work has never been less secure—or has never been more precarious; we have the wages share of GDP at the lowest level in history, if you read the report put out by the Australia Institute earlier in the week—all of these things paint a very clear picture about people who have precarious workplaces. Those opposite love the idea of lower wages—that is why they are having a chuckle, Acting Deputy Speaker. But we have profits going through the roof, and we have wages at historic lows. And that is because work is so precarious; it is because people cannot get the hours that they want work.
In that context, it is very intriguing to see in the budget these extraordinary forecasts for wages growth. Wages growth is 1.9 per cent, inflation is 2.1 per cent—so real wages in this country are actually going backwards. But despite that, and despite them being around 1.9 for some time, we have these forecasts in the budget that are: 2.1, 2, 2.5, 3, 3.5, and 3.75 per cent wages growth. That is a pretty extraordinary thing, when you consider what is actually happening to wages—for the government to assume that—despite the fact that they are supporting cuts to penalty rates—all of a sudden, miraculously, we are going to have this wages growth. A lot of the macro figures are relevant to that wages number; I will get back to that in a minute and ask some questions.
When you look more broadly at the jobs elements of this budget, I think one of the most damning figures—beyond those that I have just mentioned—is that this budget actually forecasts 95,000 fewer jobs in the economy than the previous budget. At the same time as the Treasurer is patting himself on the back for jobs, his own budget from one year to the next forecasts 95,000 fewer jobs. That is a pretty extraordinary statistic, on top of the other statistics that I have talked about. In addition to those others that I have mentioned, the number of hours worked per week at 34.5 is the lowest on record, and there are issues around business investment as well.
When you consider how far the government has fallen in the people of Australia's estimation since the election, I think it really comes to the fact that they do not understand that people are doing it tough. They are working hard but not getting ahead and, at the same time as penalty rates are cut, they are told that people who earn over $180,000 get a tax cut in this budget and big business in this country gets $65 billion handout, of which $10 billion of that goes to the four big banks. You can see why people are unhappy about that, particularly in that first weekend in July where on the Saturday someone earning a million dollars gets a $16,000 tax cut, and on the Sunday up to 700,000 Australians lose $77 a week when they have their penalty rates cut. You can see why people are pretty filthy about the economic performance of those opposite. Right through the budget papers you can see evidence for why that unhappiness in the community is warranted, and no wonder people are unhappy with the government.
The question I really wanted to ask the assistant minister, in addition to the ones that he so far has failed to answer from the member for Wakefield and my earlier questions around record levels of debt and half a trillion dollars of gross debt tomorrow—a new record—and the interest paid on that debt, on what basis, or on what planet, he thinks in the budget that wages will reach 3.75 per cent growth by the end of the forward estimates when the wages performance has been so poor in the last couple of years? Can he explain those forecasts, and what is the basis of that optimism at the same time as penalty rates are being cut? More fundamentally, I would also like him to explain to the chamber on what basis, and again on what planet, does he think the economy can grow when ordinary working people are not earning, when their wages are going backwards in relation to inflation—when their real wages are going backwards? And why don't we ever hear about those record low wages and that record high underemployment, and the implications they have for the budget?
Dr McVEIGH (Groom) (11:02): Today, I would like to ask the minister about efficiency dividend policy, and as I do so I recognise how the coalition's responsible approach to the budget this year focuses on savings and efficiencies as a priority. As the Treasurer said, this is a sustainable budget that meets the service needs of Australians and focuses on government debt so as to lessen the burden on future generations, all while ensuring the government itself lives within its means.
As I move by way of background to address how this approach plays out in my electorate of Groom, it is important to note that the budget is projected to return to balance in 2021, the growth in payments has been restricted to less than two per cent per year and, that since coming to government, we have arrested growth in our debt by more than two-thirds. Again, as the Treasurer said, to respect future taxpayers every day spending should be funded from the first dollar we receive in taxes, not funded by debt and, accordingly, the government will no longer be borrowing to pay for our everyday expenses from 2018-19—that is just one year away.
As the second largest inland city in Australia behind Canberra, Toowoomba is the key regional centre for southern inland Queensland and northern inland New South Wales for health and education services. It is the leading agribusiness capital of Australia and a significant centre for mining and construction services. Given all of this, and our burgeoning population, we are also a significant service centre for the broader region, including federal government services. Medicare, Centrelink, the Australian Electoral Commission, the Department of the Prime Minister and Cabinet, Australian Rail Track Corporation and CSIRO's Agricultural Production System Resources Unit, amongst many others, all maintain a very significant presence in our city, each with a focus on technology and management initiatives so as to improve efficiency and certainly service delivery.
I am particularly pleased about the government's focus on decentralisation. We have in our presence in our region now, as a result of that, the Grains Research and Development Corporation—very important in our part of the world, particularly in irrigated and dryland farming systems—and, of course, the Murray-Darling Basin Authority also now has a presence in Toowoomba. Again, this is very significant given that we, on the Condamine system in our part of Queensland, are at the headwaters of the whole Murray-Darling Basin system. The location of those two offices and other government services in our regional area is something that is typical of an issue that I very much look forward to concentrating on as a member of the new Select Committee on Regional Development and Decentralisation. I look forward to working with colleagues across the parliament in efforts to look at best practice for regional development and decentralisation of not only government services and offices but those of the corporate world as well.
So I would like to ask the minister about the efficiencies achieved in this budget through the government's efficiency dividend policy—specifically: how is the government making sure that departmental spending is efficient and helps contribute towards budget repair? Can the minister also update the chamber on what the savings achieved by the government's functional and efficiency reviews are, including over the forward estimates and the medium term? What kinds of reforms do these reviews achieve? What is the government doing to ensure that Commonwealth departments and agencies have the technology and the capability that they need to respond to growing public demand and expectations? What are some of the more significant projects that the Modernisation Fund, in particular, will be supporting?
Dr CHALMERS (Rankin) (11:06): It is worth noting that we have had a lot of questions asked so far in this session but not a lot of answers. We can see what the assistant minister's strategy is. It is to hope that we get timed out—
Mr Sukkar: Just ask your question, you sook!
Dr CHALMERS: answer a couple of friendly questions from those opposite—
Mr Sukkar: Come on, you sook, just ask your question! What a sook you are! What a sook!
Dr CHALMERS: He's getting very chippy, Deputy Speaker. He must be having a bad day again.
An opposition member: It could be that half a trillion—
Dr CHALMERS: It could be that half a trillion dollars in gross debt that comes up tomorrow, Deputy Speaker.
An opposition member: He won't answer that question!
Dr CHALMERS: If I were him, I would try not to answer that question either, in fairness—as he sits over there and hides behind his colleagues and hopes that he never has to answer any questions.
Mr Sukkar interjecting—
An opposition member: We ask them. You answer them.
Dr CHALMERS: He seems to have this round the wrong way, but I will persevere anyway. In addition to all the questions asked by those opposite, as well as the member for Wakefield's questions about the workforce at the ASC, my question about wages and my questions about that record half a trillion dollars in gross debt which comes up tomorrow, which they are very embarrassed about, I will add some more to the pile that the assistant minister will not answer.
Those opposite wanted the budget to be all about the bank levy, as they tried to avoid the need for a banking royal commission and avoid the fact that they were giving $10 billion of a $65 billion tax cut to just four companies, the four big banks in this country. But the startling and defining feature of this budget is really how it looks after the wealthiest in our community at the expense of the most vulnerable. I mentioned the penalty rates cuts which come in on the first weekend of July—ironically, sadly, the same weekend that that tax cut comes in for high-income earners. That really is just a subset of a broader problem with this budget, a subset of the broader problem with the priorities of those opposite, which is that they will always shower largesse on the top end of town but they will always ask the weakest and most vulnerable people to carry the can for their budget failures and they will always ask people in the middle income levels of this economy to do something which they do not ask people at the highest level of income in this economy to do.
My questions for the assistant minister are really around the unfairness of the budget, not just the $65 billion tax cut, of which $10 billion goes to the four big banks, but also that personal income tax cut which sees someone on $1 million get a $16,400 tax cut on 1 July. My questions are really around why we would do this. On the $65 billion tax cut, could the assistant minister inform the chamber what the Treasury estimates or the Finance estimates are for the impact that will have on the economy? We are told that the first tranche of tax cuts only has a 0.2 per cent impact on the economy, and that is only when fully implemented. By the government's own numbers, we are told that the full $65 billion tax cut will only boost GDP by one per cent over 20 years—something like 0.05 per cent a year, which does not strike me as extraordinary bang for your buck.
At the same time they are giving away that $65 billion, they have record debt, record net debt, record gross debt and interest being paid on that by Australian working people. At the same time they are doing that, they are saying: 'We can't find that $22 billion for schools. We can't afford that, but we can afford the $65 billion for BHP and the big banks. We can't afford to unfreeze Medicare properly and immediately. That has to wait. We can't afford to ensure we have access to a university, particularly for working-class kids'—the type of kids I represent—'but, generally, we have to jack up the costs of university because we have a problem here. But we're still going to give away that $65 billion. We're still going to give away those income tax cuts by letting the deficit levy lapse.' This is at the same time that they are asking people under $87,000 a year to pay more tax.
I would like the Assistant Minister to the Treasurer to tell us: is it true that someone on $50,000 will pay $250 more tax a year when the tax hike comes in at the same time a millionaire will pay $16,000 less? Someone on $60,000 will pay $300 more, someone on $70,000 will pay $350 more and someone on $80,000 will pay $400 more tax a year at the same time that those at the top end get an extraordinarily large tax cut. Really, the question—and the core problem of this budget—is: how can the members on that side of the House be so out of touch? How can they possibly describe the situation I have just outlined as fair?
Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (11:11): It is great to have the member for Wakefield so excited to receive an answer. I will start with your question and the related questions from the member for Boothby in relation to the ASC. Luckily, the member for Wakefield is here to listen to the answer.
As you know, the government announced the structural separation of ASC into its three core functions: a shipbuilders business, a submarine sustainment business and the Collins class submarines. I can assure you that the government is determined to ensure these assets remain in Commonwealth hands because we do want to ensure that we maintain and sustain this industry on an ongoing basis. The member for Wakefield spoke about some of the issues, potentially, around skills. He was obviously not assisted by the fact that the government of which he was a member did not place one order for six years. Ultimately, that led them to the valley of death, which meant that there was a vacation of those skills. Unfortunately, people cannot hang around forever for a Labor government to make a decision, and that is probably the biggest single factor in this sense.
Of course, the member for Boothby rightly pointed out that we will be building nine of the future frigates in her home state, which is the member for Wakefield's home state. There was a total of 54 naval vessels that the coalition has committed to building in Australia compared, as I said, to the zero vessels that the government of which the member for Wakefield was a member built. During that time, the member for Wakefield was supposedly a champion of his community. I would say that your effectiveness in that caucus must be questioned by your constituents given that not one order was placed for six years.
Mr Champion interjecting—
Mr SUKKAR: You obviously do not have much pull in that caucus, Member for Wakefield.
I think this is good news. I think there are always fair questions to ask, including: how do we get the skilled workforce necessary? The one way you do not do it is not make an order for six years. On this side of the House, we absolutely have that commitment. I think the Australian people, especially South Australians and constituents in the member for Wakefield's electorate, can be confident that we will appropriately ramp up and assist ASC, which is an independent body, to ramp up their workforce to be able to meet those.
I also want to get onto another question that was asked. The member for Banks spoke about our housing affordability package and property divestment. In the 2014-15 budget, the government announced that we would rationalise Commonwealth non-Defence property through a divestment program, which, in effect, utilises the significant assets that have been sitting on the Commonwealth balance sheet for some time for more productive purposes. I report to the House that, since July 2014, 95 non-Defence properties have been sold or are under contract or offer, and, to date, around $37 million has been returned to the budget under the divestment program, and a further 56 non-Defence properties have been listed for divestment. This dovetails into one aspect of the housing affordability package in the budget, which is a commitment from this government to unlock Commonwealth land.
Compared to the states and local governments, we actually do not hold a truckload of land, but I think we have quite rightly and quiet fairly criticised state and local governments for not doing enough to ease housing affordability pressures, particularly in our big cities. One of the things we should do is lead by example. That means, where we have surplus land, in the case of Maribyrnong—
Mr Hill interjecting—
Mr SUKKAR: in my home town, 127 hectares less than 10 kilometres from the city—excuse me, Madam Deputy Speaker, can you ask the member to withdraw, please?
Mr Hill: I withdraw.
Mr SUKKAR: Stand up.
Mr Hill: I withdraw.
The DEPUTY SPEAKER ( Ms Bird ): Can I indicate that I will actually run the chamber, thank you very much. The minister has asked for a withdrawal. The member has withdrawn.
Mr SUKKAR: Thank you. One hundred and twenty-seven hectares within 10 kilometres of the Melbourne CBD—this is land that has been essentially vacant for 15 years. Six years of a Labor government did nothing. We think that prime land—
An opposition member interjecting—
Mr SUKKAR: Yes—I will take the member's interjection—it is contaminated, and, had the decontamination work commenced during the Labor government's period, perhaps we would have houses on there now, but divestment is a key part of the plan. (Time expired)
Dr CHALMERS (Rankin) (11:16): How much interest will be paid on the $500 billion of gross debt which comes up tomorrow?
An honourable member: Sorry; can you repeat that?
The DEPUTY SPEAKER ( Ms Bird ): I need to give the call to this side of the chamber.
Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (11:17): I will take the member for Rankin's earlier question. The member for Rankin has asked a succession of questions and complained about them not being answered, so I will work through them in order.
There are a lot of members of parliament who used to work for Peter Costello in this place, and they very proudly walk around this House speaking fondly of their experiences working for the greatest Treasurer that we have seen in a generation. It is quite extraordinary that the member for Rankin walks around as 'the brain of Wayne Swan'—and he takes that as a compliment!
Dr Chalmers interjecting—
Mr SUKKAR: I am glad that you take that as a compliment. I can assure the member for Rankin that it is not a meant as a compliment but, if you take it that way, congratulations.
In relation to the debt limit, which the member has referred to, just a bit of history: in December 2013 the former Treasurer directed that the debt limit would be $500 billion. On 9 May this year, on budget night, the Treasurer directed the debt limit would be increased to $600 billion. Gross debt subject to the Treasurer's direction, as at last Friday, 9 June, was $496.7 billion, and total gross debt, some of which is not subject to the Treasurer's direction, is $499.2 billion. This is where the member for Rankin and I agree. That is a truckload of debt. It is an absolutely extraordinary amount of debt, and he should hang his head in shame for being the man who set the debt bonfire alight.
Since being in opposition, since being rewarded for being the former Treasurer's brain—which he takes as a compliment, so I will keep saying it, because, if he takes it as a compliment, then surely he is happy with it. They set the debt bonfire alight and since then have done everything possible—every obstructionist tactic—to make the debt worse. Why? I suspect it is because the modern Labor Party is unable to say no to any new spending initiatives.
We saw when we came to government that the forward estimates were laden with hidden time bombs, presumably thought up by the member for Rankin as a bit of a way to ensure that it was very difficult to repair the damage of six years of Labor mismanagement in the fiscal space. Whether that was in unrealistic funding to the states, whether it was underfunding the NDIS or whether it was underfunding a whole host of programs, we know, and I can assure the member for Rankin that the Australian people know, that the Labor Party are the ones who have created this mess, and we are toiling every single day, making very hard choices and difficult decisions, to reduce it. The rate of growth of debt has slowed significantly—again, at a time when our terms of trade were nothing like what the Labor party had when iron ore prices were well north of $100. Now, with an iron ore price lower than $50, we are seeing improvements in the budget bottom line.
So we will not take any lectures from the Labor Party, particularly given that, on the eve of the last election, they accepted a whole host of savings measures that they had criticised up hill and down dale. They accepted them for the purposes of their own budget assumptions. But, notwithstanding the fact that they caved on all of those things, they still went to the election promising to borrow an additional $16 billion. So, whatever the number is today that the member for Rankin complains about, you can add the Labor Party's $16 billion, plus all of the unfunded promises that have been made since the election. So I think it would be much closer to $30 billion or $40 billion on a hypothecated basis. So to the member for Rankin I would say: if $500 billion is very troubling for you then you must be much more concerned about $520 billion, $530 billion or $540 billion, which would be the alternative case should the Labor Party have been in government. But you are not in government. You lost the election, and you lost the election for a very good reason.
The DEPUTY SPEAKER ( Ms Bird ): Before the member for Rankin starts, I just remind members that all members of this House must be referred to by their titles, not by their names.
Dr CHALMERS (Rankin) (11:22): In fairness to the Assistant Minister to the Treasurer, who struggled through this rationale for record gross and net debt under the Abbott and Turnbull governments, the problem with this government is not that the assistant minister is the worst of them; the problem with the government is that the assistant minister is no worse than the Treasurer or the Minister for Finance when it comes to trying to rationalise this record debt.
One of the things that I would like to respond to that the assistant minister talked about is the difference in the bottom line between the government and the opposition at the last election. It is very troubling that somebody who is a Treasury assistant minister has not realised that the difference he describes between the bottom lines of the two major parties at that election has been abandoned by his own government. The measures that created the difference—the so-called zombie measures—no longer exist. I would hope, in the interests of the country, that somebody who is a Treasury assistant minister in a federal government would understand that some weeks ago, in the budget that we are talking about right now and that he has been sent in to defend, that difference was abandoned when they abandoned the so-called zombie measures. The reality is that we said at the election that those measures would not go ahead and that the government's bottom line was not an accurate reflection of the difference between the two parties, and we were actually proven right on budget night. It is troubling and disappointing. It is not even funny; it is really just quite a shame that that has not yet dawned on an assistant minister in the Treasury portfolio and nobody has yet explained to him that that difference has been abandoned by those opposite.
Predictably, as I anticipated before, those opposite, after four years of government, would like to pretend that gross debt, which in the life of this parliament will double from what they inherited, is somebody else's fault. They do that right across, whether it is power prices or a number of things where those opposite think that everything bad that happens in this country is Labor's fault. So I want to put on the record these numbers, which show that the pace of the accumulation of debt has been faster under those opposite than it was under the former Labor government—remembering, of course, that the former Labor government had to deal with the sharpest synchronised downturn in the global economy since the Great Depression, with everything that that means for the budget, whereas those opposite have relatively rosy global conditions. They have no excuses to point to for this substantial deterioration in budget. These are the numbers that should be on the record.
Those opposite, the coalition, are accruing gross debt $1.65 billion a month more quickly than the former government. They are accruing net debt $511 million a month more quickly than their predecessors, the Labor government—that is $380 million a week and $55.3 million a day quicker for gross debt, and $118.2 million a week or $16.9 million a day faster for net debt. Before they try and pretend that those numbers have been pulled out of the air, they can do the calculations if they like, or, in the assistant minister's case, he should probably get somebody else to do them for him. Gross debt grew under Rudd and Gillard by $226 billion in 69 months; under Abbott and Turnbull it has grown by $219 billion in less than two-thirds of the time, which is 44½ months.
These are not numbers that the Labor Party has made up. These are not numbers that we have pulled out of the air. These are basic calculations from the government's own budget papers and from the budget updates which are provided to the Australian people on a regular basis. If you use that measure, if you use those budget updates, which are generally put out on a Friday afternoon, for good reason—in the hope that all the journos have gone home—you will see that, when it comes to net debt, there was $175 billion on the day they came to office; it is now $317 billion. Gross debt was $280 billion, and it will be $500 billion tomorrow. That does give you a sense not just of the state of the books, which the assistant minister has described as 'a truckload of debt', which is a pretty apt description—
Mr Sukkar: I was talking about a Labor debt—
Dr CHALMERS: No, no—you did not say that. I say to the people of Hansard: keep an eye out for this one! He said it was a truckload of debt. I wrote it down. I wrote it down here in the little squiggly lines: 'truckload of debt', which is a pretty apt description. How much interest will Australians pay on that truckload of debt? (Time expired)
Honourable members interjecting—
The DEPUTY SPEAKER ( Ms Bird ): I am sure the member for Hughes would like the call, if both sides would like to be quiet.
Mr CRAIG KELLY (Hughes) (11:27): I would like to ask the minister: does he think that, since we are seeing such concern from the Labor members about debt, the concern that they are showing today, it is possible that they may join with the coalition and they may help to approve some expenditure cuts? Do you think that is possible, Minister, or will we see the continuation of the reckless approach of Labor in continuing to block everything that the coalition tries to do to bring our budget back into balance?
I would also ask you, Minister: can you tell us about the risks to the economy if we go down Labor's track and maintain an internationally uncompetitive corporate tax rate? What risks are there to investment flows into Australia if we have a 30 per cent rate of corporate tax but the US go down to 15 per cent and the UK is at 20 per cent? What risks are there to our economy from that? I also ask you: if we have, combining with that, a personal rate of marginal tax that the Labor Party want, a top rate of 49½ per cent, what risk does that have for our international competitiveness? And what risk does it have if we go down Labor's track with energy, where they want a 50 per cent renewable energy target, giving us some of the highest costs for energy in the world? How are we going to have a competitive economy in the years ahead if we go down that trilemma of Labor's: uncompetitive rates of corporate tax, uncompetitive top rates of marginal tax and uncompetitive electricity prices? What is the future for our nation if we do that?
I would also like to ask you about the issue of housing affordability. We hear Labor talk about how they want to abolish negative gearing. Are there any historical precedents—what happened when we previously abolished negative gearing? What happened to the rental markets in Sydney? What happened to the rental markets in Melbourne? Perhaps you could explain why, if this is the magic bullet that Labor suggests, we are seeing some markets with such large increases in housing prices and other markets with decreases, when we have the same negative gearing policies across the nation.
Also, Minister, you may like to comment on the rate of interest that this government has to pay on the debt that it inherited from Labor. How much is that? How much is that going forward? How is that financed, Minister, and what are the Labor Party actually doing to assist the coalition to try and bring the debt that we have under control? If we could have some discussion on those things—because we have heard some wonderfully eloquent speeches by Labor members about their concern about the debt to date, and we share those concerns. So we would hope that, in the weeks and months and years to come, it is possible that we could see the Labor Party join hands with us and work together.
The other thing, Minister, is: can you also please advise us how the government is using efficiency dividends to ensure that Australian taxpayers will actually receive value for money from all governments and their departments? Minister, with any time left, is this possible?
The DEPUTY SPEAKER ( Ms Bird ): Is the minister seeking to wrap up?
Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (11:31): I will answer this question if I have time.
The DEPUTY SPEAKER ( Ms Bird ): It would normally go to the other side. If you want to wrap up and make your final comments, you can do that.
Mr SUKKAR: Thank you, Madam Deputy Speaker. Can I thank everyone for their contributions. Can I say specifically to the honourable member who has just asked a succession of questions that this government is absolutely determined to ensure that it does not bequeath to the next generation ever-higher debt. The member was right to point out in his questions that the trajectory of the level of debt that we inherited when entering government was significantly worse than where we are now, notwithstanding all of the obstructionist approach we have seen in the Senate to reducing the debt and reducing the rate at which the debt has grown.
I can assure the member that we are committed to delivering on the corporate tax cuts that he referred to in his questions. Yes, by reducing corporate tax rates and becoming more internationally competitive, we attract investment to this country, and by attracting investment to the country we obviously grow and provide better and higher paid jobs, and it also has the benefit of improving our budget bottom line. The forward estimates and the projections of Treasury are clear in that respect.
Just briefly, Madam Deputy Speaker, on housing: the member is right to point out in his questions that the failed experiment of removing negative gearing has been seen before in this country. It was tried in the 1980s. It was hastily abandoned because it had a devastating impact on our housing market, and it had a devastating impact on those who could least afford it, the 30 per cent of people who rent, the forgotten people in the housing market. If you remove negative gearing, you increase rents. We know it. This is not hypothetical. We have seen it all before. So I want to thank the honourable member for his questions. In fact, I want to thank all honourable members for their questions in this consideration in detail.
Expenditure agreed to.
Consideration in Detail
Foreign Affairs and Trade Portfolio
Proposed expenditure, $5,915,290,000
Ms JULIE BISHOP (Curtin—Minister for Foreign Affairs) (11:33): I will make a brief opening statement and then accept questions relating to the Foreign Affairs and Trade portfolio. The 2017-18 budget is designed to enhance Australia's national security and economic prosperity at an uncertain and highly dynamic time in world affairs. Australia's strong international engagement is essential to our economic and strategic interests, creating more and better-paying jobs and keeping Australians safe.
In addition to bolstering the resourcing of our key foreign national security agency, the Australian Secret Intelligence Service, the Turnbull government has allocated $231.2 million to maintain our diplomatic presence in Iraq and Afghanistan for a further two years. These overseas posts play an important role in supporting our defence and counterterrorism efforts, contributing to global, regional and, importantly, domestic security. Our continued representation will facilitate Australia's engagement with alliance partners and support our humanitarian and capacity-building efforts, which are so vital. This budget also takes important steps to further strengthen our engagement within the Indo-Pacific region at a time of heightened geopolitical uncertainty. When we came to government, we began a program of expansion in Australia's diplomatic footprints—the biggest such expansion undertaken in over 40 years. With 10 new missions planned across seven continents, we are creating new opportunities for engagement and new opportunities for Australia.
In 2017-18, Australia will also deliver an aid program worth $3.9 billion, making us the 13th largest donor of official development assistance in the OECD. Over 90 per cent of our overseas development assistance will be spent in the Indo-Pacific region as we focus on our neighbourhood, where our national interests are most concentrated and where we can make the biggest difference. We will make investments aimed at delivering sustainable economic growth, poverty reduction and regional stability, with a continued focus on improving the lives of women and girls. We will contribute $55 million to the Gender Equality Fund to strengthen gender equality and women's economic empowerment in our region. We will continue our efforts to improve the efficacy of our aid investments, with a focus on private sector partnerships and a commitment to innovation rather than arbitrary spending targets. We will also increase our humanitarian assistance, with funding of around $400 million in 2017-18, an increase of $60 million. This is a deliberate strategy to focus on the expanding humanitarian crises that we see around the world.
The government's commitment to open markets and a rules-based international trading system continues to drive growth in the Australian economy. In 2016, Australia's net goods and services exports contributed 1.4 percentage points to our 2.4 per cent annual growth in real GDP, and we expect to see our export sector continue its strong performance. In 2017-18, the government will continue our efforts to build on our trifecta of free trade agreements with China, Japan and Korea by seeking more opportunities for Australian businesses abroad, which means more investment and more job opportunities for Australians at home. A country does not become wealthy by selling to itself. We need to continue to conclude agreements, and we are focusing on Indonesia, Hong Kong and Peru. We are launching negotiations with the European Union and continuing to pursue the Regional Comprehensive Economic Partnership, RCEP, which covers almost half the world's population, and that is not forgetting our ongoing work to capture the benefits of the Trans Pacific Partnership.
We recognise the importance of tourism in creating jobs and sustaining many small businesses. Tourism Australia will continue to receive record funding. As a result of our efforts, international tourists are staying longer and spending more when they visit Australia. During the last year, tourists from across the globe spent almost $40 billion on 262 million visitor nights. Recognising the need to support Australians affected by the devastation of Cyclone Debbie, particularly the region's vital tourism industry, the government was swift to act, with a joint $10 million tourism recovery package. This package includes new international marketing for the region.
The Turnbull government will continue to back Australians at home and overseas for the growth and prosperity of our nation. The 2017-18 budget enhances security and prosperity for all Australians.
Mr CLARE (Blaxland) (11:38): Part of the problem with the Turnbull government is that they talk a big game but do not deliver. There is no better example of that than trade. The Liberal Party paint themselves in this place and across the country as the great economic reformers and free traders, but the fact is that it is the Labor Party that has done the big, heavy lifting here.
Government members interjecting—
Mr CLARE: I hear the interjections, which make me think I have hit a sore point. The fact is that the open economy that we have today has been built on the wreckage of tariff walls ripped down first by the Whitlam government, then the Hawke government and then the Keating government. The results speak for themselves. Our economy is now three times the size it was in the early eighties, when the Hawke government was elected. Real wages have gone up, living standards have gone up, unemployment fell and our economy has kept growing, year on year, now 26 years in a row. That is our record, the work we have done in government that has delivered this new, open, competitive economy.
At the other end of the spectrum is the Turnbull government. John Howard delivered three new free trade agreements. The last time we were in government we also delivered three new free trade agreements. So did the Abbott government. The Turnbull government, though, which has been in power almost as long as the Abbott government, has delivered just one new free trade agreement, which was signed yesterday and which, I should point out to the foreign minister, was started under Labor.
Anybody who looks seriously at this issue knows that free trade is not popular—it does not win you votes—but it is important, particularly for a country like Australia, which is a trading nation. Our prosperity depends on access to overseas markets. From the US elections and the approach taken by President Trump and by Bernie Sanders, you can see how on the nose trade is around the world. You see it through Brexit as well. Not everybody around the world thinks that trade creates jobs. In the US, Pew research shows that only one in five Americans thinks that trade creates local American jobs. A poll conducted in Australia by Essential last year showed the same result—only one in five Australians thinks that trade creates local jobs. That might not be what the evidence shows but it is what a lot of people think. It is a challenge for both sides of the chamber.
Many Australians are struggling. They feel like life is getting tougher. Wage growth is plateauing. Electricity prices are going up. House prices are through the roof. People are hurting, and that is what makes them suspicious. Trade is not the reason for this, but if we are going to convince Australians that new trade deals are good for them then we have to provide the evidence. This is why economic modelling is so important, and this is the point I want the minister to address in her answer. A number of Senate committees now have called for the government—for her department—to conduct economic modelling on all new free trade agreements. The Australian Chamber of Commerce and Industry has asked for the same thing.
The assistant minister, Keith Pitt, was on Sky television a couple of weeks ago, and he also seemed to back this idea. He dodged and weaved a couple of times when he was asked questions about this by Tom Connell and Samantha Maiden. He bumbled his way through a couple of answers and then, finally, Samantha Maiden said this: 'Look, it's okay if you're not sure or if you don't know. Does the process include modelling or not?' And that is when the assistant minister for trade said this: 'The process always includes modelling on our behalf as to what is in the best interests for this country.' In other words, whenever they do a new free trade deal they do economic modelling.
If that is the case and if that is what is going to happen in the future, that is terrific; that is good news. It has not always happened in the past. I am sure the foreign minister knows it did not apply with all of the agreements that she has just mentioned that the Abbott government put into place. But if you are going to do it now that is terrific. The problem is we asked the same question in estimates a couple of weeks ago and we got a different answer from your department. They said:
… there is no government directive to model or not to model. We deal with each particular FTA negotiation on a case-by-case basis.
So my question to the Foreign Minister is this: what is going on? Who is telling the truth, your assistant minister on Sky television who said you model everything or your department in estimates who said you do not? And, most particularly, will you conduct economic modelling on every future trade agreement that this government signs?
Mr TED O'BRIEN (Fairfax) (11:43): That was a terrific performance from the member for Blaxland. However, after the Rudd-Gillard-Rudd era of foreign policy, I am baffled that the Labor Party actually has the hide to stand and suggest that the coalition has not driven the agenda on trade. In that era, of course, Kevin Rudd was the indefinite spokesperson for foreign affairs, and his greatest contribution was this intellectual argument about the specificities of the Asia-Pacific architecture. It was absolutely academic; there was no real action.
Conversely, what you have from the coalition is action. What you have from the coalition is the penning and the signing of free trade agreements. What you have in the foreign minister is somebody who has beaten the drum for years on the importance of not just political diplomacy—which is what the Labor Party only ever thinks about—but also economic diplomacy, which unlocks the economic potential for Australia, particularly with its Asian partners.
I am actually here today to ask the minister a question about the New Colombo Plan, and I do so as somebody who first went to Asia at the age of 13 with my father on business. My first major stint up there was at 18. I was living and breathing up there, speaking the language of greater China, at the age of 21. So with 20-plus years of experience in international business, I cannot tell you how important it is that economic diplomacy is put at the centre of our agenda, and, if you look at even those 30 years since I first visited Asia, how things have changed for Australia, as to the role that Australia now plays within the Asia-Pacific region, investing in the relationships that we have today, and the leadership role that Australia takes in certain debates.
Australia knows its place in the world. We know we are a middle power and we are often relied on to play a key regional role when needed. We do not set the agenda for other nations, but we offer assistance and we reinforce the region's stability. There is perhaps no better incubator for our role than the New Colombo Plan. Originally conceived by Minister Julie Bishop when minister for education under the Howard government, this signature coalition initiative aims to boost knowledge and understanding of the Indo-Pacific within Australia by supporting Australian undergraduates between the ages of 18 and 28 to gain work experience and to study in overseas communities across the region.
Since its inception as a pilot program in 2014, the government's New Colombo Plan has funded around 17½ thousand young Australians. Just one of these is Caleb Mattiske, a student at the University of the Sunshine Coast—the greatest region in Australia, I might add. This student went to South Korea for his New Colombo Plan experience and, when you speak to Caleb, now that he has returned, you hear the aspirations of a young Australian with a truly global outlook, and this is precisely what our nation needs to build our future on.
One of the features of the New Colombo Plan that excites me the most is the fact that work experience is included, which ties back to the minister's view on the importance of economic diplomacy—that each of these young Australians should actually get their hands dirty and work side by side in the host nation. This is the very experience that will lead them to be leaders in industry or government or academia in the future.
I know this from my own personal experience. When you have young Australians up in Asia, you realise the leadership role they play. There is something in our DNA as Australians—something in our culture. It is our adaptability as Australians. That is why, the world over, you see Australian expats leading the way, across many industries, and it is why the New Colombo Plan is so important. That is why I ask the minister today to explain the New Colombo Plan and what it really means to Australia.
Mr ALBANESE (Grayndler) (11:48): I want to raise the issue of tourism with the minister. I might begin with a quote:
The Turnbull Government has jeopardised the growth of Australia's visitor economy and put at risk the ability of the tourism sector to become one of the nation's largest employment sectors by treating the sector as a cash cow.
That quote is not from the Labor Party. That is from the peak organisation Tourism & Transport Forum Australia. The Australian Federation of Travel Agents said this about the budget:
The Australian Federation of Travel Agents (AFTA) is disappointed with the direction and lack of support that tonight's Federal Budget has delivered for the Travel & Tourism Industry.
So right across the sector this budget was met with contempt by organisations who understand that tourism is of course one of the supergrowth sectors of the economy, that the potential we have because of where we are located in the world and that the fastest growth that the world has ever seen is the growth of the middle-class throughout the region. Yet what we have seen in the budget is a $35 million cut to Tourism Australia over the next four years. Tourism Australia have identified a return on investment of 16 to one—that is, for every dollar that is invested, the national economy gets $16 back. It would seem to be very counterproductive indeed to be cutting back on tourism promotion.
The other concern that the sector have expressed is the increase in the visa application charges. One of the things about our modern globalised economy is that consumers can get information in real time about the respective competitive measures, and in tourism we are, of course, competing with the United States and New Zealand and with other potential destinations. The government has made a lot rhetorically of ensuring that Australia is competitive, yet in the budget the government changed visa application charges to receive an additional $410 million increase in revenue. That follows the increase in the passenger movement charge that was pushed through the parliament which was opposed by Labor, because both the major political parties went to the election in July last year saying that for this term of parliament there would be no increase in the passenger movement charge. Of course, the government threw that out and they have at least, to their credit, appointed a tourism minister. In their first term, they forgot to appoint a tourism minister, which showed the contempt that the coalition have for this sector.
Government members interjecting—
Mr ALBANESE: Those opposite actually think, and it is on the record from the new kid from on the block—where are you from?
Mr Tim Wilson: Goldstein.
Mr ALBANESE: He raises the view that it is not important to have a tourism minister. Well, the sector thought it was important to have a tourism minister and that is why they raise the contempt for those opposite.
Government members interjecting—
Mr ALBANESE: You can tell how defensive they are on the issue of tourism by how loudly they bellow. They bellow almost as loudly here as they yell at each other in their party room meetings when they are talking about climate change.
The DEPUTY SPEAKER ( Ms Bird ): I thank the member. I think the member quite correctly points out that the interjections might be fun but they are too loud. I ask people to interject less loudly next time.
Mr TIM WILSON (Goldstein) (11:53): As the new kid on the block, as I am now apparently referred to quite fondly and affectionately—it is like every time I ask a question in question time and the Labor Party start off with the term 'freedom boy'. All I can say is how delighted I am to think that I am so young, but it is a compliment and thank you very much for those views.
The important issue on the table today is trade—trade investment and opportunity for Australian so that we can continue to grow Australia's economy into the future. My question and my interest is on the gains from the coalition's free trade agreements. I have to say I am particularly privileged to be able to talk on this issue as the member for Goldstein, because my predecessor was the former trade minister, the great Andrew Robb. One of his contributions was in negotiating free trade agreements that have helped secure the future of this country and its economy for many years to come for younger Australians so they can engage in exporting products, goods and services to countries all throughout our region and across the globe to improve wealth and opportunity for every Australian. That is the legacy this government has around free trade agreements, and we are only warming up—so many other agreements are going to be secured over the life of this parliament. It is something that I think we should be enormously proud of, and I hear this all the time from businesses within the Goldstein community.
Recently we had a wonderful forum, bringing together exporters from across the Goldstein community who live there or who may have businesses there, to have discussions about what we can do in this space to make sure that our community can continue to lead the nation in driving economic development and investment. The forum brought together about 30 different businesses to have that dialogue with the trade minister, Steve Ciobo. What became abundantly clear was that businesses are constantly seeking out new avenues and opportunities to secure pathways to grow their businesses. We had a local business that exports socks—a high-value investment in socks which are used by competitive athletes all across the world who are concerned about their health and making sure their socks have longevity. There is another business just outside of my electorate, owned by somebody from within my electorate, which produces high-quality packaging for agricultural products which are processed and produced into food products to take to market and to the retail sector—so that they can be in packaging which is necessary to make sure they have longevity, so they can get onto supermarket shelves and then get to the consumer. That is something that we as a country should always be proud of: our capacity to feed the world and to make a contribution through processed foods that enables people to achieve their level of sustenance and dietary requirements. The opportunities from these free trade agreements for businesses either within Goldstein, just outside of Goldstein, or owned by people living in Goldstein are incredibly important, and that is what people are saying to me—how much they value the coalition's legacy but also how much more work they want to see us doing to continue to invest in this space and create those opportunities.
To the minister, I am interested today to ask: what are some of the tangible benefits for Australian businesses we are now seeing come through from the coalition's FTAs with countries like Korea, Japan and China? These are countries that have always been important trading partners of our nation, but hopefully this will continue and will increase into the future, particularly with countries that are either developed or developing—countries within our region that are able to supply and support a large middle class within their own countries. We need to make sure that we as a nation are in the best position to continue to leverage the advantages of these free trade agreements.
One of the unique things about the Goldstein community—and why we have such an interest in this space, in trade agreements and their potential—is that we actually do not have much industry in the electorate. It makes it quite unique among electorates across the country. But we are industrious people, whether it is through financing of investments, working professional services sectors in Melbourne's CBD, or running small businesses out of the electorate which enable people to electorate to export locally and across the globe. That was my experience, in part, before I entered parliament: prior to my service in my former capacity as a commissioner, I ran my own small business exporting professional services to the United States and throughout Europe, to help businesses operate in a globally competitive environment and dealing particularly with some of the challenges they had around government policy and research to make sure they could be competitive and relevant into the 21st century.
The question I have for the minister is: what are the gains from these free trade agreements that the government has negotiated, under the current trade minister and the previous one? And where are the opportunities into the future?
Mr CLARE (Blaxland) (11:59): I made this point a moment ago: this government talks a very big game on trade, but has delivered very, very little. Remember, the Abbott government delivered three free trade agreements in two years; the Turnbull government has been in power for almost two years and they have only delivered one—and that was signed yesterday and was started under a Labor government. That is all they have done. Just like they talk a big game on trade, they also talk a big game when it comes to foreign workers. This is the next question I want to ask the foreign minister. She will remember the Prime Minister said this back in April:
… if a job is able to be done by an Australian it should be done by an Australian … every nation is entitled to take that point of view and we certainly do.
A couple of days later the Prime Minister announced his big plan to get rid of 457 visas and institute a new regime, and in that announcement he said:
It will require in almost all cases, the majority of cases, mandatory labour market testing.
It sounds good, but in the policy document, the fact sheet that was released the same day, there is a tricky little get-out clause, and I draw the minister's attention to page 3 of that fact sheet, which says:
Labour market testing (LMT): LMT will be mandatory, unless an international obligation applies.
That means labour market testing is mandatory unless it has been waived in free trade agreements. And that is exactly what this government has done: it waived it in the China free trade agreement, it waived it in the South Korea free trade agreement, it waived it in the Japan free trade agreement, it has waived it in the changes to the Singapore free trade agreement and it attempted to do it for six countries in the TPP agreement that was signed in New Zealand last year as well.
What does this mean? This means that foreign workers from those countries—China, South Korea, Japan and Singapore—can come to Australia and work for a company without that company first having to check if there is an Aussie who can do that job. This is the sort of stuff that makes Australians angry. Surely, before a company brings in an electrician or a plumber or a carpenter or a mechanic into Australia to do a job, first they should have to go through the basic task of seeing if there is an Aussie who can do the job. But this is not happening, and the government is using trade deals to get rid of this by the back door.
Despite all the tough talk from the Prime Minister back in April when he made this announcement, it looks like this is going to keep happening. I challenged the trade minister about this on Sunrise a few weeks ago, and he refused to rule out doing this. I asked him to rule out waiving labour market testing in future free trade agreements. He would not do it. We asked about this again in estimates two weeks ago, and we were told by the department that the government have not directed them to retain labour market testing in future deals. So we can assume this is going to keep happening, and the government have made the point today that they are negotiating bilateral and regional trade deals with a number of countries. I have heard India mentioned, as well as Indonesia, Peru, UK, Hong Kong, Brunei, Canada, Mexico, Vietnam, Laos, Myanmar, Cambodia and the Philippines—they are all part of RCEP—and you have 27 countries in Europe. Now, Foreign Minister, if you waive labour market testing in these agreements, it will mean 75 per cent of the people who come to Australia to work will come here without the company they work for first having to check if there is an Australian who can do the job—75 per cent. If you do that, it will make a lie of what the Prime Minister said in April. Remember what he promised? He said:
It will require in almost all cases, the majority of cases, mandatory labour market testing.
If you waive labour market testing in these agreements, this will not happen and what the Prime Minister said will not be true. So, if this government is good to its word, it will now rule out waiving labour market testing in future deals. That is my question to the foreign minister: will you rule out removing labour market testing in future deals, or are you going to make your Prime Minister a liar?
The DEPUTY SPEAKER ( Mr Craig Kelly ): I would ask the member for Blaxland to withdraw that last comment.
Mr CLARE: I am not calling anyone a liar, Mr Deputy Speaker. If you look carefully at the standing orders, I am not calling anyone a liar. I am drawing the attention of the foreign minister to the commitment the Prime Minister made, and the government needs to make good on that commitment. If it does not make good on that commitment, it will make the Prime Minister a liar. I am not calling the Prime Minister a liar.
The DEPUTY SPEAKER: I ask the member for Blaxland to withdraw that word.
Mr CLARE: I do not.
The DEPUTY SPEAKER: I think that is unparliamentary.
Mr CLARE: If it satisfies the House, I will rephrase the question: will the government ensure that labour market testing is not waived in future trade agreements to ensure that what the Prime Minister said in April remains true?
The DEPUTY SPEAKER: I appreciate that the member has rephrased the question. I ask him to withdraw the word.
Mr CLARE: If I have not, I am happy to so. I am happy to withdraw that.
The DEPUTY SPEAKER: I thank the member.
Mr CLARE: Will the minister answer the question?
Ms JULIE BISHOP (Curtin—Minister for Foreign Affairs) (12:05): Labor's scaremongering on 457 visas is as despicable as its antitrade agenda, as we saw during the ChAFTA negotiations. Despite the doomsday cries from Labor and the unions that there would be an influx of Chinese workers when the ChAFTA commenced, that did not happen. In fact, there are now fewer Chinese 457 workers in Australia than there were prior to the commencement of the ChAFTA. We see this across our free trade agreements, from China to Japan to Malaysia. The number of 457 users peaked under Labor and before the free trade agreements came into force. Labor would have you believe that they have clean hands on the issue of labour market testing, when in fact the record, Member for Blaxland, says the exact opposite. Labor concluded three free trade agreements during their six years in office—with Malaysia, Chile and the ASEAN. Those agreements are explicit. The agreements do not impose mandatory labour market testing for a range of occupations, including contractual services suppliers, which would include jobs such as electricians, teachers and nurses. If Labor were so concerned about Australian workers, they would have made labour market testing mandatory in the free trade agreements that they negotiated. The bottom line is: they did not. They are hypocrites on this issue.
I also want to answer the points put forward by the member for Goldstein. This government does recognise the role businesses play in growing jobs and wages in our economy. We understand that opening new markets for Australian businesses, particularly small and medium enterprises, is key for their long-term sustainability and growth. We know that small and medium-sized Australian exporters on average employ more workers than businesses that do not export, and they pay higher wages. That is why the coalition government, through our ambitious trade agenda, are committed to assisting Australian businesses to access overseas exporting opportunities. As the member for Goldstein knows, our free trade agreements with Korea, Japan and China are already delivering, whether it is Australian exports of fresh table grapes to Japan or cherries to Korea. And of course our trade agreement with China, which Labor called 'a dud deal', has achieved massive increases in exports across a range of sectors including beef, wine, dairy and services.
The government are building on our track record. We have a full forward trade agenda aimed at delivering further market access gains for Australian businesses, gains that will spur economic growth and create new jobs. The Minister for Trade, Tourism and Investment has launched negotiations with Hong Kong and Peru. He has also committed to working with the remaining 11 members of the Trans-Pacific Partnership. But, at the first sign of trouble, Labor wanted Australia to walk away from the TPP, just like they are walking away from the liberal economic policies of the Hawke-Keating era.
The member for Blaxland was almost disarming in the way he misled, unwittingly, the chamber on Labor's commitment to free trade. Take one of the most significant free trade agreements this country has ever concluded, the agreement with China. They inherited the negotiations from the Howard government, yet they had never once intended to conclude a trade agreement with China. When they came to office, Labor ripped out the funding that the Howard government had allocated to nine government departments and agencies to continue trade negotiations, including funding for the Department of Foreign Affairs and Trade. They were not going to conclude free trade agreements. Labor and the unions did everything possible to kneecap negotiations short of formally pulling out, which would have been an international diplomatic incident of unprecedented proportions. In fact, Labor's trade minister at the time, Craig Emerson, labelled a trade agreement with Australia's largest export market as 'overrated'. The Leader of the Opposition, Bill Shorten, joined the disgraceful xenophobic union campaign against the China-Australia Free Trade Agreement. But Labor are torn between their allegiance to their trade unions, like the CFMEU and the MUA, and Australia's national interest.
Labor says it is going to scrap the government's economic diplomacy agenda. This is creating jobs for Australian workers through increased trade and investment opportunities, as trade unions like the CFMEU use their influence to prevent further free trade negotiations and attempts to reopen existing agreements. Labor does not have a plan to grow the economy. Labor has a plan for massive spending, which is a recipe for more Labor debt and more Labor deficit. That is true to the Labor tradition of profligate spending. I must say, our trade agreements are always negotiated to open new markets for Australian exporters who will drive economic growth. The decision to model FTA outcomes is made on a case-by-case basis, as Labor well knows.
Mr CLARE (Blaxland) (12:10): I thought I was watching the last scene of The Matrix there, where Keanu Reeves finally learns how to dodge bullets. We saw the foreign minister doing her very, very best to do everything but answer a couple of simple questions. I do not know how long the foreign minister has been in this parliament. It must be about 20 years. I thought she would be good enough to answer a question. I know they do not answer questions when it comes to question time down in the House of Representatives—
Ms Julie Bishop interjecting—
Mr CLARE: I asked you one yesterday, and you did not want to answer that. This is an opportunity here for you to tell us a few things.
Mr Husic: Look how many people she has behind her!
Mr CLARE: They know; they just do not want to tell us. Two very simple questions I have already asked and no answers. I said: are you going to provide economic modelling for future agreements? It is very simple—yes or no? The fact that she refuses to answer the question tells you of the contempt with which this foreign minister and this government hold this process.
Ms Julie Bishop interjecting—
Mr CLARE: On a case-by-case basis—in other words, no!
Ms Julie Bishop: No? I didn't say that at all.
Mr CLARE: You said 'on a case-by-case basis'.
The DEPUTY SPEAKER: Order! The member for Blaxland has the call.
Mr CLARE: I have made the point in my contribution before that you have Senate committees and you have the Chamber of Commerce saying you need to do it with every agreement, and then you refuse to commit to do it.
Then I asked a second question. I asked whether you would rule out waving labour market testing in future agreements. Again, Keanu Reeves at the dispatch box, desperate not to answer the question.
Mr Watts: I'm sorry to break it to you, but you're not that handsome!
Mr CLARE: People in glasshouses! All we need to do here is to show a bit of honesty. You do not need to talk for five minutes. Just tell us the truth. Are you going to wave labour market testing in future trade deals or not? While I am here, I want to ask you a couple more questions because I am assuming you will get back up and tell us that you cannot answer that question as well.
Mr Husic: The foreign minister answers in emoji.
Mr CLARE: Is there a Keanu Reeves emoji, perhaps! Let me ask a couple of questions about foreign aid. Can the minister confirm that the Abbott and Turnbull governments have now cut the overseas aid budget by $11.3 billion since coming to power in 2013—a 24.2 per cent reduction? At the same time as you have committed to a $65 billion tax cut for big business, the 2016-17 budget has delivered the weakest levels of Australian development assistance in history, spending just 23c in every $100 of our national income on foreign aid. Can I ask the minister as well, under her leadership, has the Abbott government and Turnbull government abandoned Australia's bipartisan commitment to GNI growth and put the aid budget on an ever-decreasing trajectory that, on current forecasts, will dip to just 0.17 per cent of GNI?
Does the minister agree with Caritas that these humanitarian crises happening around the world combined with rising inequality and the growing impacts of climate change mean that Australia's leadership in this area is more important than ever and that, by continually slashing our overseas aid program, we undermine progress in these areas that are fundamental to human development and stability? Does the minister also agree that Australia's aid program plays a critical role in supporting tens of millions of people to move out of poverty and live a life of dignity and that, by continually reducing our overseas aid program, we undermine our standing in the world and our ability to help end global poverty as it goes against our values? This comes at a time when other countries are not cutting aid, and DAC totals of aid-giving are rising, putting Australia at odds with the global commitments made with the Sustainable Development Goals. Does the minister agree that the Turnbull government's cuts to development assistance are already a source of international embarrassment for Australia and are at odds with the generous spirit of the Australian people?
Can the minister explain why she has again failed to stand up for her portfolio, given these latest cuts will only worsen our already embarrassingly low level of international development assistance and harm our efforts to alleviate poverty and make our region safer and more secure?
Ms JULIE BISHOP (Curtin—Minister for Foreign Affairs) (12:15): The government is providing an aid program that Australia can afford and that makes us the 13th-largest donor in the OECD world. If the shadow minister for foreign affairs had done her job when she was the minister for finance, the Australian budget—and hence the Australian aid budget—would not be in the position it was in. You might recall that Senator Wong took a $23 billion forecast deficit in 2011-12 and turned it into a $43 billion deficit. She took a $1.5 billion forecast surplus in 2012-13 and turned it into a $19 billion deficit. That was Labor's contribution to the aid budget. They took a $1.5 billion forecast surplus—remember the member for Lilley's famous surplus—and turned it into a $19 billion deficit.
I do want to address the points raised by the member for Fairfax in relation to the New Colombo Plan, because it is an extraordinary example of soft-power diplomacy at its best. These are not just my words—this has been reflected in our region as leader after leader has endorsed the Australian government's New Colombo Plan as a magnificent example of international engagement and a vision for the future of our country and the region. As the member for Fairfax pointed out, so many young Australians are benefiting from it because we are investing in the future of young Australians. In the first four years of the program, 2014 to 2017, the New Colombo Plan has supported around 17½ thousand to 18,000 young Australian undergraduates to study and undertake work placements in our region.
This is an extraordinarily successful program. The take-up by students and universities and governments in the region has been phenomenal, and the number of businesses and entities that have come on board as sponsors and supporters has been remarkable. I will focus on Queensland because the member for Fairfax asked the question. Close to 3,000 of these students are from Queensland. They include 68 recipients of prestigious New Colombo Plan scholarships for 12 months. A further 2,900 Queensland students have been awarded mobility grants to undertake short-term or semester-length study programs in the region. This is a story that is being repeated across Australia. Over 230 business and community partners have signed up to support the program, offering internships, practicums and mentorships. For example, the National Australia Bank offices in Tokyo, Shanghai, Hong Kong, Singapore and Mumbai have welcomed New Colombo Plan students to undertake internships across multiple disciplines, including commerce, finance, marketing, human resources and law.
Queensland universities have also developed innovative partnerships with the private sector to expand the opportunities for their students, and this includes the University of Queensland's partnering with China's NewSoft Corporation to provide opportunities for students to gain practical experience developing an IT product, getting it market ready and distributing it to the global marketplace. It is in innovation writ large. The Queensland University of Technology is partnering with Mitsui & Co from Japan to provide students with an opportunity to explore Japanese and Australian industry relations in a business context, where students gain an insight into Japanese business etiquette, customs and the like.
And this is important: the New Colombo Plan is supporting students from a broad array of backgrounds—Indigenous students, students with disabilities, students from regional and remote areas, students who began their life in a refugee camp, students who are the first in their family to attend university or, indeed, the first in their family to have a passport or to travel overseas. Sixty per cent of New Colombo Plan mobility grant recipients are female, 30 per cent were born overseas, 21 per cent speak a language other than English at home and nine per cent have never travelled overseas before. But what I want to tell you is this: so short-sighted and so lacking in vision are Labor that, at the last election, they committed to slash funding for the New Colombo Plan program. Not only would this severely damage Australia's ability to build deeper ties within our region; it would reduce a unique educational opportunity for young students. Labor's policy will hurt thousands of students who cannot afford to participate in an overseas study experience without government support. It will hurt our relationship with countries who are now partnering with us on investing in our young people to ensure that our bilateral relationships and our relationships in the region continue to grow. Only the coalition understands that investing in young Australians is investing in our future.
Expenditure agreed to.
Consideration in Detail
Prime Minister and Cabinet
Proposed expenditure, $2,128,783,000
The DEPUTY SPEAKER ( Mr Craig Kelly ) (12:20): The proposed expenditure now before the Federation Chamber is for the Prime Minister and Cabinet portfolio. The question is that the proposed expenditure be agreed to.
Mr Husic interjecting—
The DEPUTY SPEAKER: I remind the member for Chifley not to interject on the Chair.
Opposition members interjecting—
Mr TAYLOR (Hume—Assistant Minister for Cities and Digital Transformation) (12:20): I thank the committee for this opportunity to make an opening statement, and I trust I will be given the clean air to make that statement, despite those opposite. The Prime Minister and Cabinet portfolio, as you may know, has 13 agencies that receive funding from the government. The 2017-18 budget provides the portfolio with ordinary annual funding of $5.5 billion in 2017-18 and an average staffing level of just over 5,000 people. In the 2017-18 budget the Department of the Prime Minister and Cabinet has funding for 13 new measures—and I will come back to some of those in a moment—ordinary annual funding of $2 billion, an average staffing level 2,061 and a relatively stable level of funding through the forward years.
A real priority for the government is the delivery of further investment in infrastructure across our cities, and the budget allocated $17 million over four years from 2017-18 to establish the Infrastructure and Project Financing Agency. The aim of that agency is to assist in the identification, development and assessment of innovative financing options in major infrastructure projects. For many years governments have been talking about the need to match the large amount of capital available for high-quality infrastructure projects with the desperate need for more investment in infrastructure. We are getting on and doing it and we are creating a team that has the skills to match that, not just talking about how it could be a theoretical possibility.
There is also $23½ million over four years from 2017-18 to expand the capacity of the government's Cities task force, which is part of our commitment to making our cities more productive and livable. The Deputy Speaker will know that not only are we focusing on our capital cities but we also have a very strong focus on regional cities, with the first of our City Deals completed in Townsville and Launceston, and we are now working in Western Sydney. This funding will continue the work of the task force and drive implementation of the Commonwealth's agenda for Australian cities, a genuine agenda driven from the centre of government. For the first time in this country's history—
Opposition members interjecting—
Mr TAYLOR: I remind those members opposite that we focused from the beginning on Townsville and Launceston regional cities and on outer suburban areas in Western Sydney. They should take note of this because they are focused on the centre of Sydney, and it is time they got beyond the green, left focus of their agenda.
Under the Western Sydney city deal, which we are working on right now, the government will offer incentive payments to state and local governments to support planning and zoning reform—which is desperately needed, we all know that. This will also accelerate housing supply—and we need more houses in Sydney, with less than half the houses needed to support population growth actually having been built over the last 15 years. And it will deliver affordable housing outcomes in Western Sydney, something we are deeply committed to. The funding also supports the trial of incentive payments in Western Sydney, where we are facing above-average population growth and very serious housing affordability pressures. The deal will provide a shared growth plan for the region—and we know how much we need that—backed by funding and reform across all levels of government. These problems are only solved when we involve all levels of government. The housing package will be finalised in negotiation with our City Deal partners at the state and local level.
In 2017-18, $37.7 million will be provided for the hosting of the Association of Southeast Asian Nations-Australia leaders summit in 2018. The government will also provide $20 million over four years to supplement the Department of the Prime Minister and Cabinet to support the delivery of critical policy advice and assist the government in meeting its objectives.
One other important measure that it is worth drawing your attention to is the modernisation fund. The budget allocated funding for five initiatives and reforms, and through these we will aim to deliver quality government services at lower cost—and we know how much we need to do that—using leading technology and collaborative approaches.
Within the PM&C portfolio, the Digital Transformation Agency will receive $10.7 million over four years. We will also have a Cyber Security Advisory Office working with agencies to ensure they are appropriately managing the risks of cyber and other digital vulnerabilities on digital services. We know how crucial that is. We have seen illustrations of this in recent times.
I thank the Chamber for this opportunity to set out the portfolio's budget measures and give a brief insight into how they will benefit our community and our economy.
Ms BUTLER (Griffith) (12:26): I would ask the minister some questions about the Prime Minister's Statement of Ministerial Standards. It has been reported that the former Minister for Trade and Investment, Mr Andrew Robb, is now working for Landbridge, a Chinese corporation that invests in Australia. Mr Robb commenced employment with Landbridge on 1 July 2016, before he had been replaced as the member for Goldstein at the 2016 federal election. Mr Robb's employment with Landbridge is a part-time position which pays a pretty significant amount, actually—in fact, it is a whopping $880,000 a year. Can the minister please advise the Chamber of whether the Prime Minister has bothered to obtain any advice at all from either the secretary of his department or Mr Robb himself about whether Mr Robb may be in breach of the postministerial employment obligations in the Statement of Ministerial Standards? Of course, I refer in particular to clause 2.24 of the ministerial standards, which states:
Ministers are required to undertake that, for an eighteen month period after ceasing to be a Minister, they will not lobby, advocate or have business meetings with members of the government, parliament, public service or defence force on any matters on which they have had official dealings as Minister in their last eighteen months in office. Ministers are also required to undertake that, on leaving office, they will not take personal advantage of information to which they have had access as a Minister, where that information is not generally available to the public.
That is clause 2.24 of the Prime Minister's Statement of Ministerial Standards. Noting that Landbridge is a foreign company, Minister, which apparently has trade and investment interests in Australia, what steps has the Prime Minister taken to satisfy himself that Mr Robb is complying with this specific provision of the ministerial standards? What steps are being taken to ensure that he is not in breach of any undertakings that he was required to give under the Prime Minister's Statement of Prime Ministerial Standards?
I refer also to clause 2.25 of the ministerial standards, which states:
Ministers shall ensure that their personal conduct is consistent with the dignity, reputation and integrity of the Parliament.
I ask the minister: noting that Mr Robb started his $880,000-a-year part-time job on 1 July 2016—and I suspect the minister might have a better prospect of answering the questions if he listens to them—before he was replaced in the House as the member for Goldstein at the federal election, is the Prime Minister satisfied that Mr Robb's conduct is consistent with clause 2.25 of the ministerial standards? I also ask that the minister advise the House of how Mr Robb's conduct could possibly be consistent with the dignity, reputation and integrity of parliament when he does not even wait until he is replaced as the member for Goldstein before he accepts his $880,000-a-year part-time job with Landbridge. Isn't this an insult to this parliament and an insult to the people of Goldstein? Will the minister now admit that Mr Robb has done the wrong thing and call on him to apologise?
Mr ALEXANDER (Bennelong) (12:29): Providing landmark infrastructure and finding innovative ways to pay for this infrastructure is essential for the development and to address the imbalance of settlement between Australian cities and regions. Just over six months ago, I led an inquiry into the very subject of funding infrastructure. We heard from experts from across the country and around the world to put together an Australian best practice for financing and retrofitting the infrastructure that our cities crave. The extremely high cost of land in our cities has made the cost of resuming land prohibitive, making the retrofitting of infrastructure difficult at best and impossible at worst. It has regularly led to the decision to tunnel, but when tunnelling is too expensive often nothing happens. This challenge is exacerbated by the pressure of growth that our cities alone shoulder.
Value capture represents the most equitable method to fund infrastructure with the added benefit of relieving demands on consolidated revenues. From listening to expert advice, it became apparent that value capture works in different ways around the world, in many ways it is a catch-all term. Cross-city rail is often held up as a successful example; however, its value capture model focused on an untargeted levy across the community. Levies like this are not necessarily the most efficient though, and do not take into account the inherent land values of the areas it is affecting.
We need a bespoke version here that capitalises on our unique situation. Wherever infrastructure projects are happening in this country land values are going up. In situations of both decentralisation or renewal, the combination of infrastructure and land use optimises land values. These are the essential ingredients to maximise funding through value capture. In some cases, land values are so low that the provision of infrastructure will lead to astronomic price increases. Take for example the Inland Rail link, which will bring huge rises in properties to a number of regional towns. Parkes, at the junction between the main north-south and the main east-west lines, will see huge growth. Indeed, it has been reported that speculators are already buying up land in anticipation of this uplift in growth.
Taxpayers around the country are paying for this infrastructure but the monetary benefit will only fall to a small group of canny investors with the capacity to buy up speculative land or existing lucky land owners. Infrastructure should be funded out of the profits of these few rather than putting the burden on the taxpayer. The Badgerys Creek airport and associated developments are another opportunity that seems to be flying by. The number of businesses flocking out there is a testament to the quality of our city's deal, but we are watching the funding opportunity disappear. Our bespoke value capture model should seek to fund infrastructure out of the profit of these few rather than putting the burden on the taxpayer. Value capture needs to take an equitable proportion of the unearnt increase that the infrastructure and zoning has created. This funding when collected across all the properties which are gaining an upper left will raise billions.
Another finding of the inquiry was the urgent need to link the three levels of government. Long-term master planning and sustainable funding through value capture can only be achieved through the alignment of the three tiers of government and landowners and developers. It is imperative that the three levels of government recognise the opportunities that to sustainably fund infrastructure depends on their ability to cooperate. They must be willing to forego individual revenues to ultimately maximise total revenues. This overarching alignment of governments has been one of the largest benefits of the city deals. However, I would like to see this rolled out across the country as standard practice. I know that value capture is being investigated in certain situations. However, what is clear is that we need an overarching federal value capture policy that will operate across the country and across the three levels of government whenever new infrastructure is being built. So there is a clear need for more infrastructure and a clear, simple way that it can be funded. To this end, can the minister outline how the budget supports the Commonwealth to invest in more landmark infrastructure and how these reforms will create more opportunities for the private sector and government— (Time expired)
Mr ALBANESE (Grayndler) (12:34): I want to raise with the assistant minister the gap between the government's rhetoric and the reality. In relation to City Deals, there have been three proposed by the government. Two of those, Townsville and Launceston, were simply matching previous commitments that had been made by the Labor opposition, dressing them up with the same amount of funding—many months afterwards—and dressing them up as somehow being City Deals. When it comes to Western Sydney, Blacktown is not even included in Western Sydney. And there has been no substance, no advance of any real plans there, at the same time as there is, again, no funding in this budget for rail through Badgerys Creek Airport to the north and to the south, from Campbelltown up to the north-west, connecting with that western line. Because Badgerys Creek Airport will open up employment—
Honourable members interjecting—
The DEPUTY SPEAKER: The member for Grayndler is entitled to be heard in silence. The assistant minister and the member for Chifley will remain silent.
Mr ALBANESE: Thank you, Mr Deputy Speaker, but the assistant minister shows his vulnerability by his actions. I also want to raise the issue of infrastructure financing, and the government's establishment of the Infrastructure Financing Unit, or the IFU, as we like to call it. This is a solution looking for a problem because, as Infrastructure Partnerships Australia have said very clearly:
We cannot identify any currently proposed infrastructure projects which are commercially viable and not already attracting finance; therefore we cannot see how the IFU will increase the pace of infrastructure project delivery
That is what the peak industry organisation have to say. What is worse is that the unit has been established using funding cut from the actual infrastructure budget—money that was put aside to build roads and railway lines is now being used to create another bureaucracy in the Department of Prime Minister and Cabinet. Of course, Infrastructure Australia is already mandated to perform the task of financing of infrastructure. I ask the assistant minister: is he aware that section 5C, part 2 of the Infrastructure Australia Act 2008 reads as follows:
… Infrastructure Australia has the function of providing advice to the Minister, Commonwealth, State, Territory and local governments, investors in infrastructure and owners of infrastructure on matters relating to infrastructure, including in relation to the following:
… … …
(f) mechanisms for financing investment in infrastructure;
And indeed, that is what it has done. The Gold Coast Light Rail line was a $365 million injection from the Commonwealth which led to a project worth over $1.2 billion being constructed, a PPP, organised with Infrastructure Australia's support—with support from the Commonwealth. Similarly, innovative financing arrangements were already in place, with an agreement between the Commonwealth and the Queensland government for the Cross River Rail project. They were in place—and a board was actually appointed for the Melbourne Metro project; again, using innovative financing but not pretending that something can be done for nothing.
The fact is, Mr Deputy Speaker, that when you look at federal infrastructure funding under this government, it goes from $8 billion in 2017-18, the next year down to 6.2, the next year down to 5.1 and down to 4.2 in 2020-21. What is actually happening is that the government is refusing to invest in infrastructure. What is actually happening is that the government is not engaged in cities. And they are onto the assistant minister—who gives the same speech at every forum, and he will give the same one again in a couple of weeks at the Australian Financial Review's National Infrastructure Summit—where there is nothing actually of substance to back up the engagement. They abolished the Major Cities Unit. They have not engaged in important projects like Cross River Rail, Melbourne Metro or Western Sydney Rail along that north-south corridor that is required to open up access to those jobs. I say to the minister: why has he sidelined Infrastructure Australia by establishing the Infrastructure Financing Unit to do the job that Infrastructure Australia, under its legislation, is tasked to do?
Mr TAYLOR (Hume—Assistant Minister for Cities and Digital Transformation) (12:40): Let me work through the range of questions I have received here. I am very happy to focus on the ones that are related to the appropriation bill. I will, though, start by focusing on the first of the questions we heard. I hate to break it to the member opposite, but this has absolutely nothing to do with the appropriation bill. It is true that I would dearly love to talk about Labor's track record on links with foreign companies. I would love to talk about the Yuhu Group and how you received a donation of $260,000; the Top Education Group, which paid for Sam Dastyari's, 'dim Sam's', $1,670 of debts; the Australia Kingold Investment Development Company, which donated $635,000 to the Labor Party; the Australian Chinese Business Elite Awards, which donated $260,000 to the Australia Labor Party—however, none of this has anything to do with appropriation, so I suggest that the member opposite focus on asking those questions in the appropriate forum, which is not this forum.
Let me turn to the very sensible question I received from the member for Bennelong in relation to infrastructure financing. I remind those members opposite, including the member for Grayndler, that there is a fundamental difference between economic evaluation, which is done by Infrastructure Australia, and financing. That is not a distinction that those opposite would ever understand, because none of them have ever done any infrastructure financing. What we need in this country is an agency that can link the extraordinary amounts of money out there wanting to invest in infrastructure with the opportunities that we all know—every one of us on this side of the parliament knows—need investment. Those opportunities are there and real. The question from the member for Bennelong in relation to those opportunities was an excellent one, because he, as so many members on this side of the Chamber know, seized the opportunity to match those very significant pools of capital with opportunities to shape our cities, to shape our regions, to invest in infrastructure that is going to drive productivity, livability, amenity and all those things that we know that we did not get under past Labor governments, who consistently underinvested in infrastructure. I will come back to that in a moment.
For decades, the approach of Australian governments has been grant by default when it comes to infrastructure. All that this has delivered us is in fact a chronic infrastructure deficit, because grant funding will never be enough to meet the infrastructure deficit in this country. We have to partner in infrastructure. We have to partner with states and the private sector to invest. That is absolutely crucial. Where the private sector will do it, we should encourage it. But what is lacking at the federal government level is the skill set, the team that understands how to match those pools of capital, that large amount of money wanting to get into infrastructure, particularly in this country—it is a very, very good destination for infrastructure investment—with the opportunities. If we can do that—and we are doing that now: Badgerys Creek airport is a terrific example; Inland Rail is a terrific example of it—we can stretch taxpayer dollars further and open up opportunities for private sector involvement in public infrastructure.
I will remind the member for Grayndler, who has decided to leave, who is not interested in the answer to the question: you have seen in this budget a 25 per cent increase in investment in infrastructure from this government. The reason we have been able to do that is matching grant funding with genuine investment in projects like Western Sydney Airport, a crucial project for Western Sydney. Unfortunately, the member opposite opposes this terrific project—
Opposition members interjecting—
Mr TAYLOR: which can create jobs, local jobs, connectivity, amenity and opportunity for the people of Western Sydney that you do not care about. Most importantly, we need to deliver the best possible returns for taxpayers. We need investments that address today's challenges and prepare us for the future. The member for Bennelong knows well that that means we need the right people inside the federal government, who can create those revenue streams from infrastructure projects on the back of which we are able to invest, whether it is rail, roads or airports, for instance. We know those opportunities are there, and the member for Bennelong has long been a champion of this approach to investing, an approach that this government firmly believes in.
Mr HUSIC (Chifley) (12:45): What is likely to be considered in the history of digital transformation in this country is the fact that the Assistant Minister for Cities and Digital Transformation launched a book and presided over bungle after bungle. We have seen, in the space of 12 to 18 months, a series of stuff-ups when it comes to digital transformation—a project that deserves and I think has support from both sides of the House, because everyone recognises that this does need to happen and that government can work in a smarter, more efficient way. If we make the right investment, we can see differences in the way that service is provided to general citizens.
But we have had the census debacle, we have had robo-debt, we have had problems with the Child Support Agency IT upgrade and we have had issues with the Australian tax office—their website was completely down for days, with genuine concerns about the loss of data and where that data has gone. Accountants are concerned about what has happened with the information they have provided to the ATO—no answer. We have had online NAPLAN fall apart. This is in an environment where general ICT spending when the government were elected was at $5 billion and it has gone up to $10 billion.
The government are questioned on this, and we had the assistant minister say recently on television that it was because Labor had gutted ICT spending. That was his answer. Then you go to their own audit, which they did as a political exercise to try and embarrass Labor. It was their own political audit that Finance conducted for them, the desktop review, which had to be basically prised out of their hands via an FOI request. That revealed that spending was adequate, there was no gutting and there was a standard level of investment over the term of the last government. There was no gutting whatsoever. So the assistant minister was denied that convenient lever of trying to argue that it was because investment had been cut massively by Labor. That does not exist on paper, and we have had stuff-up after stuff-up after stuff-up.
But the biggest one under his watch is the situation where we had nearly 2,000 websites being run by government, with a cost to build them and a cost to maintain them across government, and a project was put in place to consolidate them in Gov.au. And the business case that this government requested the former DTO to do was all of a sudden pulled, half an hour before it had to go in to be submitted by cabinet. What would be interesting to know is: if there were so many concerns about this business case and project, why weren't there steps taken—signals given about whether or not this project was worthy of the investment? Over three-quarters of a million dollars was invested in this business case. Why didn't it happen? How many times did the assistant minister meet with the former head of the DTO? We have been asking that question, and I am asking the question today. After he assumed the role of assistant minister for digital transformation, how many times did he meet with them? How many times did he express his concerns about the way in which the business case was being managed, the resources that were being applied, the potential outcome as a result of this project and whether or not it would meet the stated aim of consolidating those websites into one portal that would make it easy for people? We have no answer yet as to why.
They do a functional efficiency review, which the representatives of the DTA hid when they appeared before estimates in October, after the announcement of this 'vowel-led restructure' of the DTO to the DTA, and they have not explained how the senior figures within DTA were involved in that review. They are not releasing the review. They are not indicating why they made the change from the DTO to the DTA. They are not indicating to us what the expected improvement in performance is. So again I am asking the question: was the former CEO involved in the functional efficiency review? How many times did the assistant minister meet with the former head of the DTO to express views about whether or not gov.au was on track and whether or not it was worth putting a business case together on it? And why is it that we are constantly seeing stuff-up after stuff-up after stuff-up? They have doubled the digital spend and doubled the number of stuff-ups under that assistant minister's watch.
Mr COLEMAN (Banks) (12:50): Digital transformation is such an important issue for government. The reality is that, for too long now, the public sector has been way behind the private sector in adopting digital technologies and in making the most of those technologies for consumers. This government is very committed to addressing this challenge head-on and really transforming Australia's infrastructure in the digital space in government.
It is particularly important that the government is looking very closely at the issue of platforms and creating platforms that are scalable, that can be used by multiple agencies, so that we do not have a situation where we have these silos in every department that are very much standalone, that do not talk to each other and that cost millions if not hundreds of millions of dollars and are sometimes far from best practice. So creating these scalable platforms is particularly important.
I also want to note that, in the context of digital transformation, it has been very important that the government has recently announced that it will be requiring the Australian banking and financial services sector to open up access to consumer data. This is something that came out of our recent House of Representatives inquiry into the banking sector. Effectively, digital technology enables a situation where there is all of this consumer data—which, at the end of the day, is your data, as the customer; it is data about your transactions and so on. At the moment it is sitting behind proprietary walls of the banks. What that means is that that asset is not being used by the consumer. It is not available to potential competitors of the banks. As a consequence, we have this latent asset which is not being exploited as it should be.
What the government said is: 'By the end of this year, a detailed road map will be published which will require the banking sector to open up access to that data at the request of consumers.' That is going to be a very big deal. It is going to seed a whole range of new opportunities in the financial services sector. It is going to encourage new start-ups in the financial services sector. Most importantly, it is going to increase competition. So that is another example of this government's forward-leaning disposition when it comes to things digital.
We saw something similar in the reforms the government put in place in relation to investments in start-ups, many of which, these days, are digital in nature. The government's initiatives to significantly reduce the tax burden on investors in start-up companies have already paid huge dividends. We saw the total amount of venture capital in Australia between 2013 and 2016 more than triple. So it is very important to continue to focus on these digital initiatives.
The platform funding that is outlined in this bill, Appropriation Bill (No. 1) 2017-2018, is particularly important: $33.6 million over three years for the work of the DTA in the platform area. This is going to enable the agencies to learn, to test and to have shared platforms that will enable greater collaboration across the government sector, because the last thing we want is government agencies being islands unto themselves, each focusing on their own little environment. We want the best practice in technology to be adopted across government, and it may be that one department has a particularly smart way of doing something in the digital space and that that should be adopted across government. That is precisely what this program will identify. The 'Tell us Once' beta will also deliver on the government's election commitment to make it so much easier for people to update their details online, because it is very frustrating when you have to say the same thing over and over again. This is an important initiative in the appropriations bill.
I do have a question for the minister, and that is: can the minister please outline how the government's funding of core digital and data programs will increase the effectiveness of our projects, deliver better services and drive efficiencies in how government does its business?
Ms BUTLER (Griffith) (12:55): I have to say, the Australian people just hate this stuff. Andrew Robb, the former Minister for Trade and Investment, on 1 July—before the election had even been held and before he had even been replaced as the member for Goldstein—took up a job of nearly 900 grand per year working for a Chinese company that invests in Australia, Landbridge. The Australian people hate it. For the Assistant Minister for Cities and Digital Transformation to stand up and refuse to answer the question, just because he is not really minded to defend the Prime Minister, is very disappointing for the Australian people when these sorts of questions are asked.
It is important to people to know that, if there is a prime ministerial statement of ministerial standards, it will actually be upheld by the Prime Minister. It is important to the Australian people to know that ministers will not be trying to get jobs with foreign corporations while they are still in the ministry. It is important for the Australian people to know that standards actually mean something, that ethics mean something, that undertakings that are given by ministers actually mean something and that prime ministers' statements of ministerial standards actually mean something. It is important to hold the Prime Minister to account for the upholding of the statement of ministerial standards.
As the member for Gellibrand, who is in the chamber said, though, the assistant minister's defence of the Prime Minister was Abbott-esque in its faintness, in its weakness. There was no defence of the Prime Minister. The assistant minister stood up and threw the Prime Minister under a bus. It was very disappointing. I think the Prime Minister will be very disappointed. I think that the people of Australia will be very disappointed that the assistant minister was not willing to deal with these very important issues.
Mr Husic: They won't be disappointed in the member for Gellibrand, though.
Ms BUTLER: They certainly will not be disappointed with the member for Gellibrand, or with the member for Chifley, but they will be disappointed with the assistant minister, because, in failing to even remark about the appropriateness of the conduct of the former member for Goldstein, in failing to even deal with the question of whether the Prime Minister was doing anything at all to uphold the statement of ministerial standards, to hold the former minister to the undertaking that he had been required to give, pursuant to the statement of ministerial standards, the assistant minister has shown that, firstly, he is not interested in meeting the legitimate and very real concerns of the Australian people in respect of the ministerial standards, and he has also shown quite an interesting—I think you would have to describe it—reluctance to defend the Prime Minister. It is an interesting reluctance to do anything at all other than to, as I said earlier, throw the Prime Minister under a bus in relation to this issue.
If I were an assistant minister to the Prime Minister, I reckon I would probably want to defend the Prime Minister. I think that that is probably what I would want to do. Mr Deputy Speaker, I suspect that if you were the assistant minister to the Prime Minister, you would also seek to loyally defend the Prime Minister's interest, and yet here we have someone who in fact has been compared to the member for Warringah in the press today as being quite influential in current stirrings in the coalition—current disputation, current unrest and the upbraiding of the Prime Minister recently.
Mr Husic: He's gone from A-Tay to Abbott-Tay.
Ms BUTLER: He has gone from A-Tay to Abbott-Tay. That is probably actually better than A-Tay, Member for Chifley, so well done on that one. Unfortunately, the assistant minister has shown a complete reluctance to do anything remotely like defending the Prime Minister or upholding the statement of ministerial standards or responding to the legitimate and genuine concerns of the Australian people.
Given that the minister was completely unable—or unwilling, perhaps—to properly address doubts about Andrew Robb's compliance with the ministerial standards, isn't it the case that this Prime Minister's standards are just so low that he does not care what his former ministers do?
Or is the Prime Minister really so weak that he cannot stand up to his colleagues even when they can no longer vote against him in leadership ballots in the party room?
Mr TAYLOR (Hume—Assistant Minister for Cities and Digital Transformation) (12:59): I am really struggling with this question. It is extraordinary that you could stretch an appropriation bill consideration in detail to the broad-ranging discussion you want to talk about. I would love to spend some time talking about, as I said, Top Education Group—this is a very interesting bit—who paid dim Sam's $1,670 of debt or Wei Wah International Trading Pty Ltd, who donated $200,000 to the Australian Labor Party in 2013. This would be terrific to discuss. But we are here to talk about consideration in detail of the Appropriation Bill. That is what I will focus on. But I encourage you, in the appropriate forum, to ask your questions.
The member for Chifley did ask a question. It deserves a response, despite the fact that the implication of it is clearly wrong. Before I get to that, I want to spend a moment on the member for Banks's question, which was an absolutely outstanding question. He understands, unlike those opposite, that big IT projects are crucial to the future of this country and that investment in IT—the right digital projects and the right data projects—can yield substantial impact to the government. But it takes time. Investments made today have impacts over many years. That is why we need to have consistent levels of investment in IT infrastructure and in IT and digital and data projects.
That is what we did not see during the six years airbrushed by those opposite, when they were in government. I thought it would be worthwhile just going back through what we have had to deal with in the IT and digital space from the time when they were in government. They were rolling along okay, because, when the GFC hit, they only took $700 million out of IT investment—you had to pay for those pink batts somehow. That was $700 million ripped out of IT investment in 2009-10. That was the reality, because you did have to pay for the clunkers and you did have to pay for the pink batts. At that point, they realised the error of their ways; they knew these systems were going to collapse in a few years time. So they got to 2011-12 and they ripped another $100 million out. But then they got through from Rudd to Gillard and back to Rudd, and they were really out of money. So look what happened in 2012-13. Do you know how much they ripped out of the budget in 2012-13? It was $1.2 billion of investment just gone. They expected that the systems—the IT and the digital and data strategy—was going to work, having ripped $1.2 billion out of investment in 2012-13.
The member for Banks understands that, if we are to have quality services provided to the people of Australia and if we are to have data projects that are going to deliver on every one of our programs in welfare, health, infrastructure and cities, we need consistent quality investment. And we need that commercial acumen—that kind of savvy that the member for Banks has and those opposite clearly lack.
We are doing that through investments like the $1.5 million for the Digital Investment Management Office and the $13 million for building capabilities and skills that are fundamentally important. They are being overseen by DTA, and I meet with the head of the digital transformation team on a regular basis, as I have since I got into this job—in answer to one of his questions. We are reviewing every project over $10 million. Some of those projects that those opposite put in motion in their time in government have not been great successes. It is true that we need to review them, we need to get on top of them and we need to make them effective. On top of that, there is a real focus in this government on data integration. The Data Integration Partnership of Australia project is crucial to making sure that we make the most of the data that we have in health, welfare, infrastructure and elsewhere. It will integrate datasets that allow us to make the right policy decisions to make sure our services are effective. That DIPA project is one that I am personally invested in and that I firmly believe can have a very positive impact for Australia and for Australians for many years to come. $131 million in the DIPA project— (Time expired)
Proposed expenditure agreed to.
Remainder of bill—by leave—taken as a whole and agreed to.
Ordered that this bill be reported to the House without amendment.
Appropriation Bill (No. 2) 2017-2018
Second Reading
Consideration resumed of the motion:
That this bill be now read a second time.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.
Appropriation (Parliamentary Departments) Bill (No. 1) 2017-2018
Second Reading
Consideration resumed of the motion:
That this bill be now read a second time.
Question agreed to.
Bill read a second time
Ordered that this bill be reported to the House without amendment.
Federation Chamber adjourned at 13:08