COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY DEBATES

SENATE

Official Hansard No. 11, 2001 WEDNESDAY, 22 AUGUST 2001

THIRTY-NINTH PARLIAMENT FIRST SESSION—TENTH PERIOD

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SITTING DAYS—2001 Month Date February 6, 7, 8, 26, 27, 28 March 1, 5, 6, 7, 8, 26, 27, 28, 29 April 2, 3, 4, 5, May 9, 10, 22, 23, 24 June 4, 5, 6, 7, 18, 19, 20, 21, 25, 26, 27, 28 August 6, 7, 8, 9, 20, 21, 22, 23, 27, 28, 29, 30 September 17, 18, 19, 20, 24, 25, 26, 27 October 15, 16, 17, 18, 22, 23,24, 25 November 12, 13, 14, 15, 19, 20, 21, 22 December 3, 4, 5, 6, 10, 11, 12, 13

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CANBERRA 1440 AM SYDNEY 630 AM NEWCASTLE 1458 AM BRISBANE 936 AM MELBOURNE 1026 AM ADELAIDE 972 AM PERTH 585 AM HOBART 729 AM DARWIN 102.5 FM Wednesday, 22 August 2001 SENATE 26287

Wednesday, 22 August 2001 in the transition to application of the Criminal ————— Code’s general principles. If relevant offences are not adjusted in this manner many will become The PRESIDENT (Senator the Hon. more difficult for the prosecution to prove, and Margaret Reid) took the chair at 9.30 a.m., therefore reduce the protection which was origi- and read prayers. nally intended by the Parliament to be provided FAMILY AND COMMUNITY by the offence. SERVICES LEGISLATION This bill will similarly improve the efficient and AMENDMENT (APPLICATION OF fair prosecution of offences by clarifying the CRIMINAL CODE) BILL 2001 physical elements of offences and amending in- appropriate fault elements. This measure has the First Reading potential to save many hours of court time other- Motion (by Senator Tambling) agreed to: wise spent in complicated, and sometimes incon- sistent, interpretation of offence-creating provi- That the following bill be introduced: A Bill sions. for an Act relating to the application of the Criminal Code to certain offences, and for related The Criminal Code is a significant step in the purposes. reform of our system of justice, and it is impor- tant that it be implemented in a way that is con- Motion (by Senator Tambling) agreed to: sidered and pays careful regard to the way Com- That this bill may proceed without formalities monwealth offence provisions are to work in and be now read a first time. practice. This bill is an important step in that Bill read a first time. process. Second Reading Ordered that further consideration of this bill be adjourned to the first day of the 2002 Senator TAMBLING (Northern Terri- autumn sittings, in accordance with standing tory—Parliamentary Secretary to the Minis- order 111. ter for Health and Aged Care) (9.31 a.m.)—I table the explanatory memorandum relating FAMILY ASSISTANCE ESTIMATE to the bill and move: TOLERANCE (TRANSITION) BILL 2001 That this bill be now read a second time. First Reading I seek leave to have the second reading speech incorporated in Hansard. Motion (by Senator Tambling) agreed to: Leave granted. That the following bill be introduced: A Bill for an Act to amend the A New Tax System The speech read as follows— (Family Assistance) (Administration) Act 1999, The purpose of this bill is to apply the Criminal and for related purposes. Code Act 1995 to all offence-creating and related Motion (by Senator Tambling) agreed to: provisions in Acts falling within the portfolio of the Minister for Family and Community Services, That this bill may proceed without formalities and to make all necessary amendments to these and be now read a first time. provisions to ensure compliance and consistency Bill read a first time. with the Criminal Code’s general principles. The Second Reading amendments will ensure that, after application of the Criminal Code, existing criminal offences and Senator TAMBLING (Northern Terri- related provisions continue to operate in the same tory—Parliamentary Secretary to the Minis- manner as at present. This bill is one of a series ter for Health and Aged Care) (9.32 a.m.)—I designed to apply the Criminal Code on a portfo- table the explanatory memorandum relating lio-by-portfolio basis. to the bill and move: An important component of the bill is to provide That this bill be now read a second time. clarity about the application of strict liability to some offence-creating provisions. Under the I seek leave to have the second reading Criminal Code an offence must specifically iden- speech incorporated in Hansard. tify strict liability, otherwise the prosecution will Leave granted. be required to prove fault in relation to each ele- The speech read as follows— ment of the offence. The bill ensures that the strict liability nature of some provisions is not lost 26288 SENATE Wednesday, 22 August 2001

This bill follows through on the Government’s INDUSTRY, SCIENCE AND recent announcement of a $1,000 tolerance for RESOURCES LEGISLATION families with a family tax benefit or child care AMENDMENT (APPLICATION OF benefit overpayment because of incorrectly esti- CRIMINAL CODE) BILL 2001 mated income or shared care in 2000-2001. First Reading The bill adapts an existing provision in the family assistance law so that the Government’s decision Motion (by Senator Tambling) agreed to: can be put into effect through a disallowable in- That the following bill be introduced: a Bill for strument. The instrument will be made and ta- an Act relating to the application of the Criminal bled as soon as possible after the bill is enacted. Code to certain offences, and for related purposes. The new family assistance system put more than Motion (by Senator Tambling) agreed to: $2 billion extra into the pockets of Australian families. It meant, for the first time ever, that top- That this bill may proceed without formalities ups will be paid to families who have been paid and be now read a first time. less than their actual entitlement because they Bill read a first time. overestimated their income during the year. Second Reading The Government’s information campaign to tell Senator TAMBLING (Northern Terri- families about the new system has been very ef- fective, with some 800,000 families updating tory—Parliamentary Secretary to the Minis- their income estimates during the year. However, ter for Health and Aged Care) (9.33 a.m.)—I the first year was one of transition, and some table the explanatory memorandum relating families clearly needed extra help in adjusting to to the bill and move: the new arrangements. While many families have That this bill be now read a second time. got their income estimate right, and they should be congratulated, there are still those whose cir- I seek leave to have the second reading cumstances mean that it is difficult for them to speech incorporated in Hansard. estimate their income accurately. This special Leave granted. $1,000 tolerance will be available to those who The speech read as follows— have underestimated their income and have an overpayment as a result. The purpose of the Industry, Science and Re- sources Legislation Amendment (Application of The $1,000 tolerance will also be available where a separated parent has incorrectly estimated their Criminal Code) Bill 2001 is to amend certain offence provisions in legislation within the In- share of their child’s care. If a family has both a dustry, Science and Resources portfolio to reflect family tax benefit overpayment and a child care benefit overpayment, the $1,000 tolerance will the application of the Criminal Code Act 1995 (the Criminal Code) to all criminal offences in apply to each overpayment. Commonwealth laws. Any family who still has an excess payment after The amendments are intended to ensure that when the $1,000 tolerance may have it recovered by chapter 2 of the Criminal Code Act 1995 (the adjusting their future payments. Of course, many Code) is applied from 15 December 2001 to all families who overestimated their income will reap Commonwealth criminal offences, those provi- one of the main benefits of the new system when sions will continue to operate in the same manner they are paid their family tax benefit or child care as they operated previously. If legislation con- benefit top-ups with their tax refund or in a direct taining offence provisions were not amended to payment. have regard to the Code, the Code, upon coming Now that families have had time to adjust to the into operation, may alter the interpretation of first year of the new system with the benefit of existing offence provisions. this lenient approach, the Family Assistance Of- The Criminal Code is set out in schedule 2 to the fice is working closely with them to help them Criminal Code Act 1995. It contains the general with their income and shared care estimates for principles of criminal responsibility that will ap- 2001–2002. ply to all Commonwealth criminal offences when Ordered that further consideration of this the Criminal Code Act comes into force, on and bill be adjourned to the first day of the 2002 after 15 December 2001. autumn sittings, in accordance with standing Chapter 2 of the Criminal Code codifies the gen- order 111. eral principles of criminal law and adopts the common law approach of subjective fault based principles. It adopts the traditional distinction of Wednesday, 22 August 2001 SENATE 26289 dividing offences into their physical elements (the preted to be part of the elements of the of- actus reus) and fault elements (mens rea). The fence; general rule is that for each physical element of • specifying whether a defence places a legal an offence it is necessary to prove that the defen- or evidential burden on a defendant; dant had the relevant fault element. The prose- • cution must prove every physical and fault ele- restructuring an offence to resolve an internal ment of an offence. The physical elements are conflict between the offence and the com- “conduct”, “result of conduct” and “circum- plicity provision of the Criminal Code; stances of conduct” and the fault elements speci- • restructuring ancillary offence provisions so fied in the Criminal Code are “intention”, as to apply the relevant ancillary provisions “knowledge”, “recklessness” and “negligence”. of the Criminal Code; The “default fault elements”, which the Criminal • extension of meaning of ‘engaging in con- Code provides, will apply where a fault element duct’ to include omissions; is not specified and where the offence (or an ele- • restructuring offence provisions so as not to ment of the offence) is not specified to be a strict require knowledge of law; or absolute liability offence. The default fault • specifying in provisions which establish elements set out in the Criminal Code are “inten- criminal responsibility for corporations tion for a physical element of conduct” and whether or not Part 2.5 of the Criminal Code “recklessness for a physical element of circum- (dealing with corporate criminal responsibil- stances or result”. ity) is applicable. Fault elements will not be applied where an of- This bill ensures that the current criminal offences fence is specified to be one of strict liability. will operate in the same manner as they currently This bill specifies where an offence is one of operate, following the application of the Criminal strict liability. This is necessary to ensure that Code. offences currently interpreted as strict liability continue to be interpreted as such after the Crimi- Ordered that further consideration of this nal Code is applied. In addition the bill amends bill be adjourned to the first day of the 2002 certain offence provisions to remove the defence autumn sittings, in accordance with standing and restate it is a separate subsection. This is to order 111. ensure that the defences are not interpreted as an element of the offence. BUSINESS The amendments fall into the following broad Consideration of Legislation categories: Motion (by Senator Tambling) agreed to: • specifying that an offence is one of strict That the provisions of paragraphs (5) to (7) of liability (with an express statement on the standing order 111 not apply to the Customs face of the offence that is an offence of strict Tariff Amendment Bill (No. 5) 2001, allowing it liability, referring to section 6.1 of the to be considered during this period of sittings. Criminal Code); ALCOHOL EDUCATION AND • restructuring offence provisions which in- REHABILITATION ACCOUNT clude an inappropriate fault element for con- BILL 2001 duct; In Committee • restructuring offence provisions which in- clude an inappropriate fault element for cir- The bill. cumstance; The CHAIRMAN—There are a number • restructuring offence provisions where part of amendments and a number of requests. of the conduct element of the offence in- Since there is no running sheet, I suggest that cludes breach of a condition; we deal with the opposition amendments • restructuring offence provisions to proscribe first, then the opposition requests for the actions of a person whose conduct causes amendment and then the Democrats’ requests damage, injury, destruction or obliteration of for amendment. If there is no disagreement prescribed property; with that, that is the way we shall proceed. Is • restructuring criminal offence provisions it the wish of the committee that the state- containing a defence, by putting the defence ments of reasons accompanying the requests provisions in separate subsections, in order be incorporated in Hansard immediately af- to avoid a defence being mistakenly inter- 26290 SENATE Wednesday, 22 August 2001 ter the requests to which they relate? There for health is no longer the minister for health being no objections, it is so ordered. in three months. It is important that the par- Senator CHRIS EVANS (Western Aus- liament reflect parliament’s view, and that is tralia) (9.35 a.m.)—On behalf of the Labor why we are keen to include our amendments Party, I move opposition amendment (1) on and requests to make sure that the legislation sheet No. 2287: is right. It is the legislation that lasts, not the agreements and not the individuals. That is (1) Clause 3, page 2 (after line 11), after para- graph (a), insert: why this is important. I do not doubt the bona fides of Senator Lees or her motiva- (aa) to support programs to reduce do- tions in this—I know that she has put a lot of mestic violence caused by alcohol or other licit substance abuse; work into the matter and that she has a lot of interest in it, and I concede that she knows I have just received the Democrat request—I more about the fundamental issues involved think the suggestion of the order is a good than I do. But my plea is: let us make sure one, so I can have a look at the detail of that. that we get the legislation right, because in In general, I want to say to the Senate, and the end that is what will stand the test of more particularly to Senator Lees, that Labor time, that is what will be permanent, that is is serious about these amendments. I was not what will become the law of the land. It is in the chamber for all of Senator Lees’s important that the legislation is correct. speech in the second reading debate, but I had a look at the Hansard and read what she I will not delay the Senate too long. We said. I want to make the point that this is a have had the Senate inquiry process, and the genuine attempt by Labor to make the legis- issues have been discussed inside the parlia- lation better. It is perfectly appropriate for ment and by the interested groups. Amend- parties and individuals to negotiate outside ment (1) concerns the question of domestic the parliament and to reach arrangements on violence. Labor are seeking to broaden the legislation; it is part of the political process. focus of the foundation to include a major While it is perfectly appropriate for those issue concerning alcohol abuse that we think discussions to take place, for agreements to has not been given enough prominence as a be reached and for understandings to be result of the negotiations that occurred be- made about how one must proceed inside the fore the bill. I think everyone in the chamber chamber—it has always been part of the po- would concede that domestic violence is a litical process; some people rail against it, serious problem and that alcohol is a major but that is just a misunderstanding of how contributing factor; most people acknowl- politics works—at the end of the day the de- edged that in their speeches in the second cision is for the Senate and any agreement reading debate. A recent study in the Medical outside of this chamber by parties or persons Journal of Australia showed that almost 30 has to be tested inside the Senate and the per cent of middle-aged women have suf- Senate gets to make a judgment about those fered violence or child abuse in their life- things. times. I will not go through all the statistics; I think the parliament accepts that the ques- In one of her references, Senator Lees tion of domestic violence and its links to al- talks about ‘people we have appointed to the cohol abuse are very firmly established. La- foundation’. You have not actually appointed bor think it is important that the foundation anyone to the foundation yet; it is a process and the legislation formally reflect that for the parliament to decide on the legisla- broadening of focus. It is important that the tion. I understand that invitations have been parliament give the direction to the founda- issued in a formal sense and that they have tion that it include that reference, and that is met informally, but there is a role for parlia- why we have moved that amendment. I urge ment. Labor think the amendments we are the Senate to support it. moving are important protections that ought to be represented in parliament. Agreements Senator LEES (South Australia (9.40 can be reached between individuals who may a.m.)— There is absolutely no doubt that come and go; it may well be that the minister domestic violence is an extremely important Wednesday, 22 August 2001 SENATE 26291 issue. As I move around in my capacity as an issue that is handled regardless of the ac- Democrats’ health spokesperson, it is an is- tual cause of the violence. While alcohol is a sue that I come across constantly. It is one major contributing factor in many instances, that I believe is frequently overlooked by the foundation will already pick that up; it both state and federal governments. Indeed, will already be dealing with the core prob- often I feel that no more than lip-service is lem. One of the spin-off effects will be that paid to its effects, particularly the flow-on domestic violence itself can be dealt with. effects to children of their experiences in a It is not just unnecessary but an unneces- violent household. In particular, the level of sary complication to put it in this way and to funding from the Commonwealth for do- risk further watering down the amount of mestic violence support services—be it for money that goes into core programs to re- accommodation or shelters or indeed for the duce the abuse of alcohol. As I said in my peak body that coordinates the various serv- speech in the second reading debate, tobacco ices across the country—has fallen well short when used as directed will kill. Tobacco is a in all of those areas. product that is legal, but we know that it is However, I do not believe that this is the deadly even used as the manufacturers direct. place to make up that shortfall. This is a one- Alcohol is a product that when used care- off amount of money contributed by those fully, used responsibly, does not cause harm; people who paid too much across the counter it is the irresponsible use of it that this piece for their draught beer since the change in our of legislation is tackling through funding and tax system and through until the change to setting up the Alcohol Education and Reha- the level of tax on draught beer was made. It bilitation Foundation. I do not for a moment is to go to programs to reduce the abuse of want to suggest that we in this place are not alcohol and other legal substances, as in pet- fully aware of the devastating impact of do- rol and glue sniffing. However, if we start mestic violence on so many Australian fami- putting in specifics such as that in this lies, but I do not believe it is constructive to amendment, there are a number of conse- try to put money into it in this way. quences. Senator TAMBLING (Northern Terri- I think that the group that have been se- tory—Parliamentary Secretary to the Minis- lected as members of the foundation are all ter for Health and Aged Care) (9.45 a.m.)— well aware of these issues. They are all peo- The government does not support this ple who have had experience in the area of amendment, as we consider it to be unneces- alcohol abuse, and there is absolutely no sarily restrictive. The relationship between doubt that there will be flow-on effects into alcohol abuse and domestic violence is rec- the issue of domestic violence and the im- ognised and would clearly be within the pact, particularly on women and children, of scope of the foundation’s activities. I refer to those people who have overindulged in alco- the subclauses under clause 3, which are hol, particularly those people who get drunk very explicit with regard to preventing alco- regularly and abuse their families. But to hol and substance abuse and supporting evi- start requiring, particularly in the wording dence based alcohol and other illicit sub- that is here, support for programs to reduce stance abuse treatment, rehabilitation, re- domestic violence caused by the abuse of search and preventative programs—particu- alcohol or other licit substances moves us larly that one. The other objectives of pro- away from the actual programs that are now moting education and public awareness and running into domestic violence. Go and visit providing funding grants would all, I think, women’s shelters and look at some of the embrace issues such as domestic violence specific support services: services for those and other matters related to alcohol abuse. who are offenders, services for children and The foundation is required to expend 20 per services for mostly women—those who are cent of its funds on projects addressing in- the victims. I do not think we can start digenous issues, and it is expected that the breaking it down as to why they are the vic- foundation will focus its early attention on tims and start looking at specific causes. It is activities and projects that are designed to 26292 SENATE Wednesday, 22 August 2001 address domestic violence. Such projects but obviously that is not going to be sup- could, for example, be in the form of public ported. awareness and education programs, or fund- Amendment not agreed to. ing could be provided to projects that have a direct impact on families that experience Senator CHRIS EVANS (Western Aus- abuse of this nature. The legislation as tralia) (9.49 a.m.)— On behalf of the Labor drafted allows funding for these purposes. Party, I move opposition amendment (2) on sheet No. 2287: Senator CHRIS EVANS (Western Aus- (2) Page [6] (after line 13), after clause 13, in- tralia) (9.46 a.m.)—If nothing else, I can sert: count and so I understand that we are not going to get the amendment carried. I must 13A Conditions of agreement put on the record that I think the explanation Any agreement made under section 9 given for not including this objective was or 12 must include the following con- very unconvincing. On the one hand, people ditions: seemed to be saying, ‘It is already covered; (a) the condition that the Foundation or they can already do it, and to say so would a replacement body must comply be too restrictive.’ That argument is non- with such policies, not inconsistent with any of the purposes referred to sense. in section 3, as the Minister directs Senator Lees—No, it’s not. should guide the activities of the Senator CHRIS EVANS—Well, Senator Foundation or replacement body; Lees, you made some comments and Senator (b) the condition that the Foundation or Tambling made some others, and they were a replacement body must consult not exactly the same story. All I am saying is with the following: that it seems to me to be a reasonable thing (i) the Aboriginal and Torres Strait to assert that we ought to support, to quote Islander Commission; and the amendment, ‘programs to reduce domes- (ii) the National Aboriginal Commu- tic violence caused by alcohol or other illicit nity Controlled Health Organisa- substance abuse’. It seems reasonable to tion; and make that an objective, to say that, as part of (iii) the National Indigenous Sub- the foundation’s work, we are serious about stance Abuse Council; dealing with the effects of alcohol abuse, about priorities for, and ways of such as the resultant domestic violence on funding, indigenous substance abuse families. We think that is a really important programs; issue. It seems to us that it is more than rea- (c) the condition that not less than 20% sonable that it be made explicit in the objec- of funding in any year must be allo- tives of the foundation. I do not understand cated to indigenous substance abuse why making that an objective is, to use the programs. words used by the government, ‘unnecessar- The purpose of this amendment is to ensure ily restrictive’. At the same time, they want that the matters which the government to argue that it is work they will do anyway, signed off on in its memorandum of agree- although Senator Lees says she does not ment with the Democrats are actually re- want that work to occur because it would quired to be included in the funding agree- broaden the focus too much. I am not sure ment with the foundation. We are very con- what the explanation is for the opposition to cerned to make sure that those objectives are this amendment. I do not want to labour the reflected in the funding agreement. We have point, but I do think it is an important had a fairly sad history of agreements made amendment. It allows us to focus on one of with Democrats and others by the minister the major social problems brought about by for health that have never actually come to alcohol abuse. Recognising it in the objec- pass. The famous letters from the minister tives is an important statement from this par- that are circulated in the chamber as reasons liament about the importance of that issue, why we should not legislate matters have become a bit of a standing joke. It is always Wednesday, 22 August 2001 SENATE 26293 the case that they never quite get applied in Senator LEES (South Australia (9.52 the same way. There is always a reason why a.m.)—I will also deal with this Labor the minister cannot quite fulfil the commit- amendment in three parts. Firstly, I want to ments. Quite frankly, the question of who stress again, as I said in my speech in the will be the minister for health in three second reading debate, that we want this months time is a bit of an open issue. foundation to be independent of government What Labor says is, ‘Let us get the legis- but still fully accountable. As we went lation right. If we want to do something, if through the committee hearing, I think we we want this to represent the intention of the saw that that is indeed the case. I again direct parliament, let us include it in the legisla- the Labor Party back to that committee re- tion.’ Therefore, it is our intention to reflect port. I think it is on pages 2, 3, 4 and 5. those matters in the funding agreement. They Senator Chris Evans—I was at the go to the question of consultation and in- hearing; I asked both of the questions. digenous substance abuse programs, and we Senator LEES—Fine—you have your specifically put this in as clause 13A, condi- answers there in terms of accountability. I tions of agreement. It is all very well to come think this amendment is absolutely unneces- into the chamber and say, ‘We have agree- sary. I am not quite sure what has motivated ment with parties outside the parliament.’ it. I listened carefully to your speech, Senator What Labor says is, ‘That is fine, that is part Evans, but, as we went through the processes of the political process; at the end of the day, in the committee hearing, I thought it was it is our job to reflect the will of the parlia- very clear that it was to be an independent ment in the legislation.’ We have a fairly body. The last thing we want to see happen is chequered history when it comes to the suc- that this body is seen as a replacement fund- cess of assurances from ministers circulated ing body; that instead of the state or, indeed, in letters or reflected in memorandums of the Commonwealth putting regular money understanding: those things do not have the into various substance abuse programs, a same authority as parliamentary amendments level of government just shrugs its shoulders reflected in legislation. Therefore, I urge the and says, ‘Oh, look, we’ll let the foundation Senate to support this amendment. take care of that. We’re not going to be both- Senator TAMBLING (Northern Terri- ered putting money into that this year, and tory—Parliamentary Secretary to the Minis- we don’t want any pressure from anyone for ter for Health and Aged Care) (9.51 a.m.)— that to occur.’ The Labor amendment is essentially in three To deal with section (b), I think it is quite parts. With regard to subclause (a), I would dangerous to start saying that we have a list argue that this approach would be entirely of people you have to talk to, because we inconsistent with the memorandum of under- obviously must add to that list. We then standing that establishes the foundation as an should need to go through the charities. If we independent organisation. With regard to go back to the document that sets out whom subclause (b), the foundation is likely to con- the board members of the foundation are to sult widely in determining priorities for ex- represent, you will see that there are indige- penditure on indigenous projects. It is ex- nous people on the board and there are peo- pected that, as an independent body, the ple representing the churches and the chari- foundation will develop its own protocols for ties—people who for years have dealt with consulting with the relevant organisations. the after-effects of substance abuse and who With regard to subclause (c), the funding have tried the best they can to work in the agreement between the Commonwealth and area of education, prevention and rehabilita- the foundation specifies that 20 per cent of tion. As for listing, for example, the National the total funds for the entire four years must Indigenous Substance Misuse Council, we be directed to projects targeting indigenous actually have the chair of that council as one Australians and, therefore, I would argue that of the members of the foundation. Scott Wil- the Labor Party amendment is unnecessary. son, the chairperson of the National Indige- nous Substance Misuse Council—I will not 26294 SENATE Wednesday, 22 August 2001 go through his complete CV—and the other You keep referring to the Senate inquiry. members are perfectly capable of knowing As you know, Senator Lees, you and I, I whom they should consult and where they think, are the only two—along with the need to go for further information. In this chair—who sat through it all. I think it is fair particular case, I think it is not up to us to to say that I took a full participatory role in pick out just three groups and say that these that. At the end of that process, I was con- are the three groups—and the wording is— cerned that your deal was not adequate, that ‘must consult with’, and then presume that it was not providing enough protections for they can get the rest of it right. I think we the expenditure of Commonwealth taxpay- leave it with some confidence to an expert ers’ funds—$115 million— saying, ‘It’s body to decide where and when they go for okay, leave it to them. We’ve got a deal; information and how they proceed. we’ve got an understanding.’ I am afraid that As for the last part of this amendment, I that is not good enough for me. I have a dif- find it quite limiting, quite restricting, be- ference of opinion with you about that. I cause it says, ‘Not less than 20 per cent of think we ought to put some protections in funding in any year.’ It may be that in the place. You said it was dangerous to put these first year they get to 18 per cent; it might be things in. We have gone from ‘not necessary’ 25 per cent in the second year. I think it very to ‘dangerous’. I do not know what it will be much depends on the programs that are sub- by the third amendment. mitted and on what information they have as Senator Lees interjecting— to whether programs need either one-off Senator CHRIS EVANS—You used the funding or ongoing funding. I do not think word ‘dangerous’—I am happy to refer you that we should limit the foundation in this to the Hansard—that it is dangerous for us to way, to say that every year they have to get put assurances and guarantees in the legisla- to that 20 per cent. It is very clear that by the tion, that it is better that we rely on the end of the four years they have to have spent agreement that you reached with the minister at least 20 per cent of funding on indigenous in writing outside of the parliament. Quite issues, on indigenous substance abuse pro- frankly, I do not share your views. What grams, but I do not think that we need to re- happened to the old Democrats of public strict them in this way. accountability—keep the bastards honest and Senator CHRIS EVANS (Western Aus- make sure it is all brought before the parlia- tralia) (9.56 a.m.)—It is clear that I am wast- ment? When it does not suit you, it is aban- ing my breath, but I do want to make a cou- doned. Quite frankly, your record of deals ple of points. When Senator Lees uses the with the minister for health is appalling. royal ‘we’, she reflects again her agreement Most of them have not been honoured. You with the minister. You have not appointed come in here and you wave letters around at anybody to a foundation. You may have a every debate: ‘I’ve done a deal with the cosy little deal with the minister and you minister.’ Quite frankly, they are not worth may have shared a nice bottle of red wine in the paper that they are printed on and they doing the deal. This is the parliament of are very rarely honoured. What I am saying Australia. We are dealing with the legisla- to you, Senator Lees—and I made the point tion, and what we have to reflect is the view at the start—is that I do not doubt your mo- of the parliament. What you want to do is to tives and I do not doubt your interest in this say that we all accept that you have done this issue, but what you have suggested in this deal and that is enough. I do not have a parliament is not good enough. It is not good problem with you doing a deal with the gov- enough for the expenditure of Common- ernment, but you cannot come in and say wealth money, and we want to make sure that, instead of us having legislation, we that we have the protections. have this deal, we have this piece of paper Your example is to say that the National between the former Leader of the Democrats Indigenous Substance Misuse Council are and, hopefully, the former minister. Quite already covered because ‘we have the chair frankly, I do not find that reassuring at all. on the foundation’. But you do not have a Wednesday, 22 August 2001 SENATE 26295 foundation, because it has not been estab- ans. Perhaps you might care to address your lished yet. You have a group of people about remarks to the chair rather than to senators. whom you and the minister had a chat and Senator CHRIS EVANS—I accept your drew up a list. They are perfectly good peo- admonishment, Mr Chairman. I was, through ple; there is no question about their qualifi- you, trying to address some remarks to cations. But what happens if that gentleman Senator Lees. We have been in the centre of resigns? Does the next chair of the National the discussion, but I accept your correction. Indigenous Substance Misuse Council come The point I am trying to make is: this is a onto the foundation? No, he does not. Why? chance for the parliament to make sure we Because there are no regulations; there is no get it right and it is important that we do so. governance of who the members are, how We are talking about $115 million of public they are reappointed or what their terms are, money. We ought to make sure that the et cetera. Again, it is all a matter of some proper protections are in place. We all agree secret deal. It is not in the legislation. It is with the objectives of the foundation. As I not good enough. If you want me to be reas- say, we have been prepared to concede that sured, and if you want the parliament to be the sort of people you are looking for to get reassured, let us cover those issues and let us involved are perfectly reputable. There is no make sure we have got the accountability argument about the public good that this measures. foundation can do and that good people are But they are not there and, quite frankly, being encouraged to be part of it, but we do Senator Lees, I am not reassured. You may think that the parliament has the right to in- say, ‘Tough; I don’t care.’ That is your politi- sist on the proper protections, and I am dis- cal judgment and that is fine. But I make the appointed that the Democrats are not sup- point to you: you have spent your political porting those measures. career arguing about public accountability Senator LEES (South Australia (10.02 and saying that that is one of the Democrats’ a.m.)—I find it very interesting that you key issues. Senator Murray comes in and should argue accountability. I can assure you lectures us day after day; let us see you put it that if there were anything evenly vaguely into practice. Don’t talk the talk; walk the wrong with this legislation—and you your- walk. Support proper accountability meas- self referred to Senator Murray—Senator ures in this legislation, not secret deals that, Murray would be down here in a flash argu- quite frankly, you are incapable of enforcing. ing very strongly about it. If you could put a You do not have the ability to enforce them, case— and we have seen that time and time again. You get done over when the minister finds The TEMPORARY CHAIRMAN that what he signed off on is all too hard. Let (Senator Lightfoot)—Would you like to put us put it in the legislation. the case to me, Senator Lees? Put it through the chair, if you would not mind. The TEMPORARY CHAIRMAN (Senator Lightfoot)—Are you referring to Senator LEES—Yes, Mr Chairman, I me when you say ‘you’? will put it through the chair. I point out to Senator Evans, through the chair, that we are Senator CHRIS EVANS—If you like, not, through this legislation, appointing those Mr Chairman. I always speak through the people who have been invited to go on to the chair. board. In fact, perhaps this is getting at the The TEMPORARY CHAIRMAN—I heart of what Labor’s problem is with this took no part in that, Senator Evans. bill. They ensured that we did not pass it last Senator CHRIS EVANS—I know you sitting session. Fine, we went through the were taking a keen interest in the debate, as committee process; I thought that was fairly always. clear, although Senator Evans now says that he has some doubts after it. But I think the The TEMPORARY CHAIRMAN—I detail set out there made it very clear that all always listen to your speeches, Senator Ev- the accountability procedures have indeed been followed. But this bill is not appointing 26296 SENATE Wednesday, 22 August 2001 those particular people. It is not done that ernment, you will not want to have to consult way. To refer back to Senator Murray, he has with anybody. You yourselves will want to tried on 17 separate occasions to get an inde- be able to choose who is on boards. We have pendent, separate process up for the ap- worked with government constructively on pointment of people to boards, whether it is the basis of merit to put up a list of people. the ABC board or whatever board it is—gen- We have now got 11 names agreed to, all of erically, to have a process whereby ministers whom have expertise in areas related to edu- do not get to decide, they do not get to put cation, to the prevention area or indeed to mates on boards, and we actually have an rehabilitation for those people who have open and transparent process based on merit. been unfortunately affected badly by alcohol. You have voted that down every time, Sena- We are very pleased to say that this is a proc- tor Evans. The Labor Party have voted down ess that has now come to a conclusion and that legislation every time. Here we have a that that board has indeed met, as had al- time when the government have not done it ready been discussed during the early com- on their own. The government have not done mittee hearings. We had Professor Webster it. there, who is the chair of the board, explain- Senator Chris Evans—Who have they ing what the board’s processes were and done it with? You. what stage that is now up to. We must look at the motives of the Labor Party here and their Senator LEES—Exactly—and that is interests of involvement in this legislation. your problem, Senator Evans. They come in here with an amendment that Senator Chris Evans—Your mates are says that we consult with three groups but on. there is no mention of ‘must consult’ with The TEMPORARY CHAIRMAN—Or- any others. These amendments speak for der! Senator Evans and Senator Lees, would themselves. They are not necessary and I say you come to order please. Could you stop again that the Democrats will not be sup- shouting at each other and address your re- porting them. marks to the chair. Senator CHRIS EVANS (Western Aus- Senator LEES—This is getting to the tralia) (10.06 a.m.)—The important point to heart of Senator Evans’s problem. He was draw from that is that the Democrats’ princi- not consulted. If the Labor Party had wanted pal position now is that the way to fix the an independent process, Senator Murray has problem of governments appointing mates to given them opportunity after opportunity. A boards is to make sure they consult with the number of other Democrat senators have Democrats to make sure that their mates are moved the amendments; they voted it down. appointed. It is a ludicrous proposition about So we stick with the old process, which public accountability. They say, ‘Provided means the government gets to appoint they have a chat with me and I am happy, it boards. Here we have, in this instance, the is okay.’ No wonder the Democrats inside the government consulting with the Democrats party have had concerns about the decision because we are the ones who helped and as- making process. You have argued for years sisted in setting up this Alcohol Education about proper accountability. A secret deal and Rehabilitation Foundation. The Labor between the minister and someone from the Party have their knickers in a knot because Democrats is not accountability. This is our they were not consulted. This is at the heart chance to have accountability. of these amendments. The Labor Party are The key point I leave with the committee upset because they have not been consulted. is the rhetorical question: how are these peo- Senator Chris Evans—The parliament ple to be reappointed? If one dies, retires or wasn’t consulted. resigns, how are they to be reappointed? Senator LEES—Obviously, if you get Again, is that a question for discussion be- into government you can take over the reins tween the health spokesman for the Demo- and, no doubt, that is why you have opposed crats and the minister? Why is that not con- our amendments. When you get into gov- tained in the legislation? The point is that Wednesday, 22 August 2001 SENATE 26297 none of this is contained, and the constant balance, I support the amendment put for- assertion that the foundation is up and ward by Senator Evans. working and the board is meeting is not true I would like to raise, however, the condi- and was not the evidence given to the com- tion that not less than 20 per cent of funding mittee. At this stage it is a group of people in any year must be allocated to indigenous who has been invited in for a cup of tea and a substance abuse programs. Is the definition chat. The legislation gives the power to these of substance abuse programs contained in the processes. That is what we are debating to- legislation? day; that is why we ought to get it right. All I am urging is that the parliament insist on the Senator Chris Evans interjecting— proper accountability measures that we have Senator HARRADINE—I do not know always insisted on before and about which whether it is, Senator Evans. the Democrats have made much play. As I The TEMPORARY CHAIRMAN say, if we are not going to have that, we are (Senator Lightfoot)—It does not appear to not going to have that, but I think it would be be in the bill, Senator Harradine. a much better piece of legislation if those Senator HARRADINE—Senator Evans, accountability measures were included. pursuant to your principle that things need to Senator HARRADINE (Tasmania) be cut and dried and put in the legislation, (10.08 a.m.)—I think much of the heat in the perhaps we ought to look at including the previous exchanges was unnecessary. I think term ‘substance abuse programs’. it is really not appropriate for Senator Evans Senator Chris Evans—A consequential to say that we do not have a chance to deal amendment might be useful, but I have not with this. These things come before us, and done too well on amendments generally, very often none of us know what is going to Senator Harradine. come through the executive government to the parliament. When it gets to the parlia- Senator HARRADINE—Let us see how ment, we are able to deal with them. That is it goes. what we are doing here and now. Senator TAMBLING (Northern Terri- I happen to agree with the amendment that tory—Parliamentary Secretary to the Minis- has been moved by Senator Evans, but I do ter for Health and Aged Care) (10.11 a.m.)—I not think the reflections that were made were think it is very important to point out that justified. Senator Lees has done a very good this legislation is not about the powers of the job in a very important area, attention to Alcohol Education and Rehabilitation Foun- which has dwindled over the years. We all dation itself or anything like that. This is know it is an enormous problem that we are essentially a budget related measure to ap- faced with. We went through the second propriate funds. In effect, it establishes an reading debate, and we have been through account to provide by 1 July 2005 at least this time and time again, individually and $115 million to the foundation, et cetera, for with constituents. Alcoholism is an enor- various things. If you look very carefully at mously costly problem, costly to the public part 1 and part 2 of the Alcohol Education purse as well as to the fundamental structures and Rehabilitation Account Bill 2001, you of our society. Alcoholism affects families see it is very much focused on establishing deeply, and they and their extended families the account. Then I would point out clause 6, bear the cost largely. ‘Credits to the account’. There must be cred- ited to the account $10 million on the day on To that extent, I appreciate what has been which the act receives royal assent, $24 mil- achieved and the outcome is here before us. lion on 1 July 2002, $40 million on 1 July Our job now is to see whether we can main- 2003 and $41 million on 1 July 2004. The tain some sort of accountability in the legis- essence of this legislation is very much that lation itself. Senator Lees has agreed that provision of funding to the foundation for that is obviously necessary and has indicated purposes that will arise. that. We happen to have a slight disagree- ment on the question of appointment. On 26298 SENATE Wednesday, 22 August 2001

The question that Senator Harradine has (e) to provide funding grants to organisa- raised goes to the core of the funding agree- tions with appropriate community link- ment with the foundation. This funding ages to deliver the services referred to in agreement between the Commonwealth and the above paragraphs. the foundation specifies that 20 per cent of It is important to draw that distinction be- total funds for the entire four years of fund- tween the licit programs and other drug ini- ing must be directed to projects targeting tiatives of government which are handled in indigenous Australians. I think that is the other government appropriations. essence of that 20 per cent, and it will be a Senator HARRADINE (Tasmania) matter for the foundation itself to determine (10.16 a.m.)— I thank the parliamentary sec- those particular programs and other activities retary. Whilst we are on that subject, I did in that area. raise in the estimates committee a number of Senator HARRADINE (Tasmania) questions, particularly the question of how (10.14 a.m.)— That is a bit vague. What does this will assist in ensuring that no-one who it mean that this 20 per cent is to assist Abo- has made a decision that they have a problem riginal and indigenous people, or words to and that they need help and has made a deci- that effect? This is the Alcohol Education sion to pick up the phone and ring a detox and Rehabilitation Account Bill 2001. I pre- unit will be told that they have got a three- sume what is meant there is not only alco- week waiting list, which is devastating to holism but also petrol sniffing, for example, them. How is this legislation going to ensure or glue sniffing and the like. The whole that those people will be able to immediately drugs area—heroin and other illegal drugs— go into a program which will be designed to is in another box, is it not? assist them with their alcoholism? Senator Lees—Illegal. Senator TAMBLING (Northern Terri- Senator HARRADINE—Yes, illegal. tory—Parliamentary Secretary to the Minis- Am I clear that we are talking about licit ter for Health and Aged Care) (10.18 a.m.)— drugs? Are we talking only about licit sub- The government shares Senator Harradine’s stances now? concerns regarding the need for quick access to rehabilitation services for people with an Senator TAMBLING (Northern Terri- alcohol addiction. The foundation will be tory—Parliamentary Secretary to the Minis- required through its constitution to provide ter for Health and Aged Care) (10.15 a.m.)— 85 per cent of its funding to professional and In addressing Senator Harradine’s questions, community organisations whose charter is to I draw his attention to clause 3 of the bill, provide rehabilitation and other specific where the objects of this act are set out in a services to alcohol-dependent people and number of subclauses: their families. The government has every (a) to prevent alcohol and other licit sub- expectation that the funding available stance abuse, including petrol sniffing, through the foundation will make a signifi- particularly among vulnerable popula- cant difference to the availability of places tion groups such as indigenous Austra- and access to such services, ensuring a more lians and youth; timely response to people in need. (b) to support evidence-based alcohol and other licit substance abuse treatment, re- I would point out that this legislation is habilitation, research and prevention providing the funding. The foundation will programs; act as the filter and provide the process by (c) to promote community education en- which that will meet. It will be up to the couraging responsible consumption of various organisations—hopefully many alcohol and highlighting the dangers of community based—to provide the actual licit substance abuse; services. So it will not be the government (d) to promote public awareness of the work acting as a service delivery agency. I appre- of the Foundation or body and raise ciate the concerns Senator Harradine raises funds from the private sector for the on- about getting quick access, getting quick going work of the Foundation or body; delivery of services, and that will be a matter Wednesday, 22 August 2001 SENATE 26299 that I am sure the foundation will oversight The foundation will be clearly seen to be a very carefully in any of the bodies making public body publicly accountable for spend- proposals to it and in monitoring their prog- ing public money, rather than a private crea- ress. ture lacking such accountability. That goes to The TEMPORARY CHAIRMAN the argument that I have been trying to put (Senator Lightfoot)—The question is that throughout this committee stage that this opposition amendment No. 2 moved by parliament should ensure that accountability Senator Evans be agreed to. mechanisms are contained in the legislation. The second part of the amendment imple- Question resolved in the negative. ments the memorandum of understanding Senator KNOWLES (Western Australia) reached between the Democrats and the gov- (10.19 a.m.)—I seek leave to table some ad- ernment to ensure that the business plan to ditional information from the Australian As- be produced by the foundation is tabled in sociated Brewers and also from the Aborigi- the parliament and hence becomes a public nal Drug and Alcohol Council that has been document. I know we are to be reassured that provided to the Community Affairs Legisla- all of that will happen anyway—trust us, it tion Committee. I apologise to Senator Har- will all be okay!—but the point I have been radine that I was unable to give him any trying to make through this debate is that further details. these things ought to be in the legislation. Leave granted. Senator Harradine, your intervention was Senator CHRIS EVANS (Western Aus- useful. I had tried earlier in the debate to say tralia) (10.20 a.m.)—I move opposition that it was perfectly appropriate for people to amendment No. 3: negotiate outside of the formal process here, (3) Page [6] (after line 18), at the end of the and I have no problem with that, but at the Bill, add: end of the day we had the opportunity to get 15 Accountability etc. it right. I think you might have missed some of the earlier debate. I also, I might say, be- (1) The Foundation and any replacement fore I got a bit excited, did pay tribute to authority are deemed to be Common- wealth authorities for the purposes of Senator Lees’s contributions to these issues Divisions 2 and 3 of Part 3 of the and her interest in them. I do not want to Commonwealth Authorities and Com- make this a personal attack, but I am most panies Act 1997. concerned about the process and about (2) The Minister must cause a copy of each making sure we get it right. The opposition business plan of the Foundation or a think this amendment makes sure we have replacement body to be tabled in each got the proper accountability measures in House of the Parliament as soon as place and that this foundation is accountable practicable after it has been finalised by to parliament for those public moneys. We the Foundation or a replacement body, think it is a very proper measure, one that as the case may be. should not cause any excitement and should This amendment seeks to insert an account- not be seen as dangerous. We think this ability clause into this very small bill. That amendment would enhance the bill, and I would essentially do two things. Firstly, it urge the Senate to support it. seeks to ensure that the foundation will have Senator LEES (South Australia (10.22 to report to parliament, be subject to the a.m.)— This foundation is to be established Auditor-General and be accountable at esti- as an incorporated charitable trust. We have mates committees by ensuring that it is already had a number of discussions about deemed to be a Commonwealth authority for the issue of accountability, and I guess the the purpose of the Commonwealth Authori- Labor Party are going to continue to say that ties and Companies Act. The opposition is there are problems, but in fact there are not. grateful for the advice from the clerks that The Auditor-General will be auditing and these goals will be achieved by this amend- properly supervising in many ways the audit ment. process and the accounts of the foundation. 26300 SENATE Wednesday, 22 August 2001

The bill requires the minister to table a copy Care. That and the other normal accounting of every funding agreement and any varia- and auditing processes, I think, would give tion to any funding agreement in each house the level of security that the committee is of federal parliament within 15 sitting days. looking for. We are not moving to a completely inde- Senator CHRIS EVANS (Western Aus- pendent company that runs off and does its tralia) (10.26 a.m.)—I would like to ask a own thing. This organisation will be ac- question of the Parliamentary Secretary to countable to parliament, we will have over- the Minister for Health and Aged Care be- sight of it and we will keep a very close cause the contribution of Senator Lees and watch on where every single cent is spent. the parliamentary secretary actually con- However, as I have said before, we do not firmed my confusion on this subject. Senator want this money back into government cof- Lees stated that what we have created here is fers just to be distributed in a regular way as an ‘incorporated charitable trust’. Those money that they would put into alcohol pro- words were not used by the minister. When I grams. This is additional money. Setting this asked the question of Professor Webster, the body up as an incorporated charitable trust soon-to-be chair of this organisation, what will hopefully also encourage ongoing dona- form this foundation was to take, I am almost tions that can be tax deductible so that after certain he replied—I will check the Han- the bulk of the money is spent in four years sard—that it was to be a company limited by there will still be more money raised, as I guarantee. This seems to me to highlight the said in my second reading contribution, per- problem: the legislation does not tell us what haps through the beer industry or the wine we are creating; it is not defined in the leg- industry or, indeed, industry generally by islation. As Senator Lees is one of the people who are concerned about the abuse of authors of this legislation and stated in her legal substances. Indeed, by the end of this contribution then that it is going to be an month, the foundation is required to submit a incorporated charitable trust and as I am sure detailed business plan. So I say to the oppo- Professor Webster indicated at the hearing sition: obviously we all want to see in this that it was to be a company limited by guar- place full accountability, but it has already antee, before we pour $115 million into this, been done. is someone able to tell me what it is? Senator TAMBLING (Northern Terri- Senator HARRADINE (Tasmania) tory—Parliamentary Secretary to the Minis- (10.27 a.m.)— I think that is a good question ter for Health and Aged Care) (10.24 a.m.)— and I am sure the chamber would be obliged The government does not support the pro- of a response to that. I am somewhat con- posed Labor amendment. The memorandum fused. Yes, you could ask questions of health of understanding establishes the foundation department officials. I have done that over as an independent organisation, as Senator the years. Lees has just outlined. It is not appropriate for such an organisation to be subject to the Senator Chris Evans—With varying suc- Commonwealth Authorities and Companies cess. Act, any more than it would be appropriate Senator HARRADINE—With varying for another independent charity such as the success. I agree with what Senator Evans Heart Foundation or the Salvation Army to says. Unless the issue is now down in the be subject to the act because they receive legislation, there could well be confusion at a Commonwealth funding. later date which is not going to do the trust I am sure that, given the level of funding I corporation any good at all. Certainly, the outlined in answer to Senator Harradine’s principle of public accountability will not be question between now and the year 2005, assisted unless we have it, as suggested by there will be a number of occasions on which Senator Evans, in the legislation. senators can ask occasions, particularly in Senator TAMBLING (Northern Terri- the Senate estimates committee, of the offi- tory—Parliamentary Secretary to the Minis- cials of the Department of Health and Aged ter for Health and Aged Care) (10.28 a.m.)—I Wednesday, 22 August 2001 SENATE 26301 am advised that the actual structure of the vised that the structure is that it is to be a organisation will be a public company lim- public company limited by guarantee. The ited by guarantee, and it is certainly intended important point I was making was that it was that the foundation will also be able to accept certainly also intended to be an organisation charitable donations. The model likely to be structured in such a way as to be an inde- adopted by the foundation reflects the speci- pendent charitable body. fications of the memorandum of under- standing between the government and the Question put: Australian Democrats for an independent That the amendment (Senator Chris Evans’s) charitable body whose primary role is to dis- be agreed to. tribute funding to non-government organisa- The committee divided. [10.36 a.m.] tions to address the issue of alcohol and other licit substance abuse. The MOU re- (The Chairman—Senator S.M. West) quires the foundation to meet a number of stringent accountability mechanisms, and Ayes………… 25 these have been incorporated into the legis- Noes………… 40 lation, the funding agreement and/or the con- Majority……… 15 stitution as appropriate. I am also advised— and I think this information was made avail- AYES able to the committee at the time it consid- Bishop, T.M. Buckland, G. ered the legislation—that the foundation’s Campbell, G. Carr, K.J. constitution is currently being developed by Collins, J.M.A. Conroy, S.M. a major law firm which specialises in com- Cooney, B.C. Crossin, P.M. pany law. The constitution is a fundamental Denman, K.J. Evans, C.V. governance document which will specify in Forshaw, M.G. Gibbs, B. some detail the foundation’s objectives, gen- Harradine, B. Hogg, J.J. eral powers, membership rules, use of public Hutchins, S.P. Ludwig, J.W. * trust funds, meeting conventions and report- Mackay, S.M. McKiernan, J.P. ing requirements. There has certainly been a McLucas, J.E. Murphy, S.M. O’Brien, K.W.K. Ray, R.F. fair degree of consultation and discussion in Schacht, C.C. Sherry, N.J. this regard which I believe covers the issues West, S.M. of accountability that are intended to be cov- ered by the Labor Party amendment. So the NOES government does not see the need for the Abetz, E. Allison, L.F. Labor Party amendment. Alston, R.K.R. Bartlett, A.J.J. Boswell, R.L.D. Bourne, V.W. Senator CHRIS EVANS (Western Aus- Brandis, G.H. Brown, B.J. tralia) (10.30 a.m.)—I may have missed it, so Calvert, P.H. Campbell, I.G. forgive me if did, but I do not think you ac- Chapman, H.G.P. Cherry, J.C. tually answered the question. The question Coonan, H.L. * Crane, A.W. was: is this to be an incorporated charitable Eggleston, A. Ellison, C.M. trust or is it to be a company limited by Ferguson, A.B. Ferris, J.M. guarantee, and where is that specified? The Greig, B. Herron, J.J. second part of the question is: are you able to Hill, R.M. Kemp, C.R. provide the Senate with a copy of this con- Knowles, S.C. Lees, M.H. stitution? Lightfoot, P.R. Macdonald, I. Macdonald, J.A.L. Mason, B.J. Senator TAMBLING (Northern Terri- McGauran, J.J.J. Minchin, N.H. tory—Parliamentary Secretary to the Minis- Murray, A.J.M. Newman, J.M. ter for Health and Aged Care) (10.30 a.m.)—I Patterson, K.C. Stott Despoja, N. do not have a copy of the constitution at this Tambling, G.E. Tchen, T. time, and I am unable to provide that. I think Tierney, J.W. Troeth, J.M. it is still at the point of being developed. As I Vanstone, A.E. Watson, J.O.W. said at the outset of my comments, I am ad- PAIRS 26302 SENATE Wednesday, 22 August 2001

Bolkus, N. Payne, M.A. demand on the appropriation and therefore the Cook, P.F.S. Ridgeway, A.D. “proposed charge or burden on the people” within Crowley, R.A. Reid, M.E. the meaning of the third paragraph of section 53 Faulkner, J.P. Gibson, B.F. of the Constitution. Lundy, K.A. Heffernan, W. Section 21 of the Financial Management and * denotes teller Accountability Act 1997 (FMA Act) provides that Question so resolved in the negative. if an Act other than the FMA Act establishes a Special Account for identified purposes, then the Senator CHRIS EVANS (Western Aus- CRF is appropriated for expenditure for those tralia) (10.39 a.m.)—I move: purposes. It is therefore a standing appropriation That the House of Representatives be requested to for the purposes of Special Accounts of this kind. make the following amendment: Clause 8 of the bill also constitutes an appropriation because it provides authority for (1) Clause 6, page 4 (after line 18), at the end of money to be drawn from the CRF and therefore the clause, add: comes within the definition of “appropriation” in Fixed income—uninvested money section 5 of the FMA Act. (2) Within 28 days after the end of a finan- ————— cial year, there is to be credited to the Account, in respect of the financial Statement by the Clerk of the Senate pur- year, an amount equal to the fixed- suant to the order of the Senate of 26 June income percentage of the difference 2000 between $115 million and the amounts The Senate has long accepted that an credited to the Account as at the end of the financial year. amendment should take the form of a request if it would have the effect of increasing Fixed-income percentage expenditure out of an appropriation in the (3) For the purposes of the application of bill or a standing appropriation in a statute subsection (2) to a particular financial amended by the bill. The Senate has also year, the fixed-income percentage is: accepted amendments as requests where the (a) the percentage equal to the rate of standing appropriation was not in the statute interest earned by the Common- to be amended by the bill but in a closely wealth as at the end of the financial related statute which, in those cases, was part year on deposits held with the Re- of the new tax system legislation. In this serve Bank of Australia; or case the appropriation is a combination of (b) if the Minister for Finance, by writ- provisions in the bill itself and in a statute ten instrument made within 28 days referred to in the bill and which applies to it. after the end of the financial year, The request is therefore in accordance with determines a higher percentage— the precedents of the Senate. that higher percentage. This request of the House of Representatives ————— seeks to deliver the government’s promise Statement pursuant to the order of the that the full equivalent of the increase in ex- Senate of 26 June 2000 cise collected on draught beer since 1 July 2001, less the $5 million allocated to the This amendment is circulated as a request be- Historic Hotels initiative, will be appropri- cause it provides for an amount of money repre- ated and allocated to the foundation. It is senting interest to be credited to the Account and therefore available to be paid out for the purposes there in black and white with the Prime of the Account. Clause 8 of the bill provides for Minister’s signature on the agreement. This amounts to be paid out of the Account in accor- is an important request. We are trying to en- dance with funding agreements, and for a refer- sure that the government fulfils its commit- ence to an amount paid out of the Account to be a ment. The government is trying to be a little reference to an amount paid out of the Consoli- mean and tricky, I might suggest, with the dated Revenue Fund (CRF). The amendment will mechanism it has devised by moving the therefore have the effect of allowing more funds money to the foundation and trying to spread to be paid out of the CRF, thereby increasing the the payments over four years. The effect will Wednesday, 22 August 2001 SENATE 26303 be to deny the foundation the full value of Treasury decision to appropriate the money the money and prevent it earning a further over four years instead of on a one-off basis $13 million in interest over the next four that would have allowed the Alcohol Educa- years. The foundation is being denied a sig- tion and Rehabilitation Foundation to accrue nificant amount of money by this mecha- the interest naturally. What we did not want nism. The government has decided to make to see—what we wanted to avoid at all payments annually to the foundation with costs—was any further delay in this bill money it has already collected but to make passing. Apparently, the government has the smaller payments in the early years. On a some specific technical issue with supporting rough calculation, we arrived at a figure of the Labor amendment. about $13 million worth of interest. The op- position has two issues with this. One is the We felt that the money should be accred- question about whether the full excise that ited to the account at the end of the period. was collected has been paid over. We argue Remember, the foundation is spending 80 that it has not been. Given that and given the per cent of this money within four years, so agreement between the Democrats and the it will not be an issue for them; they will government that the appropriate amount is know how much interest is being accrued. $115 million, we then find there is a mecha- We presented to government another alter- nism which effectively denies the foundation native because we did not want to see this the full value of that. legislation bouncing backwards and forwards between the two houses if the government I note that the Democrats have circulated was not able to accept the Labor Party’s a similar request to the one moved by me on amendment. I guess it is eventually over to behalf of the Australian Labor Party. I think government but this mechanism means that the difference goes to the question of each year an amount of money is paid at the whether the interest accrues continually or beginning of 1 July 2001, 2002, 2003 and only over three years. I will leave it for 2004. The interest will be added up and paid Senator Lees to explain the differences. We in at the end. The fund will know how much think this is an important request to ensure it is getting. It will have maybe $13 mil- that the full benefit of the money wrongly lion—our figures are suggesting closer to collected from Australian beer drinkers is $10 million. We will not really know until passed on to the foundation. There is no rea- the end of the day. But those in charge of the son why the government should reap a wind- funding process, those on the board, will fall profit from that money by its failure to know roughly how much money is accruing pay it immediately. On our calculations, that and can leave the way in which it is spent is another $13 million that could be used open until that final year. appropriately for the foundation. I would urge the chamber to support the request So while I am not moving my amend- moved by the Australian Labor Party. I will ment—I realise I cannot do that until we be clearer, when Senator Lees has spoken to have dealt with this one—we wanted to her amendment, as to the difference between cover all bases. If the government still had the two requests. problems with the Labor amendment we wanted to make sure there was one there so Senator LEES (South Australia (10.43 that this bill would not go over to the House a.m.)—I find it very interesting that the La- of Representatives, be changed again and bor Party is now defending the agreement bounced back here as we get closer and between the Democrats and the government, closer towards an election, with more and having criticised it as being unreliable previ- more legislation building up. We want this ously. However, I will let that one go. We bill dealt with today in a form that the gov- estimate that the amount of money we are ernment is comfortable with. talking about is somewhere between $10 million and $12 million. We have been hav- Senator TAMBLING (Northern Terri- ing extensive discussions with the govern- tory—Parliamentary Secretary to the Minis- ment on this issue. It was apparently a ter for Health and Aged Care) (10.46 a.m.)— 26304 SENATE Wednesday, 22 August 2001

The government does not support Labor’s chamber a reason why, specifically and tech- request for an amendment on this matter but nically—if that is the problem— there is a rather, is more attracted to the proposal being problem with Senator Evans’s amendment. If put forward by Senator Lees. The Common- there is some such problem it has gone over wealth funding for the Alcohol Education my head. But I indicate to the committee that and Rehabilitation Foundation has been ap- I will support the amendment moved by propriated over four years, as is usual gov- Senator Evans. ernment practice. The commitment of these funds over the next four years is $10 million Senator TAMBLING (Northern Terri- in 2001, $24 million in 2002, $40 million in tory—Parliamentary Secretary to the Minis- 2003 and $41 million in 2004, which repre- ter for Health and Aged Care) (10.50 a.m.)—I sents a significant spending challenge to the appreciate the question by Senator Har- foundation. I note Senator Evans’s comment radine. Let me be totally frank: the govern- about the appropriation being a lower ment is more attracted to the proposal put amount in the early years and then building forward by Senator Lees, not necessarily for up. As I am sure Senator Evans would ap- specific or technical reasons. preciate, to get the program delivery essence Senator CHRIS EVANS (Western Aus- of this in a proper form and to ensure the tralia) (10.50 a.m.)—I think I am offended success of these types of programs, that is a that, automatically, propositions advanced by more prudent and appropriate way to go Senator Lees are more attractive than ones about it. Initial high levels of up-front fund- advanced by me. That might have to be re- ing often then mean underspends, which is ferred to the Privileges Committee! Maybe I counterproductive in getting good program should shut up—maybe it is obvious to eve- outcomes, given the nature of this area. I ryone that propositions advanced by Senator would, therefore, argue that this is an appro- Lees are more attractive and I just have not priate distribution of the funds. noticed. I think it is an indictment on the Because of the need to ensure that these government that if what they are really say- moneys are spent on targeted, effective ing is that it is a question of from whence the community based activities the funding allo- request comes that determines their attitude cations have been deliberately organised to rather than the technical merits or the effi- increase over the four-year period as experi- cacy of the amendment. ence and capacity expands. As I indicated I do not want to labour the point, but I in- initially, with regard to the other issues we dicate that we think our approach is prefer- are not going to support this amendment but able. I suspect the reason Senator Lees’s we are attracted to the Democrat amendment. amendment is more attractive to the govern- Senator HARRADINE (Tasmania) ment is that it costs them less and they get to (10.48 a.m.)— I indicated in my speech dur- keep more of the money. Without any expla- ing the second reading debate that I believed nation to the contrary, I think that would be the foundation is entitled to the money de- the general view. So, unless the minister is to rived from interest on the $115 million and articulate some other reason, I am inclined to that I support any amendments to achieve persist with our request on the basis that he this. I indicated that if the government con- has not articulated a more worthy reason siders it is not entitled to the $120 million— why we ought to go for the Democrat request that was a rough figure—it must also accept instead. that it is not entitled to keep the interest de- Senator TAMBLING (Northern Terri- rived from this money for itself but should tory—Parliamentary Secretary to the Minis- pass it onto the foundation. ter for Health and Aged Care) (10.51 a.m.)— I am inclined to support the amendment Let me give Senator Evans a very good and moved by Senator Evans. If that fails, I will cogent reason why Senator Lees’s amend- support the amendment proposed by Senator ment is attractive. At the end of the four-year Lees. The government has not given the period—looking forward to what will then be the subsequent operation of the founda- Wednesday, 22 August 2001 SENATE 26305 tion—it will provide an additional bank of Statement pursuant to the order of the Senate funds for the ongoing program, which will of 26 June 2000 hopefully be supplemented and comple- This amendment is circulated as a request be- mented by the contributions of other com- cause it provides for an amount of money repre- munity based activities of the foundation. So senting interest to be credited to the Account and the specific amounts that have been agreed to therefore available to be paid out for the purposes under the memorandum of understanding are of the Account. Clause 8 of the bill provides for very much a forward commitment of the amounts to be paid out of the Account in accor- four-year program, and the accumulated in- dance with funding agreements, and for a refer- terest will then provide additional finances ence to an amount paid out of the Account to be a which will enhance and add to the operation reference to an amount paid out of the Consoli- of the foundation into the future. dated Revenue Fund (CRF). The amendment will therefore have the effect of allowing more funds Request not agreed to. to be paid out of the CRF, thereby increasing the demand on the appropriation and therefore the Request (by Senator Lees) agreed to: “proposed charge or burden on the people” within That the House of Representatives be re- the meaning of the third paragraph of section 53 quested to make the following amendment: of the Constitution. (1) Clause 6, page 4 (after line 18), at the end of Section 21 of the Financial Management and the clause, add: Accountability Act 1997 (FMA Act) provides that if an Act other than the FMA Act establishes a Interest on uninvested money Special Account for identified purposes, then the CRF is appropriated for expenditure for those (2) There must be credited to the Account purposes. It is therefore a standing appropriation by 1 July 2004 an interest amount in for the purposes of Special Accounts of this kind. respect of each of the financial years Clause 8 of the bill also constitutes an appropria- commencing on 1 July 2001, 2002 and tion because it provides authority for money to be 2003. drawn from the CRF and therefore comes within (3) The interest amount for a financial year the definition of “appropriation” in section 5 of is worked out using the formula: the FMA Act. ————— [$115 million – Sum of amounts Statement by the Clerk of the Senate pursu- credited] x Fixed – income per- ant to the order of the Senate of 26 June 2000 centage The Senate has long accepted that an amendment where: should take the form of a request if it would have fixed-income percentage, for a finan- the effect of increasing expenditure out of an ap- cial year, is: propriation in the bill or a standing appropriation (a) the percentage equal to the rate of in a statute amended by the bill. The Senate has interest earned by the Common- also accepted amendments as requests where the wealth, as at the end of the financial standing appropriation was not in the statute to be year, on deposits held with the Re- amended by the bill but in a closely related statute serve Bank of Australia; or which, in those cases, was part of the new tax system legislation. In this case the appropriation (b) if the Minister for Finance, by writ- is a combination of provisions in the bill itself ten instrument made within 28 days and in a statute referred to in the bill and which after the end of the financial year, applies to it. The request is therefore in accor- determines a higher percentage— dance with the precedents of the Senate. that higher percentage. Bill agreed to subject to a request. sum of amounts credited, for a finan- cial year, means the sum of all amounts Bill reported with request; report adopted. credited to the Account in that financial year or an earlier financial year. ————— 26306 SENATE Wednesday, 22 August 2001

FINANCIAL SERVICES REFORM porations (Compensation Arrangements BILL 2001 Levies) Bill 2001 deal with fees and levies FINANCIAL SERVICES REFORM flowing from the FSR Bill, but they are in- (CONSEQUENTIAL PROVISIONS) cluded in separate bills to comply with sec- BILL 2001 tion 55 of the constitution. CORPORATIONS (FEES) Labor supports this package of legislation. AMENDMENT BILL 2001 These bills have been the subject of an in- quiry by the parliamentary Joint Statutory CORPORATIONS (NATIONAL Committee on Corporations and Securities, GUARANTEE FUND LEVIES) which provided an opportunity to hear from AMENDMENT BILL 2001 participants in the financial services industry CORPORATIONS (COMPENSATION and also to question Treasury and ASIC on ARRANGEMENTS LEVIES) BILL 2001 aspects of this bill. I have been advised by Second Reading Treasury that these bills will realise effi- Debate resumed from 9 August, on mo- ciency gains in cost savings for the financial tion by Senator Ian Campbell: services industry by: That these bills be now read a second time. ... providing a regulatory neutral regime, moving from an industry focus of regulation—with banks (Quorum formed) being subject to one set of rules, insurance com- Senator CONROY (Victoria) (10.56 panies another, and so on— to a functional focus a.m.)—I rise to speak on the Financial Serv- of regulation, regulating like activities in like ices Reform Bill 2001 and related legislation. ways regardless of what institution, profession or The FSR Bill deals with the licensing of fi- body is engaged in this activity. nancial market operators and of clearing and The government believes that this should settlement facilities. It introduces a single encourage increased competition in the in- licensing framework for all financial service dustry, lower barriers of entry, reduce costs providers. It introduces minimum standards and provide greater confidence on the part of of conduct for financial service providers consumers. I believe that consumer confi- and enhanced disclosure of financial service dence will be enhanced by the establishment products when dealing with retail clients. It of the consistent and comparable financial introduces other amendments to the Corpo- product disclosure regime that is provided rations Act 1989, including amendments to for in the FSR Bill. The FSR bill will also the market misconduct provisions and to the ensure that consumers can access appropriate continuous disclosure provisions. The FSR complaint handling mechanisms for resolv- Bill will replace chapters 7 and 8 of the Cor- ing disputes with financial service providers. porations Act, repeal the Insurance (Agents The Labor members therefore believe that and Brokers) Act 1984, repeal provisions in these bills will enable consumers to make the Insurance Act 1973 and in the Retirement better financial decisions and will deliver Savings Accounts Act 1997 and amend the advantages to consumers. Life Insurance Act 1995, the Insurance Con- It is timely that the regulation of financial tracts Act 1984 and the Superannuation In- advice providers be considered by parlia- dustry (Supervision) Act 1993, among other ment. We have seen a rapid growth in the acts. The Financial Services Reform (Conse- number of retail participants in the financial quential Provisions) Bill 2001 makes provi- markets. For example, nearly one in two sion for the transition to the regulatory re- adult Australians now directly own shares gime proposed by the FSR Bill. That bill also listed on the ASX. That is not, however, the makes a range of amendments to other only area where Australians are investing, Commonwealth legislation that are necessary and the market now provides a range of as a consequence of the FSR Bill. The Cor- products with different characteristics and porations (Fees) Amendment Bill 2001, the objectives to cater to a range of needs. Corporations (National Guarantee Fund Beginning with Labor’s decision to make Levies) Amendment Bill 2001 and the Cor- superannuation compulsory, Australians Wednesday, 22 August 2001 SENATE 26307 have become conscious of the need to pro- The consumer movement has been widely antici- vide for their future. The demographic pating this important bill which provides a new structure of Australian society necessitates foundation for the provision of consumer protec- that this be the case. Increasingly, Austra- tion in financial services, with particular focus on lians are wanting to be financially independ- disclosure, licensing, selling practices, codes of practice and the general shift towards consistency ent and this is to be encouraged and sup- and uniformity. We are pleased to report that we ported. They need to receive good advice agree with the majority of the proposals, though from an early age and on every financial there are a number of specific areas that we be- product to ensure that their objectives can be lieve require further attention. met. Australian consumers need to feel con- These bills are not perfect and Labor will be fident that they are in a position to decide moving a number of amendments. Before I their financial future and to make financial proceed to outline some of the omissions in decisions. That requires that the people who the legislation, I wish to comment on its im- advise them are competent, that they are plementation. The Labor members note that trained and able to give the advice. It re- there is a wide power to make regulations quires that consumers receive all the infor- under the FSR Bill and that ASIC has been mation they need to make a decision, that given extensive powers to modify the legis- they know the total cost of a product, that lation. For example, under proposed section they know both the return and the risks in- 911A(2)(k) of the bill, a person can be ex- herent in the product and that they know empted from the requirement to hold an what biases may have influenced the provi- Australian financial services licence if they sion of the advice. It also requires that ASIC provide a service covered by an exemption be able to implement and enforce the objec- prescribed in the regulations. I note that the tives of this bill. In that regard, I note a rec- Minister for Financial Services and Regula- ommendation of the government members of tion said in a speech on 3 July 2001 that: the parliamentary Joint Statutory Committee on Corporations and Securities, which was ... before the introduction of choice, the Govern- ment recognises that lighter touch regulation is supported by the Labor members, that the appropriate, and only public-offer funds, which government explore the possibility of addi- excludes most corporate and industry funds will tional funding for ASIC to allow it to meet be subject to licensing under the Bill. This re- its new responsibilities. flects the current situation. Even after choice is This legislation has the support of the introduced, the regime applying to industry and consumer groups. In a submission to the corporate funds will be flexible. joint parliamentary committee, the Austra- My discussions with Treasury and ASIC of- lian Consumers Association wrote: ficers and industry participants indicate that Consumer groups have keenly anticipated the the operational structure of industry funds FSR Bill. Improving the consumer protection and corporate funds can be accommodated standards in financial services is a critical public within the structure of the bill. I trust that the policy issue in an environment where Australian minister will, as he has promised, continue to consumers are increasingly asked to take respon- consider the needs of industry funds and cor- sibility for the direct management of their wealth porate funds as this bill will apply to them. and income, including retirement incomes ... In this regard, the ACA strongly supports the ap- There are many other provisions within proach taken by the Bill to establish a consistent, the bill that allow the minister or ASIC to uniform and clear regulatory platform for disclo- finetune the application of the bill. These sure, licensing, codes of conduct and practices in include provisions governing the content of financial services. The consumer protection aims the various disclosure documents and the of the Bill and the comprehensive approach taken situations in which the disclosure documents to disclosure and licensing (including the critical must be given. I also note that the transi- issue of commission disclosure on risk products, tional provisions set out in the Financial which must continue to ensure a sound consumer Services Reform (Consequential Provisions) protection framework) are supported by the ACA. Bill 2001 provide a further degree of flexi- Similarly the Financial Services Consumer bility by allowing most people to transit into Policy Centre advised the committee: 26308 SENATE Wednesday, 22 August 2001 the new regime over a two-year period. The rities and Investments Commission Act in bill also provides for insurance multi-agents the Financial Services Reform (Consequen- to apply for a qualified licence which will tial Provisions) Bill 2001. They mirror allow such agents further time to meet the changes made to the Trade Practices Act competency requirement to hold a licence. since responsibility for financial services was The government will also introduce further removed from the ACCC’s consumer pro- amendments today which provide further tection jurisdiction and given to ASIC. A concessions to insurance agents in relation to number of significant changes had been the timing of when the bill will apply to made to the Trade Practices Act since the them. jurisdiction in relation to financial services While I would have preferred, like many was moved to ASIC, which left financial others, to have seen the benefits of this bill consumers in an inferior position. The gov- for consumers be realised at the earliest op- ernment should, having implemented the portunity, Labor remains supportive of this changes to the ASIC Act, have been more legislation. By the end of the transition pe- mindful of the need for the act to continue to riod, we expect every person offering or ad- mirror the Trade Practices Act. However, the vising on a financial product to be operating government has now acted and I support the under the FSR regime. The flexibility in the amendments. legislation should allow the minister, Treas- The minister also introduced on 28 June ury and ASIC to deal with many of the issues amendments to the powers of ASIC to im- that have been raised with the committee. pose, vary or cancel conditions on licences This flexibility also stems from the structure of bodies also regulated by APRA. These of the bill, such that only the principles of provisions are to be further amended by the the new regulatory regime are encapsulated government today. It is necessary in the in- in the legislation. Any variance in detailed terests of consumers and efficient enforce- application of those principles to particular ment that ASIC not be unnecessarily cur- sectors or circumstances are to be dealt with tailed by having to consult with APRA on in the regulations. This is a new structure and every occasion that it imposes, varies or re- will require that the implementation of the vokes a condition on a licence of an APRA bill by the minister be thoughtfully consid- regulated body. This would not protect con- ered, and the impact of the bill be monitored. sumers and would hamper ASIC’s ability to This is particularly important given the large respond in a timely manner. The amend- number of people who are likely to be re- ments—which will require ASIC to consult quired to be licensed under the Corporations with APRA before imposing, varying or re- Act for the first time. voking a condition only if such an action A number of my concerns raised in look- would, in ASIC’s opinion, have the result of ing at the provisions of the legislation were preventing the licensee from carrying on the met by the minister in amendments he tabled activities for which APRA has regulatory or in the other place on 28 June 2001. For ex- supervisory activities—appear far more ample, I and many others were concerned workable. The issue of how APRA and ASIC about the changes to the obligations of the interact is a vexing issue, and I note that financial services licensee. The original leg- many in the industry are concerned about islation only required that a financial serv- how these two agencies coordinate their ac- ices licensee act competently and honestly, tivities. rather than the existing requirement in the The final amendment introduced by the Corporations Act that a licensee act effi- minister on 28 June which I will comment on ciently, honestly and fairly. I thought it was was the change to the insider trading provi- important that the requirement for fairness be sions. The wording of that offence was reinstated. That phrase ‘efficiently, honestly changed by the legislation supposedly to and fairly’ was also well understood. comply with the Criminal Code. Those I also welcome the amendments intro- changes, however, would have made the of- duced by the minister to the Australian Secu- fence harder to prove. It is essential that the Wednesday, 22 August 2001 SENATE 26309 market be fair to protect the interests of all 2000, 99.1% of brokerage-house analysts’ rec- shareholders, including retail shareholders, ommendations were ‘strong buy’, ‘buy’ or ‘hold’ and to maintain the reputation for integrity recommendations. which Australia’s financial markets generally I have just returned from the US, where a enjoy. congressional committee is inquiring into the issue of analyst independence. Some of the I should also add my support to the evidence has been quite extraordinary. Ana- changes in the continuous disclosure regime lysts have been appearing and saying, ‘Look, which are proposed in the FSR Bill. It is everybody knows that “hold” means “sell”.’ proposed that a breach of section 1001A will The last time I went through the dictionary now be both a criminal offence and a civil ‘hold’ certainly did not mean ‘sell’, but that penalty provision. This will assist ASIC to is the code you had to understand. If Laura enforce Australia’s continuous disclosure Unger has not convinced you of the problem, regime. There is sufficient evidence, I be- an article on Mary Meeker, a stock analyst at lieve, to justify this. For example, in a joint Morgan Stanley known as the Queen of the study conducted last year by the ASX and Internet, is terrifying. Fortune magazine on ASIC of listed technology companies, ASIC 14 May 2001 wrote: concluded that a number of companies were ignoring the basics of good company disclo- Though it’s hardly news anymore that the Chi- sure or, worse, were not even aware of those nese Wall once separating investment banking from Wall Street research has eroded, what you obligations. Further, a survey last year by the realize in talking to Meeker is the extent to which University of Sydney Accounting Founda- these two supposedly conflicting functions— tion found that many directors felt that the keeping companies happy and giving investors continuous disclosure provisions ‘1acked honest stock advice—are now organically teeth’. Accordingly, Labor will be supporting intertwined. She talks unashamedly, for instance, this amendment. about how she used her research to help land However, this legislation, like the minis- banking deals for Morgan Stanley. And she ter, is silent on the issue of analyst independ- describes how upset she became when Morgan ence. It is time for the minister to acknowl- Stanley lost a hotly contested deal to archrival edge that analysts have a responsibility and Goldman Sachs. “I had never lost an IPO mandate in my life for a company that I wanted to obligation to ensure that shareholders under- take public,” she says, sounding like, well an stand the basis on which their reports are investment banker. provided. A number of retail consumers rely on analysts’ reports to provide accurate in- This is an issue which needs to be addressed. formation. They believe the reports to be a I understand that the industry, and the Secu- fair and true assessment of a company’s fu- rities Institute of Australia in particular, is ture performance. It is not acceptable that examining this issue and preparing guide- there is a code which is understood by some lines. I encourage that work to continue and, in the market but is unknown to others. Con- when completed, I encourage industry to sumers need to know, or be able to deter- adopt such guidelines. Labor is committed to mine, whether a report is biased because of seeing this practice cleaned up. Investors work being done in other sections of the fi- need to be able to rely on advice that is an nancial institution for which the broker intelligent analysis of a company’s perform- works. I have previously quoted an extract ance. from a speech by Laura Unger, the Acting Chairman of the SEC, but it is worth repeat- I will only mention briefly those areas in ing: which we are seeking amendments. They are One of the most important sources of information aimed at ensuring that Australian consumers has always been analysts. Unlike others, they put receive the information they need to make their name on their work-product and professional informed financial decisions, that licensees reputations are at stake. But, for a variety of rea- act appropriately and that restrictions are sons, including recent market events, there is placed on unsolicited telephone calls so as to scepticism of the objectivity of analysts’ recom- protect consumers from the unsavoury type mendations lately. One survey showed that in of behaviour. In particular, we will be seek- ing to restore the hawking prohibitions in 26310 SENATE Wednesday, 22 August 2001 relation to managed investment products. We landmark legislation and, as Senator Conroy will also be seeking the removal of the de- from the opposition said a few moments ago, clared professional body provisions and the it did attract very detailed attention from the proposal to record telephone conversations in parliamentary Joint Statutory Committee on relation to takeovers. Corporations and Securities, which I chair. I Labor will also be moving an amendment welcome the fact that, on behalf of the oppo- to allow regulations to be made to specify sition, Senator Conroy has indicated support certain activities which, even if performed by for this legislation. There is no doubt that the a lawyer in the ordinary course of their ac- uniform structure which this legislation will tivities, will be considered financial product establish in terms of the education and advice. In Labor’s view, it is no longer ap- training requirements, the licensing require- propriate for unlicensed persons to operate ments and the product disclosure require- mortgage investment schemes, even if it was ments for anyone involved in the financial the practice in the past that lawyers operated services industry and marketing what are such schemes. I know my colleague Senator now called financial products—that is, in- Sherry will be saying much more on this vestments in one form or another, whether when he speaks. equities, deposit products or insurance prod- ucts—will be a major step forward for this Before I conclude, I wish to confirm La- industry. Therefore, the opposition’s support bor’s commitment to full disclosure of com- for this legislation is very important. missions for all financial products. We re- main committed to achieving this objective As I said, the joint committee did examine and will be seeking a commitment from the this legislation in great detail. In a sense we government that this bill requires that. Labor have examined it on two occasions now. is, however, supportive of these bills and There was a draft exposure bill published a endorses the efforts encapsulated in this leg- year or so ago, which the committee exam- islation to assist Australians to make in- ined. It made certain recommendations with formed financial decisions. I note that the regard to that exposure draft and, as a conse- committee report has been tabled and I quence of that, the government introduced would like to acknowledge Senator Chap- this legislation. Again the committee exam- man, who has done an enormous amount of ined this legislation in great detail and pro- work on this bill. It was a lengthy process, as duced a report that was finally tabled out of I am sure Senator Chapman would agree. I session last week. did not get a chance to speak when the report In that report we indicated very strong on the bill was tabled, but I would like to support for the legislation, not only in our thank the committee staff, who did a moun- own determination as a committee, but also tain of work to get everything ready so that based on the evidence that the committee we could debate the bill today. I acknowl- received. The evidence across all sectors of edge the minister’s commitment to good the financial services industry did indicate consumer legislation and look forward to a very strong support for the legislation; how- speedy debate. ever, some evidence we received also indi- Senator CHAPMAN (South Australia) cated that there were certain areas that could (11.15 a.m.)—There is absolutely no doubt be improved with amendments to make the that this Financial Services Reform Bill 2001 legislation even better. It is to those areas is landmark legislation. It covers the finan- that I want to direct attention this morning, cial services sector of our economy which, as based on the report that the committee I understand it, now makes up some seven handed down last week. I say at the outset per cent of the Australian economy. The bill that I welcome the cooperation of Minister is certainly the most major, and possibly the Hockey in his dealings with the committee last, piece in the jigsaw of the government’s and in his response to the report and its rec- program of reform of the Corporations Law ommendations. By and large, Minister and of the financial services sector of our Hockey and the government have accepted economy. So, as I said, it is very important, the recommendations of the committee Wednesday, 22 August 2001 SENATE 26311 which, with a few exceptions, were unani- insurance policy over the telephone should mous recommendations: in other words, they not be defined as financial advice under the were recommendations of all parties. The legislation. The government have accepted government members, the Labor members that recommendation and again will be such as Senator Conroy and a couple of his moving an amendment to give effect to that. colleagues and the Australian Democrats’ They are also going to accept our recom- Senator Murray all supported the bulk of the mendation that certain types of insurance proposed amendments put forward in the should be exempt from the requirements of committee report. the legislation. The best example, I guess, in The first proposed amendment dealt with terms of a cooling-off period would be travel what in the previous Corporations Law had insurance. For instance, you might have a been an exemption provided for the media, travel insurance policy that only lasts for a including journalists who were reporting on 10-day trip someone is taking and yet under financial affairs and economic matters. In the the original legislation a 14-day cooling-off original legislation, it was proposed that period would apply to that policy. Quite those media representatives be required to be clearly it was nonsense that someone could licensed, because of the possibility that their actually take their 10-day trip, have their comments might be regarded as financial travel insurance and then come back and say, advice. The committee recommended an ‘I am still within the cooling-off period, I do amendment to the bill to restore the previous not want that travel insurance’ and get a re- exemption that existed for the media gener- fund. Again, I welcome the fact that the gov- ally, including financial journalists, in the ernment has responded positively to our rec- Corporations Law. Again, I welcome the fact ommendation that, for certain short-term that the minister has accepted that proposed insurance policies, travel insurance being the amendment, and in the committee stage an best example, that cooling-off period will not amendment will be moved to that effect to apply. restore that exemption for media representa- Another issue addressed by the committee tives. was in relation to professional bodies. This The second issue on which we made a particularly relates to lawyers and account- recommendation for change was with regard ants and the fact that, in the course of their to the proposal for a requirement that con- general advising of clients on legal and fi- versations in relation to takeover proposals nancial matters, that could have been re- should be recorded. In other words, conver- garded as financial advice and required them sations between the bidder in a takeover pro- to be licensed under the legislation. We, as a posal and shareholders of the target should committee, recommended that what we said be tape recorded. We regarded this as unnec- could be defined as incidental advice pro- essary and, in fact, quite impractical. How- vided by lawyers and accountants in the ever, the government regard this as still es- normal course of their business should be sential with regard to retail shareholders. exempt from the legislation. Again, the gov- They have, therefore, accepted our recom- ernment has responded positively to that rec- mendation in part and will move an amend- ommendation. Amendments will be included ment to limit the requirement to record tele- to provide that advice provided by lawyers in phone conversations during takeovers to the ordinary course of their activities as a conversations with retail investors—that is, lawyer that is reasonably regarded as a nec- the small shareholders—but they will accept essary part of those activities is exempt from our amendment to the extent that it applies to the definition of financial product advice. major corporate shareholders in regard to That will similarly apply to registered tax takeovers. Again, I welcome the acceptance agents. of that recommendation from our committee. I note that there is some controversy in the Another issue in our report relates to the media at the moment, apparently aroused by insurance industry. We recommended, for accountants saying that this does not go far instance, that simply providing a quote for an enough in relation to them, but it seems to 26312 SENATE Wednesday, 22 August 2001 me that most practising accountants who are ership of their client base and the ownership likely to be giving advice to their clients will of the continuing streams of commission, be registered tax agents. Obviously there is a including trailing commissions, that would continuum, if you like, in the nature of ad- flow from previous sales of products to those vice given by accountants. At one end, it is clients. We regarded those as very important clearly advice of a type which would not be issues. The legislation, as drafted, could have covered by this legislation and would not resulted in a detrimental impact on those require them to be licensed; at the other end agents, simply by the fact that a new regime of the continuum, they could clearly be giv- was coming into place. The government has ing direct financial product advice and again considered that particular issue and I should come under the licensing arrange- welcome its positive response. The govern- ments. In the middle of that, there is proba- ment will now amend the legislation to pro- bly a grey area. I believe that the proposals vide that agents who have contracts with that the government is putting forward for insurance companies will be enabled for amendment will provide an appropriate di- those contracts to continue in operation for viding line, if you like, between what is and the term of those contracts. If that is, in ef- what is not financial advice that will be sub- fect, a perpetual contract, obviously that ject to those licensing requirements. There- contractual arrangement will continue infi- fore, I believe that the concerns of the ac- nitely into the future. I think that provides countants in relation to that issue have been very important protection for that sector of covered by the government. the industry. Another issue that was raised before the I note that that again has aroused some committee was pooled superannuation controversy in the media in the last 24 hours, funds—that is, funds that act as aggregators particularly in the Financial Review, where of superannuation moneys from other funds Mr Cleary—their journalist—and their edito- and, in effect, are operating at a wholesale rial this morning refer to that matter. I quote level rather than at a retail level. Again it is from the Financial Review editorial. It says: my understanding that the government will ... the Government is set to give agents what include amendments to ensure that they are looks like an excessively high level of protection not caught by the requirements of the legis- against losing their tenure as an authorised repre- lation. They are all very important amend- sentative. ments that came under consideration by the It also quotes the chief executive of the Fi- committee, and we recommended that nancial Planning Association, Mr Ken changes should be made to the legislation. It Breakspear, as saying: is gratifying to me that the government has ... the growth of small financial planners in recent accepted, by and large, those particular rec- years shows they have not been hurt by the arrival ommendations. of the Corporations Law, and small financial ad- One of the major issues that was raised visers would also prosper under the Financial with the committee was the potential impact Services Reform Bill, contrary to fears that small of this legislation on a sector of small busi- business would suffer a loss of market value. ness—in particular, those who have previ- It goes on to say: ously operated as insurance agents, selling It [federal government] should now think care- general insurance or perhaps selling term life fully whether it is wise and in the interests of insurance, but not involved in marketing fi- consumers to protect small agents against contract nancial products that have an investment termination unless they have actually been con- return component. There were several issues victed of fraud. of concern to that sector of the financial That is not actually in the terms of the services industry. The first of those concerns amendment that the government is propos- related to the potential impact of the legisla- ing. There is no reference to the limits on the tion on what might be described as their right protection of their contracts; it simply means to work. The second issue was the impact of that their existing contracts will continue. the legislation on their client base—the own- Wednesday, 22 August 2001 SENATE 26313

I think it is important to make the point those small independent agents have the op- that this is not an excessively high level of portunity to continue in business on the basis protection. It is saying that if an insurance of their existing contractual arrangements. agent has a contract with an insurance com- Obviously, if there are provisions in those pany to provide services in this area, that contracts that allow them to be terminated contract will continue. That is not providing and the termination provisions are spelt out, excessive protection; it is simply recognising they will still apply. But, if those contracts that there is an existing legal relationship continue infinitely, those agents will have the between the agent and the insurance com- opportunity to continue to operate on their pany and that legal relationship should not be existing basis, at least in terms of their rights affected detrimentally by this legislation. In to maintain their income stream from pre- other words, the agent should not be put in existing commissions that have previously any worse position by this legislation than he been earned from sales and also in terms of would be had this legislation not been intro- the goodwill or asset value of their busi- duced. That is, I think, what any reasonable nesses. If they have buyback arrangements in person would regard as quite an acceptable terms of the goodwill with the insurance position. It does not in any way give the companies with whom they have these con- agent any advantage; it simply ensures that tractual arrangements, they will continue, he is not disadvantaged as a result of what is and that will ensure that they are not, as I a new regime, new legislation, coming into say, financially disadvantaged by this legis- place, which, as I said, is very important and lation. beneficial legislation for the industry overall. The other issue on which the parliamen- I am not a lawyer but I would have tary Joint Statutory Committee on Corpora- thought—and the minister might be able to tions and Securities made a recommendation help me on this—that all we are doing is also relates to the insurance agents. That was protecting the common law rights of insur- in relation to the disclosure of commissions. ance agents for their contractual obligations Having examined this matter twice, the to continue to be met. committee have come to the conclusion that As for Mr Breakspear’s comments, of it should not be a requirement that insurance course he represents the Financial Planning agents disclose their commission on what are Association, which tends to be the bigger described as risk insurance products, that is, end of town—the bigger businesses that will those products that provide insurance against certainly become very important under the risk—it might be fire insurance, home insur- new regime. They are essentially large busi- ance, term life insurance, crop insurance and nesses that have resulted from the aggrega- so on—which is a source of income for tion of the former individual independent many of these small insurance agents. We do agents into rather large financial planning not believe there is any consumer demand companies which by and large are now for disclosure in this particular area. We be- owned by the product manufacturers, owned lieve that it will be detrimental, particularly by the big financial institutions. So Mr for those insurance agents operating in small Breakspear does not really speak for those at communities, to their capacity to earn an the small business level when he says that income from selling these forms of insurance the small financial planners have thrived un- without any demonstrable benefit to the con- der the new Corporations Law. What he sumer. We do not believe, on the evidence needs to do is to consider exactly what has presented to us, that the commissions play happened, because what has happened is that any significant role in the advice that an in- a lot of the small financial planners have surance agent might give to a customer with been aggregated into major companies, ma- regard to the options they have for this form jor institutions, rather than continuing to op- of insurance. As a committee, we recom- erate as small operators. mended that for this form of insurance the So I regard that proposed amendment as commission should not be required to be being of singular importance in ensuring that disclosed. 26314 SENATE Wednesday, 22 August 2001

Another very important aspect of this, the Corporations Law needed to be modern- brought to our attention in evidence, is the ised, improved, made more efficient and ef- attempts by insurance companies to stan- fective and to contribute more to Australia’s dardise and force down commissions. We competitiveness. We, the Democrats, also believe that the mandatory disclosure of believed it needed to take into account social commissions for this type of insurance will values as well as economic values, and in hasten that process. What that in effect this whole process we have paid a lot of at- means is reduced incomes for the insurance tention to accountability aspects and aspects agents, which means they will have fewer of fairness as well as aspects of economics, resources with which to run their businesses. efficiency and competition. Quite often it is the insurance agent that acts The CLERP process released discussion as the intermediary between their client and papers on six issues. Those were known as the insurance company when there is a claim ‘Accounting standards’, ‘Fundraising’, ‘Di- to be made. It is the insurance agent who rector’s duties and corporate governance’, goes in to bat for their client against the in- ‘Takeovers’, ‘Electronic commerce’ and ‘Fi- surance company if there is a dispute with nancial markets and investment products’. regard to payment of a claim or whatever. If The release of those papers was an extremely those small operators have reduced incomes useful commencement for this long exercise because of a move to standardise and push of review and reform. The Senate dealt with down, drive down, commissions, they have some of those issues—accounting standards, less income and therefore fewer resources fundraising, director’s duties and corporate available within their businesses. It does re- governance—in October 1999. The Demo- duce their capacity to have the resources crats played an active role in the passage of available to them to effectively go in to bat the Corporate Law Economic Reform Pro- for their clients against the insurance compa- gram Act 1999, and we made some very nies in the event of a dispute. That was a constructive contributions and amendments. very important factor in the committee coming to the conclusion that they did: that The fifth issues paper out of CLERP titled these forms of commissions should not re- ‘Electronic commerce’ seems to have disap- quire disclosure. The government have not peared into the ether. When the minister re- accepted that particular recommendation and sponds to the speeches in the second reading they will not amend the legislation to bring debate, perhaps he might be able to refresh that recommendation into effect. They have my memory on what has happened to made an on-balance decision; I accept that CLERP 5—where it has gone and whether it but I do regret it. (Time expired) might ever reappear in any other form. I think, if you are going to present a package Senator MURRAY (Western Australia) as your overall approach, we at least ought to (11.36 a.m.)—I rise to speak to the Financial be taken out of our misery and know whether Services Reform Bill 2001 and its related it is looming in the background or whether it bills. These bills arise out of the sixth stage has disappeared. of the Corporate Law Economic Reform Program, or CLERP as it is colloquially Today we are dealing with CLERP 6, known. I have said before that CLERP which was originally titled ‘Financial mar- sounds like a troll’s name, and I still think it kets and investment products’. A discussion does. Anyway, CLERP it is. CLERP was paper on CLERP 6 was released in March conceived by the coalition in March 1997 as 1999. To give credit where credit is due, a response to the Wallis report and to com- Treasury has undertaken an extensive con- prehensively improve Australia’s corporate sultation process over the two-year period. In law as part of its drive to promote business addition to that consultation, the Joint Statu- and economic development in Australia. tory Committee on Corporations and Securi- That intention has consistently been fully ties inquired into the draft Financial Services supported by the Australian Labor Party and Reform Bill and reported in August last year. the Australian Democrats because, on a That committee then again inquired into the cross-party basis, all parties did believe that Wednesday, 22 August 2001 SENATE 26315 bill before us today and reported last any government to ensure that the pay and Wednesday. the conditions and the terms under which I want to take this opportunity, because both our electorate staff and the staff gener- none of us were able to speak to the tabling ally made available to political parties are of the report, to comment extremely fa- kept current and competitive to ensure that vourably on the process that was undertaken. we keep good people. To my mind, the position we arrive at today I return to the report. The Wallis report of addressing this bill is at the end of what is had recommended the introduction of a sin- the very best of the processes that the par- gle licensing regime for all financial sales, liament can throw up. I mentioned earlier advice and dealing, and the creation of a that Treasury have consulted heavily and not consistent and comparable product disclo- defensively in this matter. They have been sure framework—a great principle and prepared to make adjustments as a good case highly desirable but very difficult in practice has been made. to get right. The general aim of the bill is to Secondly, the Joint Statutory Committee provide uniform regulation of all financial on Corporations and Securities chaired by products, a single licensing framework for Senator Grant Chapman has, on a cross-party financial service providers, minimum stan- basis, done an extremely thorough review. dards of conduct for financial service pro- As Senator Conroy said earlier—and I agree viders dealing with retail clients, uniform with him—Senator Chapman and the hard- disclosure obligations for all financial prod- working secretariat are to be complimented ucts provided to retail clients and flexibility on the thoroughness and effort that they put for authorisation of market operator and into the process of review and the conse- clearing and settlement facilities. The Demo- quences. In fact, as the committee moved crats support the objects of the bill. How- into its latter stages, at times we were hard- ever, we have seen consistently through the pressed to keep up with the minister’s rapid process scope for improving the bill in a few and positive response to the recommenda- areas and have welcomed government tions that were being made to us in submis- amendments. There are other amendments sions. As the submissions were made and the on the floor from us and from others, and we committee was hearing them and as the will deal with those on their merits. committee was indicating in its questioning The recent report of the Joint Statutory and response a positive response to the case Committee on Corporations and Securities at issue, out would come the minister saying, into the bill made a number of very con- “I agree.’ That is very helpful to a commit- structive recommendations, and the Demo- tee, because it indicates that you can move crats supplementary report made one very on and make a recommendation knowing important one that I want to refer to in this where you are. A round of compliments to discussion in relation to what have become everyone: the Treasury, the advisers sup- termed collectively as ‘ethical investments’. porting the minister, the chair and deputy Ethical investments are investments that are chair of the committee, the secretariat, the made taking into account the use to which members of the various parties on it and, the money invested will be put and the wider most importantly of all, the people who implications of the use of that money. I use made submissions. the term ‘ethical investment’ to denote an Before I conclude my congratulations, I investment that has been made when the in- would like to record some thanks to my own vestor of the money has been cognisant of adviser, Lee Jones. When I was not able to the social, environmental and ethical impacts be at hearings he tracked this whole process. of the product that the entity has sold to him I think sometimes we need to remind the or her and the way in which that money will chamber just how important our advisers are be used. to us in arriving at informed decisions and in It has been estimated that approximately assisting us to progress legislation in this $250 million is currently invested in ethical manner. I would urge this government and investment funds in Australia. This is ex- 26316 SENATE Wednesday, 22 August 2001 tremely low and is likely to escalate rapidly. If when we reach the committee stage the Socially responsible investment now ac- chamber agrees to the amendment that I will counts for around $US2.16 trillion—I will be moving, it needs to be made clear that repeat that: $US2.16 trillion—in the United Australia will not be out on a limb relative to States and $A7.2 billion in the United King- the rest of the world. In other words, we will dom. This is a massive new market. Industry be pursuing best practice. In July of last year specialists believe that ethical investment in an amendment to the UK Pensions Act was Australia will follow United States and enacted in the United Kingdom which re- United Kingdom trends and grow to become quires pension trustees to disclose their pol- a multibillion dollar industry in the next five icy on socially responsible investment in the years. That is not far away. Consumers are statement of investment principles. The law investing in ethical investment products not does not require any fund to change its pol- only because of a perceived benefit for the icy, but its clear purpose is to draw attention environment and society as a whole but also to their practices and encourage voluntary because they are also viewing an ethical in- policy and operational changes. vestment as carrying less risk than so-called It would be almost impossible for a person unscreened investment whilst providing the to come up with a neat definition of what is potential for higher returns. ethical. That issue is something that the op- A KPMG survey conducted in the middle ponents of this sort of measure will loudly of last year showed that 69 per cent of Aus- trumpet in trying to resist what I am propos- tralians would consider socially responsible ing. However, it needs to be understood that investing if given the opportunity. The the person who decides the ethics of the Democrats are of the view that the investing situation and whether they are acceptable is public would welcome being given the in- the investor. All that the fund promoters need formation necessary to allow them to know to do is spell out against set criteria the when an investment is environmentally, so- non-financial considerations that are taken cially and/or ethically responsible. However, into account when making investment deci- the Democrats are alert to recent trends sions when using the investors’ funds. where exaggerated claims are made about In the majority report of the corporations financial products, and that is why we think and securities committee the argument some legislative attention is necessary. There against mandating this disclosure is that is support in the government for this area of market forces will deliver consumers the interest. Just over a week ago, on 13 August, most transparent disclosure of socially re- the Minister for the Environment and Heri- sponsible investments. The suggestion is that tage, Senator Hill, commented in a press re- making the requirement mandatory is unnec- lease: essary. The Democrats would like to actively In order to assess companies, socially responsible progress the advent of these types of prod- investment fund managers or individual investors ucts. It will be useful to start this process by need particular information about environmental asking in law that those who do take into and social performance but in Australia these account ethical, environmental or social con- details can be difficult to find. siderations state that unequivocally. In that The minister made that comment when he way, we believe that the interest in the avail- announced the release of a new business ability of ethical investments will be height- guide to socially responsible investment. ened. Any company making a claim that it That sort of initiative is a good start, but the considers environmental, social or ethical Democrats do believe that we need to do matters when making an investment should more. We are not attempting to prescribe be required to substantiate that claim which ethically or socially responsible investments, conveys a marketing value to the product. but we would like to encourage a market- The Democrats have two objectives in re- place which is well informed about which lation to ethical investments. The first is to funds include socially responsible consid- encourage a market for ethical investments erations in investment decisions. and to promote awareness of their availabil- Wednesday, 22 August 2001 SENATE 26317 ity. As I mentioned before, Australia cur- The Democrats are not looking to impose rently has about $250 million invested in substantial additional costs on fund managers ethical investments. We would like to en- and promoters or to see consumers swamped courage the growth of that figure. The sec- with pages and pages of useless information, ond objective is to ensure that as the market but we are wanting to see consumers pro- develops consumers are provided with accu- vided with sufficient information to judge rate information about the investments. We whether they accept that an investment prod- do not want a situation to arise where pro- uct is indeed ethical. It should be a judgment moters start to misrepresent their investments by investors, not by promoters. I can recall as ethical investments because of the mar- the passage of the Company Law Review keting benefits that that label confers. If any- Bill 1997 in June 1998, when the govern- body thinks it is a fanciful view that there ment and others in the business community will be boosterism of this sort, please pay thought the sky was about to fall in when the attention to the nature of the mass marketing Senate passed my amendment which in- investment schemes which are currently cluded the requirement to annually report on causing over 65,000 Australian investors to compliance with environmental regulation. experience a swathe of irritation, anxiety and They also thought the sky was going to fall disaster. In many respects, those prospec- in when we passed the amendment that re- tuses and marketing tools used to promote quired disclosure of directors’ fees, which I those investments used boosted information note the government now supports fully. to mislead consumers. In this area we need to The sky did not fall in. I understand that, avoid that. while it took a short time for business to be- Claims about ethical investments should come comfortable with what was required to be able to be substantiated. The Australian comply with section 299(1)(f), it now does Securities and Investments Commission not present a concern in terms of compli- should be empowered to develop guidelines ance. It has done what I intended, and that is that must be complied with where a product to focus corporate minds on this issue. The disclosure statement makes a claim that envi- Democrats were years ahead on triple bottom ronmental, social or ethical considerations line advocacy but now, too, corporate bodies are taken into account in selecting, retaining accept this as mainstream. I am hopeful that I or realising an investment. Some might put have the same support of the Labor Party on to me the question why we are singling out this issue as they courageously gave me on claims about ethical investing for special the environmental reporting amendment that attention when there are already provisions I referred to earlier. I appreciate that support, in the Corporations Act which prohibit mis- and I note that they also supported us on that leading and deceptive conduct. This bill fo- amendment we moved in 1998. cuses on full disclosure and encourages it. If The other matter which I should elaborate you were to use that argument, you might as on is the Democrat second reading amend- well say that you do not need the bill at all, ment that I have circulated and now move. I because the Corporations Law already says move: that you should not mislead and deceive At the end of the motion, add: people. That has been found to be insuffi- cient. The primary reason is that the imbal- “and that the requirement in the legislation ance in the access to information is worrying that commissions on risk products be fully disclosed be referred to the Joint Statutory the government, the opposition and us. In the Committee on Corporations and Securities absence of any other requirements, if a for inquiry and report on or before 1 Octo- statement states that, yes, the managers of ber 2003”. the fund take ethical considerations into ac- The amendment relates to disclosure of count, where can the investor go to try to commissions on risk products. In its current confirm that? The promoters of the fund form the bill requires full disclosure of those should be obliged to show their hand to such commissions, and, prima facie, the Demo- an investor and detail against set criteria why crats support disclosure. However, this is they claim that their investment is ethical. 26318 SENATE Wednesday, 22 August 2001 what I had to say on that matter in the corpo- legislative response to the financial system rations and securities committee report: inquiry report—commonly known as the I can understand the argument for complete ex- Wallis inquiry. The inquiry concluded that clusion of risk-based products from the commis- the complex and fragmented regulatory sion disclosure regime. If that is a view that is framework in financial services was creating carried so be it. However partial disclosure— inefficiencies for financial service providers as recommended by the committee— and confusion for consumers. It recom- seems inappropriate. mended the introduction of a single licensing regime for all financial sales advice and If it is accepted that the payment of a commission dealing, and the creation of a consistent and is significant to a customer then surely full disclo- sure of the quantum is also important. Presumably comparable product disclosure framework. It the quantum determines the degree to which any argued that these changes would generate agent is likely to be influenced by the existence of substantial benefits for both the industry and the commission. consumers. Given a choice between requiring disclosure and It is claimed that consumers in particular not, the Democrats will almost invariably err on will benefit from improved levels of disclo- the side of disclosing ... sure of information, improved access to ap- However, I recognise the point made my propriate complaints handling mechanisms Senator Chapman that there is concern. I for resolving disputes with financial service therefore want the committee to use the pe- providers and improvements in the compe- riod of transition to review this issue and, if tency and training of persons providing fi- necessary, go back to the government of the nancial services. The legislation deals with day and suggest further change before the the licensing of financial market operators time has elapsed for the introduction of this. and of clearing and settlement facilities, and That will allow cooler heads to prevail while introduces a single licensing framework for this is reconsidered. So I do hope that the all financial service providers, replacing the Senate will support my second reading differing licensing and legislative require- amendment to get the committee to look in ments currently imposed on dealers and ad- more depth at this issue and to come back visers in securities, futures, banking prod- when it is not so pressed by the need to push ucts, managed funds, superannuation, insur- through the main body of the legislation. ance and other financial products. Senator SHERRY (Tasmania) (11.56 The legislation introduces minimum stan- a.m.)—The Senate is considering a number dards of conduct for financial service pro- of bills in regard to financial services reform. viders and enhanced disclosure of financial Before I go any further, I would like to ac- service products when dealing with retail knowledge the work of the parliamentary clients. It also introduces other amendments Joint Statutory Committee on Corporations to the Corporations Law, including amend- and Securities. I notice that Senator Chap- ments to the market misconduct provisions man, the chair of the committee, sat through and amendments to the discontinuous disclo- this debate. I think it is important to ac- sure provisions and the like. The bill will knowledge the work of these committees require a large number of persons who have because it often goes unacknowledged. The not previously been regulated under the Cor- examination of the issues that we consider in porations Act to be so licensed. Much of the this place is very important to our under- debate surrounding this legislation is focused standing of those issues and also is a very on who is in and who is out and the degree to important outlet for individuals and various which they are in and out. I will speak a bit interest groups to express a particular view more about that later. on legislation and for that to be taken into The theme of this legislation, following on account to varying degrees by governments from the Wallis inquiry, is to regulate in this of the day. area in respect of the functional product The bills that we are considering consti- rather than in respect of the institution that is tute the third tranche of the government’s distributing and selling the particular prod- Wednesday, 22 August 2001 SENATE 26319 uct. While supporting this legislation, as part To turn to this particular legislation, I of the Labor opposition, I must say that I am want to focus on lawyers and some superan- not as enthusiastic an advocate of this ap- nuation products. Before I do that, I think it proach for a number of reasons. I am cer- is sometimes mistakenly claimed that the tainly not as enthusiastic as the government legislation we are considering—and what it in terms of the over-the-top sell job that it leads to—is the total answer to problems that attempted when it introduced the prudential occur from time to time with financial prod- regulators APRA and ASIC into this country. ucts in this country. It is not the total answer. I think the jury is still out on just how effec- The theoretical argument is often advanced tive APRA and ASIC are as financial regu- in this country that all we need is to have lators. open disclosure of fees, charges and com- Certainly at the time there were what I missions, adequate regulation of the people would argue were extravagant claims made who deliver those particular products and about Australia having the world’s best education of consumers, and then all the practice financial regulatory system, which problems will be solved. That is the sort of would be examined and implemented in a theoretical, economic competitive knowl- similar way around the world. They were edge model that is advanced by some in this certainly some of the comments made at the country—some in particular in this govern- time by the Treasurer, Mr Costello. The sad ment. That is not sufficient to protect con- fact is, of course, that in recent times there sumers in Australia. This has been well have been significant and justified criticisms highlighted in respect of the recent HIH col- made of the way APRA and ASIC have gone lapse. There is a need at certain times for about their regulation. Some of the problems governments to intervene—hopefully there in the area have been beyond APRA and are sufficient protective mechanisms in ASIC’s particular control. I believe they have place—to ensure there are appropriate been underresourced. The level of expertise mechanisms to compensate consumers in of some of their staff needs to be improved. relation to certain classes of products, though They were issues that were imposed on them not all products. by the government of the day, but there is In a capitalist system, there will always be still a culture in APRA and ASIC when it a level of risk that an individual has to bear, comes to the regulation of financial institu- but when you are faced with the collapse of a tions. They are insufficiently vigilant. When major insurance company such as HIH—tens given a reasonable level of evidence that of thousands of Australians were burnt as a there are problems, they are not acting result of that collapse and often those con- quickly enough. There is evidence of buck sumers did not know they had insurance with passing from one regulator to another. These HIH, because the company they had insured issues have been well canvassed in recent with had on-placed the insurance with times, not just in the media but also in the HIH—you need effective mechanisms to Senate Select Committee on Superannuation compensate consumers should those disas- and Financial Services report. There are sig- ters occur. I note that Australia is, I think, nificant problems with financial regulation in only one of a handful of advanced economies this country and part of that problem is the that does not have a compensation fund in current regulators themselves. Sadly, we had respect of insurance collapse. Even the the major collapse of HIH Insurance. There United States, which is often promoted as the is a royal commission. We have had recently sort of nirvana of the free market, has a the collapse of a number of superannuation compensation mechanism when an insurance funds—Commercial Nominees to name but collapse occurs; Australia does not. one. We have had significant problems with The theoretical model of superannuation solicitors mortgage funds. Given the evi- advanced recently in the guise of choice is dence that that has occurred, it is difficult, I that, effectively, deregulation means that: think, to argue at the present time that we you remove the corporate nature—the bun- have world’s best practice regulation. dling together—of product and you educate 26320 SENATE Wednesday, 22 August 2001 consumers, you disclose all the fees and firm, invests money through the funds in commissions and she’ll be right. That is the mortgages on property. It is usually the first theoretical model that has been advanced by mortgage and can be up to 65 per cent of the this government in respect of superannua- valuation of the property. In those circum- tion, when the evidence of the effective de- stances you would not expect a great deal to regulation of some of the superannuation go wrong. However, the evidence is to the market has shown, particularly in the United contrary. There have been a significant num- Kingdom and Chile, that consumers—de- ber of collapses in most Australian states and pending on the degree of deregulation—are a significant amount of money—in the hun- ripped off, despite disclosure, despite so- dreds of millions of dollars around the na- called competitive mechanisms, despite so- tion— has been lost as a result of investment called adequate regulation. in these products. I think this highlights why You need to do more in the event of theft this piece of legislation is important, bearing and fraud in respect of superannuation prod- in mind my caveats on why we need other ucts. There is a compensation mechanism protective mechanisms. that requires moneys that are lost in those Unfortunately, when you look at the par- circumstances to be placed into a fund ticular disclosure documents that were made through a cross-levy system on the rest of the by some—including, I would acknowledge, a industry. That is an important protective small number of legal firms in my home mechanism that recognises that superannua- state of Tasmania—you find that, in some tion is a retirement product. We cannot in a cases, the claims that were made were mis- society such as ours where theft and fraud leading. In most cases it was very difficult to occurs accept a situation, albeit that it is a find the commission and the charges and very small number of people who suffer in fees, but some of the claims that were made this way, where their money is stolen, be- were misleading. Some of these funds have cause they are going to depend, at least in collapsed. There was a mixture of reasons part, on these savings for their retirement. for that—partly incompetence, partly poor As I said earlier, much of the debate valuations, ranging to false valuations, and around this legislation has focused on who is partly theft and fraud. There were a range of in and who is out. This is a timely debate problems. This piece of legislation helps because there have been a number of sub- clean up, to a significant extent, these types stantial problems with what are known as of products. solicitors mortgage funds in this country. The When I read some of the evidence before Senate Select Committee on Superannuation the committee, I went to the submissions and Financial Services has carried out a case from the various legal firms and law socie- study on the problems that occurred in Tas- ties. The solicitors mortgage fund products mania. That report will be released next had been administered by law societies in week and it is pretty good reading. It is good their respective states. I was a bit taken reading in the sense that it well illustrates the aback by the submission from the Law In- major problems that even lawyers from time stitute of Victoria on this legislation. I quote to time get themselves into. However, the from a letter: problems in respect of the solicitors mort- ... the provisions of the FSRB— gage funds have not occurred just in Tasma- that is, the legislation we are dealing with— nia. They have occurred in Western Austra- lia, Queensland, New South Wales and South are considered to be an unwarranted intrusion into Australia. For some reason that I am yet to the independence of the legal profession. To re- quire solicitors to limit advice according to the identify, they do not seem to have occurred conditions imposed by ASIC will severely limit in Victoria. the independence of the profession and impede Solicitors mortgage funds are a financial the provision of independent, impartial advice to investment product generally run by a small clients. number of legal firms in each state where a That is a fairly startling and, frankly, arro- consumer, quite often a customer of the legal gant claim to be making in respect of the Wednesday, 22 August 2001 SENATE 26321 regulation of lawyers, solicitors and financial claims that have been made about the regu- products. To be fair, reading later submis- latory change in this country in the last few sions to the committee, the law societies and years. I note, however, that Mr Hockey has some legal firms made it clear that their fo- been somewhat more circumspect in the cused objection to this legislation lay with claimed advantages of this legislation com- so-called incidental financial advice in the pared with the claimed advantages that the course of what would be considered normal Treasurer, Mr Costello, made about the in- legal work. That is fair enough, but what troduction of APRA and ASIC in Australia a concerns the Labor opposition is that it is few years ago. Perhaps they have learnt from made very clear that solicitors mortgage experience that the number of corporate col- funds, which are clearly a financial invest- lapses and the problems that APRA and ment product, should be covered by this leg- ASIC have experienced do not indicate islation. world’s best practice regulatory regimes, or I want to touch briefly on the issue of su- at least that you cannot draw that conclusion perannuation. The superannuation industry— at the present time; the jury is still out. without going into enormous detail—has a I am a little more circumspect about the number of different types of funds. We have alleged ‘huge’ benefits that will flow to con- do-it-yourself small superannuation funds, sumers. There will be benefits; it is an ad- we have what are known as corporate funds, vance, but we should not forget that regula- we have master trusts, which in the main tors need to be very vigilant about the sale retail to the public, and we have what are and distribution of financial products in this known as industry funds, multi-employer country. Consumers will, regrettably, still get funds. There is a growing tendency among burnt—hopefully not often. The disclosure those funds to attempt to sell in the retail of fees and commissions and charges is fine. sector and I think it is fair that they be cov- That is all very well—people are entitled to ered by this legislation. However, the con- access that information in a way in which cerns raised by the corporate superannuation they can draw comparisons, because often industry, I believe, are valid. Generally— some of the disclosures that have occurred there may be one or two of which I am not up to the present time are not easily readable. aware—they are not for public offer; they are We should never forget that the vast majority not retailing to the general public. They are of consumers in this country are not finan- effectively custodians of the superannuation cially literate, and are unlikely ever to be so. money of employees of the corporation and Despite the best will in the world and mas- are also not-for-profit superannuation funds. sive education campaigns—in the case of Overwhelmingly, they are a good superannu- this government, propaganda campaigns—it ation product. There was an argument, at is very difficult to educate the mass con- least in the early stages of this legislation, sumer market to the necessary degree of fi- that the trustees would be required to be li- nancial literacy. There will always need to be censed, along with the other groups that are protective mechanisms and compensation brought within the ambit coverage of this mechanisms in the sorts of areas I have out- legislation. The corporate superannuation lined, to maximise protection to consumers. industry made a submission and gave evi- (Time expired) dence to the committee hearings, and I am Senator COONEY (Victoria) (12.16 pleased that the concerns they expressed, at p.m.)—I will continue on from where Sena- least in large part—perhaps not totally— tor Sherry left off. There are occasions when have been taken into account when I think it is a pity we cannot extend the time developing the legislation, the amendments that is given to a speaker. This is an occasion and the regulations. where we could have listened to Senator As my colleague, and our spokesperson, Sherry for some extra length of time. Yester- Senator Conroy has indicated, the Labor op- day I mentioned my son-in-law, Joe Ragg, position is broadly supportive of the legisla- who is a doctor. Senator Chapman promptly tion. I am a little sceptical of some of the brought me to order for dealing with some- 26322 SENATE Wednesday, 22 August 2001 thing that was irrelevant. Let me make it are dealing with money and how it is to be relevant in this way. My son-in-law is learn- spent, we are dealing not only with the eco- ing the trade of surgeon. I was saying to nomic ramifications of that, but also with its somebody what a terrible length of time my social ramifications—the fact that people can son-in-law had to serve to become a sur- be left without the proper wherewithal to geon—something like 15 years. I did not get live. That can lead to tragedy. a sympathetic reply. In fact, the reply was, ‘If Today we see how people who are getting somebody is going to take a knife to me, he older and who have to go onto the pension or she would want 15 years of experience at are living in a very frugal way. Throughout least.’ We, as a community, regulate the peo- this community there are people who are ple who are going to take a knife to some- living in very poor circumstances. That is a body else— problem. We take steps to do something Senator Sherry—How are they going to about that through the pension system. The get the experience? Labor government, as Senator Sherry was Senator COONEY—That is a very inter- saying, set up superannuation schemes to try esting question, Senator Sherry. We ensure to equip people with enough resources to that lawyers and doctors have proper experi- provide them with the means to live com- ence and integrity. The same goes for other fortably when they got older. As Senator professions. Electricians and plumbers, at Sherry has so eloquently shown, superannu- least in the old days, when I was younger, ation is a matter of great moment—not only had to serve apprenticeships and be qualified superannuation, but any vehicle in which before they went about their practice. They people want to invest. had to be people of integrity. That was ex- We each follow our own profession. We pected. In our community we have financial are in the profession—I call it that advis- advisers, people who give us advice about edly—of politics. We practice that profes- how to handle whatever money we may have sion, hopefully, with some skill. Everyone to invest. In the past there has not been suffi- practises their skill. It is great to see the tram cient consciousness of the need to have peo- drivers in Melbourne—locating myself for a ple with proper training and integrity in this moment in my city—or plumbers, or build- area. It is an area where great damage can be ers, or the members of any other profession done to people. If an operation goes badly going about their profession, devoting their that can lead to dreadful consequences. If a time and attention to it. But that means that representation before the court goes wrong you cannot devote the time and attention that somebody might end up in gaol—a dreadful you might want to devote to it investing your thing. If a plumber does not do his or her money or doing with your money what work properly we get a lack of sanitation and seems appropriate. all sorts of problems. If an electrician does I remember years ago a great man called not carry out his or her work properly we are Hubert Hoy, an electrician, thought he would without light. We can understand that sort of spend money on the Stock Exchange. He thing. went down there for a day, he saw people However, the myriad of times when peo- going about their business and he said, ‘Well ple have been given poor financial advice it is no good me going into that on my own and as a result are left penniless is over- because, without proper advice, I would lose looked. In Victoria, where I come from, the my money.’ I think it has become more and collapse of Pyramid was a disaster, as you more obvious that people who advise us well know, Madam Acting Deputy President about our money should be properly quali- Knowles. It left a tragic legacy which even fied and should be people of integrity, as I now has ramifications, particularly around keep saying, and that is what the legislation Geelong. Going back to the 1970s, Cam- we are now dealing with has much to do bridge—people here probably cannot re- with. The general proposition is that there member Cambridge—was another example ought to be a bill such that the licensing, if of a collapsed financial institution. When we you like, or the certification of people should Wednesday, 22 August 2001 SENATE 26323 be done from one source and that there do not mean to say that subordinate legisla- should be a scheme set up so that those who tion does not have its place; of course it give advice are licensed. does. I do not mean to say that subordinate Once we get to that point, and everybody legislation is not effective; of course it is. agrees that that is the point we should get to, But there is always a question of what should we then come to the question: is this person be done through primary legislation and giving financial advice? Senator Chapman what should be done by secondary or subor- chaired the committee that looked into this, dinate legislation. I think—and this is a the parliamentary Joint Statutory Committee comment of mine—that we have to watch on Corporations and Securities. It was a very carefully to see what regulations and policy eminent committee, I am sure you would statements are brought forward through agree, Senator Chapman. ASIC, and we have to keep them in check, because, in the end, it is the parliament’s re- Senator Chapman—And it had some sponsibility to ensure that legislation serves very eminent members, Senator Cooney! this country in the way that it should do. The Senator COONEY—Yes, it had some next dot point is illustrative of the problems very eminent members, Senator Chapman. that arise in this area, and they are necessary We looked into it and we produced the Re- problems that must necessarily be resolved. port on the Financial Services Reform Bill It says: 2001. I think there has been general agree- The Labor members recommend that the Bill be ment, but there have been some disagree- amended so that media organisations regain the ments along the lines of who should be li- certainty currently provided by the Corporations censed, who should not be and, in certain Act exemption. cases, what services ought to attract the li- That dot point is talking about the situation censing of people who give them. In our mi- where a financial journalist might be writing nority report, in the Report on the Financial an article about an insurance company or a Services Reform Bill 2001, the Labor mem- manufacturing business, or whatever, and is bers of the committee have set out certain giving a general description of how that points. I think we have put forward excellent business is operating. There is then the a propositions, and the shadow minister for question of whether that is financial advice. financial services and regulation, Senator If a person was writing up his or her story Conroy, has done much work. But the person and started to get into difficulties as to I admire greatly in this area is Ms Diane whether this came within the law or fell out- Brown, who is in Senator Conroy’s office, side of the law then there are some problems. because she brings the intellectual capacity So this dot point suggests that the law be and rigour that I admire. The first dot point expressed so that the journalist can write of the summary says: without going through that worry and will The Labor members support the bill. only be caught by these provisions if in fact So there is no problem with that. The next he or she gives financial advice with the in- point states: tent to do so. This becomes an issue for other The Labor members agree with the recommenda- professions, such as lawyers and account- tions of the Chair that the 2-year transitional pe- ants. If you are running a commercial case, riod be retained and that the Government explore as a lawyer, then of course there is going to the possibility of additional funding for ASIC to be discussion about commercial matters. But allow it to meet its new responsibilities. you should not be caught by provisions in Perhaps I should explain what is happening this act because you are not giving commer- here. A lot of the precise rules and regula- cial advice. What you are doing is dealing tions that are going to be made will be made with a case with commercial ramifications. through ASIC, and there will also be a series I will jump a few dot points because I am of regulations and policy statements made. running out of time. The next one is: There is always a concern when matters are The Labor members do not agree with the rec- dealt with through subordinate legislation. I ommendation of the Chair to exclude from the 26324 SENATE Wednesday, 22 August 2001

Bill compulsory third party and workers compen- go off into the ether without being corrected. sation insurance, nor the recommendation of the I hope I have done that. Chair to exclude from the disclosure requirements the provisions of a quotation alone for a general What has been said is that, with workers insurance product. compensation, third-party insurance and li- ability insurance generally, the people giving What the chairman, Senator Chapman, was that advice should be licensed but, as I un- saying, as I understand it—he can correct me derstand it, there need not be disclosure re- if I am wrong— was that when you are quirements for the provisions of a quotation. dealing with financial advice in those areas, That is what is being said, I think. There is a there is really not much in the way of deci- difference on that between the majority and sion making. If you want to take out insur- the Labor minority. The Labor minority says ance for third-party liability or workers com- that not only should the person selling this pensation liability or risk liability, then the insurance be licensed but that there should be premiums are going to be pretty much within a disclosure requirement for the provision of a range that does not require financial ad- a quotation for that sort of insurance. The vice. Therefore, since this sort of insurance is next point I have dealt with already but I will very common and is well-known to people, it read it out: should not be licensed. We Labor members of the committee said that these people The Labor members recommend that the declared should be licensed because they are giving professional body provisions be deleted from the Bill. The Labor members are still considering advice. whether an exemption for incidental advice by Senator Chapman—I am not saying that lawyers and accountants should be restored or the they should not be licensed, just that they definition of ‘financial product advice’ be appro- should not be required to disclose— priately amended. Senator COONEY—Thanks for that. There was a difference in the committee Senator Chapman is saying that they should about this, and that is what I was talking be licensed but that they should not have to about when discussing the issue of journal- disclose what the commission—is that right? ists and what they write. This is the same The ACTING DEPUTY PRESIDENT sort of thing with regard to accountants and (Senator McKiernan)—Interjections are lawyers. If you are a lawyer or an accountant incidentally to being a financial adviser, of disorderly. Do not encourage conversation. course you should be licensed and all the Senator COONEY—It is not disor- provisions of this legislation should apply. derly— But the question is: when are you a financial Senator Jacinta Collins—He is being adviser and when are you acting as a lawyer very helpful. or accountant, and where do these matters The ACTING DEPUTY PRESID- become, as it were, coincidental to your gen- ENT—Order! There are standing orders in eral advice? this place and it is my job to enforce them The next dot point deals with the issue of and that is all I am doing, irrespective of the not-for-profit superannuation funds. It states: number of supporters. The Labor members agree with the proposal of Senator COONEY—Of course, Mr Act- the Minister to table regulations exempting not- ing Deputy President, but perhaps you might for-profit superannuation funds from the licensing not be enforcing the standing orders as they requirements and certain disclosure requirements are written—not that I would suggest that for under the Bill. one minute, but I think that is the proposition This has been dealt with by Senator Sherry, being put. However you interpret matters who I think is paramount in this area in this when you are king of the castle, Mr Acting house. The last dot point says: Deputy President, we will of course accept. The Labor members agree with the recommenda- But I think it was important that I corrected tion of the Chair to review the operation of the what I had said about Senator Chapman’s Bill. position and that it should not be allowed to Wednesday, 22 August 2001 SENATE 26325

I want to make the point that the whole area join because no commissions are paid—that of corporations is an area which will always terrible thing, a commission!—to anybody need reviewing. (Time expired) who is supplying a service—a year-long Senator FERGUSON (South Australia) service or a lifelong service in many in- (12.36 p.m.)—I rise to speak to the Financial stances—and earning a commission. Services Reform Bill 2001 in the knowledge I want to comment briefly on some very that it is a bill that has had a pretty long ges- poor and ill-advised reporting in the Finan- tation period. It has been around for public cial Review when it talked about Mr Hockey consultation now for almost two years. It is a facing on Monday night strong pressure ‘to good bill, and it is an even better bill with the cave in to the long-running resistance by amendments that are going to be moved to small life insurance agents’ to the disclosure change the original bill as a result of some of commissions. Paul Cleary’s article in to- excellent work that was done by Senator day’s paper says: Chapman’s Joint Statutory Committee on Mr Hockey also refused to accept a recommen- Corporations and Securities. That committee dation in favour of exempting life agents from has looked into this bill twice and has come disclosing commissions ... up with a number of recommendations, some I was at that meeting; as a matter of fact, I for the second time. I am very pleased that chaired it. The only issue that has ever been the government accepted many of the at stake for both me and a number of the changes that were recommended in the re- members of our committee is whether or not port of the joint committee because they commissions should have to be disclosed on have made this bill a much better bill. a risk product where the payment of a com- I want to speak on only one issue in this mission has no effect on the end result to the legislation, that is, commissions for agents client. I am perfectly aware that commissions on non-accumulation or risk products. I sup- should be disclosed on any financial accu- pose it is only fair that I should declare an mulation product when it affects the end re- interest, because for eight years prior to en- sult to the client. As a matter of fact, when I tering this place I worked as a commission worked as an agent for Colonial, even as far agent, tied to the Colonial Mutual company, back as 1985 in presentations to clients we as it was then, but with a number of general were obliged to put in the full costs to the insurance agencies. I would like to place on client and how that would affect the end re- record that earning a livelihood as a commis- sult of their accumulation or financial prod- sion agent is a legitimate, respected and hon- uct. Originally it was done on a very small ourable profession and an honourable device that just gave a print-out, but further method of earning a living, which some peo- on, in 1987, we were issued with laptop ple in this place would suggest that it is not. computers, and every time we gave a pres- In all of this dash for clarity and for transpar- entation it had to include the cost to the con- ency in everything that takes place, I wonder sumer of all the fees and charges, including what the end result of this legislation, as it commissions, that were taken out by the currently provides, is going to be for the con- company. That was from 1987 onwards, and sumer. If commissions have to be disclosed in those days some of the commissions were when the end result is affected by any com- very high and had an enormous impact on missions paid, will it also include the amount the end result. The best thing that has hap- of money that is paid to someone like Bernie pened in recent times is that, on those types Fraser when he makes ads for industry of products, commissions have been changed funds? He has to be paid from somewhere— so that in the early days it does not have such unless he is doing it on a purely voluntary an impact on the client’s investment. That basis, and if he is I think he should say so. If has been a move for the better. For a long he is being paid to do those ads, that is going time now, there has been concern amongst to diminish the returns to the members of some companies that any commission that is those industry funds that he so often recom- paid to an agent which affects the return mends on television that everybody should should be disclosed. 26326 SENATE Wednesday, 22 August 2001

That is why it is so wrong when this re- making a living by earning a commission is port talks about the disclosure of the com- one of the ways that many people in Austra- mission of life agents, because in most cases lia earn their incomes. To drive these people life agents these days are selling products to give up some of their livelihood because where their commission does affect the end they have to disclose an amount that does not result. The only product they sell where it affect the client in any way whatsoever is does not is term life insurance. In fact, re- going to have a detrimental effect on a lot of gardless of what commission is paid on a people and a lot of small businesses through- term life product, the client in the event of a out Australia. claim will get exactly the same amount of Senator Knowles—They don’t have to money regardless of how much commission disclose their overheads, either. is involved in that contract. That is why I do not see any necessity for commissions to be Senator FERGUSON—Senator Knowles disclosed on term life product. is right: disclosing a commission does not tell you how much petrol they have to put in Of course, the other area where commis- their car to service a client and it does not sions will be required to be disclosed is in tell you how much their telephone bill is the area of fire and general insurance. There when they are doing business, answering are many fire and general insurance agents in calls and ringing up about claims that might Australia. I worked principally in country be made. The commission that is paid to a areas and I know of some 15,000 to 25,000 risk insurer is designed to cover all of their registered agents throughout Australia, many costs—and that is not taken into account. of whom have a general insurance agency as Everybody seems to think that that is just an adjunct to another small business, such as salary that goes in the pocket. It does not a hardware shop or a general store, that they have the same effect on salaried risk insurers may be running in a country town. In some because those on salaries will have their ex- small towns in the outlying areas in rural and penses paid in some other way. I am thinking regional Australia, that is a service that is of the enormous number of people out in provided to that community. One of the rural and regional Australia, and in some problems is that in many of these cases these cases in city areas as well, who have a risk people are only earning a very small amount insurance agency purely as an adjunct to of money out of their insurance agencies—as their business to help them make their busi- I said, it is an adjunct to their normal busi- ness more viable and one from which they ness—but it does make their business viable know they can earn a reasonable living. It is and economic to run, sometimes providing a for those reasons that I am particularly con- great service to those communities. cerned that the government did not take up Mr Acting Deputy President, you and I the recommendation of the joint committee would both know that, once the commission regarding the insurance commission on risk on these products has to be disclosed, if past products. history is any example, the client will say, Debate interrupted. ‘You’re earning that much money out of my car or house insurance, are you? How about MATTERS OF PUBLIC INTEREST you drop your commission, take half as Senator McKiernan—Order! It being much as you would normally take, and you 12.45 p.m., I call on matters of public inter- can have the business?’ The disclosure of est. commission on risk product means that these Social Policy people will have their incomes forced down Senator KNOWLES (Western Australia) purely by the disclosure of the amount of (12.45 p.m.)—Today I would like to talk commission that has to be disclosed when about the Labor Party’s total gross hypocrisy they are insuring for an event for which, re- and misrepresentation in relation to what gardless of what commission they are paid, they are telling the Australian community they will get the same end result in the event about social policy. Over the last five years, of a claim. As I said right from the start, this government has had a job and a half to Wednesday, 22 August 2001 SENATE 26327 do turning this country around to being a government. That is still too high, but an fairer country, ensuring that there are job eight per cent reduction is better than none. opportunities and that those people who can- The same applies to work force participa- not look after themselves are actually cared tion. Employment participation has increased for by other taxpayers and that pensioners since the mid-nineties under Labor. Seventy- are getting a better deal—the list goes on and one per cent of working age people are now on. All we have been confronted with, at an employed, compared to only 69 per cent in accelerated pace in recent times, is total and April 1996 when we came to office. Older utter misrepresentation. workers in particular, whom Labor were very Senators Newman and Vanstone deserve keen to throw onto the scrap heap, saying, congratulations for what they have done in ‘We do not need your expertise anymore, we this area of policy. It has been a very difficult do not want you in the work force’, have one which has been subjected to continual benefited to the tune of 150,500 places. misrepresentation. Therefore, I would like to Older people between 55 and 59 years old go through some of the facts about where we have been getting jobs. So employment are today. Employment and unemployment growth is now at the stage where 73 per cent are very important issues for so many peo- of those employed are in full-time employ- ple. The Labor Party yesterday were talking ment. As total employment has grown, the about unemployment as though it was proportion of those in part-time employment something about which they had a proud has increased. Since 1996 when we came to record. They have forgotten that during their office, 369,600 full-time jobs and 463,700 13 years of office they had well over one part-time jobs have been created. million people unemployed, which was over What does that do for families? That is the 10 per cent of the population without a job. other important aspect of this. The Labor By June this year, that had fallen to 6.9 per Party, quite willing to misrepresent facts, cent. The Labor Party cannot trumpet that have said, quite wrongly, that the gap be- they are the party of those wanting a job: tween rich and poor has widened. If that is they simply put them out of jobs. The coali- so, and if their assertion is correct, why is it tion has created 833,300 new jobs since that the ABS figures do not substantiate their April 1996. That has ensured that the unem- claim? The rate of jobless families has now ployment rate is well below that left by La- dropped, and that is something about which bor. Equally, by June this year the numbers we should all be proud. It is something about receiving unemployment related income which the Labor Party should be congratu- support payments had declined by 32 per lating the government, but they cannot bring cent since the time that Labor had one mil- themselves to do it. In 1991, 8.4 per cent of lion people unemployed. In terms of taxation all couple families with children were job- for all the other Australians who have to look less. In 1993, this peaked at 10.8 per cent of after those who are unemployed when Labor all couple families with children. That has are in office, the impact of that is a substan- fallen to 7.5 per cent under the coalition. In tial decline. 1991, 53 per cent of sole parents were job- Equally, in relation to the issue of youth less. This increased to 54.8 per cent in 1993. unemployment, the Labor Party have long It has fallen back to 48 per cent under the trumpeted their ability to look after the coalition. These are figures that the Labor young people of this country. Their ability to Party should be congratulating the govern- look after the young people of this country ment on, and yet they refuse to do so. They was demonstrated over 13 years when they just continue to go out there and misrepre- simply put them out of work. Youth unem- sent the situation. Equally, the number of ployment under Labor was at a staggering 21 jobless families with children, after rising per cent. That is shocking in anyone’s terms, through much of the 1990s, fell at the end of but it is something about which the Labor the decade. The number of jobless sole par- Party seem very proud. Fortunately, that has ent families has continued to fall. dropped to 13 per cent under the coalition 26328 SENATE Wednesday, 22 August 2001

Real wage increases for low income able and less available. Over the 10 years workers is another area that we should con- from 1991 to 2001, real Commonwealth ex- centrate on. The Labor Party believe that penditure on child care rose by 160 per cent. they are the sole repository of all wisdom In 2001 dollars, it grew from $573 million to when it comes to caring for low paid work- $1,490 million. Child-care cash payments ers. What did they do, other than push them and subsidies— which of course are the ma- out of work, pushing more and more people jor components of Commonwealth child-care onto the unemployment queues, thereby cre- expenditure—were substantially simplified ating greater poverty? They also reduced and restructured as part of the new tax sys- their real levels of income. The real value of tem. The number of children and families the minimum wage fell under the Labor using child care also grew. In 1991, there Party, but it has increased for low income were 302,000 children from 196,000 families workers under the Howard government. using child care. This year, there are 700,000 Between 1992 and 1996, the real value of children—remember, there used to be the minimum wage fell by almost five per 302,000—from 500,000 families. That is not cent. Since 1996, under the coalition, it has 200,000 families but 500,000 families. Un- grown by over eight per cent. The Labor der Labor, growth in child care was un- Party pushed it down; the coalition has checked and unsustainable. Most child-care pushed it up. That is what the coalition has centres were simply put in Labor marginal done for low income families and low in- seats to try and hold their seats. Many of come workers in comparison with the Labor those child-care centres have closed and oth- Party. This represents the fruits of sustained ers have opened, but, once again, the misrep- economic growth and a reformed industrial resentation flows on by the Labor Party, in relations system that allows the benefits of that they only talk about those that have been productivity gains to flow on to wages— not closed. They never refer to those that have keeping a brick on people’s heads, not forc- been opened—particularly those that have ing their incomes down. Equally, assistance been opened because there is an area of un- to low income families is important. Pay- met need. This is not about just slamming ments to all families have risen in the past child-care centres into a marginal Labor seat five years. No-one would believe that if they to try and hold the seat or win votes but just listened to Mr Beazley and his band of about making sure that child care is available merry men and women who just go out where it is required. willingly misrepresenting the truth. Equally, in education, the number of The new tax system has improved the po- school students has increased by 105,000 sition of low income working families by since the coalition government came to of- increasing payments for families and reduc- fice—more than a three per cent growth rate. ing their taxation levels. A single income Between 1996 and 2000, the number of vo- family with two children has boosted its real cational education students increased by a income by 15½ per cent between 1995 and massive 402,000 people—a growth rate of 2001. For families using child care, the in- some 30 per cent. There was a continued crease can be even stronger, rising to 22 per strong growth in tertiary education, with an cent or more. Income inequality, as I say, is increase of over 60,000 additional tertiary unchanged. The Labor Party will say that the students between 1996 and 2000, and that gap between the rich and the poor has just represents a 10 per cent growth. We know, of got wider and wider. Some media commen- course, that the Labor Party had absolutely tators have the gall to just slavishly repeat no wish or desire to give people an opportu- the Labor Party claims as if they were true. nity to go into trades, into apprenticeships, The gap has not got wider. and the number of apprenticeships just went down and down. The coalition has given Equally, the Labor Party—Senator Evans, young people who do not necessarily want to in particular—and their acolytes in sections go on to tertiary education a greater opportu- of the media will continue to talk about nity. child-care assistance becoming less afford- Wednesday, 22 August 2001 SENATE 26329

In the few moments that I have left avail- misrepresenting the facts to the electorate. able to me, I want to get on to pension rates, (Time expired) because pension rates is another thing that Social Policy the Labor Party continually misrepresents. Job Network Between 1991 and 1995, under Labor, pen- Senator JACINTA COLLINS (Victoria) sion rates simply kept pace with inflation. As (1.00 p.m.)—My contribution today seeks to I have said in this place so often before, they highlight and reflect on what is now one of kept pace with inflation, but retrospectively the perennial sores of the Howard govern- kept pace with inflation. The pension went ment—that is, the Job Network program. At along, the CPI figures came out and then the this same stage of the last sitting week, I pension was increased to match the CPI fig- concentrated on the poor contribution of the ures. Not so under the coalition. Real pen- Minister for Employment, Workplace Rela- sion rates are now 4½ per cent higher than tions and Small Business, Tony Abbott, to they were in 1996. In 1996, the government industrial relations in Australia, but I think it legislated to ensure that the single pension is also timely to reflect on what was his con- rate never fell below 25 per cent of the male tribution with respect to the Job Network— total average weekly earnings. Good eco- although currently Minister Brough is the nomic management and labour market re- one bearing the weight of those responsi- form have allowed sustained growth in aver- bilities. age earnings since then, and this legislation means pensioners also benefited from this Whilst I am talking about the Job Net- growth. Current rates are $201 per week for work, employment and unemployment, I singles and $335.50 for married couples, and should also reflect on some of the issues that, as I said, is a real increase of 4½ per raised just now by Senator Knowles and per- cent on the rates when Labor was in office. haps add some context to her fairytale. So when we get the pensioners’ federation— Senators should reflect on the fact that, when the mouthpiece for the Labor Party—talking Mr Howard was Treasurer when the coalition about how good the Labor Party is in looking lost government in 1983, both unemploy- after older Australians, it could not be further ment and inflation were in double digits. from the truth. They were dudded continu- Senator Knowles mentioned inflation, and ally by the Labor Party, with pension rates that is very important. Recent commentators being increased only after the CPI. We now on employment in the last week have made have them well ahead of the CPI. the point that the level of employment in The other side of income is interest rates, Australia now, with the current state of eco- because many young people have a home nomic growth, is very poor. The level of em- mortgage and have to pay out huge home ployment is very poor, once you take into mortgages. When the Labor Party were in account the overall state of the economy that office, of course, way back over decades, this government has acknowledged it was interest rates got up to 17 per cent and busi- handed by the Labor government. All of the ness mortgages were in the 20 per cent fundamentals that this government has relied range, and today the current home loan inter- upon were put in place in the 13 years of est rate is 6.8 per cent compared with that Labor. Another reflection that senators peak of 17 per cent in 1989-90. This repre- should have in this debate was, for instance, sents a saving to borrowers of $744 per the point that Senator Cherry made in his month on a loan of $100,000 or $521 on a first speech yesterday: there are four unem- loan of $70,000. That is a clear income ployed for every advertised vacancy in Aus- windfall for people who have mortgages. It tralia. is more money that goes into their pockets Let us also look at another common argu- and it is more money that they can spend on ment by this government, that there has been their children and themselves than Labor has a growth in real wages. This government ever been able to deliver to them. I just hope never talks about the social wage. Senator that the Labor Party will see reason and stop Knowles never made mention of the social wage and the contribution that that has made 26330 SENATE Wednesday, 22 August 2001 to the living standards of the working poor. report from the Office of the Employment She ran a very interesting argument, which Advocate. was that the Labor Party puts forward the Let us have a look, though, at the report myth that there is a growing division be- that the department did produce on the rorts tween the rich and the poor. It is not just the that had been highlighted in budget estimates Labor Party; it is not just what she would call in relation to the Job Network. I have put a the mouthpieces of the Labor Party: in social series of questions on notice, following that policy terms, it is very clear that that grow- report, highlighting the inadequacies and ing division is occurring. There is no myth. seeking further information from the minister Senator Cherry raised yesterday the issue and/or the department. Issues that have not of assisting the working poor when, for in- been answered in this report are things such stance, adjustments are made on the CPI as my first question about other emerging rather than the cost of food. But other ele- practices that have raised concerns during ments of the social wage that need to be the course of the inquiry, as mentioned in the taken into account are the problems that peo- report in paragraph 38, and the fundamental ple are experiencing every day in terms of question which was not addressed of how access to adequate health, education and prevalent such practices are and why the re- child care. Senator Knowles cannot argue port did not address this issue. The report has that the ABS statistics which say that there gone out of its way to diminish any practices has been an increase in the number of work- other than those that were highlighted with ing families and a growth in the numbers of Leonie Green and Associates. For instance, working poor actually mean that there is no further to paragraph 5 in the report, have IPA growth in the division between the rich and Personnel Pty Ltd or Drake Employment the poor. A higher number of working poor Services Pty Ltd been applying strategies does not mean that that gulf is being created. which are, in the words of the report itself, Her statistics do not bolster her argument. ‘inappropriate under ESC2 or which appear But let me get back to the issue that I wanted to meet the letter but not the spirit of ESC2’? to address today. This was not addressed. The question is: if Last sitting week, senators debated a pri- so, why were these not investigated and out- vate member’s bill that I had put forward, a lined, as with the Leonie Green and Associ- bill that called for the establishment of a Job ates matters? Network monitoring authority to oversee the After the report was tabled, further exam- monitoring, evaluation and complaint reso- ples of problems came forward, and in my lution processes within the Job Network pro- questions on notice I asked: when did con- gram. The government senators who spoke cerns regarding Employment Plus in to the bill cried that there was no need for a Whyalla first come to the department’s at- Job Network monitoring authority. They tention? What action was taken? Was Em- took the attitude that close enough is good ployment Plus applying strategies other than enough. As far as they are concerned, the those publicised in the Adelaide Advertiser system is doing it right, it does not need im- on 6 August this year, regarding claims for proving, it does not need greater transpar- people without assistance from Employment ency and it does not need more accountabil- Plus—which are, again in the words of the ity. While the government admit that there report, ‘inappropriate under ESC2 or which are some dubious practices and some petty appear to meet the letter but not the spirit of problems about the place, they say that they ESC2’? There are a number of questions are really not much for everyone to worry coming forward in relation to perhaps some about. But I ask: how do they know? They other practices that are yet to surface. A do not want to look. They do not want a question has been raised as to whether any of wide-ranging inquiry into corruption and these inappropriate strategies have spread rorting in the Job Network—unlike for the throughout regional South Australia as other building industry, which now has a royal agencies seek to compete with this sort of commission arising from a flimsy, gossipy rorting. Wednesday, 22 August 2001 SENATE 26331

Another question which has been high- broke in budget estimates in June, I called lighted from this report is perhaps a good for an investigation. I wanted to know if the example of how Minister Abbott, when he allegations were true with regard to Leonie was the relevant minister, and certainly Dr Green and Associates and how far the sus- Shergold in supporting his minister before pect practices went. I raised the names of estimates, have dealt with these matters. We other businesses; however, these have been raised the issue of IPA in estimates, and the swept away quickly and quietly from any in- practices were cleared as, ‘Quite okay.’ But depth departmental investigation. We still do when we look at the job-matching policy not know how prevalent these practices are. revisions, it appears to say, ‘Actually we’re It is a strange attitude for government going to rule that sort of thing out now be- senators to exhibit. One of the original cause we have decided that it is wrong.’ But guiding principles in establishing the Job this would not be admitted at estimates. Network was to address the structural weak- There were other matters that would not be nesses and inefficiencies inherent in em- admitted by Dr Shergold at estimates—for ployment services arrangements. It is inter- example, the matter of jobs being created for esting to see how quickly the government 15 hours simply so a Job Network provider have become tired of reform, even when ob- could receive a payment for putting someone vious structural problems are pointed out to in a job—the phantom job issue. them. The Job Network monitoring authority I recall the estimate hearings, and I en- that was proposed would go a long way to courage any senator to read the transcript, to addressing structural weaknesses in the Job look at the attempts at justification by the Network program. This is because a moni- department and to compare them now with toring authority is not about dealing only what has been admitted in this report. But, with suspect practices that crop up here and again, that only goes half of the way, because there around the network; rather, it is about the report does not answer many issues. For getting to some root causes of hidden proc- instance, how many Job Network members esses and lack of accountability. It is about have been identified regarding the concerns ongoing and transparent evaluation—some- raised with job splitting? How will job split- thing that in many policy areas this govern- ting be defined? How will we deal with the ment is keen to avoid. But there are conse- definition of whether someone has tried to quences, and the ongoing stories of rorts and split a job to maximise their commercial ad- rip-offs are going to continue until the gov- vantage? How many Job Network members ernment deal with these things in a more ap- have been claiming job-matching outcome propriate policy framework. fees for filling vacancies in their own of- In recent months we have learned a lot fices? Perhaps this is a more fundamental about the operations of the Job Network. question: what was the process for the devel- However, most of this knowledge has come opment of the job-matching policy revisions? not from the Department of Employment, And far more broadly, because job matching Workplace Relations and Small Business or is not the only issue of concern by a long from the minister, but rather from the media shot: what policy settings, code of conduct as it trumpets the latest scandal and problem clauses and ESC2 conditions are to be re- with the network. One journalist went as far viewed as a result of this inquiry? as to produce a lexicon of the various rorts Apart from the job-matching policy revi- and bad practices that could be found in the sions and the announced Productivity Com- Job Network. Some of these words did not mission inquiry—which is very limited with exist prior to the establishment of the Job respect to how, in the immediate sense, we Network. These words came into being be- can rectify these problems—there is little cause there are in the network structural else by way of response from this govern- weaknesses and many instances for people to ment to the very clear and obvious rorting abuse the system. We had the well-known that is occurring within the Job Network. For practices of the phantom jobs, serial place- instance, when the phantom job story first ments and job splitting, which I have already 26332 SENATE Wednesday, 22 August 2001 raised. There were some of the older prob- have been lobbying members of parliament. I lems of creaming and parking, which Senator want to talk about the matter of lobbying of Mackay and others have dealt with for quite parliamentarians by scientists. I have enor- a number of years now. But the new phrase mous respect for the work of the vast major- that I found somewhat amusing, and this one ity of scientists. Every day we benefit from relates to the Whyalla example, was the hi- the outcomes of their endeavours. We should jacking. We can now hijack jobs in the free not forget the real definition of the scientific market of trying to buy and sell job place- method used by science, as stated in the ments. Academic Press Dictionary of Science and On my count, $115,000 in wrongful pay- Technology: ments has been paid back by Job Network Scientific method is an organised approach to providers of late. But who knows what else problem solving that includes collecting data, is out there and who knows even what else formulating a hypothesis and testing it objec- has been paid to date? That is perhaps an- tively, interpreting results and stating conclusions other question I should add to my questions that can later be evaluated independently by oth- ers. on notice. It may tell us how many other ex- amples the minister or the department have The application of the scientific method is succeeded in quickly moving under the mat. used by scientists to arrive at the truth. Gen- But the department simply does not want to erally, their work is very systematic. They look at many of these. employ experimentation to facilitate the in- dependent verification of scientific observa- Unfortunately, much of the mess of the tions and to arrive at their conclusions. They Job Network program was caused by the employ many experimental techniques— former minister for employment, Minister such as statistical tests of significance and Abbott, who allowed his ideology to override double blind trials— designed to minimise commonsense in several areas of the net- the influence of individual bias in research. work, and the department, in seeking to pro- So I was rather surprised to learn of the tect their minister, have developed an attitude methods that the Federation of Australian of conceal, avoid, pretend, avoid, until it is Scientific and Technological Societies used obvious that they have to do something. In yesterday to assist scientists in their the long term I do not think that does protect communications with parliamentarians. their minister, and I think it is a very bad Some lobbyists go about their work in a very slight on Minister Abbott’s career that these professional way. They might say they apply rorts continue to surface. I think the blame similar systematic and rigorous methods as should be sheeted directly home to him. do scientists. By and large, they are a Now that the minister has moved on to reputable group. We all know who they are, bigger and better things, Minister Brough has and there is no need to mention them by been left to clean up this mess. But he ap- name. But whom did the organisation decide pears to be having trouble just being briefed to pick to tutor the scientists in how to by his department about suspect practices in approach lobbyists? None other than the the Job Network, let alone trying to find sub- spokesman for the porn industry. stantial solutions to these issues. The Can- Senator Boswell—Oh, no! berra Times editorial of 26 July put it suc- cinctly with the opening line, ‘The Job Net- Senator HARRADINE—Yes, the work has lurched from one—(Time expired). spokesman of the porn industry, Robbie Swan, or should I say Caroline Sweetly, Scientists: Lobbying of Parliamentarians whichever alias he goes by. A number of the Senator HARRADINE (Tasmania) (1.15 scientists were not very happy with that par- p.m.)—I rise today to speak on a matter of ticular decision of their organisation. The public interest. There have been a number of fact of the matter is that the porn industry scientists around Parliament House in the relies on utilising the big lie technique, last couple of days who have given us the threats of blackmail against politicians and benefit of their knowledge and research and deceitful behaviour governing terms. An ex- Wednesday, 22 August 2001 SENATE 26333 ample of the latter is the use by the porn in- In Appendix 1 to the invitation from the NHMRC dustry of the title ‘Non-violent erotica’ to to State and Territory Health Authorities, the term describe X-rated videos. The nature of those “therapeutic cloning” was used mistakenly in videos was considered by the Joint Select summarising AHEC’s policy. Committee on Video Material in its inquiry The origin of this mis-statement follows: In the into the classification guidelines for films Ethical Guidelines, AHEC reaffirmed and applied and videotapes. That committee received the well-accepted distinction between (a) thera- evidence from social scientists which peutic research and (b) non-therapeutic research. Therapeutic interventions are interventions di- showed that the bulk of X-rated videos en- rected towards the wellbeing of the individual gender a ‘sexually calloused and manipulat- embryo involved and non-therapeutic interven- ive orientation towards women’ and ‘medi- tions are interventions that are not directed to- ates in the mind of the habitual viewer a per- wards the benefit of the individual embryo but ception of women in general as being highly rather towards improving scientific knowledge or promiscuous and available’—hardly technical application. non-violent erotica. Mrs Danna Vale from ...... the House of Representatives said that there The Ethical Guidelines, and in particular the sec- should be health warnings on X-rated videos tion on research on embryos (section 6) and the and mentioned that children who view them list of prohibited/unacceptable practices (section can be sexually traumatised, can turn into 11), rely upon and apply this distinction between dysfunctional adults and sometimes habitual therapeutic and non-therapeutic research. The sexual offenders for the rest of their lives. more-recently-coined term ‘therapeutic cloning’ Robbie Swan of the sex industry—the porn collapses both (a) the distinction between thera- merchants’ spokesman—said that instead of peutic and non-therapeutic research on embryos health warnings, sex movies should carry the and (b) the distinction between destructive and non-destructive experimentation on embryos. The recommendation that, ‘This video could save creation of embryos specifically for research pur- your marriage, could improve your sex life poses, experimentation on those embryos and and could improve your state of mind.’ That their subsequent destruction, etc. all fall under is the big lie, as is the use of the behavioural this term. It was because of the lack of transpar- governing term. ency of the term ‘therapeutic cloning’, because It is not only a problem for the porn in- the term concealed rather than revealed these dustry. My concern also is that the use of ethically-significant differences, that AHEC re- jected its use. AHEC said that, in the matter of behavioural governing terms in some of the cloning and related technologies, the fundamental scientific areas these days is questionable— distinction was between the production by clon- for example, the regular use of the term ing of whole human entities (such as human em- ‘therapeutic cloning’. We have heard that bryos) and the production by cloning of the com- time and time again. Therapeutic cloning is a ponent parts of those entities (such as cells, DNA, term that is used by some of the science etc). AHEC held that, whereas the latter has been technologists who are wanting to clone hu- an accepted part of medical and scientific re- man embryos for the purposes of experi- search for over fifty years, the former should take menting on them, or deriving stem cells from place only in exceptional circumstances . them, to their destruction. They call that So it is clear that the term ‘therapeutic’ re- therapeutic cloning. That is not therapeutic lates to the subject—that is, to the embryo— cloning. The highest body in Australia, the if it is of benefit to the embryo or not. Australian Health Ethics Committee, has Clearly, the use by some of these science stated quite categorically that that is not technologists who want to do therapeutic therapeutic cloning. I think it is important on cloning is quite contrary to the official de- a day like today to put paid to this false con- scription of that term promulgated by the cept of therapeutic cloning. On 15 December Australian Health Ethics Committee, which 2000, the chair of the Australian Health is a statutory committee of the National Ethics Committee, which is a statutory body, Health and Medical Research Council. So in a letter tabled in the Senate on 7 February when anybody hears the phrase ‘therapeutic 2001, said: cloning’ ask them what they mean. Very of- ten, if this is propaganda by those who are 26334 SENATE Wednesday, 22 August 2001 wanting to do cloning for experimentation on pers and magazines, although this in itself is the resultant embryo to its destruction, if it an important provision for most of us. News- comes from that source, it means something agents are often also drycleaning agents, sta- quite different from what the Australian tioners, convenience stores, bookshops, Health Ethics Committee says ought to be community event promoters and, of course, the term’s use. It is a behavioural governing substitute post offices selling stamps and term. That is of concern for a number of ar- envelopes, et cetera, particularly where Aus- eas of endeavour in Australia, not least the tralia Post is not close by. area of endeavour that we are in— politics With particular reference to my last point, and government. We must always be clear on as we witness the disgraceful situation of the terms that we use: that they are not just post office closures unfolding it is clear just behavioural governing terms but describe how important newsagents around this precisely the nature of the being. Therapeutic country truly are. Newsagents do not just cloning which results in the destruction of represent product and service providers to the human embryo clearly is not very thera- local communities; they are a fundamental peutic for that embryo. That of course was component of the local economy as well. the gist of the Australian Health Ethics Newsagents are a generator of income and Committee’s view. wealth for the local community but, more Similarly, there are other areas where importantly, they are job creators, giving some medical scientists are talking about locals, often young people in particular, sta- eliminating disease. Very often that turns out ble employment opportunities with which to to be not eliminating or curing the disease afford a decent standard of living for them- but eliminating the bearer of the disease, the selves and their families. One might find it unborn bearer of the disease. But, coming rather dubious to argue the importance of back to the choice of lobbyist by the Federa- newsagents to a local community in such a tion of Australian Scientific and Technologi- way, but the evidence to support my claim is cal Societies to tell scientists how to go irrefutable. Like post offices and banks, about lobbying parliamentarians, I have to newsagents are part of a town’s pride. When say that, if that is the way they go, I will you take away these essential providers of have to take with a grain of salt what FASTS products and services—when you take away say to us if they follow the big lie technique a community’s local bank or post office or of the porn industry. newsagent—you are effectively taking away Newsagents an element of its pride, not to mention the economic consequences of such an outcome. Senator GIBBS (Queensland) (1.30 A newsagent might employ only one, two or p.m.)—I rise today to speak on a very im- 10 employees in each locality, but consider portant matter relating to newsagents. Recent that in terms of a national employment figure as well as past events have landed thousands and you get a major source of employment of newsagent owners across the country in a and job creation in this country, the loss of very concerning predicament which I would which would be devastating both for indi- like to bring to the attention of the Senate. vidual towns and the nation as a whole. Newsagents undoubtedly perform and pro- vide a vital service in our community. Whilst I dare say that most of us have visited a this is true regardless of whether you live in newsagent in the last week, and many un- the country or the city, the products and doubtedly have some kind of personal rela- services newsagents provide are particularly tionship with the staff who work there. In important in rural and regional centres. light of this, it is worth while taking the time Newsagents are nevertheless a commercial to consider how we would feel if our local operation, but in so many respects we have newsagent were forced to close because the come to depend on newsagents in a way that business was no longer viable. This is not is somewhat similar to the need we have of some frivolous argument but an issue that many government services and support. now faces thousands of newsagents around Newsagents are not just vendors of newspa- Australia. It is a problem that is having a Wednesday, 22 August 2001 SENATE 26335 detrimental impact on my local newsagent must be for a specific purpose. It goes with- and, I am sure, on those of other senators out saying that such a process is extremely present. I am referring, of course, to the im- lengthy and arduous. In addition, the appli- pact of deregulation and the conditions cation carries a significant fee and an brought about by the national competition authorisation will not be granted if the matter policy which newsagents such as my local is in relation to margins and/or territories. one are having to endure. These arrangements have inevitably con- Senator Boswell—Who brought it in? tributed to a grossly inequitable situation Good old Labor Party! whereby small business interests, particularly Senator GIBBS—Just let me finish, those of newsagents, are being restricted Senator, so that I can get to the point here. from effective negotiation with strong and The process of deregulation in this country much more powerful suppliers on a collec- has been a difficult process for many indus- tive basis. This obvious disparity is clearly tries. It is a process that has brought many hampering small business operators due to benefits to the community, but there can be the inherent, weighty commercial disadvan- no doubt as to the hardship it has placed tage and is ultimately leading to a major de- many small businesses and their employees cline in their performance. under. Newsagents are operating in an in- The reality faced within the industry is dustry that is constantly facing new chal- that newsagents, which are owner operated lenges. In addition to the impact of deregu- small businesses, are being forced to accept lation on newsagents, we should not forget less favourable terms with their suppliers. the numerous other factors that are making a This means small mum and dad style busi- newsagent’s survival that little more difficult. ness operations are having to try to negotiate They include: a threat to the ongoing viabil- viable terms on their own with major corpo- ity of home delivery services; a reduction in rate suppliers—without any help from a rep- the number of newspapers and increased resentative body, such as the Queensland concentration of ownership of Australian Newsagents Federation, and without a col- newspapers; increased circulation of free lective bargaining position. This predicament suburban, regional and ethnic newspapers; is obviously precarious and is inevitably the detrimental impact of the GST on com- forcing newsagents, who have been left out mission revenue; increased competitive pres- in the cold, to accept less favourable terms sure from new forms of media, including that may ultimately lead to their demise. Internet and pay TV; and changes to the Given my previous comments on the con- availability of newspapers and magazines, tribution which newsagents make to the which are now readily available in conven- economy, there should be no illusions as to ience stores, supermarkets and service sta- the economic devastation that such a demise tions. would have—not only on the lives of news- However, a new and equally pertinent is- agent operators but on the state of the econ- sue is now facing the industry. The problem omy as well. Luckily, newsagents out there relates to the inability of newsagents to col- around the country are putting up a fight. lectively negotiate terms with their suppliers They do not want to close any more than we under the Trade Practices Act. I should point would want them to, but some of the tactics out that this prohibition applies not only to that suppliers are using against newsagent newsagents but also to a number of indus- operators are nevertheless mean and tough tries dominated by small players. Under the and could send many to the wall. current regime, the Trade Practices Act pro- One ongoing example raised with me per- hibits collective negotiation and secondary sonally by my local newsagent in Queen- boycotts unless authorisations are granted by sland involved a major newspaper publisher the Australian Competition and Consumer using very heavy-handed tactics to gain bet- Commission. The problem is, however, that ter product positioning in the shop at great the process of gaining an authorisation is expense to individual newsagents. Unfortu- expensive, confined by time limitations and nately, when newsagent operators question 26336 SENATE Wednesday, 22 August 2001 this proposal, given the considerable finan- They are widely distributed across all federal cial burden, they are threatened with a sub- electorates—including the marginal electorates stantial cut to their commissions. Of course, that decide the outcome of each contest. there are undoubtedly many more examples In conclusion, the request that newsagents just like this one which thousands of news- like my local one have asked for does not agents right around the country are having to seem to be an overly complex one. As I see accept. Unfortunately, either because they it, they are simply asking for fairer treatment are too afraid to raise the matter publicly for under the law and, in particular, the basic and fear of reprisal or due to a lack of under- fundamental right to collective bargaining standing with regard to their rights, so many and negotiation. The government undoubt- newsagent operators are agreeing to unfair edly have an ideological opposition to any terms with their suppliers. type of collective bargaining, but their policy The obvious solution would be to give on newsagents is nothing short of mean and newsagents the same collective bargaining tricky. Newsagents are not powerful interest rights which other industries are entitled to. groups; they are not even unions. We are It hardly seems fair and equitable that news- talking about small businesses that are oper- agents are not entitled to be represented on a ated by mums and dads in our local towns collective scale while major corporate retail- and suburbs. They are a vital part of the eco- ers such as supermarkets, service stations nomic and social fabric in our society and and franchises are entitled to negotiate are asking for nothing more than other busi- agreements and arrangements with their sup- nesses in industries like supermarkets and pliers as a group. It is worth while noting service stations—all powerful rivals of also that a similar situation has evolved in newsagents—are entitled to and expect. other countries, such as the USA and the Newsagents are being left without a voice United Kingdom. The disparity in negotia- and without much power. They do not de- tion powers for many small businesses has serve the treatment they are currently being had significant economic and social conse- subjected to, and they should be entitled to quences in local communities, and the gov- voice their concerns collectively. I ask the ernments there are now taking steps to ad- Howard government to finally address these dress the issue. However, it seems that news- concerns, and I will continue to push for agents and other small business groups are better and fairer outcomes for newsagents not being granted the same level of sympathy until such time as this matter is resolved. or even consideration of the matter by the Volunteering federal government here in Australia. Senator BARTLETT (Queensland) (1.44 The Queensland Newsagents Federation p.m.)—I would like to speak briefly on the has endeavoured on numerous occasions to important topic of volunteering and the role bring this matter to the attention of the gov- that volunteers play in keeping the fabric of ernment over a long period, but to this day it the Australian community together. I will has largely fallen on deaf ears. Over the start by paying tribute to a particular group course of this year, the QNF has written three of volunteers whom I met with last night letters to the Minister for Financial Services who were telephone counsellors with Life- and Regulation, Mr Hockey, and a letter to line. Most Australians would be aware of the the Prime Minister, Mr Howard. Responses work that Lifeline does in a whole range of to these letters have been either non-existent areas. One of its best-known areas of activity or unsatisfactory, and it is clear that this issue is having people available at the other end of has the potential to become an important the phone for people in immediate crisis, election issue. As noted in the Australian people who are in desperate need of some- Financial Review on 20 July this year: body to talk to. What may not be known by Newsagents are always a force to be reckoned many Australians is that a vast chunk of that with in Australian politics. They are an iconic telephone counselling work is done by vol- small business delivering a service to millions of unteers, who sacrifice an enormous amount Australians, so they tend to attract public support. of time just in being trained to be able to per- Wednesday, 22 August 2001 SENATE 26337 form such an important task and then, of signal that they believe that it is important to course, in being there on the other end of the contribute to make society a better place and telephone to provide assistance, counselling to assist others to improve their role in the and support. community. It is important to give extra recognition to The concept of maximising the opportu- the role of such volunteers as these, not just nity for people to participate to their full po- with nice words passing on thanks to peo- tential is something that in many ways was a ple—although that, of course, is important— thread running through the discussion and but through recognition of the incredibly community debate in relation to welfare re- valuable role that such people as these play. form over the past 12 to 18 months. Part of Sometimes the value of the work of volun- the focus of the McClure report that was teers is calculated by putting a dollar value brought down earlier this year was to look at per hour on the amount of time that people ways to maximise people’s opportunities and work and then saying that that is a contribu- ability to participate. Unfortunately, we have tion in dollar value to the community. That is seen a heavy overreliance on the part of the a valid approach which, whenever that is government on the principle of mutual obli- done, highlights that voluntary work contrib- gation and putting extra obligations and extra utes billions to the Australian community burdens on job seekers, the unemployed and to the Australian economy. It clearly people in the community—rather than giving highlights that, without the contribution of extra emphasis where it quite clearly is re- volunteers—if that work were to be with- quired, to providing extra encouragement drawn—the economic and social impacts and assistance to people. That is much would be immense. broader than just providing individual assis- It is important to value even more strongly tance directly from government services to than that the role of people such as these individual people, such as the unemployed: it telephone counsellors, because you can also is also recognising the value of, and provid- look at the value in terms of the benefit pro- ing the incentives and the structural support vided each time they save a life, prevent for, volunteers and community organisations, family breakdown or a crisis from develop- more broadly, in their work of assisting oth- ing into a long-term chronic problem. That ers in the community to maximise their full saves enormous amounts, some of them not potential. able to be measured in dollars and cents, in In making that point, I would like to move terms of benefit to the community. Really, on to the broader issue of the role of unem- the work that volunteers such as these are ployed people themselves as volunteers and doing is sending a message that they believe the contribution that they make, which is not that every person is important, every person only often not valued but also directly un- has value and every person should be as- dermined by the excessive reliance on mu- sisted to contribute as fully as possible to the tual obligation that we have seen in recent Australian community and to realise their times. Without the efforts of the three million full potential. In many ways, providing sim- Australians who volunteer each year, com- ple but crucial services such as telephone munity organisations would be in crisis, gov- counselling is sending that message, making ernments could not fund the gaps, and social that statement and working in support of services and the economy would collapse. maximising the contribution that everybody Yet it is an irony that up to 50 per cent of all can make to the community. Again, that volunteers are people who are, at the same highlights that the value of the contribution time, seeking paid work and would be seen of volunteers rests on much more than just as unemployed and in many ways not pro- putting a dollar value on the hours that they ductive members of the community. But of work. In many ways, it is a stronger state- course these volunteers are not unemployed; ment than is made by all of us who do com- they are just unpaid. munity work for a wage, because people who The approach through the International are doing it voluntarily are giving a stronger Year of Volunteers needs to more clearly 26338 SENATE Wednesday, 22 August 2001 recognise their massive contribution and to were unsure of the difference between vol- specifically recognise the massive contribu- untary work and community service orders tion which unemployed people make to the imposed on offenders by criminal courts. unpaid work force. A key objective of the Punitive schemes such as Work for the Dole, International Year of Volunteers is working enforced ‘volunteering’ and one-sided mu- to break down stereotypes and build con- tual obligation have further blurred the pub- structive images, and it presents an opportu- lic perception of volunteering by unem- nity to publicly acknowledge the efforts of ployed people. Job seekers who take up vol- job seekers, of unemployed people, who are untary work often receive little or no gov- dogged by their own unique stereotypes. The ernment assistance with transport costs and evidence suggests that employers are influ- few organisations are able to fully reimburse enced by the negative images portrayed by volunteers’ fares. In my own state of Queen- some in the community—including, unfortu- sland we have the unfortunate situation—and nately, some ministers in this government. I think a unique situation in Australia— Seven out of 10 jobs are taken by people where job seekers are not granted transport already in the work force, and only one job concessions. All other state governments pro- in 10 goes to a long-term unemployed per- vide unemployed people with public trans- son. Who would want to risk hiring a ‘dole port concessions, but in Queensland job bludger’, a ‘job snob’ or a ‘welfare cheat’, as seekers pay full fares on buses, ferries and they are so readily portrayed to be by some trains. That not only makes it harder and in this government, when there are plenty of more expensive for job seekers when using applicants who have so-called proved them- public transport to look for work, but it also selves by being in the paid work force—thus makes it more expensive for them as volun- ignoring the way many volunteers who are teers when using public transport to get unpaid prove themselves in that area of around and provide assistance to the com- work? munity. Travel costs can add up quite quickly Job seekers’ voluntary work is not prop- and, when you are receiving levels of pay- erly recognised. Publicly available informa- ment that are already well below the poverty tion indicates that unemployed people con- line, having extra transportation costs put on tribute as much as 900 million unpaid work top of that obviously makes it much more hours each year. If you value that at just $15 difficult, whether job hunting or contributing an hour, that indicates a contribution of as a volunteer. In addition, much of the un- $13½ billion to the community and to the paid work of job seekers is performed in ar- economy, which well and truly outstrips the eas such as child care, aged care, state amount paid in Newstart payments of around schools, community organisations—many $8 billion each year. Yet unfortunately, for areas that have suffered government funding many years now, successive statements by a cuts and staff reductions— and the voluntary range of politicians have vilified and stigma- work in many cases is plugging those gaps. tised all unemployed people. As a result, I would like to make special mention of an some public opinion regards unemployed organisation that is based in my own state of people as undeserving of support which costs Queensland, the Unemployed Persons Advo- money to provide. I think that principle is cacy organisation. It is a genuine non-gov- demonstrated by the growing gap in the level ernment organisation that seeks to highlight of adequate assistance provided to unem- the contribution and the value of unem- ployed people—something that the Demo- ployed people, both in the work that they crats have been trying to highlight in recent perform as volunteers and in the extra con- weeks—and the growing degree of poverty tribution they are able to make; and it also that is occurring as a consequence of these highlights some of the many barriers they growing inadequacies in the social welfare have to being able to get back into the paid system. work force. This organisation maintains its As far as back as 1992, a survey by Vol- impartiality and independence by not seeking unteering SA revealed that some Australians funding from governments, yet it continues to make extensive efforts to seek recognition Wednesday, 22 August 2001 SENATE 26339 for unemployed people— and I think it Senator CHRIS EVANS—We might would be desirable if there were more atten- have to pursue this question of breaching the tion given to the work of organisations such minister. Is the minister aware that a rally of as Unemployed Persons Advocacy in high- families and aged care nurses today in Mel- lighting the reality of life for unemployed bourne called on the government to fix the people and for volunteers. aged care crisis? Doesn’t this rally just add to It is worth noting a quote from the Prime the chorus of voices now calling for change Minister, Mr Howard, made in May last year, in aged care, with residents and families, in Brisbane, when he was acknowledging the nurses, providers and doctors all identifying efforts of the previous Queensland Liberal problems in your system? Does the govern- Party President. Mr Howard said, ‘It’s never ment dismiss the genuine concerns raised by an easy job; it’s a thankless job as an unpaid the families of nursing home residents and volunteer.’ Being the President of the Liberal nurses at today’s rally, or will the Minister Party in Queensland these days certainly for Aged Care finally admit to the problems would be a thankless job. But I think that in aged care, which include a shortage of statement also notes that, in many cases, be- qualified staff, the underfunding of care and ing an unpaid volunteer in a range of activi- a severe shortage of aged care beds? ties is a thankless job, and it is appropriate Senator VANSTONE—I thank Senator particularly to acknowledge that extra diffi- Evans for the question. Senator, I am un- culties do exist with the voluntary work that aware of the rally that you are talking about. is provided by job seekers and unemployed I am not sure whether you said it was held in people. Melbourne today or yesterday. I do not ac- It is important to give extra value to the cept the proposition that you put in your work of volunteers. In many cases, a lot of question that there is a crisis. What I do focus is put on the entitlements and wage know about aged care is that we have a much rates of parliamentarians such as ourselves, better situation now than when we first came and I think it is much more difficult to de- to government. fend our allowances and entitlements if there Senator Chris Evans—What is the proof is inadequate support and assistance being for that? provided to others in the community who Senator VANSTONE—Madam Presi- perform valuable work. The Democrats urge dent, the senator has asked a question. I am a much more serious consideration of the trying to answer it; I am about 20 seconds proposals and suggestions put forward to into it and he has got other questions. The provide greater recognition of the unpaid proof for that is the tremendous job that has voluntary work force who are job seekers. been done in the provision of places. I have Some of those small measures would provide canvassed in this place on numerous occa- these people with extra support and assis- sions that when we left office the benchmark tance to maximise their potential as indi- of how many beds per thousand should be viduals; those measures would also help to available was not being met by your gov- acknowledge the great contribution they ernment and has significantly improved un- make more broadly to society, the commu- der this government. I will give you one nity and the economy. piece of credit, Senator: I do understand that QUESTIONS WITHOUT NOTICE in a small way the previous government tried Aged Care: Rally in Melbourne to develop some packages that would allow elderly people who would prefer to live in Senator CHRIS EVANS (2.00 p.m.)—My their home but could not really look after question is directed to Senator Vanstone, themselves without any extra assistance to representing the Minister for Aged Care. I do so. We have taken that program, which understand she is again not here yet. Here was very small under your government, and she is. have had the opportunity to expand it, and The PRESIDENT—Senator Evans, your older Australians have really taken to it. It question? was a good idea and I assume that it has sup- 26340 SENATE Wednesday, 22 August 2001 port on all sides. If you provide elderly Aus- Australians receive proper care? Weren’t the tralians with a few extra services, quite often recent reports on the Templestowe Private they can stay in their homes a lot longer. Nursing Home, where residents were left in I come to the point that you make about substandard care for at least a year while the supply of good quality staff for nursing your system allegedly monitored the care, homes, which is of course an important is- yet another example of how the Howard sue. But it is not an issue which is entirely— government’s system has failed to protect in fact, not centrally—the responsibility of residents? Won’t you admit that those fail- the Commonwealth government. Nursing is ures occur, and why won’t you seek to ad- very much a state government matter. I think dress that? Why do you say that everybody the aged care industry is in the same position else bar you is wrong, that there is no aged as a number of health care sectors. They care crisis? Providers, nurses, residents and have to face a national shortage of qualified families all say that there is a problem, but staff. Aged care employers do have greater you are continually in denial. Why won’t you flexibility to deal with the work force issues admit it and thereby start to address it? as a consequence of changes that this gov- Senator VANSTONE—Senator, I hope, ernment has made. The industry does need to before the week is out, to assist you with take advantage of those opportunities. I do focusing your mind on who is in denial in understand, as well, that a nurse returners some areas. It might be enlightening for you consultancy is being undertaken, which will but we will come to that another day. You seek to identify the number of nurses who raise the issue of Templestowe. I remind you have left nursing and why qualified nurses of the appalling record your government had are working in professions other than nursing in keeping any standards at all in the aged and to develop some strategies to in particu- care area. You had an appalling record. lar encourage nurses to return to the aged Senator Chris Evans—You keep saying care sector because, while there might be a it; it is not true. nursing shortage overall, there is a particular one in aged care. Mrs Bishop has introduced Senator VANSTONE—I thank you for at the Minister for Aged Care awards for ex- least recognising that just because you say cellence, which recognise and reward the something does not mean it is true, because pursuit of a culture of professional excel- that is certainly true in your case and that of lence in the aged care industry—and I think your colleagues. We have introduced a sys- that it is very important to recognise the tem which ensures much greater protection, work that can be done. There are some other and of course when you have the appropriate points that could be made, but generally, as I checks you will find problems. So we intend say, I do not accept your assertion that there to do. is a crisis. The aged care sector is in much Health: Public System better condition now than it was in when we Senator KNOWLES (2.07 p.m.)—My came to government. There is a problem question is to the Leader of the Government with the supply of nurses to aged care but it in the Senate, Senator Hill. Will the minister is not one you can blame this government please inform the Senate how the Howard for. government’s responsible management of the Senator CHRIS EVANS—Madam Presi- economy has allowed it to invest record dent, I ask a supplementary question. I thank amounts of funding for public hospitals? Is the minister for her answer. The minister the minister also aware of any disgraceful, starts by saying that there is not a crisis and politically motivated and dishonest claims then describes some of the symptoms and that have been made that emergency patients blames them on the former Labor admini- are being turned away from public hospitals stration. Isn’t it a fact that the Howard gov- in my home state of Western Australia? Can ernment’s reforms of 1997—your reforms the minister inform the Senate of the truth of which you said were going to fix the aged this disgraceful matter? care system—have failed to ensure older Wednesday, 22 August 2001 SENATE 26341

Senator HILL—This government is state of public health, he invented this story proud of the fact that it has contributed rec- about his family. ord funding to public hospitals in Austra- Opposition senators interjecting— lia—some $31.7 billion. Not only have we made record funding available to public The PRESIDENT—Order! health in this country but we have taken Senator HILL—When he was caught pressure off the private health system which, out, what did he say? He said that he did not as we all recall, was in a parlous state when say it in public; he said that he had said it to Labor went out of government. The flow of caucus. So he misled the caucus and he was people out of private health care at that time not trying to mislead the public. But what he was a national disgrace. forgot was that he has spokespersons who go As I said, over the life of the current Aus- out and brief on the caucus. Senator Sue tralian health care agreement, Common- West and Senator George Campbell go out wealth funding for the public health system and brief the story to the public. Further- will total $31.7 billion. This is an increase of more, Mr Beazley had his spokesperson, 28 per cent in real terms on the last agree- who is Jenny Macklin, go on the Graham ment negotiated by Labor in 1993. It is good Richardson show. What did she say? ‘When news for the states and it is good news for Kim told us that story today in caucus every- Australian families. For example, in Western one gasped because they really don’t imagine Australia, Commonwealth grants for hospi- that people will be turned away from emer- tals this year will increase by 10 per cent to a gency.’ They were not turned away; it was total of $644 million. Remember that when invented. It was a grubby political trick. we came into government Labor had left us Furthermore, when he said he did not say it with a $10 billion budget deficit. In the last in public, he forgot the fact that he did say it five years $80 billion of debt has been run at a public meeting at Merimbula last month. up. We have demonstrated that we have been Untruths are a poor alternative to the devel- able to balance the books and, at the same opment of good quality policy. time, invest more in critically important Senator Cook—You are lying. public services such as health and hospitals. The PRESIDENT—Order! Senator The reality is that health services for Aus- Cook, withdraw that remark. tralians have been given a high priority by Senator Cook—Out of deference to you, the Howard government. But Labor, of Madam President, I will withdraw the word course, still wants to run a grubby scare ‘lying’, although he is lying. campaign because it is easier to do that than The PRESIDENT—Senator Cook, with- to develop alternative policies. Yesterday, the draw that allegation. Leader of the Opposition, Mr Beazley, said that a member of his family had been denied Senator Cook—I will withdraw the word emergency treatment at a public hospital in ‘lying’, although he is lying. Perth and was forced to go to a private hos- The PRESIDENT—Order! Senator pital. That was not true. The hospital said Cook. that it was not true and the AMA said that it Senator Cook—I withdraw the word ‘ly- was not true. ing’. Honourable senators interjecting— The PRESIDENT—Thank you. The PRESIDENT—Order! Senators in Senator HILL—It is hard to understand the chamber are shouting. They know they the sensitivity. It seems that Labor say that it are behaving in a disorderly fashion. There is is okay for them to have been misled but that an appropriate time to debate the minister’s they do not believe the public should be answer. misled. Senator HILL—In order to attempt to Opposition senators interjecting— illustrate what Mr Beazley said was the poor The PRESIDENT—Order! If Labor senators want to debate this matter, there is 26342 SENATE Wednesday, 22 August 2001 an appropriate time to do so. Shouting con- and he certainly does not deserve to be con- sistently is disorderly. sidered as an alternative Prime Minister. Senator HILL—This is important, be- Motor Vehicle Industry: Free Trade cause this man aspires to be the alternative Agreement Prime Minister of this country. Senator SCHACHT (2.15 p.m.)—My Senator Cook—And you have lied to us. question is to Senator Minchin, the Minister Senator HILL—He cannot tell the truth for Industry, Science and Resources. Can the to his caucus and he cannot tell the truth to minister confirm that modelling work com- the public. missioned by his own government indicates that Mr Howard’s proposed free trade The PRESIDENT—Senator Hill, resume agreement with the United States would lead your seat. to (1) a reduction in both overall output and Senator Cook—Madam President, I rise domestic market share for the Australian on a point of order. If someone lies in this motor vehicle industry, (2) an expansion of chamber, can we say that they are lying? nearly 50 per cent in Australian imports of The PRESIDENT—You know the rules, US motor vehicles and (3) trade diversion you know the circumstances and you also from our trading partner Japan to the United know the appropriate time to deal with these States of nearly $350 million? In view of issues. There is no point of order. this, will the government come clean with Senator HILL—Perhaps Senator West the Australian car industry on the impact of and Senator George Campbell will make a an FTA before Mr Howard makes his visit to public explanation after this debate to bring the United States of America? the truth to the public in this instance. The Senator MINCHIN—It is a bit rich for point is that the Leader of the Opposition the Labor opposition now to come crawling lied to the public. (Time expired) out of a hole and pretend to be the great Honourable senators interjecting— champions of the Australian car industry, having been the ones that were totally op- The PRESIDENT—The Senate will posed to the removal of the most insidious come to order and we will proceed with tax that this industry operated under, Labor’s question time. wholesale sales tax, under which the car in- Senator KNOWLES—Madam President, dustry paid one-quarter of the federal indi- I ask a supplementary question. I ask the rect tax paid in this country. We are the ones Leader of the Government in the Senate: will who removed that, despite the opposition he please provide further details to the Sen- from these clowns opposite. So it is a bit late ate and to the Australian people to reassure for them to come now and pretend to be the them that such a disgraceful, dishonest claim champions of the Australian car industry. about the state of public hospital emergency They have no credibility on that. The car rooms in Western Australia is not true? industry has performed outstandingly under Senator HILL—I use this supplementary our government. We are great champions of question to respond to Senator Cook. Mr this industry and under us their export per- Kim Beazley at his doorstop said today: formance has been stunning as well as their ... this is the first time I’ve said anything about domestic performance, their record in sales. this publicly ... When it comes to the free trade agree- Not that it is not the truth; he said that it is ment, which is being handled by Mark Vaile, the first time he has said anything about it the Minister for Trade, we will take a very publicly. That in itself was untrue. So the hard-headed approach. We have said in prin- whole story about his daughter was a fabri- ciple that it is in the long-term interests of cation. His claim that he had never said it this nation to reach a free trade agreement publicly was a fabrication. He does not de- with the United States, but we are at the very serve the office of Leader of the Opposition early stage of that process. Obviously, there would have to be very detailed and hard- headed negotiations in relation to any par- Wednesday, 22 August 2001 SENATE 26343 ticular aspects of that proposed agreement Senator KEMP—Thank you to Senator that would have industry impacts in Austra- Crane for that very important question. The lia. One of the things that I, as industry min- benefits of responsible economic policy ister, would be most concerned about would speak for themselves. Since this government be to ensure that there were no adverse im- came into office the level of interest rates has pacts for the Australian automotive industry. plummeted, real wages have grown, which is It is a fact that, in relation to any proposed important, taxes have been cut and more than free trade agreement with the United States, 800,000 new jobs have been created. And, as we have to look very carefully at the 15 per the Treasurer pointed out today, a consensus cent tariff that this industry needs for the of forecasts in the private sector suggest that next five years, and I will certainly be right in 2002 we will be growing faster than at the forefront of ensuring that any such Europe, Japan and America. This is an ex- agreement does not impact adversely on the tremely good record. When you contrast this great Australian car industry. record with the previous government, when Senator SCHACHT—Madam President, we were first elected in 1996 the budget was I ask a supplementary question. Minister, in deficit to the tune of $10 billion. This you did not answer the question whether you came as a shock to the country and, I might can confirm that there has been modelling say, as a shock to the backbench of the Labor work done in your own department about the Party, because Mr Beazley, Senator Cook impact on the car industry. In particular, as and others had been running around assuring part of that modelling work or as a result of the country that the budget was in surplus the modelling work that has now been com- when in fact the budget was in deficit. pleted, have you consulted with Toyota, Mit- Senator Hill in his response to a question subishi and General Motors Holden about today pointed out that this is not the first the results of this modelling work? time that Mr Beazley has misled the public. Senator MINCHIN—I cannot confirm He was caught out when the Labor Party that. I have not had discussions with them went into the 1993 election hiding their tax about that modelling. I have had discussions plans. When they got into government they with those companies about the potential increased corporate taxes, they jacked up the consequences of a free trade agreement with petrol excise and they slugged everyone— the United States. As I say, while in principle man, woman and child—with the increased we strongly support the prospect of such an wholesale sales tax rates. Then Mr Beazley agreement, naturally we would have to take had the gall to stand up in parliament after very careful consideration of the impacts on 1993 and claim that Labor was able to get Australian industry and, as far as I am con- away with his dishonest plans because the cerned, we will not agree to anything that Liberal Party did not ask the right questions. would be damaging to the Australian auto- That is why we are pressing Labor every day mobile industry. It is critical. Having done so to provide us with their real plans. much on our part to build up a great Austra- Mr Beazley also claimed that he was the lian industry, a great export industry for this minister who invented competition. Rather country, we are not going to do anything to like Mr Gore, who said that he invented the damage it. Internet, Mr Beazley apparently claimed that Economy: Policies he was the man who invented competition. But what he has invented of course are new Senator CRANE (2.19 p.m.)—My ques- low standards in public life. What he has tion is to the Assistant Treasurer. Will the done today and what he has done previously minister inform the Senate of the benefits is demonstrate a pattern of behaviour which delivered to the Australian community by the has shown itself to be quite careless of the coalition government’s responsible manage- truth and quite careless of the facts. Take ment of the economy? Is the minister aware roll-back, for example, which the Labor of any alternative policies? Party are now apparently prevented from talking about: they have rolled back on roll- 26344 SENATE Wednesday, 22 August 2001 back. I have challenged the Labor Party day a seminar and I said a whole bunch of things. after day to stand up after question time and I told the government the way to go.’ Of debate roll-back, and every time after ques- course, I then wrote to him and said, ‘Just tion time Senator Cook, Senator Sherry and one small problem, sport: we weren’t in gov- Senator Conroy run out of the chamber be- ernment in 1995, and I organised that semi- cause they have been told under no circum- nar and you were nowhere to be seen. In fact, stances are they to stand up and debate roll- I had not heard of you until a couple of years back. ago when you tried to make a name for your- Telecommunications: Industry self by making these grand, sweeping state- Development ments.’ And what did I get back from him? I got back a pathetic little email saying, ‘You Senator MARK BISHOP (2.23 p.m.)— should understand that, although I don’t have My question is to the Minister for Communi- any formal qualifications, I’m very interested cations, Information Technology and the in telecommunications. I take a keen interest Arts, Senator Alston. Is the minister aware of in the subject and I’ll continue to do so.’ So the latest telecommunications industry report when I read something that just makes a which was referred to in yesterday’s Age in general, sweeping statement about how pa- an article titled ‘Alston the weakest link’. thetic competition is in this country, without What is the minister’s response to the re- suggesting what alternative approaches port’s findings that he is to blame for the lack ought to be adopted and what in fact ought to of effective competition in the Australian happen or without commenting on whether telecommunications industry and, as the re- we were wrong in opening up the market in port states: 1997— because this is a person who claimed He not only deserves the full blame for the totally that we should have done it earlier, not flawed deregulation process that has been con- later—it is rather hard to take it seriously. ceived and implemented by him; on top of that, he failed to stimulate new developments in the Senator MARK BISHOP—Madam Pre- market, such as digital TV and datacasting. sident, I ask a supplementary question. I Senator ALSTON—I did read that. It must say that I was quite surprised at that was not in the comedy pages, but that is response. Is the minister seriously trying to probably because it was more in the category suggest that he has achieved effective com- of tragedy. It was written by someone who petition in the telecommunications industry, masquerades as a serious commentator— success in the deregulation process and stimulation of new developments in the mar- Senator Conroy—Goodbye! ket, such as digital TV and datacasting? Senator Faulkner—Come in spinner! Senator ALSTON—It took me a long Senator ALSTON—You asked me for time to explain to Senator Bishop how my response. You want to know my re- slowly digital television is moving around sponse? If you really want to know his the world. In fact, it is very dependent on views—if you think he has got anything se- interactivity, which has not really emerged to rious to say—you can pay $1,000 or so to date. There is one country in the world that find out. If you really think there is any sub- has digital television of any significance, and stance to him, you cannot find out unless you that is the UK, where it is a pay TV model. pay big money up front. So what you get is a We are talking about terrestrial free to air, so teaser and all sorts of sprays around the the UK is not any point of comparison for us. world: ‘What a shocking performance we’ve The US are, although they cannot make up got,’ ‘Everyone’s going broke,’ ‘Every com- their mind whether they are HD or— pany will be down the drain,’ ‘The place is a Opposition senators interjecting— complete mess,’ ‘I warned the czar,’ and all that sort of stuff. The PRESIDENT—Order! There is a se- ries of senators on my left shouting. They are I think this bloke might have given an in- behaving in a disorderly fashion. terview in which he said something like, ‘I warned this minister back in 1995. I got up at Wednesday, 22 August 2001 SENATE 26345

Senator ALSTON—I suppose what is government has purposely set the bar high in more important is whether Senator Bishop is this area and agencies are required to meet really flagging that the opposition are op- this standard. This report states that 69 per posed to the competitive regime we intro- cent of government agencies display on their duced in 1997—whether they think that web sites a privacy statement, and we want somehow it should have gone further at the to see that percentage increased. time, because I do not ever remember that I have been advised that since the results sort of discussion occurring. I certainly have of the survey were made known to agencies, not had any concerns expressed to me—there about two weeks ago, many of those agen- have been comments of welcome—about the cies have taken steps to ensure compliance. I fact that we are about to introduce another understand that the Privacy Commissioner is set of pro-competitive initiatives. We intro- working with the National Office for the In- duced some in 1999. I cannot remember formation Economy to assist those few agen- whether you supported them. I hope that you cies experiencing problems to achieve full will be supporting this round in the next few compliance as soon as possible. To back this weeks. (Time expired) up, the Privacy Commissioner has also indi- Privacy Commission Guidelines: cated that if this survey were conducted to- Commonwealth Agencies day, he would expect the results to be quite Senator STOTT DESPOJA (2.28 different. The report, I understand, was con- p.m.)—My question is addressed to the ducted between May and July this year, and Minister representing the Attorney-General. the government is of the view that, since Is the minister aware that a recent audit by July, there have been great improvements in the Privacy Commissioner revealed that this area. However, we are still working to ‘nearly one-third of Commonwealth web ensure that the results are in accordance with sites still fail to meet the baseline require- our expectations. I have been advised by my ment of displaying a privacy statement’? colleague Senator Alston that, of the agen- This is despite a direction to Commonwealth cies reported in the March 2001 government agencies that they comply with the Privacy online survey conducted by NOIE, 97 per Commission guidelines by 1 June last year. cent indicated that they expected to meet all Does the minister agree with the comments privacy guidelines by December 2001. That by the Privacy Commissioner that what is is, 97 per cent of those agencies will be being asked of agencies is not unreasonable meeting what is a stringent requirement in or difficult; it is simply a matter of their relation to privacy by the end of this year. paying more attention to the privacy impli- We have taken steps, as a government, in cations of their web site than they have? I relation to privacy, not only in the govern- ask the minister: why are government agen- ment sector but also in the private sector, and cies still not meeting these basic require- you have seen that with the draft guidelines ments in relation to privacy and what is the being drafted by the Privacy Commissioner. government doing to ensure that Common- We are taking steps to address concerns in wealth agencies comply? relation to privacy which have been ex- Senator ELLISON—I am aware of the pressed in the community, and this has been comments of the Privacy Commissioner in across a whole range of activities in the this regard, and the government is somewhat Australian community. This government is disappointed at those comments in relation to totally committed to seeing that government this audit. As more and more information agencies and departments meet those obliga- becomes available online and as Australians tions in relation to privacy, and we have been increasingly deal with government online, it doing work in relation to this. If that report is critical that people using online services were conducted right now, there would be a are aware of what personal information may different result—a very much more encour- be retained and of how it will be used. While aging result. I agree that the results of the federal Privacy Senator STOTT DESPOJA—Madam Commissioner’s audit are disappointing, the President, I ask a supplementary question. I 26346 SENATE Wednesday, 22 August 2001 thank the minister for his answer and thank When is the government planning to have him for conceding that the government another go at it? shares the Privacy Commissioner’s disap- Senator KEMP—Is that the best question pointment. I ask the minister whether he is that can be given to Senator Shayne Mur- also aware—and I acknowledge the 69 per phy? I know that you do not write your own cent figure and the government’s disap- questions, Senator Murphy, but you should pointment with that—that the same audit go to the questions committee and demand demonstrated that less than half of the web that they lift their game, to be quite frank. It sites that collect personal information over is a pathetic question. This government has the Internet actually complied with the re- brought about massive tax reform to create, quirement that they indicate what the infor- among other things, a more competitive tax mation was being collected for and to whom system. We have lowered the company tax it would be provided. The minister says that rate. We have had the largest income tax cuts agencies are being encouraged to meet the in Australian history. We have abolished a deadline as soon as possible. Could he ex- raft of taxes and we have brought in the plain to the chamber what is ‘as soon as pos- goods and services tax, which has brought sible’? Is it the December date to which he about a major change in the economy to the referred? Obviously, that is when the legisla- benefit of Australian families and Australian tion comes into effect. Could he outline any businesses. other progress to the chamber? The truth of the matter is that the success Senator ELLISON—As Senator Stott of our policy is demonstrated by the attitude Despoja indicated, the legislation does come of the Australian Labor Party. The Australian into effect by December this year, and I have Labor Party said a couple of years ago that indicated that we fully expect there to be they had a central policy for the next election compliance to the tune of 97 per cent by that called ‘roll-back’. They conceded that they time. That is the figure you need to look at. were going to keep the new tax system, even The report by the Privacy Commissioner though they complained all the way through indicated a figure that was recorded some the Senate debates that this could not be months ago. Since then, we have moved on fixed and that it was not a fair system. But, at and we have increased the performance of the end of the day, the Labor Party, in a burst these agencies and departments in relation to of hypocrisy which beggars belief, have said privacy. that they would keep the GST—but then they Senator McKiernan interjecting— said that they would roll it back. We have Senator ELLISON—Senator McKiernan been waiting almost two years for the Labor does not want to hear this, of course, because Party to tell us what roll-back is. The shadow it is good news. It is good news and good Treasurer, Mr Crean, indicated that it was work being done by the government in rela- their central policy as they go towards the tion to privacy—something which he is not next election. We now read that even a Labor concerned about. frontbencher is fed up with the performances and the whining of Mr Simon Crean. On this Goods and Services Tax: Modifications side of the chamber we have our suspicions; Senator MURPHY (2.34 p.m.)—My we think it was probably Senator Conroy question is to the Assistant Treasurer, Sena- who fingered Mr Simon Crean. We say that tor Kemp. Is the Assistant Treasurer aware because Senator Conroy has a bit of a repu- that the Minister for Family and Community tation for occasionally speaking the truth. Services, Senator Vanstone, criticised the We had an explanation that roll-back was government’s implementation of the GST on the central policy and now we understand the Sunday program last weekend? Was she that the Labor Party are not talking about speaking for the government when she said: roll-back. Roll-back has gone off the Labor There’s a limit to how frequently you can adjust Party agenda. It shows that the Labor Party, and fine tune. You need things to settle down and in effect, have accepted the major tax re- you can have another go at it. forms that we have made. Roll-back, appar- Wednesday, 22 August 2001 SENATE 26347 ently, is not the central policy which it was ACCC monitors a fair proportion of this in- claimed to be. Senator, if you do not like the crease being passed on to dairy farmers? system that we brought in, you should have a Senator ALSTON—On 27 July, the policy to change it, and you have not. The ACCC announced the outcome of a review truth of the matter is that you have not got a of its report findings of April 2001 that the policy to change it. As the Treasurer said, profit margins of supermarkets on milk had and I quoted him before, ALP stands for fallen following dairy deregulation. I pre- ‘Australian lazy party’—a party that, after sume that Senator Harris’s concerns relate to five years in opposition, find it impossible to that whole deregulatory approach. In April, define their central policy; that is, roll-back. the ACCC released a comprehensive report What is it, how much will it cost and how entitled Impact of farmgate deregulation on will it be funded? No-one seems to know. the Australian milk industry. The ACCC re- The challenge is there. If Senator Cook cares port found that farm gate prices for market to drop me a note saying, ‘We are going to milk had fallen significantly by an average of debate roll-back after question time,’ I will 19c per litre across Australia. The report stay here and debate it. This is the 20th time, confirmed that the greatest impact of falling I suspect, that I have put out this challenge farm gate prices had been on farmers in the and no-one accepts it. (Time expired) former quota states. On a more positive note, Senator MURPHY—Madam President, I the report also found that the lower prices ask a supplementary question. The minister had been passed to consumers. For example, might like to inform the Senate whether or supermarket plain milk prices had fallen by not the Minister for Family and Community an average of 22c per litre, with all milk Services, Senator Vanstone, consulted with categories falling by an average of 12c per him before speaking about the government’s litre. The report also found that both super- BAS backflips on the Sunday program. markets and processors had reduced their Senator KEMP—I would regard Senator profit margins on milk, with supermarket Vanstone as a very effective minister. If I margins on aggregate milk sales decreasing may say so, she is a very popular minister by 19 per cent. This finding was confirmed out in the wider community. What we have on 27 July following a subsequent review put up is major tax reform. It is tax reform brought about by pressure from some dairy that will benefit Australian business and farmer organisations and processors. Australian families. As the Labor Party does The Dairy Farmers Cooperative has an- not propose to roll it back I would have to nounced that it is seeking a retail price in- say that the Labor Party is effectively en- crease for branded and home brand milk of dorsing the changes we have made. Senator, 10c to 15c per litre from 1 September and the challenge is out. If you do not like the tax this move reflects the higher world prices system and you want to debate roll-back, I being achieved generally for milk products, will be the first person in the chamber to do along with some reductions in supply due to it. The challenge is out to you. poor seasonal conditions in South Australia Dairy Industry: Deregulation and southern Australia and the impact of deregulation. As a result of the announce- Senator HARRIS (2.39 p.m.)—My ques- ment by Woolworths, the government urges tion is to Senator Alston, representing the processors to share the benefits of any retail Minister for Agriculture, Fisheries and For- price increases with farmers. If the price in- estry. Last Friday, dairy farmers announced creases are achieved, it will negate a signifi- an increase of 10c to 15c on their white milk cant portion of the benefits that have flowed products, while at the same time not guaran- from deregulation to consumers and would teeing any of this price increase being passed be unfortunate. However, as I have already to the dairy farmers. As Australian consum- indicated, the change essentially reflects a ers are now starting to see the benefits of strengthening world market for dairy prod- national competition policy and dairy de- ucts rather than any real transfer of benefits regulation flowing out of their pockets, will away from the consumer. the minister commit to ensuring that the 26348 SENATE Wednesday, 22 August 2001

Senator HARRIS—Madam President, I interest did the minister, as consumer repre- ask a supplementary question. The minister’s sentative, have when the PBPA negotiated answer did not provide any assurance that the listing of Celebrex on the pharmaceutical the ACCC would monitor this new price. In benefits scheme? Why has the government relation to the national competition policy allowed the independence of the authority introduced by the Keating government and charged with negotiating prices for pharma- supported by this government, has the gov- ceuticals to be so seriously compromised by ernment exaggerated the benefits of national the actions of Minister Wooldridge? competition policy and subsequent dairy de- Senator VANSTONE—I have some ad- regulation for both the consumers and the vice from Dr Wooldridge in relation to this dairy farmers? matter. He has been advised that Mr Honnor, Senator ALSTON—I think the title of the consumer representative on the Pharma- the organisation gives you some indication of ceutical Benefits Pricing Authority, was en- where its priorities lie. It is the Australian gaged on contract for a period of 3½ weeks Competition and Consumer Commission. Its by the Australian Pharmaceutical Manufac- charter requires it to look after the concerns turers Association. Dr Wooldridge under- of consumers. stands that the contract, which has now been Senator Robert Ray—Tell us which one completed, arose after the last Pharmaceuti- it is. cal Benefits Pricing Authority meeting on 11 July and that the contract had not been of- Senator ALSTON—We put them first. I fered to Mr Honnor at the time of that meet- know you put the unions first. ing. There was, therefore, no potential con- Senator Robert Ray—Are you sure flict of interest that he needed to declare at about that? that 11 July meeting. Senator ALSTON—Yes, I am very sure Dr Wooldridge also says that he rightly about it. I am sure Senator Harris is sure that expects that Mr Honnor will declare a poten- consumers get very well looked after by the tial conflict of interest at the next meeting of ACCC, often to the chagrin of some in the the authority as required by the conflict of business sector. The fact remains that they interest guidelines in place. That will be ex- will always examine issues that are brought amined in the first instance by the authority to their attention. If you regard that as an members. Dr Wooldridge points out that, as ongoing monitoring role, then they already he has indicated before, he expects the high- have it. It is open, of course, to any organi- est standards of probity from all advisory sation to make complaints about the extent to bodies within his portfolio. He takes seri- which prices are being passed on. As I have ously any allegations of conflict of interest already indicated, there have been very sub- and he will take steps to ensure that there are stantial price reductions to the overwhelming no actual conflicts of interest amongst the benefit of consumers as a result of that pack- membership of all committees within his age. That package, as you know, was brought portfolio. Once he has heard any more on about because of pressure from the dairy this matter, if there is any action that is re- industry itself, certainly not by the federal quired to be taken he will take it. government. (Time expired) Senator FORSHAW—I ask a supple- Pharmaceuticals: Pricing mentary question, Madam President. I thank Senator FORSHAW (2.45 p.m.)—My the minister for that answer. The first part of question is directed to Senator Vanstone, the original question was: when did the min- representing the Minister for Health. When ister become aware of Mr Honnor’s em- did the Minister for Health become aware ployment as a consultant? I do not think the that his consumer representative on the minister provided that answer and I ask you Pharmaceutical Benefits Pricing Authority, to answer that part of the question. Also, Mr Geoff Honnor, was also employed as a how many meetings of the Pharmaceutical consultant to the Australian Pharmaceutical Benefits Pricing Authority has Mr Honnor Manufacturers Association? What conflict of had to excuse himself from because he was Wednesday, 22 August 2001 SENATE 26349 on the pharmaceutical industry’s payroll? I presume the Labor Party is not about to Who was representing Australian consumers repeal the universal service obligation, the on the authority when the minister’s con- price cap regime, the untimed local calls re- sumer representative was unable to partici- gime, the customer service guarantee and the pate because of conflict of interest? like. Of course it is not. But Mr Beazley is Senator VANSTONE—Senator, the re- the type of leader who thinks that if he can maining parts of your question—both those just slip around issues, mislead people when- which you say were not addressed in the first ever he gets the opportunity and generally instance and those you have subsequently confuse and muddy the waters, somehow added—I will refer to Dr Wooldridge and I people will not take much notice. He was out will come back to you. the other day saying that people are not ask- ing him for any detail on his health and edu- Telstra cation proposals. He thinks that somehow he Senator TCHEN (2.48 p.m.)—My ques- will skate through. Well, Madam President, tion is directed to the Minister for Communi- he will not. He has form. Let us look at what cations, Information Technology and the happened with the Commonwealth Bank, for Arts, Senator Alston. Minister, has the coali- example. On Business Sunday in May 1994, tion been totally honest and up-front in its when asked: approach to Telstra and other telecommuni- Do you have to sell off more of the Common- cations issues? Is the minister aware of any wealth Bank to cover the $2 billion hole? alternative approaches and are they similarly honest and up-front? He said: Senator ALSTON—As Senator Tchen It wouldn’t be our intention to do that. well knows, we have certainly made our in- They are the weasel words that they used in tentions plain. In the lead-up to the 1996 and the prospectus after the 1993 election—after 1998 elections, for example, we made it it, not before. So as soon as he became the crystal clear what our attitude was in relation Finance Minister in 1995 he privatised the to Telstra and ownership issues and we de- Commonwealth Bank—the rest of it. It was livered on those commitments. In the lead-up merely an intention, meaning he would do to the next election it is going to be critically what he liked in due course. important for people to make judgments, not All this has come home to haunt Mr only about what is said but about the credi- Beazley in the last 24 hours as a result of bility of those saying it. That is why I think what he told caucus privately. What is the our record is a very impressive one on that point of saying these things? Are you only front. misleading caucus? Is that his point—that it That has always been accompanied by a is okay to lie to your colleagues? Why does whole range of consumer protection ar- Senator West, as one of the spokespersons, rangements. We introduced the customer go out there and say that a friend drove Mr service guarantee which ensures that people Beazley’s daughter from accident and emer- get their phones connected and repaired on gency ward to accident and emergency ward, time or they get a rebate. There are a number to accident and emergency ward? of other legislative protections as well which Opposition senator—What’s this got to operate utterly irrespective of ownership. Mr do with it? Beazley knows that—just as he knows that Senator ALSTON—Everything, because back in 1991, when he was the communica- it goes to credibility. If Senator West said tions minister, he turned Telstra into a GBE that, presumably she said it on the basis of and required it to operate commercially. But authority. Mr Beazley then turns around and that does not stop him writing letters to peo- says, ‘Actually, I never said anything about ple suggesting that Telstra is a company only this in public,’ and we have stories all day on interested in profits and that it will ignore all ABC radio about ‘he never said it in public.’ its obligations. They are statutory obliga- It turns out he did say it in Bega. So what tions. does he say at his doorstop this morning? He 26350 SENATE Wednesday, 22 August 2001 said, ‘Well, I didn’t say it in the national me- both as a share of GDP and in relationship to dia. Mind you, I would have no objection to the OECD spending levels? Don’t these fig- saying it in the national media.’ So he twists ures show an increase from 1.11 per cent of and turns. It is a classic example of what GDP to 1.76 per cent of GDP over that pe- happens when you do not have the political riod, an increase of 59 per cent? Can the courage to stand up there and justify your minister further confirm that relative spend- policies but you think you can use these sorts ing on R&D has been in decline since the of examples and then skate around the truth. Howard government came to office in 1996, It is a matter of great concern that he dis- and hasn’t R&D as a share of GDP fallen by misses his caucus spokespersons as informal 15 per cent from 1.76 per cent in 1995-96 to advisers, blames the media for not getting it 1.49 per cent in 1998-99? Given these facts, right, says they were fully briefed and then isn’t it a sham for the minister to continue to says they should have—(Time expired) assert that the Howard government is doing Senator TCHEN—Madam President, I better than Labor on its commitment to sci- ask a supplementary question. I thank the ence? minister for his answer. Can he provide fur- Senator MINCHIN—I thought Senator ther details of how the government is im- George Campbell was getting up to make a proving telecommunications services for all personal explanation for dumping his own Australians? leader in it miserably today. He has caused Senator ALSTON—Yes. We are in the his leader unbelievable strife. Then he tried process, of course, of implementing a $163 to cut off his deputy leader. In relation to his million package as a result of recommenda- question, which is a pretty pathetic attempt tions in the Besley report, and we are doing to gain some mileage on Science Meets Par- that so that we can provide services across liament today, I think it is pretty pathetic the board, whether they are basic services, because the science community knows that whether they are mobile phone services or this government has made a huge investment whether they are Internet access. Labor of in science under the Backing Australia’s course opposed everything. A billion dollars Ability program, a $3 billion additional worth of social bonus initiatives were op- commitment to science and innovation in posed by Labor. They have always criticised this country, made possible by the fact that the NTN—the Networking the Nation we have cleaned up the mess left to us by the trust—and now of course we have this pa- previous government. We inherited from this thetic performance by someone who wants to lot $10,000 million a year in bankrupt busi- be leader. Oh what a tangled web we weave! nesses, and a $95 billion debt that we had to This will haunt him forever: going out there reduce. That has enabled us to set aside $3 bagging everyone in sight, blaming everyone billion extra over the next five years to invest but himself, trying to think that he can some- in science and innovation which would not how get away with this without anyone ever have been possible unless we had resurrected following it up. That is what will happen to this economy from the shambles that was left you, whether it is Knowledge Nation or to us. anything else. You thought you could surf in Senator George Campbell knows as well on the GST; then you thought you could surf as I do that, in relation to R&D, this country in on Knowledge Nation. (Time expired) performs very well internationally in relation Science and Technology Indicators to public investment in R&D. We stand up with the best in the OECD. The problem this Senator GEORGE CAMPBELL (2.55 country has had historically is relatively low p.m.)— My question is for Senator Minchin, levels of business investment in R&D com- Minister for Industry, Science and Re- pared to Europe. That is a function of the sources. Can the minister confirm that the structure of our economy and the nature of OECD’s main science and technology indi- manufacturing in this economy. What we cators show quite clearly that there was a have done under Backing Australia’s Ability rapid growth in Australian research and de- is do something the Labor Party never did in velopment spending between 1984 and 1995, Wednesday, 22 August 2001 SENATE 26351 its 13 years in office—that is, introduce a (3.00 p.m.)— Senator Schacht asked me a 175 per cent tax concession for additional question today regarding the proposed R&D, a substantial commitment to ensuring United States free trade agreement. I have that business increases its investment in some further information to add to my an- R&D. swer and I seek leave to incorporate that re- We have also introduced, for the first time sponse into Hansard. ever, a cash rebate equivalent to the 125 per Leave not granted. cent standard tax concession for R&D for small business—again, something the Labor Senator MINCHIN—I am quite happy to Party never did. We have committed to an read my answer into Hansard. The answer to additional five years of investment at $180 the senator’s question is no. Neither my de- million a year in R&D start grants, some- partment nor any of the agencies that report thing again that is showing where this gov- to me have done modelling or research into ernment is coming from in stimulating busi- the effects of an Australia and United States ness R&D. We have a great record in science free trade agreement on the Australian auto- and innovation and we are proud of it. What motive industry. As I stated earlier today, our we are seeking from the Labor Party is at government will, as part of any free trade least a commitment to endorsing what we agreement negotiations with the United have done. They have not yet even done that. States, seek to ensure that no section of Aus- We have heard nothing from them: just the tralian industry, most particularly the car ‘noodle nation’; just the ridiculous debacle industry, is worse off as a result of the we had with Barry Jones’s report. No policy agreement. In fact, we will be endeavouring whatsoever. to provide greater benefits for each area of Senator GEORGE CAMPBELL— Australian industry. Madam President, I ask a supplementary Commonwealth Heads of Government question. Is the minister aware that the Meeting: Zimbabwe President of the Federation of Australian Senator HILL (South Australia—Minis- Scientific and Technological Societies, ter for the Environment and Heritage) (3.01 Professor Peter Cullen, recently stated that p.m.)—I want to qualify something that I Australia has failed to build on our know- said yesterday in an answer to Senator ledge base and to convert clever Australian Faulkner regarding Zimbabwe. I said that Mr ideas into wealth for our country? Can the Downer will be attending a meeting in minister confirm that the professor is correct Abuja, which was my brief. I now under- in his assertion? stand that it is not certain that he will be at- tending. He may be attending that meeting. Senator MINCHIN—In my presence last Telecommunications: Industry night Peter Cullen got up at the cocktail Development party for scientists and warmly thanked the Senator CARR (Victoria) (3.01 a.m.)—I government for its Backing Australia’s Abil- move: ity and congratulated the government on its That the Senate take note of the answer given substantial investment in science and inno- by the Minister for Communications, Information vation—$3 billion extra over the next five Technology and the Arts (Senator Alston) to a years, only made possible by our excellent question without notice asked by Senator Bishop management of the economy. today relating to competition in the telecommuni- Senator Hill—Madam President, I ask cations industry. that further questions be placed on the Notice I do so in response to the newspaper reports Paper. about this government’s ‘weakest link’. I ANSWERS TO QUESTIONS WITHOUT think we are entitled to ask why it is that NOTICE Channel 10’s latest contestant is so often being told goodbye. I think we are entitled to Motor Vehicle Industry: Free Trade ask why it is that the Paris option looks so Agreement good for this minister. I think we are entitled Senator MINCHIN (South Australia— to assess his performance and, in view of the Minister for Industry, Science and Resources) (3.00 p.m.)— Senator Schacht 26352 SENATE Wednesday, 22 August 2001 report that recently appeared in regard to this This report indicates that this minister minister, examine his record. does not have a clue about a blueprint for the We could look, for instance, at the abor- telecommunications market in Australia. We tive changes that he tried to bring in regard note in this report that the government is cur- to cross-media laws. We could look at his rently back-pedalling. I think we are entitled, record of performance in regard to digital when we look at this whole litany of policy TV. We could look at his vendetta against the failures, to try to understand what is central ABC. We could see the deliberate way in to this minister’s incompetence. The central which he has sought to run down our na- feature in all of this is his arrogance and his tional broadcaster. We could examine the contempt for his responsibilities as a minister way in which he has sought to marginalise in a national government. the SBS. We could look at the way in which We have seen a minister who finds it too he has sought to undermine Radio Australia. difficult to come down to the chamber to We could examine the famous Cox Peninsula vote in important divisions, even when there fiasco. We could take the view that was is a budget bill under consideration. We have taken by the Australian that: seen a minister who is more obsessed with In any language, the Howard Government’s ap- spending time in the gym than he is about proach to Radio Australia has been shortsighted, bothering to maintain a detailed understand- incoherent and irresponsible. Its decision to spend ing of a complex policy area. We have seen a $9 million in resurrecting Radio Australia, while minister who is essentially preoccupied with an overdue remedial step for foreign policy, re- his own narcissism. He is interested in the flects domestic policy failure and is an embar- rassment. No one should feel this more acutely trappings of office but he is not interested in than the Communications Minister Richard Al- doing the work. He is not interested in ston. keeping on top of the brief. What he is inter- We could look at his obsession with the pri- ested in is acting like a lazy barrister—play- vatisation of Telstra, which has seen the en- ing to the gallery, seeking to trivialise, seek- tire policy direction of this government in ing to ridicule, seeking to reduce, as we saw regard to telecommunications centre upon once again today, people’s positions and his failed attempt to prop up the share price question their motives in making the com- for Telstra rather than what it ought to be ments they are making. centred on, which is maintaining a good, This is a minister that we have seen to be efficient national telephone system that all a complete failure. It is no wonder that he is Australians can enjoy. We have seen a gov- the weakest link in this government. He is a ernment that takes the view that it is not ap- minister that has been preoccupied with be- propriate for the Australian government to ing a lap-dog for the Prime Minister and a own a telecommunications company but it is poodle for the media proprietors. He is a all right for the Singapore government to minister who is not able to effectively deal maintain a telephone company. with the complex issues of telecommunica- This recently published report highlights tions because he is not interested in them. the way in which this government’s commu- (Time expired) nications policy is totally flawed. We have Senator TIERNEY (New South Wales) seen in this report the statement by Paul (3.07 p.m.)—I have a feeling of deja vu in Budde that there is no solution in sight. We this debate because I was here yesterday had the minister tell us today that this was an when Senator Carr was making a statement attempt by a particular commentator to make relating to higher education. For Senator a name for himself. He tried to dismiss it in a Carr, the history of higher education seemed cavalier way and this is characteristic of the to start in 1996; nothing occurred before that. way in which this minister treats his portfo- Yesterday I rolled out what the problems lio. We have heard comments that the devel- were in higher education, created by the opments during the first half of 2001 can Dawkins reform of 1987. In a similar fash- only be described as disastrous for competi- ion, today I want to roll out what happened tion in telecommunications. under the communications policy of the ALP Wednesday, 22 August 2001 SENATE 26353 from 1991 to 1996. The great tragedy for ministration of the ABC by the Labor gov- Australia was that we were on the edge of ernment. Senator Carr was on that inquiry— the information revolution in this country indeed, he was the first speaker. He was so and who was holding the levers at that time interested in the inquiry that he and his mate but the Labor government under Paul Keat- Senator Forshaw spent half the time talking ing. And who was his minister? Michael Lee, through the inquiry. He made some rather whom I used to call at the time the Rip Van unfortunate allegations about some things Winkle of communications policy because he that Senator Alston had done— allegations was asleep at the wheel when the most vital that were completely incorrect and were decisions in communications policy were proved incorrect by a witness. Senator Carr being made. was taken to court by Senator Alston and had The way that ‘rational’ decision making to pay up for saying some rather foolish was made under the last Labor government things outside the parliament. was basically through caucus backroom So what we had was a rather chaotic pic- deals by Keating, wanting to get his way on ture of communications policy under the last satellites or whatever else. There was no Labor government. It is to the great credit of logic, there was no structure to the whole the Australian communications industry that thing. And when we were on the cusp of the they did so well, given the poor start under information age, we had the battle between the Labor government. It is total and rank Keating and Hawke for the leadership. This hypocrisy for Senator Carr to get up here was a time when there was a rapid move- today and criticise our minister, who has ment of ministers in and out of the field of done such a great job in communications communications. At that time, we had six policy over the last six years. ministers for communications in 18 months Senator SCHACHT (South Australia) under the Labor government. Under this (3.11 p.m.)—I rise to support the motion government, we have had Senator Richard moved by my colleague Senator Carr to take Alston for 5½ years. We have had stability in note of the answer given by Minister Alston policy making and a consistent direction as to the question asked by Senator Bishop we moved towards a deregulated approach in about his performance as minister, headlined the communications industry. There was in the report by the independent communi- nothing like that under Labor: it was just cations consultant Paul Budde, who in sum- chaos. At that time, a whole range of deci- marising his report said the following re- sions was made which could have totally garding the minister’s area of responsibility: nobbled the roll-out of communications and Government telecommunications policy is totally the information age in this country. It is a flawed— no solution in sight. Under political and miracle that we have done so well, given the legal pressure, the ACCC has dismally failed the poor start in laying down the basic policy in industry. Under the current regime at least two communications that occurred under the pre- more years of delay are expected. Under the cur- vious Labor government. rent regime, no-one apart from Optus will survive I would like to go into a few very short as a national telecom operator to compete with examples. One classic related to the A and B Telstra. The Labor Party, through its knowledge based nation policy has so far been the only one licences for pay TV, the satellite bidding pro- to show leadership and vision. Both Telstra and cess. You might remember that at the time the government failed to display any of this. we had Senator Collins, who signed a docu- ment that he had not read. There was a major He then goes on to say elsewhere in his re- Senate inquiry into the situation where a port: group, through a collapsing bid process, got Developments during the first half of 2001 can control of licences at a very low price. We only be described as disastrous for competition in had a major hearing into that. telecommunications in Australia. At the same time, one of the central issues Another quote: in communications policy was the ABC. We are currently pedalling backwards. There was a major hearing into the malad- 26354 SENATE Wednesday, 22 August 2001

This is what an independent communications dependent report saying that this minister is consultant has said about this minister and weaker than all of them. his policy. When we asked the question to- Senator Conroy—What about Missing day, the answer that the minister gave clearly Minchin, Invisible Minchin? indicated that he treated seriously Mr Budde’s complaints and criticism, because The DEPUTY PRESIDENT—Senator we got a diatribe back about the history— Conroy, will you cease interjecting. who Mr Budde was, what his previous Senator SCHACHT—Maybe Senator reports were, how long he had been around, Minchin is considered more competent be- and the fact that the minister on previous cause he shuts up and does not say as much. occasions has communicated with Mr That is the only reason that he does not get a Budde, pointing out, according to the bad comparison. But I have to say this arro- minister, some of Mr Budde’s errors. As the gant minister— answer went on, it became clear that Mr The DEPUTY PRESIDENT—Senator, Budde’s report has got under the skin of this please watch your language. minister. We would have expected a compe- Senator SCHACHT—He prides himself tent minister to give a quick, short answer on being one of the top people in the Liberal saying, ‘Who is Mr Budde? His report is of Party and hankers to become leader of the no concern to the government,’ and to sit Liberal Party in this chamber, although he is down. But no, Minister Alston spent the time no threat to Senator Hill, no matter how bad during both the answer to the question and Senator Hill’s performances are— the answer to the supplementary question bagging the consultant, which proved to us Senator Conroy—He can’t be worse than that deep down, in a Freudian way, he Jackie Kelly? admitted that this is actually a problem, that Senator SCHACHT—Maybe he gets he knows he is under pressure. there just ahead of Jackie Kelly, although it is a close run thing. But remember, this is a Senator Alston is the government’s minister who over the last 5½ years has ‘weakest link’. Calling him the weakest link, wrecked ABC funding, wrecked Radio Aus- I am, of course, referring to the popular tele- tralia, wrecked the introduction of digital vision program of the same name. Some television and wrecked competition policy. people might not think of it as one of our In the sale of Telstra, in the first tranche he more intellectual programs, but a popular undersold it and in the second tranche he range of quotes has come into the commu- oversold it. The public lost the value of Tel- nity from it. This minister is the weakest link stra in the first sale because of his under- among the 30 or so ministers in the govern- selling of the share value. He then took the ment. He is the deputy leader of the Senate— punters for a ride by overselling it in the sec- the No. 4 minister in the government—and ond. (Time expired) he is considered to be weaker than Senator Senator EGGLESTON (Western Aus- Abetz! What a disgrace to be called worse tralia) (3.16 p.m.)—What a tour of nonsense than Senator Abetz, or Senator Ian Mac- we have just been taken through by Senator donald, or Bronwyn Bishop—the kerosene Schacht. Senator Alston is one of the strong- lady—or David Kemp. These are ministers est and most effective ministers in this gov- who we from the opposition see day after ernment. He is a minister with an outstand- day bumbling, obfuscating and being incom- ing record, unequalled by anybody in the petent and confused. ALP who has held the post of telecommuni- Senator Conroy—What about Elmer cations minister or anybody on that side of Fudd? the house responsible for IT. Senator SCHACHT—And then, of Senator Alston, without doubt, is one of course, there is Senator Kemp, who cannot the stars of the Howard government. He has answer questions even about his own respon- brought reform to the telecommunications sibility of taxation. Yet here we have an in- scene in Australia and produced major bene- Wednesday, 22 August 2001 SENATE 26355 fits not only for people in metropolitan areas way of the future, and Richard Alston has but throughout Australia, through improve- shepherded Australia into the digital era, ments in telecommunications in regional while protecting the interests of the existing areas of Australia. Senator Alston is some- free-to-air television companies. On 1 Janu- one who should be regarded as a great bene- ary this year we saw the introduction of factor to the people of Australia in terms of digital TV. It will bring a new era in televi- the improvements he has brought in tele- sion to the people of Australia. It will bring communications. For Senator Schacht to get an era which will have interactivity as a spin- up today and criticise this great senator, who off in due course and better access for people has created so much change and brought in regional areas to health and education such great improvement to telecommunica- programs. It will be seen, along with other tions, is an absolute farce. We know that achievements of Richard Alston, as a great Senator Schacht would love to be staying on, achievement of that very effective and strong hopefully one day to get back into the posi- minister. tion of being a telecommunications minister, One of the most important things Richard but, sadly for him, he never will, and nobody Alston has overseen is the Networking the at all on the Labor side will ever equal the Nation program, which has done a great deal record of Senator Alston. to improve telecommunications in regional Let us have a look at some of the things areas. In particular, one might quote the ex- Senator Alston has done. First of all, he de- ample of the establishment of rural transac- regulated the telecommunications industry. tion centres. Over 100 of them have been That brought competition to the telecommu- established, and they have brought banking nications industry. It has meant a dramatic and Internet access to people in small re- decrease in the cost of telephone calls around gional communities. (Time expired) this country and vast improvements in other Senator MARK BISHOP (Western Aus- areas. We have seen not only a decrease in tralia) (3.21 p.m.)—If we were to go back in the cost of calls but also improved Internet time to March 1996, had the Prime Minister access for people in regional Australia and of the day allocated the portfolio of commu- improved mobile phone access for them with nications to you, you could not have asked the introduction of the CDMA network and for a more interesting portfolio area. It cov- the provision of mobile phone coverage all ered diverse areas like digital TV, broad- the way along Highway 1 on the east coast of casting policy, datacasting, Internet regula- Australia—and that will be extended to other tion, telecommunications deregulation and areas of Australia as time goes on. the associated competition principles. It cov- One of Richard Alston’s great achieve- ered some interesting agencies like the ABC, ments on behalf of the government, in con- SBS, Australia Post and Telstra, all of them junction with Minister Fahey, was the sale of at the cutting edge of development, change, Telstra. That brought widespread benefit to innovation and service delivery. In the port- the Australian community, most obviously in folio there was enough policy work to make the creation of the $1.6 billion Natural Heri- any reformer drool at the prospect of plant- tage Trust, which has done so much to pro- ing his vision on key industries in this coun- tect and preserve the environment of Austra- try, and yet this minister has failed in nearly lia— not only on the land but also in the every area of policy development and im- waterways, on the coast and in the oceans— plementation I have just mentioned. and to protect endangered species. That came Let us examine a few, one by one—digital as a result of an initiative from Senator Al- TV and datacasting, Internet regulation, tele- ston. That is not a major achievement in the communications competition and the ABC. telecommunications industry but it came as a First, let us deal with digital TV and data- result of selling off Telstra, or part of it. casting. It is almost 18 months now since the Senator Schacht referred to the digitilisa- bill was passed in this place, and the results tion of television, which was a very compli- are clear and on the public record for all to cated thing to do. Digital television is the see. We know that there has been expensive 26356 SENATE Wednesday, 22 August 2001 spectrum wasted by excessive grants to free- petition policy. Again, after five years of this to-air broadcasters. There is no digital broad- minister, results are clear. We are heading to casting in Australia as yet. There are no ad- an effective duopoly in this industry of Tel- ditional datacasters in Australia. There is stra and Cable and Wireless Optus. Growth boycott of government policy in this area, by is rapidly shrinking, mobile markets are both News Corporation and Fairfax. Conver- dropping, new entrants are failing to get any sion boxes sold at a retail level number less significant market share and, hence, we have than 300 after 18 months. The net result is declining levels of competition. As a conse- that digital TV and datacasting have both quence, wholesale prices are too high. Insuf- been strangled at birth. In this area, Minister ficient growth means low wholesale margins, Alston gets a grade F for failure. He is the which means fewer companies operating and weakest link, as my colleague said. He gets a less competition. It is mostly caused by Tel- grade F because he has failed to listen to in- stra and by ineffective and deficient regula- dustry, failed to respond to advice and failed tion by the ACCC. Again, they are the two to have any plan, strategy or vision in the agencies that report in this area to this min- area of datacasting and digital policy. ister. (Time expired) In the area of Internet regulation, almost Question resolved in the affirmative. 24 months have passed after the first bill was Dairy Industry: Deregulation passed in this chamber, and again the results are clear and on the public record for all to Senator HARRIS (Queensland) (3.27 examine and see. We know that millions of p.m.)—I move: dollars were spent by this government on That the Senate take note of the answer given futile efforts at prohibition. The results are by the Minister for Communications, Information clear also. There has been no reduction at all Technology and the Arts (Senator Alston) to a question without notice asked by Senator Harris in the amount of offensive material available today relating to the deregulation of the dairy on the Internet, coming into this country industry. from offshore; there has been no reduction in the amount of offshore gambling sites offer- It is quite clear from Senator Alston’s answer ing product to this country—all because this that he has not been informed by the dairy minister has acted contrary to advice from producers in Victoria, New South Wales, his own agency, from his own department, Queensland, South Australia and Western from a range of industry experts and from a Australia. Very clear indications of what has whole range of interested observers. On each happened within the industry are available. occasion in the content regulation and gam- Quoting from a document from the dairy bling area, Minister Alston knew better. He producers association, it is quite clear that in had a way to regulate and he had a way to the New South Wales regulated market in control the Internet, but the net result in both 1995, the consumer was paying $1.10 per of those areas has been no change. Offensive litre, with a clearly defined margin for proc- material and gambling products are still con- essors and retailers adding 58.5c to the con- tinuously beamed into this country from off- sumer price, and the dairy farmer received shore. All the talk, all the policy change and 51.5c per litre. In a deregulated market, on 1 all the Internet regulation has resulted in no December 2000, the consumer was paying change at all. Again, that is a grade F for $1.19 per litre, an increase of 9c, processors failure to Minister Alston in this area of and retailers added 84c, an increase of 24.5c Internet regulation. He has failed to listen to per litre, and the dairy farmer was 35c per industry, failed to accept any advice from his litre down—that is, down 16.5 per cent per own department, failed to have any plan in litre. So farmers lost 14.1c per litre, the proc- this area, except that of deliberate and wilful essors and retailers gained 25.1c per litre and ignorance, and failed to list any strategy or the consumer price was up by 9c per litre. This is totally contrary to the information vision for this new communications medium. that Senator Alston conveyed to the chamber I next turn to the area referred to by previ- today. Again, I quote from the dairy produc- ous speakers—telecommunications and com- ers association: Wednesday, 22 August 2001 SENATE 26357

As the article explains, this is pretty much catchments feeding into the Great Barrier Reef what is happening now with milk. Once again region. we’ve been taken for a ride by the big empty Senator Tierney to move, on the next day promises of the cheer-squads of neo-liberalism. of sitting: Case by case they exaggerate and outright lie about the benefits we the consumer will get from That the time for the presentation of the report these fabulous policies. Why do we continue to of the Employment, Workplace Relations, Small believe the nonsense they spout? Business and Education Legislation Committee on the provisions of the Workplace Relations We now have less farms, buggered-up families Amendment (Prohibition of Compulsory Union and communities, including a number of suicides Fees) Bill 2001 be extended to 18 September ... an environmental disaster waiting to happen in 2001. the form of ‘battery cows’ ... I have raised this issue before and I believe Senator Chris Evans to move, on the we now have in Queensland at Kilcoy an next day of sitting: application for a 7,000-head dairy. If that is That the Senate— not the introduction of battery cows into this (a) notes the failure of the Government: industry, I do not know what is. Speaking of (i) to adequately contribute to the earlier times, Jim Scott pointed out the other funding of public health services, and day—in fact, he pointed out years in advance (ii) to plan for and fund the aged care of deregulation—that there was a bonus services needed by our ageing profit that is about to increase for the big population; and businesses who pushed for deregulation in (b) calls on the Government to address the the first place, and now there is the evapora- problems now evident in Australia’s tion of the one benefit we were promised to health and aged care systems. compensate us for all of this, that is, cheaper Senator Hogg to move, on the next day of milk. sitting: I would like to make reference to some of That the time for the presentation of the the issues that have been raised directly with following reports of the Foreign Affairs, Defence me by those in the industry. I would like to and Trade References Committee be extended to have a look at the comparison of the Wilson 27 September 2001: case, in which the lessee left the industry (a) second report on the examination of after spending only 55 days—that was al- developments in contemporary Japan and most two years ago—and got a cheque in the the implications for Australia; and mail for approximately $180,000, and the (b) the disposal of Defence properties. Stohl case, in which the lessee defaulted and Senator Lees and Senator Lundy to the owner of that property had to mortgage move, on the next day of sitting: his mother’s home in an attempt to raise money to purchase more cattle. I believe that That the Senate— Senator Alston’s answer today was grossly (a) notes that the Australian Broadcasting incorrect for the reasons that I have put on Corporation (ABC) is currently the record. reviewing its television coverage of sport; Question resolved in the affirmative. (b) is concerned that the review will result in NOTICES the cessation of the television broadcast Presentation coverage of women’s sport, particularly basketball and netball; Senator Bolkus to move, on the next day (c) notes: of sitting: (i) that over the past decade, and That there be laid on the table by the Leader of probably more, the ABC has been a the Government in the Senate (Senator Hill), no leader in the broadcast of women’s later than immediately after questions without sport, which has provided a signi- notice on the next day of sitting, the report ficant boost to the development of prepared by the Great Barrier Reef Marine Park women’s sport in Australia and which Authority on water quality targets in the provides audiences with program- 26358 SENATE Wednesday, 22 August 2001

ming not provided elsewhere, in (c) calls upon the Government to keeping with the ABC’s Charter that immediately negotiate a social charter the ABC provide, amongst other with Australia’s banks to ensure that all programs, ‘specialised broadcasting Australians have access to affordable programs’, banking services. (ii) that any decision to cancel the Senator Hill to move, on the next day of television broadcast of women’s sport sitting: will have a detrimental effect on the That the following bill be introduced: A Bill sport, particularly on drop out rates for an Act to improve the quality of employment amongst adolescent girls, which will services and rehabilitation programs provided for reduce the pool of talent available people with disabilities, and for related purposes. within Australia and therefore the Disability Services Amendment (Improved strength and viability of women’s netball and basketball, currently Quality Assurance) Bill 2001. well-respected and successful COMMITTEES internationally, and Selection of Bills Committee (iii) further the disproportionate disadvan- Report tage likely to be felt amongst young women in rural and regional centres, Senator CALVERT (Tasmania) (3.32 who, because of geographical circum- p.m.)—I present the 12th report of 2001 of stances, are unable to travel to capital the Selection of Bills Committee. cities to watch live sport, Ordered that the report be adopted. (d) recognises the strong role models elite Senator CALVERT—I also seek leave to women sports athletes are to young have the report incorporated in Hansard. women and the positive value this has on young women’s self-esteem, health, Leave granted. fitness and general well-being, and that The report read as follows— without such television broadcast coverage such positive role models will SELECTION OF BILLS COMMITTEE disappear; and REPORT NO. 12 OF 2001 (e) calls on the ABC Board to agree to the 1. The committee met on 21 August 2001. continuation of the television 2. The committee resolved to recommend – broadcasting of women’s sport. (a) That the provisions of the following Senator Conroy to move, on the next day bill be referred to a committee as fol- of sitting: lows:

That the Senate— Bill title Stage at which Legislation Reporting date (a) notes that banking is the most profitable referred Committee industry in Australia and that these Trade Prac- Immediately Environ- 17 September profits have been caused by increased tices Amend- ment, 2001 bank fees, increased bank queues and ment (Tele- Communi- reduced banking services; communica- cations, (b) notes, in particular, that: tions Bill 2001 Information (see appendix Technology (i) in the past half year the major banks 1 for a state- and the announced record profits of more ment of Arts than $5 billion and are headed for reasons for profits of more than $10 billion for referral) the full year, and (b) That the following bills not be referred (ii) according to the Reserve Bank’s to a committee: recent update Bank Fees in Australia, • Customs Tariff Amendment Bill (No. 5) banks earned $2.1 billion in fees from 2001 households in the past 12 months and that in the past 4 years this income • Education, Training and Youth Affairs Leg- has increased by 75 per cent; and islation Amendment (Application of Crimi- nal Code) Bill 2001 (iii) since 1996 banks have closed 1,505 bank branches; and • Financial Services Reform Bill 2001 Wednesday, 22 August 2001 SENATE 26359

Financial Services Reform (Consequential Appendix 1 Provisions) Bill 2001 Proposal to refer a bill to a committee Corporations (Compensation Arrangements Name of bill(s): Levies) Bill 2001 Trade Practices Amendment (Telecommunica- Corporations (Fees) Amendment Bill 2001 tions) Bill 2001 Corporations (National Guarantee Fund Levies) Amendment Bill 2001 Reasons for referral/principal issues for con- sideration • New Business Tax System (Thin Capitalisa- tion) Bill 2001 To examine, in particular, the impact of limiting the evidence that can be adduced on appeals to • New Business Tax System (Debt and Equity) the Australian Competition Tribunal to the evi- Bill 2001 dence that was put before the ACCC • States Grants (Primary and Secondary Edu- cation Assistance) Amendment Bill (No. 2) Possible submissions or evidence from: 2001 Telstra • Veterans’ Affairs Legislation Amendment Cable and Wireless Optus (Further Budget 2000 and Other Measures) Macquarie Corporate Telecommunications Bill 2001 Vodafone • Workplace Relations Amendment (Minimum Entitlements for Victorian Workers) Bill Australian Competition and Consumer Commis- 2001 sion 3. The committee deferred consideration of Committee to which bill is referred: the following bills to the next meeting: Environment, Communications Information Bill deferred from meeting of 22 May 2001 Technology and the Arts Legislation Committee • Aviation Legislation Amendment Bill (No. Possible hearing date: 2) 2001 Possible reporting date: 17 September 2001 Bills deferred from meeting of 7 August 2001 (signed) • Constitution Alteration (Appropriations for Vicki Bourne the Ordinary Annual Services of the Gov- ernment) 2001 Whip/Selection of Bills Committee member • Customs Tariff Amendment Bill (No. 4) Intelligence Services Committee 2001 Meeting • General Insurance Reform Bill 2001 Motion (by Senator Calvert)—by • Motor Vehicle Standards Amendment Bill leave—agreed to: 2001 That the Joint Select Committee on the Intelli- • Superannuation Legislation Amendment gence Services be authorised to hold a private (Indexation) Bill 2001 meeting otherwise than in accordance with • Taxation Laws Amendment Bill (No. 4) standing order 33(1) during the sitting of the Sen- 2001 ate from 4 pm today. Bills deferred from meeting of 21 August 2001 LEAVE OF ABSENCE • Commonwealth Electoral Amendment Bill Motion (by Senator O’Brien)—by 2001 leave—agreed to: • Health and Aged Care Legislation Amend- That leave of absence be granted to Senator ment (Application of Criminal Code) Bill Crowley for the period 20-23 August 2001 inclu- 2001 sive on account of absence overseas on parlia- • State Elections (One Vote, One Value) Bill mentary business. 2001 COMMITTEES • Wool International Amendment Bill 2001 Economics Legislation Committee (Paul Calvert) Extension of Time Chair Motion (by Senator Calvert, at the re- 22 August 2001 quest of Senator Gibson) agreed to: ————— 26360 SENATE Wednesday, 22 August 2001

That the time for the presentation of the report following letter, dated 22 August, from of the Economics Legislation Committee on Senator Greig: annual reports tabled by 30 April 2001 be Dear Madam President extended to 19 September 2001. Pursuant to standing order 75, I give notice that Economics References Committee today I propose to move: Extension of Time That, in the opinion of the Senate, the following Motion (by Senator O’Brien, at the re- is a matter of urgency: quest of Senator Murphy) agreed to: The need for the Senate to acknowledge the That the time for the presentation of the report increasing community opposition to man- of the Economics References Committee on the datory sentencing and the imminent repeal framework for the market supervision of of such legislation in the Northern Territory, Australia’s stock exchanges be extended to and to urge the Western Australian Gov- 27 August 2001. ernment to repeal mandatory sentencing MERRI CREEK VALLEY: PROPOSED laws. FREEWAY Yours sincerely Motion (by Senator Brown) not agreed Senator Brian Greig to: Is the proposal supported? That the Senate— More than the number of senators re- (a) considers that, as there are viable quired by the standing orders having risen in alternatives to the freeway proposed for their places— the Merri Creek valley in Melbourne The DEPUTY PRESIDENT—I under- between Craigieburn and the Metropolitan Ring Road, the freeway stand that informal arrangements have been should not be built; and made to allocate specific times to each of the speakers in today’s debate. With the concur- (b) supports the National Highway funds being spent instead on these alternatives, rence of the Senate, I shall ask the clerks to each of which is long overdue: set the clock accordingly. (i) improvements to the Hume Highway, Senator GREIG (Western Australia) (ii) upgrading passenger public transport, (3.37 p.m.)— I move: and That, in the opinion of the Senate, the follow- (iii) interstate rail freight infrastructure. ing is a matter of urgency: Senator Brown—I would like my obvi- The need for the Senate to acknowledge the in- creasing community opposition to mandatory ous lone support for the motion recorded. sentencing and the imminent repeal of such leg- GREENPEACE: ARREST OF islation in the Northern Territory, and to urge the PROTESTERS IN THE UNITED Western Australian Government to repeal man- STATES OF AMERICA datory sentencing laws. Motion (by Senator Brown) agreed to: There can be little doubt that, in the wake of That the Senate— the very recent Northern Territory election result, we have seen a very strong swing to- (a) is concerned by the arrest of Australian wards those parties opposed to the Northern citizens, Nicholas Clyde and Stuart Lennox, in the United States during the Territory mandatory sentencing regime and peaceful Greenpeace protest against the that community opposition to that regime is ‘Star Wars’ proposal; and increasing and welcome. Certainly that was (b) calls on the Government to seek their not the only factor in that election, but debate early return to Australia. around mandatory sentencing was a signifi- cant part of the overall election and one that MATTERS OF URGENCY drew sharp distinction between the Terri- Mandatory Sentencing tory’s government and opposition. The ruling The DEPUTY PRESIDENT—I inform CLP, a strong advocate of mandatory sen- the Senate that the President has received the tencing, is about to lose power after 26 years in government in spite of its relentless sup- Wednesday, 22 August 2001 SENATE 26361 port for mandatory sentencing and the use of ventions. Yet, in spite of that international that issue as a political tool and weapon—a and domestic condemnation, the federal gov- weapon that, thankfully, has backfired— in ernment has failed to take a reasonable ap- its armoury of campaign strategies. In that proach to this matter. context, I do think it is worth the Senate re- The issue was resolved unsatisfactorily, viewing its position on mandatory sentenc- largely with smoke and mirrors, when the ing, given that the issue is once again in the Prime Minister formulated a political solu- spotlight and given that this chamber has tion with the then Northern Territory Chief previously passed legislation to repeal man- Minister, Mr Shane Stone. As an editorial in datory sentencing. the Australian noted at that time: After campaigning on what has been seen [The changes] merely ameliorate the extent of the as an electorally unpopular platform of re- regime. It is important that the age of adulthood pealing mandatory sentencing legislation in in the territory is raised to 18 years (from 17). It is the Northern Territory, the Northern Territory important also that all juveniles arrested for minor Labor Party, to its credit, has won strong offences be placed in diversionary programs be- support for its position. Perhaps Territorians fore a decision is taken whether they are charged. finally came to understand the inherent in- It is important that the diversionary program will justice of such a scheme or perhaps they be enhanced through an injection of $5 million in federal funds. It is also important that an Aborigi- came to see the fruitless waste of time and nal interpreter service will be funded, if only to money needed to support such an ineffective explain the purpose of the law to some transgres- scheme. Either way, the tide has turned. sors. But the fundamental issue—mandatory sen- The Territory’s regime and its sister re- tencing itself—has escaped review. gime in WA have rightly been brought into It seems now, though, that the Northern Ter- domestic and international condemnation. ritory government has paid the electoral Despite some modifications to the Territory’s price. One long-time resident of the Territory scheme by the coalition last year, it remains was quoted recently in the Australian as an ineffective solution to juvenile crime be- saying: cause it continues to deny judges and magis- There was a time when those of us in the North- trates the discretion they need in deciding ern Territory didn’t mind as being seen as differ- appropriate sentencing given the circum- ent and dismissive of southerners criticisms of the stances of a particular crime. Whilst not tar- way we do things—but times have changed. geting indigenous crime directly, both re- Many of us no longer want to be regarded as red- gimes operate in states with a high concen- necks and cowboys. tration of indigenous people, and therefore Whilst federally Labor has taken heart from the effect of those laws has been to disad- this poll and has supported the repeal of vantage indigenous youth and their families. mandatory sentencing in this chamber, its When the first imprisonments for rela- broader record on mandatory sentencing is tively trivial property offences were first not one to be proud of. It was, after all, first highlighted in Australia they brought signifi- introduced by then Premier Dr Carmen Law- cant protests on the streets— mostly protests rence in my home state of Western Australia. from what Territorians would call the south- Yet now, as a federal Labor politician, Dr ern states but also protests on the streets of Lawrence and her colleagues are opposed to Alice Springs and Darwin. The wider com- mandatory sentencing. Sadly, this is in con- munity in Australia has rightly demanded the flict with the state Labor government of my repeal of such legislation, as made evident home state, which maintains mandatory through protests, popular press, radio talk- sentencing laws and, as recently as yester- back, petitions and so on. Indeed, the Sen- day, reiterated its support for them. ate’s own Legal and Constitutional Refer- There is no question of the popular elec- ences Committee inquiry found that manda- toral support for mandatory sentencing in my tory sentencing is not appropriate in a mod- home state— and probably for all the wrong ern democracy and does in fact breach inter- reasons—yet the state government in WA, national obligations under treaties and con- and Attorney-General McGinty in particular, 26362 SENATE Wednesday, 22 August 2001 have shown themselves in recent months to previously for the same offence, they are have the courage and integrity to take on subject to mandatory sentencing. It is argued unpopular issues, particularly with regard to that somehow, because that is less draconian social policy, and to show leadership on than the Northern Territory situation, that is them. Sadly, that leadership is nowhere to be acceptable. But as Mr Dennis Eggington, found in the hazy and emotive law and order Aboriginal Legal Services Chief Executive debates that dominate the airwaves and print Officer, said only yesterday: columns in the popular press. WA’s laws jailed younger juveniles for longer However, despite having the opportunity, periods than those in the NT. both the federal coalition’s and opposition’s If they— commitment to overturning this offensive meaning the Northern Territory— legislation is, at best, half-hearted and the repeal their laws, WA will be the only State in Human Rights (Mandatory Sentencing of breach of Australia’s human rights obligations. Juvenile Offenders) Bill 2000, cosponsored by Senator Brown and Senator Bolkus and While we are about to see the death of this by Mr Andren from the House of Represen- legislation in the Northern Territory, these tatives, is now a distant memory. Granted, laws remain operative in Western Australia. that bill died in the other place, but attempts Senator COONAN (New South Wales) by me to continue to promote mandatory (3.44 p.m.)—Senator Greig’s motion today is sentencing repeal amendments to Territory a bit like the curate’s egg: it is good in parts. legislation—something I tried to do in an The operation of mandatory sentencing leg- omnibus bill last year—saw both the gov- islation is undoubtedly difficult and complex. ernment and the opposition collude to with- I do not think anyone denies that. There is no draw that bill in its entirety rather than even doubt that there is a body of community op- allow debate on my amendment. position to mandatory sentencing, and I think But where exactly does the Northern Ter- that needs to be acknowledged. Indeed, it ritory Labor leader Ms Clare Martin really may be growing, as Senator Greig’s motion stand on mandatory sentencing? It seems that suggests. I am on the record as saying that I when mandatory sentencing is repealed do not support mandatory sentencing for the there, as it appears that it will be, they will categories of offences that are covered by the be introducing sentencing legislation that present Northern Territory and Western Aus- will introduce a small element of judicial tralian legislation, and I have consistently discretion, but otherwise the plans sketched advocated other more constructive ways to out during the campaign appear not much deal with repeat offenders, especially juve- different from the existing system. niles. The Attorney-General has previously expressed concern and has indicated that the So the state of play in the Northern Terri- Commonwealth does not support mandatory tory is that currently we have a deal between sentencing but, of course, firmly believes Prime Minister Howard and the now imme- that sentencing is a state and territory matter. diate past Chief Minister Denis Burke. We have a situation where Northern Territory Be that as it may, in speaking against the police have the option to use diversionary motion today I would remind the Senate that programs involving juveniles, and the federal opposition to mandatory sentencing is not a government have provided some $5 million universal view. While the opposition of the for diversionary programs, including inter- Labor leader in the Northern Territory, Clare preter services. But it does mean that the first Martin, to mandatory sentencing may well offence by an adult would attract a manda- have galvanised opposition to mandatory tory sentence of 14 days in jail. sentencing in the Territory, as some have claimed, in Western Australia a change of There is a clear difference and distinction government has resulted in no foreshadowed between the Territory situation and the West- change. Indeed, the Premier of Western ern Australian situation. In Western Austra- Australia, Labor leader Dr Gallop, is on the lia, the system applies to home burglary. If record as supporting the mandatory sentenc- an offender has offended two or more times Wednesday, 22 August 2001 SENATE 26363 ing regime. He did this against the wishes of tory in the introduction of these programs if Mr Beazley all through the mandatory sen- time permits. tencing debate and before he became Pre- But, as I mentioned earlier, the Labor mier. Clearly, there is both political and leader in the Northern Territory has indicated community support for mandatory sentenc- her intention to repeal mandatory sentencing ing in Western Australia. I think we need to if she forms a government. As the possibility acknowledge that. of mandatory sentencing being repealed is The question for today’s debate then is certainly in prospect—I think we have to whether this parliament should lead public acknowledge that—that may leave Western opinion in what might be thought of by some Australia as the only jurisdiction where as the appropriate direction or whether it is mandatory sentencing for property offences more appropriate for the Commonwealth to remains on the statute books; so I intend to recognise that sentencing is a matter for state concentrate on Western Australia. What does and territory governments to deal with and the Western Australian law provide and why that the government is conscious of the does it apparently enjoy community and po- problems they face in balancing the need to litical support in that state? Put succinctly, curb repeat crime and the community’s con- the Western Australian mandatory sentencing cern to protect young people. That is the bal- regime is directed to home invasion or home ance that has to be struck. burglary. They are words that strike terror As the Senate would know, the issue of into most home owners’ hearts. In that re- mandatory sentencing has been extensively gard, it differs significantly from the North- canvassed by the Senate Legal and Constitu- ern Territory legislation, which covers a wide tional References Committee in its inquiry range of property offences and which could into the Human Rights (Mandatory Sen- have got, prior to the changes that were made tencing of Juvenile Offenders) Bill 1999, and in the Territory, a young person for some it is currently undertaking an inquiry into the quite trivial offence. Human Rights (Mandatory Sentencing for The Western Australian legislation pro- Property Offences) Bill 2000 to report in vides that an adult, 18 years and over, should September of this year. The earlier inquiry receive 12 months jail for a third or subse- examined the mandatory sentencing regimes quent offence and that a young person—that in both the Northern Territory and Western is, 16- and 17-year-olds—should receive 12 Australia. It was acknowledged by all of the months prison or detention or, relevantly for committee members that the apparent safe- the purposes of today’s discussion, an inten- guards and practical operation of the Western sive youth supervision order. In other words, Australian legislation did put it in a different in Western Australia the court can have re- category of severity to the then Northern gard to the fact that the rehabilitation of a Territory regime. Following the report, the young offender is facilitated by the partici- Northern Territory regime was substantially pation of the offender’s family in a program. altered to meet concerns, with the financial It stands to reason, really, that someone’s assistance of the Commonwealth. Senator prospect of rehabilitation is much enhanced Greig mentioned $5 million committed by if the whole family—or at least those who the Commonwealth for the juvenile pre-court are important adults in the young person’s diversion scheme and a jointly funded Abo- life—are involved. riginal interpreter service. I think it is fair to Sections 98 and 99 of the Young Offend- say that a range of diversionary programs has ers Act provide that the court may make an been introduced that has substantially im- intensive youth supervision order with or proved the outcome for juvenile offenders, without a sentence of detention. The Presi- including the definition of 17-year-olds, who dent of the Children’s Court in Western were hitherto treated as adults for the pur- Australia has decided that the court could use poses of the legislation, as juveniles. I will those provisions to release a young person come back to the considerable achievements who was a repeat home burglar. In other of the negotiations with the Northern Terri- words, the magistrate or judge was not con- 26364 SENATE Wednesday, 22 August 2001 strained from exercising his or her discretion, The government shares the community’s concern which is the relevant point, and taking the about the prevalence of home invasion offences individual circumstances of the young person and acknowledges the devastating effect which into account. such offences can have on the lives of victims. In 1998, the Young Offenders Act was At a local level, I believe it is important to amended to enable the courts to give credit respect the views of a democratically elected to juveniles for time spent on remand. There government giving expression to constituent is provision in the Young Offenders Act for concerns. I certainly have received commu- referral to a juvenile justice team of a young nications from people in Western Australia person alleged to have committed, been asking how I would feel if my home had charged with or found guilty of various of- been broken into. One person had a break-in fences including home burglaries. The team on 13 occasions and they asked me how I may dispose of the matter by, for example, would like to be cleaning up a house 13 specifying conditions to be complied with by times later. I certainly would not like it, and I the young person. The Young Offenders Act certainly do respect the right of the Western makes limited provision for the early release Australian government to move at their own of young persons under supervision. In other pace in making their own laws for sentencing words, the legislation has been tempered by of repeat offenders. most of the usual safeguards and options that Senator COONEY (Victoria) (3.54 you would expect in any responsive and p.m.)—This is a very important topic up for flexible criminal justice system dealing with discussion today. Senator Greig has, as is young offenders. In addition, the minister often the case, come forward with a matter of administering the Criminal Code is bound to some moment. He has moved the proposal: review the mandatory sentencing legislation That, in the opinion of the Senate, the follow- after four years from its commencement and ing is a matter of urgency: submit a report to parliament, and that is ex- The need of the Senate to acknowledge the in- pected by 14 November of this year, as I un- creasing community opposition to mandatory derstand the situation. sentencing and the imminent repeal of such leg- Having regard to the fact that the manda- islation in the Northern Territory and to urge the tory sentencing scheme for juveniles in Western Australian government to repeal manda- tory sentencing laws. Western Australia is not mandatory in its operation and that in the Northern Territory He has dealt with that, as has Senator there have been significant enhancements to Coonan and, as has been mentioned, as did their scheme by means of diversionary pro- the Legal and Constitutional References grams—and indeed the whole scheme may Committee report, on which I think we be repealed—what is left to offend the sensi- worked very well. bilities of those who oppose mandatory sen- I think there is some concern in this con- tencing? Adults in Western Australia who text—and I understand entirely that Senator have broken into a home and committed bur- Greig does not intend it this way—that we glary on three occasions receive a mandatory are concentrating only on mandatory sen- sentence—the so-called ‘three strikes’ for tencing, which is bad for all the reasons that repeat offenders. The legislation was thought Senator Greig has mentioned and that Sena- to be necessary and justifiable. The commit- tor Coonan has spoken of. But mandatory tee was told that Western Australia has the sentencing is only part of the problem in highest rate of home burglary in Australia. In sentencing generally. It is quite clear that in 1993, 11 per cent of homes in Western Aus- Australia today more and more people are tralia experienced a burglary or an attempted being put in prison because of the sentencing burglary compared with the overall rate for laws right around the country, and there is, Australia of 6.8 per cent. I think it is worth for better or for worse, a law and order cam- going back to the introduction of the Crimi- paign going on from state to state. I think nal Code Amendment Act, where it was said: they are the sorts of issues that must be faced. So it is not just mandatory sentencing; Wednesday, 22 August 2001 SENATE 26365 if we concentrated only on mandatory sen- propriate course to take in any particular in- tencing I think that we would be missing the stance. A judge’s decision, when the judge is point in many a case. faced with the question of what should hap- Senator Coonan spoke of how somebody pen to a person who comes before him or would feel whose house had been broken her, can be reached by asking these ques- into again and again and again. How would tions. What has this person done? What sort somebody feel whose son or daughter was of evil has he or she perpetrated on his or her assaulted? How would someone feel whose fellows? Then he or she might go on to ask: money was taken from them by some finan- what sort of person is the criminal? Is it his cial dealer? And we were talking about doing or her first offence? Is that relevant? Is the something about financial advice only this crime an abominable one? Is that an issue to morning. How would anybody feel when an take into account? Has reparation been insult was done to their body, their pocket or made? Is that a matter to take into account? their sense of dignity? They would feel very These are the sorts of things that should be bad about it. But should that be the only con- open to consideration for justice to be done sideration we take into account when we are to the person who is before the court. If a looking at the issue of sentencing? People person is put in prison, the length of their say, ‘Look, why don’t we ask the victim sentence will depend on the answers to those what he or she would do in respect of the questions. Each person should be tested on person who has committed the offence?’ But his or her merits against what has been suf- what if on the other hand we asked what the fered by the victim. You will take into ac- mother and father of the person who perpe- count what has happened to the victim and trated the crime would do if he or she were you will take into account what sort of per- asked that question? You are going to get son the perpetrator of the crime is, and from two different results, depending on who you those circumstances you will try to work out ask. That is why the system has developed what will happen. That is a decision to be over the years to have a person who should made in respect of each individual, and that bring a good mind to this—a good mind in is why people do not like mandatory sen- the sense of one who can do justice by eve- tencing. ryone. This issue has arisen today—Senator A lot of the problems arise in this area be- Greig, correct me if I am wrong—because of cause some of us believe that there is such a the probable win of the Northern Territory thing as redemption—that some people, if election by Ms Clare Martin. She promises they have committed a crime, can neverthe- to take an appropriate approach to this mat- less be redeemed in certain circumstances. ter, and I think she ought to be congratulated. Some years ago a musical called Les Miser- Since we are congratulating members of my ables played in Melbourne and the rest of party—Mr Acting Deputy President, I know Australia. It was based on the book of the you have the generosity of soul to give credit same name by Victor Hugo. There were of where credit is due— course several figures, but the two interesting The ACTING DEPUTY PRESIDENT ones in this respect were Jean Valjean, the (Senator Lightfoot)—I do indeed, Senator criminal, and Javert, the policeman, who Cooney. chased him. The policeman was full of sin- Senator COONEY—Thank you, Mr cerity, but it turned out that he was mistaken. Acting Deputy President. I hope senators He thought that there was no good in Val- remember former Senator Michael Tate—he jean—that he would never recover—and that is from your state, Senator Brown—who is he should therefore pursue Valjean no matter now in Holy Orders in Tasmania. He was the what. As that play showed, there was a great person who brought in the sentencing provi- deal of good in the criminal in that case. sions set out in the Commonwealth Crimes What we have to do as a civilised com- Act. They operate in respect of federal of- munity, as a community in which civil prin- fences and are set out in division 2. I do not ciples predominate, is to see what is the ap- have time to go through it all, but section 26366 SENATE Wednesday, 22 August 2001

16A outlines the matters to which the court about the Northern Territory provisions that should have regard when passing sentence. It Clare Martin has brought in. Senator Brown, states: are you going to speak? In determining the sentence to be passed, or the Senator Brown—Yes. order to be made, in respect of any person for a Senator COONEY—I am always very federal offence, a court must impose a sentence or make an order that is of a severity appropriate in interested to hear what he has to say. I think all the circumstances of the offence. this is a topic that should be debated in this chamber. If you are sentenced to imprison- It then goes on to talk about those matters. ment, the old idea of the civilly dead is still As a party, we have some good things to say around. about ourselves in this area of sentencing. I am not saying that this is universal through- Senator Bolkus—The what? out the land, but as far as the federal system Senator COONEY—The civilly dead. In is concerned the Labor Party have some other words, if you are locked up you have good things to talk about here. no rights; therefore, you are called civilly It is easy to demonise people who commit dead. There was a film made about that in crimes. The biblical admonition that there Melbourne—a horrifying film about the re- ought to be an eye for an eye and a tooth for sults of that sort of thing. People not only a tooth always seemed to me to be too se- lose their freedom but also lose their reputa- vere. The way things are happening these tion, their future and all sorts of things. They days, you begin to wonder about people’s might deserve to have that happen to them. attitude to that. People often call for penal- All I am saying is that, if we believe in a re- ties far in excess of the severity of the crime demptive process, if we believe in some sort that has been committed. That is my obser- of justice, we will look at each individual vation. Also, it is always easier to give jus- and try to do the right thing in respect of him tice to the attractive people in the world. For or her. There are lots and lots of principles example, if a young lady aged 25, beautifully about sentencing that have been developed, dressed and beautifully spoken were to come and we are still developing them, so let us in here, she would appeal to our hearts and it develop them with the right spirit and on the would be easy to give justice. It becomes a right basis. bit more difficult when you have an old lag, Senator MASON (Queensland) (4.07 somebody in their 60s—I am in my 60s, so I p.m.)—In rising to briefly address Senator am a bit concerned— Greig’s urgency motion this afternoon, I Senator Bolkus—You appeal to our congratulate him on an eloquent address hearts. against mandatory sentencing. I will make three points very quickly. Firstly, I oppose Senator COONEY—Yes. If somebody is mandatory sentencing. I think that generally dirty and looks mean and miserable and does in this country punishment is justified be- not work well, it is very hard to give that cause it rehabilitates. There is no evidence person justice in the same sense. But, if we that mandatory sentencing rehabilitates. were using our sentencing law appropriately, Sometimes it is argued that punishment may if we were doing justice to everyone, we deter. I do not think there is any argument would be trying to divorce our prejudices—I that mandatory sentencing deters. Some peo- am not saying divorce our feelings because ple have argued that mandatory sentencing you cannot divorce feelings from the area of can be an appropriate act of retribution or criminal law when there is so much emotion, revenge, or part of just desserts. I am not and properly so—to do justice between the even sure of that because, without the exer- victim and the perpetrator of the crime and cise of judicial discretion, the capacity for an then we would be getting somewhere. Man- appropriate reflection of just desserts is ex- datory sentencing has to be seen in that con- tremely difficult. I do not think you can jus- text. It is a good thing that Senator Greig has tify mandatory sentencing on common pun- raised it. I cannot anticipate what Senator ishment grounds. Ludwig will say, but I hope he speaks a lot Wednesday, 22 August 2001 SENATE 26367

Mandatory sentencing is a simple ap- responsibility. That is central to our philoso- proach to a very complex problem, but what phy. I have been disturbed by things I have it does illustrate is that there is community heard and read recently, to the effect that concern about crime. Of that there is no certain racial, perhaps religious or gender doubt. There is great concern in the Northern groups may be more predisposed to criminal Territory and Western Australia. I see from activity and that, therefore, if they commit news clippings over the last couple of days criminal activity, that is okay. I do not like that Mr Carr, the Premier of New South that. Wales, has come under some criticism for Senator Bolkus—No-one said it is okay. not being able to control crime in Western Sydney in particular. It is a big problem, Senator MASON—Senator Bolkus in- hence people often clamour for simple solu- terjects and says, ‘No-one says it is okay.’ I tions. That takes me to my second point. accept that no-one is saying it is okay. What While I do not support mandatory sentenc- I am trying to do though is shoot home re- ing, I do think it is an appropriate issue for a sponsibility. People in Australia will not state or territory government to deal with. wear the fact that people try to blame society. That might sound like a cop-out, but let me Individuals are responsible and must be held explain why. accountable for their actions. It is for that reason that the Attorney-General, Mr Wil- It has always been the case under our con- liams, and this government proposed diver- stitutional arrangements—under the Com- sionary programs in the Northern Territory— monwealth Constitution and state constitu- with the former Chief Minister, Mr Burke, tions—that state governments have power and his government—that forced offenders over law and order and punishment. I think to come to terms with their offences—not to we would all agree with that: it is a matter of blame the victim, not to blame society, but to fact. But it is also a matter of principle. I am bring offenders face-to-face with the victims reluctant, sitting here in Canberra, to legis- of their criminal activity. I think that is a late for crime and justice issues relating to very good thing. One thing we never want to people living in Darwin or, for that matter, get in this community is the view that some- Perth or Brisbane. I think it is a matter best how people are not responsible for their ac- left to state legislatures. There has been a tions, or that some people are less responsi- change of government in Western Australia ble for their actions than others. That is racist this year and, it would seem, in the Northern and discriminatory. I will not wear it, and Territory. If that is because people have neither will the community. We have to en- changed their opinion on mandatory sen- sure that all Australians are treated as one tencing, that is fine with me. I will not be and, where there is disadvantage—and I ac- complaining about that. If Dr Gallop and Ms cept Senator Bolkus’s interjection—that has Martin wish to change the law, that is fine. I to be addressed. I hope that these diversion- have no problem with that at all. It is some- ary programs are successful. There has been thing that is best left with state legislatures. success in the past with the Dubbo program My third point is perhaps more important and with the victim-offender mediation in and more interesting. What worries me about New Zealand. If we continue to work on some of the arguments—and these are not that, I think we will move ahead. arguments put by Senator Greig today, but In conclusion, I think Senator Greig arguments I hear in the community, offered should be applauded for bringing this matter in the opinion pages of newspapers—is that before the Senate today. It is an important there is a social and political agenda that issue. I think he is right that mandatory sen- seems to want to blame society for criminal tencing is an inappropriate sentencing tool. activity rather than the individual. It is a In a federation such as Australia it is appro- philosophy that tends to deny that individu- priate that state and territory legislatures take als have free will. That is a very dangerous responsibility for that, but let us never take philosophy. Obviously it is antithetical to away responsibility from the individual. liberalism because we believe in individual 26368 SENATE Wednesday, 22 August 2001

Senator LUDWIG (Queensland) (4.15 about how to deal with crime. With sufficient p.m.)—I rise to speak on standing order 75, time I will go to the Queensland position and the urgency motion moved by Senator Greig. to how Queensland is dealing with crime in At the outset I remind the Senate that the the community. But before going there, it urgency motion goes to: might be worthwhile having a look at where The need for the Senate to acknowledge the in- we are now in relation to mandatory sen- creasing community opposition to mandatory tencing in the style that I understand it. Two sentencing and the imminent repeal of such leg- types of mandatory sentencing exist in the islation in the Northern Territory ... Northern Territory currently and I suspect if I might just pause at that point, and it is not Clare Martin becomes the Chief Minister to be unkind to Senator Greig. I understand that mandatory sentencing in the form of a the passion with which he speaks about property offence will end. In Western Aus- mandatory sentencing in his home state. tralia I understand it was proposed that man- However, I am perplexed as to whether his datory sentencing, following the introduction motion means mandatory sentencing per of the proposed property offences regime se— whether it encompasses all types of there, be reviewed after four years. mandatory sentencing—or whether we are Senator Cooney talked specifically about talking about the mandatory sentencing how you deal with issues that bubble up in Senator Brown’s bill speaks about, which bill the community such as what to do about is currently before the Senate Legal and crime. Senator Cooney hit the nail on the Constitutional Committee, or the mandatory head when he talked about diversionary pro- sentencing considered by the Senate Legal grams. The Northern Territory—under At- and Constitutional References Committee torney-General and Chief Minister, Denis when it inquired into the Human Rights Burke—did eventually look at how to walk (Mandatory Sentencing of Juvenile Offend- away from mandatory sentencing per se as it ers) Bill 1999. relates to property offences. That regime The urgency motion talks specifically went not so much to what the WA regime about the repeal of such legislation in the envisages—a ‘three strikes and you are in’ Northern Territory and urges the Western regime—but more to a position where you Australian government to repeal mandatory have a graduated number of days in prison sentencing laws. Is that ‘laws’ in plural—in for the first offence, and then any subsequent other words, all mandatory sentencing laws? offences. I think it is a minefield to go down that path. It is important to take a step back and look There is obviously a distinct difference be- at what happened in the Northern Territory tween what is happening in Western Austra- when they agreed with the federal govern- lia and what is happening in the Northern ment to introduce diversionary programs. Territory. But there is also a distinct differ- From submissions that have been made in ence between mandatory sentencing laws as another place, the results appear to show that I understand them in this context—laws the programs were starting to have some ef- which go to property offences—and manda- fect. What directly worked to assist were tory sentencing laws which might go to more community based drug and substance abuse serious or violent offences, that type of re- diversionary programs, a jointly funded Abo- gime. I think Senator Cooney had a point riginal interpreter service, together with the when he said that mandatory sentencing is establishment of a juvenile diversionary unit only one part of the issue. in the Northern Territory Police to administer The other part of the issue is the commu- the diversionary processes and to conduct nity at large and how they regard mandatory family conferencing. Those issues, when you sentencing. Senator Greig has informed us put them together, start to give us a better that there is increasing community opposi- picture. They show us that diversionary pro- tion to mandatory sentencing. The commu- grams can work to mitigate the problems in nity, as I understand it from a Queensland the community. Clare Martin’s policy posi- perspective, is concerned about crime and Wednesday, 22 August 2001 SENATE 26369 tion, as enunciated prior to the Northern Ter- mandatory sentencing that we are looking at. ritory election, was that: Senator Mason went on briefly to give us his Labor will repeal mandatory sentencing for prop- three reasons. Perhaps one of them was more erty crime, replacing it with a regime that is tough a free-will speech rather than an argument on crime, and tough on the causes of crime. about mandatory sentencing, but he was right in the sense that community concern about That brief statement fronts a well articulated crime is important and needs to be ad- position paper on crime protection, punish- dressed. But simply abolishing mandatory ment and prevention. The one idea in that sentencing is not always the answer. paper that I draw out is that there is clear evidence that community, social and devel- Senator BROWN (Tasmania) (4.23 opmental initiatives work to reduce crime. p.m.)—I congratulate previous speakers on the quality of this debate and, indeed, Sena- The Queensland Premier similarly estab- tor Greig for bringing the motion before the lished a task force on crime prevention back Senate. In the short time I have, I point to the in August 1998 to address the causes of very important role that the Senate has had in crime and implement effective crime pre- changing the mindset on mandatory sen- vention activities across all areas of govern- tencing laws in the Northern Territory and ment. Later, in December 1999, the Premier Western Australia as they relate to property launched the Queensland crime prevention crimes. We are all aware that these laws have strategy, Building Safer Communities, as particularly captured young indigenous peo- part of the government’s overall approach. ple at a rate far above the non-indigenous The Queensland government committed in population, and we recognise that these laws the order of $80 million over three years for are for the mandatory sentencing of people what are real solutions to deal with crime in for property crime but not, as Senator Coo- the community: to establish a community ney said, for white collar crimes which often crime prevention fund, to support local involve much greater property loss for peo- communities and to plan and manage crime ple in the community. prevention activities, plus a range of other mechanisms and guiding principles to ensure In the run to the federal election in 1998, I that diversionary programs and the like actu- foreshadowed I would move to introduce a ally work within the community. bill into the Senate to override mandatory sentencing laws which captured children in It is not only in Queensland. Western the Northern Territory. I had been ap- Australia similarly established a justice co- proached by indigenous groups and the ordinating council to coordinate criminal Greens in the Northern Territory, but at that justice and crime prevention initiatives—that time there was no public debate about it. is, the implementation of a state crime pre- After the election I made good that commit- vention strategy. Mandatory sentencing for ment and consulted widely with other mem- property crime exists, as far as we can tell, in bers of the Senate and got assistance from detail in two states. We have dealt with the Chris Sidoti of the Human Rights and Equal Northern Territory which, as I have said, Opportunity Commission, Louis Schetzer deals with a particular form of mandatory from the National Children’s and Youth Law sentencing. For a first offence you get 14 Centre, and from legal and community repre- days, for a second offence 90 days and for a sentatives in the Northern Territory. On 25 third offence one year. Hopefully the North- August 1999, with the support of the ALP, ern Territory government which I understand the Democrats and the Independent member is about to form will abolish that system. of the House of Representatives Peter An- In WA the Criminal Code was amended dren, I introduced a bill to ban mandatory on 14 November 1996 to provide that adults sentencing for juveniles across Australia. or juvenile offenders who are convicted for a That legislation was finally supported by the third or more time of a home burglary of- Senate. It was the first private member’s fence must be sentenced to a minimum of 12 legislation to go through this place in five months imprisonment. So that is the type of years. I remind senators that it was supported 26370 SENATE Wednesday, 22 August 2001 because the government allowed government Senator EGGLESTON (Western Aus- time for it to be debated, recognising the by tralia) (4.29 p.m.)—Mandatory sentencing then high level of public concern about the legislation raises complex and difficult is- issue. There had been quite considerable sues. I think the record shows the Common- turnouts of people protesting about manda- wealth government has recognised that states tory sentencing in Hobart, Sydney, Mel- and territories have a difficult job dealing bourne and other cities around the country. with the impact of crime and the problem of Also, huge amounts of mail had been coming repeat offenders, and acknowledges that in to the offices of members of the Senate these are issues which the states and territo- and the House of Representatives. ries are best placed to address. I think we A Senate committee then had hearings in have to ask ourselves why in Western Aus- Darwin, Alice Springs and Perth. Subsequent tralia and the Northern Territory there is to that there was the tragic death of a 15- mandatory sentencing. Mandatory sentenc- year-old Aboriginal boy from Groote Ey- ing in those two jurisdictions was introduced landt who had been detained in Darwin while because people were concerned about law serving a 28-day sentence for stealing texta and order problems. There was a culture of colours worth a few dollars. It appears that lawlessness in Perth: there were home break- he was totally unable to comprehend why he ins and old people were being beaten quite was there and for how long he was to stay in cruelly. There was a great deal of public con- detention. There were public hearings and cern about what was happening. That is why protests, and prominent people from all the Western Australian government intro- walks of life, including Jane Campion and duced very focused mandatory sentencing Mal Meninga, signed petitions and supported laws concerning home invasion or home statements in support of the bill. The major- burglary. ity of the Senate supported it. In the Northern Territory, there was also As you know, Mr Acting Deputy Presi- great public concern about what appeared to dent, the bill was then supported in the be a culture of lawlessness and an impres- House of Representatives by Mr Andren and sion—a widespread belief, in fact—that the the Labor Party but it was not able to be de- courts were being too lenient with offenders bated because of government numbers. and that the punishments that were being However, the government in turn then meted out did not reflect the seriousness of moved to introduce, with the Northern Ter- the crimes involved. People were concerned ritory, diversionary programs. I must say that that recidivists seemed to be let off too this introduced the very important provision lightly. We have to understand that back- for Aboriginal language interpreters in the ground in considering the question of man- courts in the Northern Territory. There are datory sentencing. now over 200 of these interpreters. Also, the The agreement between the Common- age of majority was raised to 18 in the wealth and the Northern Territory govern- Northern Territory, which means that today, ments for a juvenile pre-court diversion while we are here debating this, a large num- scheme and an Aboriginal interpreter service ber of 17-year-olds are not in jail who other- has reflected the Commonwealth govern- wise might have been. Diversionary sen- ment’s commitment to work cooperatively tencing is working, and it will do so too in with the states and territories to prevent ju- Western Australia where there is an even veniles entering the criminal justice system. greater number of Aboriginals as against That program has had a fair degree of suc- non-Aboriginals locked up under mandatory cess. The Commonwealth has worked with sentencing laws. I support this motion. I will the Northern Territory government to ensure continue to work to end mandatory sentenc- that rehabilitation and education programs ing and to do the right thing, that is, hand for young people are effective in preventing back to the courts their right to make the repeat offending, by addressing the underly- punishment—and hopefully rehabilitation ing causes of juvenile crime. Significant pro- sentence—fit the crime. gress has been made under the agreement, Wednesday, 22 August 2001 SENATE 26371 including the implementation of community those in the rest of the world. Professor Frei- based diversionary programs, the establish- berg made the point that Australia’s regimes ment of a juvenile diversion unit in the are minor and that in the United States, 23 Northern Territory and the training of police states have mandatory sentencing laws, some in diversion procedures. Victim-offender of which are quite draconian. He said: conferencing has also been established, ... in California there have been 40,000 convic- which has helped—perhaps reduced— the tions under mandatory sentencing laws, and peo- incidence of juvenile detention in the North- ple can get up to 25 years for a third strike for ern Territory. The establishment of an Abo- stealing a pizza. riginal interpreter service has also been a very important innovation. Australia’s regime pales in comparison. In the United Kingdom, the mandatory legisla- The WA laws were introduced to deal with tion also applies more strictly than it does in the question of home burglaries, and they are Australia. (Time expired) not draconian. Offenders are given ample opportunity to modify their behaviour before Senator GREIG (Western Australia) they run the risk of being sentenced to de- (4.35 p.m.)— In the few minutes remaining tention. Under the three-strike law, the man- in the debate, I will touch on the key themes datory detention system operating in WA, the that have emerged today. I begin by making question of detention only arises on a third it very clear that the motion before us is not a conviction for home burglary. Before that directive. It is not a piece of legislation. We occurs, offenders are always, in all cases, cannot today force the Western Australian given numerous opportunities to mend their government to do anything in particular. The ways. The detention is a way of dealing with motion is merely making a statement. I problem offenders, and I think that should be would argue that it is a moral statement, an understood. The detention occurs in Western important one and one which should be Australia in the interests of protecting mem- made. Given that this chamber has already bers of the community and helping the of- passed legislation to that effect, which is a fenders to overcome their problems through directive—because it would have had a real counselling and through dealing with issues legal impact on the ground—I find it bizarre like drug and alcohol problems. But it is not that we cannot simply reiterate that with a inevitable that children in Western Australia, motion today. even upon conviction for a third offence, will Both Senators Mason and Coonan effec- be detained. The alternative is that young tively said in their respective contributions people are placed on intensive youth super- that they believe strongly in states rights. vision orders, through which they are pro- Whatever views they may have on manda- vided with counselling and help in the com- tory sentencing itself, they had strong views munity. Detention is only a default alterna- on the rights of states and territories to de- tive. termine their own laws. I would argue that Although a great deal has been said over that ethos was completely obliterated some the last two years in the parliament of Aus- years ago when members of this chamber tralia about Australia’s mandatory detention voted to overturn the voluntary euthanasia regimes, I think it is very instructive to have laws in the Northern Territory— which was a look at the rest of the world and compare legislation that that parliament introduced for Australian regimes with those of other coun- its own people. I also make the point that the tries, particularly with other common law Northern Territory recently had a referen- jurisdictions such as the United States and dum—I think it was at the last federal elec- the United Kingdom. On 18 April 2000, Ra- tion—in which it asked: ‘Do you want self- dio National’s Law Report dealt with the determination? Do you want self- issue of mandatory sentencing. Susanna Lo- government, or would you rather the Com- bez, the presenter, interviewed Professor monwealth continue to have overriding pow- Freiberg, of the University of Melbourne, ers?’ A majority of people voted for the lat- about how Australia’s regime compared with ter, thereby giving this chamber the mandate 26372 SENATE Wednesday, 22 August 2001 to do as it chooses in terms of various laws Murray, A.J.M. Stott Despoja, N. in relation to the territories. NOES I take exception to some of Senator Ma- Bishop, T.M. Bolkus, N. son’s argument in relation to individual re- Brandis, G.H. Buckland, G. sponsibility and to the notion of free will. It Calvert, P.H. Campbell, G. is a quaint notion, but I would argue that free Carr, K.J. Chapman, H.G.P. will does not exist where an offender is se- Conroy, S.M. Coonan, H.L. verely and adversely affected, perhaps by Cooney, B.C. Crane, A.W. drugs or poverty or desperation or mental Crossin, P.M. Denman, K.J. illness or peer pressure. I learnt recently on Eggleston, A. Evans, C.V. an investigative tour in Darwin that many of Ferguson, A.B. Ferris, J.M. the particularly young Aboriginal men that Forshaw, M.G. Gibbs, B. are being sentenced under mandatory sen- Gibson, B.F. Heffernan, W. tencing in the Northern Territory are doing Herron, J.J. Hill, R.M. so as a right of passage. It is a way of Hogg, J.J. Hutchins, S.P. achieving manhood, particularly for those Kemp, C.R. Knowles, S.C. Lightfoot, P.R. Ludwig, J.W. from Groote Eylandt. It is a way of obtaining Macdonald, I. Macdonald, J.A.L. some kind of kudos within the white system. Mackay, S.M. Mason, B.J. I would say to Senator Mason rhetorically, McGauran, J.J.J. * McKiernan, J.P. who is not here, that, if we firmly believe in McLucas, J.E. Minchin, N.H. freedom of the individual, individuals must Murphy, S.M. Patterson, K.C. have freedom of choice and free will, and we Reid, M.E. Schacht, C.C. must extend that ethos to judges and magis- Sherry, N.J. Tchen, T. trates. They must be the ones who decide on Troeth, J.M. Watson, J.O.W. the appropriate sentencing of offenders. In- West, S.M. * denotes teller flexible laws are not to be promoted by in- flexible politicians. That is the core of the Question so resolved in the negative. issue here. I think this chamber has both the COMMITTEES right and the duty to send a message—if not Scrutiny of Bills Committee to override legislation—to the Western Aus- tralian parliament that it firmly believes that Report mandatory sentencing is wrong for social Senator LUDWIG (Queensland) (4.46 reasons, for reasons of reconciliation and our p.m.)—On behalf of Senator Cooney, I pres- response to indigenous people, and for eco- ent the 10th report of 2001 of the Standing nomics. (Time expired) Committee for the Scrutiny of Bills. I also lay on the table Scrutiny of Bills Alert Digest Question put: No. 10 of 2001, dated 22 August 2001. That the motion (Senator Greig’s) be agreed Ordered that the report be printed. to. Membership The Senate divided. [4.42 p.m.] The ACTING DEPUTY PRESIDENT (The President—Senator the Hon. Marga- (Senator Lightfoot)—The President has ret Reid) received a letter from a party leader seeking Ayes………… 10 a variation to the membership of a commit- Noes………… 47 tee. Majority……… 37 Motion (by Senator Minchin)—by leave—agreed to: AYES That Senator Crowley be discharged from and Allison, L.F. Bartlett, A.J.J. Senator West be appointed to the Community Bourne, V.W. * Brown, B.J. Affairs References Committee from 31 August Cherry, J.C. Greig, B. 2001. Harradine, B. Lees, M.H. Wednesday, 22 August 2001 SENATE 26373

VETERANS’ AFFAIRS LEGISLATION Other amendments again mirror changes in social AMENDMENT (FURTHER BUDGET security system, to simplify provisions relating to 2000 AND OTHER MEASURES) the recovery of compensation. These amendments BILL 2001 will provide for direct recovery of compensation debts from compensation payers and insurers, in First Reading circumstances where there has been an overpay- Bill received from the House of Repre- ment of pension because of the treatment of peri- odic compensation as ordinary income. sentatives. This bill also amends the Veterans’ Entitlements Motion (by Senator Minchin) agreed to: Act 1986 in relation to the treatment of financial That this bill may proceed without formalities assets which are regarded as unrealisable for the and be now read a first time. purposes of hardship provisions under the assets test. In hardship cases, such unrealisable assets Bill read a first time. will also not be regarded as a financial asset when applying deeming provisions under the income Second Reading test. Senator MINCHIN (South Australia— This means that in future the actual return on an Minister for Industry, Science and unrealisable asset will be counted as ordinary Resources) (4.49 p.m.)—I move: income, rather than the deemed rate of return. That this bill be now read a second time. The treatment of income streams will be amended to ensure that the conditions applied to income I seek leave to have the second reading streams under the means test will be clear and speech incorporated in Hansard. unambiguous. These amendments will also cor- rect a number of anomalies and unintended con- Leave granted. sequences. The speech read as follows— Finally, this bill will change the payment of in- come support instalments, which currently are This bill is a package of amendments to imple- rounded to the nearest multiple of ten cents. In ment several measures designed to further im- future, instalments of income support will be paid prove the delivery of income support benefits to the nearest cent, bringing Veterans’ Affairs through the repatriation system. A number of arrangements into line with the calculation of these measures reflect changes in the social secu- pension instalments paid through the social secu- rity system, to ensure that both systems operate rity system. consistently and fairly. This bill demonstrates the Government’s ongoing These amendments to the Veterans’ Entitlements commitment to improving the repatriation system Act 1986 will provide for more generous treat- to benefit those in the veteran community who ment for income support recipients whose part- most need our help. ners receive periodic compensation payments, such as those paid by insurance companies. Debate (on motion by Senator Denman) adjourned. Currently, if a person receives a compensation- affected payment, then the couple’s combined FEDERAL OFFICE OF ROAD SAFETY pensions are reduced by one dollar for every dol- lar of the periodic compensation. Under the new Return to Order measure, the dollar-for-dollar reduction will apply Senator MINCHIN (South Australia— only to the pension of the person who receives the Minister for Industry, Science and compensation. If the amount of compensation Resources) (4.49 p.m.)—by leave—The exceeds the amount of that person’s pension, then the excess will be treated as the ordinary income Senate agreed on 22 August 2001 that the of their partner. With the income free area and Minister representing the Minister for taper that applies to ordinary income, this meas- Transport and Regional Services provide ure will result in an increase in the amount of documents detailed in the order by 5 p.m. income support payments to couples who have today. The minister expects to be in a low levels of income from compensation pay- position to table the response to the return to ments. order by 6.50 p.m. today. 26374 SENATE Wednesday, 22 August 2001

FINANCIAL SERVICES REFORM I note Senator Murray’s second reading BILL 2001 amendment where he, as a sort of halfway FINANCIAL SERVICES REFORM house, moved: (CONSEQUENTIAL PROVISIONS) … that the requirement in the legislation that BILL 2001 commissions on risk products be fully disclosed be referred to the Joint Statutory Committee on CORPORATIONS (FEES) Corporations and Securities for inquiry and report AMENDMENT BILL 2001 on or before October 2003. CORPORATIONS (NATIONAL In other words, during the transition period GUARANTEE FUND LEVIES) we will see what happens to risk products: AMENDMENT BILL 2001 we will have an inquiry and at the end of the CORPORATIONS (COMPENSATION day if it is not working so well then maybe ARRANGEMENTS LEVIES) BILL 2001 we will do something about it. Can I say Second Reading with respect to Senator Murray that, while I certainly will be supporting that because it is Debate resumed. better than anything that is currently in the Senator FERGUSON (South Australia) bill, really that is putting the cart before the (4.50 p.m.)—Prior to the luncheon break I horse. What should have happened is that the was talking about this legislation and in par- disclosure of commission on risk products ticular the disclosure of commission on risk should have been left as it is during the tran- products. I will not go over the ground that I sition period. Then at the end of two years covered at that time except to say that, as far there could be an inquiry to see whether or as I am concerned, it is a matter of principle, not the nondisclosure of commission on risk which I stated quite strongly during all the products had affected in any way the trans- discussions that we had prior to the intro- parency or the decision making of people duction of this bill, that where the commis- who were actually purchasing those products sion that is received by an agent in relation to from agents and whether people might make a product has no effect on the end result for submissions to the Joint Corporations and that client should a claim be made—and be- Securities Committee saying, ‘Look, we feel cause it is defined as a risk product or a non- that the nondisclosure of commission on risk accumulative product there can only be a products is having an adverse effect on the claim when the event occurs—the agent or clients.’ the representative should not have to disclose I can tell you that the disclosure of com- to the client the amount of remuneration that mission has never come at the request of he or she is getting. As a matter of fact, the consumers. The consumer bodies may have disclosure could have exactly the opposite given evidence to Senator Chapman’s com- result. From my experience as an insurance mittee that they needed all the transparency agent for eight years, I know that there were that was available. That is their job. The some products where five per cent commis- Consumers Association need almost to find a sion was paid and some where 10 per cent justification for their existence in some commission was paid. It is quite possible that cases, and I think this is one of them. There the product that paid 10 per cent commission has never been any push from consumers for was a better product than the product that the disclosure of commission on risk prod- paid five per cent commission, yet it is in the ucts. I sold those products for eight years and consumers’ mind that they must be getting a I can tell you that never once was I asked better deal. If the person who is selling the what was the commission rate on the product product is receiving less money, the con- that was being sold. The client was con- sumer thinks they must be better off. The cerned only as to whether the product that reverse is the case: sometimes they may they were buying was going to deliver them choose the wrong product when the disclo- the result they wanted in the event of a claim sure has to be made. being made. Commission was never the is- sue. While people might come in here and Wednesday, 22 August 2001 SENATE 26375 talk about HIH and the collapse of major quires a disclosure of all commissions paid insurers, the disclosure of commission would except for those commissions paid on risk or not have made any difference to that. The non-accumulation products. Where there is a quantum of commission that is paid to agents commission paid on an accumulation product certainly does not influence the product that and the amount received by the agent or the people will buy in risk cases. person representing the company affects that I can give you another example in the area which the client may get, it must be dis- of crop insurance, which I was involved with closed. The person needs all that information because I lived in a farming area and did a to make a balanced decision, particularly in lot of work there. Some companies do not the case of general insurance. Term life is like crop insurance; some companies do like another example where you insure yourself crop insurance because the larger your port- for a flat rate regardless and the premium is folio the more your risk is spread. If you can X amount of dollars. In most cases in term get a big enough portfolio it becomes good life, people look at the premium. They do not insurance; if you have only a small portfolio look at what commission is paid; they want of crop insurance it is a higher risk because to know how much it is going to cost them in you have not spread it as much. I dealt with actual dollars to get the death and disability companies some of whom offered five per cover that they require for their own protec- cent commission for crop insurance and tion, the protection of their business or the some of whom offered 10 per cent commis- protection of their family. sion for crop insurance. Their rates were ex- This is a very good bill overall. It has been actly the same, but one company liked the made much better by the amendments that business; the other did not. It was only natu- will be moved by the government as a result ral that, as an agent, where there was no dif- of the considerable work that has been done ference, I wanted to look after my security by Senator Chapman and the Joint Commit- and my income so I chose in most cases one tee on Corporations and Securities. They that paid 10 per cent commission. I knew the have twice looked into this bill. As I said in product that the client was getting was ex- my opening remarks, this bill has had a very actly the same as that where I was getting long gestation period. I congratulate the only five per cent. I think that is a decision minister on the amount of consultation that that any person in business would make. I took place, because it is almost two years may have put car insurance with another since we first saw the proposals that are company because they liked car insurance coming forward in this legislation. Every while the company that liked crop insurance player in the field has had a chance to be did not like car insurance. The quantum of consulted and had a chance to have their say. commission and the level of commission that I was disappointed in the remarks in the is paid to an agent bears no relation to editorial in today’s Financial Review and in whether or not the person is adequately cov- Paul Cleary’s article which were simply not ered for the risk that they are insuring accurate. If they choose to report on rumour against. or what somebody else might tell them, it Senator Chapman—It is strange that in would not hurt them to actually check the this bill crop insurance is regarded as whole- facts before they put it in the paper. There sale and not covered. was never on our side of politics any resis- Senator FERGUSON—I understand that tance. He talked about ‘long running resis- Senator Chapman. I was only using it as an tance by small life insurance agents to dis- example. closure of commission’. That simply was not true. This side of the parliament has always Senator Chapman—It is an inconsis- supported disclosure for life agents where tency. they are talking about accumulation and fi- Senator FERGUSON—But it would nancial products. I do not know whether have been so simple in this bill for the gov- Senator Sherry was in the chamber this ernment to have decided to say that it re- morning when I was talking, but in my life 26376 SENATE Wednesday, 22 August 2001 as an agent we were disclosing full fees and men’s clothing store will have to tell you he charges in every presentation out of a laptop is making a quid because he is selling more computer from 1987 onwards. This is not of those suits than something else. Why sin- something new. Some companies did not, but gle out risk products and the disclosure of this is not something new. I am disappointed commission on risk products when in fact the in the reporting. person who is purchasing gets exactly the I am also disappointed in some of the re- same result at the end of the day regardless action of the Financial Planning Association, of the commission that is paid? But I com- Mr Ken Breakspear and IFSA. They are mend the bill as a whole because I think it is looking after the big end of town, they are a very good bill. looking after the companies and they are Senator COONAN (New South Wales) looking after those people who deal in much (5.01 p.m.)—I am very pleased to speak in greater amounts of money and looking at support of the Financial Services Reform things like trailer commissions and other Bill 2001 and the related bills in this package matters. My concern and my only concern in that will revolutionise financial services in relation to risk products is to make sure that Australia and the provision of financial the livelihoods of the very, very small op- services in Australia. The bill contains land- erator, that person who makes even just part mark reforms, as earlier speakers have said. of their income out of selling risk insurance The reforms have been described in detail as an adjunct to their business—and there are and I do not want to go over the detail again. thousands of them throughout rural and re- The bill restructures an industry that con- gional Australia that I know of and certainly tributes about seven per cent to Australia’s some in metropolitan areas as well—are not economy and employs close to 330,000 going to be affected by the fact that they Australians. It will directly benefit the 17 have to disclose the quantum of their com- million consumers of financial services in mission to their clients when they are talking Australia and it will provide the industry to them. As I stated just before lunch, I know with unprecedented opportunities to export a number of people who would say, ‘Well, if services to an estimated three billion people this is the quantum of commission you are in Asia and in other jurisdictions. making, sling me a half or take less and I will give you the business,’ so in fact you are The purpose of the bill is to harmonise the fragmented regulatory regime for the finan- reducing their income. cial services industry to ensure a consistent The other point I want to make is that I level of market integrity and consumer pro- believe this is going to be a device for major tection across the industry. It establishes a insurance companies to push down the rate single licensing regime for the provision of of commission to the lowest common de- financial services. Essentially, it proposes nominator so it makes it very difficult for three key reforms: a harmonised licensing, some of the smaller operators and smaller disclosure and conduct framework for all agents to make a living as a commission financial service providers, a consistent and agent. As I said right at the very start from comparable framework for financial product my speech, earning an income from commis- disclosure and a streamlined regulatory re- sion is still an honourable profession and gime for financial markets and for clearing way to make a living and one that should be and settlement facilities. respected in the way that it always has been. I wonder whether we will get to the day, if Consumers particularly will benefit from this legislation gets through and we see the the introduction of a consistent framework of disclosure of commission, where someone consumer protection. They will have an en- who is selling second-hand cars and wants hanced capacity to understand and compare you to buy a Holden instead of Ford will different financial products and to evaluate have to say, ‘I am getting paid $150 extra to financial advice. Consumers will also have sell you the Holden,’ or someone who is access to efficient procedures to deal with pushing a certain line of suit to you in a complaints and to resolve disputes with fi- nancial service providers. I want to say Wednesday, 22 August 2001 SENATE 26377 something about that a little later. Industry ties and Investments Commission within a will benefit by the cutting of compliance two-year transition period. So far, ASIC has costs and the removal of regulatory barriers approved the insurance inquiry complaints to the introduction of technological innova- scheme for general insurance as well as the tions. E-commerce will be boosted by the financial industry complaints scheme. The facilitation of electronic delivery of a range latter covers licensed shareholders, financial of financial services and products. planners, life insurers and fund managers. Today, our services sector is one of the Obviously, providers of banking services and most dynamic and innovative sectors of the superannuation services will also require Australian economy. It represents 72 per cent approval of an appropriate complaints of GDP and this percentage is growing. scheme. Mining and agriculture represent over eight The significant improvement on existing per cent and financial services represent over complaints schemes is that, at the point of seven per cent of GDP. But when it comes to sale, either when buying a financial product exports, it is a very different story. Services or receiving financial advice, a provider will represent only one per cent, whereas the also be required to furnish a comprehensive mining and manufacturing sector represents disclosure document that will include infor- 55 per cent. Projections suggest that revenue mation on how to make a complaint. This is from Asia’s financial services industries will a boost for the consumer, who otherwise reach $US450 billion by the year 2011. In might be unaware of how to make a com- non-Japan Asia, real financial market reve- plaint and might get discouraged by the dif- nues are expected to grow by 10 per cent per ficulty of taking on a large institution and year. Obviously, there is significant potential indeed overwhelmed by the financial burden for Australia to grow our export of financial of the cost implications of pursuing a com- and professional services. It is against this plaint in court. Obviously, a cheap, effective background and the need to meet the chal- and fair means of resolving disputes is in the lenges of changing consumer needs, the interests of both the consumer and the finan- forces of globalisation, technological ad- cial provider, and there is a real interest in vances and the blurring of traditional making that known right at the start. boundaries between different types of service It has to be said that not all complaints providers that this bill has been introduced. will be justified or will warrant a remedy, This government is responding to consumer whatever a complainant might think. But expectations for better service at less cost where consumers have been misled or facts and greater returns on more diverse invest- material to the risk being assumed have not ments. been disclosed or adequately explained, or The bill delivers the third instalment of where the provider has been negligent and a the reforms arising out of the 1997 financial consumer has suffered loss, an independent system inquiry known as the Wallis report. and readily accessible complaints mecha- The bill is essentially based on the premise nism can assist in sorting out responsibility that it is no longer possible for different in- before the matter escalates and entrenched stitutions, services and products to be regu- positions are taken by either side. lated under separate financial frameworks Following what might be regarded as an governing licensing, disclosure and other exhaustive consultation process—as Senator conduct obligations which vary across dif- Ferguson has said—that has included exten- ferent industry sectors. The bill, as others sive industry consultation and two reports of have said, is complex and far reaching. For the Parliamentary Joint Statutory Committee the purpose of my brief contribution today, I on Corporations and Securities, the govern- want to confine my comments to a couple of ment has brought forward some sensible issues. The first is the complaint provisions. amendments to the regulatory framework Under the bill, all licensees will be required and uniform licensing provisions. Here I to be members of an independent complaints would also like to add my commendations on scheme approved by the Australian Securi- the work of the committee, which across 26378 SENATE Wednesday, 22 August 2001 party lines have worked through a very com- clear-cut as it should be. Any material factors plex regulatory framework and have brought going to the formation of a contract which the bill to the chamber in a pretty sound state could influence a consumer’s choice of pro- for debate. The key amendments are: reten- vider should be transparent and disclosed. I tion of existing contractual arrangements do not think that the arguments advanced for with life companies; exempting lawyers and exemption are sufficient to outweigh the tax advisers who give incidental financial consumer’s right to know about the financial advice in the ordinary course of their activi- reward that the agent will gain by recom- ties; the exemption of pooled superannuation mending a certain provider. funds in the wholesale market; and some No doubt these reforms will require ad- limitations on the taping of financial advice justments, and the two-year transitional pe- given by telephone to retail investors during riod seems not unreasonable in the circum- takeovers. stances. As Chair of the Senate Regulations I wish to briefly comment on the require- and Ordinances Committee, I look forward ment that those selling financial products to scrutinising the detailed machinery of the disclose all fees, charges and commissions, regulatory scheme to ensure fairness and that which has been the subject of earlier contri- personal rights are protected. The regulations butions. This requirement has been the sub- are also subject to an extensive consultation ject of some criticism as having the potential process with industry and consumer repre- to affect small agencies, typically in country sentative bodies. Australia, which sell general insurance, often Finally, the bill represents new approaches as an adjunct to some other business such as to regulation of market misconduct. The ex- a stock and station agency or a pharmacy. planatory memorandum makes it clear that One of the arguments advanced in favour of the existing law in the Corporations Act is the proposition that those agents selling risk intended to be reproduced but extended to all products should be exempt from disclosure is financial products and markets. Lawyers and that the commission paid will have no direct those advising industry will need to be alive impact on the ultimate outcome for the con- to the implications that the application of the sumer. However, this view overlooks the fact Criminal Code will bring to conduct regu- that the underlying objective of the bill is to lated by the bill. As this is a speech and not a ensure that the consumer is protected and legal advice—sometimes I tend to slip into given sufficient information in a form that my former role—I will but refer to the com- will enable them to make an informed prehensive and thoughtful exploration of choice. these legal issues in a paper given by Joe The amount of commission paid to an Longo, special counsel to Freehill’s lawyers, agent is a material fact that may influence a and delivered on 31 May at Sydney Univer- consumer’s choice of provider. It may also sity’s law school. signal how keen a provider is to get the busi- Senator Ian Campbell—A fine Western ness. When faced with two largely identical Australian. products from two different providers, why would an agent not go for the one that pays Senator COONAN—He is a good West- the highest commission? In that scenario, the ern Australian. I quote the concluding para- decision would be influenced by the finan- graph: cial interests of the agent rather than factors For lawyers, great care will need to be taken to that would impact on the consumer such as identify the legislative strand which supports a the service history or the financial health of particular conclusion. For industry, while much of the substance of the regulatory approach presently the provider. It must be said in defence of found in the Corporations Act is intended to be agents—and I wholeheartedly accept this— reproduced in proposed Chapter 7, the attempt to that most would be influenced quite properly take a unified approach to regulating financial by a number of factors, including competi- products generally will, I think, force industry to tive premiums and how to provide a good reconsider its compliance strategies as regulatory service for their client. However, it is not as and market attention is, in effect, refocussed on a Wednesday, 22 August 2001 SENATE 26379 range of financial products that historically may in moving it from the initial concept of not have been regarded as being relevant to mar- merging chapters 7 and 8 of the Corporations ket manipulation and insider trading, for example. Law to today, when it has become known as I commend the paper to those who are inter- the Financial Sector Reform Bill. The exist- ested in the market misconduct provisions. ing Corporations Law had the stock ex- It would be remiss of me if I did not also change regulated or legislated under chapter note the role that Senator Ian Campbell 7 and the futures exchange under chapter 8. played in the development of many aspects Back in 1997, we decided that the products of this legislation. There have been a lot of and services effectively offered by the fu- players in this, as well as extensive consulta- tures exchange and by the stock exchange tion, but while we have quite rightly praised had merged in many respects, that many of the efforts of the committee we should also the derivatives type contracts and a range of note that Senator Ian Campbell played a piv- the other futures type contracts offered by otal role in earlier incarnations of this bill. the stock exchange at that time had merged Having said all that, I will now sit down. I and that there was little justification for commend the bill to the Senate. having two separate bodies of law regulating those financial products. Senator IAN CAMPBELL (Western Australia— Parliamentary Secretary to the From there, we also looked closely at a Minister for Communications, Information report called the good advice report, as I re- Technology and the Arts) (5.14 p.m.)—How call, which recommended, as you would hard it is to follow the eloquent contribution know, Mr Acting Deputy President Sherry, of the Deputy Government Whip. It would from your experience in superannuation, that be hard to find anyone in this building whose there needed to be some harmonisation of knowledge could surpass her knowledge of regulation of people involved in giving fi- corporate law issues. While we are patting nancial advice across a range of financial each other on the back so vigorously, I areas, including superannuation, general in- should mention the tremendous contribution surance, risk and non-risk products and a of a range of people to what has been, with- range of other financial planning offerings— out exaggerating, a very successful program. including managed investments, which have I do not even think people on the opposition been in the news lately—and the traditional benches would contradict this, although I can securities and futures products. That was a get carried away from time to time on this. report that made some sound recommenda- The Corporate Law Economic Reform Pro- tions. gram—CLERP, one of the worst acronyms in Following that report, we then had the modern political history, designed in my of- Wallis inquiry, which looked at reform of the fice back in 1997—has generally been sup- entire financial system in Australia, and ported by all groupings within the parlia- many of the key Wallis recommendations ment. We have had a couple of disagree- were implemented during the last parliament. ments. The most significant one was over That saw the establishment of the Prudential takeovers reform, where I and the govern- Regulatory Authority, new powers for ASIC ment were pressing to have a follow-on rule, and the most historic reform of the financial a mandatory bid rule, which would mirror system in Australian history. Most people— the law that is in place in the City of London. certainly those in international areas looking That is the most significant policy difference, at Australia’s regulatory structure—are and I still remain hopeful that at some stage finding a system in Australia that is operat- in the future the Democrats and potentially ing very effectively and has made Australia the Labor Party may see the benefit of that an exemplar around the world in terms of takeovers reform. corporations and financial regulation. It is Having said that, I want to carry on from interesting to see that even in European Senator Coonan and say thank you to the countries like Germany they are tending range of people who saw what started its life more and more to model their financial and as CLERP 6 and have been deeply involved corporate law governance structures on the 26380 SENATE Wednesday, 22 August 2001 system that has been developed here in Aus- tributed to Australia’s increasing economic tralia under the CLERP program since the security in a period when we are pretty much Treasurer gave me responsibility for that a Rock of Gibraltar economically in a turbu- program at the end of 1996. lent sea of international economic events. That was when we set out. With this sig- That is a very good thing. It means that the nificant piece of reforming legislation, we mums and dads, as they have begun to be are nearing the end of that enormous Corpo- known in recent years, the investors of Aus- rate Law Economic Reform Program. This tralia, who either invest through big superan- brings to an end a lot of that process. Even nuation funds or in managed investment though we look forward to CLERP 7 coming schemes or directly into securities or other before the parliament fairly shortly, CLERP products, can feel some security and become 1, 2, 3, 4, 5 and 6 together saw the most sig- part of the free enterprise system in Australia nificant rewriting of Corporations Law in with some security about their investments. Australian history. They make our Corpora- No Corporations Law and no financial tions Law the envy of many other jurisdic- structure is ever going to take away risk, but tions around the world. I think when we fi- it is very important that, when people enter nally get the follow-on rule and the manda- into these products, they understand what the tory bid rule into takeovers law, it will be risks are and what the rewards are. without any doubt the greatest corporations I think it has been an important reform. I regime on the globe. We look forward to am pleased to have been associated with it. I Senator Andrew Murray’s support for that join Senator Coonan in thanking Senator change when it comes before the Senate Chapman for his significant work throughout next. the entire CLERP program, and particularly But it did involve enormous consultation with this bill. I also pay credit particularly to and a policy view from the Treasurer and Senator Ferguson. During my time of trying myself and the government that we should to get CLERP6 into a piece of legislation and rewrite the Corporations Law with a couple ultimately into this place, he gave me enor- of key objectives. The core one was to have mous assistance with his significant personal a body of law in this country which encour- knowledge of and expertise in the insurance aged enterprise, encouraged business, en- industry. I know that Senator Ferguson is couraged investment, encouraged the forma- respected throughout the industry across tion of capital and encouraged mergers and Australia. I thank him for the time he gave to acquisitions so that capital could find its best me when I was a parliamentary secretary use and which also created an institutional struggling with the demands of the insurance framework with the Wallis reforms that gave industry. I also thank my friend John Hibbett consumers a stronger level of protection and at the FPA, the banks and all the different better disclosure regimes, so that consumers players in this. I think the concept of finding knew, in better and more assessable detail, a unique, single regulatory regime for all the what the sorts of risks and rewards and op- people who have been in that industry for so portunities of the various products they long was, I guess, in Sir Humphrey’s lan- would be accessing were, so that they were guage a brave decision, but we are here to- then able to make better decisions based on day. I see from my briefings from depart- that information. mental officials that on most of the areas of this law there is pretty solid agreement. We It has been an enormous process. I think it will have a couple of disagreements in the is fair to say that it has contributed signifi- committee stage. cantly already, with the enactment of the fundraising reforms, the takeovers reforms, I conclude by thanking not only all the the corporate governance reforms and, very people here but all the people who did bother importantly, the reforms to accounting stan- to come forward and assist the government dards, to Australia’s growth as an interna- to design this large package. I mentioned tional financial centre and, although it is hard John Hibbett, but there were many other to measure these things, I think it has con- people right around Australia who contrib- Wednesday, 22 August 2001 SENATE 26381 uted and gave up their very valuable time to moved to these bills. The memoranda were assist the government with its consultations. circulated in the chamber yesterday. Last, but not least, I thank the departmental FINANCIAL SERVICES REFORM BILL officials who used to be in the Business Law 2001 Division—I do not know what it is called these days. Since Jim Murphy’s time as the The bill. head there, there has been a whole range of Senator IAN CAMPBELL (Western people in the Treasury department in what Australia— Parliamentary Secretary to the was called the Business Law Division. It is Minister for Communications, Information probably called something else now. They Technology and the Arts) (5.28 p.m.)—by are not all here in the box today but are back leave—I move government amendments Nos at Treasury, but I thank them for the enor- 1 to 19, 21 to 64, 69 to 126 and 128 to 157: mous amount of work that has gone on since (1) Schedule 1, item 1, page 6 (lines 26 to 30), late 1996 until the present. omit paragraph (d), substitute: I think you would be hard pressed to find (d) funds are able to be withdrawn or a piece of legislation that has had the sort of transferred from the facility on the consultation that this has had. It deserved it. I instruction of, or by authority of, the think Joe Hockey, the minister, would tell depositor: you that it is about seven per cent of the (i) without any prior notice to the GDP of Australia. It affects just about every ADI that makes the facility avail- man, woman and child in Australia, because able; or just about everyone has some form of inter- (ii) if the ADI that makes the facility action with the investment community, no available is included in a class of matter where they invest. Getting this legis- ADIs specified in regulations made for the purposes of this lation right and ensuring that consumers are subparagraph—subject to a prior protected, and balancing that with a need to notice requirement that does not develop capital, is a hard balancing exercise. exceed the period specified in I sincerely thank the Treasury officers who those regulations in relation to have put so much time and effort into what is that class of ADIs; a significant piece of legislation. I thank all whether or not the withdrawal or honourable senators who have contributed to transfer will attract a reduction in the debate and look forward to moving this the return generated for the deposi- legislation through its subsequent stages. I tor as mentioned in subpara- commend the bill to the Senate. graph (c)(i); and The ACTING DEPUTY PRESIDENT (2) Schedule 1, item 1, page 8 (after line 8), (Senator Sherry)—The question is that the after the definition of disqualified individ- second reading amendment moved by Sena- ual, insert: tor Murray be agreed to. execution-related telephone advice has the meaning given by subsection Question resolved in the affirmative. 946B(1). The ACTING DEPUTY PRESID- (3) Schedule 1, item 1, page 8 (lines 14 and 15), ENT—The question is that the amended omit “subsection 766B(1)”, substitute “sec- motion be agreed to. tion 766B”. Question resolved in the affirmative. (4) Schedule 1, item 1, page 9 (after line 30), Bills read a second time. after the definition of general insurance product, insert: In Committee holder, in relation to a financial prod- Senator IAN CAMPBELL (Western uct, means the person to whom the fi- Australia— Parliamentary Secretary to the nancial product was issued, or if it has Minister for Communications, Information (since issue) been disposed of to an- Technology and the Arts) (5.27 p.m.)—I table other person who has not themselves supplementary explanatory memoranda re- disposed of it, that other person (and lating to the government amendments to be hold has a corresponding meaning). 26382 SENATE Wednesday, 22 August 2001

(5) Schedule 1, item 1, page 11 (line 2), omit provided to the person as a retail cli- “or (l)”. ent; and (6) Schedule 1, item 1, page 13 (after line 9), (c) if a financial service (other than the after the definition of recognised affiliate, provision of a financial product) insert: provided to a person who is: relevant personal circumstances, in (i) the trustee of a superannuation relation to advice provided or to be fund, an approved deposit fund, a provided to a person in relation to a pooled superannuation trust or a matter, are such of the person’s objec- public sector superannuation tives, financial situation and needs as scheme (within the meaning of would reasonably be considered to be the Superannuation Industry (Su- relevant to the advice. pervision) Act 1993) that has net (7) Schedule 1, item 1, page 17 (before line 1), assets of at least $10 million; or after subsection (3), insert: (ii) an RSA provider (within the (3A) For the avoidance of doubt, none of the meaning of the Retirement Sav- following are taken to give rise to the ings Accounts Act 1997); issue of a financial product to a person relates to a superannuation product (the client): or an RSA product, that does not (a) the client making a further contribu- constitute the provision of a finan- tion to a superannuation fund of cial service to the person as a retail which the client is already a mem- client. ber; (10) Schedule 1, item 1, page 23 (line 33) to page (b) the client making a further deposit 24 (line 5), omit notes 1, 2 and 3 to subsec- into an RSA maintained in the cli- tion (9), substitute: ent’s name; Note 1:There is no such presumption in (c) the client making a further payment relation to the provision of a under a life insurance investment product or service that is or re- product; lates to a general insurance product, a superannuation prod- (d) the client making a further deposit uct or an RSA product. Whether into a deposit product; or not such a product, or a (e) the client engaging in conduct speci- service relating to such a prod- fied in regulations made for the pur- uct, was provided to a person as poses of this paragraph in relation to a retail client is to be resolved a financial product already held by as provided in subsection (5) or the client. (6), as the case requires. (8) Schedule 1, item 1, page 20 (line 30), omit Note 2:In criminal proceedings, a de- “subsection (5) or (7)”, substitute “subsec- fendant bears an evidential bur- tion (5), (6) or (7)”. den in relation to the matters in (9) Schedule 1, item 1, page 22 (lines 13 to 19), paragraphs (7)(a) to (d) (see omit subsection (6), substitute: subsection (8)). Superannuation products and RSA (11) Schedule 1, item 1, page 30 (line 15), omit products “may be still be”, substitute “may still be”. (6) For the purposes of this Chapter: (12) Schedule 1, item 1, page 30 (after line 33), after paragraph 764A(1)(b), insert: (a) if a financial product provided to a person is a superannuation product (ba) any of the following in relation to a or an RSA product, the product is managed investment scheme that is provided to the person as a retail cli- not a registered scheme, other than a ent; and scheme (whether or not operated in this jurisdiction) in relation to which (b) if a financial service (other than the none of paragraphs 601ED(1)(a), (b) provision of a financial product) and (c) are satisfied: provided to a person who is not cov- ered by subparagraph (c)(i) or (ii) (i) an interest in the scheme; relates to a superannuation product or an RSA product, the service is Wednesday, 22 August 2001 SENATE 26383

(ii) a legal or equitable right or inter- (9) In this section: est in an interest covered by sub- exempt document or statement means: paragraph (i); (a) a document prepared, or a statement (iii) an option to acquire, by way of given, in accordance with require- issue, an interest or right covered ments of this Chapter, other than: by subparagraph (i) or (ii); (i) a Statement of Advice; or (13) Schedule 1, item 1, page 32 (lines 17 to 20), omit subparagraph (k)(ii), substitute: (ii) a document or statement of a kind prescribed by regulations (ii) a contract to exchange one cur- made for the purposes of this rency (whether Australian or not) subparagraph; or for another that is to be settled immediately; (b) any other document or statement of a kind prescribed by regulations (14) Schedule 1, item 1, page 32 (lines 21 to 29), made for the purposes of this para- omit paragraph (l). graph. (15) Schedule 1, item 1, page 34 (lines 18 to 21), (22) Schedule 1, item 1, page 37 (line 31), after omit paragraph (m), substitute: “conduct”, insert “(whether engaged in as (m) a contract to exchange one currency principal or agent)”. (whether Australian or not) for an- (23) Schedule 1, item 1, page 38 (line 10), after other that is to be settled immedi- “own behalf”, insert “(whether directly or ately; through an agent or other representative)”. (16) Schedule 1, item 1, page 34 (lines 24 and (24) Schedule 1, item 1, page 38 (after line 12), 25), omit paragraph (o). after subsection (3), insert: (17) Schedule 1, item 1, page 35 (lines 1 to 9), (3A) For the purposes of subsection (3), a omit paragraph (s), substitute: person (the agent) who deals in a prod- (s) any of the following in relation to a uct as an agent or representative of an- managed investment scheme other person (the principal) is not taken (whether or not operated in this ju- to deal in the product on the agent’s risdiction) in relation to which none own behalf, even if that dealing, when of paragraphs 601ED(1)(a), (b) and considered as a dealing by the princi- (c) are satisfied and that is not a pal, is a dealing by the principal on the registered scheme: principal’s own behalf. (i) an interest in the scheme; (25) Schedule 1, item 1, page 39 (after line 12), (ii) a legal or equitable right or inter- at the end of section 766D, add: est in an interest covered by sub- (2) Paragraph (1)(a) does not apply to a paragraph (i); person stating prices at which they pro- (iii) an option to acquire, by way of pose to acquire or dispose of financial issue, an interest or right covered products if: by subparagraph (i) or (ii); (a) the person is the issuer of the prod- (18) Schedule 1, item 1, page 37 (line 5), omit ucts; and “the provision of an exempt document”, (b) the products are superannuation substitute “the provision or giving of an ex- products, managed investment empt document or statement”. products or financial products re- (19) Schedule 1, item 1, page 37 (lines 12 to 15), ferred to in paragraph 764A(1)(ba) omit paragraphs (3)(a) and (b), substitute: (which relates to unregistered man- aged investment schemes). (a) the provider of the advice has con- sidered one or more of the person’s (26) Schedule 1, item 1, page 39 (lines 14 to 34), objectives, financial situation and omit subsections 766E(1) and (2), substitute: needs; or (1) For the purposes of this Chapter, a per- (b) a reasonable person might expect son (the provider) provides a custodial the provider to have considered one or depository service to another person or more of those matters. (the client) if, under an arrangement between the provider and the client, or (21) Schedule 1, item 1, page 37 (lines 21 to 29), between the provider and another per- omit subsection (6), substitute: son with whom the client has an ar- 26384 SENATE Wednesday, 22 August 2001

rangement, (whether or not there are clearing and settlement arrangements, also other parties to any such arrange- for transactions effected through a fi- ment), a financial product, or a benefi- nancial market, means arrangements cial interest in a financial product, is for the clearing and settlement of those held by the provider in trust for, or on transactions. The arrangements may be behalf of, the client or another person part of the market’s operating rules or nominated by the client. be separate from those operating rules. (2) The following provisions apply in rela- (30) Schedule 1, item 1, page 48 (line 19), omit tion to a custodial or depository serv- “in”, substitute “on or in relation to”. ice: (31) Schedule 1, item 1, page 50 (line 35), omit (a) subject to paragraph (b), for the “an individual”, substitute “a person”. purposes of this Chapter, the time at (32) Schedule 1, item 1, page 53 (lines 1 to 20), which a custodial or depository omit section 792G, substitute: service is provided is the time when the financial product or beneficial 792G Obligations to notify people about interest concerned is first held by clearing and settlement arrangements in the provider as mentioned in sub- certain circumstances section (1); (1) If, in relation to a category of transac- (b) for the purposes of Part 7.6, and of tions, being all transactions or a class any other provisions of this Act pre- of transactions effected through a li- scribed by regulations made for the censed market, the market licensee: purposes of this paragraph, the con- (a) does not have any clearing and set- tinued holding of the financial prod- tlement arrangements for transac- uct or beneficial interest concerned tions in that category; or by the provider as mentioned in sub- (b) has clearing and settlement ar- section (1) also constitutes the pro- rangements for transactions in that vision of a custodial or depository category, but they are not arrange- service. ments with the operator of a clearing Note: Because of paragraph (a) (sub- and settlement facility for the clear- ject to regulations made for the ing and settlement of such transac- purposes of paragraph (b)), the tions through the facility; requirements of Part 7.7 relat- the market licensee must, before a ing to financial services disclo- person becomes a participant in the sure need only be complied market, give the person written ad- with before the product or in- vice: terest is first held by the pro- (c) if paragraph (a) applies—that the vider. However, because of paragraph (b), the provider will licensee does not have any clearing and settlement arrangements for be subject to the licensing and transactions in that category, and related requirements of Part 7.6 for so long as they continue to that it is the responsibility of the parties to such transactions to make hold the product or interest. their own arrangements for the (27) Schedule 1, item 1, page 40 (line 4), after clearing and settlement of such “registered scheme”, insert “, or the holding transactions; or of the assets of a registered scheme”. (d) if paragraph (b) applies—setting out (28) Schedule 1, item 1, page 44 (after line 35), particulars of the clearing and set- after subsection (8), insert: tlement arrangements for transac- (8A) Nothing in this section, other than sub- tions in that category. sections (7) and (8), excludes or limits Note: Failure to comply with this sub- the operation of subsection 601FB(2) section is an offence (see sub- in relation to the provisions of this section 1311(1)). Chapter or to proceedings under this (2) Within a reasonable time before a mar- Chapter. ket licensee ceases, in relation to a (29) Schedule 1, item 1, page 46 (lines 5 to 9), category of transactions, being all omit the definition of clearing and settle- transactions or a class of transactions ment arrangements, substitute: effected through a licensed market, to Wednesday, 22 August 2001 SENATE 26385

have clearing and settlement arrange- (3) For the purpose of this section, the ments (the terminating arrangements) provisions of this Part include: with the operator of a particular clear- (a) definitions in this Act, or in the ing and settlement facility for the regulations, as they apply to refer- clearing and settlement of such trans- ences in this Part; and actions through the facility, the market licensee must give the participants in (b) any provisions of Part 10.2 (transi- the market written advice: tional provisions) that relate to pro- visions of this Part. (a) if the terminating arrangements are not being replaced by any other (37) Schedule 1, item 1, page 120 (lines 8 to 11), clearing and settlement arrange- omit paragraph (c), substitute: ments—that the licensee will no (c) the operator of a clearing and set- longer have clearing and settlement tlement facility, if: arrangements for that category of (i) there are clearing and settlement transactions, and that it will be the arrangements (as defined in sec- responsibility of the parties to such tion 790A) for some or all trans- transactions to make their own ar- actions effected through the mar- rangements for the clearing and set- ket; and tlement of such transactions; or (ii) those arrangements are with the (b) if the terminating arrangements are operator of the facility; or being replaced by new clearing and (38) Schedule 1, item 1, page 156 (lines 6 to 11), settlement arrangements—setting out particulars of the new arrange- omit the definition of representative, sub- stitute: ments. Note: Failure to comply with this sub- representative of a person means: section is an offence (see sub- (a) if the person is a financial services section 1311(1)). licensee: (33) Schedule 1, item 1, page 62 (line 13), omit (i) an authorised representative of “in”, substitute “on or in relation to”. the licensee; or (34) Schedule 1, item 1, page 77 (line 17), omit (ii) an employee or director of the “an individual”, substitute “a person”. licensee; or (35) Schedule 1, item 1, page 112 (line 22), omit (iii) an employee or director of a re- “Record-keeping etc.”, substitute “Miscel- lated body corporate of the licen- laneous”. see; or (36) Schedule 1, item 1, page 113 (after line 24), (iv) any other person acting on behalf at the end of Part 7.4, add: of the licensee; or 854B Exemptions and modifications by (b) in any other case: regulations (i) an employee or director of the (1) The regulations may: person; or (a) exempt a person or class of persons (ii) an employee or director of a re- from all or specified provisions of lated body corporate of the per- this Part; or son; or (b) provide that this Part applies as if (iii) any other person acting on behalf specified provisions were omitted, of the person. modified or varied as specified in (39) Schedule 1, item 1, page 157 (lines 3 to 12), the regulations. omit paragraph (b), substitute: (2) Without limiting subsection (1), regu- (b) the service is the issue, variation or lations made for the purposes of this disposal of a financial product by section may declare that provisions of the person (the product provider) this Part are modified so that they ap- pursuant to an arrangement (an in- ply (with or without further modifica- termediary authorisation) between tions) in relation to persons, bodies or the product provider and a financial situations to which they would not oth- services licensee under which: erwise apply. 26386 SENATE Wednesday, 22 August 2001

(i) the financial services licensee, or (ec) the service is the provision of gen- their authorised representatives, eral advice and all of the following may make offers to people to ar- apply: range for the issue, variation or (i) the advice is provided in sound disposal of financial products by recordings, video recordings, or the product provider; and data recordings; (ii) the product provider is to issue, (ii) the person makes the recordings vary or dispose of financial prod- available to the public by sup- ucts in accordance with such of- plying copies of them to the pub- fers, if they are accepted; lic and/or by causing the record- provided that the offer pursuant to ings (if they are sound record- which the issue, variation or dis- ings) to be heard by the public, posal is made was covered by the fi- causing the recordings (if they nancial services licensee’s Austra- are video recordings) to be seen lian financial services licence; and heard by the public, or the (ba) the service is the entry into of an contents of the recordings (if they intermediary authorisation referred are data recordings) to be dis- to in paragraph (b); played or reproduced for the public; (40) Schedule 1, item 1, page 157 (after line 26), after paragraph (e), insert: (iii) the sole or principal purpose of the recordings is not the provi- (ea) the service is the provision of gen- sion of financial product advice; eral advice and all of the following apply: (41) Schedule 1, item 1, page 158 (lines 14 to 16), omit subparagraph (g)(ii), substitute: (i) the advice is provided in a news- paper or periodical of which the (ii) the service is one in relation to person is the proprietor or pub- which APRA has regulatory or lisher; supervisory responsibilities; (ii) the newspaper or periodical is (42) Schedule 1, item 1, page 159 (lines 11 to generally available to the public 16), omit subsection (5), substitute: otherwise than only on subscrip- (5) The exemption under para- tion; graph (2)(ea), (eb) or (ec), or an ex- (iii) the sole or principal purpose of emption under paragraph (2)(k) or (l), the newspaper or periodical is not may apply unconditionally or subject to the provision of financial product conditions: advice; (a) in the case of the exemption under (eb) the service is the provision of gen- paragraph (2)(ea), (eb) or (ec), or an eral advice and all of the following exemption under paragraph (2)(k)— apply: specified in regulations made for the purposes of this paragraph; or (i) the advice is provided in the course of, or by means of, trans- (b) in the case of an exemption under missions that the person makes paragraph (2)(l)—specified by ASIC by means of an information in writing published in the Gazette. service (see subsection (6)), or (6) In this section: that are made by means of an in- information service means: formation service that the person owns, operates or makes avail- (a) a broadcasting service; or able; (b) an interactive or broadcast videotext (ii) the transmissions are generally or teletext service or a similar serv- available to the public; ice; or (iii) the sole or principal purpose of (c) an online database service or a the transmissions is not the pro- similar service; or vision of financial product ad- (d) any other service identified in regu- vice; lations made for the purposes of this paragraph. Wednesday, 22 August 2001 SENATE 26387

(43) Schedule 1, item 1, page 161 (after line 3), (a) standards or requirements made by at the end of section 911B, add: ASIC; or (3) If, as mentioned in paragraph (1)(d), (b) approvals given by ASIC. the provider holds their own Australian (46) Schedule 1, item 1, page 164 (line 31), omit financial services licence covering the “this Act”, substitute “the financial services provision of the service, then, for the laws”. purposes of the other provisions of this Chapter, the service is taken to be pro- (47) Schedule 1, item 1, page 168 (lines 12 and vided by the provider (and not by the 13), omit “significantly limiting or restrict- principal) unless regulations made for ing the APRA body’s ability to carry on”, the purposes of this subsection provide substitute “preventing the APRA body from otherwise. being able to carry on”. (44) Schedule 1, item 1, page 162 (lines 21 to (48) Schedule 1, item 1, page 168 (lines 32 and 26), omit paragraph (g), substitute: 33), omit “significantly limiting or restrict- ing the ADI’s ability to carry on”, substitute (g) if those financial services are pro- “preventing the ADI from being able to vided to persons as retail clients— carry on”. have a dispute resolution system com- plying with subsection (2); and (49) Schedule 1, item 1, page 171 (after line 14), at the end of section 915B, add: (45) Schedule 1, item 1, page 162 (after line 30), at the end of section 912A, add: (4) ASIC may suspend or cancel an Aus- tralian financial services licence held (2) To comply with this subsection, a dis- by the trustees of a trust, by giving pute resolution system must consist of: written notice to the trustees, if: (a) an internal dispute resolution proce- (a) the trustees of the trust cease to dure that: carry on the financial services busi- (i) complies with standards, and ness; or requirements, made or approved (b) a trustee who is a natural person: by ASIC in accordance with regulations made for the purposes (i) becomes an insolvent under ad- of this subparagraph; and ministration; or (ii) covers complaints against the (ii) is convicted of serious fraud; or licensee made by retail clients in (iii) becomes incapable of managing connection with the provision of their affairs because of physical all financial services covered by or mental incapacity; or the licence; and (c) a trustee that is a body corporate (b) membership of one or more external becomes an externally-administered dispute resolution schemes that: body corporate; or (i) is, or are, approved by ASIC in (d) the trustees lodge with ASIC an accordance with regulations application for ASIC to do so, made for the purposes of this which is accompanied by the docu- subparagraph; and ments, if any, required by regula- (ii) covers, or together cover, com- tions made for the purposes of this plaints (other than complaints paragraph. that may be dealt with by the Su- Note 1:For fees in respect of lodging perannuation Complaints Tribu- applications, see Part 9.10. nal established by section 6 of the Note 2:If there is only one trustee, sub- Superannuation (Resolution of section (1) will apply (if the Complaints) Act 1993) against trustee is a natural person), and the licensee made by retail clients subsection (3) will apply (if the in connection with the provision trustee is a body corporate). of all financial services covered (50) Schedule 1, item 1, page 173 (lines 14 to by the licence. 28), omit subsection (1), substitute: (3) Regulations made for the purposes of (1) If a financial services licensee, or a subparagraph (2)(a)(i) or (2)(b)(i) may related body corporate, is a body (the also deal with the variation or revoca- APRA body) regulated by APRA, other tion of: 26388 SENATE Wednesday, 22 August 2001

than an ADI (within the meaning of the Note: Failure to comply with this sub- Banking Act 1959), section is an offence (see sub- the following provisions apply: section 1311(1)). (a) ASIC cannot suspend or cancel the (56) Schedule 1, item 1, page 175 (after line 27), licensee’s licence if doing so would, at the end of section 916B, add: in ASIC’s opinion, have the result of (7) An authorisation of an individual as preventing the APRA body from mentioned in subsection (3) may be re- being able to carry on all or any of voked at any time by: its usual activities (being activities (a) the licensee; or in relation to which APRA has regulatory or supervisory responsi- (b) the body corporate that gave the bilities), unless ASIC has first con- individual the authorisation; sulted APRA about the proposed giving written notice to the individ- action; ual. (b) if ASIC suspends or cancels the (8) If a person revokes the authorisation of licensee’s licence and paragraph (a) an individual under subsection (7), that does not apply to that action, ASIC person must inform, in writing, the must, within one week, inform other person who could have revoked APRA of the action that has been the authorisation. taken. (9) To avoid doubt, an authorisation given (51) Schedule 1, item 1, page 174 (lines 1 and 2), as mentioned in subsection (3) is taken, omit “significantly limiting or restricting the for the purposes of sections 916C to ADI’s ability to carry on”, substitute “pre- 916F, to be given by the body corpo- venting the ADI from being able to carry rate, not the licensee. on”. (57) Schedule 1, item 1, page 176 (lines 8 to 10), (52) Schedule 1, item 1, page 175 (after line 7), omit subsection 916C(3), substitute: after subsection 916A(3), insert: (3) A person must not give a purported (3A) A person must not give a purported authorisation if that purported authori- authorisation if that purported authori- sation is in breach of this requirement. sation is void to any extent under sub- Note: Failure to comply with this sub- section (3). section is an offence (see sub- Note: Failure to comply with this sub- section 1311(1)). section is an offence (see sub- (58) Schedule 1, item 1, page 176 (after line 20), section 1311(1)). after subsection 916D(2), insert: (53) Schedule 1, item 1, page 175 (after line 15), (2A) A person must not give a purported after subsection 916B(2), insert: authorisation if that purported authori- (2A) A person must not give a purported sation is given in breach of this re- authorisation if that purported authori- quirement. sation is contrary to this section. Note: Failure to comply with this sub- Note: Failure to comply with this sub- section is an offence (see sub- section is an offence (see sub- section 1311(1)). section 1311(1)). (2B) The requirement in subsection (1) does (54) Schedule 1, item 1, page 175 (line 20), at the not prohibit a financial services licen- end of subsection 916B(3), add “in writing see from being an authorised represen- given to the body corporate”. tative in circumstances covered by sec- (55) Schedule 1, item 1, page 175 (after line 25), tion 916E. after subsection (5), insert: Note: In a prosecution for an offence (5A) If a licensee gives consent under sub- based on subsection (2A), a de- section (3) to a body corporate, the li- fendant bears an evidential bur- censee must keep a copy of the consent den in relation to the matters in for 5 years after the day on which it this subsection. See subsection ceases to have effect. 13.3(3) of the Criminal Code. (59) Schedule 1, item 1, page 177 (line 5), after “ASIC”, insert “etc.”. Wednesday, 22 August 2001 SENATE 26389

(60) Schedule 1, item 1, page 177 (after line 11), (d) if subparagraph (c)(i) applies—the after subsection 916F(1), insert: authorising licensee is responsible (1A) A person who authorises an individual for the conduct, as between that li- to provide a financial service on behalf censee and the client; or of a financial services licensee as men- (e) if subparagraph (c)(ii) applies—the tioned in section 916B must give the li- authorising licensees are jointly and censee written notice (in accordance severally responsible for the con- with subsection (2)), within 10 busi- duct, as between themselves and the ness days of the individual being client. authorised to provide the financial (63) Schedule 1, item 1, page 186 (lines 22 to service, if the licensee’s consent to the 27), omit paragraph (e), substitute: authorisation was given in respect of a specified class of individuals. (e) if members of the body provide that kind of financial product advice to Note: Failure to comply with this sub- persons as retail clients—ensure that section is an offence (see sub- each of its members has a dispute section 1311(1)). resolution system complying with (61) Schedule 1, item 1, page 177 (lines 19 to subsection (2); and 23), omit subsection (3), substitute: (64) Schedule 1, item 1, page 187 (after line 2), (3) A person must notify ASIC, by lodging at the end of section 919A, add: a written notice, within 10 business (2) To comply with this subsection, a dis- days if: pute resolution system must consist of: (a) the person authorised a representa- (a) an internal dispute resolution proce- tive under section 916A or 916B and dure that: there is a change in any details re- lating to the representative that are (i) complies with standards, and required to be included under sub- requirements, made or approved section (2); or by ASIC in accordance with regulations made for the purposes (b) the person revokes the authorisation of this subparagraph; and of a representative under sec- tion 916A or 916B. (ii) covers complaints made by retail clients in connection with the Note: Failure to comply with this sub- provision by the member of the section is an offence (see sub- kind of financial product advice section 1311(1)). covered by the declaration; and (62) Schedule 1, item 1, page 181 (lines 5 to 15), (b) membership of one or more external omit subsection (3), substitute: dispute resolution schemes that: Financial service covered by multiple (i) is, or are, approved by ASIC in authorities: conduct within authority accordance with regulations for one or more of them made for the purposes of this (3) If: subparagraph; and (a) the representative is the representa- (ii) covers, or together cover, com- tive of more than one of the licen- plaints (other than complaints sees in respect of a particular class that may be dealt with by the Su- of financial service; and perannuation Complaints Tribu- nal established by section 6 of the (b) the conduct relates to that class of Superannuation (Resolution of service; and Complaints) Act 1993) made by (c) the conduct is within authority in retail clients in connection with relation to: the provision by the member of the kind of financial product ad- (i) only one of those licensees (the vice covered by the declaration. authorising licensee); or (3) Regulations made for the purposes of (ii) two or more of those licensees subparagraph (2)(a)(i) or (2)(b)(i) may (the authorising licensees); also deal with the variation or revoca- then: tion of: 26390 SENATE Wednesday, 22 August 2001

(a) standards or requirements made by tions made for the purposes of ASIC; or this subparagraph or, if there are (b) approvals given by ASIC. no such applicable requirements, must be such as to allow the cli- (69) Schedule 1, item 1, page 195 (line 10), omit ent a reasonable opportunity to “(ii)”, substitute “(iii)”. request a record of the advice; (70) Schedule 1, item 1, page 204 (line 14), omit and “and”. (74) Schedule 1, item 1, page 212 (lines 34 to (71) Schedule 1, item 1, page 209 (after line 4), 38), omit paragraph (h), substitute: after subsection (4), insert: (h) information about the dispute reso- (4A) The regulations may define what con- lution system that covers complaints stitutes a public forum for the purposes by persons to whom the providing of subsection (4). entity provides financial services, (72) Schedule 1, item 1, page 211 (lines 5 to 8), and about how that system may be omit paragraph 941F(b), substitute: accessed; and (b) the following conditions are satis- (75) Schedule 1, item 1, page 214 (after line 5), fied: at the end of section 942B, add: (i) there is a change in circum- (8) If: stances before the service is pro- (a) the Financial Services Guide in- vided, and the Financial Services cludes a statement to the effect that Guide does not contain the in- a client may request a record of exe- formation it would be required to cution-related telephone advice; and contain if it were given to a per- (b) the client is provided with execu- son immediately after that tion-related telephone advice to change; which that statement applies; and (ii) the fact that the Financial Serv- (c) the client has not already been pro- ices Guide does not contain the vided with a record of that advice; up to date information is materi- ally adverse from the point of the providing entity must comply view of a reasonable person de- with a request made in accordance ciding, as a retail client, whether with that statement for a record of to proceed to be provided with that advice. the financial service; Note: Failure to comply with this sub- (73) Schedule 1, item 1, page 212 (lines 24 to section is an offence (see sub- 33), omit paragraph (g), substitute: section 1311(1)). (g) if the providing entity provides exe- (76) Schedule 1, item 1, page 215 (lines 18 to cution-related telephone advice (see 28), omit paragraph (h), substitute: section 946B)—a statement in rela- (h) if the providing entity, when acting tion to which the following require- as representative of the authorising ments are satisfied: licensee or any of the authorising li- (i) the statement must indicate that censees, provides execution-related the client may request a record of telephone advice (see sec- execution-related telephone ad- tion 946B)—a statement in relation vice that is provided to them, if to which the following requirements they have not already been pro- are satisfied: vided with a record of that ad- (i) the statement must indicate that vice; the client may request a record of (ii) the statement must set out par- execution-related telephone ad- ticulars of how the client may re- vice that is provided to them, if quest such a record; they have not already been pro- vided with a record of that ad- (iii) any limitations in those particu- vice; lars on the time within which the client may request such a record (ii) the statement must set out par- must be consistent with any ap- ticulars of how the client may re- plicable requirements in regula- quest such a record; Wednesday, 22 August 2001 SENATE 26391

(iii) any limitations in those particu- those personal circumstances, the lars on the time within which the providing entity has given such con- client may request such a record sideration to, and conducted such must be consistent with any ap- investigation of, the subject matter plicable requirements in regula- of the advice as is reasonable in all tions made for the purposes of of the circumstances; and this subparagraph or, if there are (c) the advice is appropriate to the cli- no such applicable requirements, ent, having regard to that considera- must be such as to allow the cli- tion and investigation. ent a reasonable opportunity to request a record of the advice; Note: Failure to comply with this sub- and section is an offence (see sub- section 1311(1)). (77) Schedule 1, item 1, page 215 (lines 29 to 34), omit paragraph (i), substitute: (80) Schedule 1, item 1, page 223 (line 4), omit “the client”, substitute “the client’s relevant (i) information about the dispute reso- personal circumstances”. lution system that covers complaints by persons to whom the providing (81) Schedule 1, item 1, page 223 (lines 12 and entity provides financial services 13), omit “objectives, financial situation and when acting as representative of the needs”, substitute “relevant personal circum- authorising licensee or any of the stances”. authorising licensees, and about how (82) Schedule 1, item 1, page 223 (line 16), omit that system may be accessed; and “objectives, financial situation and needs”, (78) Schedule 1, item 1, page 217 (after line 7), substitute “relevant personal circumstances”. at the end of section 942C, add: (83) Schedule 1, item 1, page 224 (lines 17 to (8) If: 32), omit subsection (2), substitute: (a) the Financial Services Guide in- (2) The providing entity does not have to cludes a statement to the effect that give the client a Statement of Advice if, a client may request a record of exe- before the execution-related telephone cution-related telephone advice; and advice is provided, the client agrees to a Statement of Advice not being given (b) the client is provided with execu- in respect of the advice, or advice of tion-related telephone advice to that kind. which that statement applies; and (84) Schedule 1, item 1, page 225 (after line 3), (c) the client has not already been pro- after subsection (3), insert: vided with a record of that advice; (3A) The providing entity must keep a rec- the providing entity must comply ord of the advice and, in doing so, must with a request made in accordance comply with any applicable require- with that statement for a record of ments of regulations made for the pur- that advice. poses of this subsection. Note: Failure to comply with this sub- Note 1:Failure to comply with this sub- section is an offence (see sub- section is an offence (see sub- section 1311(1)). section 1311(1)). (79) Schedule 1, item 1, page 222 (lines 5 to 15), Note 2:For the client’s right to a record omit subsection (1), substitute: of the advice, see subsections (1) The providing entity must only provide 942B(8) and 942C(8). the advice to the client if: (85) Schedule 1, item 1, page 225, lines 4 to 11, (a) the providing entity: omit subsection (4). (i) determines the relevant personal (86) Schedule 1, item 1, page 225 (line 16), omit circumstances in relation to giv- “(c)”, substitute “(b)”. ing the advice; and (87) Schedule 1, item 1, page 232 (line 6), omit (ii) makes reasonable inquiries in “financial situation and needs”, substitute relation to those personal circum- “financial situation or needs”. stances; and (88) Schedule 1, item 1, page 232 (line 19), omit (b) having regard to information ob- “financial situation and needs”, substitute tained from the client in relation to “financial situation or needs”. 26392 SENATE Wednesday, 22 August 2001

(89) Schedule 1, item 1, page 235 (lines 5 to 16), (96) Schedule 1, item 1, page 259 (line 14), omit omit section 950B, substitute: subparagraph (iii), substitute: 950B Requirement to have reasonable (iii) to the licensee in the licensee’s basis for the advice capacity as a person acting on The providing entity must only provide behalf of the client. the advice to the client if: (97) Schedule 1, item 1, page 263 (after line 8), (a) the providing entity: at the end of Subdivision A, add: (i) determines the relevant personal 981H Money to which Subdivision ap- circumstances in relation to giv- plies taken to be held in trust ing the advice; and (1) Subject to subsections (2) and (3), (ii) makes reasonable inquiries in money to which this Subdivision ap- relation to those personal circum- plies that is paid to the licensee: stances; and (a) by the client; or (b) having regard to information ob- (b) by a person acting on behalf of the tained from the client in relation to client; or those personal circumstances, the (c) in the licensee’s capacity as a person providing entity has given such con- acting on behalf of the client; sideration to, and conducted such investigation of, the subject matter is taken to be held in trust by the li- of the advice as is reasonable in all censee for the benefit of the client. of the circumstances; and (2) Subsection (1) does not apply to money (c) the advice is appropriate to the cli- that the licensee and the client agree in ent, having regard to that considera- writing is not held in trust by the licen- tion and investigation. see for the benefit of the client. Note: Failure to comply with this sec- (3) The regulations may: tion is an offence (see subsec- (a) provide that subsection (1) does not tion 1311(1)). apply in relation to money in speci- (90) Schedule 1, item 1, page 235 (line 20), omit fied circumstances; and “the client”, substitute “the client’s relevant (b) provide for matters relating to the personal circumstances”. taking of money to be held in trust (91) Schedule 1, item 1, page 235 (lines 28 and (including, for example, terms on 29), omit “objectives, financial situation and which the money is taken to be held needs”, substitute “relevant personal circum- in trust and circumstances in which stances”. it is no longer taken to be held in trust). (92) Schedule 1, item 1, page 235 (line 32), omit “objectives, financial situation and needs”, (98) Schedule 1, item 1, page 268 (line 14), omit substitute “relevant personal circumstances”. “money”, substitute “property”. (93) Schedule 1, item 1, page 237 (after line 7), (99) Schedule 1, item 1, page 292 (lines 3 to 6), at the end of section 950D, add: omit section 1011A, substitute: (4) The providing entity must also, at or 1011A Jurisidictional scope of Division before the giving of the advice, give the (1) Subject to subsection (2), sec- client any other information required tions 1012A, 1012B and 1012C only by regulations made for the purposes of apply in relation to offers and recom- this subsection. mendations referred to in those sections (94) Schedule 1, item 1, page 257 (after line 6), that are received in this jurisdiction. after subsection (3), insert: (2) Section 1012B also applies in relation (3A) For the purposes of paragraph (3)(c): to issues referred to in subparagraph 1012B(3)(a)(iii) that are made in this (a) section 917C is taken to apply, de- jurisdiction. spite section 917F; and (3) The regulations may make provision (b) section 917D is taken not to apply. dealing with the jurisdictional scope of (95) Schedule 1, item 1, page 259 (line 13), after some or all of the other provisions of “client”, insert “;”. this Division. The other provisions of Wednesday, 22 August 2001 SENATE 26393

this Division have effect subject to any (c) a body corporate controlled by a such regulations. person referred to in paragraph (a) (100) Schedule 1, item 1, page 301 (line 22) to or (b). page 302 (line 2), omit subsection (4). (105) Schedule 1, item 1, page 305 (line 29), (101) Schedule 1, item 1, page 303 (lines 8 to omit “992A)”, substitute “992A”. 10), omit paragraphs (8)(a) and (b), substi- (106) Schedule 1, item 1, page 311 (after line tute: 8), after section 1012I, insert: (a) the financial product is a financial 1012IA Treatment of arrangements un- product described in paragraph der which a person can instruct another 764A(1)(ba) (which relates to cer- person to acquire a financial product tain managed investment schemes Definitions that are not registered schemes); and (1) In this section: (b) the holder of the office (by whatever name it is known), in relation to the acquirer, in relation to a custodial ar- managed investment scheme, that rangement, has the meaning given by corresponds most closely to the of- the definition of custodial arrange- fice of responsible entity of a regis- ment. tered scheme is an exempt body; client, in relation to a custodial ar- and rangement, has the meaning given by (102) Schedule 1, item 1, page 303 (lines 14 the definition of custodial arrange- and 15), omit “responsible entity of the ment. scheme”, substitute “office holder referred to custodial arrangement means an ar- in paragraph (b)”. rangement between a person (the pro- (103) Schedule 1, item 1, page 303 (line 17), vider) and another person (the client) omit “responsible entity of the scheme”, (whether or not there are also other substitute “office holder referred to in para- parties to the arrangement) under graph (b)”. which: (104) Schedule 1, item 1, page 303 (after line (a) the client is, or is entitled, to give an 29), after subsection (9), insert: instruction that a particular financial product, or a financial product of a Recommendation, issue or sale situa- particular kind, is to be acquired; tion—client is associated with regis- and tered scheme (b) if the client gives such an instruc- (9A) In a recommendation situation, an issue tion, a person (the acquirer), being situation or a sale situation, the regu- the provider or a person with whom lated person does not have to give the the provider has or will have an ar- client a Product Disclosure Statement rangement, must (subject to any dis- if: cretion they have to refuse) acquire (a) the financial product is a managed the financial product, or a financial investment product; and product of that kind; and (b) the client is associated (within the (c) if the acquirer acquires the financial meaning of subsection (9B)) with product, or a financial product of the scheme’s responsible entity. that kind, pursuant to an instruction (9B) For the purposes of subsection (9A), given by the client, either: the client is associated with the (i) the product is to be held on trust scheme’s responsible entity if the client for the client or another person is: nominated by the client; or (a) an executive officer of the responsi- (ii) the client, or another person ble entity or of a related body corpo- nominated by the client, is to rate; or have rights or benefits in relation (b) a spouse, parent, child, brother or to the product or a beneficial in- sister of a person who is an execu- terest in the product, or in rela- tive officer of the responsible entity tion to, or calculated by reference or a related body corporate; or to, dividends or other benefits de- rived from the product. 26394 SENATE Wednesday, 22 August 2001

instruction includes a direction or re- Determining whether a PDS would quest. have to be given for an equivalent di- provider, in relation to a custodial ar- rect acquisition rangement, has the meaning given by (3) The following provisions apply for the the definition of custodial arrange- purpose of determining whether the ment. regulated person would be required by regulated acquisition means an acqui- subsection 1012B(3) or 1012C(3) to sition of a financial product pursuant to give the client a Product Disclosure an instruction by the client under a Statement for the financial product: custodial arrangement, being an acqui- (a) the effect of the provisions referred sition: to in subsection 1012B(5) or (a) by way of issue by the issuer (the 1012C(10), as the case requires, as regulated person); or they have effect subject to the fol- lowing paragraphs, must be taken (b) pursuant to a sale by a person (the into account; regulated person) in circumstances described in subsection 1012C(5), (b) subsections 1012D(1) and (2) apply (6) or (8). as if references in those subsections to the regulated person’s belief in regulated person, in relation to a relation to a matter were instead ref- regulated acquisition of a financial erences to the provider’s belief in product, has the meaning given by relation to that matter; paragraph (a) or (b) (as the case re- quires) of the definition of regulated (c) subsections 1012D(2) and (3) apply acquisition. as if references to the client already holding a financial product of the Obligation on provider to give client a same kind also included a reference PDS to a person already holding a finan- (2) Before a regulated acquisition of a fi- cial product of the same kind as a nancial product occurs pursuant to an result of an instruction given by the instruction given by the client under a client under a custodial arrange- custodial arrangement, the provider ment; must give the client a Product Disclo- (d) sections 1012E and 1012F are to be sure Statement for the product if a disregarded; Product Disclosure Statement for the product would, if there were an (e) section 1012G has effect in accor- equivalent direct acquisition by the cli- dance with subsection (4). ent, be required by subsection Modification of section 1012G 1012B(3) or 1012C(3) (see subsec- (4) The following provisions apply in rela- tion (3) of this section) to be given to tion to section 1012G: the client by the regulated person be- fore that acquisition occurred. For this (a) in determining for the purposes of purpose, an equivalent direct acquisi- subsection (2) whether the regulated tion is an acquisition that would occur person would be required by sub- if: section 1012B(3) or 1012C(3) to give the client a Product Disclosure (a) the product were instead being of- Statement for the financial product, fered for issue or sale direct to the subsection 1012G(2) applies as if client by the regulated person for the the reference to the client instructing same price (or for the appropriate the regulated person (in an issue proportion of that price, if the trans- situation) that they require the fi- action for the regulated acquisition nancial product to be provided or is- also covers other products); and sued immediately, or by a specified (b) the circumstances of that issue or time, were instead a reference to the sale to the client were otherwise the client instructing the provider that same as those in which the regulated they require the financial product to acquisition will occur. be acquired immediately, or by a specified time; Wednesday, 22 August 2001 SENATE 26395

(b) if, because of subsection 1012G(2) the relevant custodial arrangement is as it applies because of para- taken not to be an agent of the client. graph (a) of this subsection, the pro- Provider is covered by sections 1015E, vider does not have to give the client 1021F and 1021I a Product Disclosure Statement for a financial product before a regulated (7) Sections 1015E, 1021F and 1021I ap- acquisition of the financial product ply in relation to a regulated acquisition occurs pursuant to an instruction as if the references to a regulated per- given by the client under a custodial son were instead references to the pro- arrangement: vider in relation to the relevant custo- dial arrangement. (i) subsection 1012G(2) applies in relation to the provider, the client Regulations may provide for other and the regulated acquisition as if modifications the obligation it imposes to com- (8) The regulations may provide for other ply with subsection 1012G(3) modifications of provisions of this Part were imposed on the provider; that are to have effect in relation to and regulated acquisitions. (ii) subsection 1012G(3) applies in (107) Schedule 1, item 1, page 316 (lines 1 to relation to the provider, the client 4), omit paragraph (g), substitute: and the regulated acquisition as if (g) information about the dispute reso- the reference to the regulated lution system that covers complaints person were instead a reference by holders of the product and about to the provider, as if subpara- how that system may be accessed; graph 1012G(3)(b)(i) were omit- and ted and as if the reference in sub- (108) Schedule 1, item 1, page 316 (line 15), at paragraph 1012G(3)(b)(ii) to the the end of subsection (1), add: day on which the financial prod- uct was issued or sold to the cli- ; and (k) any other statements or information ent were instead a reference to required by the regulations. the day on which the regulated (109) Schedule 1, item 1, page 330 (line 3), at acquisition occurs. the end of subsection (2), add: Modification of section 1013A ; or (f) it is a restricted issue that occurs in a (5) Section 1013A applies in relation to a situation covered by regulations regulated acquisition as if: made for the purposes of this para- graph. (a) paragraph 1013A(1)(b) also covered a Product Disclosure Statement that (110) Schedule 1, item 1, page 339 (line 22), is required to be given by subsec- after “managed investment product”, insert tion (2) of this section in relation to “that is an ED security”. an acquisition covered by para- (111) Schedule 1, item 1, page 339 (line 24), graph (a) of the definition of regu- after “managed investment products”, insert lated acquisition in subsection (1) “that are ED securities”. of this section; and (112) Schedule 1, item 1, page 348 (after line (b) paragraph 1013A(2)(b) also covered 31), after subsection (2), insert: a Product Disclosure Statement that (2A) Subject to subsections (2B) and (2C), is required to be given by subsec- the money is taken to be held in trust tion (2) of this section in relation to by the product provider for the benefit an acquisition covered by para- of the person who paid the money. graph (b) of the definition of regu- lated acquisition in subsection (1) (2B) Subsection (2A) does not apply to of this section. money that the product provider and the person who paid the money agree Provider is not an agent for the pur- in writing is not held in trust by the poses of section 1015C product provider for the benefit of the (6) For the purposes of the application of person. section 1015C in relation to a regulated (2C) The regulations may: acquisition, the provider in relation to 26396 SENATE Wednesday, 22 August 2001

(a) provide that subsection (2C) does (a) an internal dispute resolution proce- not apply in relation to money in dure that: specified circumstances; and (i) complies with standards, and (b) provide for matters relating to the requirements, made or approved taking of money to be held in trust by ASIC in accordance with (including, for example, terms on regulations made for the purposes which the money is taken to be held of this subparagraph; and in trust and circumstances in which (ii) covers complaints, against the it is no longer taken to be held in person required to have the sys- trust). tem, made by retail clients in re- (113) Schedule 1, item 1, page 354 (lines 5 to lation to financial services pro- 9), omit subsection (7), substitute: vided in relation to any of those Content of confirmation products; and (7) The confirmation of the transaction (b) membership of one or more external must give the holder the information dispute resolution schemes that: that the responsible person reasonably (i) is, or are, approved by ASIC in believes the holder needs (having re- accordance with regulations gard to the information the holder has made for the purposes of this received before the transaction) to un- subparagraph; and derstand the nature of the transaction. (ii) covers, or together cover, com- (114) Schedule 1, item 1, page 355 (lines 7 to plaints (other than complaints 22), omit section 1017G, substitute: that may be dealt with by the Su- 1017G Certain product issuers and perannuation Complaints Tribu- regulated persons must meet appropriate nal established by section 6 of the dispute resolution requirements Superannuation (Resolution of Complaints) Act 1993), against (1) If: the person required to have the (a) particular financial products are, or system, made by retail clients in have been, available for acquisition relation to financial services pro- (whether by issue or sale) by a per- vided in relation to any of those son or persons as retail clients; and products. (b) the issue or sale of those products is (3) Regulations made for the purposes of not covered by an Australian finan- subparagraph (2)(a)(i) or (2)(b)(i) may cial services licence; also deal with the variation or revoca- both the issuer, and any regulated tion of: person obliged under subsection (a) standards or requirements made by 1012C(5), (6) or (8) to give a retail ASIC; or client a Product Disclosure Statement (b) approvals given by ASIC. for one or more of those financial products, must each have a dispute (115) Schedule 1, item 1, page 361 (after line resolution system complying with 21), after subsection (5), insert: subsection (2). (5A) The regulations may specify other cir- Note 1:If the issue of particular finan- cumstances in which the right to return cial products is covered by an the product (and have money paid to Australian financial services li- acquire it repaid) cannot be exercised. cence, the requirement to have a (116) Schedule 1, item 1, page 361 (line 35), dispute resolution system re- after “is to be”, insert “increased or”. lating to the issue of the prod- (117) Schedule 1, item 1, page 362 (line 2), ucts is imposed by paragraph omit “of managed investment products”, 912A(1)(g). substitute “relating to certain managed in- Note 2:Failure to comply with this sub- vestment schemes”. section is an offence (see sub- (118) Schedule 1, item 1, page 362 (line 5), section 1311(1)). omit “managed investment product”, sub- (2) To comply with this subsection, a dis- stitute “financial product described in para- pute resolution system must consist of: graph 764A(1)(ba) (which relates to certain Wednesday, 22 August 2001 SENATE 26397

managed investment schemes that are not section 822A for that matter to be dealt registered schemes)”. with in those rules. (119) Schedule 1, item 1, page 367 (line 7), (126) Schedule 1, item 1, page 460 (line 20), omit “taken”, substitute “if the acquisition omit “relating to financial products”. occurs in circumstances in which the party is (128)Schedule 1, item 1, page 461 (after line 11), required by a provision of this Part to have before subsection (1), insert: been given a Product Disclosure Statement for the product—taken”. (1A) A person must not engage in conduct that results in the falsification of: (120) Schedule 1, item 1, page 387 (after line 20), after subsection (4), insert: (a) a book required to be kept by a pro- vision of this Chapter; or (4A) For the purposes of paragraph (4)(b): (b) a register or any accounting or other (a) section 917C is taken to apply, de- record referred to in section 1101C. spite section 917F; and Note: Failure to comply with this sub- (b) section 917D is taken not to apply. section is an offence (see sub- (121) Schedule 1, item 1, page 392 (line 25), section 1311(1)). after paragraph 1041E(b), insert: (129) Schedule 1, item 1, page 461 (line 16), ; and (c) when the person makes the state- omit “1101D”, substitute “1101C”. ment, or disseminates the informa- (130) Schedule 1, item 1, page 461 (line 32), tion: after “subsection”, insert “(1A) or”. (i) the person does not care whether (131) Schedule 1, item 1, page 462 (after line the statement or information is 7), after section 1101G, insert: true or false; or 1101GA How Part 9.3 applies to books (ii) the person knows, or ought rea- required to be kept by this Chapter etc. sonably to have known, that the statement or information is false (1) In this section: in a material particular or is ma- Chapter 7 book means: terially misleading. (a) a book (by whatever name it is (122) Schedule 1, item 1, page 392 (line 26), known) that a provision of this omit “this section” substitute “this subsec- Chapter requires to be kept; or tion”. (b) a document lodged under, or for the (123) Schedule 1, item 1, page 392 (line 29), purposes of, a provision of this omit “this section” substitute “this subsec- Chapter; or tion”. (c) a book relating to the business car- (124) Schedule 1, item 1, page 392 (after line ried on by a financial services licen- 31), at the end of section 1041E, add: see or an authorised representative (2) For the purposes of the application of of a financial services licensee; or the Criminal Code in relation to an of- (d) a register or accounting record re- fence based on subsection (1), para- ferred to in section 1101C. graph (1)(a) is a physical element, the (2) Part 9.3 does not apply in relation to a fault element for which is as specified Chapter 7 book except as provided in in paragraph (1)(c). the following paragraphs: (3) For the purposes of an offence based (a) section 1303 applies to a Chapter 7 on subsection (1), strict liability applies book; to subparagraphs (1)(b)(i), (ii) and (iii). (b) section 1305, and subsections Note: For strict liability, see sec- 1306(5) and (6), apply to a Chap- tion 6.1 of the Criminal Code. ter 7 book as if references in sec- (125) Schedule 1, item 1, page 444 (after line tion 1305 to a body corporate were 31), at the end of section 1074C, add: instead references to a person; (3) Nothing in subsection (1) or (2) confers (c) regulations made for the purposes of a discretion to deal with a matter in the this paragraph may provide that operating rules of a prescribed CS fa- other provisions of Part 9.3 apply in cility if there is an obligation under relation to a Chapter 7 book, or a class of Chapter 7 books, with such 26398 SENATE Wednesday, 22 August 2001

modifications (if any) as are speci- trading day of a financial market fied in the regulations. means a day on which the market is (132) Schedule 1, item 20, page 471 (line 6), open for trading in financial products. omit “registered scheme”, substitute “man- (141)Schedule 1, item 323, page 516 (line 1), aged investment scheme”. omit “an option approved by a securities ex- (133)Schedule 1, item 20, page 471 (line 33) to change as”. page 472 (line 4), omit paragraph (l). (142)Schedule 1, page 520 (after line 4), after (134)Schedule 1, item 20, page 473 (lines 24 to item 357, insert: 32), omit paragraph (l). 357A Section 350 (135)Schedule 1, item 20, page 475 (lines 1 to 3), Repeal the section, substitute: omit subsection (3). 350 Forms for documents to be lodged (136) Schedule 1, item 20, page 476 (line 23) with ASIC to page 477 (line 10), omit subsections (12) (1) A document that this Act requires to be and (13), substitute: lodged with ASIC in a prescribed form Meaning of provide a custodial or de- must: pository service (a) if a form for the document is pre- (12) For the purposes of this section, a per- scribed in the regulations: son (the provider) provides a custodial (i) be in the prescribed form; and or depository service to another person (the client) if, under an arrangement (ii) include the information, state- between the provider and the client, or ments, explanations or other between the provider and another per- matters required by the form; and son with whom the client has an ar- (iii) be accompanied by any other rangement, (whether or not there are material required by the form; or also other parties to any such arrange- (b) if a form for the document is not ment), a financial product, or a benefi- prescribed in the regulations but cial interest in a financial product, is ASIC has approved a form for the held by the provider in trust for, or on document: behalf of, the client or another person (i) be in the approved form; and nominated by the client. (ii) include the information, state- (137)Schedule 1, item 20, page 477 (line 14), after “registered scheme”, insert “, or the ments, explanations or other holding of the assets of a registered matters required by the form; and scheme”. (iii) be accompanied by any other (138)Schedule 1, page 506 (after line 20), after material required by the form. item 252, insert: (2) A reference in this Act to a document that has been lodged (being a document 252A Section 9 (definition of to which subsection (1) applies), in- on-market buy-back) cludes, unless a contrary intention ap- Repeal the definition, substitute: pears, a reference to any other material on-market buy-back means a buy-back lodged with the document as required by a listed corporation on a prescribed by the relevant form. financial market in the ordinary course (3) If: of trading on that market. (a) this Act requires a document to be (139) Schedule 1, item 261, page 507 (line 30), lodged with ASIC in a prescribed after “APRA”, insert “, other than a trustee form; and of a fund or trust referred to in any of sub- (b) a provision of this Act either speci- paragraphs (d)(i) to (iv)”. fies, or provides for regulations to (140)Schedule 1, page 513 (after line 15), after specify, information, statements, ex- item 302, insert: planations or other matters that must 302A Section 9 (definition of trading be included in the document, or day) other material that must accompany Repeal the definition, substitute: the document; Wednesday, 22 August 2001 SENATE 26399

that other provision is not taken to Omit “stock market of a securities ex- exclude or limit the operation of sub- change”, substitute “financial market”. section (1) in relation to the pre- (147)Schedule 1, item 457, page 542 (after table scribed form (and so the prescribed item 265A), insert: form may also require information etc. to be included in the form or 265AA Subsection 100 penalty units or material to accompany the form). 916A(3A) imprisonment for 2 years, or both. (143) Schedule 1, page 523 (before line 1), after item 377, insert: 265AB Subsection 100 penalty units or 916B(2A) imprisonment for 2 377A Subsection 633(1) (table years, or both. item 14) 265AC Subsection 50 penalty units or im- Repeal the item, substitute: 916B(5A) prisonment for 1 year, or 14 The target must send a To be done on the day both. copy of the target’s the target’s statement 265AD Subsection 100 penalty units or statement (and any is sent to the bidder 916C(3) imprisonment for 2 accompanying report) See also subsection (7) years, or both. to the operator of each prescribed financial 265AE Subsection 100 penalty units or market on which the 916D(2A) imprisonment for 2 target’s securities are years, or both. quoted. (148)Schedule 1, item 457, page 542 (after table (144)Schedule 1, page 524 (before line 4), after item 265B), insert: item 382, insert: 265BA Subsection 25 penalty units or im- 382A Paragraph 636(1)(g) 916F(1A) prisonment for 6 months, After “if any securities”, insert “(other or both. than managed investment products)”. (149)Schedule 1, item 457, page 543 (after table 382B After paragraph 636(1)(g) item 269A), insert: Insert: 269AA Subsection 50 penalty units or im- 942B(8) prisonment for 1 year, or (ga) if any managed investment products both. are offered as consideration under the bid and the bidder is: 269AB Subsection 50 penalty units or im- 942C(8) prisonment for 1 year, or (i) the responsible entity of the man- both. aged investment scheme; or (150)Schedule 1, item 457, page 543 (after table (ii) a person who controls the re- item 270C), insert: sponsible entity of the managed investment scheme; 270CA Subsection 50 penalty units. 946B(3A) all material that would be required by section 1013C to be included in a (151)Schedule 1, item 457, page 543 (table Product Disclosure Statement given item 271A), omit the table item. to a person in an issue situation (152)Schedule 1, item 457, page 548 (table (within the meaning of sec- item 299A), omit “Section 1017G”, substi- tion 1012B) in relation to those tute “Subsection 1017G(1)”. managed investment products; (153)Schedule 1, item 457, page 549 (after table (145)Schedule 1, page 526 (after line 29), after item 307C), insert: item 398, insert: 307CA Subsection 50 penalty units. 398A Paragraph 662B(1)(d) 1021M(1) Omit “securities exchange”, substitute 307CB Subsection 100 penalty units or “market operator”. 1021M(3) imprisonment for 2 (146)Schedule 1, page 533 (after line 3), after years, or both. item 426, insert: (154)Schedule 1, item 457, page 549 (table 426A Paragraph 724(1)(b) item 308B), omit the table item. 26400 SENATE Wednesday, 22 August 2001

(155)Schedule 1, item 457, page 550 (table the bill for the opposition, and Senator item 310C), omit “Section 1041E”, substi- Murray, who is handling it for the Demo- tute “Subsection 1041E(1)”. crats—it is probably better if I say that I am (156)Schedule 1, page 550 (after table on call here to answer any specific queries, item 317B), insert: unless you want me to run through all of 317BA Subsection 50 penalty units or im- them. That would just take up time. It is 1101F(1A) prisonment for 12 probably better to focus on the ones on months, or both. which there is disagreement or where there (157)Schedule 3, page 565 (after line 22), after are questions. item 10, insert: Senator MURRAY (Western Australia) 10A Section 9 (definition of old (5.30 p.m.)—I apologise for having missed Corporations Law) the slot for general questions; I was in the Omit “Part 11.1”, substitute back talking to my adviser. To me, this de- “Part 10.1”. bate seems a little like an epilogue. We have I am assured by the good people in the ad- actually done everything; we are just tying visers box that most of these amendments are the bow, almost. I have two general ques- of a minor or technical nature. They are in- tions, while we have the opportunity. I did tended to clarify the operation of the pro- ask in my second reading speech that you posed new arrangements and to correct remind me of what has happened to CLERP drafting errors in the current version of the 5. I do not know whether you made those bill. However, a number of the proposed remarks as I was coming down to hear you amendments involve significant policy talk. It would be nice to know what is hap- changes. These changes are partly the prod- pening to that. uct of the continued consultation that has The second thing is that I was very con- taken place between the government and scious of Senator Ferguson’s heartfelt— stakeholders since the introduction of the rather than hard—advocacy on the risk two bills. The amendments also seek to ad- product side of things. We have, as you dress a number of areas of concern identified know, moved a second reading amendment, by the Parliamentary Joint Statutory Com- which has been accepted. I would merely mittee on Corporations and Securities— like an assurance from the government that, known to me as the Chapman committee. even though we are going to pass those Senator Chapman—A very good name, provisions, the government will too. wholeheartedly assist the committee in Senator IAN CAMPBELL—I thought examining that issue more deeply to you would like that. In its report, the parlia- determine and understand the issues that mentary joint committee affirmed its long- Senator Ferguson and many other senators in standing support for the objectives of the bill your backbench and numbers of others are and for the process of consultation that has concerned about. been engaged in to ensure that these objec- tives are appropriately achieved. However, Senator CONROY (Victoria) (5.32 the committee also made a number of rec- p.m.)—I want to ask a question that you also ommendations for change. In responding to might want to answer, if I can have your in- the committee’s recommendations, the gov- dulgence. I know that with the Managed In- ernment has taken care to balance the im- vestments Act we also sought a similar pro- portance of ensuring that the new regime vision. Probably to your surprise and cer- does not impose a disproportionate regula- tainly mine, the government decided to do a tory burden on industry participants with the private inquiry into managed investments. I need to maintain the bill’s consumer protec- would like to clarify whether this is a request tion objectives. for the Parliamentary Joint Statutory Com- mittee on Corporations and Securities to ac- Rather than going through the amend- tually do it or just a request for an investiga- ments in detail—I think they are all well tion to be held, Senator Murray. known to Senator Conroy, who is carrying Wednesday, 22 August 2001 SENATE 26401

Senator MURRAY (Western Australia) rectors and one is the secretary; you do not (5.32 p.m.)—The record has it that it is for change your address for everything—it is an Corporations and Securities, yes. unnecessary piece of paperwork to lodge Senator IAN CAMPBELL (Western every year. So, amongst a range of other Australia— Parliamentary Secretary to the things, we came up with a decision not only Minister for Communications, Information to get rid of that requirement but also to sig- Technology and the Arts) (5.32 p.m.)— nificantly e-enable the processes of business Firstly, CLERP 5 has always been a mystery between ASIC and the various businesses. CLERP, because it was one of a series of The bits of CLERP 5 that were not picked up exceptionally good policies under the in the CLRB legislation or the Payments CLERP banner. If you think about it in the Systems and Netting Act 1998 will be picked context of it being written in 1997, it was all up by a piece of legislation which we hope to about electronic commerce in enabling the introduce in the next couple of weeks. The corporations’ interaction with ASIC, effec- second point is that the government will fully tively, but also e-commerce generally. It was cooperate with the committee, and I give you quite significantly ahead of its time in trying the undertaking that you have sought in rela- to enable e-commerce. In fact, if you do a tion to that inquiry. retrospective analysis of government policy Senator MURRAY (Western Australia) across the whole globe, you will find it is (5.36 p.m.)—I have a further general ques- one of the earliest papers, if not the earliest tion—because I am aware that there are paper, on what a government can do to fa- loose ends to be tied up—to the parliamen- cilitate e-commerce. I do not even think it tary secretary. With regard to the proposed was called e-commerce then. I cannot claim legislation that will come in in the next few credit for that. I will not do an Al Gore and weeks, is it the intention of the government say that we invented the Internet or e- to automatically send that to the Parliamen- commerce, but it was a far-reaching policy. tary Statutory Joint Committee on Corpora- Some of it was picked up by the Corporate tions and Securities to progress? Is there ur- Law Review Bill 1998, which Senator gency with it, or is it one of those things that Murray and I—and, I think, Senator Con- could be delayed until after the election? I roy—debated in that year, including reforms will repeat that: it is a question with regard to to the Payment Systems and Netting Act the further bill that is going to come before 1998. A number of the subsidiary unfinished us, which will include loose ends that need to bits of business there will form part of legis- be tied up. Is it the intention of the govern- lation that enacts a range of the CLERP 7 ment to put that straight across to the corpo- policies, which I released just before the last rations and securities committee to try to get federal election. I remind you that they in- an early result on the matter, or is the inten- clude things such as changing the annual tion to allow it to go over the election period reporting requirements of companies from and be dealt with next year at more leisure? having to lodge a return annually to having Senator IAN CAMPBELL (Western to do it only if there is a change to the par- Australia— Parliamentary Secretary to the ticulars. As Senator Murray would know, at Minister for Communications, Information the moment every company is required to Technology and the Arts) (5.37 p.m.)—The send a return each year to the government practical reality is that the parliament is and attach their annual corporations fees to scheduled to sit two weeks on, two weeks off it. As you would know, Mr Temporary for the rest of the year. But all of us know Chairman Sherry, and as Senator Murray there is likely to be an election—if you un- would know, this government is strongly derstand what the Prime Minister is saying— committed to cutting red tape. There is a some time before the end of the year, so we piece of annual paperwork that a company is are not going to have that many sitting weeks required to do and, if you are a small busi- left. Virtually every corporations bill that has ness and you effectively have a husband and happened in the time I have been here has wife partnership—two of them are the di- been referred to the Chapman committee. We 26402 SENATE Wednesday, 22 August 2001 expect that to be the case in this instance. first tabled you had a bit more hair on top Generally, consideration of corporations bills than you have now. by the Joint Statutory Committee on Corpo- Senator Ferguson—Yes, and it was a dif- rations and Securities ensures that they get a ferent colour too. smoother passage through this place. That is how the committee should work. Without Senator CONROY—We will hopefully bragging, the Joint Statutory Committee on see our way through this legislation over the Corporations and Securities was established next 24 or 48 hours—the shorter the better. I because I asked the previous Labor govern- know the government are working as I speak ment for a statutory committee when they to try to facilitate this and to allow us some brought in the new Corporations Law in time to consider a range of amendments that 1990. The then Attorney-General—Michael have been tabled recently so that we can Duffy, I think— agreed it was a good idea. I move more comfortably through this tomor- think the committee has worked very well, row morning. We are awaiting final confir- particularly under Senator Chapman’s mation of that. Perhaps tomorrow morning chairmanship. we will have a bit more time to work our way through some of the finer points. I hope Senator CONROY (Victoria) (5.38 Senator Murray is comfortable with that. p.m.)—Senator Campbell, have you had a chance to confer on that matter we were dis- Senator IAN CAMPBELL (Western cussing? I think we are able to accommodate Australia— Parliamentary Secretary to the that if we go down that path, but I am happy Minister for Communications, Information to talk for a few moments on these amend- Technology and the Arts) (5.41 p.m.)—There ments if you would like. is a whole range of amendments. It is silly to bring on a debate if everyone is not quite Senator Ian Campbell—I will respond ready to deal with it. We did understand that later. everyone was ready, but I respect the posi- Senator CONROY—I want to congratu- tion of senators opposite. Senator Murray has late the government on moving these very suggested that we deal with this batch of worthwhile amendments. The government amendments that have been moved, if sena- have been very responsive in what has been, tors are happy with that. I have a signal from as I am sure Senator Ferguson and Senator Senator Conroy that that is okay with Labor. Chapman would agree, a long and detailed I think we will do that, Mr Temporary consultation period, and the government Chairman. We have an indication from the should be congratulated. Senator Ferguson parliamentary liaison officer that we will has been very active behind the scenes, chat- return to the environment legislation that the ting away with many of his old colleagues in Senate has been dealing with previously. We his old industry—as have I, it should be said. are just sending out an all points bulletin to There is no attempt to portray Senator Senator Ridgeway, who apparently was in Ferguson as having a vested interest when I continuation on his second reading speech. have also come from the same industry, al- When Senator Ridgeway comes down to the though a different part. chamber I will jump onto my feet and move Senator Ferguson—You didn’t get com- that the committee report progress. In the mission! meantime, I encourage Senator Chapman to make one of his brilliant contributions. Senator CONROY—It has been wel- comed that the government have been pre- Senator CHAPMAN (South Australia) pared to consult. In fact, I know at times the (5.42 p.m.)—I refer the Parliamentary Sec- minister has joked about consultation fatigue retary to the Minister for Communications, on this issue. Most people will probably wel- Information Technology and the Arts to gov- come the fact that we will hopefully be able ernment amendment No. 16, which proposes to complete the Financial Services Reform to insert after clause 1436 in the Financial Bill 2001 over the next few days. I know, Services Reform (Consequential Provisions) Senator Ferguson, that when this bill was Bill 2001 clause 1436A, Treatment of repre- sentatives—insurance agents. Clause 1436A Wednesday, 22 August 2001 SENATE 26403 has some nine subclauses. Can the parlia- that are themselves financial service provid- mentary secretary confirm for me that the ers—for example, financial planners and practical effect of this amendment is to en- insurance brokers. Senator Chapman’s com- sure the continuation for insurance agents of mittee expressed some concerns about the whatever existing contractual arrangements impact on insurance agents, and they are they currently have in place with insurance similar to the concerns that Senator Ferguson companies or which might be put in place has been raising very persistently— ever during the transition period of the next two since 1997, I have got to say. years, irrespective of other effects of this The government proposes to address these legislation—in other words, if insurance concerns through the introduction of a re- agents currently have contracts in place with vised set of transitional arrangements. Pro- insurance companies, that this legislation posed government amendments to the bill will not act in any way to override the effects will allow insurance agents to continue to of those contracts? Secondly, could the par- operate under the current regulatory frame- liamentary secretary confirm for me that in work throughout the two-year transition pe- fact this amendment actually deals with that riod that will follow the commencement of relationship between the agent and the insur- the new regime. This will apply even where ance company and has no effect in any way insurance company principals transition to of diminishing the level of consumer protec- the new regime by becoming financial serv- tion provided under this legislation? ices licensees. The new transitional arrange- Senator IAN CAMPBELL (Western ments have been introduced in recognition of Australia— Parliamentary Secretary to the the differences between the regulatory Minister for Communications, Information framework that currently applies to insurance Technology and the Arts) (5.43 p.m.)—The agents and that governing the representatives point that Senator Chapman goes to is one of of other existing licensees, such as securities the crucial elements of the Financial Services dealers. They will provide agents with more Reform (Consequential Provisions) Bill time to set in place arrangements for transi- 2001. Dealing with the insurance agents has tioning to the new regime. been a critical part of the consultations in For those agents that do not wish to seek trying to move to a new regime without, as I their own licence, it will provide more flexi- said in my opening remarks at the committee bility in establishing arrangements with li- stage, imposing an unfair and unnecessary censees. The amendments will also clarify regulatory burden on those people. As the impact of the new regime on existing Senator Chapman would know, the great contractual relationships between agents and majority are small business people who have principals. It will make it clear that where been running successful and ethical busi- conduct by the agent prior to commencement nesses for many years. They are a very im- creates an entitlement to remuneration such portant part not only of the economic fabric as commission payments this bill does not but also of the social fabric of Australia, and terminate that entitlement. I hope that an- they usually play a very important role in swers Senator Chapman’s inquiries. their own communities. Senator CHAPMAN (South Australia) This bill generally provides enhanced (5.47 p.m.)—I think that does. The parlia- protection for small business clients of fi- mentary secretary has referred to entitle- nancial service providers. I will read you the ments to commission, but I understand from full brief, Senator Chapman, because I think reading the amendment that it refers to it goes to the points you raise and I think it is commission and other forms of remunera- important to put it on the record for the bene- tion. My interpretation is that if an agent has fit of the people whom you are seeking some in place a contract with an insurance com- assurances about. It does provide enhanced pany that relates to, for instance, the buyback protection for those clients of financial serv- arrangements for the book value of their cli- ice providers. It also has been welcomed by ents, trailing commissions and so on—basi- the representatives of many small businesses cally any contractual arrangement—then that 26404 SENATE Wednesday, 22 August 2001 will continue in place basically ad infinitum may influence which product they wish to if a contract remains open-ended. If a con- sell to a client. While I do not necessarily tract does have a termination date, then ob- agree with the principle, I understand the viously it terminates on that date, but if it is reasoning behind that. Where a person only an open contract then, notwithstanding this has a single product to sell—in other words, legislation, those contractual arrangements he or she is not giving advice— from one will continue in place. Even under the new company, does the quantum of commission regime these benefits to the agents will con- have to be stated in the contract? tinue. Senator IAN CAMPBELL (Western Senator IAN CAMPBELL (Western Australia—Parliamentary Secretary to the Australia— Parliamentary Secretary to the Minister for Communications, Information Minister for Communications, Information Technology and the Arts) (5.51 p.m.)—The Technology and the Arts) (5.48 p.m.)—I advice I am given is that, if it is not personal think I can give Senator Chapman an assur- advice, it will not have to be disclosed. I am ance that his understanding is correct. The happy to give more detailed advice, because shorthand way to do it is to read section it is obviously a matter of great importance. 1436A, headed ‘Treatment of representa- We could go into a series of hypotheticals, tives’, at pages 5 and 6 of the amendments. I and I do not think it would help. think that would make it clear to anyone who Senator FERGUSON (South Australia) had a concern here. It says: (5.52 p.m.)—If it is the case that a person is (8) If: not giving personal advice on a product as it (a) before the end of the transition period, or relates to any other product—in other words, such longer period during which regulations made they had only one product to sell—what for the purposes of subsection (7) provide for the would be the difference in a situation where application of some or all of the relevant old leg- a person has three agencies with the same islation, the insurance agent engages in conduct product, all of which have the same commis- that, under the authorising agreement as then in sion rate—in other words, there is no differ- force, creates a right to brokerage, commission or ence between the commission rate on any of other remuneration (which may be a present right, or a future right that is dependent on matters those three products? How, if each of those specified in the authorising agreement) ... products had exactly the same commission, could that then be construed as influencing That, I think, would cover the buyback the advice as to which product that person situation that you are referring to, Senator could buy? Chapman. That is dependent on matters specified in the authorising agreement, and Senator IAN CAMPBELL (Western the right is still in existence immediately Australia— Parliamentary Secretary to the before the end of that period. So it does, to Minister for Communications, Information use your language, go into the future. Noth- Technology and the Arts) (5.53 p.m.)—It ing in the bill will interfere with that con- does depend a bit on the individual circum- tractual arrangement. stances. I am happy to give you a more de- tailed answer. I do understand the importance Senator FERGUSON (South Australia) of it better than most people. (5.50 p.m.)—I am not sure that I have fol- lowed all of the changes that have been made Amendments agreed to. to the bill recently, but one of the points un- Progress reported. der discussion certainly in recent times was ENVIRONMENT AND HERITAGE that the disclosure of commission on risk LEGISLATION AMENDMENT BILL products was particularly put in place for (NO. 2) 2000 [2001] occasions where advice is given—in other words, where people have more than one AUSTRALIAN HERITAGE COUNCIL product with varying rates of commission to BILL 2000 [2001] offer. In fact, they must disclose the commis- AUSTRALIAN HERITAGE COUNCIL sion because the quantum of the commission (CONSEQUENTIAL AND Wednesday, 22 August 2001 SENATE 26405

TRANSITIONAL PROVISIONS) BILL heritage, that we are about to allow the van- 2000 [2001] dals to get inside the gate. Second Reading As a Tasmanian, Mr Acting Deputy Presi- Debate resumed from 21 August, on mo- dent Sherry, you may recall—and I certainly tion by Senator Ian Campbell: do, as a New South Welshman—the Askin years in New South Wales between 1965 and That these bills be now read a second time. 1976 under Sir Robert Askin, Premier Tom Senator HUTCHINS (New South Wales) Lewis and Sir Eric Willis. I recall the number (5.55 p.m.)—I rise, following my colleagues of heritage properties that were bulldozed Senator Bolkus and Senator McLucas, to around Sydney in that era—in those 11 years outline Labor’s position on these environ- of conservative New South Wales rule—to ment bills. As has been reported to the Sen- make way for high-rise apartments. That is ate by Senators Bolkus and McLucas, the what the coalition did when they were in bare bones of what these bills will do cover power over that period in New South Wales. four areas. Firstly they will gut the Austra- It disturbs me that this is the intent of this lian Heritage Commission, which currently legislation, particularly for places in New operates independently to manage and pro- South Wales. tect Australian heritage, and replace it with the Australian Heritage Council, which will As I said, there are 13,000 sites listed on merely have an advisory role. Secondly they the Register of National Estate. In just my will transfer the power to make decisions local area, in the city of Penrith, there are a relating to the listing of heritage sites away number of them, which I will refer to shortly. from an independent body of experts like the When we have a number of Liberals and Heritage Commission and pass it on to the National Party people in this place who pur- federal environment minister. port to have some sense of history and some need, as I said, for the continuity of not only The third aspect of the bills is that they indigenous heritage but also European heri- will abolish the current Register of National tage, I cannot understand why they are not Estate and replace it with a National Heritage more outspoken in their party rooms and are List or Commonwealth Heritage List. This not saying more here in the parliament itself. will be limited only to properties of national value, relegating responsibility for the pro- There are a number of sites—and I will be tection of all other sites to the states. Finally, Sydney-centric and New South Wales- this puts a cloud over the future of the centric—that are worthy of preservation. At 13,000 sites currently on the Register of Na- the moment we have 13,000 listed. But, if we tional Estate. It will be at the discretion of accept what the minister and the government the minister as to which sites will fit into this are proposing, we could end up with only a new Commonwealth Heritage List and which handful of sites. The sites that may be will simply be left off it. deemed to be on the Commonwealth Heri- tage List may be limited and a number of So these bills seek to abolish an independ- indigenous and European icons that we wish ent body of experts such as the current Aus- to preserve may be abolished by an incoming tralian Heritage Commission and replace it conservative government—whether it is in with an advisory body; they seek to abolish New South Wales or anywhere else. This is the Register of National Estate and put in akin to allowing the vandals in the gates. jeopardy those 13,000 sites that are currently This is akin to allowing them to walk in, take on it; and they seek to transfer the naming of over and threaten these icons that we hold that sort of stuff—that is, they will move precious and dear. from being on a Register of National Estate to being on a Commonwealth Heritage List. I recall clearly the tory years in New That signifies to me, and I am sure it signi- South Wales, during which a lot of heritage fies to a lot of Australians who are concerned listed buildings were torn down, carted away about the preservation of not only our in- and not preserved to make way for high-rises digenous heritage but also our European around Sydney Harbour. I recall clearly go- ing with one of my uncles, who was a tip 26406 SENATE Wednesday, 22 August 2001 truck driver, to Mosman while they carted ecology. Why would we—or anybody lis- away the remnants of a number of buildings tening to this broadcast—give this govern- with beautiful Georgian architecture that had ment a blank cheque to go and destroy our been bulldozed to make way for some sort of indigenous and European heritage? There are high-rise. no guarantees in this legislation that that I know that you, Mr Acting Deputy Presi- would not occur—none at all. It all goes dent Lightfoot, are probably very concerned back to the minister. It all goes back to the about the preservation of icons of European possibility that the minister would be subject importance, as your own actions in relation to pressure from his political cronies. to the Fremantle Artillery Barracks demon- I saw what Sir Robert Askin did in New strate. So I wonder why the party room of South Wales during his government’s years the coalition has allowed the opportunity in in power. I saw what Tom Lewis did. I saw this legislation for the preservation of these what Sir Eric Willis did when a high-rise heritage listed areas to be transferred to the building got in the way of some European or hands of the state governments. I cannot re- indigenous heritage. They were subject to call the name of the former New South political pressure—or they applied it them- Wales coalition minister who was quite selves. They tore down these buildings and proud of his slogan ‘tar, seal and beautify’, they tore away a lot of Sydney’s heritage. but that was the way he approached any area, That was done because of the kind of politi- whether it was heritage listed buildings or cal pressure the Minister for the Environ- heritage listed bushland. That is what we will ment and Heritage, Senator Hill, will be put- see. The bill will transfer the decision mak- ting himself under if this bill is passed. We ing from an independent body of experts to are going to oppose these bills and I hope an advisory panel and, in the end, the deci- that the Democrats oppose these bills. We sion will be made by a minister on political believe that the current legislation is quite grounds. adequate. We feel that the legislation should People might say that we are lucky to be altered so as to progress the ability of the have a conservative conservationist type Commonwealth to protect and manage Aus- minister in the position at the moment, but I tralian heritage sites, not to strip them back, do not believe that, and I think that will be as this legislation allows to occur. proven in time. I do not believe that this Senator Hill—The current legislation of- should be subject to political pressure, be- fers no protection at all! cause we are dealing with a number of sites Senator HUTCHINS—Understand this, in a number of areas that, if they were Minister: you are going to be put under po- ‘tarred, sealed and beautified’, would proba- litical pressure if this bill is passed. It will all bly attract a lot of money. I do not believe it come back to you. The white shoe brigade is fair on any federal government minister to will come and say to you, ‘Please, let’s rip be put into a political predicament where, for this away, let’s put some nice high-rises here, example, there is some bushland around let’s put a freeway through here—let’s do Sydney Harbour and they are approached something like that.’ You will be subject to and told, ‘If you can sell this bushland off it. It is foolish of anybody to think that that you might get a few hundred million dol- will not occur. It is absolutely foolish of the lars,’ even though this bushland might have government to put their minister in a position some indigenous attraction or might have where that might occur. some attraction for descendants of European settlers. I do not believe that the minister I want to talk about my local area, as I should be put into that position. That is why, have done before. Currently, of the 22 sites under Labor’s legislation, the independent in my local area— the city of Penrith—21 body of experts made that decision. What are in the electorate of Lindsay, which is held was wrong with that? The body is made up by Mrs Kelly. of people who have an interest in heritage listing, architecture, the environment and the Wednesday, 22 August 2001 SENATE 26407

Senator Hill—She is a very good mem- Hutchins, that your remarks should be ad- ber, too. She is an excellent local representa- dressed to the bills before the Senate. How- tive. ever, if you are developing an argument in Senator HUTCHINS—I would not say the next few seconds with respect to what that. I want to talk about a number of the you were saying, please proceed; otherwise, sites that will be in jeopardy if this bill is revert back to the bill. carried. I know what the Liberals think about Senator HUTCHINS—What I am get- Western Sydney. They think we do not exist. ting to, as I said, is the fact that in the City of Like a lot of Liberals, they think that Sydney Penrith, where I am a resident, we currently stops at Strathfield and starts again at Leura. have 22 estates on the national register. I Except for probably Mrs Kelly and, say, Mr believe they are in jeopardy if this legislation Kerry Bartlett, there are no Liberals past Par- is carried. I believe they are in jeopardy be- ramatta. Of course, you understand why. cause, as I said earlier, most Liberals think Senator Payne has an office at Parramatta, Sydney stops at Strathfield and starts again at but she drives out there every day from some Leura. trendy inner city suburb. I am not sure where Senator Hill—Are they on the state list? Senator Coonan lives, but I am sure that it is nowhere near where I live in St Marys, Senator HUTCHINS—No, they are your which is out in the west of Sydney. Liberals too. Let us look at what the Liberals think Senator Hill—No. Heritage items—are about people who live in Western Sydney they on the state list? and why I say we are in jeopardy if this leg- Senator HUTCHINS—Let me explain to islation is passed. I refer to a report by David Senator Hill, through you, Mr Acting Deputy Penberthy in the Daily Telegraph of 6 President, that Senator Marise Payne, one of August. Mr Acting Deputy President, being a his colleagues, has an office in Parramatta, Western Australian, you might not be aware but she drives out to Parramatta from the that there is to be a by-election in Auburn in inner city every day, I assume, when she Western Sydney in a few weeks time. The goes to her office. I understand that the of- Liberals are running a candidate. I do not fice of Senator Coonan, another Liberal know why, but I suppose it is to beef up Mrs senator, is in Phillip Street. I am not sure that Chikarovski’s leadership chances. Let me tell Senator Coonan gets out to the west at all. you what the advice was for the Liberals Senator Heffernan is a Liberal from Wagga when they went out and campaigned in Wagga. I do not know that Senator Heffernan Auburn. What frontbencher Brad Hazzard has an office in Sydney at all. What I was said to his colleagues—I do not know Mr developing— Hazzard but I understand he represents the Senator Hill—I rise on a point of order, North Shore seat of Wakehurst in Sydney— Mr Acting Deputy President. I submit to you was that when male MPs go out to the west that it is a reflection upon Senator Coonan to and campaign in Auburn they should keep a suggest that she does not travel to the west of tracksuit top in their car because in the past Sydney. She represents the whole of New residents have responded better when he South Wales, and I am confident she repre- wore a tracksuit instead of a shirt and tie. sents it well, including the west of Sydney. Senator Hill—I rise on a point of order. The ACTING DEPUTY PRESI- Mr Acting Deputy President, this might be DENT—I do not think that was a point of interesting to some—although I doubt it— order, but— but it is certainly not relevant to the bill Senator HUTCHINS—I withdraw that before the chamber. If the honourable senator reflection on Senator Coonan because I wants to have a chat about domestic political know, from talking to her the other day, that issues near his place of residence, perhaps he she was out in Blacktown. She had to get a should do so on the adjournment. lift from a tow truck driver, as I understand The ACTING DEPUTY PRESIDENT it. (Senator Lightfoot)—I remind you, Senator 26408 SENATE Wednesday, 22 August 2001

The ACTING DEPUTY PRESI- Senator Forshaw—I was responding to DENT—Senator, please proceed to address the argument that the point by Senator the bills currently before the chair. If there Hutchins about the cultural views of Liberals were fewer interjections, I am sure Senator in Sydney is not relevant to this debate. I Hutchins would find it much more appropri- would suggest that it is very relevant because ate to address the bill, rather than answering it is relevant to the approach that this gov- interjections. ernment and the political party would take to Senator HUTCHINS—We believe that cultural heritage in Western Sydney. our locally registered sites will be in jeop- The ACTING DEPUTY PRESI- ardy. DENT—I am sure the Senate will take on Senator Hill—How? board what you have said, Senator Forshaw. I invite Senator Hutchins to proceed with the Senator HUTCHINS—I have already bills currently before the Senate. explained it to you. If you have not worked it out by now, you are not going to. What do Senator HUTCHINS—Thank you, Mr the Liberals in Sydney think? As I have said, Acting Deputy President. I refer to what Ms Brad Hazzard has advised his colleagues Kernohan said. She advised— campaigning in Auburn that they should Senator Coonan—Mr Acting Deputy wear a tracksuit top and tracksuit pants. President, Senator Hutchins is reverting— There is one Liberal state member of parlia- Senator Forshaw—He hasn’t even ment in Western Sydney, Liz Kernohan—she quoted her yet. She’s a member for Western is not a bad person—who has apparently Sydney. advised that when the women MPs run around Auburn trying to— Senator Coonan—He has. He said that when she was speaking to women Liberal Senator Coonan—Mr Acting Deputy members— President, I raise the point of order that was made a little earlier. What Liberals may or The ACTING DEPUTY PRESI- may not have said about what people should DENT—Do you have a point of order, wear seems to have almost no relevance to Senator Coonan? how these sites could conceivably be endan- Senator Coonan—My point of order is gered. that Senator Hutchins is reverting to form Senator Forshaw—On the point of order, and proceeding to speak about what Liz Ker- Mr Acting Deputy President, I have been nohan, the member for Camden, said to some listening to Senator Hutchins’s excellent other Liberal women members. That cannot speech. Senator Hutchins has been drawing be relevant, culturally or in any other way, to attention to the cultural significance of West- the protection of heritage sites. ern Sydney, and he believes it would be en- The ACTING DEPUTY PRESI- dangered as a result of this legislation. I DENT—Senator Forshaw, I do not mean to think it is entirely appropriate, in developing disturb your conversation with Senator that argument, for Senator Hutchins to reflect Coonan—and I apologise for having to do upon the cultural heritage, if you like—the it—but you are out of order. Senator Hutch- cultural attitudes—of the representatives of ins, you may proceed with the information the Liberal Party with respect to— that you can give the Senate that is relevant The ACTING DEPUTY PRESI- to the bills. DENT—There is no point of order, Senator Senator HUTCHINS—I would argue Forshaw. that what I am about to say in relation to Senator Forshaw—I am not making a what Dr Kernohan said— point of order: I am speaking on the point of The ACTING DEPUTY PRESI- order. DENT—That is what I am inviting you to The ACTING DEPUTY PRESI- do. If it is relevant, Senator Hutchins, you DENT—You are out of order. may do it. Wednesday, 22 August 2001 SENATE 26409

Senator HUTCHINS—I believe it is. It standing that was constructed in that period says what the attitude of Sydney Liberals to is at Menangle. Also in Penrith is a place people who live in the western suburbs of called Thornton Hall. This was the home of Sydney does in terms of jeopardising the the Smith family—I do not mean the Smith sites that are on the Register of the National Family charity group—of Thomas Smith and Estate. then his son Sydney. Sydney Smith was the The ACTING DEPUTY PRESI- first member for Macquarie in the federal DENT—I do not think you can generalise, parliament and the first Post Master General. Senator Hutchins. These sites are of immense value, and the minister may agree. I do not believe that Senator HUTCHINS—Let me proceed, such decisions should be taken away from Mr Acting Deputy President. independent experts whose opinion is that The ACTING DEPUTY PRESI- these buildings belong on the estate and DENT—I am inviting you to proceed, but given to some sort of advisory body that may please restrict your comments to those that or may not agree with that opinion. pertain to the bills before the chamber. It is clearly the intention of this legislation Senator HUTCHINS—I will. When to reduce the number of places on the Reg- Sydney was first settled in 1788, the early ister of National Estate from 13,000 to a few part of the settlement was on Sydney Har- hundred. This is where I come back to my bour but the major part of the settlement for point about the Liberals and their attitude to almost 30-odd years was on the fringes of Western Sydney. I have already said that they Sydney. In fact, they call places such as Liv- think that we just wear tracksuit tops and erpool, Penrith, Windsor and Parramatta pants out there, that that is how sartorially ‘Macquarie towns’. At the time, they were elegant we are. Dr Kernohan said that Lib- far more relevant to the governing and the eral MP women were best not to wear make- economic wellbeing of the colony. In my up or dress too well because women may be area, there are a number of sites of historic embarrassed to answer the door— value that I believe will be jeopardised if this Senator Hill—Mr Acting Deputy Presi- bill proceeds. One of the sites that I believe dent, I rise on a point of order, which goes to is in danger is called Mamre House, which is relevance. The bill has nothing to do with not far from where I live. It was originally women wearing make-up. The honourable the property of Samuel Marsden, the ‘flog- senator was doing well for a while. He was ging parson’. I believe its continuity on the referring to listed properties within Western Register of the National Estate could be well Sydney and was seeking to make— and truly jeopardised if this bill proceeds. As in the good old days of Robert Askin, this Senator Forshaw—You are just wasting building, being on valuable property, could his time. You have made the same point of be bulldozed. order all the way through. It is you that is irrelevant. I also want to refer to Werrington House. In terms of the history of the country, Wer- Senator Hill—Thank you very much. We rington House, which is in the city of Pen- do not talk about whether women should rith, was where Sir Henry and Lady Parkes wear make-up during question time. once resided. They resided there from 1860 The ACTING DEPUTY PRESI- to 1872. I believe that this place may be DENT—Senator Hill, what is your point of jeopardised if it is put into a political envi- order. ronment where a minister has to make a de- Senator Hill—The point of order is that cision, even though independent experts Senator Hutchins, having got back onto the have determined this place is of historical bills for a short while, has now drifted off relevance. There is also Victoria Bridge, again into a discussion of whether women across from Emu Plains to Penrith, which is should wear make-up. That is clearly not at one of two bridges constructed between 1864 all relevant to these bills and I invite you to and 1867. The only other bridge that is still 26410 SENATE Wednesday, 22 August 2001 bring him back to what is before the cham- As Michael Dodson has put it: ber. Everything about Aboriginal society is inextrica- The ACTING DEPUTY PRESI- bly interwoven and connected to the land. Culture DENT—Senator Hill, I am sure that Senator is the land ... our reason for existence is the land. Hutchins, in the 30 seconds that are left to You take that away and you take away our reason for existence. We have grown the land up. We are him, will come back and speak of something dancing, singing, painting for the land. We are that is relevant to the bills currently before celebrating the land. Removed from the land we the Senate. are literally removed from ourselves. Senator HUTCHINS—Mr Acting Dep- The recognition and protection of Indigenous uty President, I have made my point about heritage, including sites, places and landscapes, is what the Liberals think of people in Western therefore central to the reconciliation process. Sydney. Irrespective of the minister’s rheto- As ATSIC noted in its recent submission to the ric, you would be mad to put yourself in this Senate Committee, “protection provides an im- position where you will come under political portant safeguard to the maintenance and regen- pressure. (Time expired) eration of Indigenous culture and demonstrates an acceptance and respect for cultural differences Senator LEES (South Australia (6.20 which are the hallmarks of reconciliation.” p.m.)—Due to Senator Ridgeway being on a pair, I seek leave to incorporate the speech But at the current time, Indigenous heritage is poorly protected and Indigenous peoples have no that was begun by him. direct control over their heritage. Leave granted. Nor have they been involved in discussions over The speech read as follows— the new heritage protection regime to the extent I rise to speak today about the Environment Pro- that we believe they should have, especially given tection and Biodiversity Conservation Amend- the recent discussion about the Aboriginal and ment Bill (No. 2) 2000 and in particular, about the Torres Strait Islander Heritage Protection Bill implications of this bill for the protection of In- 1998, which seeks to reform the 1984 Act. digenous heritage. Of particular concern is the lack of consultation This bill seeks to insert a new heritage protection and discussion relating to the relationships be- regime into the Environment Protection and tween the ATSIHP Bill and this current suite of Biodiversity Conservation Act 1999, thereby pro- heritage bills. viding for the protection of natural, cultural, his- The fact that the legislators of this country con- toric as well as Indigenous heritage. tinue to make decisions about Indigenous heritage These amendments would make national heritage in this day and age without seeking the prior and places another matter of ‘national environmental informed consent of the people whose lives will significance’ under the Act. be affected by those decisions is not acceptable - especially when the subject of these decisions is The bills also establish two new lists: as fundamental as the protection and management 1. National Heritage List and of the oldest living cultures in the world. 2. Commonwealth Heritage List, which would The Australian Democrats are not alone in being replace the current Register of the National gravely concerned with the disrespect that this Estate, that contains a number of Indigenous type of behaviour shows to Aboriginal peoples places. and Torres Strait islanders. The protection of cultural heritage is one of the The Environment Committee, in its report into the utmost importance to Indigenous peoples. bill, raised the issue of how the proposed legisla- It is part of our identity that has been passed from tion would relate to existing laws, and in particu- generation to generation over many thousands of lar, the Aboriginal and Torres Strait Islander years. It is interwoven with our languages, stories, Heritage Protection Act 1984, and its proposed our art, customs and traditional practices. replacement, the Aboriginal and Torres Strait Islander Heritage Protection Bill 1998. For my generation, our culture is the legacy that we will give to our children and grandchildren. The Committee stated that “there is no clear dis- This is a weighty responsibility, and one that ex- cussion in either the legislation itself or the ac- ists under Indigenous law and custom - regardless companying materials about the intended rela- of whether it is acknowledged by the mainstream tionship between the two regimes. This is unac- Australian legal system or not. ceptable given the complexity and sensitivity of Wednesday, 22 August 2001 SENATE 26411 indigenous heritage protection, and the amount of implementation of this proposal, and should also negotiation, consultation, review and inquiry that have a role in monitoring Aboriginal heritage has been invested into the ATSIHP legislation, protection nationally and in co-ordinating laws including the: and programs that have an impact on Aboriginal • Review of the Aboriginal and Torres Strait heritage.” Islander Heritage Protection Act 1984 by the Perhaps if we had acted on the advice of the Hon Hon Elizabeth Evatt AO (the Evatt Report) Elizabeth Evatt, we would not find ourselves still • Joint Parliamentary Committee on Native grappling with the issues she clarified over 5 Title and the Aboriginal and Torres Strait Is- years ago. lander Land Fund 11th and 12th Reports I also bring to the Senate’s attention the fact that • Senate Legal and Constitutional Legislation ATSIC, as the peak national body for Indigenous Committee report into the Aboriginal and peoples, has similar concerns to those of the Torres Strait Islander Heritage Protection Bill Australian Democrats in relation to the lack of 1998. consultation with Indigenous peoples about the relationship between existing heritage regimes The Committee consequently recommended that and the proposed amendments to the EPBC Act to the Government provide full details about the include heritage. relationship between Indigenous heritage protec- tion in the proposed EPBC regimes and the The Chairman, Mr Geoff Clark, stated in his ATSIHP Act prior to the Senate’s consideration of submission that “it is ironic and very disappoint- the bills and that Indigenous peoples be given the ing that on the day before the Bills were intro- opportunity to comment on the Government’s duced into Parliament, representatives of the In- response. digenous leadership, including myself as the Chairman of ATSIC were meeting with the Min- The Committee also recommended that the Gov- ister Hill on the Aboriginal and Torres Strait Is- ernment provide a full response to the recom- lander Bill 1998 and not one word was uttered by mendations contained in the Evatt report. the Minister or his advisers about a new heritage So far. no response has been forthcoming. which regime being introduced into Parliament on the is highly unsatisfactory given that this report was next day.” tabled in this place in 1996 are a most thorough The ATSIC submission states that: and considered evaluation of these complex is- sues by The Hon Elizabeth Evatt. “While the heritage amendments to the EPBC Act are before Parliament, it would be important to I remind the Senate that the Evatt report was detail the impact of the whole indigenous heritage warmly received by many Aboriginal and Torres regime and consider those in context with the Strait Islander peoples and their representative ATSIHP Bill negotiations, and on the ground organisations across the country because for the protection of Indigenous sites and heritage in the first time, a government review set out with the interim.” goal to: In response to the need to significantly strengthen “respect and support the living culture, traditions the protection of Indigenous heritage, ATSIC (and and beliefs of Aboriginal people and to recognise the Australian Conservation Foundation) have their role and interest in the protection and control proposed that Indigenous heritage become an- of their cultural heritage.” other matter of national environmental signifi- This is the approach that all members of this cance, under the Act. This would then regulate place should be taking in relation to the heritage actions which have a significant impact on In- amendments we put before this Chamber. digenous heritage. I would also like to remind the Chamber of one of The Australian Democrats believe that this pro- the recommendations of the Evatt Report which is posal is worthy of further consideration, and long overdue in this country, and that is a national should be the subject of further consultation and policy for Indigenous heritage protection that negotiation with Indigenous Peoples in the con- would address all aspects of Indigenous cultural text of changes to both this and the Indigenous heritage. As the report recommended: Heritage Protection Act. “Such a policy should form the basis of standards The second reading amendment which I am con- for cultural heritage protection, and for programs sequently moving today is that the Government at all levels of government which affect Aborigi- engage in discussions with Indigenous Peoples nal heritage. An Aboriginal-controlled body such about the relationship between the Aboriginal and as an Aboriginal Cultural Heritage Advisory Torres Strait Islander Heritage Protection Act Council should have responsibility to oversee the 1984, the 1998 Bill, the Native Title Act 1993 and 26412 SENATE Wednesday, 22 August 2001 the proposed insertion of a new heritage protec- “but the Senate calls on the Govern- tion regime into the Environment Protection and ment: Biodiversity Conservation Act 1999, and that (a) to engage in discussions with In- these discussions include consideration of making digenous Peoples about the relation- Indigenous heritage another matter of national ship between: environmental significance under the EPBC Act. (i) the Aboriginal and Torres Strait Specifically, the Government needs to discuss Islander Heritage Protection Act with Indigenous peoples the details of any such a 1984; trigger and in particular: (ii) the Aboriginal and Torres Strait a. the type of trigger which could be Islander Heritage Protection Bill used, including whether to use the cur- 1998; rent significant impact trigger under the EPBC Act; (iii) the Native Title Act 1993; and b. if this EPBC trigger were used, what (iv) the proposed insertion of a new would constitute a ‘significant impact’ heritage protection regime into in relation to Indigenous heritage, and the Environment Protection and what would consequently be a ‘con- Biodiversity Conservation Act trolled action’; 1999 (EPBC Act); and c. the opportunities and constraints of (b) to include in these discussions, con- using a trigger under the EPBC Act to sideration of indigenous heritage as protect both tangible and intangible another matter of national environ- heritage; mental significance under the EPBC Act”. d. the requirements upon a person who discovers a site or object with Indige- I will speak briefly about the issue that nous heritage values; Senator Ridgeway was dealing with specifi- e. what consultation processes are cally relating to this bill. I also wish to dis- needed in alerting Indigenous peoples cuss another piece of legislation that seems about a proposed action; to have vanished. Indeed, Senator Ridgeway f. issues related to public notification of stressed, as did Senator Woodley, how disap- sites; pointing it is that, after lengthy negotiations, after all the discussions and, finally, after an g. the options available in dealing with an action which may have a significant agreement between indigenous people and impact on Indigenous heritage; the environment minister, the Aboriginal and Torres Strait Islander Heritage Protection h. how ‘Indigenous heritage’ or ‘Indige- nous heritage values’ should be de- Bill 1998, which was an improvement and a fined; replacement for the 1984 act, seems to have vanished. On behalf of Senator Ridgeway, I i. what the criteria should be for assess- ing Indigenous heritage values; and ask Senator Hill if there is any sign of that bill and, in particular—this will also be dealt j. the appropriateness and workability of with by my colleague Senator Allison—how using state and territory heritage re- gimes and planning laws to protect that relates to and integrates with the legisla- and manage Indigenous heritage and tion that we are currently dealing with. This whether these regimes could be ac- bill establishes, as the chamber knows, two credited by the Commonwealth under new lists—the National Heritage List and the a bilateral agreement. Commonwealth Heritage List—which re- I commend this amendment to the Senate for its place the current Register of the National consideration. Estate. The Register of the National Estate Senator LEES—The second matter I contains a number of indigenous sites. want to deal with is Senator Ridgeway’s sec- Therefore, questions arise as to what this ond reading amendment. On behalf of Sena- legislation is seeking to do and what, at the tor Ridgeway, I move: stage of final negotiations, that other piece of legislation would have achieved, how it re- At the end of the motion, add: lates back and, indeed, which is the stronger Wednesday, 22 August 2001 SENATE 26413 of the two acts as far as their working for what is being sought through this process. indigenous people. One might say that there is a deliberate To make one final point as I look at avoidance of the fact, but I will not argue Senator Ridgeway’s amendment, the Demo- that. I am simply prepared to accept that it is crats agree with the ATSIC proposal that all a misunderstanding. indigenous sites should have protection. In- The problem with the existing Register of deed, the ATSIC proposal is certainly worthy the National Estate is that there is no real of further consideration. However, to for- protection power that comes with it. It has mally amend during the committee stage of been a very important contribution to the this bill, particularly given the previous ne- development of heritage conservation in gotiations and discussions, is something we Australia and, at the time of the commence- are very wary of at this point in time. We ment of that legislation and the establishment believe that, given the work that has already of the Register of the National Estate, it been done, we need to revisit that to look at really was leadership in this field. It required how the two acts will work together. In par- the development of lists of places that should ticular, if we are to move down the road in become part of this Register of the National this bill, we need to go back to the national Estate, and those places could cover the field indigenous working groups, the land coun- of natural heritage, built heritage and cultural cils, and basically, in the context of both heritage including indigenous heritage. That pieces of legislation, look at protection for has been valuable in developing a list of indigenous Australians. So, in closing, I want some 13,000 items that most Australians to speak on behalf of this motion that Sena- would accept are of heritage importance. tor Ridgeway has put together. It asks the However, the degree of importance has been Senate to call on the government to engage a subject that has come in for much more in discussions with indigenous peoples about critical debate in recent years. There is cer- the relationships between the Aboriginal and tainly a point of view that basically applica- Torres Strait Islander Heritage Protection Act tions for listing and pressure for listing have 1984, the protection bill of 1998 so far as the come about because of political issues of the negotiations have gone and the Native Title day rather than any overall analysis as to Act 1993, and to propose the insertion of a what are the really important heritage items new heritage treatment regime into the in this country that should therefore be on a EPBC Act. national list. Senator HILL (South Australia—Minis- Secondly, apart from that debate as to ter for the Environment and Heritage) (6.24 whether the list reflects items that most Aus- p.m.)—In closing this second reading debate, tralians would think are of national impor- I thank all senators who have participated. I tance today, the protection of those items is have not personally heard all contributions not really significantly enhanced by the ex- but— isting legislative scheme at all. Basically, the Senator Bolkus interjecting— existing scheme only places an obligation on the Commonwealth government, and only Senator HILL—No, I did not. I listened when a proposed action of the Common- to Senator Cooney yesterday. I thought his wealth government will have a detrimental was a most constructive historical recollec- effect upon those assets is the act triggered. tion and very useful as background informa- Even if it is triggered, all that is required un- tion to this debate. I heard Senator Ridge- der section 30 of the legislation is a consid- way’s brief contribution yesterday. I listened eration as to whether all feasible alternatives carefully to Senator Hutchins’ contribution have been taken into account. So most this afternoon. So I think I have at least been threats to items on the Register of the Na- able to get the flavour of the debate. tional Estate are not from the Common- There is clearly, on the part of the Labor wealth at all. It is a very rare occurrence Party, the opposition—to give them the bene- where the Commonwealth intends to take fit of any doubt—a misunderstanding as to some action that could detrimentally affect a 26414 SENATE Wednesday, 22 August 2001 listed item. As I have said, even on those rare The debate that took place within heritage occasions there is no protection per se given communities around the country certainly to that item: it is simply that the Common- was passionate. For some, it is true there is a wealth has clearly got to understand the con- deep sentimental attraction to the notion of sequences of what it is doing and that it has the Register of the National Estate, even taken that into account. though those who are involved in this debate What happened, of course, is that this and are well-informed accept that it offers early start in Australia on heritage conserva- very little, if any, protection at all. The com- tion through the existing Australian Heritage mission recognised that at this stage of Aus- Commission Act was quickly overtaken by tralia’s cultural development there needed to better protection in each of the states. It was be a better national scheme, one that could the states that set up independent heritage more effectively provide protection where it authorities that basically had a power and is appropriate to provide protection and one responsibility of protection. You, I think, Mr that would also give the primary responsibil- Acting Deputy President, would argue that ity to that level of government that should this is in fact a primary responsibility of the accept that responsibility—not only for pro- states rather than the Commonwealth in any tection but for the costs that are inevitably event. associated with it. The ACTING DEPUTY PRESIDENT I have mentioned protection at a Com- (Senator Lightfoot)—That is probably right, monwealth level and protection at a state Senator, yes. level but of course many local governments around Australia have also taken on this re- Senator HILL—That is clearly a Western sponsibility and developed lists within their Australian perception of our federal struc- jurisdictions. They have also, to some extent, ture, but I can quite understand it—that the developed ways of protecting the assets on primary responsibility for conservation of their localised lists. The fourth stream is the heritage lies with the states. When there were non-government lists, the National Trust lists no state legislative regimes it was under- and the like. It is therefore not surprising that standable for the Commonwealth to show those who regard this issue as a serious one leadership and to establish the Register of the have been wrestling for some years with the National Estate. We now have this huge na- way in which all of these lists and all of tional register with no real powers attached these various regimes of differing levels of to it. In addition, we have state heritage pro- protection might be rationalised into some- tection schemes that provide much greater thing that is a more effective national real protection to items that have been listed. scheme. Not surprisingly, we find many items are now listed on the Register of the National We picked up this challenge when we Estate and listed on state heritage lists as came to government. We took the advice of well. Not surprisingly, because of the size of the Australian Heritage Commission and the national list and because of the processes took it to governments other than our own. In of registration, a huge backlog has devel- 1997, the governments of Australia—the oped. Commonwealth and the state governments— agreed that there should be a new scheme. All of this caused the commission, some That agreement is the basis of what is before years ago—I acknowledge it commenced the chamber today. It is interesting that this process before we came to government Senator Hutchins sees a great threat from in 1996—to question whether it was time to Liberals in this scheme, when the New South move on to a more contemporary scheme of Wales Labor government endorsed it back in conservation and protection. The commis- 1997. They did so because they also recog- sion itself commenced this debate, through nised that it was time to move on and it was preparing discussion papers. It led the debate time to develop a new scheme. from 1996 onwards around the country. Peo- ple regard the issue of heritage dearly and so The fundamentals of this scheme are that there are passionate views on this subject. there would be a national list, probably a Wednesday, 22 August 2001 SENATE 26415 relatively limited national list, of items tainly a level of protection that is far superior which most Australians would regard as so to that which exists today. In addition to that, fundamentally important to our cultural in this legislation we recognise that the heritage—whether they be built items or oth- Commonwealth is the owner of many prop- erwise— that they should be recorded in that erties. They may not reach a level of national national sense and that, within its capacity, significance, but the Commonwealth never- the Commonwealth should accept an ulti- theless has to accept responsibility for the mate responsibility for their protection. I will heritage values of its properties. try to explain that to you a little further, Mr Senator Forshaw interjecting— Acting Deputy President. I can imagine you would be the sort of honourable senator that Senator Bolkus interjecting— might be a little nervous about that concept, The ACTING DEPUTY PRESI- so I will not use an example in Western DENT—Senator Bolkus! Sorry to interrupt Australia. But let us take, for example, the you, Minister. Senator Bolkus, you are inter- Victorian parliament, the first parliament of rupting proceedings with your conversation; the Federation of Australia. It is clearly an the speaker on his feet has the call and I find asset of great historical and cultural impor- it difficult to concentrate on what he has to tance to all Australians. I, as a South Austra- say. If you want to talk to Senator Forshaw, I lian, have as much interest in seeing that invite you to meet outside somewhere. properly conserved as any Victorian. I would Senator HILL—For that purpose, the not be surprised therefore if independent ex- Commonwealth should list such items. In perts say that that is the sort of place that practice, of course, what would happen is should be regarded as being of genuinely that you would avoid this duplication and national heritage significance, for which the that items that are not of national importance Commonwealth, representing all Australians, but are of state importance and are on the would have ultimate responsibility for pro- state lists would stay there. That is obviously tecting. a sensible reform in itself. The Common- On that idea, the Commonwealth govern- wealth and the states having agreed to that ment and the state governments agreed. They framework, we then went through the proc- also agreed that there are many items that ess of drafting this legislation. The parlia- could be best described as being of state mentary committee considered the legisla- heritage significance and that they should be tion, and there has been a long and important protected by effective state heritage regimes. community— You would then have a better scheme in that The ACTING DEPUTY PRESI- you would have a national list and Com- DENT—Senator Hill, could I interrupt you monwealth protection for items of genuinely again. I understand that there may have been national heritage significance, whilst the an arrangement to stop the debate at 6.40 mass of items that are of state significance p.m. would be protected under the existing state Senator HILL—Why don’t I stop in regimes. Those regimes could be accredited about two minutes? by the Commonwealth, provided that they meet a set of best contemporary practices. Senator Bolkus—Twenty seconds. The state and Commonwealth governments Senator Forshaw—You’ve stopped now. also believed that it was legitimate for local Senator HILL—At this stage it would be governments, and it was the responsibility of sensible, it seems to me, to complete the sec- local governments, to protect items that ond reading debate. I have set out the could be described as being of local heritage framework for it and I have given the ration- importance. ale. I have said that there has been a long and That is the framework of what is before important public debate that has led to this the chamber today. It is designed to achieve a parliamentary debate. better protection, a more effective protection, The last issue I want to touch upon is that of our heritage in a national sense and cer- raised by the Australian Democrats—that is, 26416 SENATE Wednesday, 22 August 2001 the indigenous heritage issue. I was invited motion could be moved to postpone the divi- to comment on the sites bill. It is still the sion on the second reading until the next day government’s desire to have that piece of of sitting, I think that would serve my pur- legislation passed this session. I believe that pose. we are close to achieving that goal and we Senator O’Brien—In relation to the pro- will continue to work to achieve that out- ceedings this evening, there was an under- come. In relation to indigenous heritage, yes, standing that at 6.40 p.m. we would proceed it is included within this legislation. So, if to certain other business—a message and a the indigenous heritage achieved the national response to a return to order—which would significance standard, it would be treated as have enabled at least some time to be spent such. dealing with the return to order subject. That In relation to the broader area of indige- time is no longer available, so I do not see nous heritage, we accept—as the govern- any reason why we should curtail the second ments accepted in 1997—that there is still reading division. We might as well have it more work that needs to be done to develop now as tomorrow. an effective way to properly respect and con- The ACTING DEPUTY PRESI- serve the broader range of indigenous heri- DENT—I put the question that the motion tage values across Australia. That debate that these bills be now read a second time, as must continue, and the rationalisation that amended, be agreed to. has been argued for by Senator Ridgeway of the various pieces of legislation should ulti- The Senate divided. [6.48 p.m.] mately occur as well. In our view, that (The Acting Deputy President—Senator should be the next phase of heritage protec- P.R. Lightfoot) tion within Australia and the next major Ayes………… 39 project for this parliament. On that basis, I Noes………… 28 would accept the amendment to the second reading suggested by Senator Ridgeway, be- Majority……… 11 cause I think it is pointing to an important AYES direction for the future that this government Abetz, E. Allison, L.F. would accept. I commend the bill to the Sen- Bartlett, A.J.J. Boswell, R.L.D. ate. Bourne, V.W. Brandis, G.H. Senator BOLKUS (South Australia) (6.41 Calvert, P.H. Campbell, I.G. p.m.)— by leave—The opposition also sup- Chapman, H.G.P. Cherry, J.C. port the amendment in order to give consid- Coonan, H.L. * Crane, A.W. eration to the issues raised by the Democrats. Eggleston, A. Ellison, C.M. In respect of the second part of the amend- Ferguson, A.B. Ferris, J.M. ment, though, we anticipate that there may Gibson, B.F. Greig, B. be some pitfalls in doing what the Australian Heffernan, W. Herron, J.J. Democrats would like us to do. We give it Hill, R.M. Kemp, C.R. passage in respect of the second part in order Knowles, S.C. Lees, M.H. to air some of the pluses and minuses of it, Lightfoot, P.R. Macdonald, I. but we also share the concern expressed by Macdonald, J.A.L. Mason, B.J. Senator Ridgeway about ATSI heritage leg- McGauran, J.J.J. Murray, A.J.M. islation. Newman, J.M. Patterson, K.C. Stott Despoja, N. Tambling, G.E. Amendment agreed to. Tchen, T. Tierney, J.W. Senator Hill—I understand that the Labor Troeth, J.M. Vanstone, A.E. Party want to divide on the second reading. It Watson, J.O.W. was put to me that that will obviously take NOES some time, and I am wondering whether it Bolkus, N. Brown, B.J. would assist the chamber if some process Buckland, G. Campbell, G. were agreed to that would allow the division Carr, K.J. Collins, J.M.A. to take place tomorrow rather than today. If a Conroy, S.M. Cook, P.F.S. Wednesday, 22 August 2001 SENATE 26417

Cooney, B.C. Crossin, P.M. bill, we saw a disproportionate, inequitable, Denman, K.J. Evans, C.V. divisive and totally unfair allocation of Forshaw, M.G. Gibbs, B. funding brought forward by this government Harradine, B. Hogg, J.J. which demonstrated an ideological obsession Hutchins, S.P. Ludwig, J.W. * and a prejudiced view against public educa- Lundy, K.A. Mackay, S.M. tion in this country. That is quite inconsistent McKiernan, J.P. McLucas, J.E. with the national goals for schooling as out- Murphy, S.M. O’Brien, K.W.K. lined in this report. Ray, R.F. Schacht, C.C. Sherry, N.J. West, S.M. In that bill, we saw a continuation of a policy whereby from 2000 through to PAIRS 2004—that is the quadrennium under discus- Alston, R.K.R. Ridgeway, A.D. sion in that bill—the amount of money going Minchin, N.H. Faulkner, J.P. to government education from the Com- Payne, M.A. Crowley, R.A. monwealth is reduced as a total of outlays * denotes teller from 37.1 per cent to 34 per cent. That is a Question so resolved in the affirmative. marked and substantial shift in the allocation Bills read a second time. of moneys going to public education in this country. We saw a new model of funding put DOCUMENTS in place—the so-called SES model—which The ACTING DEPUTY PRESIDENT was totally unfair and was totally prejudiced (Senator Lightfoot)—Order! It being after towards the schools that are already wealthy 6.50 p.m., I intend to proceed to considera- or powerful and, of course, are able to look tion of government documents. after themselves much more effectively than Department of Education, Training and the poorer non-government schools. Youth Affairs: National Report on A couple of weeks ago, I visited two small Schooling Jewish schools in Victoria: Yeshivah and Senator CARR (Victoria) (6.53 p.m.)—I Beth Rivkah College in Caulfield and Ad- move: dass Israel. Those schools highlight just how That the Senate take note of the document. grossly improper this bill was last year and how inadequate a funding model it was. This is a report from the 1999 national report These two schools are in a wealthy area, but on schooling in Australia. It would appear they are so poor that they have to actually that this government is not yet able to bring run a roster system for use of the play- forward documents any more quickly than grounds. Not enough money is put into those we have seen in the past. It is two years out schools to allow all the kids to go into the of date. This was the first year where we saw playground at once. It is a small community the recommitment of the national goals for of people which is required, for religious and schooling. The national goals for schooling community reasons, to live around a syna- are outlined in this report. The Minister for gogue and the school. They often live in ex- Education, Training and Youth Affairs, Dr tremely poor circumstances. That community Kemp, is the first education minister since is not characterised by wealth, as this model this report was brought down to completely would suggest living in Caulfield would be. undermine those national goals for school- More often than not this community is char- ing. Last December, we saw a schools bill acterised by poverty. We have a government brought into this parliament which saw $22 that sees this as a model that discriminates billion expended on schools in such a man- ner that it seriously challenged those national against those people. objectives and goals as outlined in this re- On the other hand, the government port. It was a schools bill that undermined schools in the area in which I live in the the basic premise that we have had for many north of Melbourne are being discriminated years in this country of a fair and reasonable against by this government to the point distribution of funding between government where Commonwealth expenditure has been sectors and non-government sectors. In that reduced from 37 per cent of total outlays in 26418 SENATE Wednesday, 22 August 2001

2000 to 34 per cent in 2004. That is a re- whelmingly the result of the policies of state markable jump in such a short time. The na- governments such as the Carr government in tional school goals outlined in the report New South Wales. Fortunately, we have have been undermined by this government— come in with top-up money in a number of a government that is intent on undermining areas such as literacy and numeracy, which the Karmel settlement, the consensus that has dramatically halved the rates of illiteracy held sway in this country for 25 years around in our primary schools in New South Wales. the issue of non-government schools. We And that is what I wanted to focus on today. have a government that is intent upon a pol- Before I finish, and before Senator Carr icy which is unfair, divisive and totally un- walks out of the chamber, I want to make the just. We have a government determined to point that Senator Carr started his comments discriminate against public education and the by saying that this report was late. Senator majority of Australians in favour of the Carr, the reason the report is late is that your wealthy and the privileged few. Labor mates in New South Wales and in Senator TIERNEY (New South Wales) Victoria have been slow in putting the fig- (6.58 p.m.)—I rise to speak on the same ures in. How can you actually have a na- matter. I am delighted to follow Senator Carr tional report without New South Wales and to put the record straight on this nonsense Victorian figures? These two states make up that he has been peddling. The very simple two-thirds of the schools in Australia. Why fact that Senator Carr seems to want to to- are they late? Because those state Labor gov- tally ignore is that public schools are 88 per ernments are dragging the chain. I was very cent funded by state governments. What has surprised that Senator Carr did not start bag- declined in recent years is the commitment ging the state Labor governments. He does of the states to their public schools. The not seem to like doing that, but they are the worst example of that is the Carr Labor gov- guilty parties in this regard. ernment, which came into office in 1995, in I want to focus on the way in which the my own state of New South Wales. We left federal government, in its specific areas of office in New South Wales spending 25½ per responsibility in the states schooling system, cent of the state budget on education. What has dramatically improved the literacy and have the Carr government in New South numeracy rates in this country in the time it Wales spent on education as a percentage of has been in government. I want to quote the the budget? They have spent 22 per cent— figures for year 3 and year 5. These are the that is, 25½ per cent down to 22 per cent. figures relating to 1996 to 1999. In that time That is the problem, Senator Carr. The state the illiteracy rate for year 3 students has governments are cost shifting and moving dropped from 27 per cent to 13 per cent, and money out of the public schools to the that is a halving for that year. For year 5 stu- point—if you have a look at the budget com- dents, it has fallen from 29 per cent to 14 per parisons—where they are putting up the cent—again, a halving of the illiteracy rate in budget, in New South Wales, by between one this country. But we have a series of state per cent and two per cent. At the same time, Labor governments across this country now, the federal money— and remember that that unfortunately, that are really dragging the is only 12 per cent of the money that goes to chain on agreements to improve these stan- state schools—is going up at over five per dards even further. The state Labor govern- cent a year, which is more than double what ments do not want to report this; they do not is happening in the states. We are actually want to report it to parents. The behaviour of making up for some of this shortfall created the Labor states on this matter has been an by the states, but because they are 88 per absolute disgrace. We made great progress in cent of school budgets it is of course a big the last three years. That is now all in danger ask. The reality is—and Senator Carr totally because the state Labor governments do not ignored this—that government schools in want to report their figures. I call on them to this country are overwhelmingly the respon- really focus on this incredibly important sibility of state governments and, if there is a matter and to make sure that we do have problem in the public schools, it is over- Wednesday, 22 August 2001 SENATE 26419 proper reporting requirements. We know more practice nurses so that they can focus where we are up to, we know what needs to on diagnosis and clinical care; $13 million be done, and in the future we can drop these over four years to provide 110 nursing schol- illiteracy rates even further. The whole key arships worth $10,000 per year targeting stu- to the future of children in this country is that dents from rural and regional backgrounds to they are literate and that they are numerate. access undergraduate nursing degrees; $120 They cannot survive in our economy and in million for GPs to provide better outcomes in our society without that. We have made dra- mental health care; nearly $50 million to matic improvements. I call on the Labor allow GPs to better treat Australians with Party, federally and state, to join with us in diabetes, which is an increasing problem for that very important matter. (Time expired) all of us; funding for GPs to better manage Question resolved in the affirmative. patients with asthma; $72 million to increase the number of women who can be screened ADJOURNMENT for cervical cancer, especially women living The ACTING DEPUTY PRESIDENT in regional and remote areas and targeting (Senator McKiernan)—Order! Considera- migrant women and Aboriginal women; and tion of government documents has now con- over $43 million to increase the availability cluded and I propose the question: of after-hours and emergency care for 32 That the Senate do now adjourn. new after-hours medical care sites that are Health Services: Rural, Regional and being established across the country. Remote Australia The coalition government has particularly Senator SANDY MACDONALD (New focused on enhancing rural health education South Wales) (7.04 p.m.)—In light of this and training. This will see the development week’s debate about health services, I want of nine rural clinical schools and three uni- to outline the coalition’s achievements and versity departments of rural health in re- our determined commitment to deliver fur- gional areas. I am pleased to be able to say ther improvements. In the past three budgets that this includes a department of rural health there have been more than 120 targeted to be established in Tamworth, where my health initiatives introduced by the Howard- electorate office is. This will be established Anderson government. This year’s budget in cooperation with the University of New- continues the government’s commitment to castle, which is working in partnership with better health outcomes for rural, regional and the University of New England in Armidale. remote Australians by addressing shortfalls Congratulations to both those universities in the rural health work force, particularly in and to the medical schools within those uni- the field of nursing, and strengthens existing versities. This initiative will provide specific measures to provide sustainable rural health rural health training and encourage medical services. and other health professionals to take up ru- ral practice. These initiatives complement the really inspirational $562 million regional health Another initiative is the Rural Australia strategy called More Doctors, Better Serv- Medical Undergraduate Scholarship Scheme, ices that has been in place since the 2000-01 which aims to increase the number of stu- budget, and it followed the Michael dents with a rural background studying Wooldridge-John Anderson medical outreach medicine by providing financial support tour. This year’s budget delivers record during university. In the year 2000, this pro- funding for Medicare and confirms the coa- vided approximately 430 scholarships, and lition’s commitment to strengthen and im- around 80 further scholarships have been prove our public hospital system. It includes awarded this year. $300 million for increased Medicare rebates Further, a total of $33.4 million has been for GP visits, particularly benefiting patients allocated to fund the Commonwealth Medi- with complex health conditions who need cal Rural Bonded Scholarship Scheme over longer consultations with their doctor; $104 the next four years. Under this scheme, 100 million over four years for GPs to employ new medical school places tied to the schol- 26420 SENATE Wednesday, 22 August 2001 arships will be offered every year, with stu- Each year some 600 medical students receive dents receiving $20,000 annually while assistance under this scheme, with 150 new studying, in return for a commitment to work scholarships available this year. In the 1999- in rural areas for at least six years once they 2000 budget, the rural women’s general complete their fellowship as a general prac- practitioner service was funded to provide titioner or as a specialist. One hundred medi- regular female GP visits to more than 60 cal students have already signed up for these communities—another world first. The gov- scholarships. ernment has funded the Royal Flying Doctor The multipurpose services initiative is a Service for more than 40 years, particularly joint Commonwealth, state and territory to help rural and remote communities access government program responding to the needs a broad range of clinical services and the of rural families through the delivery of im- best aero-medical emergency retrieval sys- proved health and aged care services. This is tem in the world. achieved through the pooling of funds from The coalition is also working to make the various sources to sustain diverse medical health system better and more user friendly. services in the one location. To date, 54 of For example, when Labor was in govern- these multipurpose service sites have been ment, Australians could claim a Medicare approved and operate nationally. These mul- rebate only from a Medicare office or by tipurpose service sites also support 1,124 post. Over the last four years the coalition flexible aged care places. The more allied has implemented a number of initiatives to health services initiative provides $49.5 mil- improve access to Medicare, including more lion over four years to boost the range of than 800 national claiming facilities in addi- health professionals, including mental health tion to telephone claiming facilities. Over the workers, podiatrists, physiotherapists and next year advances in technology should in dieticians in rural areas. Early estimates indi- fact allow patients to claim their Medicare cate there will eventually be more than 130 rebate on the spot from the doctor’s surgery. full-time equivalent health positions funded In contrast to Labor, the coalition believes nationally from this program. The medical in a strong private health sector to comple- specialist outreach assistance program will ment the public system. The private health ensure that visiting specialists, local GPs and sector allows Australians the freedom to health services can work together to improve choose their own doctor and hospital and local health practitioners’ skills as well as helps alleviate pressures on the public sys- health care for rural Australians. The en- tem. The coalition will continue to improve hanced pharmacy package provides funding Australia’s health system by reforming over four years for a range of allowances to Commonwealth-state relations and by em- sustain or increase the number of pharmacies phasising quality care and preventive treat- in more remote areas and provide work force ment. If Labor were serious about providing support. better health services to Australians, even in Other rural health initiatives undertaken in opposition they have the chance to do the past three years are continuing. I will something constructive—for instance, by mention some key programs. The Rural Re- urging the New South Wales state Labor tention Program has provided payments to government, which gets around $8.3 billion more than 2,000 doctors who have practised this year from the GST arrangements, to in rural areas for a specified period since the spend more of that money on the public introduction of this world-first initiative in health services that are desperately needed in 1999. This amount includes a second pay- New South Wales. The coalition will con- ment to over 1,600 of those doctors. The tinue to provide Australians with a choice of John Flynn scholarship scheme continues private care combined with a quality public and provides financial support to enable hospital system. This means that Australians, medical students to form long-term relation- particularly those who live in regional Aus- ships with rural communities and gain a bet- tralia, will have affordable, high quality and ter understanding of rural medical practice. world-class health care. Wednesday, 22 August 2001 SENATE 26421

Northern Territory Election no doubt this week that there is a mood of Senator CROSSIN (Northern Territory) excitement prevailing throughout the com- (7.14 p.m.)—18 August 2001 will be re- munity, and so there should be. corded in the history books of Australia as a There are now four women from the La- very significant day for the people in the bor Party who will take up positions in the Northern Territory. I must say it is a great new government, one woman Independent honour for me to be able to stand up in front and two women from the CLP. We have an of my colleague Senator Tambling and de- outstanding result in having elected seven liver this adjournment speech on the election women to the 25-seat government in the outcome in the Northern Territory last Satur- Northern Territory. Delia Lawrie and her day. When Paul Keating stood up and said, mother, Dawn Lawrie—Dawn Lawrie, of ‘How sweet it is,’ after he won the federal course, was a member of that parliament election in 1993 some of us in the Labor many years ago—are the first mother- Party could not imagine a sweeter victory, daughter political duo or dynasty in the na- but last Saturday was certainly it. The 26- tion to be elected to the same parliament. year reign by the CLP in government in the The indigenous balance has increased. We Northern Territory is finished— gone. Their now have four indigenous members from the stranglehold over the political scene in the Australian Labor Party sitting in govern- Northern Territory has finally collapsed, and ment. That representation matches the in- it has collapsed with a nine per cent swing digenous population in the Northern Terri- against the Country Liberal Party. It was a tory on a per capita basis. It is the highest swing that, if we were being honest, none of indigenous representation in any Australian us would have predicted this time last week. parliament ever. In Marion Scrymgour we It was a significant swing against the Coun- have elected the second indigenous woman try Liberal Party. to a parliament in this country and the first- The people in the Northern Territory have ever indigenous woman into the parliament elected the Australian Labor Party for the in the Northern Territory. first time since self-government. We are con- There is no doubt that the electorate rec- fident that after counting finishes this week ognises the positive plans that Labor put out we will govern in our own right in the through the campaign to deal with the fun- Northern Territory, having gained 13 seats. damentals that have always been a priority There is a new, enthusiastic and revitalised for Labor: health, education and jobs. From team now heading up the annals of Parlia- the very day that the campaign kicked off the ment House in the Northern Territory. The CLP were on the backfoot, fighting each day Northern Territory has come of age. As the to try to resurrect themselves out of a quag- papers have suggested this week, people in mire of negativity and ill-conceived policies. the Territory have finally thrown off the The second day after the campaign was mantle of being redneck and staid. They launched the gas-petroleum project fell over, have seen through Clare Martin and her team yet Denis Burke, the Chief Minister, wanted what terrific new and fresh policies are to still campaign and trumpet that his gov- waiting for them when that government takes ernment was the only government that could office in the next week or so in the Northern bring development to the Northern Territory. Territory. The Australian Labor Party had their policies My congratulations go to Clare Martin, costed by Access Economics, something who, as someone said to me today, goes which the CLP did not do. The CLP never down as a legend in the Labor Party, and so bothered to show Territorians details of its she will. She is the first female political policies throughout the campaign. leader ever in Australia to win government What have we seen since the campaign re- from opposition. She is not only the first sult on Saturday night? What have we seen Northern Territory Chief Minister from the since that huge swing to the Labor Party, Labor Party but also the first female Chief managing to put them into office? Denis Minister in the Northern Territory. There is Burke has apologised for one of the most 26422 SENATE Wednesday, 22 August 2001 fundamental mistakes a leader in this country day’s election—Denis Burke knows that; the could have ever made—that is, that the Country Liberal Party knows that—in the Country Liberal Party decided that no matter Northern Territory. If there is anybody at all what the cost to Territorians they would put in the Northern Territory who could best the Labor Party last. That meant that in five know and understand what push polling is, seats they would give their preference to One then it certainly is the Country Liberal Party Nation above the Labor Party. It caused an and Denis Burke. Territorians can now ex- outcry up there. The Multicultural Council pect a more open and transparent govern- immediately put out a press release and said ment. They can expect major changes in the that they were: areas of health and education. A Labor vic- ... shocked, dismayed and disappointed at the tory will make a huge difference in the deliv- decision made today by the CLP not to put One ery of federal funded services. Nation last. I will conclude by recognising those peo- Beryl Mulder, the council’s president, went ple who deserve the most recognition after on to say: last Saturday’s win for us. Apart from Clare The Territory is a diverse, multicultural place Martin, her staff and the 12 candidates who where diversity is valued, and we had expected got in, there are those other 12 candidates that in recognition of this, the CLP would make a who stood for the Labor Party and who were principled stance against what parties with a rac- not successful in getting elected. Thanks is ist platform, such as One Nation, stand for. due to them, on behalf of the members of the But what dominated the campaign in the party, for their hard work and the commit- Northern Territory was the politics of sur- ment they maintained throughout that cam- vival, not the politics of ruling for all Territo- paign. But this was a win in the Northern rians. How could Denis Burke and his team Territory for many, many Australian Labor stand up there and say how proud they were Party members, some of whom have given of the Northern Territory being a multicul- more than 20 years of their life to see this tural community, how much money they had outcome last Saturday night. There are some given to multicultural organisations and how who do not live in the Territory anymore. I they valued their input when in fact they did could start to name them but, as is the case not put the One Nation Party last on their with naming people, sometimes you miss ticket at Saturday’s election? Denis Burke some out, and I would not want to do that. has now had to eat humble pie. We have seen So those people know who they are and they him publicly apologise nationally for making will take heart from the thanks that is being such a mistake. As some of my colleagues given to them. That includes those people have said in Darwin this week, ‘Denis, it’s who have walked kilometres over 20 years too little, too late.’ doing letter-boxing, those people who have The second thing that the CLP have said is folded thousands of pieces of paper and that the Labor Party push polled last Friday those people who have given their time and night. Well, Denis Burke, I say this to you: money to see exactly what was achieved last you only know too well what push polling is. Saturday night. You do not have to seek legal advice as to It is a great win for the Australian Labor whether or not what the Labor Party did last Party in this country and for people in the Friday night was push polling. Go and ask Northern Territory, and I would hope that Lynton Crosby, go and ask Mark Textor, go what Clare and her team have been able to and ask Shane Stone. They will all tell you, achieve would receive congratulations inter- because they all know, because they have nationally. I am very excited and enthusiastic done it in previous Territory elections, that when I look to what a Northern Territory will what the Labor Party did last week was to be like under a Labor government. Territori- canvass voters on behalf of the Labor Party. ans can expect— and rightly so—that a sense It was not a polling company that rang peo- of great achievement and a sense of great ple last week and it was not push polling that change awaits them over the next four years. occurred in one of those seats prior to Satur- Wednesday, 22 August 2001 SENATE 26423

Centenary of Federation: AirShows in the aviation pilots were able to share in the Fed- Outback eration AirShows in the Outback experience. Senator LUDWIG (Queensland) (7.24 As well as visiting the larger towns where p.m.)—I rise tonight to congratulate the the major air shows were held, this travelling Queensland state government and Centenary air show and air rally also visited a number of Federation Queensland on their recent and of other Western Queensland towns, includ- very successful AirShows in the Outback ing Tambo, Blackall, Winton, McKinlay, program. As all members of the chamber Julia Creek, Richmond, Hughenden, Moran- would be aware, this year marks the centen- bah, Clermont, Capella, Springsure and In- ary of our nation’s federation. It is a year in june. This served to bring a key federation which we as a nation are celebrating the event to many rural and outback Queensland strength of purpose that federation has towns. A notable side benefit of this event brought to Australia and a year in which we was that all the proceeds raised from the air will celebrate the cultural diversity of our rally went to the Royal Flying Doctor Serv- society. It is a historic year, filled with events ice, a very worthwhile recipient and a truly enabling all Australians to participate and invaluable service for regional and rural show pride in their communities and nation. Australians—a service, I might add, that was pioneered in Western Queensland. Centenary of Federation events are de- signed to be inclusive of all Australians. I had the good fortune to be invited to the They reflect the diversity of talent, interest Federation AirShows in the Outback corpo- and imagination that are the building blocks rate lunch, held in Longreach by the Hon. of our nation. Centenary events are taking Peter Beattie from Queensland. Longreach is place in our cities, towns and regional cen- not only my birthplace but a very appropriate tres and in the outback. Indeed, this is a cen- venue for a major air show, given its long tenary for all Australians and is as much and very close association with the early about providing a glimpse of our nation’s pioneers of Australian commercial avia- future as it is about celebrating our past tion—the most notable of these, of course, achievements. AirShows in the Outback was being the fledgling commercial aviation car- an event that amply met these aims of inclu- rier Qantas. Further, like many towns in siveness and community involvement. Western Queensland, Longreach also had a wartime role and operated as a major base The Queensland government, the Centen- for American long-range heavy bombers and ary of Federation Queensland and the Na- had a base hospital. However, all this is tional Council of the Centenary of Federa- aviation history. The town of Longreach is tion, in association with Airshows DownUn- not just an appropriate venue because of its der, developed a unique aviation spectacular links with the past but is now a major stop- that reflected the great importance of West- ping point for tourists and travellers experi- ern Queensland in the development of Aus- encing the rich diversity of Western Queen- tralian aviation. AirShows in the Outback sland along the Matilda Highway. Indeed, consisted of a series of aviation displays with venues such as the Stockmen’s Hall of travelling throughout Western Queensland, Fame and the soon to be completed Qantas staged over a circular route of something in Museum, Longreach has become a worth- the order of 2,400 kilometres. Major flying while tourist destination in its own right. displays were held in Charleville, Longreach, Cloncurry, Charters Towers, Emerald and The air show itself was a huge success and Roma. a great credit to its organisers. Static and flying displays served to detail the history of Further, in the spirit of inclusiveness that the aviation industry in Queensland and lies at the heart of all Centenary of Federa- other parts of Australia. A range of materials tion events, general aviation pilots flying were loaned by organisations such as the their own aircraft were invited to become Qantas founders museum, the TAA museum part of an air rally. This air rally then oper- and the Ansett museum. Highlights of this ated in conjunction with the travelling air historic display included the full-sized rep- show. In so doing, many Australian general 26424 SENATE Wednesday, 22 August 2001 lica of Sir Charles Kingsford-Smith’s South- Maloney and her team can certainly take ern Cross and a TAA DC3. However, I think pride from their achievements in the local that all who were there would agree that the community. show-stealer was the static and flying dis- I would also like to make special mention plays of the Lockheed Constellation, affec- of Mr Bill Paton, the District Secretary of the tionately known as the ‘Conni’ or ‘Super Australian Workers Union and long-time Constellation’—for those people who may member of the Australian Labor Party. It was have recalled that great aircraft. the Longreach branch of the Australian La- This aircraft is a tribute to the dedication bor Party that sponsored the Federation Prin- of the members of the Australian Historical cess Parade. The Princess Parade is about Aircraft Restoration Society who found this small children being part of the community aircraft in Arizona at an aircraft graveyard and representing the spirit of the outback and and then spent in the order of five years— the Centenary of Federation. The children just think of the amount of toil and trouble— took great pride in dressing in various period and an additional $1.5 million restoring it costumes to represent the outback in the and returning it to Australia. It now provides spirit of the Centenary of Federation. I was a valuable link to Australia’s aviation history dragooned into being a judge of that parade. because Super Constellations, as some may I would have to say it was one of the most recall, were used by Qantas from 1954 and difficult tasks that I have ever had to per- were the first Australian aircraft to fly a true form. I had to come up with a winner of the round-the-world service. Princess Parade of what was called the out- The people of Longreach also showed back but, because it is the Centenary of Fed- great support for this stage of the AirShow in eration, was renamed the Centenary of Fed- the Outback with attendance numbers esti- eration: Federation Princess. I can say on mated to be about 4,000 which, to put it in behalf of Mr Paton and the local Australian perspective, is more than 90 per cent of Lon- Labor Party that a significant amount of time greach shire’s entire population. This event and effort was put into making the event a was clearly enjoyed and welcomed by the success and I was very pleased. I pass on my people of Longreach and I was pleased to see congratulations to them. The number of peo- my state colleague the Hon. Matt Foley at- ple that actually turned out on the Saturday tend this leg of the air show on behalf of the morning rivalled, in my view, the people that Premier. I am sure that, for all those who turned out for the air show that was held on took part in the AirShow in the Outback pro- the Friday. gram either as part of the air show or the air In closing, I would once again like to con- rally or as one of the many thousands who gratulate the Queensland state government witnessed it, the experience will have been a and the Centenary of Federation, Queensland once in a lifetime memory of our Centenary on the success of the AirShow in the Out- of Federation. back program. It was particularly pleasing to While in Longreach I also had the good see the people of western Queensland in- fortune to be invited to present the ribbons cluded in what was a key Centenary of Fed- and prizes for the Longreach Federation eration event. Princess. It was good to see the community Northern Territory Election spirit of the people of Longreach, who turned Senator TAMBLING (Northern Terri- out in large numbers for the Federation Prin- tory—Parliamentary Secretary to the Minis- cess competition and its associated parade. ter for Health and Aged Care) (7.33 p.m.)— Clearly the people of Longreach take great Last Saturday there was an election in the pride in their town and local community. In Northern Territory to elect members of the recognition of this, I make special mention Legislative Assembly. I acknowledge and of the Mayor of Longreach, Councillor Ma- congratulate the Australian Labor Party on loney. Western Queensland towns are very their success at that election. However, I am much a reflection of the efforts that their lo- apprehensive and concerned about a number cal councils put into them and Councillor of issues that were raised during the election Wednesday, 22 August 2001 SENATE 26425 campaign and I seriously will be watching nities of the Northern Territory. The Country very carefully the implementation of policies Liberal Party has served each and every Ter- and the administration of the Labor regime in ritorian in each and every electorate and in the Northern Territory. each and every town and community ex- Very proudly, I was a member of the first tremely well. I am sure that when history Legislative Assembly of the Northern Terri- records that period of 26 years it will be not tory, created in 1974. In my long political only the economic growth that is noted and career in the Northern Territory, I have been so significantly recorded but also the pleased to work with a number of leaders changes in the social environment, the racial and chief ministers; Goff Letts, Paul Ever- environment, the tolerance and the types of ingham, Ian Tuxworth, Steve Hatton, Mar- situations that have arisen. shall Perron, Shane Stone and Denis Burke. Obviously, one of the issues that impacted Each and every one of these chief ministers on last week’s campaign was the spectre of has brought a unique and special style to the One Nation. Whilst One Nation and its vot- Northern Territory that I think all Territorians ing patterns in other parts of Australia have have recognised for such a long period, 26 been significant, it is interesting to note that years—a period in Australian political life in this election One Nation put up candidates that had an incredible record of development in five seats where they made no difference and particularly social change in the North- whatsoever to the vote. In those northern ern Territory. suburbs of Darwin where many multicultural Eighteen of the 25 electorates stayed true groups and communities live there was obvi- to their routine voting profiles at last Satur- ously an adverse reaction to the considera- day’s election, which included two Inde- tion of preferences. I acknowledge that and I pendents, and that is not abnormal in a note that the Chief Minister has apologised Northern Territory election. The changes to the community for it. There were many were largely based on geographical and so- other issues connected with this election cial issues in the seven seats in the northern campaign—for instance, the concentration of suburbs of Darwin where previously only television. Senator Crossin has commented one of those seats was held by the ALP. So on push polling. There is certainly criticism six seats changed hands. We obviously need of the way in which the Labor Party chose to to ask questions about why there was such a engage in this style of campaigning on the swing geographically. The focus at this elec- last day of the campaign. As I said earlier, tion was on suburban families and their con- there were parochial and geographic issues, cerns and perceptions of the party that I rep- as well as the impact of policies that need to resent, the Country Liberal Party, and the be looked at and understood. advertising of the challenger. Very obviously, My challenge to the new ALP administra- the antenna into the northern suburbs by my tion in the Northern Territory is that it should own political party needs to be more care- always recognise the changing values and fully and finely tuned. changing needs within the community and However, I would point out to the Labor not be directed by its federal or national Party that the swing to the Labor Party was bodies and union shop stewards. Thankfully, only in the order of two per cent on the pri- in the Northern Territory to date union power mary vote. The flow-on of preferences from and influence has not been an issue that has the Independents was what achieved the final entered into any great exchange. I sincerely result for the Labor Party. I do not take away hope that we will not now see in the North- from that end result. We need to recognise ern Territory the degree of influence that the that the Northern Territory community has union movement has sought to exercise on changed very significantly since 1974 in Labor Party administrations in many other terms of population size, economic devel- states, as it did when Labor was in office opment and maturity with regard to tertiary federally. education and the significant changes that As I have said, there will be challenges have taken place in the Aboriginal commu- and there will be tests. Ms Martin is to be 26426 SENATE Wednesday, 22 August 2001 congratulated on her win but, at the same Council for Aboriginal Reconciliation— time, she is equally to be challenged and put Report for the period 1 June 1999 to 31 De- on notice that at every move she will be cember 2000 (Final report). tested not only by the community of the six Finance—Departmental items—Adjust- electorates in which she gained her signifi- ments and borrowings—Statements and cant advantage and swing but by the entire supporting applications for issues—June Northern Territory, and certainly by the 2001. Country Liberal Party, which I am pleased to Ministerial Council on Education, Em- have represented in that Legislative Assem- ployment, Training and Youth Affairs— bly and the House of Representatives and National report on schooling in Australia now represent in the Senate. 1999. The Northern Territory is an exciting Tabling community. Madam President, as you know, The following documents were tabled by in representing territories we have rather dif- the Clerk: ferent constitutional and social communities Australian Meat and Live-stock Industry to represent. I would sincerely hope that in Act— Australian Meat and Live-stock In- the near future we will see a very close and dustry (Live Sheep Exports to Saudi Ara- collaborative arrangement between the fed- bia) Amendment Order 2001 (No. 2). eral government and the Northern Territory Fuel Quality Standards Act— government, albeit the new Labor admini- Fuel Standard (Diesel) Determination stration. I will work constructively with Ms 2001. Martin, her team and her ministers but, at the Fuel Standard (Petrol) Determination same time, I will be critical if at any stage I 2001. believe they step outside of the character, the Veterans’ Entitlements Act—Instruments needs and the requirements of Territorians. under section 196B—Instruments Nos 57- Senate adjourned at 7.41 p.m. 64 of 2001. DOCUMENTS Indexed Lists of Files Tabling The following document was tabled pur- The following government documents suant to the order of the Senate of 30 May were tabled: 1996 as amended 3 December 1998: Indexed lists of departmental and agency Advance to the Finance Minister—State- ments and supporting applications for is- files for the period 1 January to 30 June 2001—Statements of compliance—De- sues— partment of Foreign Affairs and Trade. May 2001. June 2001. Wednesday, 22 August 2001 SENATE 26427

QUESTIONS ON NOTICE The following answers to questions were circulated: Government Services: Information Shops (Question No. 3589) Senator Faulkner asked the Minister representing the Minister for Finance and Admini- stration, upon notice, on 28 May 2001: (1) (a) How many Federal Government information shops were operating as of 1 March 1996; and (b) can a list be provided of each town/city in which a shop was located at that time. (2) What was the annual cost of operating those Federal Government information shops operating as at 1 March 1996. (3) What was the total annual revenue of the information shops in the 1995-96 financial year. (4) (a) How many Federal Government information shops were operating as of 1 March 2001; and (b) can a list be provided of each town/city in which a shop was located at that time. (5) What was the annual cost of operating those Federal Government information shops operating as 1 March 2001. (6) What is the total annual revenue of the information shops in the 2000-01 financial year to date. (7) What is the reason for the reduction in estimated resourcing for Output 2.3.1—Access to Govern- ment Information from $12 385million in 1999-2000 to $ 11 173 million, as outlined at page 38 of the Finance and Administration Portfolio Budget Statements 2000-01, Budget Related paper 1.9. (8) What is the reason for the reduction in estimated revenue for Output 2.3.1—Access to Govern- ment Information from $10 884 million in 1999-2000 to $8 834 million, as outlined at page 38 of the Finance and Administration Portfolio Budget Statements 2000-01, Budget Related paper 1.9. (9) How has the portfolio implemented, to date, the commitment that ‘developments this year will provide improved access by customers to Government information’, as outlined at page 36 of the Finance and Administration Portfolio Budget Statements 2000-01, Budget Related paper 1.9. Senator Abetz—The Minister representing the Minister for Finance and Administration has supplied the following answer to the honourable senator’s question: (1) (a) Nine. (b) Adelaide, Brisbane, Canberra, Hobart, Melbourne, Parramatta, Perth, Sydney, Townsville. (2) The estimated annual cost of operating the nine Government Info Shops as at 1 March 1996 was $ 5.324 million. (3) The annual revenue from sales of publications through the nine Government Info Shops in 1995- 96 was $ 5.203 million. (4) (a) Nine. (b) Adelaide, Brisbane, Canberra, Hobart, Melbourne, Parramatta, Perth, Sydney, Townsville. (5) The annual cost of operating the nine Government Info Shops in 2000-01 is estimated to be, ex- clusive of overhead costs, $ 4.125 million. (6) Revenue from sales through the nine Government Info Shops in 2000-01 is estimated to be $3.082 million. (7) and (8) The total price of output 2.3.1 declines from $23.269 million estimated actual 1999/2000 to $20.007 million budgeted 2000/2001. Whilst appropriations and external revenues remain relatively constant over the 2 year period, to- tal price declines due to savings in overheads allocated to this output. (9) The portfolio has implemented the following measures in 2000-01 to improve access to govern- ment information: • improved the functionality of the www.fed.gov.au whole of government website; • made an online version of the Public Service Gazette available free of charge; and • developed an online bookshop facility to provide an additional method of access to govern- ment information. 26428 SENATE Wednesday, 22 August 2001

Atomic Testing: Compensation (Question No. 3625) Senator Allison asked the Minister representing the Minister for Veterans’ Affairs, upon notice, on 19 June 2001: (1) How much compensation for health conditions related to radiation exposure to civilians and ex- servicemen involved in the nuclear tests in the 1950s and 60s and the subsequent clean up opera- tions. Can the answer be provided to show breakdowns for: (a) Australian servicemen and women; (b) Indigenous people; (c) civilian contractors; (d) pastoralists; (e) families of the deceased; (f) health disorders for which compensation has been made; (g) number by year awarded compensa- tion; and (h) the average compensation pay out. (2) How many people in each of the above categories have applied unsuccessfully for compensation. (3) Can details be provided of the nuclear test claims, to Comcare for compensation, which have been rejected by the Government but which have been and/or are being challenged in the courts. (4) What are the legal costs to date for the Government of defending such cases. (5) What was the medical and/or scientific basis for limited payment of compensation to those with multiple myeloma or leukaemia other than chronic lymphatic leukaemia. (6) Will the limitation of these two diseases be reviewed following, or as part of, the current health study. (7) If other cancers are found to be linked to radiation exposure, will compensation for these diseases be paid to the families of the deceased. (8) Is there a more accurate assessment of the total number involved in the test program than the esti- mate of 15 400 provided in 1989; if so, what is that figure and can it be broken down into the categories referred to in (1); if not, why has this assessment not been done. (9) How many of these 15 400 have subsequently died of cancer. (10 What measures has the Government adopted to collect data in each of the categories referred to in (1). (11) Is it the case that no records are available of defence personnel and civilians involved at Emu Plain and Monte Bello Islands; if so: (a) why; and (b) what steps have been taken to trace those records. (12) (a) How many defence personnel involved in the nuclear tests have been and are currently receiv- ing war disability pensions; and (b) are any of these ex-servicemen receiving these pensions for illness related to nuclear tests as opposed to other war service related illnesses. (13) How many people receiving a Department of Veterans’ Affairs war disability pension are also nuclear test veterans. (14) What steps have been taken by the Government to inform people in each of the categories listed in (1) of the compensation arrangements in place and in particular Aboriginal people who were at the time: (a) on pastoral properties in the Everard Ranges and Officer Creek areas; (b) at stations within the northern and north-eastern vicinity of the Emu sites; (c) in the Maralinga area; (d) in the Gascyone, Pilbara and Murchison area; and (e) at the Wallatina and Welbourn Hill during the so- called ‘black mist’. (15) Are recent reports that suggest that disabled people were brought to Australia from Britain to be part of the nuclear tests accurate; if so: (a) what was the rational for their involvement; (b) how many were involved; (c) what was the nature of their involvement; (d) were they willing partici- pants; (e) what information was provided to them about the tests; (f) what was Australia's in- volvement; (g) were these people returned to Britain, and if so, when; (h) how many remained in Australia; (i) were those who remained provided with Australian pensions and/or compensation; (j) can details be provided of their care following the tests; and (k) will this group be included in the current health review. Senator Minchin—The Minister for Veterans’ Affairs has provided the following answer to the honourable senator’s question: (1) Compensation has been paid to claimants under: Wednesday, 22 August 2001 SENATE 26429

• the Special Administrative Scheme and the Act of Grace Scheme administered by the Depart- ment of Industry, Science and Resources; • as result of a successful common law action; • under the Safety, Rehabilitation and Compensation Act 1988 administered by COMCARE; and • the Military Compensation and Rehabilitation Service (MCRS) which assumed responsibility for claims by ex-service personnel in July 1991 from COMCARE. The breakdown for each category is as follows: (a) 9 payments have been made to Australian servicemen (a further 7 cases are still under consid- eration); (b) 5 payments have been made to indigenous people; (c) 3 payments have been made to civilians; (d) no payments have been made to pastoralists; (e) 10 payments have been made to families of the deceased (excludes 3 payments to families in category (b)); (f) the health disorders for which payments have been made include malignant neoplasms and skin conditions such as psoriasis. (g) 1981 (1), 1989 (6), 1990 (6), 1991 (1), 1992 (2), 1993 (1), 1994 (2), 1996 (2), 1998 (1), 2000 (2) and 2001 (3). (h) The average compensation payout has been $126,561. (2) Australian servicemen – 342 (This figure includes some cases where the Commonwealth has ac- cepted liability for conditions arising from a member’s service but where no compensation has been paid.) Indigenous people – 14 Civilians - 11 (3) Common Law Actions Since the conclusion of the British Nuclear Testing Program, at least 79 common law actions against the Commonwealth have been instituted by ex-servicemen, other former Commonwealth employees and employees of Commonwealth contractors. Many of the cases before the courts have either been discontinued or withdrawn. Four cases have been heard by the court. (4) Legal costs expended by the Commonwealth are funded by a Special Appropriation, established in September 1989 to cover the costs of defending the Atomic Test related common law actions and compensation payments arising from these actions. To date, $5.13 million has been spent on both legal and compensation costs. It is not possible to provide a further breakdown of legal and com- pensation costs. (5) The Special Administrative Scheme was announced on 4 September 1989 and is administered by the Minister for Industry, Science and Resources. Changes to the Scheme, were announced on 10 February 1995 and it now provides for the payment of compensation to those Australian partici- pants (or their dependants) in the British atomic tests program who developed leukaemia (other than chronic lymphatic leukaemia) in the first 25 years after participation in the tests program. The decision to commence the Scheme was based on the results of a study undertaken by the UK National Radiological Protection Board (NRPB) of the health of participants in the British atomic tests program. The study, published in 1988, showed a possible increase in risk of test participants developing multiple myeloma and leukaemia (other than chronic lymphatic leukaemia). The UK Government then extended its war pensions scheme to cover British test participants with these conditions. As the activities of Australian and UK personnel at the sites were similar it was de- cided by the Australian Government to introduce a scheme to cover Australian participants. Following the publication of a follow-up NRPB study in December 1993, the UK Government de- cided to accept new claims only where leukaemia (other than chronic lymphatic leukaemia) had developed in the first 25 years after participation in the atomic tests. On 10 February 1995 the 26430 SENATE Wednesday, 22 August 2001

Australian Government announced changes to the Special Administrative Scheme to reflect these later findings. (6) and (7) The Government will consider reviewing the Special Administrative Scheme and the Act of Grace Scheme if the results of the current health study suggest this is appropriate. (8) The preliminary version of the Nominal Roll of Australian participants in the British Atomic Tests Program conducted in Australia from 1952 – 1963 at present contains 16,716 names. The names on the Roll are in the following categories: • Navy – 3,268; • Army – 1,657; • RAAF – 3,201; and • 8,590 civilians, including 10 indigenous people. Pastoralists are not identified separately within the civilian group. (9) It is not possible to provide an answer to this question at this stage. However, the Cancer Inci- dence and Mortality Study will match data with national cancer registers and death certificates. The information obtained from the Study will provide an estimate of the number of atomic tests participants who have died since the tests. (10) The preliminary Nominal Roll referred to in (8) has categories for civilian personnel, defence service personnel and indigenous people. The definition of an Australian ‘Atomic Participant’ for the purpose of the Roll is someone who was present, either working or as a visitor, in at least one of the testing areas whilst a test or tests were conducted in that area, or were there within a 2 year period after the explosions. The Roll has been compiled by examining Department of Defence records (including ship lists of the involved HMA Ships, Routine Orders from the Army Units known to have been involved, and identified RAAF Squadrons and Squadron members), personnel records of private firms engaged for the purposes of conducting and supporting the tests, the Report of the Royal Commission into Atomic Testing (1986) and records of the issue of Maralinga Security Cards. Documents prepared previously for the purposes of listing participants in the tests and other documents provided by the various ‘nuclear veteran’ associations were also examined for any additional names and identify- ing details. The names on the Roll have also been checked against the list of radiation-exposed personnel compiled by JR Maroney in the Australian Radiation Laboratory document ‘Personal Monitor Re- cords From Exposure To Beta And Gamma Radiation During Engagement In The Program Of British Nuclear Weapons Tests In Australia’, dated 10/12/1984. The Roll contains the names of ten aboriginal residents who were present in the testing areas. Ob- taining a comprehensive list of aboriginal people who were exposed to the tests because they were in the area is extremely difficult. It is recognised, therefore, that there are names of aboriginal people, who were in the area, that are missing from the Roll. This is partly because population in- formation from the relevant communities (Yalata, Koonibba, Ernabella, Maralinga Tjarutja, Pit- jantjatjara, Yankunytjara, Wallatinna, Ngaanyatjarra, Marble Bar and Cundeellee) was not sought or obtained at the time of the testing program and partly because movement of indigenous people through the restricted area during the testing period, may not have been effectively policed. Similarly, a lack of contemporary population information on the residents of pastoral properties, which may have included some aboriginal people, means that the Roll may not include that group if they were not included as part of the information in other documents. However, the Aboriginal and Torres Strait Islander Commission (ATSIC) have a representative on the Atomic Tests Partici- pants Consultative Forum chaired by the Department of Veterans’ Affairs (DVA). Officers from DVA and ATSIC are working together to identify sources from which this information may be obtained. (11) The Department of Industry, Science and Resources holds records for defence personnel and ci- vilians involved at both the Emu Plain and Monte Bello Island Atomic Tests. These documents in- clude a Nominal Roll for Australian participants at Emu Plain, Australian Radiation Laboratory records of radiation dose readings, Ship Lists for the 1952 and 1956 Monte Bello Island tests and RAAF lists for both Emu Plain and the Monte Bello Islands. Wednesday, 22 August 2001 SENATE 26431

(12) and 13) (a) No comparison has yet been done between the Atomic Tests Participants Nominal Roll and DVA data bases to determine the number of atomic tests participants in receipt of a disability pension. Such a comparison would be time consuming and could not be completed until the Nominal Roll was finalised. (b) No disability pension paid by DVA would be paid for illnesses relating to atomic testing. Atomic testing is not service covered by the Veterans’ Entitlements Act 1986. Therefore, all pensions paid by DVA are for conditions arising from service other than atomic testing. (14) The Special Administrative Scheme and the Act of Grace Scheme were announced through the issue of separate Ministerial media releases. In addition, the plaintiff for common law actions, Maurice May and Company, has been regularly provided information on the two schemes for dis- tribution to their clients. The Government has also directly provided potential claimants with de- tails of the two schemes in response to requests for information through correspondence with Ministers or officials, and has provided information directly to Atomic Test Veterans’ groups for circulation to its members. Senator Gareth Evans, the then Minister for Resources and Energy announced the then Govern- ment’s response to the Royal Commission into British Nuclear Tests in Australia, as recorded in Hansard on 17 September 1986. In that response, Senator Evans announced the Government’s intention to establish a scheme to allow claims to be considered under the Compensation (Com- monwealth Employees) Act 1971, to be administered by the Department of Social Security. The Minister also extended an invitation to the Aboriginal communities’ legal representative to submit claims for compensation. Australian defence personnel have previously been made aware of the role of the MCRS through media releases and information made available to members at their workplace. (15) This allegation received media attention in 1984 and was brought to the attention of the Royal Commission and is referred to in the list of exhibits at the back of the Report. The Royal Commis- sion considered this allegation and rejected it as having no substance. Australian Search and Rescue: Upstart (Question No. 3696) Senator O’Brien asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 9 July 2001: (1) When was the yacht sailing off the coast of Queensland to the town of 1770, that was the subject of a search by Australian Search and Rescue (AusSAR) which commenced on 8 July 2001, first reported missing. (2) (a) What was the name of the missing yacht; and (b) did it have an emergency position indicating radio beacon (EPIRB) and a life raft, or life boat with EPIRB fitted, on board. (3) (a) When was the last contact with the missing yacht; and (b) what was the yacht’s location when that contact was made. (4) In which state is the yacht registered. (5) When was AusSAR advised, and by whom, that the yacht was missing. (6) Who notified AusSAR that the yacht was missing. (7) When was AusSAR first notified that debris had been found washed up near Baffle Creek, north of Bundaberg. (8) Who notified AusSAR that the debris had been located. (9) Did Queensland state search and rescue authorities initiate the search for the missing yacht fol- lowing the discovery of the debris near Baffle Creek or did AusSAR initiate the search for the yacht. (10) If the Queensland state search and rescue authorities initiated the search, how and when did Aus- SAR become involved in the search. (11) If AusSAR initiated the search for the yacht, what was the basis for that action and did it follow a request from the Queensland authority to take over the coordination of the search. (12) If AusSAR did take over the coordination of the search following a request from the state author- ity: (a) how; (b) when; and (c) by whom, was that request communicated to AusSAR. 26432 SENATE Wednesday, 22 August 2001

(13) (a) What was the basis for the request; and (b) what was the basis for AusSAR agreeing to take over the coordination of the search for the missing yacht. (14) (a) Did the senior search and rescue officer on duty at the time the debris was discovered define the search area for the missing yacht; and (b) how soon after AusSAR was advised that debris had been located was the search area defined. (15) Can the Minister provide all calculations, including all work sheets, used in determining the search area. (16) (a) Since the first search area was defined, on how many occasions has the search area been recal- culated; and (b) can a copy be provided of the calculations, including work sheets, used in the above recalculations. Senator Ian Macdonald—The Minister for Transport and Regional Services has provided the following answer to the honourable senator’s question: (1) The yacht was not reported missing. The Queensland Police Service advised that the police in Bundaberg were notified of debris on Saturday 7 July 2001 found on a beach north of Bundaberg. It was identified to have come from a yacht named Upstart. (2) (a) The name of the yacht was Upstart. (2) (b) The Queensland Police at Bundaberg advised that Upstart had lifejackets, a maritime distress beacon (EPIRB), a liferaft and a Zodiac tender. (3) (a) Advice from Queensland Police indicated that the last contact with Upstart was at midday on Friday 6 July 2001. (3) (b) Advice from Queensland Police indicated that Upstart was then off Baffle Creek. (4) Upstart is registered in Victoria. (5) The Queensland Police at Bundaberg advised AusSAR at 11.25 am on Saturday 7 July that they were making inquiries into debris found on a beach north of Bundaberg. It was identified to have come from a yacht named Upstart but at that stage it was not known if the debris was new. The Queensland Police Search and Rescue Mission Coordinator at Hervey Bay advised AusSAR at 1.34 pm on Saturday 7 July that Police investigations had confirmed the debris to be new, re- lating to Upstart’s intended voyage from Bundaberg to 1770. (6) See answer to question (5). (7) See answer to question (5). (8) See answer to question (5). (9) The Queensland Police initiated search actions after debris was found. (10) The Queensland Police had overall coordination responsibility throughout the incident. AusSAR was formally requested by facsimile from the Queensland Police to assume responsibility for the air search component from 2.03 p.m. on Saturday 7 July. (11) Not applicable. (12) Not applicable. (13) Not applicable. (14) (a) The AusSAR officer concerned prepared an air search area in anticipation of the request to assume responsibility for the air search component. The area was agreed by the Queensland Police Search and Rescue Mission Coordinator. (14) (b) The proposed air search area was defined at 2.04 pm on Saturday 7 July 2001. (15) Copies of the search areas have been provided to the Table Office. (16) (a) The search area was redefined twice, in response to improving information about the vessel’s movements and water movement, and to increasing numbers of available search aircraft. (16) (b) The redefined areas are included in the answer to question 15. Australian Search and Rescue: Just Cruisin (Question No. 3715) Senator O’Brien asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 13 July 2001: Wednesday, 22 August 2001 SENATE 26433

(1) When was the motor cruiser, Just Cruisin, that was travelling from Mooloolaba in Queensland to Swansea in New South Wales first reported missing. (2) Was the missing cruiser known to have on board an Emergency Position Indicating Radio Beacon (EPIRB) and a liferaft, or lifeboat, with EPIRB fitted. (3) (a) When was the last contact with the missing cruiser; and (b) What was its location when that contact was made. (4) In which state is the cruiser registered. (5) When was Australian Search and Rescue (AusSAR) advised, and by whom, that the cruiser was missing. (6) Did Queensland state search and rescue authorities initiate the search for the missing cruiser or did AusSAR initiate the search for the cruiser. (7) If the Queensland state search and rescue authorities initiated the search, how and when did Aus- SAR become involved in the search. (8) If AusSAR initiated the search for the cruiser, what was the basis for that action and did it follow a request from the Queensland authority to take over the coordination of the search. (9) If AusSAR did take over the coordination of the search following a request from the state author- ity; (a) how; (b) when; and (c) by whom, was that request communicated to AusSAR. (10) (a) What was the basis for the request; and (b) What was the basis for AusSAR agreeing to take over the coordination of the search for the missing cruiser. (11) (a) Did the senior search and rescue officer on duty at the time the cruiser was reported missing define the search area for the missing cruiser; and (b) how soon after AusSAR was advised that the cruiser was missing was the search area defined. (12) Can the Minister provide all calculations, including all work sheets, used in determining the search area. (13) (a) Since the first search area was defined, on how many occasions has the search area been recal- culated; and (b) can a copy be provided of the calculations, including work sheets, used in the above recalculations. Senator Ian Macdonald—The Minister for Transport and Regional Services has provided the following answer to the honourable senator’s question: (1) This information is not held by AMSA because the vessel was first reported missing to the New South Wales Police. (2) Just Cruisin was known to have a maritime distress beacon (EPIRB) for the boat and one crew member had a personal EPIRB. Both beacons required to be manually activated. Just Cruisin had a 3-metre fibreglass dinghy, but no liferaft or lifeboat. (3) (a) AusSAR has been advised that the last contact with the vessel was at 1.53 pm on Friday 6 July by radio with the Volunteer Coast Guard at Mooloolaba. They stated they were on route to Tan- galooma on Moreton Island. (3) (b) The vessel’s position was not reported but is assessed as being within a few kilometres of the harbour based on other intelligence. (4) The vessel is registered in Queensland. (5) The Sydney Water Police advised AusSAR at 10.31 pm on Tuesday 10 July that a vessel was overdue on the north coast of New South Wales. (6) The Queensland Police Service initiated the search. (7) AusSAR first became involved when requested by the New South Wales Police Service to issue an “All Ships" broadcast to ships transiting the northern New South Wales coast region. The broadcast requested vessels to report any sightings of Just Cruisin to AusSAR or Sydney Radio. The broadcast was issued at 2.09 am on Wednesday 11 July. (8) Not applicable. (9) (a) The Queensland Police requested AusSAR to assume coordination of the search by facsimile. (9) (b) The transfer of coordination became effective at 2.15 pm on Wednesday 11 July. 26434 SENATE Wednesday, 22 August 2001

(9) (c) The request was made by Brisbane Water Police. (10) (a) The basis for the request was that the potential search area spanned part of the Queensland and New South Wales coastlines and that, although a search for a pleasure craft is strictly a Police task according to the National Search and Rescue Manual, coordination of all three authorities would be better handled by AusSAR. (10) (b) The basis for assuming coordination was AusSAR’s agreement that coordination of all three SAR authorities would be best handled by AusSAR. (11) (a) The respective search areas were defined by the particular authority with overall coordination responsibility at the time. Police defined the search areas early in the search before AusSAR as- sumed overall coordination. (11) (b) AusSAR defined a search area immediately after accepting coordination but had commenced search planning and sourcing search aircraft about 90 minutes prior to the formal transfer of coor- dination. (12) Copies of the search areas are attached. (13) (a) Initial search areas for search aircraft were defined by AusSAR on Wednesday 11 July, when AusSAR assumed coordination from the Queensland Police. AusSAR re-defined the air search ar- eas on completion of aircraft sorties on Tuesday 11 July and again on completion of aircraft sor- ties for Wednesday 12 July. AusSAR completed its air search activity late afternoon on Friday 13 July. AusSAR then sus- pended the air search pending further intelligence. Overall coordination for the incident was trans- ferred back to Queensland Police at 5.30 pm on 13 July. After police reported positive identifica- tion of some wreckage found during the searches on 13 July, AusSAR resumed coordination of the air search component at 1.26 pm on Saturday 14 July. AusSAR defined a new search area fo- cused on the tidal movement areas in and around Moreton Bay. The search on 14 July located the submerged wreckage of Just Cruisin but no evidence of the crew. AusSAR’s coordination of the air search component ceased on completion of the searches on 14 July. (13) (b) Copies of the search areas have been provided to the Table Office. Immigration and Multicultural Affairs Portfolio: Missing Computer Equipment (Question No. 3734) Senator Faulkner asked the Minister representing the Minister for Immigration and Mul- ticultural Affairs, upon notice, on 25 July 2001: (1) Have there been any desktop computers or any other item of computer hardware, other than laptop computers, lost or stolen from the possession of any officer of the department and/or agencies within the portfolio during the 2000-01 financial year; if so: (a) what and how many have been lost; (b) what and how many have been stolen; (c) what is the total value of these items; (d) what is the normal replacement value per item; and (e) have these items been recovered or replaced. (2) Have the police been requested to investigate any of these incidents; if so: (a) how many were the subject of police investigation; (b) how many police investigations have been concluded; (c) in how many cases has legal action commenced; and (d) in how many cases has this action been concluded and with what result. (3) How many of these lost or stolen items had departmental documents, content or information other than operating software on their hard disc drives, floppy disc, CD Rom or any other storage de- vice. (4) (a) How many of the documents etc. in (3) were classified for security or any other purpose; and (b) if any, what was the security classification involved. (5) (a) How many of the documents etc. in (3) have been recovered; and (b) how many documents etc. in (4) have been recovered. (6) What departmental disciplinary or other actions have been taken in regard to the items in (1) or in relation to the documents etc. in (3) or (4). Wednesday, 22 August 2001 SENATE 26435

Senator Minchin—The Minister for Immigration and Multicultural Affairs has provided the following answer to the honourable senator’s question: (1) (a) None lost. (b) None stolen. (c) to (e) Not applicable. (2) (a) to (d) Not applicable. (3) Not applicable. (4) (a) and (b) Not applicable. (5) (a) and (b) Not applicable. (6) Not applicable. Veterans’ Affairs Portfolio: Missing Computer Equipment (Question No. 3739) Senator Faulkner asked the Minister representing the Minister for Veterans’ Affairs, upon notice, on 25 July 2001: (1) Have there been any desktop computers or any other item of computer hardware, other than laptop computers, lost or stolen from the possession of any officer of the department and/or agencies within the portfolio during the 2000-01 financial year; if so: (a) what and how many have been lost; (b) what and how many have been stolen; (c) what is the total value of these items; (d) what is the normal replacement value per item; and (e) have these items been recovered or replaced. (2) Have the police been requested to investigate any of these incidents; if so: (a) how many were the subject of police investigation; (b) how many police investigations have been concluded; (c) in how many cases has legal action commenced; and (d) in how many cases has this action been concluded and with what result. (3) How many of these lost or stolen items had departmental documents, content or information other than operating software on their hard disc drives, floppy disc, CD Rom or any other storage de- vice. (4) (a) How many of the documents etc. in (3) were classified for security or any other purpose; and (b) if any, what was the security classification involved. (5) (a) How many of the documents etc. in (3) have been recovered; and (b) how many documents etc. in (4) have been recovered. (6) What departmental disciplinary or other actions have been taken in regard to the items in (1) or in relation to the documents etc. in (3) or (4). Senator Minchin—The Minister for Veterans’ Affairs has provided the following answer to the honourable senator’s question: There have been no reports of lost or stolen desktop computers or any other item of computer hardware. Immigration and Multicultural Affairs Portfolio: Missing Laptop Computers (Question No. 3753) Senator Faulkner asked the Minister representing the Minister for Immigration and Mul- ticultural Affairs, upon notice, on 25 July 2001: (1) Have there been any laptop computers lost or stolen from the possession of any officer of the de- partment and/or agencies within the portfolio during the 2000-01 financial year; if so: (a) how many have been lost; (b) how many have been stolen; (c) what is the total value of these comput- ers; (d) what is the average replacement value per computer; and (e) have these computers been recovered or replaced. (2) Have the police been requested to investigate any of these incidents; if so: (a) how many were the subject of a police investigation; (b) how many police investigations have been concluded; (c) in how many cases has legal action commenced; and (d) in how many cases has this action been concluded and with what result. 26436 SENATE Wednesday, 22 August 2001

(3) How many of these lost or stolen computers had departmental documents, content or information other than operating software on their hard disc drives, floppy disc, CD Rom or any other storage device. (4) (a) How many of the documents etc. in (3) were classified for security or any other purpose; and (b) if any, what was the security classification involved. (5) (a) How many of the documents etc. in (3) have been recovered; and (b) how many documents etc. in (4) have been recovered. (6) What departmental disciplinary or other actions have been taken in regard to the computers in (1) or in relation to the documents etc. in (3) or (4). Senator Ellison—The Minister for Immigration and Multicultural Affairs has provided the following answer to the honourable senator’s question: (1) (a) None lost. (b) One laptop computer, leased under outsourced desktop leasing arrangements, was stolen. (c) The laptop was leased under leasing arrangements for a three-year period. It was stolen before the leasing arrangement had expired. The Department was required to pay out the remaining monthly leasing payments to the value of $3405.00. (d) The replacement value for each leased laptop computer is $227.00 per month for a three-year period, totalling $8172.00. (e) The laptop computer has not been recovered or replaced. (2) No. (a) to (d) Not applicable. (3) One laptop computer. (4) (a) The number of documents is unknown. (b) The laptop was believed to contain documents classified no higher than In-Confidence. (5) (a) None. (b) None. (6) No disciplinary action has taken place as the theft was not investigated. The incident was referred to the Internal Investigations Section. The Department has in place the following security measures: Protective Security and Information Technology Security Instructions, which are based on the policies outlined in the Commonwealth Protective Security Manual and relevant Defence Signals Directorate manuals; Code of Conduct policies; Home Base Work procedures; Encryption software installed on all laptop computers. The function of this software is to protect the data stored on the laptop computer’s hard drive from unauthorised persons by encrypting the hard drive and providing password protection; and Ongoing Code of Conduct and security awareness training, which is a mandatory requirement for all staff to attend. Veterans’ Affairs Portfolio: Missing Laptop Computers (Question No. 3758) Senator Faulkner asked the Minister representing the Minister for Veterans’ Affairs, upon notice, on 25 July 2001: (1) Have there been any laptop computers lost or stolen from the possession of any officer of the de- partment and/or agencies within the portfolio during the 2000-01 financial year; if so: (a) how many have been lost; (b) how many have been stolen; (c) what is the total value of these comput- ers; (d) what is the average replacement value per computer; and (e) have these computers been recovered or replaced. Wednesday, 22 August 2001 SENATE 26437

(2) Have the police been requested to investigate any of these incidents; if so: (a) how many were the subject of police investigation; (b) how many police investigations have been concluded; (c) in how many cases has legal action commenced; and (d) in how many cases has this action been concluded and with what result. (3) How many of these lost or stolen computers had departmental documents, content or information other than operating software on their hard disc drives, floppy disc, CD Rom or any other storage device. (4) (a) How many of the documents etc. in (3) were classified for security or any other purpose; and (b) if any, what was the security classification involved. (5) (a) How many of the documents etc. in (3) have been recovered; and (b) how many documents etc. in (4) have been recovered. (6) What departmental disciplinary or other actions have been taken in regard to the computers in (1) or in relation to the documents etc. in (3) or (4). Senator Minchin—The Minister for Veterans’ Affairs has provided the following answer to the honourable senator’s question: (1) Yes (a) nil; (b) one; (c) at the time of the theft the written down value was approximately $700; (d) $3,378; and (e) the laptop stolen has not been recovered and a replacement laptop has been issued. (2) Yes (a) one; (b) police investigations to date have not resulted in recovery of the laptop or the laying of any charges; (c) none; and (d) not applicable. (3), (4) and (5)The one laptop did not contain any departmental documents, it did not have a CD Rom and it was used for accessing the department remotely which needed a password. (6) There has been no departmental disciplinary action. The theft was reported to the police for inves- tigation as stated in (2). Australian Search and Rescue: Aimlis (Question No. 3784) Senator O’Brien asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 31 July 2001: (1) When was the yacht, the Aimlis, sailing off Chesterfield Reef 1,100 kilometres east of Bundaberg first reported in need of assistance or missing. (2) Did the yacht have an Emergency Position Indicating Radio Beacon (EPIRB) and a life raft or lifeboat with EPIRB fitted. (3) In which state is the yacht registered. (4) When was AusSAR advised, and by whom, that the yacht needed assistance or was missing. (5) Who notified AusSAR that the yacht needed assistance or was missing. (6) Did Queensland state search and rescue authorities initiate the search for the yacht or did AusSAR initiate the search for the yacht (7) If the Queensland state search and rescue authorities initiated the search, how and when did Aus- SAR become involved in the search. (8) If AusSAR initiated the search for the yacht: (a) what was the basis for that action; and (b) did it follow a request from the Queensland authority to take over the coordination of the search. 26438 SENATE Wednesday, 22 August 2001

(9) If AusSAR did take over the coordination of the search following a request from the state author- ity: (a) how; (b) when; and (c) by whom, was that request communicated to AusSAR. (10) (a) What was the basis for the request; and (b) what was the basis for AusSAR agreeing to take over the coordination of the search for the yacht. (11) (a) Did the senior search and rescue officer on duty at the time define the search area for the missing yacht; and (b) how soon after AusSAR was advised that the yacht needed assistance was the search area defined. (12) Can the Minister provide all calculations, including all work sheets, used in determining the search area. (13) (a) Since the first search area was defined, on how many occasions has the search area been recal- culated; and (b) can a copy be provided of the calculations, including work sheets, used in the above recalculations. Senator Ian Macdonald—The Minister for Transport and Regional Services has provided the following answer to the honourable senator’s question: (1) 1.28 am on Tuesday 26 July 2001. (2) The yacht had a 121.5 MHz maritime distress beacon (EPIRB), a liferaft and a tender vessel. (3) New Zealand. (4) 1.28 am Tuesday 26 July 2001 by Taupo Maritime radio (New Zealand). (5) Taupo Maritime radio (New Zealand). (6) AusSAR initiated a response to the distress situation. It was not a search. (7) Not applicable. (8) (a) Not applicable. (8) (b) Not applicable. (9) Not applicable. (10) Not applicable. (11) (a) No, the vessel was aground at a known location. (11) (b) Not applicable. (12) Not applicable. (13) Not applicable. CONTENTS

WEDNESDAY, 22 AUGUST

Family and Community Services Legislation Amendment (Application of Criminal Code) Bill 2001— First Reading ...... 26287 Second Reading...... 26287 Family Assistance Estimate Tolerance (Transition) Bill 2001— First Reading ...... 26287 Second Reading...... 26287 Industry, Science and Resources Legislation Amendment (Application of Criminal Code) Bill 2001— First Reading ...... 26288 Second Reading...... 26288 Business— Consideration of Legislation ...... 26289 Alcohol Education and Rehabilitation Account Bill 2001— In Committee...... 26289 Financial Services Reform Bill 2001, Financial Services Reform (Consequential Provisions) Bill 2001, Corporations (Fees) Amendment Bill 2001, Corporations (National Guarantee Fund Levies) Amendment Bill 2001, and Corporations (Compensation Arrangements Levies) Bill 2001— Second Reading...... 26306 Matters of Public Interest— Social Policy...... 26326 Social Policy...... 26329 Job Network ...... 26329 Scientists: Lobbying of Parliamentarians...... 26332 Newsagents...... 26334 Volunteering ...... 26336 Questions Without Notice— Aged Care: Rally in Melbourne...... 26339 Health: Public System ...... 26340 Motor Vehicle Industry: Free Trade Agreement...... 26342 Economy: Policies...... 26343 Telecommunications: Industry Development ...... 26344 Privacy Commission Guidelines: Commonwealth Agencies ...... 26345 Goods and Services Tax: Modifications...... 26346 Dairy Industry: Deregulation...... 26347 Pharmaceuticals: Pricing ...... 26348 Telstra ...... 26349 Science and Technology Indicators ...... 26350 Answers To Questions Without Notice— Motor Vehicle Industry: Free Trade Agreement...... 26351 Commonwealth Heads of Government Meeting: Zimbabwe...... 26351 Telecommunications: Industry Development ...... 26351 Dairy Industry: Deregulation...... 26356 Notices— Presentation ...... 26357 Committees— Selection of Bills Committee—Report...... 26358 CONTENTS—continued

Intelligence Services Committee—Meeting...... 26359 Leave Of Absence...... 26359 Committees— Economics Legislation Committee—Extension of Time ...... 26359 Economics References Committee—Extension of Time...... 26360 Merri Creek Valley: Proposed Freeway...... 26360 Greenpeace: Arrest Of Protesters In The United States Of America...... 26360 Matters Of Urgency— Mandatory Sentencing...... 26360 Committees— Scrutiny of Bills Committee—Report ...... 26372 Membership...... 26372 Vet er a ns’ Affairs Legislation Amendment (Further Budget 2000 and Other Measures) Bill 2001— First Reading ...... 26373 Second Reading...... 26373 Federal Office Of Road Safety— Return to Order...... 26373 Financial Services Reform Bill 2001, Financial Services Reform (Consequential Provisions) Bill 2001, Corporations (Fees) Amendment Bill 2001, Corporations (National Guarantee Fund Levies) Amendment Bill 2001, and Corporations (Compensation Arrangements Levies) Bill 2001— Second Reading...... 26374 In Committee...... 26381 Environment and Heritage Legislation Amendment Bill (No. 2) 2000 [2001], Australian Heritage Council Bill 2000 [2001], and Australian Heritage Council (Consequential and Transitional Provisions) Bill 2000 [2001]— Second Reading...... 26405 Documents— Department of Education, Training and Youth Affairs: National Report on Schooling...... 26417 Adjournment— Health Services: Rural, Regional and Remote Australia...... 26419 Northern Territory Election ...... 26421 Centenary of Federation: AirShows in the Outback...... 26423 Northern Territory Election ...... 26424 Documents— Tabling...... 26426 Indexed Lists of Files ...... 26426 Questions on Notice— Government Services: Information Shops—(Question No. 3589)...... 26427 Atomic Testing: Compensation—(Question No. 3625) ...... 26428 Australian Search and Rescue: Upstart—(Question No. 3696)...... 26431 Australian Search and Rescue: Just Cruisin—(Question No. 3715) ...... 26432 Immigration and Multicultural Affairs Portfolio: Missing Computer Equipment—(Question No. 3734)...... 26434 Vet er a ns’ Affairs Portfolio: Missing Computer Equipment— (Question No. 3739)...... 26435 CONTENTS—continued

Immigration and Multicultural Affairs Portfolio: Missing Laptop Computers—(Question No. 3753)...... 26435

Vet er a ns’ Affairs Portfolio: Missing Laptop Computers— (Question No. 3758)...... 26436 Australian Search and Rescue: Aimlis—(Question No. 3784)...... 26437