House of Representatives Official Hansard No

COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY DEBATES

House of Representatives Official Hansard No. 7, 2008 Wednesday, 4 June 2008

FORTY-SECOND PARLIAMENT FIRST SESSION—SECOND PERIOD

BY AUTHORITY OF THE HOUSE OF REPRESENTATIVES

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SITTING DAYS—2008 Month Date February 12, 13, 14, 18, 19, 20, 21, 22 March 11, 12, 13, 17, 18, 19, 20 May 13, 14, 15, 26, 27, 28, 29 June 2, 3, 4, 5, 16, 17, 18, 19, 23, 24, 25, 26 August 26, 27, 28 September 1, 2, 3, 4, 15, 16, 17, 18, 22, 23, 24, 25 October 13, 14, 15, 16, 20, 21, 22, 23 November 10, 11. 12, 13, 24, 25, 26, 27 December 1, 2, 3, 4

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FORTY-SECOND PARLIAMENT FIRST SESSION—SECOND PERIOD

Governor-General His Excellency Major General Michael Jeffery, Companion in the Order of Australia, Com- mander of the Royal Victorian Order, Military Cross

House of Representatives Officeholders Speaker—Mr Harry Alfred Jenkins MP Deputy Speaker—Ms Anna Elizabeth Burke MP Second Deputy Speaker—Hon. Bruce Craig Scott MP Members of the Speaker’s Panel—Hon. Dick Godfrey Harry Adams MP, Hon. Kevin James Andrews MP, Hon. Archibald Ronald Bevis MP, Ms Sharon Leah Bird MP, Mr Steven Geor- ganas MP, Hon. Judith Eleanor Moylan MP, Ms Janelle Anne Saffin MP, Mr Albert John Schultz MP, Mr Patrick Damien Secker MP, Hon. Peter Neil Slipper MP, Mr Peter Sid Side- bottom MP, Mr Kelvin John Thomson MP, Hon. Danna Sue Vale MP and Dr Malcolm James Washer MP

Leader of the House—Hon. Anthony Norman Albanese MP Deputy Leader of the House—Hon. Stephen Francis Smith MP Manager of Opposition Business—Hon. Joseph Benedict Hockey MP Deputy Manager of Opposition Business—Mr Luke Hartsuyker MP

Party Leaders and Whips Australian Labor Party Leader—Hon. Kevin Michael Rudd MP Deputy Leader—Hon. Julia Eileen Gillard MP Chief Government Whip—Hon. Leo Roger Spurway Price MP Government Whips—Ms Jill Griffiths Hall MP and Mr Christopher Patrick Hayes MP

Liberal Party of Australia Leader—Hon. Brendan John Nelson MP Deputy Leader—Hon. Julie Isabel Bishop MP Chief Opposition Whip—Hon. Alex Somlyay MP Opposition Whip—Mr Michael Andrew Johnson MP Deputy Opposition Whip—Ms Nola Bethwyn Marino MP

The Nationals Leader—Hon. Warren Errol Truss MP Chief Whip—Mrs Kay Elizabeth Hull MP Whip—Mr Paul Christopher Neville MP

Printed by authority of the House of Representatives i

Members of the House of Representatives Members Division Party Abbott, Hon. Anthony John Warringah, NSW LP Adams, Hon. Dick Godfrey Harry Lyons, Tas ALP Albanese, Hon. Anthony Norman Grayndler, NSW ALP Andrews, Hon. Kevin James Menzies, Vic LP Bailey, Hon. Frances Esther McEwen, Vic LP Baldwin, Hon. Robert Charles Paterson, NSW LP Bevis, Hon. Archibald Ronald Brisbane, Qld ALP Bidgood, James Mark Dawson, Qld ALP Billson, Hon. Bruce Fredrick Dunkley, Vic LP Bird, Sharon Leah Cunningham, NSW ALP Bishop, Hon. Bronwyn Kathleen Mackellar, NSW LP Bishop, Hon. Julie Isabel Curtin, WA LP Bowen, Hon. Christopher Eyles Prospect, NSW ALP Bradbury, David John Lindsay, NSW ALP Broadbent, Russell Evan McMillan, Vic LP Burke, Anna Elizabeth Chisholm, Vic ALP Burke, Hon. Anthony Stephen Watson, NSW ALP Butler, Mark Christopher Port Adelaide, SA ALP Byrne, Hon. Anthony Michael Holt, Vic ALP Campbell, Jodie Louise Bass, Tas ALP Champion, Nicholas David Wakefield, SA ALP Cheeseman, Darren Leicester Corangamite, Vic ALP Ciobo, Steven Michele Moncrieff, Qld LP Clare, Jason Dean Blaxland, NSW ALP Cobb, Hon. John Kenneth Calare, NSW Nats Collins, Julie Maree Franklin, Tas ALP Combet, Hon. Gregory Ivan, AM Charlton, NSW ALP Costello, Hon. Peter Howard Higgins, Vic LP Coulton, Mark Maclean Parkes, NSW Nats Crean, Hon. Simon Findlay Hotham, Vic ALP Danby, Michael David Melbourne Ports, Vic ALP D’Ath, Yvette Maree Petrie, Qld ALP Debus, Hon. Robert John Macquarie, NSW ALP Downer, Hon. Alexander John Gosse Mayo, SA LP Dreyfus, Mark Alfred, QC Isaacs, Vic ALP Dutton, Hon. Peter Craig Dickson, Qld LP Elliot, Hon. Maria Justine Richmond, NSW ALP Ellis, Annette Louise Canberra, ACT ALP Ellis, Hon. Katherine Margaret Adelaide, SA ALP Emerson, Hon. Craig Anthony Rankin, Qld ALP Farmer, Hon. Patrick Francis Macarthur, NSW LP Ferguson, Hon. Laurie Donald Thomas Reid, NSW ALP Ferguson, Hon. Martin John, AM Batman, Vic ALP Fitzgibbon, Hon. Joel Andrew Hunter, NSW ALP Forrest, John Alexander Mallee, Vic Nats Garrett, Hon. Peter Robert, AM Kingsford Smith, NSW ALP Gash, Joanna Gilmore, NSW LP Georganas, Steven Hindmarsh, SA ALP ii

Members of the House of Representatives Members Division Party George, Jennie Throsby, NSW ALP Georgiou, Petro Kooyong, Vic LP Gibbons, Stephen William Bendigo, Vic ALP Gillard, Hon. Julia Eileen Lalor, Vic ALP Gray, Hon. Gary, AO Brand, WA ALP Grierson, Sharon Joy Newcastle, NSW ALP Griffin, Hon. Alan Peter Bruce, Vic ALP Haase, Barry Wayne Kalgoorlie, WA LP Hale, Damian Francis Solomon, NT ALP Hall, Jill Griffiths Shortland, NSW ALP Hartsuyker, Luke Cowper, NSW Nats Hawke, Alexander George Mitchell, NSW LP Hawker, Hon. David Peter Maxwell Wannon, Vic LP Hayes, Christhopher Patrick Werriwa, NSW ALP Hockey, Hon. Joseph Benedict North Sydney, NSW LP Hull, Kay Elizabeth Riverina, NSW Nats Hunt, Hon. Gregory Andrew Flinders, Vic LP Irons, Stephen James Swan, WA LP Irwin, Julia Claire Fowler, NSW ALP Jackson, Sharryn Maree Hasluck, WA ALP Jenkins, Henry Alfred Scullin, Vic ALP Jensen, Dennis Geoffrey Tangney, WA LP Johnson, Michael Andrew Ryan, Qld LP Katter, Hon. Robert Carl Kennedy, Qld Ind Keenan, Michael Fayat Stirling, WA LP Kelly, Hon. Michael Joseph, AM Eden-Monaro, NSW ALP Kerr, Hon. Duncan James Colquhoun, SC Denison, Tas ALP King, Catherine Fiona Ballarat, Vic ALP Laming, Andrew Charles Bowman, Qld LP Ley, Hon. Sussan Penelope Farrer, NSW LP Lindsay, Hon. Peter John Herbert, Qld LP Livermore, Kirsten Fiona Capricornia, Qld ALP McClelland, Hon. Robert Bruce Barton, NSW ALP Macfarlane, Hon. Ian Elgin Groom, Qld LP McKew, Hon. Maxine Margaret Bennelong, NSW ALP Macklin, Hon. Jennifer Louise Jagajaga, Vic ALP McMullan, Hon. Robert Francis Fraser, ACT ALP Marino, Nola Bethwyn Forrest, WA LP Markus, Louise Elizabeth Greenway, NSW LP Marles, Richard Donald Corio, Vic ALP May, Margaret Ann McPherson, Qld LP Melham, Daryl Banks, NSW ALP Mirabella, Sophie Indi, Vic LP Morrison, Scott John Cook, NSW LP Moylan, Hon. Judith Eleanor Pearce, WA LP Murphy, Hon. John Paul Lowe, NSW ALP Neal, Belinda Jane Robertson, NSW ALP Nelson, Hon. Brendan John Bradfield, NSW LP Neumann, Shayne Kenneth Blair, Qld ALP

iii Members of the House of Representatives Members Division Party Neville, Paul Christopher Hinkler, Qld Nats O’Connor, Hon. Brendan Patrick John Gorton, Vic ALP Owens, Julie Ann Parramatta, NSW ALP Parke, Melissa Fremantle, WA ALP Pearce, Hon. Christopher John Aston, Vic LP Perrett, Graham Douglas Moreton, Qld ALP Plibersek, Hon. Tanya Joan Sydney, NSW ALP Price, Hon. Leo Roger Spurway Chifley, NSW ALP Pyne, Hon. Christopher Maurice Sturt, SA LP Raguse, Brett Blair Forde, Qld ALP Ramsey, Rowan Eric Grey, SA LP Randall, Don James Canning, WA LP Rea, Kerry Marie Bonner, Qld ALP Ripoll, Bernard Fernand Oxley, Qld ALP Rishworth, Amanda Louise Kingston, SA ALP Robb, Hon. Andrew John, AO Goldstein, Vic LP Robert, Stuart Rowland Fadden, Qld LP Roxon, Hon. Nicola Louise Gellibrand, Vic ALP Rudd, Hon. Kevin Michael Griffith, Qld ALP Ruddock, Hon. Philip Maxwell Berowra, NSW LP Saffin, Janelle Anne Page, NSW ALP Schultz, Albert John Hume, NSW LP Scott, Hon. Bruce Craig Maranoa, Qld NP Secker, Patrick Damien Barker, SA LP Shorten, Hon. William Richard Maribyrnong, Vic ALP Sidebottom, Peter Sid Braddon, Tas ALP Simpkins, Luke Xavier Linton Cowan, WA LP Slipper, Hon. Peter Neil Fisher, Qld LP Smith, Hon. Anthony David Hawthorn Casey, Vic LP Smith, Hon. Stephen Francis Perth, WA ALP Snowdon, Hon. Warren Edward Lingiari, NT ALP Somlyay, Hon. Alexander Michael Fairfax, Qld LP Southcott, Andrew John Boothby, SA LP Stone, Hon. Sharman Nancy Murray, Vic LP Sullivan, Jonathan Harold Longman, Qld ALP Swan, Hon. Wayne Maxwell Lilley, Qld ALP Symon, Michael Stuart Deakin, Vic ALP Tanner, Hon. Lindsay James Melbourne, Vic ALP Thomson, Craig Robert Dobell, NSW ALP Thomson, Kelvin John Wills, Vic ALP Trevor, Chris Allan Flynn, Qld ALP Truss, Hon. Warren Errol Wide Bay, Qld Nats Tuckey, Hon. Charles Wilson O’Connor, WA LP Turnbull, Hon. Malcolm Bligh Wentworth, NSW LP Turnour, James Pearce Leichhardt, Qld ALP Vaile, Hon. Mark Anthony James Lyne, NSW Nats Vale, Hon. Danna Sue Hughes, NSW LP Vamvakinou, Maria Calwell, Vic ALP Washer, Malcolm James Moore, WA LP

Members of the House of Representatives Members Division Party Windsor, Anthony Harold Curties New England, NSW Ind Wood, Jason Peter La Trobe, Vic LP Zappia, Tony Makin, SA ALP

PARTY ABBREVIATIONS ALP—Australian Labor Party; LP—Liberal Party of Australia; Nats—The Nationals; Ind—Independent

Heads of Parliamentary Departments Clerk of the Senate—H Evans Clerk of the House of Representatives—IC Harris AO Secretary, Department of Parliamentary Services—A Thompson

v RUDD MINISTRY Prime Minister Hon. Kevin Rudd, MP Deputy Prime Minister, Minister for Education, Minister for Hon. Julia Gillard, MP Employment and Workplace Relations and Minister for Social Inclusion Treasurer Hon. Wayne Swan MP Minister for Immigration and Citizenship and Leader of the Senator Hon. Chris Evans Government in the Senate Special Minister of State, Cabinet Secretary and Vice Senator Hon. John Faulkner President of the Executive Council Minister for Trade Hon. Simon Crean MP Minister for Foreign Affairs Hon. Stephen Smith MP Minister for Defence Hon. Joel Fitzgibbon MP Minister for Health and Ageing Hon. Nicola Roxon MP Minister for Families, Housing, Community Services and Hon. Jenny Macklin MP Indigenous Affairs Minister for Finance and Deregulation Hon. Lindsay Tanner MP Minister for Infrastructure, Transport, Regional Hon. Anthony Albanese MP Development and Local Government and Leader of the House Minister for Broadband, Communications and the Digital Senator Hon. Stephen Conroy Economy and Deputy Leader of the Government in the Senate Minister for Innovation, Industry, Science and Research Senator Hon. Kim Carr Minister for Climate Change and Water Senator Hon. Penny Wong Minister for the Environment, Heritage and the Arts Hon. Peter Garrett AM, MP Attorney-General Hon. Robert McClelland MP Minister for Human Services and Manager of Government Senator Hon. Joe Ludwig Business in the Senate Minister for Agriculture, Fisheries and Forestry Hon. Tony Burke MP Minister for Resources and Energy and Minister for Hon. Martin Ferguson AM, MP Tourism

[The above ministers constitute the cabinet]

RUDD MINISTRY—continued Minister for Home Affairs Hon. Bob Debus MP Assistant Treasurer and Minister for Competition Policy and Hon. Chris Bowen MP Consumer Affairs Minister for Veterans’ Affairs Hon. Alan Griffin MP Minister for Housing and Minister for the Status of Women Hon. Tanya Plibersek MP Minister for Employment Participation Hon. Brendan O’Connor MP Minister for Defence Science and Personnel Hon. Warren Snowdon MP Minister for Small Business, Independent Contractors and Hon. Dr Craig Emerson MP the Service Economy and Minister Assisting the Finance Minister on Deregulation Minister for Superannuation and Corporate Law Senator Hon. Nick Sherry Minister for Ageing Hon. Justine Elliot MP Minister for Youth and Minister for Sport Hon. Kate Ellis MP Parliamentary Secretary for Early Childhood Education and Hon. Maxine McKew MP Childcare Parliamentary Secretary for Defence Procurement Hon. Greg Combet AM, MP Parliamentary Secretary for Defence Support Hon. Dr Mike Kelly AM, MP Parliamentary Secretary for Regional Development and Hon. Gary Gray AO, MP Northern Australia Parliamentary Secretary for Disabilities and Children’s Hon. Bill Shorten MP Services Parliamentary Secretary for International Development Hon. Bob McMullan MP Assistance Parliamentary Secretary for Pacific Island Affairs Hon. Duncan Kerr MP Parliamentary Secretary to the Prime Minister Hon. Anthony Byrne MP Parliamentary Secretary for Social Inclusion and the Senator Hon. Ursula Stephens Voluntary Sector and Parliamentary Secretary Assisting the Prime Minister for Social Inclusion Parliamentary Secretary to the Minister for Trade Hon. John Murphy MP Parliamentary Secretary to the Minister for Health and Senator Hon. Jan McLucas Ageing Parliamentary Secretary for Multicultural Affairs and Hon. Laurie Ferguson MP Settlement Services

vii SHADOW MINISTRY Leader of the Opposition Hon. Brendan Nelson MP Deputy Leader of the Opposition and Shadow Minister for Hon. Julie Bishop MP Employment, Business and Workplace Relations Leader of the Nationals and Shadow Minister for Hon. Warren Truss MP Infrastructure and Transport and Local Government Leader of the Opposition in the Senate and Shadow Minister Senator Hon. Nick Minchin for Defence Deputy Leader of the Opposition in the Senate and Shadow Senator Hon. Eric Abetz Minister for Innovation, Industry, Science and Research Shadow Treasurer Hon. Malcolm Turnbull MP Manager of Opposition Business in the House and Shadow Hon. Joe Hockey MP Minister for Health and Ageing Shadow Minister for Foreign Affairs Hon. Andrew Robb MP Shadow Minister for Trade Hon. Ian Macfarlane MP Shadow Minister for Families, Community Services, Hon. Tony Abbott MP Indigenous Affairs and the Voluntary Sector Shadow Minister for Agriculture, Fisheries and Forestry Senator Hon. Nigel Scullion Shadow Minister for Human Services Senator Hon. Helen Coonan Shadow Minister for Education, Apprenticeships and Hon. Tony Smith MP Training Shadow Minister for Climate Change, Environment and Hon. Greg Hunt MP Urban Water Shadow Minister for Finance, Competition Policy and Hon. Peter Dutton MP Deregulation Manager of Opposition Business in the Senate and Shadow Senator Hon. Chris Ellison Minister for Immigration and Citizenship Shadow Minister for Broadband, Communications and the Hon. Bruce Billson MP Digital Economy Shadow Attorney-General Senator Hon. George Brandis Shadow Minister for Resources and Energy and Shadow Senator Hon. David Johnston Minister for Tourism Shadow Minister for Regional Development, Water Security Hon. John Cobb MP

[The above constitute the shadow cabinet]

viii

SHADOW MINISTRY—continued Shadow Minister for Justice and Border Protection; Hon. Chris Pyne MP Assisting Shadow Minister for Immigration and Citizenship Shadow Special Minister of State Senator Hon. Michael Ronaldson Shadow Minister for Small Business, the Service Economy Steven Ciobo MP and Tourism Shadow Minister for Environment, Heritage, the Arts and Hon. Sharman Stone MP Indigenous Affairs Shadow Assistant Treasurer and Shadow Minister for Michael Keenan MP Superannuation and Corporate Governance Shadow Minister for Ageing Margaret May MP Shadow Minister for Defence Science, Personnel; Assisting Hon. Bob Baldwin MP Shadow Minister for Defence Deputy Manager of Opposition Business in the House and Luke Hartsuyker MP Shadow Minister for Business Development, Independent Contractors and Consumer Affairs Shadow Minister for Veterans’ Affairs Hon. Bronwyn Bishop MP Shadow Minister for Employment Participation and Andrew Southcott MP Apprenticeships and Training Shadow Minister for Housing and Shadow Minister for Hon. Sussan Ley MP Status of Women Shadow Minister for Youth and Sport Hon. Pat Farmer MP Shadow Parliamentary Secretary Assisting the Leader of the Don Randall MP Opposition and Shadow Cabinet Secretary Shadow Parliamentary Secretary Assisting the Leader of the Senator Hon. Ian Macdonald Opposition in the Senate and Shadow Parliamentary Secretary for Northern Australia Shadow Parliamentary Secretary for Health Senator Hon. Richard Colbeck Shadow Parliamentary Secretary for Education Senator Hon. Brett Mason Shadow Parliamentary Secretary for Defence Hon. Peter Lindsay MP Shadow Parliamentary Secretary for Infrastructure, Roads Barry Haase MP and Transport Shadow Parliamentary Secretary for Trade John Forrest MP Shadow Parliamentary Secretary for Immigration and Louise Markus MP Citizenship Shadow Parliamentary Secretary for Local Government Sophie Mirabella MP Shadow Parliamentary Secretary for Tourism Jo Gash MP Shadow Parliamentary Secretary for Ageing and the Mark Coulton MP Voluntary Sector Shadow Parliamentary Secretary for Foreign Affairs Senator Marise Payne Shadow Parliamentary Secretary for Families and Senator Cory Bernardi Community Services

ix CONTENTS

WEDNESDAY, 4 JUNE Chamber Personal Explanations...... 4381 Crimes Legislation Amendment (Miscellaneous Matters) Bill 2008— First Reading ...... 4381 Second Reading...... 4381 Commonwealth Securities and Investment Legislation Amendment Bill 2008— First Reading ...... 4382 Second Reading...... 4382 Business— Consideration of Private Members’ Business...... 4385 Wheat Export Marketing Bill 2008 and Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008— Second Reading...... 4387 Third Reading...... 4403 Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008— Second Reading...... 4404 Third Reading...... 4404 Tax Laws Amendment (Election Commitments No.1) Bill 2008— First Reading ...... 4404 Second Reading...... 4404 Income Tax (Managed Investment Trust Withholding Tax) Bill 2008— First Reading ...... 4406 Second Reading...... 4406 Income Tax (Managed Investment Trust Transitional) Bill 2008— First Reading ...... 4407 Second Reading...... 4407 Passenger Movement Charge Amendment Bill 2008— Second Reading...... 4407 Third Reading...... 4427 Defence Home Ownership Assistance Scheme Bill 2008 and Defence Home Ownership Assistance Scheme (Consequential Amendments) Bill 2008— Second Reading...... 4427 Third Reading...... 4437 Defence Home Ownership Assistance Scheme (Consequential Amendments) Bill 2008— Second Reading...... 4437 Third Reading...... 4437 Indigenous Education (Targeted Assistance) Amendment (2008 Budget Measures) Bill 2008— Second Reading...... 4437 Third Reading...... 4441 Questions Without Notice— Budget ...... 4441 Economy...... 4441 Economy...... 4443 Economy...... 4444 Alcopops...... 4445 Infrastructure ...... 4446 Private Health Insurance...... 4447 Productivity ...... 4448

CONTENTS—continued

Private Health Insurance...... 4449 Small Business ...... 4450 Schools: Computers...... 4452 Anticompetitive Practices...... 4453 Fuel Prices ...... 4454 Wheat Exports ...... 4454 Stockfeed...... 4455 Domestic Violence...... 4456 Sustainable Regions Program...... 4458 Disability Services...... 4459 Personal Explanations...... 4460 Questions to the Speaker— Question Time ...... 4460 Parliamentary Service Commissioner— Annual Report ...... 4460 Auditor-General’s Reports— Report No. 38 of 2007-08...... 4461 Matters of Public Importance— Asia Pacific Region...... 4461 Social Security and Other Legislation Amendment (Employment Entry Payment) Bill 2008— Second Reading...... 4474 Third Reading...... 4478 Same-Sex Relationships (Equal Treatment in Commonwealth Laws— Superannuation) Bill 2008— Second Reading...... 4478 Third Reading...... 4525 Higher Education Support Amendment (2008 Budget Measures) Bill 2008— Second Reading...... 4525 Third Reading...... 4530 Customs Tariff Amendment (Tobacco Content) Bill 2008— Report from Main Committee ...... 4530 Third Reading...... 4530 Fisheries Legislation Amendment (New Governance Arrangements for the Australian Fisheries Management Authority and Other Matters) Bill 2008— Report from Main Committee ...... 4530 Third Reading...... 4530 Vet er a ns’ Affairs Legislation Amendment (International Agreements and Other Measures) Bill 2008— Report from Main Committee ...... 4530 Third Reading...... 4531 Customs Legislation Amendment (Modernising) Bill 2008— Report from Main Committee ...... 4531 Third Reading...... 4531 Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2008— Report from Main Committee ...... 4531 Third Reading...... 4531 Customs Amendment (Strengthening Border Controls) Bill 2008— Report from Main Committee ...... 4531

CONTENTS—continued

Third Reading...... 4531 Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008— Second Reading...... 4531 Third Reading...... 4544 Notices ...... 4544 Main Committee Statements by Members— Greenway Electorate: Fundraising ...... 4546 Leichhardt Electorate: Fundraising ...... 4546 Apprenticeships ...... 4547 Dobell Electorate: 2020 Summit ...... 4548 Agriculture Advancing Australia Funding...... 4549 United Nations...... 4549 Boeing Australia...... 4550 Petrie Electorate: Education ...... 4551 Dunkley Electorate: Budget ...... 4551 Budget ...... 4552 Appropriation Bill (No. 1) 2008-2009, Appropriation Bill (No. 2) 2008-2009, Appropriation (Parliamentary Departments) Bill (No. 1) 2008-2009, Appropriation Bill (No. 5) 2007-2008 and Appropriation Bill (No. 6) 2007-2008— Second Reading...... 4553 Customs Tariff Amendment (Tobacco Content) Bill 2008— Second Reading...... 4590 Fisheries Legislation Amendment (New Governance Arrangements for the Australian Fisheries Management Authority and Other Matters) Bill 2008— Second Reading...... 4592 Consideration in Detail...... 4604 Vet er a ns’ Affairs Legislation Amendment (International Agreements and Other Measures) Bill 2008— Second Reading...... 4607 Consideration in Detail...... 4625 Customs Legislation Amendment (Modernising) Bill 2008— Second Reading...... 4626 Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2008— Second Reading...... 4627 Customs Amendment (Strengthening Border Controls) Bill 2008— Second Reading...... 4632

Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4381

Wednesday, 4 June 2008 because I had secured a funding commitment ————— of $564,000 from a re-elected coalition gov- The SPEAKER (Mr Harry Jenkins) ernment. took the chair at 9.00 am and read prayers. The SPEAKER—I think the member for PERSONAL EXPLANATIONS McEwan has now sufficiently put her case. To go further would be entering into a de- FRAN BAILEY (McEwen) (9.00 am)— bate. Mr Speaker, I wish to make a personal explanation. FRAN BAILEY—Mr Speaker, I would not do that but I do believe that the minister The SPEAKER—Does the honourable should apologise to me and my communities. member claim to have been misrepresented? The SPEAKER—The honourable mem- FRAN BAILEY—Yes. ber will resume her seat. The SPEAKER—Please proceed. CRIMES LEGISLATION AMENDMENT FRAN BAILEY—I am advised that yes- (MISCELLANEOUS MATTERS) BILL terday, while I was either waiting to speak or 2008 speaking in the Main Committee, the Minis- First Reading ter for Infrastructure, Transport, Regional Development and Local Government in this Bill and explanatory memorandum pre- chamber claimed that I had misled this sented by Mr Debus. House when I asked him in question time Bill read a first time. yesterday of the current status of the Golden Second Reading City Support Services in the Macedon Mr DEBUS (Macquarie—Minister for Ranges and whether he was aware that there Home Affairs) (9.03 am)—I move: was now no respite bed available in the region. A question seeking information on be- That this bill be now read a second time. half of constituents is in no way misleading The Crimes Legislation Amendment (Mis- the House. cellaneous Matters) Bill 2008 contains three Mr Melham—Mr Speaker, I rise on a minor but important criminal law amendments. point of order. We have yet to hear how the member was misrepresented. We are hearing This is the first criminal law bill that I argument, and I would ask you to bring her have brought before the parliament. I look very quickly to where she has been misrepre- forward to bringing many more, including a sented. victims rights package and federal sentenc- ing reforms eventually. Each of these larger The SPEAKER—The member for McE- wen should come to where she has been mis- packages will be the subject of extensive represented. public consultation. FRAN BAILEY—I have just referred to In the meantime, there are some minor the question in which the minister claimed I amendments that require attention as a matter of priority and they are contained in this misled the House. He further claimed that I bill. misled my local community in regard to this project. What I said on 5 November last The first amendment will reinsert the year—and I am happy to table it for the maximum penalty of two years imprison- member for Banks—was that respite services ment for the secrecy offence in subsection would be boosted in the Macedon Ranges 60A(2) of the Australian Federal Police Act

CHAMBER 4382 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

1979. The penalty provision was inadver- The final amendment is to the Crimes tently repealed by the Law Enforcement In- (Aviation) Act 1991, which governs crimes tegrity Commissioner (Consequential and other acts committed on aircrafts, or in Amendments) Act 2006. The amendment airports or related facilities. Section 15 of the does not alter the elements of the offence in Crimes (Aviation) Act is intended to ensure any way but simply reinserts the penalty that standard ACT criminal laws apply to all which was previously in the provision before Australian flights. However, the current ref- it was inadvertently repealed. erence to ACT laws in the Crimes (Aviation) The penalty for the offence is backdated to Act is out of date. Currently, only offences the date when the penalty was repealed. This contained in the ACT Crimes Act 1900 apply is important as the prohibition for the secrecy on flights, while those in the ACT Criminal offence continued to be in force even though Code 2002 do not. there was no penalty for it. If the provision The amendment will ensure that both the were not retrospective, individuals convicted ACT Criminal Code and the ACT Crimes of the offence between 2006 and now would Act apply to conduct on relevant flights. The otherwise be able to escape punishment. amendment will also introduce a regulation- The second measure is an amendment to making power into section 15 of the Crimes part ID of the Crimes Act 1914. Part ID of (Aviation) Act. That will provide flexibility the Crimes Act deals with the collection and in the event of future changes to ACT crimi- use of DNA material by Commonwealth law nal law. enforcement agencies. Part ID also sets up In summary, this bill contains three minor the National Criminal Investigation DNA but necessary changes to ensure that Com- Database as a platform to facilitate the monwealth criminal law legislation is kept matching of DNA profiles across Australian up to date. jurisdictions. The bill will amend section Debate (on motion by Mrs Bronwyn 23YV of the Crimes Act to remove the re- Bishop) adjourned. quirement that a second review of part ID be COMMONWEALTH SECURITIES AND held within two years of the completion of INVESTMENT LEGISLATION the first review. AMENDMENT BILL 2008 Because the first review was held in 2003, First Reading the second review was due to commence in March 2005. In early 2005, however, the Bill and explanatory memorandum pre- database was still only partially operational. sented by Mr Bowen. The amendment provides that the review Bill read a first time. should now commence no later than 1 No- Second Reading vember 2009. This will allow time for the Mr BOWEN (Prospect—Minister for database to be fully operational when the Competition Policy and Consumer Affairs, review takes place. The review itself will and Assistant Treasurer) (9.08 am)—I move: assess trials which have involved DNA matching and the adequacy of safeguards as That this bill be now read a second time. well as any matters that have arisen in court The Commonwealth Securities and In- proceedings. The review will also analyse vestment Legislation Amendment Bill 2008 the implementation of the recommendations will strengthen the efficient operation of the from the first review in 2003. Treasury bond market by increasing Treasury

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4383 bond issuance and extending the collateral Following consultations with market par- accepted for securities lending of these ticipants about the adequacy of the volume bonds. of Treasury bonds on issue, the government It also provides for the safe investment of has decided to increase Treasury bond issu- the proceeds of increased issuance in con- ance. junction with management of the govern- The volume of fixed coupon Treasury ment’s cash balances, using a wider range of bonds on issue is currently around $50 bil- high quality investment instruments than at lion. present. It has been around this level for the past These measures will help maintain the five years. role played by Treasury bonds in the smooth Other Australian financial markets have functioning of Australia’s financial markets. grown substantially over this period, as has Issuance of Treasury bonds the size of the Australian economy. The government’s commitment to strong Reflecting these trends, the demand for fiscal discipline means that there is no need Treasury bonds has also grown. to issue debt securities to finance spending. Over recent months, demand for the bonds However, a liquid Treasury bond market has intensified due to the strength of the Aus- plays an important role in the Australian fi- tralian economy and exchange rate, together nancial market. with global credit concerns that have in- The Treasury bond and Treasury bond fu- creased the demand for high-quality securi- tures markets are used in the pricing and ties. hedging of a wide range of financial instru- As a result, the Treasury bonds available ments and in the management of interest rate on issue have become more tightly held and risks by market participants. it has become more difficult for dealers to They thereby contribute to a lower cost of obtain some lines of stock and maintain an capital in Australia. active market in them. Without these markets, the financial sys- Some increase in their issuance is needed tem would also be less diverse and less resil- for the market to continue to operate effec- ient to the shocks that can emerge from time tively. to time. This bill provides a new standing author- This has been demonstrated over recent ity for borrowing by the issue of Common- months, when these markets provided impor- wealth government securities, subject to a tant anchors for Australia’s financial system limit on the total volume of securities on is- as it responded to the impact of credit and sue at any time not exceeding $75 billion. liquidity concerns sparked off by the sub- This will allow an increase in the volume prime housing crisis in the United States. of fixed coupon Treasury bonds on issue by The government is committed to ensuring around $25 billion over their current level. that the Treasury bond market continues to The amount and timing of future issuance operate effectively and therefore play this will depend on market needs. important role in the Australian financial In 2008-09 the government will add market. around $5 billion to the Treasury bond issu-

CHAMBER 4384 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 ance of $5.3 billion that was already planned At present the office invests surplus and detailed in the 2008-09 budget. Commonwealth cash in term deposits with The additional issuance will be targeted at the Reserve Bank of Australia. bond lines that are in the shortest supply in The bill will extend the range of eligible the market. investments that the Treasurer can make un- The government will continue to monitor der the Financial Management and Account- market conditions to determine whether fur- ability Act to include investment grade debt ther issuance is required. securities, and provide for the Treasurer to give directions to delegates on classes of Any future increases within the overall authorised investments and matters of risk $75 billion ceiling will be announced by the and return. government and implemented by a direction tabled in both houses of parliament. However, the bill provides that the Treas- urer must not give a direction that has the The government’s decision to increase purpose, or is likely to have the effect, of Treasury bond issuance at this time is consis- requiring delegates to invest in a particular tent with the decision of the previous gov- company, business or entity. ernment, announced in the 2003-04 budget, to maintain the market for Commonwealth This is to ensure that investment decisions government securities. are based on sound financial criteria. In announcing that decision, the previous Securities lending government noted that this would entail en- The Australian Office of Financial Man- suring sufficient securities remain on issue to agement operates a securities lending facility support the Treasury bond futures market. to facilitate the efficient operation of the The increased issuance of Treasury bonds Treasury bond market. will not adversely affect the government’s This facility allows financial market par- overall financial position since the increase ticipants to borrow particular Treasury bonds in bonds on issue will be offset by an infor short periods when they are not readily crease in financial assets on the govern- available from other sources. ment’s balance sheet from the proceeds of It thereby helps bond market intermediar- the additional issuance. ies to trade and make two-way prices for all The returns on these assets will also offset Treasury bonds. Collateral is required, and a the interest costs from the increased issu- fee is charged. ance. Currently, when seeking to borrow, other Investment CGS is required as collateral. The proceeds from the increased issuance This has constrained access to the facility will be managed and invested by the Austra- when such securities have been in short sup- lian Office of Financial Management in con- ply. junction with its present cash management Following consultations with financial activities. market participants the government has de- The office has experience and expertise in cided to allow a wider range of collateral to managing fixed interest financial assets. be accepted by the facility. At present, the securities lending facility operates using the Treasurer’s investment

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4385 powers under the Financial Management and members’ business on Monday, 16 June Accountability Act. 2008. The bill provides a separate authority for The report read as follows— the Treasurer to enter into securities lending Pursuant to standing order 41A, the Whips rec- arrangements for the loan of CGS. ommend the following items of committee and The bill requires that collateral must be delegation reports and private Members’ business received for any securities lending and lists for Monday 16 June 2008. The order of prece- collateral that may be accepted, including dence and allotments of time for items in the Main Committee and Chamber are as follows: cash and investment grade securities. Items recommended for Main Committee (6.55 The bill requires the Treasurer to give a to 8.30 pm) direction on the kinds of collateral that may PRIVATE MEMBERS’ BUSINESS be taken from within the categories listed in the bill. Notices 1 MR PYNE: To move: The list is sufficiently wide to cover the same assets as the Reserve Bank of Australia That the House: currently accepts as collateral in its market (1) recognises the importance of providing state- operations. of-the-art mental health care for the mentally ill; Conclusion (2) acknowledges that the way to help the men- These various measures will strengthen tally ill rehabilitate from their illness is to the markets for Treasury bonds and the fu- improve mental health services, not cut tures contracts that depend on them. them; and They will thereby contribute to the effec- (3) notes that mental health services in South tiveness and efficiency of Australia’s finan- Australia are under threat from the State cial markets more broadly and to the resil- Government with the proposed sale and re- ience and robustness of our financial system. development of the Glenside Campus. Time allotted—30 minutes. These measures demonstrate the government’s determination to ensure the efficient Speech time limits— operation of Australia’s financial markets. Mr Pyne—10 minutes. Further details on the changes outlined in First Government Member speaking—10 min- the bill are contained in the explanatory utes. memorandum. Other Members—5 minutes each. I commend this bill to the House. [Minimum number of proposed Members speaking = 2 x 10 mins and 2 x 5 mins ] Debate (on motion by Mrs Bronwyn The Whips recommend that consideration of this Bishop) adjourned. matter should continue on a future day. BUSINESS 2 MR HAYES: To move: Consideration of Private Members’ That the House: Business (1) affirms its recognition that a combination of Mr PRICE (Chifley) (9.15 am)—I pre- special education, speech therapy, occupa- sent the report of the recommendations of the tional therapy and behavioural interventions whips relating to the consideration of com- has proved to be successful in helping people mittee and delegation reports and private with an autism disorder;

CHAMBER 4386 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

(2) recognises early diagnosis and intervention is [Minimum number of proposed Members also essential to ensure families and carers speaking = 2 x 10 mins and 2 x 5 mins ] have access to appropriate services and pro- The Whips recommend that consideration of this fessional support; matter should continue on a future day. (3) supports the Federal Government policy to Items recommended for House of Representa- establish specialised child care and early in- tives Chamber (8.30 to 9.30 pm) tervention services for children with autism; and COMMITTEE AND DELEGATION REPORTS (4) calls on the Government to consider a specialised child care centre be established in Presentation and statements South West Sydney. 1 STANDING COMMITTEE ON PRIMARY Time allotted—35 minutes. INDUSTRIES AND RESOURCES Speech time limits— More than honey: The future of the Australian honey bee and pollination industries Mr Hayes—5 minutes. The Whips recommend that statements on the First Opposition Member speaking—5 min- report may be made—all statements to conclude utes. by 8:40pm Other Members—5 minutes each. Speech time limits— [Minimum number of proposed Members Each Member—5 minutes. speaking = 7 x 5 mins] [Minimum number of proposed Members The Whips recommend that consideration of this speaking = 2 x 5 mins] matter should continue on a future day. 2 JOINT STANDING COMMITTEE ON 3 FRAN BAILEY: To move: ELECTORAL MATTERS That the House: Advisory report on Schedule 1 of the Tax Laws (1) recognises the unapproved recipients of Amendment (2008 Measures No.1) Bill 2008 hormone treatments, including young men The Whips recommend that statements on the and boys who received human growth hor- report may be made—all statements to conclude mone, between 1960 and the mid 1980s; by 8:50pm (2) acknowledges that the report it commis- Speech time limits— sioned in 1993, known as the Allars Inquiry, found that approved female patients receiv- Each Member—5 minutes. ing the same treatment for infertility suffered [Minimum number of proposed Members negative effects and as a result of that report, speaking = 2 x 5 mins] received compensation from the Common- PRIVATE MEMBERS’ BUSINESS wealth; and Notices (3) recognises the male recipients—both ap- 1 MS PARKE: To move: proved and unapproved—who received the same hormone treatment for growth purposes That the House: and provides similar compensation. (1) notes the grave and ongoing humanitarian Time allotted—remaining private Members’ busi- and political crisis in Zimbabwe; ness time prior to 8.30 pm (2) expresses its concern at the unacceptable Speech time limits— delay in the release of official results from the 29 March 2008 presidential election in Mrs Bailey—10 minutes. that country, and records its concern that this First Government Member speaking—10 min- delay was part of a ploy by the incumbent utes. Mugabe Government to fraudulently retain Other Members—5 minutes each. power;

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4387

(3) asserts that the democratic choice of the peo- First Opposition Member speaking—10 min- ple of Zimbabwe must be respected, and that utes. the second, run-off presidential election, to Other Members—5 minutes each. be held by 31 July 2008, must be free, fair [Minimum number of proposed Members and without intimidation; speaking = 2 x 10 mins and 4 x 5 mins ] (4) calls on the Zimbabwe Election Commission The Whips recommend that consideration of this to invite international election observers to matter should continue on a future day. monitor the election including observers from the African Union and the United Na- Report adopted. tions; WHEAT EXPORT MARKETING (5) confirms its commitment to the fundamental BILL 2008 democratic requirement of a free and open Cognate bill: media, and urges the Zimbabwe Government to allow international media full access to WHEAT EXPORT MARKETING Zimbabwe to report on and properly scruti- (REPEAL AND CONSEQUENTIAL nise the run-off election; AMENDMENTS) BILL 2008 (6) condemns the use of violence and other Second Reading kinds of intimidation or manipulation by election participants in Zimbabwe, including Debate resumed from 3 June, on motion by associates of the ruling Zimbabwe African by Mr Burke: National Union – Patriotic Front party, in at- That this bill be now read a second time. tempts to pervert the democratic process; Mr COMBET (Charlton—Parliamentary (7) expresses its hope that the election process Secretary for Defence Procurement) (9.16 can be resolved in order that a properly con- am)—This is in fact a profoundly important stituted government of Zimbabwe can turn bill for the future of wheat export marketing its full attention to addressing the serious and does implement another one of Labor’s problems afflicting its people, including se- vere food shortages, a spiralling rate of election commitments. Wheat growers have HIV/AIDS infection, high level unemploy- faced great uncertainty for a number of years ment, raging inflation and the lack of basic now due not only to the effects of the health services; drought but also because of the destabilising (8) welcomes the Australian Government’s hu- effects of the AWB Iraqi wheat scandal. That manitarian aid to Zimbabwe which provides scandal saw almost $300 million worth of humanitarian relief and human rights support secret payments made to the Iraqi regime led for ordinary Zimbabweans; and by Saddam Hussein and irretrievably de- (9) supports the Minister for Foreign Affairs in stroyed the credibility of the AWB’s export his efforts on Australia’s behalf in seeking to marketing monopoly for Australian wheat. It cooperate with the United Nations, other na- also underscored, of course, an appalling tions, and relevant non-government organisa- failure by the Howard government to take tions to bring a rapid and peaceful resolution responsibility for its own incompetence in to the political impasse in Zimbabwe, and to the oversight of export wheat marketing pol- address the humanitarian crisis in that coun- icy. Who could forget the then Deputy Prime try. Minister, Minister for Trade and Leader of Time allotted—remaining private Members’ busi- the National Party, Mr Vaile, I think on no ness time prior to 9.30 pm less than 42 occasions in his evidence to the Speech time limits— Cole royal commission, indicating in re- Mover of motion—10 minutes. sponse to questioning that he could not recall

CHAMBER 4388 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 or did not remember? Australian wheat wheat exporters, and this is a fundamental growers deserve far better than this from objective of the bill. their government, and this bill provides for The legislation establishes a new industry much-needed certainty concerning marketing regulator, Wheat Exports Australia, with the arrangements for wheat growers. power to develop, amend and administer an Under arrangements installed by the pre- accreditation scheme for bulk wheat exports. vious government, the minister for agricul- The bill will set the broad policy parameters ture’s temporary power of veto over wheat under which Wheat Exports Australia will exports expires on 30 June this year, and, design and administer the accreditation without new arrangements, the Export Wheat scheme. WEA will only accredit companies Commission would be responsible for issu- that meet stringent probity and performance ing export consents, and AWB (International) tests. Key criteria that the WEA will consider would remain exempt from seeking such include the financial resources available to consent and would retain its privileged posi- the company, its risk management systems, tion in the wheat market. The Liberal Party’s and the demonstrated behaviour of the com- decision not to oppose this bill is a welcome pany and its executives. In light of the clarification of their position after all this AWB’s performance over recent years, these time, but the National Party does not appear are extremely important accreditation crite- to be able to recognise the reality and neces- ria. Wheat Exports Australia will also have sity of change. The National Party does not the necessary investigative powers to per- seem to understand, importantly, that the form its regulatory, monitoring and enforce- current legislation, once 30 June has passed, ment responsibilities. There will also be se- changes everything. vere penalties for breaching the conditions of The concept of the single desk that the the scheme or individual accreditations. National Party claims they wish to keep WEA will also be able to suspend or revoke would actually effectively disappear if the accreditations. In the end, the new arrange- current arrangements were to continue, but ments contained in this bill are designed to there would be no effective and appropriate benefit the entire wheat industry, particularly alternative regulation and oversight of wheat growers, by providing greater contestability exports. If this legislation is not passed, the and selling options for growers, more cost- Export Wheat Commission will become ef- efficient marketing services, greater trans- fectively the sole determinant of whether or parency of price and cost information, and not an export permit should be issued, and reducing the risks associated with relying on the test it will have to apply is the one in the a single seller. existing act, which is whether or not the ap- There were, of course, many problems plication for a bulk permit will complement with the old system. There was no effective the objectives of AWB (International) in the separation of the management of the listed running of the national pool or whether it company, AWB Ltd, and the subsidiary, develops niche markets. This, of course is an AWB (International). Secondly, the export extremely restrictive position. That aside, monopoly resulted in a lack of contestability however, the retention of the existing ar- in services, to state the obvious. This means rangements would also mean that the Export that returns to growers from the national pool Wheat Commission would have no clear ob- were not effectively maximised because ligation to assess the probity of potential there were poor incentives to minimise the costs of operating the pool. The Nationals

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4389 continue to maintain that the export monop- agriculture has undertaken an extensive se- oly or the single desk delivers for farmers. ries of consultations, and in this industry, But you have to look for the evidence for with the significance of this change, this is this. Neither the 2000 national competition extremely important. We have seen the re- policy review, the 2006 ACIL Tasman study, lease of an exposure draft for public com- nor a more recent ABARE analysis could ment. The Senate rural and regional affairs find compelling evidence that single-desk and transport committee has held an inquiry marketing could deliver price premiums in and the government has established a wheat the international marketplace. industry export group. Minister Burke has What these studies did find is that the ex- also met with all of the major state farming port monopoly had an inhibiting effect on organisations and the major bulk handling both innovation in marketing and the realisa- and trading companies, especially in relation tion of cost savings in grain transport and to the issues of access and storage infrastruc- handling. The single desk increased the risk ture. Demonstrating that this is genuine con- for wheat growers by forcing them to rely on sultation, which of course it is, a number of a single exporter. This was seen in the after- amendments have been made to the draft math of the wheat for oil scandal when Aus- legislation to reflect the comments made. tralian growers were effectively locked out The government has gone about the business of the critically important Iraqi market. But of trying to build consensus and support and why didn’t the previous government make take on board criticisms in the formulation of the necessary changes after the Cole com- this legislation. mission revealed the flaws in the previous Changes that have been made include the system? You can only conclude that it is be- addition of an objects clause, a civil penalties cause both of the parties within the coalition regime and enabling cooperatives to be eli- were divided over this issue. Of course the gible for accreditation. This government is coalition are still divided and disunified in committed to a viable rural sector and has their policy response to this important ques- worked very cooperatively with the industry tion. Even the AWB has described the cur- to refine the legislation and examine the fu- rent temporary arrangements as unworkable. ture of wheat exports in a rational manner. I The AWB Ltd managing director has stated: have been around this industry too, although No responsible Board of Directors would agree to it surprises some of those opposite from time continue running a National Pool in these circum- to time, given they seem to see me in a par- stances and in the current US sub-prime environ- ticularly singular role from my former career ment. in the union movement. I have been around This government is not going to be blink- the wheat industry for a long time as well, ered, as the previous government was. It has and I know the importance of this to wheat proposed that the Productivity Commission growers. Even though it is a difficult transi- will conduct an independent evaluation of tion— these arrangements, commencing in 2010. Mr Windsor—Why didn’t you listen to The other important consideration—there them? were some comments about this in the House Mr COMBET—I have listened—these last night—is the level of consultation that are extremely important and meritorious the government has undertaken in relation to changes, which I support. Just as farmers the formulation of this bill. The minister for continue to benefit from the trade reforms

CHAMBER 4390 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 and the deregulated domestic wheat market Barwick was also a very good supporter of introduced by the Hawke-Keating govern- mine in my first campaign back in 1991. He ment, I firmly believe and the government was instrumental in mentoring me, in a believes that the industry will benefit from sense, to prevent the then Liberal state gov- the reforms contained in this bill. Effectively, ernment, the Greiner government, from sell- for the first time since 1948, Australian ing off the grain handling system to interna- wheat growers will be able to choose who tional grain traders, who would have been they sell their grain to and at what price. The the highest bidders. The member for Charl- fact is that once again it falls to the Labor ton may well remember some of this history. Party to implement important industry re- I note with some degree of interest that the forms. I commend this bill to the House. morphed organisation that was saved at that Mr WINDSOR (New England) (9.26 particular time from being sold out by the am)—I rise to oppose the Wheat Export Liberals is one of those that will seek ac- Marketing Bill 2008. We have just had an creditation to become one of the accredited indication from the member for Charlton as exporters under this legislation. It was at a to what the agenda really is here, and I time, in 1991, when there was a hung par- would encourage people to read the first part liament and the then Greiner government had of his speech. If they do, they will start to see committed to sell it off, just as the current what the real agenda is in relation to this par- federal Liberal opposition have agreed to let ticular legislation. It is not about wheat mar- it all go, and it was the Labor Party in New keting at all; it is about politics and placating South Wales that was opposed to it. In my some of the rent seekers. It is about putting mind we have this interesting position devel- people in positions in the food chain of the oping—that is, that over that period of time production of food, where many others will there has been an evolution of the politics of make money and the growers will be left out the Liberal and Labor parties. If anybody had of the equation. any doubt that the two parties are almost The now Prime Minister came to Tam- identical, then I think the way in which they worth a bit over two years ago when the Cole have acted in relation to this particular bill inquiry was being held. He rang me and said and both parties’ shoddy treatment of country he was travelling through that part of the people is an indication that they do not really world and wanted to speak to wheat growers. care about the people who live in those par- I said to him, ‘Look, rather than just driving ticular areas. down the road, I’ll put a group of growers I listened to the member for Kennedy last together for you to talk to.’ I did, and we had night and his condemnation of the National breakfast together and talked about a number Party in what he called its sell-out on most of issues. That meeting was held at a little other industries. He said that they were here silo south of Tamworth and about 40 or 50 standing up on one of the last remaining in- growers turned up. There was a family repre- dustries that they have had some influence sented at that meeting called Barwick. The in. Maybe I am not as hard as the member Prime Minister met the Barwicks. The mem- for Kennedy, but I think there is an opportu- ber for Charlton mentioned 1948. The mem- nity here for the National Party. If they stay ber for Charlton, if he has a memory in rela- within the Liberal coalition after this treat- tion to this, and others would remember that ment then they deserve to die as a represen- Don Barwick was one of the original foun- tative group. I challenge them to break links ders of the Australian Wheat Board. Don with this pathetic group that they have asso-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4391 ciated themselves with and have allowed posed to be that you can only have fit and themselves to be sold down the drain by. proper conduct for companies—or for indi- More importantly the people they represent viduals, if the coalition’s amendment gets have been sold down the drain, whether it is through—yet here we are allowing the soon Telstra, on this particular piece of legisla- called thief in the night, the very reason for tion or on many other pieces of legislation. this bill being brought on, to be a very im- So it seems that the rent seekers have portant clause in the legislation. I just cannot won. This has not been about marketing; this understand how the minister could allow that has not been about consultation. Prime Min- sort of activity to happen and try and have ister Rudd, when he was shadow minister for some credibility in terms of some of the ac- foreign affairs, at that meeting in Tamworth cess provisions, and other provisions, within made the statement—and it is readily avail- the legislation. able on tape—that he believed that before The motives behind this are purely politi- any changes to export wheat marketing ar- cal. There is a lot of payback in this. The rangements took place there should be a poll Labor Party could see that the Nationals and of all registered wheat growers. He has not Liberals were split traditionally over this and done that. Mark Vaile, the member for Lyne this is about exposing those weaknesses. It is and Deputy Prime Minister when the previ- not about the wheat growers. If people were ous government was in power, said, at War- interested in what the wheat growers racknabeal in Victoria, that before any thought, they would have consulted with changes took place there should be a poll of them. Well, I did. The Prime Minister may all registered wheat growers. He did not do have said that he would have, the former that. I think if the member for Lyne, the then Deputy Prime Minister may have said that he Deputy Prime Minister, had taken the initia- would have and did not, but I did, and I think tive and actually sought a clear expression that for the record those results should be from growers then we would not be debating indicated. this farce today. Before reading the results out I should say, The motives in this particular legislation just for the academics, that the research that are not about improvement. They are not was done here is of a sample of 2,819 that about the Australian Wheat Board at all. I will give this study a 1.7 per cent confidence personally believe that many in the Austra- interval at a 95 per cent confidence level lian Wheat Board should be spending time in based on the 20,845 distributed survey forms jail, but this particular legislation, in the ‘fit in Australia. This is—and this is the impor- and proper’ clause, allows the Australian tant point—basically saying that if you con- Wheat Board back into the game. It is abso- ducted the same survey 100 times, 95 out of lutely designed to have the wheat board in the 100 wheat growers should yield results there as a player. The minister for agriculture within plus or minus 1.7 per cent of the pub- and the Prime Minister stood up in here lished number of the percentage. I notice the some weeks ago and said that this would not member for Farrer made some passing refer- have happened had the Australian Wheat ence to this poll, but she obviously has not Board not done what it did—and the member carried out any political polls in the past. If for Charlton, Mr Combet, referred to it again she had, she would understand that these today—and here we have a bill that is de- findings are highly significant. Essentially, signed to put it back in the game. The reason growers were asked in all states which option for the legislation, for the changes, is sup- best represented their views—a single-desk

CHAMBER 4392 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 option, the government’s deregulated mar- The Leader of the Opposition waffled on keting system with a multilicensing ar- about GPS in tractors and various other tech- rangement, or a fully deregulated marketing nology and tried to draw some analogy with arrangement. 80.2 per cent of respondents improved marketing techniques. This is the argued that they wanted the single desk split by age. Across Australia—that is, all maintained. So, when people say there has states—of those aged 31 to 40, 79 per cent been consultation that is absolute nonsense. supported a single desk; of those aged under 14.9 per cent supported the government’s 30, 72.5 per cent supported it; and of those position. Western Australia is very dependent aged 31 to 40, 75.8 per cent supported it. on wheat exports. It does not have the do- Those showing the most support for the gov- mestic market that the eastern states have in ernment’s initiative, the multilicensing ar- terms of the competitive markets that are rangement, were those aged 41 to 50, at 17.5 available. The Prime Minister again stood up per cent. As I said, they consulted with and said, ‘Oh, we are doing this because the growers—that is, there has been consultation Western Australians want it.’ Well, people in with those who are going to make money out Western Australia were asked that specific of the production chain. That is hypocritical question. In their answers, 71.4 per cent said of the Labor Party, particularly because of they wanted a single desk whereas 22 per their view on collective arrangements. This cent—not even a quarter—wanted what the supports those who make money out of food government is presenting. production. There are issues at the moment Some have suggested, ‘Oh well, it’s only in food and fuel and the carbon footprint of those little growers that are weak in the mar- transportation. Those who make money out ketplace that are being protected by this ves- of food production will continue to make tige of the past. We have got to allow the money out of food production. In fact, as the industry to flex its wings. The bigger players pressure on world food commodities in- are being restricted by this old time single creases, they will make more. But those who desk arrangement.’ If you split it by produc- produce the food—the growers—will not tion, however, those who supported the sin- necessarily be part of that process. gle desk were 83.9 per cent of respondents in If you need any evidence, look at what is the 0- to 500-tonne production range, 84.6 happening in chemical and fertiliser prices in per cent of respondents in the 500- to 1,000- line with the boost in grain prices of the last tonne production range wanted a single desk, 12 months. Look at the rent seekers who are 77 per cent from the 1,000- to 5,000-tonne ripping more out of the marketplace now. production range wanted a single desk and Some of the people the minister for agricul- even in the over 5,000-tonne producers—the ture, and I presume others in the government, bigger growers—62.6 per cent wanted a sin- has been dealing with behind the scenes, gle desk. Not a quarter wanted what the gov- who purported to be representatives of grain ernment is proposing: 23.1 per cent in the growers—that is, some of those in the grain- over 5,000-tonne production range wanted handling system, some of those in the Na- the government’s proposal, and that govern- tional Farmers Federation and some of those ment proposal is being supported by the Lib- in some of the state based bodies—have po- eral Party. sitioned themselves to receive rent from the Some people have said, ‘We have to allow work of others. That is the appalling position the younger farmers to express themselves that the Labor Party has presented. As the because of the new age marketing systems.’ member for Kennedy said last night, they

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4393 won the election on the right of workers to he, the member for Charlton and the Prime collectively bargain. This is the wheat grow- Minister have based their whole argument on ers’ industry. They are not asking the gov- the Australian Wheat Board. That is not a ernment for any money in relation to this; structure. The legislation should be about the this is not a begging bowl arrangement. It is structure that the majority of wheat growers their industry and they have not been con- want. Time and time again you see examples sulted. Those who will profit from their in- where, if individuals or smaller groups go dustry—not those who actually do the out into the world market, they get beaten work—have been involved in the consulta- up. Look at what happened to the coal indus- tive phase. If this government stands up try some years ago. They went overseas as again and argues the right of the worker, it individual companies and bid each other will have a fairly hollow ring in my view. down. They kept bidding each other down in The poll shows some resistance in New Japan. South Wales—and no wonder—as 87.8 per Some academics have been used to come cent of wheat growers want a single desk; up with this logic that there are no substan- only 8.8 per cent prefer what the government tive gains to be had through a single desk and now the Liberal Party prefer. If anybody marketing arrangement. If you look through had bothered to ask—if the member for Lyne the various boards of some of the groups that had bothered, if the Prime Minister had are going to be accredited, they are there. bothered or if the minister for agriculture had Some of the people in the Grains Council, bothered—they would have got exactly the for instance, are there. The only people in the same answers. The reason they did not wheat industry, in my view, who can hold bother is that they did not want to know. their heads up high—the Grains Council They know the answer. They are clearly de- cannot, the National Farmers Federation can- fying the majority of an industry group that not; some people in the New South Wales has made clear time and time again what Farmers Association can but the majority of they want for the export of their bulk- the body cannot—are those in Western Aus- marketing wheat. They have allowed con- tralia who have genuinely fought a cause for tainers and bagged wheat to go—and this those they represent. Many others have sud- indicates that they did want bagged and con- denly slipped behind the tree. That is what tainerised wheat to go—but they want a sin- we saw here yesterday with the Liberal Party gle desk structure for bulk export wheat. leader. He is a man who can make a speech This is about structure, Minister. I do not without any notes, but he is so committed to necessarily mean the Australian Wheat the poor, downtrodden farmer that he had to Board. I would not give it to the Australian read nearly every word he said on this legis- Wheat Board. I would not give it to them lation! because I think their behaviour was appall- It is a sad day for the wheat industry but it ing. But you do not throw the baby out with is a sadder day for politics, in my view, be- the bathwater. The minister for agriculture cause today, for all to see, there is no divi- has endorsed a structure. The minister for sion in politics in this place. There are two agriculture has not given anybody the mar- ‘Liberal’ parties. They exist on both sides of keting arrangements yet. He may give them this chamber and there is a very weak junior to one organisation. He may give them to the coalition party which has allowed itself to be Australian Wheat Board or the Wheat Export run over by both of them, to be assumed by Authority. He has not endorsed anybody, yet both of them for decades, a junior coalition

CHAMBER 4394 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 party which now has an opportunity. The world since the ABC went from black-and- question is: will they take that opportunity or white to colour is not to be trusted. just occupy the benches and move on when As a Western Australian, I am aware of their individual times are up? the significance of this bill to the sustainabil- If we are so concerned about the global ity and future of the Western Australia wheat market and choice, what is the government belt. This bill will introduce competition into going to do when a carbon footprint starts to the bulk wheat market export industry. It will be implanted on the movement of grain in- support farming communities and farming ternationally? What is the government going families. We hear lots in this place about to do about the taxation and excise arrange- working families and there are farming fami- ments which are currently on grain based lies, too. ethanol, for instance? Are we going to tax a WA has a strong history of agricultural renewable fuel or allow free interchange to achievement in challenging conditions. take place? These additional questions Colonists arrived in WA in 1829 and planted should have been answered quite clearly be- grain they brought from England. Colonial fore this legislation was even brought into farmers recorded their first wheat harvest in the House. (Time expired) WA in 1831. Of course the grain had been Mr GRAY (Brand—Parliamentary Secre- developed in English conditions and fre- tary for Regional Development and Northern quently failed to provide reliable and sub- Australia) (9.46 am)—I rise to speak today stantial crops. The failure of these first crops in support of the Wheat Export Marketing was inevitable. In isolated areas such as the Bill 2008, not just as a government member Victoria District at Champion Bay near what for the seat which contains the Kwinana ex- we now call Geraldton, it was even known port terminal but also as a member, albeit by that starvation deaths followed crop failure. I marriage, of an extended wheat-farming quote from Sister Mary Albertus Bain: family from Western Australia. To pick up By the end of 1873 it could correctly be some of the points made by the member for claimed that there had only been one good season New England, it is clear from discussions I since 1867. The most promising harvest since that have had in my family that there is a genera- date had that year been attacked again by red rust tional difference between views on this pro- and almost the entire crop in the district was a posal. The younger the farmer—such as my failure ... brother-in-law Rod Birch—the more vocal Malnutrition, worry and heat gradually took its the support for this legislation, the more toll in the district. The greatest number of deaths thoughtful his consideration and support for from 1870 to 1894 was amongst the children and this legislation. The older the farmer, I find the most common cause was ‘marasmus’— inability to thrive due to a protein deficiency— less confidence. The older the farmer, I accept that there is nervousness about these Such was the skill of successive generations proposals. Having said that, when I speak of of farmers in the Western Australia grain belt my family, of course it is extremely extended that, from failed first crops and starvation, and the member for O’Connor is part of that the industry we have today has progressed to family, too. His support for this bill is unique a sophisticated, science based, satellite among that generation. My father-in-law, guided, machine driven export industry. The Peter Walsh, who spent many years on his realisation that cheap and efficient bulk- tractor up at Doodlakine, tends to take the handling systems could reduce handling view that anything that happened in the costs, made effective through the establish-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4395 ment of Co-operative Bulk Handling, known icy review of the Wheat Marketing Act 1989, by its acronym as CBH. In 1933, CBH was it was the commission’s view that: registered by the wheat pool of WA and di- It is unlikely that the current wheat export vided into 100,000 shares of £1 each. This marketing monopoly generates net benefits for effectively created the co-operative bulk Australia or, indeed, wheat producers themselves. handling system for grain growers. The fundamental reasons for this assessment are From the 1920s to the 1960s, there was that: significant improvement in Western Austra- • the current lack of choice for wheat growers lian grain yields through the use of super- is likely to be impairing efficiency and innovation within the industry, and— phosphate fertiliser and identification and amelioration of trace element deficiencies The industry in Western Australia prides it- such as zinc, copper and manganese. Science self on its efficiency and innovation— and increasing efficiencies combined with • most if not all of the potential benefits of the good harvests have seen the grain industry AWB’s single desk could be achieved under propel itself into the 21st century. competitive selling arrangements. Western Australian agriculture prides it- This bill will remove the fundamental prob- self on being science based. The Western lem with the current arrangements that have Australian wheat belt not only supports WA’s created a restriction on participation in the food needs but also creates an exportable export wheat market and, subsequently, a surplus representing 90 per cent of its total lack of competition. The Rudd government is grain production. Today, Western Australian committed to addressing the problems asso- grain is now exported to over 20 countries, ciated with export wheat marketing arrange- with major shipments to Japan, South Korea, ments. Farmers are used to dealing with un- Indonesia, Iran, Pakistan and China. In WA, certainty—whether it is their machinery, the as we speak, seeding is still underway with supply chain, the weather or varying prices. many farmers having a poor start to the sea- This government acknowledges that the new son and there is growing concern that this arrangements contained in this bill, while may not be a good year, despite good prices. market oriented, while providing a new start The rains have not yet arrived. for wheat marketing after Iraq, will include an element of uncertainty as farmers learn to Farming has few certainties but one thing adapt to life in a competitive selling market. is for sure: farmers deserve to know how they will market their crop before they put it Of course, farmers already survive in a in and, understandably, want some certainty moving market with a range of market costs in what the marketing rules will be before and pressures such as labour costs and avail- the next harvest. After 30 June this year, if ability, fertiliser costs that are heavily de- this parliament does not change the current pendent on the price of fossil fuels and am- rules, the ministerial veto will disappear and monia, diesel costs and exchange rate vari- the single desk that the National Party want ability. These often volatile forces make it to keep will vanish under the current law. difficult but necessary to sell in an open The law as it stands leaves us with the worst market, just as farm inputs are at prices set in of all worlds and no-one wants that to hap- open markets. I acknowledge that risks and pen, not even the AWB. We need to create uncertainties are inherent in surviving in the certainty. In the Productivity Commission’s global marketplace. The government is submission to the National Competition Pol- committed to ensuring support, where possible, is provided to farmers, especially in the

CHAMBER 4396 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 transition period. That is why the govern- on a property that has been held by our fam- ment has announced new funding of almost ily since 1913. I personally helped plant my $10 million over three years to assist with first wheat crop when I was 10 years old and the transition to the new arrangements, in- I have been involved in the industry ever cluding funding for information sessions for since. Last year and the year before, when growers and customers, collection and publi- the wheat farmers became the sacrificial cation of marketing data, seed funding for lambs of the 2007 federal election over the Wheat Exports Australia, technical market Cole inquiry, I was sitting on a tractor trying support grants for new exporters and assis- to grow a crop. I represent an electorate that tance to the National Agricultural Commodi- has just under 3,000 wheat growers, and I ties Marketing Association to develop an would suggest that they are possibly the most industry code of conduct. advanced wheat growers in the most produc- This bill delivers on the government’s tive area for wheat in the world. election commitment to give growers more As children growing up, when we would certainty, more choice, to minimise costs, to ask my father for a bedtime story, the scariest boost innovation and efficiency, and develop bedtime story that he could ever come up new export markets. These reforms effec- with, that absolutely scared the pants off us, tively further deregulate the market and re- was about his earlier days in the late 1930s place the single desk marketing arrange- when he was kicking off. He was trying to ments that currently exist with the Australian pay off a farm by shearing off-farm and try- Wheat Board. This bill has undergone exten- ing to grow a crop, only to find that he was sive consultation processes, including the at the mercy of unscrupulous grain traders. release of an exposure draft of the legisla- He was a great supporter of Don Barwick tion, a Senate inquiry, the work of an inde- and the crew that set up the Australian Wheat pendent expert group and private industry Board. Until the day he died earlier this year and grower briefings. he was a great proponent of orderly wheat WA has come a long way since the days marketing. We have to understand that we when early settlers suffered starvation at have moved on. In the 1930s, when my fa- Champion Bay. Today, not only do we feed ther was trying to market wheat, he had a ourselves but we feed the rest of the world. party line and virtually no access to the out- Today it is Australia and Western Australian side world. The farmers in my area are very farmers who are champions. This bill will much in tune with world markets. Thanks to see the WA wheat belt continue to be a world the previous government they now have leader in innovation and ensure that the in- broadband connections. Last year when I dustry can adapt to the changing global was harvesting my crop I was marketing it wheat market. I commend the bill to the on a mobile phone while I was still on the House. header. Farmers are now using marketing tools like forward selling and whatnot. Mr COULTON (Parkes) (9.55 am)—I rise to oppose the Wheat Export Marketing While you might think that in an area like Bill 2008. For many in this House and this that they might be considered free traders, debate, last night and today, this has been an and many do, there are just a couple of academic debate. But for me it is extremely things I would like to highlight to the House personal. My family has been growing wheat that I think have slewed the argument. One since the 1800s. My brother is still farming of them is that for the last seven or eight years we have not produced a large wheat

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4397 crop in Australia. Many of the farmers that farmers have become very aware of the dan- have been fortunate enough to grow a crop— gers. What happens when fertiliser becomes and they have grown a crop because they are the domain of one company? Fertiliser prices at the cutting edge of technology—have have gone up by 100 per cent this year largely been able to market it domestically. purely due to the predatory nature of a mo- Some of the farmers in my area have ex- nopoly and the indication that there might be ported in containers and have found markets solid prices for grain. Farmers have been right across the world, boutique markets, for paying through the neck for fertiliser and grain. There is one thing that does concern many of them still have not had planting them—and this is pretty well universal, al- rain. So they are well aware of what happens though the member for Brand spoke about a when a monopoly takes control. generation gap. I have been meeting with My farmers are forward thinking; they are wheat farmers right throughout the electorate not looking to the past—we have to move since I became elected, to try to gauge their on. But the problem is that what is on offer is feelings. Even the most innovative marketers not going to help them; it is going to be det- and the younger farmers are terribly con- rimental. In 1991, the member for New Eng- cerned about what is happening. The logis- land was a member of a selection panel that tics involved in what this bill would bring chose me to go to America on a Rotary group in—and there is talk of multiple sellers in an study exchange. He did not know I was a international market—is just not possible National then—his ingrained hatred of the when you are talking about large volumes of National Party had not been honed to the fine wheat. point it has today! During that trip I spent The money in wheat is the knowledge of two weeks as the guest of an American grain where that wheat is and the specifications of company, Continental Grain. I started in that wheat. If you are Fred Nerk, grain trader Chicago and spent time on the floor of the from Gunnedah, and you are loading a ship Chicago Board of Trade. I went to Memphis of 50,000 tonnes out of Newcastle, you can- and spent a couple of days with grain buyers not just find 50,000 tonnes and get it to on the Mississippi, and then I finished up at Newcastle. Logistically that does not happen. their terminal in New Orleans. That terminal You have to source wheat from a large area exported 17 million tonnes of grain—one and you need trains to get it there. Exporting American company; 17 million tonnes. That wheat, by the logistic nature of it, is a job for is not that different from an average Austra- a large company. lian wheat crop. Certainly, that is what we The concern is that in New South Wales would hope to grow on the eastern side in a GrainCorp presently control most of the up- good year. country storage. They control the terminals, That system was not set up to help the and there is a fair indication that they are American farmers. They had barges and going to have an interest in the grain trains were relying on the Mississippi. They were that are running. At the moment Cargill owns taking 36,000 tonnes on one barge with a a percentage of GrainCorp and there is noth- crew of three, and the only time they had to ing to stop that increasing. My growers are start the motor was to slow down to go terribly concerned that we are going to hand around corners and negotiate bridges. They over the Australian wheat handling system could put that grain on a ship in New Orleans and, by default, the marketing system to an and send it to anywhere in the world. One of overseas company. In the last 12 months the the people with me was a grain buyer at the

CHAMBER 4398 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 time. He worked out that he could buy grain meet the world market. Then we will be at in Illinois, float it down the Mississippi, put the mercy of the international grain traders. it on a ship and send it to Sydney for about I strongly oppose this bill and hope that the same freight charge as you would pay the minister could at least reconsider his po- from Moree to Newcastle. So the idea that, if sition. you are a farmer and you have 10,000 tonnes Mr SECKER (Barker) (10.06 am)—I of wheat you are a world player, is just not have some things in common with the previ- right. ous speaker. I too went on a Rotary group You have to understand that the Australian study exchange to America, in 1986. Thank- wheat industry has some great advantages. fully, the member for New England was not The disadvantages are that we are on the op- on the panel, otherwise I might not have posite side of the world to most of our mar- been able to get that trip, but certainly I have kets, so we have enormous freight charges, similarities to the member for Parkes. I am a and we have a variable climate. Our advan- wheat grower myself, my father was a wheat tages are that we grow extremely high- grower, my grandfather was a wheat grower quality wheat and we have managed to open and my son is a wheat grower, so I think I up markets in the Middle East and other speak with some experience. places through very innovative work, mainly Whilst I grow wheat, I also grow barley. by the AWB, with the construction of flour Up until recently, we had a go-it-alone stake mills and port facilities. Australian farmers, with a monopoly on the sale of barley within by backing the AWB in previous times, have South Australia. But many of us who live managed to set up this world market. You near the Victorian border use section 92 of have to understand that not only was Austra- the Constitution to export our wheat via Vic- lia a single desk seller; a lot of our customers toria—often at better prices. Even in South are single desk buyers. They will only deal Australia we no longer have that arrange- with a single desk representative of Austra- ment with the Australian Barley Board be- lia. There has been no indication as to how cause they no longer have those monopoly that is going to be overcome by the new leg- powers. islation. It is interesting that, if you talk to other I am pleased that the minister has attended farmers—as I obviously have, because I rep- the House for this entire debate, but I am resent a very large rural seat—you will find disappointed that we have not been able to that there has been quite a change in view on come up with a more workable solution. this idea of a monopoly single desk with the There is a bit of good news this week in my Australian Wheat Board in recent years. If electorate—we have had up to 40 millilitres you had asked wheat farmers in my area 10 of rain and there are massive plantings going years ago, probably 90 per cent would have on now. My electorate covers areas like Wal- said that they wanted a single desk. I think gett, Coonamble, Moree, Croppa Creek, that now you would be lucky to find nine per North Star and Weemelah, which are massive cent of farmers that want a single desk. As wheat areas. If we pull off a large crop there previous members of this chamber have said, is great concern that, come December, we are there is almost a generational difference be- going to have large piles of wheat under can- tween farmers. The older farmers tend to vas at Walgett, Coonamble and places like want to hold on to what they have had all that with no organised marketing structure to their lives—the single desk and the AWB

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4399 whereas younger farmers tend to want—and black market in grain soon developed, and this is not black and white; it never is in the government marketing scheme was these sorts of things—to use the experiences abandoned. Thereafter, during the 1800s, they have had with other grains. As I said, I government involvement was directed am a barley grower. I have not used the pool mainly at granting land and providing rail- set-up in South Australia for probably 10 ways. The effect was to develop a wheat- years, and now it no longer exists in the form farming community which was undercapital- that it did. I also grow canola. I have never ised and dependent on government for its had a single desk for that. I grow lucerne. I land and transport services. The Common- have never had a single desk for that. I grow wealth government first became involved in many things—lucerne seed, beans, oats— wheat marketing when it compulsorily ac- without a single desk, and I do it quite suc- quired the crop during World War I as a tem- cessfully. Personally, I have never had a real porary wartime measure. During the 1920s, tie to a monopoly status for the Australian the wartime pools were replaced with some Wheat Board. voluntary and some compulsory state pools, Certainly, over the past few years this de- depending on the state, but growers consis- bate has been raging within the wheat indus- tently received higher returns from private try, and I will admit that I think there are traders, so the pools faded away. differences between states. Western Australia With the advent of the Second World War, is probably even more in favour of this legis- compulsory wheat pooling and acquisition lation than Queensland or New South Wales. by the government was introduced under I am willing to accept that. The previous two emergency wartime powers. Since World speakers were from New South Wales, and I War II, there have been at least eight wheat thought there would have been a bit more marketing plans. All plans have shared some support for the Australian Wheat Board mo- common features, such as granting the Aus- nopoly status that has been in existence for tralian Wheat Board sole receiving and mar- quite a while. But the debate has been some- keting powers for virtually all wheat grown times bitter and divisive and it certainly has in Australia, discriminatory pricing of wheat had widespread coverage in the rural press in sold domestically, pooling of sales revenue my electorate. Deregulation of the wheat and marketing costs, and assistance provi- market challenges the very foundations of sions which transfer some of the risk of ad- monopoly controlled marketing within Aus- verse price movements to the government. tralia but, at the same time, has focused at- Marketing arrangements for Australian tention on many of the inefficiencies in the wheat have changed substantially over the distribution system that has grown up around past decade or so. Domestic wheat marketing that monopoly. has been opened to competition and the Government involvement in the wheat in- AWB was re-established as a private corpo- dustry began in the first years of white set- ration, with explicit allocation of shares to tlement in the eastern states when grain pro- wheat producers-cum-owners. I do not dis- duction, storage and marketing was social- pute that these and other changes improved ised under a system of public farming. This the efficiency of marketing and related ac- subsequently failed, and the Governor of tivities with consequential benefits to wheat New South Wales then allowed private set- growers. Then we had the release of the Cole tlement agriculture to produce grain, with the report, which had clear implications for the Governor being the sole buyer. Of course, a operation of the single desk system for Aus-

CHAMBER 4400 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 tralian wheat exports. This in turn caused in the electorate of Barker, is an example of significant concerns for growers, both at the an industry that very successfully undertakes time and through to today. significant amounts of market development However, the relevant question today is and value-adding without recourse to mo- whether the remaining monopoly over wheat nopoly marketing. exports is helping or hindering Australia’s Australia is a modern, open-market, com- major export industry. In my own electorate petitive economy. As a matter of public pol- of Barker, a large wheat-growing area, a icy, monopolies are not desirable and need to number of producers continue to support the carry strong public interest arguments for single export desk for wheat. At the same their imposition or retention. It now makes time, a large and growing number are keen to sense to make that argument for export explore alternative marketing arrangements. wheat, particularly when all other grains and I listen to their reasons and, for some, their rural products are happily exported, with a opposition to change partly reflects an at- choice of exporters, in normal open-market tachment to accustomed ways of doing arrangements. If a single desk is not needed things. Some growers tell me that they are for all other agricultural and trade products, concerned that they will be compelled to the question must be asked: why is it in the perform unfamiliar marketing functions public interest for it to be retained for wheat? themselves or forced to deal with interna- I share the view of the South Australian tional commodity traders and processors. Farmers Federation that it just cannot be Some producers tell me of their fear of being business as usual, as if the Iraqi wheat scan- worse off due to reduced wheat prices or dal never happened. The pathway forward, as removal of the implicit cross-subsidisation provided by the Wheat Export Marketing that typically occurs under a single desk av- Bill 2008, will allow the wheat marketing eraging arrangement. But, as I say to many industry to recover and prosper in the future, of these farmers, they still have the option of with viable and competitive participants. using a pool. The Australian Wheat Board Mr BURKE (Watson—Minister for Agri- has announced quite clearly that they will culture, Fisheries and Forestry) (10.16 am)— still run a pool so that option is still available in reply—I commence by thanking all mem- to those growers. bers of parliament for their contributions to Other growers might fear a reduction in this debate on the Wheat Export Marketing asset value and profits if competition is al- Bill 2008. Anyone who has travelled and lowed, as well as loss of their control over heard the different views and the lack of con- marketing functions. But if you then ask sensus around the country from wheat grow- them whether they fear the same thing with ers would have to agree that the debate barley, canola, lupins, peas or any of the within this parliament has at least ensured other many agricultural products that they that everybody’s view has been represented grow, they have no similar fear. Given the and that everybody’s view has been repre- number of significant exporters and produc- sented somewhat passionately. I have been ers of wheat internationally and the erosion hoping for some time to be able to provide of buying monopolies, it seems unlikely that certainty for Australian wheat growers. I Australia possesses sufficient market power thank the Leader of the Opposition for the in world markets to justify continuation of comments he made last night which provided the export monopoly. The Australian wine an opportunity for wheat growers, whether industry, which is a very significant industry they are supporters of the change or not, to at

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4401 least now have some certainty as to the rules through containers, are already deregulated. which will apply to their current crop. I The same growers who grow wheat will very would have preferred if that certainty could regularly grow a variety of crops, as in the have been given to them three months ago example by the member for Barker. In those when the exposure drafts were first put out. other crops they are already deregulated. Indeed, that was the idea of putting the expo- These reforms allow, for the first time, grow- sure drafts out, so that we could have some ers who want to be involved in bulk exports, certainty, but at least we have it now. but would rather do so without operating The views of growers do differ around the through a pool system, to have the option of country. There has been some discussion doing so. already about views differing between young The bills before the House constitute a growers and old growers. It is also true that major economic reform. We are talking about opposition to these measures is strongest a $5 billion industry, roughly half of which is among those who sell to the domestic market involved directly in exports. To make sure and that support for these measures is that we had the policy development right, strongest among those who export. A lot has and carrying forward what was an election been said about the protection which is pro- commitment, there has been extensive con- vided by the averaging systems of a national sultation. The consultation began in visits to pool. I just remind the House that averaging growers on their own properties over sum- works both ways. Averaging not only serves mer. That consultation resulted in my con- for people to be brought up; it also involves a cern to make sure that we did not replace a process where those who had grown a high- national export monopoly with three regional value wheat end with a lower return. Some monopolies with respect to GrainCorp, CBH growers will want to continue to work col- and ABB. That was the reason for arriving at lectively. The legislation allows them to do the ACCC undertakings, which appeared so. Pools will still exist. We have extended, then in the exposure draft. Before the expo- as I mentioned in my second reading speech, sure draft went out, consultation was made the original requirement to have to operate with growers groups, with the state farming through a corporation to also now apply to organisations and with other affected parties. cooperatives. The exposure draft process then went for- A point has been made throughout the de- ward. bate about the fact that many of our overseas We also went forward with the independ- buyers are single desks. I had the opportunity ent expert group and with the Senate inquiry. earlier in the year to meet directly with the The opposition spokesperson from the Sen- single-desk buyers in Japan. I have to say the ate made a request that that Senate inquiry fears that they will refuse to deal with a sys- go for longer than what was originally an- tem of multiple traders certainly are not well ticipated and we allowed that to occur. Of the founded and do not reflect the discussions recommendations from the Senate inquiry: that my officials have been having around they asked for an objects clause and we the world. amended the legislation to do that; they The domestic market in wheat for some wanted an amended definition of an execu- time has been deregulated. Domestic exports, tive officer and we did that; they wanted to if they are done in bags, are already deregu- require WEA to follow due process before lated. Domestic exports, if they are done varying an accreditation and that change was made; they wanted to allow cooperatives to

CHAMBER 4402 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 be accredited and the legislation was AYES changed; they wanted a register of exporters Abbott, A.J. Adams, D.G.H. to be included on conditions on accreditation Albanese, A.N. Andrews, K.J. and that was done. They also wanted infor- Bailey, F.E. Baldwin, R.C. mation sessions to be provided for growers Bevis, A.R. Bidgood, J. and that is happening. Billson, B.F. Bird, S. Bishop, B.K. Bishop, J.I. In addition, there are responses to that Bowen, C. Bradbury, D.J. Senate inquiry from Liberal senators. They Broadbent, R. Burke, A.E. asked for WEA to be required to pay for au- Burke, A.S. Butler, M.C. dits it has ordered. That change was made. Byrne, A.M. Campbell, J. They asked for a review of arrangements to Champion, N. Cheeseman, D.L. Ciobo, S.M. Clare, J.D. be included in the legislation, and that is now Collins, J.M. Combet, G. included. Both the Senate majority report D’Ath, Y.M. Danby, M. and the Liberal senators’ comments also Debus, B. Downer, A.J.G. asked for us to go down a higher road of Dreyfus, M.A. Dutton, P.C. regulation. We did not do that. I now under- Elliot, J. Ellis, A.L. stand, from comments made by the Leader of Ellis, K. Emerson, C.A. Farmer, P.F. Ferguson, L.D.T. the Opposition last night, that Liberal Ferguson, M.J. Fitzgibbon, J.A. amendments, instead of asking for a higher Garrett, P. Gash, J. level of regulation, are going to be asking for Georganas, S. George, J. a lower level of regulation. We accept in Georgiou, P. Gibbons, S.W. good faith the need to work cooperatively as Gray, G. Grierson, S.J. we go forward to get the best economic out- Griffin, A.P. Haase, B.W. come on this and the best deal for growers. Hale, D.F. Hall, J.G. * Hawke, A. Hawker, D.P.M. We have an open mind on those proposed Hayes, C.P. * Hockey, J.B. amendments and will certainly look at them Hunt, G.A. Irons, S.J. when they come to us in a final form in the Irwin, J. Jackson, S.M. Senate debate. Jensen, D. Johnson, M.A. I thank all members for their participation Keenan, M. Kelly, M.J. Kerr, D.J.C. Laming, A. in this debate, particularly where they have Ley, S.P. Lindsay, P.J. gone from the policy detail—and I note in Livermore, K.F. Macfarlane, I.E. particular the member for Mallee—to the Macklin, J.L. Marino, N.B. real-life stories of many people who are in a Markus, L.E. Marles, R.D. situation following years of bitter drought. I May, M.A. McClelland, R.B. thank all members for their contribution and McKew, M. McMullan, R.F. commend the bills to the House. Melham, D. Mirabella, S. Morrison, S.J. Murphy, J. Question put: Neal, B.J. Nelson, B.J. That this bill be now read a second time. Neumann, S.K. Owens, J. Parke, M. Pearce, C.J. The House divided. [10.27 am] Perrett, G.D. Price, L.R.S. (The Deputy Speaker—Hon. BC Scott) Pyne, C. Raguse, B.B. Ramsey, R. Randall, D.J. Ayes………… 126 Rea, K.M. Ripoll, B.F. Noes………… 10 Rishworth, A.L. Robb, A. Majority……… 116 Robert, S.R. Roxon, N.L. Ruddock, P.M. Saffin, J.A.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4403

Schultz, A. Secker, P.D. Cheeseman, D.L. Ciobo, S.M. Shorten, W.R. Sidebottom, S. Clare, J.D. Collins, J.M. Simpkins, L. Slipper, P.N. Combet, G. Danby, M. Smith, A.D.H. Snowdon, W.E. Downer, A.J.G. Dreyfus, M.A. Somlyay, A.M. Southcott, A.J. Dutton, P.C. Elliot, J. Stone, S.N. Sullivan, J. Ellis, A.L. Ellis, K. Symon, M. Tanner, L. Emerson, C.A. Ferguson, L.D.T. Thomson, C. Thomson, K.J. Ferguson, M.J. Fitzgibbon, J.A. Trevor, C. Tuckey, C.W. Garrett, P. Georganas, S. Turnbull, M. Turnour, J.P. George, J. Georgiou, P. Vale, D.S. Washer, M.J. Gibbons, S.W. Gray, G. Wood, J. Zappia, A. Grierson, S.J. Griffin, A.P. NOES Haase, B.W. Hale, D.F. Hall, J.G. * Hawker, D.P.M. Cobb, J.K. Coulton, M. Hayes, C.P. * Hockey, J.B. Forrest, J.A. Hartsuyker, L. * Irons, S.J. Jackson, S.M. Hull, K.E. * Katter, R.C. Jensen, D. Johnson, M.A. Neville, P.C. Truss, W.E. Keenan, M. Kelly, M.J. Vaile, M.A.J. Windsor, A.H.C. Kerr, D.J.C. Laming, A. * denotes teller Livermore, K.F. Macfarlane, I.E. Question agreed to. Macklin, J.L. Marino, N.B. Markus, L.E. Marles, R.D. Bill read a second time. May, M.A. McClelland, R.B. Message from the Governor-General rec- McKew, M. McMullan, R.F. ommending appropriation announced. Melham, D. Mirabella, S. Morrison, S.J. Murphy, J. Third Reading Neal, B.J. Nelson, B.J. Mr BURKE (Watson—Minister for Agri- Owens, J. Parke, M. culture, Fisheries and Forestry) (10.44 am)— Pearce, C.J. Perrett, G.D. by leave—I move: Price, L.R.S. Pyne, C. Raguse, B.B. Ramsey, R. That this bill be now read a third time. Randall, D.J. Rea, K.M. Question put. Ripoll, B.F. Rishworth, A.L. Robb, A. Robert, S.R. The House divided. [10.45 am] Roxon, N.L. Saffin, J.A. (The Deputy Speaker—Hon. BC Scott) Schultz, A. Secker, P.D. Ayes………… 113 Shorten, W.R. Sidebottom, S. Simpkins, L. Slipper, P.N. Noes………… 10 Smith, A.D.H. Somlyay, A.M. Majority……… 103 Southcott, A.J. Stone, S.N. Sullivan, J. Symon, M. AYES Tanner, L. Thomson, C. Thomson, K.J. Trevor, C. Abbott, A.J. Adams, D.G.H. Tuckey, C.W. Turnbull, M. Albanese, A.N. Bailey, F.E. Turnour, J.P. Vaile, D.S.. Baldwin, R.C. Bevis, A.R. Washer, M.J. Wood, J. Bidgood, J. Billson, B.F. Zappia, A. Bird, S. Bishop, B.K. Bishop, J.I. Bowen, C. NOES Bradbury, D.J. Broadbent, R. Cobb, J.K. Coulton, M. Burke, A.E. Burke, A.S. Forrest, J.A. Hartsuyker, L. * Butler, M.C. Byrne, A.M. Hull, K.E. * Katter, R.C. Campbell, J. Champion, N.

CHAMBER 4404 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

Neville, P.C. Truss, W.E. This bill represents the final stage of the Vale, M.A.J. Windsor, A.H.C. implementation of this election commitment * denotes teller which was first announced in last year’s Question agreed to. budget reply by the now Prime Minister. Bill read a third time. Schedule 1 to this bill replaces the exist- WHEAT EXPORT MARKETING ing 30 per cent non-final withholding tax (REPEAL AND CONSEQUENTIAL regime applying to certain distributions from AMENDMENTS) BILL 2008 Australian managed investment trusts to foreign investors with a new withholding tax Second Reading regime. Debate resumed from 29 May, on motion The importance of this measure to Austra- by Mr Burke: lia’s future prosperity should not be underes- That this bill be now read a second time. timated. This measure is a key plank of the Question agreed to. government’s aim to make Australia a finan- Bill read a second time. cial services hub. It will ensure that Australia Message from the Governor-General rec- remains a world leader and at the cutting ommending appropriation announced. edge of funds management. Third Reading The financial services industry makes a large contribution to Australia’s wealth and Mr BURKE (Watson—Minister for Agri- has huge potential to contribute even more to culture, Fisheries and Forestry) (11.00 am)— the Australian economy. The finance and by leave—I move: insurance sectors currently contribute more That this bill be now read a third time. than seven per cent of GDP. This makes it Question agreed to. the third largest industry in the Australian Bill read a third time. economy. The sector employs around four per cent of Australia’s workforce, or around TAX LAWS AMENDMENT (ELECTION 400,000 people, and contributes about $30 COMMITMENTS No.1) BILL 2008 billion in tax revenue through corporate and First Reading personal income taxes. Bill and explanatory memorandum pre- Some people would be surprised to learn sented by Mr Bowen. that Australia in fact has the fourth largest Bill read a first time. onshore managed fund market in the world Second Reading with assets worth approximately $1.4 trillion under management, primarily due to the Mr BOWEN (Prospect—Minister for compulsory superannuation introduced by Competition Policy and Consumer Affairs, the Keating government. and Assistant Treasurer) (11.01 am)—I move: This puts Australia in a uniquely fortunate position to become a financial hub and ex- That this bill be now read a second time. port financial services to the world. I am very happy to introduce this bill today, a bill that delivers on a very important elec- Due to the huge size of funds under man- tion commitment to slash the withholding tax agement, Australia has developed a number rate that applies to non-resident investors. of natural advantages in funds management.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4405

Australia has built up a good reputation in • Australia’s GDP would be $1.9 billion funds management with a well respected and above ‘business as usual’ levels by 2010; experienced regulatory regime, a skilled • And there would be an extra 25,000 jobs workforce, and being strategically placed in in the economy, including 3,500 in the the Asian time zone. finance sector. However, despite all these advantages, in- However, the current high 30 per cent credibly less than three per cent of the fees withholding tax rate, which was imposed by derived by Australian managed funds are the former government, prevents Australian attributable to foreign investment. Added to managed funds from attracting foreign in- this is the fact that of the small amount of vestment. foreign funds under management here most of this is derived from investors in a narrow Reducing the withholding tax rate will range of countries, in particular the United substantially improve the competitiveness of States and the United Kingdom. Australian managed funds and help Australia realise its potential and boost financial ser- It is clear to this government and to the vices exports. industry that the financial services sector has an immense untapped potential for growth, This measure will give Australia one of particularly within the Asian region. the lowest withholding tax rates in the world which will significantly boost the attractive- The domestic market has grown by more ness of Australian managed funds, particu- than 460 per cent since 1992 and the pool of larly property trusts for foreign investors. funds is forecast to grow to $2.5 trillion by 2015, and the growth of funds under man- I do not pretend that Australia will be- agement in Asia is expected to grow signifi- come a London or New York, but we can cantly. build on our solid foundations in the industry and become an Asian financial services hub With Asian economies booming and the and compete effectively with the likes of growing middle classes in China and India Singapore, Hong Kong and Dubai. And we looking for investment opportunities Austra- can grow an Australian industry to ensure lian funds are well placed to manage their that our bright and skilled young people can money. have world class jobs in Australia and are not An Access Economics report last year forced to go overseas to gain valuable ex- demonstrates the export potential of Austra- perience. lian funds management. The report found The new withholding tax regime will ap- that, under a ‘business as usual’ forecast, the ply predominantly to distributions by Austra- financial services industry would, by 2010, lian funds of Australian source rental income export just over $1.5 billion out of total sales and capital gains but also to income not as- for the sector of just under $50 billion. sociated with land such as some foreign ex- But if the share of exports in the finance change gains or gains from traditional securi- sector increased gradually from its current ties. The current flow through treatment for level of three per cent to 10 per cent by foreign source income will continue. 2010: The rate of withholding tax will depend • Exports by the sector would be $3.3 bil- on the residency of the foreign investor. lion higher by 2010; Residents of countries with which Australia has an effective exchange of information

CHAMBER 4406 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 agreement on tax matters will be subject to a empt and this bill delivers on that commit- reduced final withholding tax rate of 7.5 per ment. cent, once the measure is fully implemented. The Prime Minister’s Literary Awards This rate goes beyond the government’s elec- provide an annual cash prize of $100,000 in tion commitment and ensures that Australia’s each of two literary award categories, for a funds management industry is well placed to published fiction book and a published non- attract and retain future foreign investment, fiction book. assisting it to reach its full potential in a Whether the award is assessable depends growth sector. on the recipient’s circumstances and, in par- In the first year, the rate of tax will be 22.5 ticular, the recipient’s assessable income. per cent, dropping to 15 per cent in the sec- To ensure that award winners receive the ond year. full benefit of this award, this measure will However, in that first year, residents of ef- ensure that the award is tax exempt. fective exchange of information countries Full details of the measures in this bill are will be eligible to claim deductions for ex- contained in the explanatory memorandum. penses relating to their distributions. This will assist in the transition to a flat and final I commend the bill to the House. withholding tax regime. Debate (on motion by Mr Pyne) ad- Residents of countries with which Austra- journed. lia does not have an effective exchange of INCOME TAX (MANAGED information agreement will be subject to a 30 INVESTMENT TRUST WITHHOLDING per cent final withholding tax. This enhances TAX) BILL 2008 the integrity of the measure and sends a clear First Reading signal of the government’s non-tolerance of Bill and explanatory memorandum pre- international tax evasion and avoidance. sented by Mr Bowen. Efforts to prevent international tax evasion Bill read a first time. are substantially enhanced by the ability of countries to exchange information relevant to Second Reading tax matters. Australia does not have this ca- Mr BOWEN (Prospect—Minister for pacity with many countries, with some ac- Competition Policy and Consumer Affairs, tively trading on their scope to offer indi- and Assistant Treasurer) (11.09 am)—I viduals and businesses anonymity. move: The list of countries with which Australia That this bill be now read a second time. has effective exchange of information will be This bill sets out the other rates of tax that prescribed by regulation. apply to residents of information exchange Schedule 2 to this bill will exempt from countries for the second and later income income tax the Prime Minister’s Literary years. Such foreign investors will be subject Awards, to the extent that the awards would to tax at the rate of 15 per cent for the second otherwise be assessable income. income year of the measure following royal The Minister for the Environment, Heri- assent and 7.5 per cent for later income tage and the Arts announced on 28 February years. this year that these awards would be tax ex- This is a final rate of tax, with no provision to claim deductions for expenses.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4407

This bill also imposes a 30 per cent final Debate (on motion by Mr Pyne) ad- withholding tax on residents of countries journed. with which Australia does not have effective PASSENGER MOVEMENT CHARGE exchange of information, with application AMENDMENT BILL 2008 from the first income year of the new regime. Second Reading Full details of this bill are contained in the Debate resumed from 28 May, on motion explanatory memorandum already presented. by Mr Debus: I commend the bill to the House. That this bill be now read a second time. Debate (on motion by Mr Pyne) ad- Mr PYNE (Sturt) (11.12 am)—I am journed. pleased to be speaking today on the Passen- INCOME TAX (MANAGED ger Movement Charge Amendment Bill INVESTMENT TRUST 2008, a bill that will implement some of the TRANSITIONAL) BILL 2008 announcements made in the budget a couple First Reading of weeks ago. I foreshadow that I will be Bill and explanatory memorandum pre- moving a second reading amendment at the sented by Mr Bowen. end of my brief remarks. A departure tax was first introduced for persons departing Austra- Bill read a first time. lia for another country by the Departure Tax Second Reading Act 1978. The rate was initially set at $10 Mr BOWEN (Prospect—Minister for and remained at that level until 1981, when it Competition Policy and Consumer Affairs, was increased to $20. The rate was reduced and Assistant Treasurer) (11.11 am)—I in 1988 from $20 to $10 and subsequently move: the rate was increased from $10 to $20 in That this bill be now read a second time. 1991 and from $20 to $25 in 1994. The De- parture Tax Amendment Act 1994 changed This bill sets out the transitional rate of tax the name of the Departure Tax Act 1978 to that applies to residents of countries with the Passenger Movement Charge Act 1978 which Australia has effective exchange of and increased the rate of charge from $25 to information on tax matters for the first in- $27. The PMC was introduced in July 1995, come year of the new withholding tax re- replacing the departure tax. The PMC is lev- gime. Such foreign investors will be subject ied under the Passenger Movement Charge to tax at 22.5 per cent on their distributions Act 1978 and collected under the Passenger from Australian managed funds but will be Movement Charge Collection Act 1978. The eligible to claim deductions for expenses PMC was introduced as a cost recovery associated with their investment. measure to recoup the notional cost of cus- This is an important step in assisting in- toms, immigration and quarantine processing vestors to transition from the current non- of passengers entering and leaving Australia final withholding tax regime to the new final and the cost of issuing short-term visitor vi- withholding tax regime. sas. However, in law, the PMC is a tax. Full details of this bill are contained in the The Australian Customs Service adminis- explanatory memorandum already presented. ters the PMC legislation through arrange- I commend the bill to the House. ments with each transport carrier, and the arrangements are standardised for each type of carrier. The PMC was increased to $30 per

CHAMBER 4408 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 passenger on 1 January 1999. However, in on or after that date. The government will be the 2001-02 budget the then government an- seeking to have the bill passed through the nounced that it would increase the charge by Senate as quickly as possible to enable the $8 to $38 to offset the increased cost of in- change to take effect. specting passengers, mail and cargo at Aus- The increase in the passenger movement tralia’s international airports. Generally charge announced in the 2008-09 budget is speaking the PMC is payable by all passen- designed to raise $459.3 million over four gers departing Australia by air and sea. Sec- years, $106.3 million in 2008-09 alone. tion 5 of the collection act contains a number Budget papers state that the increase will of exemptions, such as those for diplomats contribute to offsetting the cost of a range of and children under 12 years. There are 12 aviation security initiatives which until now categories of exemption in total, and the have not been cost recovered. The passenger PMC is not levied on incoming passengers. movement charge also recovers the costs of While initially a cost recovery measure, processing international passengers at inter- the PMC became more controversial over national airports and maritime ports and the allegations that it has become yet another cost of issuing short-term visas overseas. general revenue-raising measure. That the The opposition has attacked the govern- PMC had moved beyond cost recovery and ment over this increase on two grounds: na- was contributing to consolidated revenue tional security, as this tax grab is accompa- was clear from the evidence given to the nied by a cut to Customs funding; and tour- Senate Legal and Constitutional Affairs Leg- ism, as this tax grab will increase the cost of islation Committee on 28 May 2001 by an tickets. While the measure is claimed to be official of the Australian Customs Service. offsetting the cost of aviation security initia- Mr Woodward said: tives, the new revenue that will flow accom- In round terms, our assessment of the over- panies cuts in real terms to Customs and recovery—and this is revealed in answers to other border security measures. This is really questions that have been asked before, on no- a revenue-raising exercise cynically dressed tice—is something like an $80 million collection up as a border security measure. greater than the actual costs of customs, immigration and quarantine, but the passenger movement This tourism tax increase accompanies charge is a tax. It is not a pure cost recovery ar- other tourism and passenger related tax in- rangement, and that indication of moving away creases in this budget amounting to nearly $1 from direct relativity came out when the $3 in- billion, while funding has been cut to Tour- crease was made at just about Olympics time. So ism Australia by nearly $6 million. This leg- that is clearly on the public record. islation will impact on the travelling public It is not now clear whether the PMC is over- as it will increase the cost of airline tickets recovering costs. The PMC has not been in- by $9. Consequently, there will be flow-on creased since 2001. So its real—that is, infla- effects to airlines and tourism operators as tion adjusted—value has fallen and costs holiday making in Australia becomes more would have risen over the same period. This expensive for overseas tourists. The shadow bill is required to put into place the govern- minister for tourism has maintained consulta- ment’s budget measure increasing the pas- tion with stakeholders throughout the budget senger movement charge from $38 to $47. process and has strong views on the subject. The measure is due to take effect on 1 July Australian working families looking to 2008 and applies only to tickets purchased take a break and have a holiday are unfortu-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4409 nately going to be slugged as of 1 July 2008 million in real terms next year, while at by this new tax, courtesy of the Rudd gov- the same time announcing a measure ernment’s first budget. The 2008-09 budget that will raise $459.3 million over four has revealed an increase in the charge from years, allegedly to offset ‘the cost of a $38 to $47, a 24 per cent increase, which will range of aviation security initiatives’; force up the price of airline tickets for Aus- (c) that this tourism tax increase accompa- tralian holidaymakers and particularly Aus- nies other tourism and passenger related tax increases in this Budget amounting tralian families. It is another inflationary tax to nearly $1 billion, while at the same hike to add to the growing pile, with taxes on time funding has also been cut to Tour- premixed drinks and luxury cars announced ism Australia by nearly $6 million; and pre budget. (2) calls for the Government to refer to the Joint The government has been especially Standing Committee of Public Accounts and tricky with respect to this measure. They Audit for examination the application of have claimed in their promotional material revenue derived from the Passenger Move- that this tax, which will raise almost $460 ment Charge, in particular the increases in million over the next four years, is necessary revenue provided for in the Budget, and ex- to offset the cost of a range of aviation secu- amine the potential to establish a new noise abatement fund from these revenues to pro- rity initiatives and the cost of processing in- vide relief for residents living within the 25- ternational passengers at international air- 30 ANEI contours, to mitigate the ongoing ports. If this were true, we would see that burden of aircraft noise for people and fami- money being put back into Customs. The fact lies living in these areas”. is that Customs has seen its budget slashed The DEPUTY SPEAKER (Hon. Peter this year by $51½ billion in real terms. It Slipper)—Is the amendment seconded? really is a raw deal for Customs. Next year Mr Forrest—I second the amendment alone, they will collect $106 million from and reserve my right to speak. this tax on the public, only to see it funnelled back into Treasury’s general revenue, as Cus- Mr BUTLER (Port Adelaide) (11.21 toms have to continue protecting Australia’s am)—I rise to support the Passenger Move- borders with reduced funds. The opposition ment Charge Amendment Bill 2008 and to calls on the Rudd government to admit that say a couple of things about it as a fiscal this revenue will not be used to protect Aus- measure and also about the state of the tour- tralian travellers and that this is just another ism industry and some of the more shrill ALP tax hike. I move: comments made by the member for Sturt. I That all words after “That” be omitted with a have also heard the member for Moncrieff view to substituting the following words: talk about tourism taxes. As always, the his- torical lesson from the member for Sturt, whilst not declining to give the bill a second reading, the House: given with the eye to detail of a University of Maryland professor, was very helpful but it (1) notes: seriously understated, first of all, the lack of (a) that the increase to the Passenger broad perspective from the previous gov- Movement Charge is an unfair slug on ernment around tourism generally, as well as Australian working families; their increases in the passenger movement (b) that the Government has shown itself to charge over the course of their government, be both tricky and cavalier in its attitude to Australia’s border security by cutting leading up to the very significant changes to Australia’s Customs Budget by $51.5

CHAMBER 4410 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 aviation security that flowed from the Sep- note that there will be put in place measures tember 11 disaster. to ensure that this is not retrospective. That is It is important that someone on this side of to say that any tickets sold before 1 July the House, other than the minister, of course, 2008, even if they are for flights that take gets up and supports this as a responsible place after 1 July 2008, will be exempt from fiscal measure, as one that would go some the increase in the PMC. It is also important way—and only some way—to recovering to note that this measure, in addition to being many of the costs that flowed from Septem- a measure that really only reflects the CPI ber 11 and that are now imposed on the gov- changes since 2001, is also a percentage in- ernment, and says something about the crease that pales in comparison to the per- broader tourism policy of this government. centage increases made by the last govern- The purpose of the bill is to amend the act to ment, which the member for Sturt was honest increase the PMC by $9 to $47 with effect enough to point out to the House. Those in- from 1 July 2008. That is an increase in the creases were in the order of 37 per cent, all order of 23 per cent, and I will say a couple prior to the significant addition to the secu- of things about that later. It will go some way rity burden that flowed from September 11. to funding national aviation security initia- Those changes in aviation security, par- tives, which are the responsibility of the Aus- ticularly in relation to international flights tralian government. The year 2001 was the since September 11, are well known, but last time that the PMC was increased and they are worth addressing briefly here. Avia- also the time at which aviation security tion, as we unfortunately know, is and has measures started to become significantly been for some time a particularly attractive tightened in the wake of September 11. It is target for terrorists. This was the case before important to note that, since 2001, the Aus- September 11, with disasters such as Lock- tralian government has spent about $1.2 bil- erbie and more, but was particularly brought lion implementing a significant number of home with the tragedy and disaster of Sep- national aviation security measures. Up until tember 11 and, since then, with a number of the 2011-12 financial year, that sum is ex- foiled attempts by terrorists to inflict further pected to be in the order of $2.2 billion. This damage to aviation. Those changes affect all increase over the next four years amounts to aviation, including domestic and, increas- somewhere in the order of $459 million. ingly, regional aviation security, but they are Broadly speaking, this increase is in line particularly important in the area of interna- with changes in the consumer price index, tional aviation. Specific security require- the CPI, since 2001, which was the last time ments for international flights can be set by it was increased. The CPI to the March quar- any country to which an aircraft is flying. We ter of 2008 moved by about 21.2 per cent. know particularly that the United States has This increase, which takes effect on 1 July tightened their security measures—that is, 2008, is in the order of 23 per cent. Ac- the security measures that apply to flights at knowledging that the CPI is likely to have the point of departure that end up at the moved by maybe one per cent by then, the United States. increase proposed by the government is sim- The International Civil Aviation Organisa- ply no more than a matter of indexation. Ex- tion may also impose new security measures isting exemptions from the PMC will remain that bind Australia. A good example of those in place, such as those for passengers aged is measures relating to liquids that were put under 12 years of age. It is also important to in place by that organisation in 2006 and that

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4411 came into effect in Australia in March 2007. with our international obligations at the very The increases in passenger screening re- least. quirements are probably the best known and I would like to briefly address the remarks most in-your-face, if you like, change to the made by the member for Sturt and outside security regime, but there have also been this place by the member for Moncrieff very significant changes to checked baggage about the impact this might have on tourism. screening since 2001. Since 2004, the This government does not raise taxes lightly, screening of 100 per cent of checked bag- particularly on an industry like tourism, gage has been a requirement of all interna- which finds itself in a very challenging envi- tional flights leaving Australia. This increase ronment, especially at an international level. goes some way towards the cost recovery for The competition facing Australian tourism that. More recently, as I indicated, new now is fierce, particularly with the prolifera- measures have been in place since March tion of low-cost airlines and a range of other 2007 for all carry-on baggage on interna- commercial arrangements that make places tional flights. They flowed from a terrorism like Macau, China, Hong Kong and Vietnam attempt to bring down planes crossing the very attractive destinations for tourists in our Atlantic by use of improvised bombs made region. Long-haul destinations like Australia from liquids taken on board. From now on, are hit hard by increases in fuel prices. Aus- each container of liquids, aerosols or gels in tralia is also particularly susceptible to peo- your carry-on baggage on an international ple’s justifiable concerns over the impact on flight must be 100 millilitres or 100 grams, climate change of taking long-haul plane as the case may be, or less. All of the con- flights. Finally, but certainly not least impor- tainers that carry those materials must be tantly, the strong Australian dollar is placing sealed in a transparent one-litre plastic bag. very serious pressure on the Australian tour- Those of us who have taken international ism industry. flights since that time know what sort of se- But those challenges are much bigger than curity burden that has placed on the airports, an increase in the PMC that does little more which has been partly funded by the gov- than keep the PMC in line with indexation. ernment. Less obvious, perhaps, to passen- That is why the minister for tourism has is- gers have been measures flowing from the sued the national tourism strategy review. Wheeler review in 2005 to strengthen our air This is the first time in many years that the cargo security arrangements. All of these Australian government as the leader in this things have happened since the PMC was area has called the industry to work with it last set at the rate of $38 per passenger and and state tourism organisations and state have added very significant additional costs ministers to find some real and long-term to the Australian government. strategies to deal with the challenges that I Members will be aware that aviation secu- outlined—to come up with a coherent and rity is part of the general aviation policy re- consistent marketing strategy rather than the view being overseen by the Minister for In- marketing plans that changed every year or frastructure, Transport, Regional Develop- two under the last government. Compare that ment and Local Government. Submissions to with the focused marketing plan that New the review close at the end of June, but we Zealand has had in place for probably nine can be reasonably sure that, flowing from years now. This government has a serious that review, measures will not be relaxed. plan to deal with skill shortages. When we Measures will remain in place in accordance talk to tourism operators about challenges

CHAMBER 4412 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 facing tourism, there is none more significant tax. The passenger movement charge cannot than the lack of skilled workers to provide be considered in isolation but is part of the services to tourists coming to our country. framework. It is part of a high-tax structure Lastly, there is product development. that is being built by the Rudd government This is a government that is serious about regardless of its commitment to people in the future of tourism. This is a government Australia who are affected by the high cost that is serious about a fiscally responsible of living. budget that looks at changes to charges like What is actually on the Rudd govern- the PMC in line with indexation to only ment’s tax agenda? It is obvious that there partly recover the additional costs that have are to be more taxes. Indeed, the total in- been placed on the government because of crease in the tax grab in the recent budget is additional aviation security requirements $2.9 billion per year, or $14.7 billion from flowing from September 11. I commend the the pockets of Australians from 2007-08 to bill to the House. 2011-12. What are these new taxes? There Mr TRUSS (Wide Bay—Leader of the are several, such as the passenger movement Nationals) (11.33 am)—The Passenger charge that we are discussing today. There is Movement Charge Amendment Bill 2008 is also an increase in the tax on premixed another in the long line of tax rises forced drinks—this so called alcopop tax that is upon the Australian people by the high- expected to raise $3.1 billion from the pock- taxing Rudd government. Whilst the budget ets of mainly young Australians over the next detailed tax cuts on some occasions, the real- four years. We have been talking in this de- ity is it will collect more revenue from Aus- bate about the impact on the tourism indus- tralian taxpayers than any other budget in our try. In fact, this tax increase on alcopops will history. The budget is indeed a directionless also have an effect on visitors coming to mess, with some things going up and other Australia and the costs they incur. In defence things going down. What we are actually of the tax, the government has been running seeing, though, as a result of the new taxes an argument that it is about dealing with the that are being implemented, or the tax rises problem of teenage binge drinking, but we that are associated with this budget, is a all know now that that is nonsense. The gov- strategy that seems to be working against ernment’s own forward estimates for this tax what the government has been saying in its demonstrated that it is not expected to reduce rhetoric about reducing the pressure on teenage binge drinking at all. It is actually working families. In fact, the policies that the expected to increase government revenue, government has been rolling out are having and that is what the tax is about. the opposite effect. That is right: the Rudd Indeed, such an argument that it is a so- government is about applying upward pres- cially responsible tax is counterintuitive—it sure on prices. It is doing so by slugging is not socially responsible; it will simply en- hardworking Australians with yet more taxes courage drinkers to purchase spirits instead, and charges. and the early reports have demonstrated that Let me be clear about this—and I place that is precisely what is happening. There- this in the context of the passenger move- fore it is quite possible that this tax will in ment charge and its overall place in the fact make teenage drinking worse. My point budget. This new tax is part of the general is that this is a tax that has been presented approach of the Rudd government towards falsely to the Australian people.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4413

What about other taxes? The passenger In spite of what this tax means, the Rudd movement charge is an attack by the Rudd government persists with it, introducing on government on Australia’s tourist industry, the sly the required regulation under the Fuel but that is not the only extra tax on move- Tax Act 2006. The government tabled this ments that must be borne by the Australian regulation in this place on 13 March this year people. That tax will apply to businesses and to implement the tax from 1 January 2009. to a whole range of other Australian people Fortunately for all Australians who purchase but, where that tax is applied to a single sec- items from shops that carry goods carried by tor, there is another tax that applies all over trucks, which is just about all of them, the the place. That tax is the road user charge. opposition blocked this nasty inflationary tax This pernicious tax is about increasing the in the other place on 14 May. But the Prime cost of diesel fuel for trucks and buses by Minister has said in question time that he increasing the effective diesel fuel excise remains determined to persist with this tax from 19.63c per litre to 21c per litre based on that makes the task of average Australians to the concept of a road user charge. Now it is meet the costs of living that much harder. going to be indexed on an annual road cost As I mentioned, the passenger movement adjustment formula. In other words, the in- charge is a sector-specific tax, but the Rudd dexation of fuel excise is back. government is pursuing a tax agenda that The indexation of fuel excise, people may applies everywhere. The road user charge recall, was introduced by the Keating gov- will increase the price of virtually every item ernment and abolished by the Howard gov- in the shops. What is particularly extraordi- ernment in 2001. After a seven-year absence, nary is that the government is imposing this it is back and it is pegged to a formula that tax at a time when all Australians are strug- will lock in a tax take that will rise faster gling with higher petrol prices. We have al- than the consumer price index. Who will pay ready seen that the government’s ineffective this tax? The answer, of course, is everyone. response to the problem of rising petrol Trucks, members may recall, carry over 75 prices is basically built around Fuelwatch. per cent of Australia’s domestic freight. That The Fuelwatch scheme imposes price fixing means that those who drive the nation’s and further regulation on small business— 365,000 trucks, many of whom are strug- again, giving lie to the government’s claim gling small business operators, will pay. So that it is going to put a special effort into much for defending working families. tearing down the red tape affecting small But Australia will also pay as a nation. As business. In reality, they are increasing it. I said earlier, the passenger movement The scheme, which will remove spot dis- charge applies mainly to one sector of the counting, could actually increase the price of Australian economy, but it will have flow-on fuel for many Australian motorists. This is a implications. The road user charge applies double whammy on fuel prices in this coun- everywhere since the increased cost it causes try: increases in diesel fuel prices and in- will be passed on to consumers and raise creases in petrol prices. prices for everyone—from cornflakes to This is already having a significant impact building materials, from medicines to school on the tourism industry. It is more difficult shoes; the everyday items that families need. and costly for people to travel. They are con- This tax is therefore about increasing infla- cerned about the cost of fuel. In areas such as tion. It is about making the cost of living for my own, where a large proportion of the all Australians so much higher. tourists come by road, there is already an

CHAMBER 4414 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 impact being felt in the marketplace. It is more money to be able to promote Australia gross hypocrisy on the part of the Rudd gov- in more difficult economic circumstances. ernment to be talking about encouraging in- As we heard from the previous speaker, dustry while on the other hand increasing the government’s only response to the addi- taxes. That is what the passenger movement tional cost burden that they are putting on the charge is all about. This tax is part of an industry is another review. It is a review into overall attack by the Rudd government on tourism strategies this time. This is a classic the business sector, on business travel and on excuse from a government that do not have a the Australian economy, particularly through clue what to do about almost every policy the tourist industry. issue. Now 100, maybe 200, reviews have This crucial industry generates approxi- been commissioned to give them some ideas. mately $24 billion in export income for the We had 1,000 experts in town to try and give national economy and provides employment us ideas. We have had endless committees of for nearly half a million Australians. It is a inquiry and review. One would have thought service sector industry that is currently after 11½ years in opposition that, when the struggling, with flatlining visitor numbers as Labor Party came to government, they would a result of the high Australian dollar and sky- have an agenda ready to go and would know rocketing fuel prices. It has become less what their plan was for industries like tour- competitive. Australia is a remote location ism. But in reality they clearly did not have a for international tourists. They have to travel clue. They are now out there starting to de- a long way. For that reason, the cost of fuel velop policies, but it is far too late in the has a bigger impact on flights to countries process and, in the interim, the industry is like Australia than it does on flights in being hit with a whole range of additional Europe where most of the travel is over short taxes. distances. It also has an effect within the I wonder why the Rudd government has country, because the cost of getting around acted this way. Doesn’t it realise that the Australia as a large nation is high. That is tourism sector is characterised by a large making Australia a much less attractive mar- number of small businesses and is a key pro- ket for international tourists. vider of jobs, especially in regional Austra- This is just the wrong time to increase the lia? In my electorate of Wide Bay, for exam- passenger movement charge, to put a new tax ple, there are around 3,000 people employed on people coming to Australia and travelling in tourism. But small businesses in regional in and out of our country. At a time when the Australian are constituencies that the Rudd tourist industry is facing particular difficul- government does not care about. ties, this is just the wrong time to be putting The passenger movement charge is only up a tax on all of those people who come to one tax on the tourist industry that will make Australia. The latest budget initiative will life difficult. Others, like the luxury car tax, belt the tourism industry with a suite of new will also have an impact on tourism. Many of taxes. The passenger movement charge is the vehicles that are used extensively in the only one of them. It is estimated that the im- industry will be subject to the luxury car tax. pact of the budget tax measures on the tour- For instance, Toyota LandCruisers are work- ism industry alone will be $1 billion. At the horses of the tourism industry in regional same time, the government is cutting indus- Australia. Some of these vehicles have eight try support. It is cutting $6 million out of the seats and are not exempt from the luxury car tourism corporation at a time when it needs

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4415 tax. This component of the tourism indus- is no evidence or information provided as to try—small group tourism—which deals with the appropriateness of this charge, if it is in customers who demand high-quality vehi- fact intended to meet just the costs associated cles, is the one area of regional tourism that with security and processing of visitors arriv- is growing right now. These operators must ing in this country. What assurances can the operate vehicles that are roomy, modern and high-taxing Rudd government offer this fitted with current safety features. These ve- place that the passenger movement charge hicles need to be replaced regularly. There will not overcollect and become a general are also many hire car operators that run ve- revenue-raising measure? hicles at this end of the market. The luxury I also note the somewhat anarchic way in car tax is another one of the suite of new which the passenger movement charge is taxes that has been introduced by this gov- being introduced. In its haste to belt more ernment that is going to significantly affect people with more taxes, Labor blundered by tourism. imposing the charge on budget night on all The passenger movement charge, as tickets presold to passengers intending to members may recall, was lifted in the high- travel after 1 July this year. These tickets taxing budget from $38 to $47 on everyone were sold by the airlines in good faith at a entering or leaving Australia. It will apply price that included the old $38 tax. Initially, from 1 July this year and is a tax slug that the high-taxing government failed to provide will raise nearly half a billion dollars over an exemption for these tickets, resulting in a the next four years. The tax was poorly ex- messy situation where airlines would have to plained in the budget as a measure to offset foot the extra cost. In this day and age, peo- the cost of aviation security measures that ple buy their tickets much further in advance the government claims have not been cost than was possible in decades past and, with recovered to date. It is also meant to recover the advent of low fares, there is an increasing the cost of processing international passen- wish of people to buy their tickets early to gers at international airports and maritime take advantage of those low prices. And yet, ports as well as the cost of issuing short-term in a blunder on budget night, these people visas overseas. were going to have to pay an extra tax if they What is curious is the total failure of this were travelling after 1 July. I suspect they high-taxing government to provide any detail would have been unwilling to do so and of the costs of the measures the passenger there would have been a stand-off between movement charge is supposed to cover. This the airlines and others as to who was respon- is all the more concerning since the passen- sible for this unexpected increase in the tax. ger movement charge, according to the tes- Obviously, Labor failed to consult with the timony of the then Department of Finance industry and stakeholders and demonstrated and Administration to the Senate Legal and its administrative incompetence. Constitutional Committee on 28 May 2001, As a result of coalition and industry pres- is a tax and not purely a cost-recovery ar- sure, the government has back-flipped and rangement. Those views were reaffirmed in tickets sold prior to 1 July 2008 for use after Senate estimates hearings again this year. this time will be exempt from paying the This is not a charge to recover costs at all; it extra tax. That is as it ought to be, that is is a tax. The money is not hypothecated to be how previous increases in this tax were ap- used for any list of specific purposes; it is a plied and it is incredible that the current gov- tax. It goes into consolidated revenue. There ernment did not even bother to look at past

CHAMBER 4416 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 experience before announcing this measure. actions, it is doing precisely the opposite. The new tax will of course remain for all This tax increase will have a significant ef- tickets sold after 1 July this year and the fect on Australia’s tourist industry and the Australian tourism industry, already strug- business sector, which needs to travel. It gling with rocketing fuel prices and a strong must be seen for what it is: simply another dollar, will continue to wear the pain being tax rise. imposed by a government that seems to be Mr MORRISON (Cook) (11.52 am)—I making up the rules as it goes along. am pleased to rise today in support of the What does the passenger movement amendment that has been proposed to the charge display? It displays a Rudd govern- Passenger Movement Charge Amendment ment that does not consult with stakeholders Bill 2008—in particular, the matters relating and is administratively inept. It displays the to the issues that impact on my constituents view of the Rudd government that the tour- in Cook. In Cook, we share more than half of ism industry is just a cash cow. It is all about the flights that go from Sydney airport. In glamour and not about working families. It Cook, we also have the highest proportion of suggests that the Rudd government does not Qantas employees living in the electorate particularly care about the knock-on impacts than in any other electorate in the country. of this tax along with others, such as the lux- On both of those counts, I am pleased to rise ury car tax, on small business in regional in support of this amendment and to speak Australia. More particularly, it displays the on the matters that are raised. A third point is hypocrisy of the government. We see a gov- that a significant portion of my time before ernment ripping over $3 billion from young entering this place was spent in the tourism Australians with a tax on premixed drinks industry, and I also rise to speak on their be- that instead of reducing teen binge drinking half today in terms of these measures. will probably make it worse. We see a gov- The passenger movement charge, as pre- ernment ignoring the advice of its own Pub- vious speakers have said, is not a charge; it is lic Service and foisting upon Australia an ill- a tax. It is a tax, as has been said not only by considered scheme to watch petrol prices—a those who have spoken in this place but also scheme that will abolish spot discounting, by the ANAO and on the basis of legal ad- impose further burdens on small business vice that has been presented to various hear- and possibly increase petrol prices as a re- ings over time. This is a tax; it is not a sult. charge. The passenger movement charge in- We have a government that is already so crease of $9 announced by the government is out of touch that, at a time when Australians a tax grab of almost $460 million over four are struggling with high petrol prices, it de- years. cides to push up the price of diesel as well, Previously in this debate, the member for resulting in higher costs for everyday items Port Adelaide said: needed by all Australians. We see a govern- This government does not raise taxes lightly … ment intent on grabbing more money off tourists and travelling Australians with its I can only agree. They do it very heavily. hasty taxes on the tourist sector—taxes that They have done it very heavily on every op- will make the lives of many Australians de- portunity they have had in this place, in the pendent upon the tourist dollar that much six months they have been in government, to harder. So much for this government promis- raise taxes—$19 billion in a tax grab as part ing to reduce the cost of living. By its own of this budget to fund $30 billion of new ex-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4417 penditure, making it the highest-spending said, has been slashed by $51.5 million in and highest-taxing budget in our nation’s real terms, yet we are raising taxes for these history. But of greatest concern is the statis- measures by an amount in the vicinity of tic in the budget which says that it will put $459.3 million over four years. The previous 134,000 Australians out of work. government, as has been said, also increased Tax increases contribute to inflationary the passenger movement charge, by $8 in pressures. You do not keep prices down by 2001-02. But this is why we did it: to putting taxes up. But in this budget we have strengthen quarantine protection at Austra- $19 billion worth of new revenue measures. lia’s airports and to protect the country from In this particular measure, we are increasing foot-and-mouth disease and other risks, with the price of travel by $9, as announced in all cargo and mail entering Australia to be this measure. There was no mention by the inspected. There is the purpose. If you go to government when in opposition, when they the budget papers of that year, you will find paraded around this country, of new taxes. what the revenue measure was and also what There was no discussion about the new taxes the expenditure measure was. And what was they would be bringing down. There was a the expenditure? It was $592.8 million over lot of discussion about how they were going five years. The measure, as introduced in that to keep fuel prices down; there was a lot of budget, was to raise $72 million per year. So discussion about how they were going to the measure was introduced for a purpose; it keep grocery prices down. Those opposite was not produced for the purpose of a tax may think that this may never have been grab, as is the case on this occasion. spoken in words, but there is no doubt in the This tax is a pernicious impost on our community’s mind about what it was led to aviation and tourism sectors, which are al- believe by the government when they were ready under pressure. Tax increases are de- in opposition. They led people to believe that signed to discourage consumption, so plac- this would happen and, as the polls this week ing a tax on travel is, I therefore assume, clearly showed, people believed them. Peo- designed to discourage business activity in ple believed that they were going to do these the travel sector. As I mentioned, Qantas are things. But, equally, people did not believe a significant employer in my electorate. and did not know that the government were There are significant shareholdings in Qantas going to bring in new taxes, because the across the Australian community, and they government never said they would. But, at are our national carrier, whom we cannot do the first opportunity they have not to raise without. Having worked closely in the indus- taxes, what do they do? They raise taxes. try, I know what can happen if your national In this measure in particular, there is no carrier is not able to support the initiatives of nexus, as previous speakers have said, be- your country as you are seeking to promote tween the charge and the expenditure. There your country as a tourism destination. The is no nexus at all. The government claim that New Zealand government found this out the it is necessary to offset the cost of: hard way with the collapse of Air New Zea- land, and they had to buy it back. We need to … a range of aviation security initiatives … support our national carrier in the form of But the question I have is: what are they? I Qantas, and we need to be doing things that have searched for them. I cannot find what assist them in their efforts, not things that these measures are. How much do they cost? detract from their efforts. The Customs budget, as the member for Sturt

CHAMBER 4418 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

Geoff Dixon has recently said that the is- Despite oil prices falling in recent days to below sues faced by Qantas are ‘real and substan- $US127 a barrel, there remain concerns that the tial’. Qantas are already reeling from fuel continued surge in demand for oil in Asia, com- prices increases—which have been signifi- bined with any unforeseen disruptions in supply, cant since their fuel surcharges were intro- could propel the price towards $US200 a barrel by the end of the year. duced a number of years ago—and also, most recently, from union action from the The Daily Telegraph of 30 May said: TWU. The Prime Minister’s front-line troops QANTAS will have to lift airfares by another in the war against inflation and wage pres- 5.5 per cent and cut more flights to offset the im- sures, the TWU, are out there asking for a pact of current fuel prices, analysts said. five per cent wage increase from Qantas as … … … we speak. To highlight what this means for ‘Obviously there will be job losses,’ chief execu- Qantas as they work through the challenges tive Geoff Dixon said. ‘We do not have a specific that they face, I will read to you a recent an- target, however it will be in the low hundreds.’ nouncement. Tomorrow, I understand, we This is the impact on Qantas, our national will learn what Qantas will be doing in terms carrier. It will have an impact on their busi- of their international services as a result of ness; it has an impact on how they operate fuel price increases and, I am sure, these new their business and, sadly, it is going to have additional costs that they are forced to pass an impact on some people who are currently on to consumers. The Australian Financial working for Qantas. Review of 29 May says: As we move through this period of great The airline will cancel about 5 per cent of seats in difficulty, we should be assisting these indus- its fleet by retiring one Boeing 737, grounding tries to cope with these challenges, not im- two 767s and accelerating the retirement by the posing further taxes. In relation to the current end of the year of four 747s that serve Perth. Fast- union dispute, Mr Dixon described the un- growing discount business Jetstar will ground one ion’s campaign—which has included claims Airbus A320 aircraft and cancel the delivery of one A321 plane ... Qantas will cease flying Gold that Qantas was using illegal strike break- Coast to Sydney and Ayers Rock to Melbourne, as ers—as ‘1950s unionist stuff’. Geoff Dixon well as trimming back Ayers Rock to Sydney is well known as not necessarily being politi- services. Jetstar will ... exit the Sydney to Whit- cally persuaded towards the coalition side of sunday Coast, Adelaide to Sunshine Coast and politics. That he is a fairly fair-minded indi- Brisbane to Hobart routes from July while reduc- vidual in the political realm is well recog- ing frequencies on some Adelaide, Avalon and nised. But he said: Calms routes by August. I am pretty basically supportive of the unions ... Furthermore, the Sydney Morning Herald of but scab-labour strike-breakers? I feel like I am 31 May said that ‘JP Morgan’s research’ back in the 50s. highlighted the threats faced by Qantas, This is the environment we are now living in ‘warning that the airline could post a $1 bil- post November of last year. lion full-year loss if oil prices hit $US200 a To get back to the issue of the impact on barrel.’ Yet: tourism, and particularly in the Whitsundays: The airlines engineering union is still demanding Mr O’Reilly, who is from the Whitsundays, a 5 per cent annual pay rise, while the airline is said in an article in the Financial Review that offering only 3 per cent. the cuts by Qantas would be the final straw … … … for many businesses struggling to recover

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4419 from poor domestic tourism numbers result- tions on the creativity of advertising cam- ing from rising fuel prices and interest rates, paigns—it has gone from $19.6 billion a year floods, damaging storms and the separation up to $23.3 billion a year. That is an increase of Easter from the school holidays. This will of over $2 billion every year as a result of close businesses in the Whitsundays. On cur- that investment. rent average load factors, the 1,770 seats lost Of that $23.3 billion, $15.4 billion is spent will see 1,400 to 1,500 fewer people in the directly in Australia. In terms of GST alone, Whitsundays. These are the realities that the the tourism industry is already contributing tourism industry and the aviation industry $1.4 billion every year just from interna- are confronting right now. What has been the tional tourists to the Australian economy. Yet government’s response to this? The govern- the government thinks that it is a good idea ment’s response has been to increase taxes to go and slug them again. The tourism in- on the tourism and aviation industries. dustry, particularly small businesses, de- The current Minister for Tourism is an pends not just on international tourism. The honest man. I say that with all sincerity, hav- international tourism provides relief and ing worked with him when I was the manag- much needed yield. It provides the second ing director of Tourism Australia and he was part of their business. The core part of all the shadow minister for tourism. He is an businesses operating in tourism around this honest man, and on 21 March, back when the country is domestic tourism. The domestic previous government increased the passenger tourism scene has unfortunately been very movement charge from $30 to $38, this is flat indeed. The tourism industry is under what the now Minister for Tourism, then strain domestically, with fuel prices in par- shadow minister for transport and always ticular putting pressure on small business. member for Batman, said: ‘The government Fewer people are getting in their cars and should use the money it was already making going for day trips. The aviation cuts, which from the aviation industry before imposing I mentioned previously, are also putting pres- further charges.’ The Minister for Tourism’s sure on these small businesses. argument says it all. The answer is not to increase taxes but to The tourism industry pays its way. There provide support for this industry—the sort of were over $23 billion in earnings from over- support that the previous government gave seas tourism last calendar year. That is up this industry through a massive injection of from $19.6 billion in 2005. I raise those fig- investment and capital and commitment. ures because the last time we had a serious That is what I call on this government to do investment in and a strategy for tourism was rather than cutting back on Tourism Austra- when the member for North Sydney was the lia’s budget by around $6 million next year. minister for tourism. When the member for Just so you know what that means, that is on North Sydney was the minister for tourism average more than Tourism Australia would he brought forward a white paper which in- spend in direct marketing programs in any jected the single largest investment in the one of their top 10 markets. It is not an in- tourism industry and tourism promotion in significant cut. This tax is an impost on the history of this country. As a result of that price-sensitive travellers. investment and the campaigns that fol- Last year Australians aged over 15 took lowed—some of which attracted a lot of me- more than 4.7 million international trips, tak- dia attention, but I prefer to look at the facts ing advantage of our higher dollar and rather than at opinions and people’s percep-

CHAMBER 4420 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 spending on average 22 nights abroad. They electorate of the member for Grayndler or of largely went to New Zealand, the United the member for Lowe or of the member for States, Canada and the United Kingdom. The Wentworth, I think there is the opportunity reason they were doing that was to go on for us to seriously agree that providing res- holiday and visit friends and relatives. This is pite for people and families living under the a positive thing for people to do, spending flight path is a worthy measure. But not just time with their families, visiting friends and in Sydney, I should stress. We could look at relatives and seeing new things. They not other cities. We could look at Adelaide in only have to face this new tax of $9 extra particular but we could also look at Perth, when they make this decision, they have al- which has not been the subject of any par- ready been dealing with fuel levies that have ticular measures on noise amelioration. We been surging over the last three or four years. could look at Perth suburbs such as Clover- In May 2004 Qantas first introduced the fuel dale, Kewdale and Queens Park, as well as charge at $6 per domestic sector and $15 per suburbs in other cities where people are af- international sector. At that time oil was fected. US$44 a barrel. Today you pay a fuel levy of There was a program called the Sydney $26 for a domestic sector and between $100 Aircraft Noise Insulation Project, which and $170 for international sectors, and oil is commenced in November 1994. It was in- now over $125 a barrel. It is difficult enough tended at the time to raise $183 million over for those the government proclaims it has 10 years. It was based on applying this sympathy for to deal with what is already money on the ANEF contours, which later happening in our economy and to take the became the ANEI contours when forecasts time and make the investment in order to turned into indicators in May 1999. It meant spend time on a holiday with their family. there would be voluntary acquisition of Now they have to pay $9 extra every single properties affected above 40 ANEF; for pub- time they want to do that. lic buildings, 25, and residence insulation, Finally, this is a tax without a purpose. above 30. The program spent $347 million, The nexus between the money raised out of all raised by 30 June 2006. The result was this measure and where it is spent has been 4,300 homes, 17 schools, 21 childcare cen- broken. This is the nail in the coffin for that tres, seven nursing homes, 23 churches and nexus. It has been put to death by this meas- 22 hospitals insulated. That was a very suc- ure. We have the pain of increased taxes cessful program financed by a noise levy, without the benefit of accountability through which was in the vicinity of $3.50 per pas- a hypothecated increase in funding for secu- senger. The member for Grayndler thought it rity or other worthy measures. And it is these was such a good idea that he said in 2001: other worthy measures that I would like to It is my view that if the levy has to be raised un- draw attention to in my closing remarks. Ad- der the user-pays principle or if it has to be ex- ditional respite for people and families living tended out in its application ... then so be it. If under a flight path is a worthy measure. That you are going to subject people to this terror of is something that I think we in this parlia- noise, then give them proper compensation. ment could hopefully agree across the cham- I would agree with the member for ber is a worthy measure. Whether it is in the Grayndler, but I would ask this simple ques- electorate of Cook, which represents more tion. I would like to know where he was in than half of the flights coming out of Sydney cabinet when they decided to increase the airport on any day of the week, or in the passenger movement charge by $9 and not

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4421 consider providing further noise insulation, seems to me that the minister is fighting on not only for the residents of Cook who live many, many fronts at the moment. in Kurnell or in other places in the electorate, There can be no doubt at the last federal but for his own constituents in the electorate election and on the election of Rudd gov- of Grayndler and for those others affected by ernment, the tourism industry expected in a aircraft noise. The member and now minister very formal sense that the Labor Party was has had a second chance and has now, I un- saying that having the tourism minister at the derstand, extended his sympathy on aircraft cabinet table was going to mark a profound noise to Fort Street High School, which I positive impact for tourism. There was an note was outside the 25 ANEI contour. I do expectation from industry that with Martin not begrudge him this sympathy of extending Ferguson, the member for Batman, at the that measure but, as I said in this place yes- cabinet table, there would be a voice for the terday at question time, I do not understand tourism industry and it would be looked af- why he is not prepared to extend that sympa- ter. What we see today in the chamber is a thy to other public buildings that have the very, very different story. I am disappointed same case as Fort Street High School and, that the Minister for Tourism has not felt it more significantly, consider those residents necessary to contribute because what we are who live in 25 ANEI and above and give debating today represents a slug on Austra- them some form of support. lia’s tourism industry. We know that over the The Sydney Airport Community Forum is forward estimates the increase of taxation on preparing a new proposal for the minister to the tourism industry will be $459.3 million. provide gradated relief, potentially down to That is an extra nearly half a billion dollars the 20 ANEI contour but I would hope down being slugged from the tourism industry at a to the 25 ANEF or ANEI contour. The Joint time when it simply does not need this addi- Committee on Public Accounts and Audit tional taxation. must take a look at the PMC, the passenger Australia’s tourism industry employs movement charge, and the revenues that are about 480,000 people and generates about derived and see how that can be used for this $23 billion worth of exports, so it is worth purpose. That is the meaning of the second while recognising that it is a very meaningful item of the amendment that is before this contributor to Australia’s economy and a big House. As the Minister for Tourism, that employer. It is with profound regret that I am lonely honest man of the Rudd government, speaking to this bill today. That is the reason said recently, ‘The government should use that the coalition moved this amendment. We the money it already has.’ (Time expired) have a very strong belief that the way to gen- Mr CIOBO (Moncrieff) (12.13 pm)—I erate further exports and the way to nurture am pleased to have the chance to speak to the and grow an industry like Australia’s tourism Passenger Movement Charge Amendment industry is to provide policy support for it. Bill 2008 and in particular to support the The bill before the House today does the ex- amendment that was moved by the shadow act opposite. minister from the coalition. The bill that is My concern is also that, not only do I before the House today is, in summary, a know that Australia’s tourism industry is still slug on the tourism industry. I am not sur- reeling from the changes that this Labor gov- prised that the Minister for Resources and ernment has put in place with respect to the Energy and Minister for Tourism has not industry—nearly $1 billion of new taxes made a contribution to this debate because it

CHAMBER 4422 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 coupled with a real cut in funding for Tour- Mr CIOBO—But they would be wrong, ism Australia—but we also know that they as the shadow minister said. I will explain to are reeling because the tourism minister in the minister who is at the table why that the Rudd Labor government has done a criticism would be wrong. The reason it is complete backflip. There was a time when wrong is that although the coalition did his- Martin Ferguson, the member for Batman, torically increase the passenger movement actually held the view that increases in the charge, it made sure that any increases in the passenger movement charge were a bad passenger movement charge flowed through thing. I refer to a speech that he made in this in increased funding for Australia’s tourism very chamber on the Customs Legislation industry. In fact, it was under the coalition Amendment Bill (No. 2) 2003. In that de- that the Howard government provided the bate, the now Minister for Tourism made a single biggest boost and the most policy sup- couple of comments that I would like to report to Australia’s tourism industry, basically, peat to the House. When he was being at that in its history. stage very critical of the Howard coalition Under the white paper that the former government, he said: minister for tourism, the member for North However, what the government has persistently Sydney, introduced into the House, Com- and conveniently failed to mention to the Austra- monwealth revenue—money that flowed lian community and the travelling public is that directly to Tourism Australia to benefit Aus- the passenger movement charge turns a very sig- tralia’s tourism industry and to help generate nificant, healthy profit to the Commonwealth $23 billion worth of tourism exports— coffers. Even before the $8 increase in 2001, the government was already creaming off around $80 increased and uplifted Tourism Australia’s million per year and putting this into consolidated funding so that, for example, for the period revenue. from 2004 to 2005 we saw an increase from Further on in the debate he said: $135 million of Commonwealth support under the coalition for tourism to $218 million. The issue now is that the government, in its seven But across the board there were very tangible years in office, has stepped far from the original intent of the passenger movement charge and uses and significant increases in support for Tour- it as a tax to pad consolidated revenue to the tune ism Australia and for Australia’s tourism in- of some $80 million per year. dustry. Finally, in defence of the then tourism indus- So, yes, we did increase the passenger try, he said: movement charge, but we followed through When it comes to ripping off the travelling public, with action that delivered in very real terms undermining the tourism industry and job growth for the long-term benefit of Australia’s tour- and development in Australia, my criticism today ism industry. That stands in very stark con- is not confined to the passenger movement trast what has happened under the Rudd La- charge. bor government. The Rudd Labor govern- But that was very much a central part of his ment were critical at the time that the former thrust. coalition government increased the passen- There may be some who would say that it ger movement charge; the now Minister for is very rich of the coalition to now be critical Tourism not only criticised that increase but of this government’s move on the passenger he has now sat at the cabinet table under the movement charge. Rudd Labor government and signed off on a $9 increase in the PMC—an extra nearly half Mr Pyne—They would be wrong. a billion dollars of tourism tax—and he has

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4423 said nothing. He has not even contributed to Let’s look at some of the figures in New the debate today about what impact this will South Wales. We see that tourism funding— actually have on Australia’s export tourism this was at the time that the coalition was industry or indeed, more broadly, on Austra- putting in record amounts—was $50 million lia’s tourism industry. in 2002 and $54 million in 2003, which is a I say to the Rudd Labor government that it reasonable increase in real terms. But this is time you took your hands out of the pocket was when all the problems started. In 2004 it of Australia’s tourism industry. If, however, went back to $52 million, then in 2005 it there is a requirement for the Rudd Labor stayed at $52 million—no real increase. government to keep its hand in the pocket of Then in 2006 it was cut further to $50 mil- Australian tourism, then at least follow lion. So over the period of about four or five through with real increases in funding. But years we saw that funding for tourism in the Rudd Labor government has done the New South Wales was at best flatlined and in opposite. We have actually seen a decrease in real terms significantly cut. real terms of support for Australia’s tourism That is Labor’s record of support of the industry. tourism industry. That is why the amendment It should not be surprising that this has that is before the House today recognises— been the case because Labor has very strong and this is under point (c)—that this is in fact form in this regard. Even yesterday, with the a tourism tax increase that is part of nearly release of the Queensland state Labor gov- $940 million of new taxes on Australia’s ernment’s budget—and Queensland is in tourism industry at a time when Labor is also broad terms recognised if not as the premier cutting support for the industry in real terms. state then at least as one of the key states It is simply not good enough that the Minis- when it comes to tourism—we saw that state ter for Tourism has sat silently around that Labor government cut tourism funding. Rudd Labor cabinet table and said nothing Across the board we have seen many cuts by about this passenger movement charge. I state Labor governments to tourism. Indeed, would ask the minister at the table: did he it is worth noting that, thanks in part to the manage to move this increase in the PMC increase in the passenger movement charge over the protests of the Minister for Tour- when the coalition was in power—money ism? Was there any contribution from the that was used, or hypothecated, if you like, to Minister for Tourism or did he simply just benefit Australia’s tourism industry—the look the other way as the industry that he is coalition government put more money into responsible for was gouged of funding and tourism and more resources behind tourism then further gouged with nearly $1 billion of than ever before, while state Labor and the new taxes? minister at the table now, the Minister for I know that Australia’s tourism industry is Home Affairs, Mr Debus, who actually pre- rightly very angry with the Rudd Labor gov- sided as part of the Carr and Iemma Labor ernment, because their lack of support for governments in New South Wales, ran the this industry is coming at a time when the other way. As the coalition stepped up to the industry is doing it particularly tough. With plate and provided record funding, we saw such a high Australian dollar we know that the Carr and Iemma governments running in Australia’s tourism industry—to use the the other direction away from the tourism word of the CEO of TTF, Christopher industry. Brown—has ‘flatlined’. Actually that was his optimistic scenario—flatlined—at a time

CHAMBER 4424 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 when in this region we are seeing significant destroy the Australian economy in the same growth in tourism numbers. It is no surprise way. This bill before the House today is sim- that Australia’s tourism industry has flat- ply another nail in the coffin. At a time when lined, because the withdrawal of support for this industry is doing it so tough and when it tourism by state Labor has been compounded needs policy support, and at a time when this now by the rubbing of salt into tourism industry was relying on the Rudd Labor gov- wounds by federal Labor with this tax grab, ernment who promised so very much prior to coupled with others, and combined with a the last federal election and who stood up cut in real terms in tourism funding. It is no with their chests out and said, ‘We will give surprise that the tourism industry is justifia- tourism voice at the cabinet table,’ what do bly angry and upset. we see? Within six months we see this kind We are seeing the implications of this in of bill being put through with nearly half a so many different ways. Only a couple of billion dollars of additional taxes. In that days ago, as the member for Cook says—and respect, this bill is very much going to be to he is a man who has a great knowledge of the detriment of the tourism industry. It is a the tourism industry, particularly given his bill that should not, in my view and the view former role as managing director of Tourism of the coalition, be before the House. It is Australia—we have seen concern in the tour- going to do the opposite to what is antici- ism industry. It is no surprise that we have pated. Its net effect is going to be to put extra seen cuts in aviation capacity across Austra- pressure on Australia’s families and on the lia. Our key carrier, Qantas, and Australia’s tourism industry and, in the long term, it will other carrier, Virgin Blue, which is also an- be another nail in the coffin of the Rudd La- ticipated to be likely to reduce services in the bor government, which has turned its back near future, are both battling very strong on tourism. headwinds. The very strong headwinds of Mr DEBUS (Macquarie—Minister for course are the price of oil or jet fuel. In this Home Affairs) (12.27 pm)—I thank members respect, at a time when this industry is doing for their contribution to the debate, noticing it particularly hard and when we are seeing that many of them seem to have neglected to reductions in capacity, we see this leering notice that it was necessary for the new Aus- Rudd Labor government looking and almost tralian government to curtail government salivating at the prospect of being able to expenditure in the face of the extraordinary slug nearly $1 billion of new taxes on tour- growth in expenditures for which those op- ism and thinking that it will be okay because posite had been responsible in the immedi- we will be able to sell it out there in the elec- ately preceding years. The purpose of this torate as being a tax on tourists. Passenger Movement Charge Amendment We know that this Labor government is Bill 2008 is to amend the Passenger Move- traditional Labor—big taxing, big spending. ment Charge Act 1978 to increase the rate of Despite all the protests, despite the assur- passenger movement charge by $9 to $47 ances from the Prime Minister that he is an with effect from 1 July this year, and I men- economic conservative, we know that federal tion that it is this year because there seemed Labor is no different from state Labor and, to be some confusion about that circum- just as state Labor has now racked up $92 stance during the debate. The increase was billion of debt at a state level, it is only a indeed announced by the Treasurer in the matter of time before these economic incom- recent budget and it will partially—and I petents that now sit on the Treasury bench emphasise ‘partially’—fund the national se-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4425 curity aviation initiatives that are presently costs should be offset by those who are actu- being funded by the Australian government. ally using our aviation facilities. I point out, Since 2001 the Australian government has as it seems to be a matter neglected by those spent approximately $1.2 billion implement- on the other side, that border protection and ing the necessary aviation security measures. security measures at airports are absolutely The passenger movement charge, which is crucial for the safety and security of tourists imposed on the departure of a person from and therefore for our reputation as a safe des- Australia, is collected by airlines and ship- tination. It is totally necessary that we should ping companies at the time of ticket sales have implemented the security measures that and then remitted to the Commonwealth. I have described and others, and it is reason- National security aviation initiatives imple- able that those costs should, to some de- mented since 2001-02 are expected to cost gree—and that is all we are speaking of: $2,249 million up until 2011-12. Presently some degree—be offset by the passenger those costs are not recovered as part of the movement charge. passenger movement charge. The passenger I should also make the point that, in the movement charge was last increased in 2001- light of all available information, the $9 in- 02 by $8 to offset at that time the increased crease recommended by the Department of cost of inspecting passengers and mail and Finance and Deregulation (Quorum formed) cargo in our international airports. has been accepted by the government as be- It is entirely well known that since 2001 ing broadly consistent with the amount that government has implemented a significant the passenger management charge would number of aviation security measures. I have have grown had it been indexed. That is to a brief list of them here. There have been a say, we are not engaged here in what the range of measures in relation to enhanced member for Sturt described as overrecovery aviation security, including the upgrading of of costs; this is a direct reflection of the De- security at airports, implementation of the air partment of Finance and Deregulation’s cal- security officer program, application of secu- culation of what the increase would have rity regulation regimes in all airports, pro- been if the charge had been indexed over the moting industry awareness and compliance, period since it was last increased by the last trained officers on domestic and international government. flights, improved data access for border con- There has also been the suggestion in trol agencies, expanding the detector dog connection with the foreshadowed amend- program, improving the security and crime ment that somehow or other the Customs information exchange arrangements for avia- department is being subjected to unreason- tion, funding counterterrorism first response able cost cutting while at the same time we teams, community policing at airports, en- are seeing this increase in the passenger hanced CCTV monitoring, funding trial X- movement charge. In fact, the Customs ray inspection technology, the deployment of budget is around $1 billion this year and, like explosive trace detection equipment, in- all agencies within this fiscally responsible creased funding for air cargo security, the government, it has been asked to achieve purchase of mobile X-ray screening vans— some efficiency savings. Those savings are and there is much more. As I said, by 2011- nothing like the $51 million that the honour- 12 this will cost government $2.49 billion able member for Sturt has mentioned. In any and it is reasonable and indeed it is economi- event, and importantly, the efficiency divi- cally efficient to suggest that some of those dend that will apply to Customs has been

CHAMBER 4426 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 significantly offset by the injection, follow- (The Deputy Speaker—Dr MJ Washer) ing an election promise by the government, Ayes………… 71 of $16 million to provide for increased ca- Noes………… 56 pacity of Customs to inspect cargoes at four important regional ports: Darwin, Newcastle, Majority……… 15 Launceston and Townsville. AYES I am completely confident that the effi- Adams, D.G.H. Albanese, A.N. ciency savings required of Customs—as they Bevis, A.R. Bidgood, J. have been required across government by an Bird, S. Bowen, C. entirely fiscally responsible budget—will in Bradbury, D.J. Burke, A.E. no way undermine the capacity of Customs Burke, A.S. Butler, M.C. to work effectively to protect our border and Byrne, A.M. Campbell, J. Champion, N. Cheeseman, D.L. to be as efficient as ever where it matters at Clare, J.D. Collins, J.M. the ports and the airports of our nation, pro- Combet, G. D’Ath, Y.M. tecting us effectively as they do on so many Danby, M. Debus, B. fronts from illegal activity. Dreyfus, M.A. Elliot, J. Ellis, A.L. Ellis, K. I foreshadow that the government will not Emerson, C.A. Ferguson, L.D.T. support the amendment moved by the oppo- Ferguson, M.J. Fitzgibbon, J.A. sition. We do not accept for a moment that Georganas, S. George, J. the passenger movement charge is an unfair Gibbons, S.W. Gray, G. tax. It merely represents an appropriate in- Grierson, S.J. Griffin, A.P. dexation of an already existing tax. That in Hale, D.F. Hall, J.G. * turn is to offset in part the absolutely neces- Hayes, C.P. * Irwin, J. Jackson, S.M. Kelly, M.J. sary payments that are being made to im- Kerr, D.J.C. Livermore, K.F. prove aviation security, the cost of which is Marles, R.D. McClelland, R.B. inevitably increasing. McKew, M. McMullan, R.F. As to the suggestion that the bill should be Melham, D. Murphy, J. referred to a joint standing committee, I Neal, B.J. Neumann, S.K. Owens, J. Parke, M. point out that by no stretch of the imagina- Perrett, G.D. Plibersek, T. tion can this bill be said to have any relation- Price, L.R.S. Raguse, B.B. ship whatsoever to a question of noise Rea, K.M. Rishworth, A.L. abatement. I think it is pretty plain that what Roxon, N.L. Saffin, J.A. the opposition is really about in this circum- Shorten, W.R. Sidebottom, S. stance is seeking some way to delay an en- Snowdon, W.E. Sullivan, J. tirely proper tax bill associated with the Symon, M. Thomson, C. Thomson, K.J. Trevor, C. budget and to do so for no good reason at all. Turnour, J.P. Vamvakinou, M. I commend the bill. Zappia, A. Question put: NOES That the words proposed to be omitted (Mr Abbott, A.J. Bailey, F.E. Pyne’s amendment) stand part of the question. Baldwin, R.C. Bishop, B.K. The House divided. [12.44 pm] Bishop, J.I. Ciobo, S.M. Cobb, J.K. Coulton, M. Downer, A.J.G. Dutton, P.C. Farmer, P.F. Forrest, J.A. Gash, J. Georgiou, P.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4427

Haase, B.W. Hartsuyker, L. Mr BALDWIN (Paterson) (12.51 pm)— Hawke, A. Hawker, D.P.M. From the outset, let me make it abundantly Hull, K.E. * Irons, S.J. clear that the coalition supports the Defence Jensen, D. Johnson, M.A. * Home Ownership Assistance Scheme Bill Keenan, M. Laming, A. Ley, S.P. Lindsay, P.J. 2008 and the Defence Home Ownership As- Macfarlane, I.E. Marino, N.B. sistance Scheme (Consequential Amend- Markus, L.E. May, M.A. ments) Bill 2008 and welcomes their consid- Mirabella, S. Morrison, S.J. eration by the House today. These bills im- Neville, P.C. Pearce, C.J. plement an important measure to establish a Pyne, C. Ramsey, R. new scheme to provide financial assistance Randall, D.J. Robb, A. to members of the Defence Force for the Robert, S.R. Ruddock, P.M. Schultz, A. Scott, B.C. purchase, maintenance and development of Secker, P.D. Simpkins, L. their homes. The coalition is pleased these Slipper, P.N. Smith, A.D.H. bills have finally made it to the floor of the Somlyay, A.M. Southcott, A.J. chamber. After all, the House has been sitting Stone, S.N. Truss, W.E. for nearly seven weeks now and an earlier Tuckey, C.W. Turnbull, M. introduction would have reduced the pres- Vaile, M.A.J. Vale, D.S. Windsor, A.H.C. Wood, J. sure to have had these bills passed by 1 July * denotes teller in both houses. Question agreed to. The coalition strongly support this measure and the scheme commencing on 1 July Original question agreed to. 2008. After all, this was a Howard govern- Bill read a second time. ment initiative proposed in the 2007 budget. Third Reading Ideally, we would have liked to have seen the Mr DEBUS (Macquarie—Minister for detail of the final legislation earlier, and I Home Affairs) (12.50 pm)—by leave—I have to ask the question: why the delay when move: the funding was allocated in the 2007 budget and the Rudd government has had six That this bill be now read a third time. months to prepare the legislation? Given the Question agreed to. urgency to have this legislation passed by Bill read a third time. both houses to enable the scheme’s com- DEFENCE HOME OWNERSHIP mencement by 1 July, why was there a delay ASSISTANCE SCHEME BILL 2008 in providing the detail? But, knowing the Cognate bill: importance of this measure, I have been seeking updates and further information from DEFENCE HOME OWNERSHIP the minister frequently. We are as keen for ASSISTANCE SCHEME the ADF members to have access to this new (CONSEQUENTIAL AMENDMENTS) scheme from 1 July as the ADF members BILL 2008 themselves. Second Reading The government have been tardy in their Debate resumed from 28 May, on motion management of this legislation’s process. I by Mr Snowdon: note, for example, a letter addressed to me That this bill be now read a second time. from the Minister for Defence Science and Personnel seeking the coalition’s consent for the signing of contracts to allow the success-

CHAMBER 4428 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 ful tenderers at least eight weeks to transition scheme, as announced by the coalition in prior to the 1 July 2008 implementation date. 2007, is more contemporary and more gen- This letter was dated 21 April. The final erous than the previous scheme, and we wel- paragraph of that correspondence says: come the new government’s adoption of this Should you have any comment on the proposal I coalition-initiated measure. would be grateful if you could provide it to me by Firstly, I want to put on the record the his- 17th April 2008 as Defence needs to sign the con- tory of this measure. The legislation imple- tracts in the week commencing 21st April 2008. ments a 2007 budget decision by the former I know that I am effective as the opposition coalition government that aimed at increas- spokesperson on these matters, defending ing the rates of retention in the ADF. In 2006 our fine serving men and women. But, Mr the Defence Force (Home Loans Assistance) Deputy Speaker, it is unreasonable and you Amendment Bill extended the life of the De- would be right in saying that it would be im- fence Home Owner Scheme by 12 months to possible for me to deliver on this govern- allow Defence to conduct a review of the ment’s demand for a response four days prior scheme. The objectives of the review were to to the letter actually being signed by the min- look at the scheme and examine the options ister and, further, to actually receive the letter for a revised scheme that would support re- on the day the contracts are scheduled to be cruitment, retention and resettlement, and signed. recognise the benefits that home ownership This lethargic and tardy attitude by the provides to both members of defence and its government has been less than helpful for the cost-effectiveness for Defence. work of the House and the facilitation of In the 2007 budget the coalition an- passage of this legislation through the House. nounced its response to the Defence review Despite this potentially being a truncated into the scheme and funding of $864 million debate in the parliament to ensure timely through to the year 20016-17 in the form of a passage, I called on the department to keep home loan interest subsidy to involve pro- me informed of the progress of the drafting gressively higher subsidy assistance to ADF of the legislation and the relevant tender members who serve beyond critical retention processes that have already occurred. points. In 2007, amending legislation was The coalition acknowledges the strong passed extending the life of the current support of this measure by the many defence scheme until 30 June 2008 while legislation personnel and their families. It will allow to implement the 2007 budget decision was ADF personnel to have access to a more ap- being prepared. The coalition also wanted propriate method of home loan assistance this new scheme to come into operation by 1 that more appropriately reflects the require- July 2008 but legislation was being drafted ment of ADF service and the current housing when the parliament was prorogued. market. It is important to note that a range of Labor supported this measure in opposi- other housing and assistance measures will tion, and this legislation reflects the coali- continue but that these bills close the former tion’s original announcement. Let me make it Defence Home Owner Scheme to serving clear yet again: the coalition do support this members who have not yet exercised their legislation and its 1 July commencement rights under the scheme. The legislation will, date. In doing so, though, I suggest that there though, allow for the transition of eligible are a number of factors that need to be con- persons into the new scheme. The new

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4429 sidered and that would benefit from ongoing be informed in their decision-making proc- monitoring. ess. There are varying ranges of eligibility Firstly, I think it is important for informa- based on enlistment criteria. Regulars must tion about this scheme to be clearly and ac- have a minimum of four years continuous curately communicated to ADF personnel service; reserves, a minimum of eight years and their families. It is important to make consecutive service of efficient service. Effi- sure they are aware of the various fees im- cient service equals 20 days of reserve ser- posed by their current financial institutions if vice per year. If a reservist has done any con- they switch mortgages to take up this new tinuous full-time service whilst in the re- subsidy scheme. These costs may be exorbi- serves, this reduces the eight-year waiting tant for some, and I have been asked why it period. For full-time continuous service un- was restricted to only three providers. Let us der six months, the waiting period reduces hope that, in a review of the scheme, this can by one year. For full-time continuous service be broadened to allow greater access without which is six months and over, the waiting penalty. period reduces by two years. In light of the Rudd government’s deci- There are three tiers that apply to the sion to means-test the baby bonus and the scheme for both regulars and reserves. These family tax benefit B without a taper rate, are the figures provided to me by the minis- these subsidies can affect families across ter’s office this week. For regulars, on a sub- other mechanisms of support. Defence will sidised loan limit of tier 1, $187,159 after need to make sure its website information four years of service; tier 2, $280,738 after and proposed roadshow provide accurate eight years of service; and tier 3, $374,318 information on the financial considerations after 12 years of service. For reserves, on a in taking up this new scheme. subsidised loan limit of tier 1, $187,159 after eight years of service; tier 2, $280,738 after A decision to access the Defence Home 12 years of qualifying service; and tier 3, Ownership Assistance Scheme will depend $374,318 after 16 years of service. The on members’ personal and financial circum- amount of subsidy assistance is provided up stances. Members who delay taking up the to, for tier 1, $350 per month on the subsi- assistance in an attempt to minimise the cost dised loan limit of $187,159; on tier 2, $525 of transfer will not suffer detriment to their per month on a subsidised loan limit of eligibility and entitlement, as they can retain $280,738; and tier 3, $700 per month on a a service credit in the DHOAS that may be subsidised loan limit of $374,318. used at a later date, including up to two years after leaving the ADF. The value of the subsidy assistance is determined by the median interest rate, and this Ultimately, the decision to take on a home will vary in accordance with market fluctua- loan or change a home loan is a big financial tions reflected by Reserve Bank official in- decision for any individual or family. Finan- terest rate movements. In other words, as cial decisions of this nature do require an interest rates rise and fall, the value of the analysis of their impact on the family budget subsidy assistance will also rise and fall. Fur- and disposable income over the life of the thermore, subsidised loan limits may vary loan. These are big decisions and, in imple- depending on what the ABS determines is menting this new scheme, Defence and gov- the average house price. In other words, the ernment will need to ensure that families subsidised loan limits will rise and fall as have access to the information they need to average house prices rise and fall.

CHAMBER 4430 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

The regulation supporting the operation of Other factors to be considered in this the DHOAS will set a cap on the median scheme are that members have to be living in interest rate used to assess the DHOAS the home they are receiving the subsidy for. monthly subsidy amount. The cap will be set How many other homes members may own at the median interest rate applicable at the or have a mortgage on is irrelevant. Mem- time the bill receives royal assent. The me- bers of the old scheme will be able to access dian interest rate as applies from time to the new scheme as long as they meet the cri- time, or a formula to calculate the median teria and, importantly, the scheme will be interest rate, may be determined by the min- subject to fringe benefits tax, which will be ister. Such a determination will be a legisla- paid by the department. Using the scheme tive instrument and hence subject to disal- does not exclude a member from accessing lowance. However, the median interest rate other benefits such as the First Home Owner that is used in any given month to calculate Grant. Members who leave the ADF will the amount of subsidy shall be the lesser of have access to the scheme within two years the capped rate set by regulation or the rate of leaving the service, and conditions such as set under a determination by the minister. length of service will be determined on the Accrual and payment of subsidies for various benefits. regulars commences after completing four It is important that schemes are reviewed. years of service. The subsidies will accrue on A review of this scheme will occur after four a monthly basis after this period if the mem- years with Defence reporting on the outcome ber does not access the scheme. Accrual and of the review for consideration in the context payment of subsidies for reserves accrue at of the 2012-13 budget deliberations. We call the end of each year of efficient service after on the government to provide updates on the the reservist has qualified as eligible—in operation of the scheme earlier than year 4 other words, eight years. Therefore, the first by including an examination of the impact of payment subsidy received by an eligible re- the critical retention points in the operation servist would occur at the end of the ninth of the scheme overall. This should include year. The subsidies will accrue on a one year qualitative as well as quantitative advice on for one year basis if the scheme is not ac- satisfaction with the scheme by ADF person- cessed when eligibility comes up. nel and their families and particularly the For both regulars and reserves, and if the ease of understanding the scheme’s opera- scheme is not used after a member becomes tions. I suggest it might be useful to engage eligible, the subsidies will accumulate and ADF Financial Services Consumer Council the member can access them at a later date. officers for some of the analysis ahead of The subsidies will accumulate for a maxi- year 4. Whatever mechanisms and bodies mum period of 25 years. A lump sum can be exist should be used to ensure the smooth accessed from the accrual, the maximum of take-up and operation of the scheme and its which is equivalent to four years of subsidies operation within existing housing allowances at tier 1 level only. In other words, you can and assistance for ADF personnel. have four years worth of subsidies as a lump I would also take this opportunity to sum but only at the tier 1 level. The reason it commend the department and its drafters for is at tier 1 level only is because the purpose their efforts with this legislation. This is a of a lump sum payment is to assist members complex bill that has been a long time in who are buying their first home whilst in preparation. We appreciate the time that has service. been put into the bill and also into the tender-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4431 ing process for the appointment of lending matically eligible for home ownership assis- institutions and scheme administrators. As tance under DHOAS on 12 December the minister has outlined, the Department of 2008—in other words, on the completion of Vet er a ns’ Affairs has been appointed as the four years of continuous service. Another scheme administrator and the National Aus- example is a member joining the permanent tralia Bank, the Australian Defence Credit ADF on 15 October 2003. In this case, the Union and the Defence Force Credit Union member will complete four years continuous as the panel of lending institutions. I also service on 15 October 2007. By 1 July 2008 wish to commend the work of the Defence the member will have completed four years Families Association. They have been strong and nine months continuous service. There- in their support for this measure, and I know fore, on 1 July 2008 this member will have they have been keen to see that this measure satisfied the DHOAS qualifying period, and comes into effect on 1 July. at that time will have accrued nine months The coalition will keep a close eye on the subsidy period—in other words, credit— subsequent variations via legislative instru- which will continue to accumulate until such ment in relation to market indicators. We time as the member buys a house and ac- have asked the government to provide addi- cesses the subsidy assistance. The current tional information via the question and an- home owner scheme provides additional sub- swer sections of their website on the impact sidy periods for members who undertake of variations in market interest rates so that warlike service. They will also apply to families taking up this subsidy know exactly DHOAS. how the subsidy could change their monthly Additional subsidy periods for warlike mortgage repayments. There will no doubt service will continue to be available for up to be questions about the qualifying service five years additional subsidy. However, time, and there are a range of variants. It is unlike the current scheme, the initial qualify- important to note members of the permanent ing period will not be waived as a waiver ADF are required to provide five years ser- would not be consistent with the retention vice to qualify for home ownership assis- focus of the new scheme. The additional pe- tance under the Defence housing ownership riods of subsidy assistance that will accrue scheme. Therefore, members joining the for which warlike service is performed are: permanent ADF after 1 July 2003 will not be not more than three months will attract two eligible for Defence home ownership scheme additional years of subsidy, more than three membership. All members joining after 1 but not more than six months will attract July 2003 will automatically become eligible three additional years of subsidy, more than for the subsidy assistance under DHOAS on six but not more than nine months will at- completing their four-year qualifying period. tract four additional years of subsidy, and Access to the previous home ownership as- more than nine months will attract five addi- sistance schemes will not be available to tional years of subsidy. This has the ability to these members. extend the period of subsidy from 20 years to Examples should then be provided to clar- 25 years in mortgage repayments— ify the application of the DHOAS qualifying something that was not made very clear by period for members joining the permanent Defence when they briefed me on this sub- ADF after 1 July 2003. An example is when ject. When a person and his or her spouse or a member joins the permanent ADF on 12 partner are both serving members of the December 2004. This member will be auto- permanent ADF, they will both be entitled to

CHAMBER 4432 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 the subsidy assistance available under the (2) calls on the Government to amend the bill to DHOAS. This was a provision available un- remedy this defect”. der the current DHOS and will continue to I put forward this amendment in the hope be available under the DHOAS. They can that the government will support the coali- access the DHOAS jointly on a single home tion in strengthening protections for the wid- loan, or separately if they see fit. ows and their families of those killed in war- I understand that Defence has developed a like service. If supported by the Rudd gov- communications plan to inform and advise ernment, this amendment will extend to the ADF personnel and to promote the new maximum period and the maximum subsidy scheme. Part of this plan is a roadshow that that applies to the surviving partner, regard- will visit all Defence establishments across less of their period of service. I move this Australia between July and September 2008. amendment in support of those brave per- The roadshow team will comprise a Defence sonnel who have made the ultimate sacrifice contract manager, a representative from the for this country in order to protect and secure scheme’s administrator, the Department of the future of their families. It provides for Vet er a ns’ Affairs, and also a representative greater peace of mind for those engaged in from each of the three home loan providers. I service in warlike zones. This amendment would urge all defence personnel to visit the will directly support the surviving spouses of roadshow when it visits their area and have Defence personnel who have been killed in questions prepared for the team on this the past 12 months on operations. Those are: scheme. I would further encourage anyone Trooper David Pearce, who was killed by a considering joining the Australian Defence roadside bomb in Afghanistan on 8 October Force to go along to the roadshow as this 2007; Sergeant Locke, who died in combat in scheme provides a further incentive for them Afghanistan on 25 October 2007; Private to join our regular or reserve forces. Ashley Baker, who was found dead in Dili, East Timor, on 5 November 2007; Private The coalition will be closely monitoring this measure and, more broadly, will hold the Worsley, who died in combat on the night of government to account if there is any nega- 22-23 November 2007; and Lance Corporal Jason Marks, who was killed in combat in tive impact on ADF personnel because of the Rudd Labor government’s renewed penchant Afghanistan on 27 April 2008. I call on the for means-testing and increased taxing. The government to adopt this amendment. This is coalition is also concerned to ensure that the a relatively minor cost measure that, on a maximum not the minimum protection for budget of $846 million for the scheme, would appear insignificant. surviving partners is provided in the event of a service-related death under this scheme. As In closing, may I once again stress that the such, I move: coalition want this legislation passed so that That all words after “That” be omitted with a the new scheme can commence on 1 July. view to substituting the following words: We are pleased that Defence personnel will have access to the scheme. The coalition ini- “whilst not declining to give the bill a second reading, the House: tiated this measure. We look forward to ADF families utilising this subsidy and, subse- (1) regrets that the bill does not create automatic eligibility for the surviving partner of a quently, retention rates in the ADF increas- member of the Defence Force who has died ing. There is one point that I would raise. In in warlike service, to have access to the my capacity as the shadow minister for De- maximum subsidised loan entitlement; and fence science and personnel, I work with a

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4433 committee of backbenchers—our policy Assistance Scheme. It is important to note at committee. This Friday, it was my intention the outset that funding for the scheme totals to visit the RAAF Base East Sale to meet more than $988 million in the years to 2017- with members of Defence and their families, 18 and was provided for in the government’s and for my policy committee to do the same. recent budget and the projections within the I have been given approval to visit the base Defence budget. and undertake meetings. However, the policy The scheme provides eligible ADF mem- committee of the backbench—the people bers with access to home ownership assis- who work on issues such as this—have been tance in the form of a monthly subsidy on the denied access. So, what opportunities do interest expense incurred on a home loan. those members of this parliament as indi- The scheme will provide tiered home loan viduals or as members of a policy committee subsidies to permanent members of the ADF have to ascertain the thoughts, views and who serve over four years and to reservists contributions of those in our Defence force with service of more than eight years. There and their families if the minister blocks their are three tiers within the scheme. Tier 1 ap- attempts to go to the base? The minister said plies to permanent ADF members who have that the opportunity is there for the Joint served for at least four years or reserve Standing Committee on Foreign Affairs, De- members who have served at least eight fence and Trade to visit, but I would ask the years. This tier allows for a subsidy calcu- minister to reconsider. These are not only lated on the basis of 40 per cent of the aver- members of a policy committee but also in- age house price. Tier 2 of the scheme applies dividual members of parliament with a right to permanent ADF members who have to obtain information for the purposes of served for at least eight years or reserve conducting the business of this House. We members who have served at least 12 years. support this legislation. We urge the govern- This tier allows for a subsidy calculated on ment to adopt our amendment and we ask the the basis of 60 per cent of the average house minister to provide access for all members of price. Tier 3 of the scheme applies to perma- parliament to visit Defence installations. nent ADF members who have served for at The DEPUTY SPEAKER (Dr MJ least 12 years or reserve members who have Washer)—Is the amendment seconded? served at least 16 years. This tier allows for a Mr Robert—I second the amendment and subsidy calculated on the basis of 80 per cent reserve my right to speak. of the average house price. For each of the tiers, the average house price for the pur- Mr COMBET (Charlton—Parliamentary poses of the scheme is determined by the Secretary for Defence Procurement) (1.17 national weighted average house price. pm)—As a parliamentary secretary in the Defence portfolio, I am very pleased to be As an indication of the subsidy that will able to speak today on the Defence Home become available, based on 2007-08 figures, Ownership Assistance Scheme Bill 2008 and the following subsidies would apply under the Defence Home Ownership Assistance the three tiers: under tier 1, a subsidy of $241 Scheme (Consequential Amendments) Bill per month on a subsidised loan limit of 2008. This scheme will offer great assistance $160,000; under tier 2, a subsidy of $353 a for ADF members and their families who are month on a subsidised loan limit of purchasing their own home. The bills before $234,000; and, under tier 3, a subsidy of us establish the Defence Home Ownership $470 per month on a subsidised loan limit of $312,000. As can be seen from these figures,

CHAMBER 4434 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 it is a substantial level of assistance and one Special consideration is given for mem- which is well deserved. The actual subsidy bers discharging with a compensable injury, under the scheme will be equal to 37.5 per including waiver of the qualifying period and cent of the average interest incurred over 25 reduction of tier on separation and provision years on the value of a loan equivalent to the of an eight-year minimum period of subsidy subsidised loan limit or the amount bor- assistance. If a member dies, their entitle- rowed, whichever is less. The member may ment to subsidy assistance—and this is im- borrow more than the subsidised loan limit portant in the context of the amendment that but will not receive subsidy assistance for the has been moved by the member for Pater- excess borrowings. Unlike its predecessor son—will be transferable to their surviving schemes, the subsidy assistance available spouse or partner. Former ADF members will under this new scheme will not be tied to a continue to have access to benefits available specific home loan or loan amount offered to them under the Defence Service Homes by a home loan provider. Instead, ADF Act 1918 and the Defence Force (Home members will have far greater flexibility and Loans Assistance) Act 1990. choice in accessing the scheme. Defence has One of the biggest challenges currently already completed a competitive tender facing the ADF is the shortage of the right process to establish a home loan provider people with the right skills. In my responsi- panel to support the scheme. On 23 April bilities as Parliamentary Secretary for De- 2008, my colleague the Minister for Defence fence Procurement, this is an issue that I con- Science and Personnel, Mr Snowdon, an- front every day when moving about various nounced the successful tenderers as the Na- bases within the ADF. To help overcome this tional Australia Bank Ltd, Australian De- challenge, the Rudd Labor government is fence Credit Union Ltd and Defence Force committed to improving retention amongst Credit Union Ltd. A panel arrangement will: ADF members. That is extremely important provide choice for ADF members, provide to meet the challenges for national security greater potential for panel members to de- in the future. That is why Labor’s election velop specific loan products and contain policies contain support for this new home scheme administration costs. loans scheme, which will be established by It is important to touch on who is eligible these bills. It is estimated that the scheme for the scheme. Members who are serving on will reduce separations from the ADF by up or after 1 July 2008 and who have met the to 500 members per year in the first three eligibility requirements may access subsidy years of the scheme’s operation. Features of assistance under the scheme. Members may the scheme have been designed to specifi- access the scheme at any stage during their cally achieve higher retention rates. This is military career subsequent to becoming eli- why under the scheme higher levels of sub- gible members. Periods during which an eli- sidy assistance will be available to members gible member does not access the scheme on the completion of specified years of ser- will accrue and may be accessed by the vice. Further to the measures outlined in the member on separation from the ADF. Assis- bill today, the Minister for Defence Science tance to members separating from the ADF and Personnel is working to develop a strate- will be reduced to the tier 1 level, except for gic retention framework to ensure answers to those with 20 years of service or more who enduring retention problems. will continue to receive assistance at tier 3 The government has taken action in this level. area already. For example, we have intro-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4435 duced a Navy capability allowance, provid- (The Deputy Speaker—Dr MJ Washer) ing a significant amount of support for ser- Ayes………… 75 vice sailors and submariners from able sea- Noes………… 57 man to chief petty officer rank, with important incentives to complete a further 18 Majority……… 18 months of service. On 19 March 2008 the AYES Prime Minister also announced the appoint- Adams, D.G.H. Albanese, A.N. ment of the new service chiefs, and it was Bevis, A.R. Bidgood, J. announced that each service chief will be Bird, S. Bowen, C. directly responsible for ensuring that suffi- Bradbury, D.J. Burke, A.E. cient trained and skilled personnel are avail- Burke, A.S. Butler, M.C. able. Progress in this matter will be moni- Byrne, A.M. Campbell, J. tored by cabinet. However, the government Champion, N. Cheeseman, D.L. also recognises that more needs to be done in Clare, J.D. Collins, J.M. Combet, G. D’Ath, Y.M. this area to meet the needs of the ADF in the Danby, M. Debus, B. future. Greater training incentives, provision Dreyfus, M.A. Elliot, J. of more stability for families through re- Ellis, A.L. Ellis, K. duced relocations, introduction of national Emerson, C.A. Ferguson, L.D.T. education curricula to reduce the stress of Ferguson, M.J. Fitzgibbon, J.A. interstate posting on families, a review of the Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. current superannuation arrangements and Gray, G. Grierson, S.J. measures designed to promote meaningful Griffin, A.P. Hale, D.F. spouse employment during different postings Hall, J.G. * Hayes, C.P. * will all be considered in due course. Irwin, J. Jackson, S.M. The government is determined to make Kelly, M.J. Kerr, D.J.C. Livermore, K.F. Macklin, J.L. sustained improvements in the area of reten- Marles, R.D. McClelland, R.B. tion in the ADF. Today’s bills go some way McKew, M. McMullan, R.F. towards achieving this aim. I am sure that the Melham, D. Murphy, J. minister, in speaking to this bill in due Neal, B.J. Neumann, S.K. course, will make observations about the O’Connor, B.P. Owens, J. amendment moved by the member for Pater- Parke, M. Perrett, G.D. son. It is not one that I anticipate the gov- Plibersek, T. Price, L.R.S. Raguse, B.B. Rea, K.M. ernment will be supporting. We understand Ripoll, B.F. Rishworth, A.L. its sentiment but are concerned about the Roxon, N.L. Saffin, J.A. equity impact of it. I commend these bills to Shorten, W.R. Sidebottom, S. the House. Snowdon, W.E. Symon, M. Tanner, L. Thomson, C. Mr ALBANESE (Grayndler—Leader of Thomson, K.J. Trevor, C. the House) (1.25 pm)—I move: Turnour, J.P. Vamvakinou, M. That the question be now put. Zappia, A. Question put. NOES The House divided. [1.30 pm] Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Billson, B.F. Bishop, B.K. Bishop, J.I. Ciobo, S.M. Cobb, J.K. Coulton, M.

CHAMBER 4436 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

Downer, A.J.G. Dutton, P.C. Emerson, C.A. Ferguson, L.D.T. Farmer, P.F. Forrest, J.A. Ferguson, M.J. Fitzgibbon, J.A. Gash, J. Georgiou, P. Georganas, S. George, J. Haase, B.W. Hartsuyker, L. Gibbons, S.W. Gillard, J.E. Hawke, A. Hockey, J.B. Gray, G. Grierson, S.J. Hull, K.E. * Hunt, G.A. Griffin, A.P. Hale, D.F. Irons, S.J. Johnson, M.A. * Hall, J.G. * Hayes, C.P. * Keenan, M. Laming, A. Irwin, J. Jackson, S.M. Ley, S.P. Lindsay, P.J. Kelly, M.J. Kerr, D.J.C. Macfarlane, I.E. Marino, N.B. Livermore, K.F. Macklin, J.L. Markus, L.E. Mirabella, S. Marles, R.D. McClelland, R.B. Morrison, S.J. Neville, P.C. McKew, M. McMullan, R.F. Pearce, C.J. Pyne, C. Melham, D. Murphy, J. Ramsey, R. Randall, D.J. Neal, B.J. Neumann, S.K. Robb, A. Robert, S.R. O’Connor, B.P. Owens, J. Ruddock, P.M. Schultz, A. Parke, M. Perrett, G.D. Scott, B.C. Secker, P.D. Plibersek, T. Price, L.R.S. Simpkins, L. Slipper, P.N. Raguse, B.B. Rea, K.M. Smith, A.D.H. Somlyay, A.M. Ripoll, B.F. Rishworth, A.L. Southcott, A.J. Stone, S.N. Roxon, N.L. Saffin, J.A. Truss, W.E. Tuckey, C.W. Shorten, W.R. Sidebottom, S. Turnbull, M. Vaile, M.A.J. Snowdon, W.E. Symon, M. Vale, D.S. Windsor, A.H.C. Tanner, L. Thomson, C. Wood, J. Thomson, K.J. Trevor, C. * denotes teller Turnour, J.P. Vamvakinou, M. Question agreed to. Zappia, A. NOES Question put: Abbott, A.J. Andrews, K.J. That the words proposed to be omitted (Mr Bailey, F.E. Baldwin, R.C. Baldwin’s amendment) stand part of the question. Bishop, B.K. Bishop, J.I. The House divided. [1.35 pm] Ciobo, S.M. Cobb, J.K. (The Deputy Speaker—Dr MJ Washer) Coulton, M. Downer, A.J.G. Dutton, P.C. Farmer, P.F. Ayes………… 75 Forrest, J.A. Gash, J. Noes………… 58 Georgiou, P. Haase, B.W. Hartsuyker, L. Hawke, A. Majority……… 17 Hawker, D.P.M. Hockey, J.B. AYES Hull, K.E. * Hunt, G.A. Irons, S.J. Johnson, M.A. * Adams, D.G.H. Albanese, A.N. Keenan, M. Laming, A. Bevis, A.R. Bidgood, J. Ley, S.P. Lindsay, P.J. Bird, S. Bowen, C. Macfarlane, I.E. Marino, N.B. Bradbury, D.J. Burke, A.E. Markus, L.E. May, M.A. Burke, A.S. Butler, M.C. Mirabella, S. Morrison, S.J. Byrne, A.M. Campbell, J. Neville, P.C. Pearce, C.J. Champion, N. Cheeseman, D.L. Pyne, C. Ramsey, R. Clare, J.D. Collins, J.M. Randall, D.J. Robb, A. Combet, G. D’Ath, Y.M. Robert, S.R. Ruddock, P.M. Danby, M. Debus, B. Schultz, A. Scott, B.C. Dreyfus, M.A. Elliot, J. Secker, P.D. Simpkins, L. Ellis, A.L. Ellis, K. Slipper, P.N. Smith, A.D.H.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4437

Somlyay, A.M. Southcott, A.J. INDIGENOUS EDUCATION Stone, S.N. Truss, W.E. (TARGETED ASSISTANCE) Tuckey, C.W. Turnbull, M. AMENDMENT (2008 BUDGET Vaile, M.A.J. Vale, D.S. MEASURES) BILL 2008 Washer, M.J. Wood, J. * denotes teller Second Reading Question agreed to. Debate resumed from 29 May, on motion Original question agreed to. by Ms Gillard: Bill read a second time. That this bill be now read a second time. Dr STONE (Murray) (1.41 pm)—I rise Message from the Governor-General rec- ommending appropriation announced. today to speak to the Indigenous Education (Targeted Assistance) Amendment (2008 Third Reading Budget Measures) Bill 2008. I am pleased to Mr SNOWDON (Lingiari—Minister for inform the House that the coalition under- Defence Science and Personnel) (1.38 pm)— stands the significance of any measures that by leave—I move: are going to further advance the life chances That this bill be now read a third time. of Indigenous Australians. As many in this Question agreed to. House will recall, it was the coalition government under the leadership of John How- Bill read a third time. ard and the then Minister for Families and DEFENCE HOME OWNERSHIP Community Services and Indigenous Affairs, ASSISTANCE SCHEME Mal Brough, who responded heroically to the (CONSEQUENTIAL AMENDMENTS) Little children are sacred report from the BILL 2008 Northern Territory. That report identified, Second Reading not for the first time, the most extraordinary Debate resumed from 28 May, on motion distress and victim status of families, particu- by Mr Snowdon: larly those living in remote settlements in the Northern Territory. That this bill be now read a second time. We understood that the causes of those Question agreed to. dysfunctional communities and the violence, Bill read a second time. disease, oppression and lack of employment Message from the Governor-General rec- in the people’s lives were a combination of a ommending appropriation announced. whole range of factors but key amongst those Third Reading was the lack of educational opportunities for Indigenous Australians. We, therefore, sup- Mr SNOWDON (Lingiari—Minister for port very much the measures in this bill, par- Defence Science and Personnel) (1.40 pm)— ticularly the targeted assistance. The minister by leave—I move: called the measures ‘Closing the gap— That this bill be now read a third time. expansion of intensive literacy and numeracy Question agreed to. programs and individual learning plans’ and Bill read a third time. ‘Closing the gap—contribution to Indige- nous boarding colleges’ and they are described in Budget Paper No. 2 of 2008-09. We know that in order to be employed today in Australia—as a driver, in a kitchen, as

CHAMBER 4438 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 a teacher or in any job—you need literacy ployment. Welfare dependency disempowers and numeracy. Without literacy and nu- an individual; it deprives any Australian of meracy in English, our major language, you the opportunity to enjoy their leisure time as are going to be substantially disadvantaged they want, to live where they would like, to and perhaps locked out of the workforce for travel as they would and to take on the full all time. Therefore, the additional funding responsibility of a family. that is to be made available for intensive lit- Employment is a foundation of and fun- eracy and numeracy programs is going to be damental to a good life in Australia. The money very well spent in assisting Indige- CDEP program was developed many dec- nous Australians. ades ago as work for the dole for Indigenous We also understand that one option for Australians. As with a lot of Aboriginal pro- helping Indigenous Australians attend school grams many years ago, it was designed with is to establish boarding colleges. It is not the very good intentions, but, in the many years silver bullet and it is not the only option of since, it has proved not to be a stepping stone course. In some of these remote Northern to employment. In fact, what it did was lock Territory communities, the community fami- a lot of Indigenous Australians out of real lies themselves have said that, if there could training and education opportunities. It be established places where the children can locked them into dysfunctional communities sleep and have their meals and then attend where there was little work. Locally, this school, the chances are there would be more program came to be known colloquially as regular attendance and less opting out of ‘sit down money’. school at a very early age. As a consequence We are therefore most concerned that the more Australians would have the opportunity CDEP program be replaced with real educa- to have a decent education. tion and training opportunities for all Indige- So we are most pleased to support addi- nous Australians who reach working age. tional funding for education. This, as I say, One of my serious concerns is that this new continues on the excellent work of the coali- government has chosen not to continue our tion government, which was absolutely de- rolling back of CDEP but has instead, I sug- termined to close the gap and to make sure gest, bowed down to the pressures of those that Aboriginal Australians had the same life who were exploiting CDEP by obtaining expectancy as others, that Aboriginal chil- cheap, government-subsidised labour for the dren were as likely to be disease free and 20 per cent who were in real jobs and en- have proper nutrition as others, and that there rolled in the CDEP program. In the case of was no longer the very strong possibility of the Northern Territory prescribed communi- children being deaf before they even at- ties area, this 20 per cent—we think about tended preschool or experiencing violence in 2,000 people—were doing real jobs in their young lives. schools as teachers’ assistants, in night pa- In the Northern Territory—in fact, right trolling, in health centres, and with the local throughout Australia—we have a program government in areas such as town mainte- called Community Development Employ- nance and rubbish collection. ment Projects, or CDEP. One of my big con- It is of critical importance that we do not cerns is that of helping all Australians have lose sight of the fact that Aboriginal Austra- independence, self-esteem and a real sense of lians deserve to have the same job-seeking choice in their lives, and this is all about em- support and opportunities as other Austra-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4439 lians. The CDEP program did not require any Territory dragging its feet when it comes to person in that program to actually seek work putting teachers’ assistants, previously on or to attend literacy, numeracy or other train- CDEP, onto their payrolls with superannua- ing programs in return for the welfare they tion, career opportunities, real training and received. In other words, it was a debilitating professional development? Failing to do this program with no mutual obligation or shared comes at the expense of educational ad- responsibility. That is why I say that we will vancement for their students and stymies be disappointed if this government, which is their own personal career development. How currently reviewing CDEP, chooses to main- can these Indigenous teachers be role models tain that debilitating program when we know for the rest of their communities if they are that it has done nothing to change the very treated as second-rate citizens by the North- serious levels of unemployment throughout ern Territory government? communities, in Northern Australia in par- The Indigenous Education (Targeted As- ticular, where there are jobs but also signifi- sistance) Amendment (2008 Budget Meas- cant unemployed Indigenous populations. ures) Bill 2008 is a very important continua- In supporting this bill today I want to re- tion of the John Howard government’s de- peat that it is important that we understand termination for Aboriginal Australians to that without a decent education in Australia, have a better go, and I certainly commend particularly in English language literacy and this bill to the House. also in numeracy—without all Australians Mr MARLES (Corio) (1.51 pm)—I rise having the opportunity to attend school—we to speak in support of the Indigenous Educa- cannot expect there ever to be a closing of tion (Targeted Assistance) Amendment (2008 the gap between those who have and those Budget Measures) Bill 2008. This bill seeks who have not. For a very long time Indige- to amend the Indigenous Education (Tar- nous Australians in the Northern Territory geted Assistance) Act 2000. It does this have been exploited by the CDEP program, through two very important appropriations which saw some of them working, but for a aimed at assisting our Indigenous population. welfare wage, not for a real wage, when in It is very much part of the Rudd govern- fact they should have been on the payroll of ment’s commitment to closing the gap in the the Northern Territory government, for ex- social, economic and health indicators be- ample as professional teachers, not teachers’ tween Indigenous and non-Indigenous Aus- aides. tralians. As a part of the federal budget, the The John Howard government understood government has provided $1.2 billion over so profoundly the effect of welfare depend- the next five years towards closing the gap. It ency on the human condition that we put includes 37 separate measures which were some $70 million from our budget into the contained in the budget. emergency response to transfer people off We believe that, in implementing these CDEP into real jobs, including some $30 very practical approaches, it is very impor- million to the Northern Territory government tant that we adopt a ground-up approach, that in particular, to transfer their public servants, we work and consult with the Indigenous such as teachers assistants, into their profes- communities themselves and that we find sional teacher workforce. In talking to the solutions through that process. That is ex- minister today I was disappointed to hear actly what this bill will do. that that transitioning work is going very slowly. I have to ask: why is the Northern

CHAMBER 4440 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

The starting point of the framework of ac- state of Victoria and the Commonwealth of tion by the Rudd government in this term Australia—to make their apology to the In- was the apology made to the stolen genera- digenous community in the region. That was tions on 13 February this year. That apology important for a few reasons. Firstly, it al- was quite simply a momentous occasion in lowed all of those in Geelong, non- our country’s history. It acknowledged the Indigenous and Indigenous Australians, to wrongs that were committed in relation to participate in an extraordinary national the stolen generations. It acknowledged on event. It also allowed us to highlight Gee- the part of non-Indigenous Australia that it long’s peculiar history in relation to Indige- was wrong to have a program of forced re- nous affairs. moval of Indigenous children from their par- In many ways, Geelong is a centre of the ents, a program which ultimately had at its stolen generation in this country. Geelong core an agenda of trying to bring about an had five orphanages in its history, which was end to Aboriginal culture in this country. the largest number of orphanages in any city Whilst that is the pre-eminent example of outside a capital city. That means that there the wrongs that have been committed to- are a number of people in Geelong who grew wards our Indigenous people since European up in institutional care, which is something settlement, it is only one of those wrongs and that I have spoken about previously in this it is representative of the larger history of place. It was to these orphanages that repre- this country which, with some notable excep- sentatives of the stolen generation were tions, has by and large been very sad and taken when they were removed from their difficult in relation to our Indigenous popula- parents. The consequence of that is that there tion. But the fact that we have had a sad and is a large number of the stolen generation difficult history with respect to our Indige- who now live in our region. Whilst this was nous population does not condemn this coun- an opportunity to make our own apology to try to a sad and difficult future. It does not the Wathaurong people—the Indigenous condemn us at all. The apology was so im- people of the Geelong region—by virtue of portant because it represented the gateway the process of the stolen generation there are from that sad and difficult past to a much in fact representatives of a number of peo- brighter and greater future in our Indigenous ples in our Indigenous community who live relations. That ultimately is why the apology in Geelong and it was important to be able to was such an important act. It represented a make our apology to them. It was also very turning point in this country in our Indige- important for them to participate in the apol- nous affairs, but it also represented a turning ogy and to hear it themselves. point in the reconciliation of our own iden- Geelong has another peculiar history in re- tity as a country. lation to this country’s Indigenous affairs. Soon after the apology was made in this Geelong is the country of the Wathaurong. It place, we in Geelong held our own apology is also the country of William Buckley. Be- to those in the Indigenous community within tween William Buckley and the Wathaurong, our region. Within our region, it was in its it is arguable, we had the first act of recon- own way a very powerful, emotional and ciliation in this country. William Buckley significant event. It was, for the first time, an was a convict in that first failed attempt to opportunity for all three tiers of government establish a penal colony in Port Phillip Bay. within the Geelong region, local, state and He escaped from that colony, which was federal—the City of Greater Geelong, the very short lived. He was in a very desperate

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4441 situation and on the point of death when he own conclusions about the sincerity of the was ultimately taken in by the Wathaurong opposition’s interest in this issue. people. In that, we had the first act of recon- Economy ciliation in this country. That was a very im- Ms SAFFIN (2.01 pm)—My question is portant act, as is this bill in committing a to the Prime Minister. Will the Prime Minis- significant amount of money for targeted ter outline to the House the government’s assistance for education for Indigenous Aus- response to today’s national accounts? tralians. With that, I commend the bill to the House. Mr RUDD—Today’s national accounts, reflecting 0.6 per cent increased growth in Question agreed to. the March quarter and 3.6 per cent in the Bill read a second time. year to the March quarter, reflect some mod- Message from the Governor-General rec- eration in overall economic growth. Today’s ommending appropriation announced. national accounts paint a clear picture of the Third Reading economic challenges which now face the nation. We have continuing economic Mr ALBANESE (Grayndler—Minister growth, but at the same time we have a real for Infrastructure, Transport, Regional De- problem in dealing with supply-side con- velopment and Local Government) (1.58 straints in the economy, which have had a pm)—by leave—I move: cumulative effect in increasing inflationary That this bill be now read a third time. pressures. Question agreed to. We are very much at the initial stages of a Bill read a third time. 15-round fight against inflation. Inflationary QUESTIONS WITHOUT NOTICE pressures have taken a long time to build in Budget the economy and they will take a long time to turn around. Inflation is a critical chal- Ms LEY (2.00 pm)—My question is to lenge facing the national economy because the Minister for Housing and Minister for the inflationary pressures running ahead have an Status of Women and concerns changes to upwards impact on interest rates. If you have the GST and the sale of property announced an upwards impact on interest rates, that in the budget and forecast to raise $620 mil- represents a long-term drag on economic lion over the next four years. Minister, by growth and therefore a long-term impact on how much will this new tax on residential employment as well. That is why it is impor- land drive up the price of a house-and-land tant that this government places at the centre package for first home buyers? of its economic priorities the fight against Ms PLIBERSEK—I thank the member inflation. for Farrer for her question. The member for That is what the government did in Janu- Farrer should know that this is a very modest ary this year when we announced our five- measure that will affect a very small number point strategy for dealing with the inflation of people and that the money will go directly challenge. Remember that, at the point at to the states. Again, I find extraordinary the which we assumed office, inflation was run- sudden interest of the opposition in the issue ning at a 16-year high. Therefore, we an- of housing affordability. In government, they nounced a strategy which was going to have did nothing for 12 years to progress housing as its core elements: (1) responsible eco- affordability. I think people can draw their nomic management through bringing about a

CHAMBER 4442 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 significant budget surplus; (2) encouraging have a meeting of the advisory council of private savings; (3) increasing capacity when Infrastructure Australia and a Building Aus- it comes to skills formation in the economy tralia Fund, which has been part of the and dealing with skill shortages; (4) invest- budget papers because this government is ing in infrastructure and overcoming infra- serious about dealing with the challenges of structure bottlenecks; and (5) enhancing infrastructure bottlenecks and the constraints workforce participation. This is a coherent that they represent in terms of not just long- strategy for dealing with the inflation chal- term economic growth but ensuring we are lenge, and if there is one sobering message to effectively fighting inflation. Similarly, on emerge from the national accounts data today the skills front, there is the establishment of it is that this challenge must be addressed the Education Investment Fund of some $10 head on. billion for the future. The government’s response in the imple- We need look no further than the part of mentation of this strategy has been clear cut. the national accounts which deals with the We have brought about a $22 billion surplus contribution of net exports to overall growth. and, in the engineering of that surplus, we The net exports contribution has been nega- have also brought about $7.3 billion in sav- tive 0.7, and this of itself reflects the fact that ings in the coming year and $33 billion we are still not overcoming infrastructure worth of savings across the forwards esti- bottlenecks and skill shortages when it mates. Ensuring that you are bringing about comes to getting our product out to market. It significant savings and that you are exercis- is very simple: we are depending at present ing appropriate restraint on expenditures is a on prices going up when it comes to demand responsible course of action for the future. globally for our resources, but, while we Again, we have done that by ensuring that have a lot of volume coming in by way of expenditure growth as a proportion of GDP imports, we basically have modest growth has been kept low and that, similarly, tax as a when it comes to the volume of exports leav- proportion of GDP has been kept low as ing the country. Therefore, if we are going to well. deal with these challenges, we have to finally The second element of the government’s respond to those 20 consecutive warnings budget strategy has been to deal with others contained in one Reserve Bank document of those inflationary pressures which are after another to act on capacity constraints in evident upon any analysis of the national the economy. There was warning after warn- accounts data. That means dealing with our ing, year after year, about skills and infra- supply-side constraints. That is why the gov- structure, and that is nowhere more evident ernment is clear cut in its strategy to invest in than in the national accounts data today and skills and invest in infrastructure. That is their reflection on the net contribution of why we have established the Building Aus- exports to overall growth. tralia Fund to deal with infrastructure chal- Of course, the third element of the gov- lenges for the future. On that point, I com- ernment’s budget strategy is not only to bring mend the Minister for Infrastructure, Trans- about responsible economic management port, Regional Development and Local Gov- through a sizeable budget surplus—and to ernment for convening today the first meet- invest in our future in skills and in infrastruc- ing of the advisory council of Infrastructure ture to deal with these constraints and to deal Australia. It is six months to the day, I think, with those factors which are fuelling infla- since this government was sworn in, and we tionary pressures in the economy—but also

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4443 to deal with the financial pressures faced by particularly on the back of this new national working families, working Australians and accounts data, is clear. We fight the fight those doing it tough, because for those Aus- against inflation. That means dealing with tralians inflation is not a charade. For those upward pressure on interest rates. If we fail Australians inflation is not a fairy tale. For to do that then higher interest rates will flow those Australians inflation is a real problem, through to economic growth and flow and it is a real problem when inflation going through to employment. We have a responsi- up has an upwards impact on interest rates ble strategy for dealing with it; those oppo- and that feeds through to their mortgage rates site do not. and the overall cost of living. That is why Economy this government has been determined as part Mr TURNBULL (2.09 pm)—My ques- of its budget strategy to deliver a package of tion is addressed to the Minister for Finance support for families, for individuals as well and Deregulation. I refer to the minister’s as for pensioners and carers, as I outlined to remarks yesterday where he observed that the House yesterday. real growth in expenditure next year is esti- The government inherited, after 12 years mated at 1.1 per cent per annum which he in office by those opposite, inflation running said was lower than in recent years. Will the at 16-year highs. We inherited 10 interest minister confirm, however, that in the fol- rises in a row. We have inherited these eco- lowing year, 2009-10, expenditure is forecast nomic circumstances and, as a consequence, to grow in real terms by four per cent, if ad- the real challenge we face with inflation is justed by the CPI, and by 5½ per cent if ad- either to regard it as a charade, to regard it as justed by reference to the non-farm GDP a fairy tale or to take that fight head on. This deflator, which is higher than in all but one government’s resolve is to take that fight of the Costello budget years? Hasn’t the head on. As I said before, taking on the fight government just pushed its expenditure out with inflation is critical for this country’s for 12 months to make its first budget look long-term economic health and the wellbeing good? of individuals and families, who depend on Mr TANNER—I thank the member for the cost of credit and the cost of finance to Wentworth for his question. It appears that do so much when it comes to their normal he has changed his position on this year’s everyday lives. Fighting the fight against budget yet again. So we now have a third inflation is core business for us but I say this: position on the budget—it appears that the the best way you can fight inflation in terms 2008 budget is now a rather good budget. of the outlays from government is to engi- But we will take that on board. We are happy neer—and not render a threat to the integrity for today’s endorsement. It may well change of—the budget surplus. In this process we tomorrow, but we will take that on board. I have generated a $22 billion budget surplus. notice the trickiness in the question in that he That represents responsible economic man- referred to two different indicators. What he agement. The contrast is a $22 billion raid on did not mention is that if we use the GDP the surplus which is the essential accumula- deflator indicator it would show that gov- tion of all the individual budget measures ernment spending in this year’s budget is which those opposite have said they will op- actually going to fall in real terms. So you pose. The contrast on responsible economic choose one indicator when it suits you, but management is clear. The government’s re- you do not want to choose it when it actually solve in fighting the fight against inflation,

CHAMBER 4444 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 suits the government. What a remarkable first budget address the economic challenges coincidence. and opportunities outlined in today’s national What is most astonishing about this per- accounts? formance is that this question is coming from Mr TANNER—I thank the member for the party which says that this budget is ex- her question. In the context of a slowing pansionary, that the budget is a high- world economy, today’s national accounts spending budget and yet that the government provide reassuring news on economic growth should be loosening the purse strings to the but they also show that the inflation fight is tune of billions and billions of dollars. It very definitely far from over. As the Prime should add $22 billion to net government Minister said yesterday, we are still in the spending. It should reduce the surplus by $22 early rounds of what is definitely a 15-round billion over those years. That is the position fight. That is why the figures that I have re- of the opposition. leased today, the national accounts figures, Mr Turnbull—I rise on the point of order underline the importance of a tough, respon- of relevance. The minister has had more than sible budget—the budget that the Treasurer enough time to think of the answer. handed down last month—and underline the importance of the $22 billion surplus that we The SPEAKER—Order! The member brought about, as the Prime Minister said. cannot approach the table on a point of order and make added remarks. The point of order Mr Costello interjecting— is on relevance and the minister is respond- Mr TANNER—I must say I am delighted ing to the question. to see there is some life in the member for Mr TANNER—I will conclude on one Higgins. point. If you would care to finally get around Mr Tuckey—I rise on a point of order: to reading the budget papers, which you will standing order 75 on irrelevant and tedious eventually do, no doubt, what you will repetition. find— The SPEAKER—As the member for The SPEAKER—Order! The minister O’Connor on further research will note, that will refer his remarks through the chair. standing order applies to speeches, not actu- Mr TANNER—Sorry, Mr Speaker. What ally to answers. The only standing order that the member for Wentworth will find is that is relevant to answers is the standing order government spending as a proportion of GDP on relevance, and the minister is relevant. across the four years of the forward estimates Mr TANNER—I know that members of is substantially lower than it was under the the opposition find it tedious that we have member for Higgins in the 2007-08 budget. handed down a $22 billion surplus, but you So the percentage of GDP the government is had better get used to it. Today’s figures rein- spending as a proportion of the total econ- force the need for responsible spending and omy across the forward estimates stays be- dealing with the capacity constraints that we low the level we inherited from the former inherited after a decade of neglect under the government. recently revived member for Higgins. The Economy government will not rest until we get the long-term policy settings right that will en- Ms CAMPBELL (2.13 pm)—My ques- able the building of a modern economy that tion is to the Minister for Finance and De- will deliver sustainable, strong growth and regulation. How does the Rudd government’s low inflation.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4445

I have a very simple message for the op- downward pressure on inflation and interest position here: the last thing that the Austra- rates through a responsible budget that deliv- lian economy needs, the last thing that the ers a strong surplus and invests in the future. Australian people need, is to loosen the fiscal That is something the Leader of the Opposi- settings that have been put in place by this tion did not understand a few months ago. government to slash the surplus and to pump Higher inflation means higher interest rates more money into the economy. That is the which, in turn, tend over time to reduce eco- last thing that the Australian economy needs nomic growth and reduce employment and that is the real message that comes growth. That is why it is so crucial to get through from these national account figures. inflation in check and that is why it is so cru- The opposition are endeavouring to mount a cial to run a strong surplus. I urge the opposi- smash-and-grab raid on the surplus through tion to think very carefully before they throw the Senate. They have the swag over the their economic responsibility credentials shoulder, the funny mask on and they are off completely out the window in the Senate. in the corridors of the Senate seeking to Alcopops mount a smash-and-grab raid on the surplus. Mr HOCKEY (2.18 pm)—My question That is simply a recipe for higher inflation is to the Prime Minister. Will the Prime Min- and higher interest rates. I understand that ister confirm Treasury advice before esti- the Leader of the Opposition was out there mates in the Senate that the Department of handing out even more money this morning, Health and Ageing was not even consulted but still there are no offsetting savings and before the $3.1 billion alcopop tax was inno explanation of what impact this would troduced? Is this the Prime Minister’s idea of have on inflation and interest rates. These evidence-based health policy? Prime Minis- accounts indicate that real growth eased to ter, doesn’t this just prove that the initiative 0.6 per cent in the March quarter, or 3.6 per is just a tax grab and the government does cent over the year, and they do show that not have a plan to address teenage binge families are feeling the impact of rising drinking? prices and higher interest rates, with house- hold consumption slowing to 0.7 per cent in Mr RUDD—I thank very much the mem- the quarter and 4.3 per cent over the year. ber for North Sydney for his question. What we have seen in the period since the measure It is good news, though, that business in- has been increased, I am advised, is that vestment continues to grow strongly, rising there has been a 39 per cent decrease in dark by 1.6 per cent in the March quarter and 6.6 spirit based drinks and a 37 per cent decrease per cent over the year and, as a share of the in light spirit based drinks. That is one thing. nominal economy, business investment re- Of course, there have been increases in other mains at approximately its highest level categories of drinks. since the early 1970s. Net exports detracted from GDP growth in the March quarter and Opposition members interjecting— reflect, as the Prime Minister indicated, on- Mr RUDD—That is true. The question, going weakness in export volumes and, in though, is what is happening in this particu- turn, the problems with capacity constraints lar category and what the overall impact is. that this government is so committed to tack- Opposition members interjecting— ling. In conclusion, the Rudd government is committed to playing its part to putting

CHAMBER 4446 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

The SPEAKER—Order! The question confidential? The documents are confiden- has been asked and the Prime Minister is tial. answering it. Infrastructure Mr RUDD—Of course, this is early data. Mr TREVOR (2.21 pm)—My question is We are talking about a month’s worth of to the Minister for Infrastructure, Transport, data. That is the first thing. The second thing Regional Development and Local Govern- is that this government is determined to act ment. Will the minister outline to the House on binge drinking. Those opposite stand on why a strong surplus is needed to deliver the side of the distilleries on this question. nation-building infrastructure? We believe that the responsible course of Mr ALBANESE—I thank the member action lies in acting in the face of the data for Flynn for his question. The government that we have received, and the data we have has indeed delivered a strong budget surplus received shows that ready-to-drink products of $22 billion that ends wasteful spending targeted at girls and young women have seen and sets aside the vital funds to begin to a 23 per cent growth since 2005. On top of make up for years of neglect. The govern- that, we have seen a 250 per cent increase in ment is taking the steps necessary to drive RTD sales since the Howard government down inflation and drive down interest rates. created a tax loophole back in 2000. So what I refer to the statement by the Governor of you can do is: ignore that data, ignore the the Reserve Bank yesterday where he again, social problem and ignore the public state- on top of the 20 warnings about capacity ments by the police commissioners of the constraints in the economy leading to in- nation and do as those opposite are doing creases in inflation and increases in interest and simply wave a white flag—or act as this rates, indicated that the capacity constraints government has decided to act. in the economy were what had led the Re- Mr Pyne—Mr Speaker. I rise on a point serve Bank to address demand in the econ- of order. Under standing order 104 the Prime omy by increasing interest rates through 12 Minister was asked a specific question about consecutive rises. whether the advice of the Department of But you can only invest in infrastructure Health and Ageing was sought before the and address these long-term issues if you alcopops’ introduction— have responsible economic management, and The SPEAKER—The honourable mem- that is what the advisory council members of ber will resume his seat. The question then Infrastructure Australia who met for the first went on to another two parts, which opens time here in parliament today are making a very widely the ability for the Prime Minister contribution to. The Infrastructure Australia to be totally relevant to the question. The Advisory Council will make recommenda- Prime Minister has the call. The Prime Min- tions to the government on a range of issues. ister has finished? The member for Sturt was Firstly, addressing infrastructure is not just very lucky to get the call. about new investment; it is actually about Dr Nelson—The Prime Minister was cit- using more efficiently the infrastructure that ing data from papers that he was reading. we have. It is also about making sure that we Would he please table those for us? have greater harmonisation of guidelines and The SPEAKER—Was the Prime Minister regulations, including on public-private part- quoting from documents? Are the documents nerships.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4447

They will also be conducting a national pitals in this country. When it comes to the audit into infrastructure and will produce a future of hospitals in this country, you can national infrastructure priority list at the either invest in the future of hospitals or ig- COAG meeting in March 2009. This will be nore them, which is why this government, aimed at addressing the infrastructure bottle- for the first time in the nation’s history, has necks that those opposite might ignore, not established a hospitals investment fund of just in speech but in practice, by their $22 some $10 billion to look at the long-term billion raid on the surplus. But those who needs of the system. This is fundamental to acknowledge that infrastructure bottlenecks making sure that the capital needs of the na- are a major capacity constraint on the econ- tion’s hospitals are set in the right direction. omy, along with skill shortages, know that If you travel around the hospitals, as the we need that long-term planning. The Rudd Minister for Health and Ageing and I have in government is determined to do that. We recent times, you will discover one set of have the structures in place to do that capital needs after another. Then there are the through Infrastructure Australia. We have put workforce needs—again, monstrously un- our money where our mouth is by investing dertended by those opposite who, year after in these long-term infrastructure funds, not year and for a full decade, did nothing to just in the Building Australia Fund but also address the undersupply of doctors and in education and health. If we are serious nurses across the nation despite the fact that about addressing these issues, we have to be doctors and nurses are trained in tertiary in- also serious about being responsible eco- stitutions which are the exclusive responsi- nomic managers. That means maintaining a bility of the Commonwealth. commitment to a strong budget surplus as the If the opposition are raising questions se- first point in the Rudd government’s five- riously about the future of hospitals, the fu- point plan to fight inflation. ture of health policy and the future of our Private Health Insurance health workforce, I would suggest that after Mr HOCKEY (2.24 pm)—My question 12 years in office, with ample opportunities is addressed to the Prime Minister. Will the to act in each of these areas, they should Prime Minister confirm Treasury advice to have done so. We have a long-term plan for the Senate estimates hearings that the gov- the future when it comes to health and hospi- ernment’s estimated private health insurance tals—$10 billion worth of investment and a drop-out figure of 484,000 people does not cooperative negotiation currently underway include children and dependants? Will the through the Council of Australian Govern- Prime Minister confirm that the estimated ments to work with the states and territories drop-out figure for private health insurance on how we overcome duplication and over- is now closer to one million people and that lap and bring an end to the blame game in these people will now add to the massive this critical area of concern to the people of burden on state public hospitals? Prime Min- Australia. ister, doesn’t this just prove that the private Mr Abbott interjecting— health insurance changes were just a savings The SPEAKER—Will the member for measure and the government has no plan for Warringah sit down. He cannot act in that better hospital care? disorderly manner. I use this point, after a Mr RUDD—The government has a first- comment was made to me, to remind people class plan for dealing with the future of hos- that nobody needs a warning to get one hour

CHAMBER 4448 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 under standing order 94(a). The warning Ms GILLARD—I thank the member for would also then lead to an ability to be Braddon for his question and note his interest named for one day. Without going to a point in productivity, because he understands that of order that was not raised, the illustration today’s productivity growth is the nation’s in that question and answer was that that was future prosperity. a three-part question that went to mentioning Opposition members interjecting— whether the government did or did not have Ms GILLARD—I understand from the a plan—that is, inter alia. I think that that reaction that members opposite do not care then becomes a difficulty for people who to discuss productivity, because they would wish to seek a question being ruled out as be rightly ashamed of the record of the for- irrelevant. mer government on productivity, and, of Mr Albanese—Mr Speaker, I rise on a course, as they shred their economic creden- point of order. The member for Warringah tials and try to mask that behind bullyboy should withdraw. carry-on, they do not want people talking The SPEAKER—I cannot remember about the economy at all. But whilst the op- what he actually said, but it would assist if position, the Liberal Party, demonstrates he did withdraw. each and every day just how much it has lost Mr Abbott—I withdraw. I am justly— its way, the government is getting on with the job of building productivity and prosper- The SPEAKER—The member for War- ity for the future. There is no more important ringah will resume his seat. part of that agenda than the human capital Mr Albanese—Mr Speaker, I rise on a agenda—the investment in education and point of order. Under the standing orders for training, which goes from the education of disorderly conduct, you have just raised with our youngest children, through schools, the member for Warringah the inappropriate- through vocational education and training to ness of his point of order. He then came to higher education. We need to make a differ- the dispatch box and acted in a disorderly ence for all of that breadth of education if we fashion in defiance and contempt of your are to make a difference over time for na- ruling, and I ask that you take action. tional productivity growth. The SPEAKER—The Leader of the This is a government that is committed to House will resume his seat. The member for an education revolution and to reform in all North Sydney will resume his seat. I have areas. We have embarked on a comprehen- taken note of the point made by the Leader sive range of measures in child care and the of the House. We are now in questions. early education agenda—a $2.4 billion in- Productivity vestment. It includes our changes to the Mr SIDEBOTTOM (2.29 pm)—My childcare tax rebate to take pressure off question is to the Minister for Education, the working families, with an increase from 30 Minister for Employment and Workplace per cent to 50 per cent. It includes our com- Relations, and the Minister for Social Inclu- mitment to the delivery of up to 260 new sion. Will the minister detail the govern- childcare centres. It includes our commitment’s approach to boosting productivity? In ment to deliver $126.6 million to build ca- addition, will the minister contrast this ap- pacity in the early years workforce. This proach to alternative approaches? level of activity and investment stands in stark contrast to the neglect of the previous

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4449 government, where the current Deputy ing to industrial relations extremism and Leader of the Opposition, the then minister Work Choices. And we are bringing fairness, for education, said: balance and productivity to Australian work- ... I agree that investment in early childhood is places by dismantling the industrial relations very, very important and traditionally the State extremism of those opposite, putting the fo- Governments have been responsible for early cus back on cooperation and on lifting pro- childhood. I’m not blaming anyone, I’m just stat- ductivity. In each of these areas the govern- ing a fact that State Governments are responsible ment is determined to act. for early childhood ... I know members opposite don’t like to lis- That is, that the former government was go- ten to this because they don’t like to listen to ing to do nothing, did not care to do any- talk of their more than decade of neglect— thing, did not believe in doing anything and neglect of early childhood, indifference to never acted. the quality of schooling, creation of a skills On the question of schools, we have in- crisis, ideological intervention in our univer- vestments in new capital and we have in- sities in pursuit of industrial relations ex- vestments in the quality of teaching. We have tremism. Where the former government investments to try to assist students in failed, this government is acting. We under- schools that are in the most disadvantaged stand that productivity growth is about pros- circumstances. We are working towards new perity tomorrow. That is economic responsi- national partnership arrangements for all of bility on display. those areas of schooling that the former gov- Private Health Insurance ernment put in the too-hard basket. Dr NELSON (2.35 pm)—My question is In skills, we are investing $1.9 billion to to the Prime Minister. Will the Prime Minis- create up to 630,000 new training places, ter confirm the statement of fact by Treasury with the first 20,000 of them already deliv- that, as a result of the Medicare levy sur- ered. What we will not do and what we know charge, almost one million Australian men, the alternate approach was, one so graphi- women and children will be leaving private cally articulated by the member for Gold- health insurance to queue up in Australian stein when he was the relevant minister, is to public hospitals? sit idly by and watch a skills crisis grow and do precisely nothing about it. That was the Mr RUDD—The government stands by record of the previous government. Treasury’s modelling and has no basis to question the Treasury modelling upon which Of course we are investing in our univer- the government’s decision has been based. sity sector, with our $500 million investment We notice that that modelling has been chal- this financial year through our Better Uni- lenged both by the Australian Health Insur- versities Renewal Fund and a new long-term ance Association and the AMA. Again, it is Education Investment Fund—$11 billion no passing coincidence that those opposite available to assist with infrastructure in uni- always rely upon organisations like those versities and in vocational education and who represent the big supermarkets, the big training. oil companies and the private health insur- Once again, this approach, of investment, ance companies to underpin their argument. is a stark contrast to a government whose As I said before, we stand by the modelling only concern about universities was to med- which Treasury has provided us in framing dle in their industrial relations by tying fund- our policy on this.

CHAMBER 4450 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

The second point I would make on it is Small Business that those opposite are still of the view that a Ms NEAL (2.38 pm)—My question is to $50,000 salary is a high income, because that the Minister for Small Business, Independent is the threshold at which they introduced the Contractors and the Service Economy. In surcharge on families way back when and light of today’s national accounts figures, they have refused to adjust it since. And each will the minister advise the House of the im- time the member for Higgins, when he was portance for business, especially small busi- Treasurer, was challenged on this, he said, ness, of maintaining responsible fiscal pol- ‘No, no, not now, not yet.’ Now, $50,000 icy? may have been the calculation of the Liberal Dr EMERSON—I thank the member for government back then as representing those Robertson for her question. She is a very on a high income; I would say, as a further strong supporter and advocate of the local indication that those opposite have lost touch small business community on the Central with working families and those under finan- Coast of New South Wales. The national ac- cial pressure in the community, that $50,000 counts released today are reassuring news at is no longer a high income. Therefore, they a time of global uncertainty in an economic are standing in the road of providing savings downturn, but they also confirm that the of up to $20 per week per individual and $30 fight against inflation here in Australia is far per week for families and couples. I would from over. Members opposite will be aware suggest that those opposite get themselves that, when the Rudd government was back in touch with those Australians who are formed, we inherited an inflation rate at a 16- struggling deeply with the challenges to their year high. This is despite 12 interest rate family budget. This is one measure— rises in a row. We know that high interest together with the education tax refunds, to- rates are public enemy No. 1, but they are gether with the childcare tax rebate, together especially the enemy of small business. with our initiatives in the housing portfolio, together with $44 billion worth of tax cuts to There have been several small business families and individuals under financial pres- surveys that have confirmed that businesses sure—to take pressure off the overall family are identifying high interest rates as a key budget. I would suggest that is the produc- factor affecting business confidence and their tive way forward in dealing with this and, business planning decisions. I will refer to secondly, with a radical program of invest- three of them. One is the National Australia ment in the nation’s hospital and health ser- Bank’s quarterly business survey, which vices—a system from which those opposite says: extracted $1 billion during their time in of- … the combination of much tighter financial con- fice. ditions, falling global equity markets and the global credit crunch has produced a sharp fall in Mr Hockey—Mr Speaker, I seek leave to business confidence. table a copy of the Hansard from the Senate where the Treasury’s own modelling says The Dun and Bradstreet National Business that they only covered adults and forgot Expectations Survey says: about the children, therefore taking the figure … the combination of high interest rates and up to nearly one million Australians drop- market turmoil has fuelled executive concerns ping out of private health insurance. regarding the impact of the credit market on operations. Leave not granted.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4451

And, finally, an SAI Global/ACCI survey on Australia need is a $22 billion raid on the investor confidence was released and in rela- surplus, which is being orchestrated by the tion to that ACCI said: coalition. That would be very bad news for The survey shows that interest rates and ongoing small business and very bad news for the financial sector turmoil has significantly dented Australian economy. business confidence. The budget also helps ease the capacity The point is that interest rates are having an constraints, which were identified again yes- effect on business confidence and on busi- terday by the Reserve Bank in its statement ness planning decisions. announcing that it was keeping interest rates The budget, however, is designed to help on hold. There was some dispute about this. put downward pressure on interest rates The infrastructure minister was pointing this through putting downward pressure on infla- out. He was asserting that the Reserve Bank tion. It is a contractionary budget, Malcolm, did identify capacity constraints. Members with a surplus of almost $22 billion or 1.8 opposite do not seem to believe there are per cent of GDP. It cuts spending growth any. But the Reserve Bank does say, from from five per cent in the current financial that statement yesterday: year down to one per cent. I am reminded Inflation in Australia has been high over the that, at the time of the release of the former past year and in an environment of limited spare Prime Minister’s biography, the member for capacity and earlier strong growth in demand. Higgins was prompted to say about the then So there you have it, Mr Speaker: yet again, Prime Minister, ‘In formulating budget pol- on top of the 20 warnings, another warning icy, I showed him the menu and he took the yesterday saying that the problem is— entree, the main course, the dessert and the Mr Ciobo—That’s a lie! That’s a com- vegetarian option.’ It was an unprecedented plete lie! spending spree and we are now reining in Dr EMERSON—we have capacity con- that irresponsible government spending. straints. The budget provides $1.9 billion Indeed, the budget cuts spending as a over five years to create 630,000 training share of gross domestic product goes from places. This is very important for small busi- 24.4 per cent to 23.4 per cent. That is a full ness in easing the skills crisis— one percentage point reduction in govern- Mr Ciobo—That’s a lie! ment spending as a share of GDP in a single year. That is a very big achievement for the Dr EMERSON—and investing very Treasurer, for the Minister for Finance and heavily in infrastructure. Deregulation, the Prime Minister, for every- The SPEAKER—Order! The minister one involved in formulating that budget— will resume his seat. The member for Mon- bringing in a budget surplus of $22 billion, crieff will withdraw. 1.8 per cent of GDP, and a very, very sub- Mr Ciobo—Mr Speaker, it is a lie that stantial reduction in government spending as there were 20 warnings. I am stating the a share of GDP. And that is why it is vital in truth; it is incorrect. this fight against inflation that this budget is The SPEAKER—The member for Mon- passed by the Senate, so that it can do its crieff will continue to the door for one hour work and help put that downward pressure under standing order 94(a). on inflation and downward pressure on interest rates. The last thing small businesses in The member for Moncrieff then left the chamber.

CHAMBER 4452 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008

The SPEAKER—The minister will re- wonder the shadow ministry tactics commit- spond to the question. tee has been holding him back, with the cali- Dr EMERSON—The Rudd government bre of questions like that. is building a strong surplus for a strong Mr Anthony Smith interjecting— economy, capable of meeting the challenges The SPEAKER—Order! The member for of the 21st century for the working people of Casey will assist by not repeating his ques- Australia and for Australia’s 1.9 million tion—he has now asked it—and by not inter- small businesses. jecting. The Deputy Prime Minister will now Schools: Computers respond to the question. Mr ANTHONY SMITH (2.44 pm)—My Ms GILLARD—I certainly will, Mr question is to the Deputy Prime Minister. Speaker. I was just hoping to offer a little bit Mr Rudd interjecting— of encouragement along the way. On the question that the member asks about com- Mr ANTHONY SMITH—I would not puters in schools, the government’s policy is laugh, Prime Minister. We know that Julia absolutely clear. We are delivering now a cooked the hot dog. $1.2 billion investment in computers in Honourable members interjecting— schools. Have a look at the budget papers; The SPEAKER—Order! The member for you will see it there. That $1.2 billion in- Casey will resume his seat. Members on both vestment in schools includes $100 million sides are not assisting. which will be delivered before the end of this Mr Pyne interjecting— financial year. On the question of the partnership with the states ensuring that com- The SPEAKER—Order! The member for puters are in settings where they can be used, Sturt is denying the member for Casey the at the last meeting of the Ministerial Council call. for Education, Employment, Training and Mr ANTHONY SMITH—Can the Dep- Youth Affairs, MCEETYA, a resolution was uty Prime Minister confirm that, as was re- adopted unanimously by the ministers who vealed in Senate estimates today, she still has met there on partnership and cooperation not attempted to calculate, or even estimate, about the digital education revolution. Of the additional costs of actually implementing course, what the government is trying to the government’s computers in schools pol- achieve here—which is something, I under- icy? Deputy Prime Minister, doesn’t this stand, that members opposite must be op- prove that your computers in schools initia- posed to from the way that they are calling tive was a plan designed to last only until out—is to invest in upper secondary schools, election day? years 9 to 12, to ensure— Ms GILLARD—I am glad to see that the Mr Anthony Smith—Mr Speaker, a point shadow minister for education finally got a of order on relevance: the question was question. He is no longer the Marcel Mar- whether the minister could— ceau of Australian politics. I was looking The SPEAKER—Order! I know what the forward to that miming of eating an apple question was. The member for Casey will later on in the session. We are obviously go- resume his seat. ing to miss out on that. But, if he is going to routinely get questions in the future, I think Ms GILLARD—To conclude my answer: he is going to have to up the quality. No the government’s program is being delivered. All I can conclude from the antics of mem-

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4453 bers opposite is that they are opposed to stu- from across the board to fix that situation, dents in years 9 to 12 learning with digital and it has taken the election of a new gov- education technology. If one looked at their ernment, five years after the Boral case, to track record in government, what one would fix the Trade Practices Act. On 28 April we see is 12 years of neglect of the need to en- announced the government’s package of re- sure that students are learning in 21st century forms to fix this problem. This amounts to classrooms. This is a government that is the biggest reform of the Trade Practices Act committed to that process and is investing in 22 years. The new rules will make it easier $1.2 billion in getting the job done. for the ACCC to prosecute businesses who Anticompetitive Practices are engaging in anticompetitive behaviour. The government’s amendments will ensure Mr NEUMANN (2.49 pm)—My question that victims of predatory pricing, or the is to the Assistant Treasurer. Will the minis- ACCC, will no longer have to prove that the ter update the House on the government’s predator has the ability to recoup losses after actions to crack down on anticompetitive participating in anticompetitive, below-cost behaviour by powerful business? Why has pricing. this reform been delayed? We will also clarify the meaning of the Mr BOWEN—Prior to the last election, term ‘take advantage’ in section 46 in re- the Labor Party made a commitment to sponse to concerns raised that the present strengthen the Trade Practices Act to crack meaning of the term has prevented section 46 down on anticompetitive conduct by power- from capturing anticompetitive behaviour. ful businesses. I am pleased to inform the And we will remove the uncertainty that House that the government is acting on that arose in the dying days of the previous gov- commitment. Australian consumers need ernment under the cobbled-together amend- small and medium sized enterprises to pro- ment which resulted in a two-track process. vide rigorous competition. The Australian It is very important for business certainty economy depends on rigorous competition so that that situation is fixed, and we are look- that Australian consumers can benefit. Preda- ing for bipartisan support for that very im- tory behaviour by large and powerful busi- portant reform. We will also give small businesses means that they abuse their power in ness cheaper and easier access to the courts the market with a view to damaging a small to prosecute situations in which they are be- business to increase their market dominance. ing disadvantaged by anticompetitive con- Through a series of cases, the courts have duct by big and dominant players by giving watered down the Trade Practices Act over them access to the Federal Magistrates several years. For example, in 2003 the High Court. We will also enshrine in legislation— Court, in the Boral case, said that if a big make it the law—that one of the deputy firm cuts its prices to drive a small business chairs of the ACCC will have a small busi- out of operation to dominate the market the ness background. ACCC must be able to prove that that big I am pleased that these reforms have been firm can make up the losses into the future. welcomed as striking the right balance from That evidentiary burden proved so high that businesses across the board and are seen as a the ACCC immediately discontinued all its sensible approach. They have been wel- predatory pricing cases and has not com- comed by the Council of Small Business menced any others. Unfortunately, the mem- Organisations, by the Australian Industry ber for Higgins completely ignored calls Group, by the Motor Traders Association, by

CHAMBER 4454 HOUSE OF REPRESENTATIVES Wednesday, 4 June 2008 the Fair Trading Coalition and by that well- the old system was not serving growers well, known friend of the government the Austra- it was the moment that can be defined by lian Chamber of Commerce and Industry. three letters, AWB, or three words, wheat for These reforms have been welcomed because weapons. At that moment it was made clear they are sensible, they have been welcomed to everybody around this parliament that the because they are long overdue and they have system had to be changed. Last year the pre- been welcomed because the previous gov- vious government, instead of providing cer- ernment wilfully neglected to act. tainty for growers, took the legislation to a Fuel Prices point where it provided the worst of all worlds. Mr DUTTON (2.53 pm)—My question is to the Assistant Treasurer and Minister for To find the best endorsement of that, look Competition Policy and Consumer Affairs. at what people have defended in this cham- Minister, what was the process used to draft ber over the last 24 hours. We had the Na- the Fuelwatch legislation? Can the minister tional Party position. They said, ‘Forget the explain why two bureaucrats were locked in current legislation,’ and advocated the rules a room overnight to draft the legislation in- we had at precisely the time that wheat for stead of the government drafter, the Office of weapons took place. We then had the Liberal Parliamentary Counsel, being used? Minis- Party position in the Senate inquiry, which ter, doesn’t this just prove that the Fuelwatch said we needed more regulation than what initiative is just policy on the run and the our bills provided. We then had the Liberal government has no plan to reduce petrol Party position in this chamber last night, prices? which said we needed less regulation than what our bills provided. But nobody at any Mr BOWEN—The assertion by the hon- point said the way to provide certainty to ourable member is incorrect. The Office of growers was to leave the previous govern- Parliamentary Counsel was integrally in- ment’s legacy in place. Not one person in volved in the development of the Fuelwatch this chamber at any moment during the de- legislation, as is normally the case. bate on that bill has said that the previous Wheat Exports government’s legislation got it right. The Mr CHAMPION (2.54 pm)—My ques- reason that no-one can defend it is that it is tion is to the Minister for Agriculture, Fisher- truly indefensible. ies and Forestry. Will the minister update the I have been seeking for some months to House on the latest developments in provid- provide certainty for wheat growers through ing certainty to wheat growers? a sensible marketing system into the future. Mr BURKE—I thank the member for On 5 March we released an exposure draft Wakefield for his question and acknowledge bill. At any time since 5 March it was open his strong engagement with the wheat grow- to the Leader of the Opposition to declare ers in the electorate of Wakefield, who have what the position of the Liberal Party would a prime involvement in the export market. be. Growers have had to go through, work The reform that was dealt with in the cham- out whether they are going to plant and work ber earlier today was required for the $5 bil- out exactly what sort of wheat they are going lion industry that is the wheat industry in to plant. They have had to make all those Australia. It was required because of failures business decisions while waiting for the con- of the previous government. If there was venience three months later of the Leader of ever a moment where it was made clear that the Opposition to finally declare a position.

CHAMBER Wednesday, 4 June 2008 HOUSE OF REPRESENTATIVES 4455

Certainty for wheat growers is finally getting Greg A. says: closer. This only shows that the Nationals need to be But we saw divisions when earlier today more independent and not just vote like lemmings we had the division here in this chamber on to support their Liberal colleagues. It is clear that going to the next stage of providing certainty the Liberals do not treat their election partners for growers. Let us not pretend that there was well, look at the McGauran defection. any small gap among the members opposite. As we move forward to try to provide cer- The Leader of the Opposition, when he tainty for growers for the next harvest, the talked about the reasons why the Liberal chasm between the opposition parties could Party would be not opposing it referred to not be greater—and that is not due to how I the legislation as being ‘consistent with the define their differences, but due to how they core philosophy of the Liberal Party’. The define their differences. They talk about it National Party, when explaining their rea- being a difference between fundamental ten- sons for opposing it, referred to the legisla- ets and core philosophy. When their funda- tion as being a ‘fundamental tenet of the Na- mental tenets and their core philosophy clash tional Party’. Each of the parties opposite has but they are still talking about a merger then completely elevated how wide and funda- it can only be because they have given up on mental to their core beliefs this issue is. So plans for a future and are just out there look- they have decided that now—when they are ing for a logo. voting on opposite sides of the chamber, Stockfeed when they are dis