Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the International Tax Agreements Amendment Bill (No. 1) 2009, which gives force of law to taxation agreements reached between Australia and the British Virgin Islands and the Isle of Man. The purpose of these agreements was outlined by the Assistant Treasurer in his second reading speech in the House on 19 March 2009 and fundamentally relates to, firstly, overcoming double taxation that may presently occur in relation to certain income of individuals flowing between Australia and the British Virgin Islands and the Isle of Man; and, secondly, the prevention of tax avoidance and evasion. It is my view that these measures may also lead to the detection and successful prosecution of other criminal activities. I am pleased to note that these agreements may be the first of others to come with other countries, because if these measures are to be effective in tax avoidance and evasion then we need to also close the loopholes currently available in those other countries.

We live in a global economy in which funds are instantly moved from one country to another. There was no better example of the global financial economy that has been created than watching the international domino effect of the global financial crisis. What is required but is not yet in place in our global financial system is a uniform set of financial regulations and tax laws. The reality is that we are unlikely to see that for some time, although I understand that uniformity of financial regulations is under consideration by the G20 countries. A paper put out by the OECD with respect to work on countering international tax evasion says:

Since the beginning of 2009, international tax evasion and the implementation of the internationally agreed tax standard has been very high on the political agenda, reflecting recent scandals that have affected countries around the world, the spotlight that the global financial crisis has put on financial centres generally, and the recent G20 London summit. In July 2008, the G8 Heads of State and Governments urged “all countries that have not yet fully implemented the OECD standards of transparency and effective exchange of information in tax matters to do so without further delay, and encourage the OECD to strengthen its work on tax evasion …”

I am certainly encouraged by that statement. There will, however, continue to be low-tax jurisdictions around the world and, whilst that is the case, there will continue to be tax avoidance and tax evasion schemes created by individuals and by global corporations—tax avoidance schemes which deprive Australia of legitimate taxes and which other Australian taxpayers ultimately carry the burden for, either through higher general tax levels or through cuts in government services.

For the year 2005-06, the most recent year for which data was available, the Australian Taxation Office estimates that $5.3 billion flowed from Australia to tax havens in overseas countries. Some of those transfers may well have been legitimate. I strongly suspect, however, that most would have been for tax minimisation or avoidance purposes. On the basis of average tax rates, the tax that may have been avoided by the transfer of $5.3 billion to overseas tax havens would be around $2 billion. That is a significant sum of money. I also note that Project Wickenby has raised over $300 million in lost tax liabilities since it was established in 2004. It is my belief that what we are able to recover is only a minuscule amount of the revenue that is lost each year through international monetary transfers and other tax accounting schemes used by multinational organisations and individuals in order to avoid tax—tax avoidance schemes that are not perpetrated by the millions of hardworking wage-earners who pay their tax weekly.

There is of course a second but equally serious matter associated with the transfer of money to overseas tax havens, and I refer to the transfer of funds raised through criminal activities. The exchange of taxation information between Australia and the British Virgin Islands and the Isle of Man will undoubtedly make it more difficult for criminal organisations or individuals to use these islands to deposit their proceeds of crime. Of course, every time a loophole or a criminal opportunity is closed those engaged in criminal or tax avoidance activities are forced to change their operations. Again, I quote from the document I referred to earlier. On harmful tax practices, it says:

The challenge of combating offshore tax evasion is not new, but it has grown more complex and more serious given the increase scope for illicit use of the international financial system in a globalised world.

That is why it is important to pursue similar agreements with other tax haven countries, and I note the positive references made by the then Assistant Treasurer, now the Minister for Financial Services, Superannuation and Corporate Law, in his second reading speech about Hong Kong, Singapore, Liechtenstein, Switzerland, Luxemburg and Austria. I also note that, to date, Australia has signed tax information exchange agreements with Bermuda, on 15 November 2005; Antigua and Barbados, on 1 February 2007; Netherlands Antilles, on 1 March 2007; and, more recently, with the British Virgin Islands, on 28 October 2008, and the Isle of Man, on 29 January 2009. Equally encouraging is that since November 2008 almost 40 agreements have been signed or announced around the world.

With respect to the legitimate allocation of taxing rights agreements—which, for example will ensure that government employees of the British Virgin Islands working in Australia in a British Virgin Island government office will not be taxed in Australia—I note that the majority of those people affected will be government employees, students and retirees. These are not tax evaders or tax avoiders but legitimate taxpayers who should not be double taxed. In fact, if they were it would be unlikely that they would want to work in the country where they were going to be double taxed. This, in turn, might make it very difficult both for them and the government they were most likely going to be employed by.

This bill supports those taxpayers who do the right thing and targets those who do the wrong thing. I quote again from the same document I referred to earlier on. I quote a statement which I believe was associated with the G8 declaration at L’Aquila in Italy on 8 July 2009 and which appears in annex 1 of an OECD overview of work on countering international tax evasion:

In this difficult time, the protection of our tax base and the efforts to combat tax fraud and tax evasion are all the more important, especially given the extraordinary fiscal measures adopted to stabilise the world economy and the need to ensure that economic activity is conducted in a fair and transparent manner.

For the past 12 months we have been debating in this chamber issues associated with the global economic recession—issues which firstly arose from the global financial crisis but which, in turn, have required extraordinary levels of commitments by governments around the world. These commitments undoubtedly rely on the tax bases of the individual countries. I believe those tax bases have been undermined by people using tax havens around the world to evade or avoid taxes.

We have seen in recent years a trend towards more uniformity in all kinds of laws relating to global matters, and that is a good thing. When it comes to tax laws, it will be a much bigger hurdle to overcome to ensure that there is consistency of tax laws around the world. If there was, then it would make it very difficult for people wanting to perhaps place their operations in a low-taxing country because such countries would not exist. Nevertheless, it is, and should be, an objective of countries around the world, and I am heartened by reports that countries are looking to do exactly that. I understand the work that is currently underway by the G20 countries and others to ensure that some uniformity is progressing and progressing at a good rate.

Likewise, the exchange of information between countries is critical. In fact, it is crucial in identifying funds that have been placed in different bank accounts in different countries solely for the purpose of avoiding tax. This bill goes a long way towards overcoming some of those obstacles, to identifying some of those funds that have been transferred from one country to another. I note that in recent years there have been many, many other agreements similar to this which do exactly the same. I think we are moving in the right direction and many of the tax havens that in years gone by had been used by either criminals, tax avoiders or tax evaders have now been closed down. This is another step towards doing that. I commend the bill to the House and look forward to seeing similar agreements being put in place between Australia and other countries where such tax havens exist.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

I rise to talk on the International Tax Agreements Amendment Bill (No. 1) 2009 and do so proudly looking at the coalition’s track record of initiating, growing, developing and nurturing bilateral tax agreements. In fact, from 1996 until when the coalition lost office in 2007, over 30 treaties have been signed with 19 different countries. It is demonstrable of the coalition’s commitment to ensuring foreign investment, providing opportunities for all Australians and ensuring Australian businesses overseas both are competitive in the environments they operate in and are not punitively damaged in any way by double taxation or information losses. It is telling to look at the 19 countries which, in the great and glorious times of the coalition government when the nation was debt free, signed taxation treaties—Argentina, Belgium, Canada, East Timor, Finland, France, Japan, Malaysia, Mexico, New Zealand, Norway, Romania, Russia, Slovakia, South Africa, Taipei, United Kingdom, United States of America and Vietnam. So it is pleasing to stand here and lend some comment on the two agreements that this bill is seeking to enact with both the British Virgin Islands and the Isle of Man.

In 2001, the coalition provided a significant commitment to look at a whole raft of international tax arrangements through the Securing Australia’s Prosperity policy document. In reviewing those arrangements, the coalition put forward a range of reforms with the sole intent of ensuring that our businesses were competitive not just in Australia but also overseas and that Australia’s status would continue to be maintained, and indeed enhanced, as a great place for foreign companies to invest foreign dollars and for businesses to sink their roots and call Australia a business port of call. That began bilateral negotiations with many countries, in the areas of double taxation and information sharing, to ensure that there were no punitive areas that would damage people working in the government’s base or those seeking education or looking at educational institutions. Many of the agreements that were signed included the exchange provisions that met OECD standards and provided a range of reciprocal assistance between agencies which were invested with the issues of tax collection. The opportunity to sit down in dialogue with different nations and to pull down barriers stopping mutually beneficial investment certainly strengthened relationships between countries. Those 19 countries and over 30 tax treaties went a long way to helping out in that environment.

Today we are looking at a bill which gives force of law to the tax agreements between the government of Australia and the governments of the British Virgin Islands and the Isle of Man. The agreement with the British Virgin Islands, signed on 27 October last year, deals with the allocation of taxing rights with respect to certain income of individuals, and the agreement with the government of the Isle of Man deals with the allocation of taxing rights with respect to certain income of individuals and the establishment of a mutual agreement procedure in respect of transfer pricing adjustments. The agreements are significant inasmuch as they add to the 19 previous ones, meaning there are 21 significant agreements at a bilateral level which deal with the issues of tax. But they also continue the great work of the coalition in dealing with the issue of tax havens. The coalition can stand very proudly on its record of tax reform at both a domestic and an international level. No-one can discount the courage of the member for Higgins, and indeed the entire Howard government, in reforming taxation, especially through bringing in a GST. The measures today continue, in some part, that reform process, by adding to the 19 bilateral tax agreements.

The agreement with the British Virgin Islands ensures that those employed by governments will not be subject to double taxation. It takes away a punitive measure that may seek to ‘double dip’, if I may use the words from Seinfeld, into the salaries of those who are working hard in the British Virgin Islands. It also provides that any income received from government services is taxable only in the one country. The provision of course does not apply to those earning income from private business or commerce. It also ensures that education related payments received by students are exempt from tax. This is good news for students who have so viciously felt the weight of the Labor government’s initiatives, those in the regional areas who were looking at missing out on incentives just because they took a gap year. It is encouraging to see the government make a move to ensure that education related payments received by students in the British Virgin Islands are exempt from tax. The agreement also provides an exemption for students from Australia or the British Virgin Islands from paying income tax on money received from their resident country for the purposes of education and maintenance.

It is important to recognise that the bill covers not only the British Virgin Islands but a favourite part of the world for me—the Isle of Man. The agreement between Australia and the Isle of Man provides for a complete exchange of information in both criminal and, importantly, civil tax matters. This will remove the ability for Australian taxpayers to use the Isle of Man as a tax haven. It is important to realise, if I may use Japan as an example, that companies in Japan are proud to pay tax. They are proud to be part of a society in which they can earn, develop a profit and then put back into their nation. The idea of tax havens, where people try to escape their fundamental responsibility to contribute to their nation, its people and its values by passing back some of their profits through taxation, should be a moribund idea to all of us in this House. A well-ordered, well-managed, well-operated and simple tax system is paramount for the success of a nation in going forward, which is why, as a coalition, we can draw great pride from our tax reform, not only the brave efforts of the GST but onwards as we move forward towards greater tax reform.

This House looks forward with great interest to the Henry tax review. We look forward with great interest to where Labor is taking tax reform in this country. This House can be assured that the Henry tax review will be scrutinised in keen detail to ensure that the tax system that Labor was envisaging continues to be robust but fair; continues to be significant in its breadth across business; becomes simple; rewards innovation; seeks to lift up business; and will not punitively damage Australians who are looking forward to raising a family and earning an income. The Henry tax review must be built on solid standards. It must seek to deliver to this country the fairness and the balance that the tax review and reforms delivered under the Howard-Costello years.

The Labor government is certainly on notice that the bill that they bring forward after the Henry tax review is brought down will have the weight of scrutiny applied to it. The great tax reform that this House has seen in the last 12 years should not be undone by an ideology that is bent on punishing small business, a return to collectivism and a return to unions coming into businesses. That the Treasurer has said that only collective agreements can deliver productivity is both reckless in its statement and false in its premise. In the last 12 or 13 years under the Howard-Costello reign we saw productivity increase substantially. We saw real wages increase 24 per cent compared to the previous Hawke-Keating government where real wages went backwards by 1.9 per cent. The House can be assured that that review will receive significant and due attention.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I remind the House that standing order 76 was suspended earlier today for the duration of the speech by the member for Bradfield and that the member may speak without limitation of time.

Brendan Nelson (Bradfield, Liberal Party) Share this | Link to this | Hansard source

I thank the Prime Minister, the Leader of the Opposition—my leader—and all of my colleagues who are here from this chamber and from the other place. You humble me by your presence and you honour the people I represent by being here. I thank you very much. It is with a sense of privilege, deep gratitude and team achievement that I make my final contribution to the parliament of Australia.

During preselection in 1995, I was asked how long I might serve. Though it was impossible to define, I knew that I would know when the time had arrived—and that time is now. Before dealing with more substantive issues though, I perhaps should deal with the two most consistent things that have been raised in relation to me from the time I arrived in parliament: the first is my earring and the second is my hair. The media enjoy evaluating me and I might as well give them something to throw around. The truth of it is that, at the age of 17, my then girlfriend suggested I should get an earring. I thought, ‘If that’s what it takes, I’ll get an earring.’ Later, having gone through part of an economics degree and having spent a year in the workforce, I began thinking about what would be a useful way to spend my life. I decided that I would try to study medicine. My mother’s reaction upon informing her in 1977 that I had been accepted to medical school was not, ‘Isn’t it wonderful? My son is going to be a doctor.’ Instead, her immediate reaction was, ‘That’s great. You’ll have to take your earring out now.’ I did intend to, but you can forget you have them in. I arrived at the medical school to enrol and the first bloke I met said, ‘Get that thing out of your ear, son.’ The second person I met, who gave me a very long lecture in an explosive manner, I subsequently learned was John Chalmers, the Professor of Medicine. He said, ‘Get that thing out of your ear. You will never get anywhere here with that.’ I said to him, ‘I am here to study medicine. I am not here to go through a fashion parade. I do not care what anybody ever says to me, I am not taking it out.’ Then my ex-wife, Kate, gave me a diamond earring. Then, some 12 or 13 years ago, once I had put my private life into receivership, my good friend Bruce Shepherd and his wife decided I should meet a woman. That woman turned out to be my wife of almost 10 years now, Gillian. As the men here and listening would empathise with, about six months after we decided to get married she started on about the earring. She said, ‘Blokes your age look stupid with earrings.’ I thought, ‘If that’s what it takes, I’ll take it out.’ The reason for taking the House’s time with that is that it is often said that I took my earring out to ingratiate myself with John Howard. I can only say to you that John Howard not once ever raised the earring. But, if he had, I would have had a second one put in!

I arrived in Bradfield in late 1994. When we had the first election campaign, I had this diamond earring. The campaign committee agonised over whether the earring would be displayed for the purposes of the campaign brochure. We decided to display it. We then received hundreds of the pamphlets back in the mail with the ear cut out and circles around the earring saying, ‘What is this thing?’ Two people an hour would ring and say, ‘I am not voting for a bloke with an earring,’ and then hang up. But the highlight of the campaign was three days before polling day. Five very serious, stern-faced ladies from the electorate arrived in my office. I knew it was a serious matter because they all declined a cup of tea. They all sat on the opposite side of the table to me and the appointed spokesperson leaned forward and said, ‘Dr Nelson, I will get straight to the point: you have an earring.’ I said, ‘Yes.’ She said, ‘We believe you are a homosexual.’ It is not that funny! I struggled with my thoughts, and I said, ‘I am not. I can assure you that I am not.’ At this point this woman leaned across the table, banged her fist down and said, ‘Yes, but can you prove it?’ The point is that not all challenges that one is offered in public life are ones to which you ought to respond!

The second issue is the hair. Annabel Crabb, up in the press gallery, has very nice hair. She has written that mine has been tested in wind tunnels and the like. Just to put this into some perspective, I too, Prime Minister, once had hair like yours that was soft, flexible and parted easily to one side. But I knew it was time to change when I had year 5 from Lindfield Public School from my electorate here six years ago and I explained to them what we do. My wife is still trying to find out! I said, ‘You only have one life and one chance to use it in a way which makes this country even better than the one my generation has enjoyed. We are making decisions today about the sort of Australia in which you will live when you are half dead at my age.’ At that point, I got the first question: ‘Dr Nelson, why is it that the hair on one side of your head sticks up higher than the other?’ Once I related this to my wife, she made an urgent appointment for me to see a hairdresser, and so I go every month.

I begin on a serious note by thanking my children. My son, Tom, and my daughter, Emily, made the greatest involuntary sacrifices for me to serve first the medical profession through leadership of the Australian Medical Association, and then the people of Bradfield and my country, as its member. I spent more time, through their 22 years of life, travelling, at meetings, in conferences, in parliaments, at functions and on the phone than I have spent with them. And I am not alone in this place in that regard.

They were seven years old when I returned as President of the Australian Medical Association from 10 days away in remote Aboriginal communities. The self-imposed objective was to bring to the awareness of middle Australia the appalling health, premature death and existential despair of Indigenous people. Returning to Hobart late at night I went to kiss them good night. Emily roused and I apologised for my long absence. She replied: ‘That’s all right, Daddy. You’re trying to help the Aborigines.’ Emily and Tom, you are my greatest achievement.

It was for the Aborigines and to play a role in building a better Australia that in September 1994 I resolved to sell my home and move to Sydney. Having provided medical care to low-income families for almost a decade, I knew that the horizon of MPs in such communities is entirely consumed by life’s day-to-day struggles and I wanted to do more. But I love Tasmania and have asked that my ashes be spread at Adventure Bay, Bruny Island, 40 or 50 years from now, hopefully.

I am who I am and have done what I have only because of other people. My father died six days before the 2004 election. He did not see me go on to be defence minister and Liberal leader. That is an experience that both the Prime Minister and my leader, the opposition leader, have also had. My father was a decent, thoughtful and intelligent man possessed of deep concern for the poor, the voiceless and victims of excess. My mother taught me that life’s value would ultimately be found in the people and the causes to which it was committed. My mother said that power was an instrument to be used in the service of those who had none and that in that service would be found fulfilment. I thank the Jesuits for seeking to instil in me the imaginative capacity to see the world through the eyes of other people.

I only came to the parliament through those who believed in me. Bruce Shepherd has been a second father; at times, also, like a second son. We met 20 years ago. I told him I did not like him. Uncharacteristically he refrained from a profanity, offering instead his first advice, ‘Never pass an opinion on someone you have not met.’ He later taught me the absolute importance of believing in a cause and bleeding for it.

Rhondda Vanzella made me, politically and personally—through 15 years of selfless sacrifice for Bradfield, the Liberal Party and my family. Doug Thompson dispensed encouragement, support and always a Slim Dusty story. Whether campaigning, making wedding plans or managing kids, Doug and Monique were always there.

Don Glover was the Bradfield Liberal who really had the courage to back me at the most crucial time in 1995. I was then mentored and supported by Betty Flick, Peter and Norma Beckley, John and Angela Carrick, Les Taylor, Robert Longstaff, Felix Venn Brown, Geoff Selig, Tony and Lee Hall and many, many others.

I would not have arrived here without Bill Heffernan; nor would I have remained without Tony Staley. Nor could I have done anything without my staff: Lee Hall, Ben Franklin, Sarah Cruickshank, Yaron Finkelstein, Simon Berger, Deborah Chan, Jaci Armstrong and ‘Hudson’ in my electorate office—to name but a few. Peter Hendy, Catherine Murphy and Maria Fernandez served me magnificently as chiefs of staff. To the many ministerial and leader’s staff, especially Peta Credlin, I owe you all a debt that cannot be repaid. You all made me better than I deserve to be.

I thank the Liberal Party for believing in me and for giving me extraordinary undeserved opportunities. I came to my Liberal belief through life, absorbing it through reflection upon and familiarity with the hard work, self-sacrifice and idealism of just everyday people. I am a better person and a stronger Liberal for the path that I chose.

It has been an honour to serve Bradfield, an extraordinary electorate populated by educated, hardworking people who are imbued with a deep sense of commitment to service—volunteerism, philanthropy and the best interests of Australia. These are people who give much but ask little, deserving much better than the devastating environmental vandalism being imposed upon them by the New South Wales government’s rampant overdevelopment.

I arrived here in 1996 in the company of men and women who will forever be accorded a very special place in my life. Phil Barresi, Gary Nairn, Jo Gash, Danna Vale and Warren Entsch. It takes an effort to arrive in parliament as a crocodile farmer and cattle producer and leave as a gay rights activist with an earring, but that is Entschy. Amongst many others, they taught me a great deal.

I had intended to cross the floor in 1997 should the government relax cross-media ownership laws to allow the Packers to get Fairfax. I did not want to create a future in which they and Mr Murdoch would ultimately control the way my kids were going to think. I told the Packers so. I also held strong views on native title—Pauline Hanson had become a lightning rod for grief and anger that many Australians felt about changes in our country from the Keating era that they neither understood nor wanted—and mandatory sentencing in the Northern Territory.

Although I wanted to be a minister and to drive policy, I had all but given up believing it would ever happen when, in December 2000, John Howard asked me to be Parliamentary Secretary to the Minister for Defence. I was surprised because I sensed that John believed me risky, with an earring and a questionable background for Liberal politics. But I learned of John Howard that he respected people who challenged him provided they had an intellectually sustainable basis for their argument and refused to parade it through the media. I later learned that it was Peter Reith who convinced John Howard to give me a go. Maligned by unions, the media and their fellow travellers, Peter Reith is one of the finest men that I have met in politics. We were in Aboriginal Australia together when he was employment minister, accepting my proposal to establish an organisation to facilitate volunteerism in Aboriginal communities.

My proudest achievement as parliamentary secretary for Defence was rebuilding the propellant factory at Mulwala. Defence had planned to close it, which would have meant we would import all our ammunition and lose 750 direct and indirect jobs, creating a human and social tragedy, not to mention a strategic failure. Madness.

I relished my four years as Minister for Education, Science and Training. The then departmental secretary, Peter Shergold, wore a tie adorned with tumbling pigs—all the way through 2002—and I was a bit too polite to ask him why. Finally he explained to a large gathering of stakeholders in the Main Committee room at the end of the consultation year on higher education reform that he called it his ‘pigs might fly’ tie. He considered that my chances of getting university reform through the cabinet, let alone a Senate controlled by four Independents, fell into the ‘pigs might fly’ category. But we did get it through: $11 billion more for the sector, with limited deregulation, governance reform, performance funding pools, scholarships, 25,000 more publicly-funded places, new medical schools, a transformational opening up of the private sector and access to income contingent loans. The ‘pigs’ tie is framed and it now hangs in my office.

Voluntary student unionism was delivered only by belief, persistence, negotiation and a judgment that I exercised at a critical juncture to test it in the Senate without knowing what the outcome would be. The schools agenda pursued by the current government is essentially that which we drove and legislated in 2004: national performance benchmarks in literacy and numeracy; a common school starting age; plain-language report cards; national standards for teaching; measurement and publication of school performance; principal autonomy; direct funding to schools; and the development of a national curriculum. The states had four years to comply, otherwise they would lose the Commonwealth money. That is why they are doing it. The Rudd government deserves credit for implementing the agenda, and I thank both the Prime Minister and his government for doing so and for standing up to the intransigence that I experienced from their Labor cousins in the states over the four years that I was the minister.

I also make no apology for requiring schools to fly the Australian flag and to teach values. It was right to drive values education in the knowledge that character is destiny. A values-free education risks producing values-free adults. The problem too often is not that young people have not learned our values; it is that they have.

I also believed that our nation had failed in creating a culture in which young people felt that their lives were measured by the educational choices that they made. If they did not get an outstanding university entrance score, a university degree and a BMW then, in some way, they felt they were of lesser value—lesser value to their families and lesser value to their country—than those who did. It was right to confront this orthodoxy and renew the political and policy emphasis on apprenticeships. No person’s life is valued by the educational choices that they make.

We must never return to the class war in school funding. Those parents who choose to send their children to Catholic and independent schools had to be defended from those who were engaged in the politics of envy. All those children receive less public money for their education, deserving this nation’s support for their education and parental sacrifice.

I thank John Howard and Peter Costello for their belief in science and research, doubling funding to the Australian Research Council and allocating an additional $8.3 billion to the nation’s research and innovation agenda.

Defence remains the most demanding yet personally satisfying role that I have had in my public life. It was far more demanding than being opposition leader, which was difficult in different and less important ways. Management of the portfolio, reform of it, major procurements, intelligence, foreign policy and overseeing Australia at war—including 10 deployments—was gruelling. Acquisition of the four C-17 Globemasters, the three per cent real compounding increases in Defence spending over the next decade, two additional army battalions, three F100 Aegis equipped air warfare destroyers, two 28,000-tonne LHDs and a $3 billion recruitment and retention package are the most significant legacy decisions that I leave Australia. I thank then Prime Minister John Howard and then Treasurer Peter Costello for their belief in those decisions and for their support of them. The most important, though, was de-risking the transition to the Joint Strike Fighter with the purchase of 24 FA18F Super Hornets. I drove it, I am proud of it, and I was right.

I also record my quiet admiration for a man who made mistakes and recognises them but whom I found, in my dealings with him, to be intelligent, decent, thoughtful and principled. I regard him as arguably the most misunderstood and misrepresented figure in recent history, and that is President George W. Bush. It may not be fashionable to say this, but it is true. I supported the toppling of Saddam Hussein in the post September 11 world. He may not, in hindsight, have been an immediate threat, but he was an inevitable one.

To their families, I will never forget SAS Sergeant Matthew Locke, Private Luke Worsley, SAS Signaller Sean McCarthy, Lance Corporal Jason Marks, Trooper David ‘Poppy’ Pearce, Captain Mark Bingley and SAS Trooper Josh Porter, who gave their lives on my watch operationally in the service of Australia as a consequence of decisions that I made, that I supported and that I administered. My life, my attitude to it and that of my country was forever changed by carrying responsibility for equipping them and placing them in harm’s way. Their sacrifice transcends and endures far beyond any contribution that I have ever made or ever will. I thank every man and woman who wears the uniform of our three services for what they do in our name and under our flag, in the defence of Australia’s interests and values.

I did not expect to become the leader of the parliamentary Liberal Party. I could have sat back after the election defeat in November 2007 and waited. For my own self interest, I was advised to do so. But that is not me. I knew it would be a crucial period for managing individual and collective grief at losing government and losing some of its key figures, embracing our legacy, framing the new government and setting an alternative vision for the country.

I had my reservations about the apology to the forcibly removed generations of Aboriginal Australians. I respected the legitimate conservative opposition to it in sections of my own party and the Australian community. I publicly aired my reservations deliberately as a device to bring my party to the ‘sorry’ table because I strongly believed that morally and politically it was the right thing to do. I stand by every word I said that day. I note that more Indigenous children are being removed today than ever were in the period for which the apology was offered.

Petrol—and Fuelwatch was a crock!—pensioners, carers, wheat marketing, same-sex couples and climate change: nothing was easy but what of value ever is? And the cardboard cut-out was my idea!

There are, in my opinion, five key challenges that face this country. The first is the prosperity that we will offer the next generation of Australians. It will require amongst other things: continuous taxation reform that is critical to incentive and Australia’s international competitiveness; a flexible labour market characterised by individual choice and protection; relentless pursuit of trade liberalisation in the knowledge that isolationism will never make us safer; major reform of teacher training, which can be done without spending additional money; appointment of classroom teachers to universities as lecturers, tutors and researchers; performance benchmarks and financial rewards for teachers; and quality assurance as a prerequisite for ongoing teacher credentialling. I ask the Prime Minister also to consider implementing the 2005 report chaired by the late Dr Ken Rowe into the teaching of reading. It will do more to transform lives and lift our productivity than any other single measure in Australian schooling.

Also at the time I floated with John Howard, whose blood pressure for some inexplicable reason went up at this point, that in modern Australia, in the 21st century, the CSIRO, which had been established at a time when little research was being done in Australian universities, should be amalgamated with the ANU and that some of its regional important satellite activities amalgamated with relevant regional universities. I still believe that is the case. It would immediately give Australia a global top 10 research and teaching institution. It would drive economies of scale and it would also drive research even more effectively in regional communities relevant to the communities in which it is undertaken.

The second challenge in my view is that of the dysfunctional federation. The greatest constitutional challenge that faces this nation is the relationship between the three tiers of government, and how the money is raised. This is obviously quite a different world from that of Henry Parkes and those who gave us the Federation and the Constitution that served us so well for most of the 20th century. It is now failing us. It will require bipartisan leadership in a process to develop options for reform and to put them to the Australian people. Whatever the differences between us politically, it is obvious wherever you live in Australia, whatever your politics, that the relationship between the three tiers of government is at the heart of many of the issues that we debate here on a day-to-day basis.

The third key challenge is that of the environment. It is time for our generation to begin to live on environmental interest instead of the environmental capital that has sustained us since the industrial revolution. On climate change, let us not be a nation of intellectual lemmings. Why introduce the biggest change to the economic architecture in this nation in my lifetime with a tax on everything—massive churning of money through the economy as we emerge from the deepest economic downturn in 80 years—for no environmental gain in the absence of a global agreement? To legislate an emissions trading scheme in a country responsible for 1.4 per cent of global emissions before knowing what the three major emitters will do defies not only logic; it also violates Australia’s best interests. The dictum in medicine is uberrima fides—to always act in the utmost good faith. The interests of everyday Australians who want action on climate change but are ignorant of the cost to be imposed on them by those who do know what those costs are must surely be placed ahead of political advantage by both sides of politics.

The fourth challenge is that of the defence of Australia and, increasingly, our interests and values throughout the world. To those Australians who question our deployment to Afghanistan, please understand that our generation is engaged in an epic struggle against resurgent totalitarianism. This is a global insurgency driven by disparate groups. They have hijacked the good name of Islam to build a violent political utopia. More than 100 innocent Australians have already been murdered in Bali, Jakarta and New York at the hands of these people. They were murdered by people whose attitude to religious freedom, the rights of women and the liberating power of education violates everything for which this country has stood in its short history. We cannot leave our children held hostage to a force that they may never control. That is why it is so important that the political will be maintained in the leadership of the country from both sides of the political divide.

The fifth challenge, as I see it, is the cohesion of our society. Whether it is drug use, gambling, homelessness or the plight of Indigenous Australia, Liberals should be no less concerned for these issues than economic fundamentals. If we are falsely perceived as accountants aspiring to run an economy rather than men and women committed to building a better society we will be harshly judged. If all economic and scientific questions were ever solved, all important problems would remain still unanswered.

I also caution the nation’s leadership as I leave. We have to be very clear about our values and our beliefs, never allowing Australia to become a country of cultural aimlessness. Whether by birth or by migration, we are Australians defined as we are by our institutions, triumphs, failures, heroes, villains, adversities, literature and culture. We cannot ever abandon what Arthur Schlesinger described as ‘historic purpose’ in building the future that we want.

The Liberal Party’s future lies in its past, never forgetting from where we come, who we are and for whom we exist. Liberals gave Australia its first refugee, its first woman and its first Aborigine as members of parliament. Neville Bonner’s life of grace, humility and principle in the face of extraordinary adversity has been an inspiration to me personally. As the first Aboriginal Australian elected to the parliament, he considered his greatest achievement as being there. When Robin the Hughes asked him in 1992, he said:

They no longer spoke of boongs or blacks. They spoke instead of Aboriginal people.

Robert Menzies, in 1942, arguably the most important year in Australia’s history since 1788—a seminal year for the Liberal Party—spoke and wrote of the forgotten people. I have said this to my colleagues before and I will say it again today. He wrote:

Salary earners, shopkeepers, skilled artisans, professional men and women…

          …            …            …

farmers….politically and economically they are the middle class. Unorganised and unselfconscious, not rich enough to wield power in its own right and too individualistic for pressure politics, and yet,

he observed:

…they are the backbone of the nation….and in their children they see their greatest contribution to it.

Two years later in 1944, again Sir Robert, to those who had come to Canberra to form what would become the Liberal Party emerging from the political dramas of the UAP, said:

What we must look for is a revival of true liberal thought, one that will work for social justice and security. True liberals have great and imperative obligations to the weak, sick and unfortunate.

In his vision of Australia, this country would owe to ‘every good citizen, not only a chance in life—but a self respecting life.’ As Liberals we must always place our principles and Australia’s best interests ahead of what we think are our political interests. In my opinion and experience, one follows the other.

Thank you to my many friends and colleagues with whom I have worked, past and present. Tony Smith, Bruce Billson, Bob Baldwin and Mitch Fifield, you are men of courage and character. I will never forget it. Thank you, Peter Costello, to you and your family. Thank you for the central role that you have played in making this a more confident, prosperous and stronger country. I thank you for your support of me and I will never forget it. I wish my leader, Malcolm Turnbull, every well-deserved success for the future that will come through perseverance. To my Liberal colleagues, that future is in our hands. It is entirely in our hands.

I also thank Prime Minister Rudd for the considerable courtesies shown to me since we ended hostilities as political leaders. I thank the Prime Minister also for his commitment to screen every newborn baby for deafness. If we choose to do so, we can set a vision for our country where every child born profoundly deaf can, with a cochlear implant—if that is what their parents choose—and an appropriate program be able to hear, speak and be fully integrated into a normal school by the time they start at the age of five. A previous prime minister once said ‘no child would live in poverty’. All of us support that aspiration but, as Christ himself recognised, there would always be poor. But this is something that we can do. There is not a lot of money involved. Most of it is already in the system. It requires political will and it also requires a good heart. I know on this issue especially you have both.

I am asked at the moment—and, Peter Costello, you would be asked the same—whether I would encourage young people to go into politics. To young Australians, I say never abandon your idealism. Never give up believing that you can make a difference to your community, your country and the world. The way each of us lives affects our world. You can make a decision early in your life to live in a way which changes the world. Never confuse position with principle and power. Arguably the most significant backbencher in history was William Wilberforce, who 200 years ago eschewed position to successfully challenge the repugnant economic orthodoxy of human slavery.

Success, in my experience, relies on three things. The first is to keep an open mind to other people and other ideas. None of us is right about everything, which is part of what is wrong with our system. Those who close their minds set themselves up for failure. The second is to constantly nurture and protect the inner integrity of your intellect: your ability to formulate ideas and express them to challenge and change the attitudes and opinions of other people. The third criterion for success is ultimately about the respect that we show to one another, whether in our community, the parliament or, indeed, our world.

To all Australians I say: never lose your sceptical attitude to political figures who think themselves better than others or who exploit your hard work. But I also say, as I leave, that this country is extraordinarily well served by the men and women across the spectrum that are here: Liberal, National, Labor, Independent, Greens and a variety of other parties. I came in with a degree of cynicism; I leave with great confidence that our country is well served by what happens here—as hard as it may be to see it, at times, on the evening news. Though some are occasionally worthy of scorn, relentless attacks on politicians’ remuneration diminishes the nation that they serve.

I will continue to pursue my vision of the Australia that I believe in. It should be one in which we value the health and integrity of human life as much as we do achieving our economic objectives. We should see that the barriers to the creation of wealth are the real enemy of equitable and fair social policy. We should nurture the idealism of young people. We should urge them always to embrace values for the world that they want and not just to accept values for the world they think that they are going to get.

Every Australian should know that he or she will be cared for, but in return we expect every Australian to make a contribution to this society from which we all derive a benefit. Ultimately, we should strive to be an outward-looking, intensely competitive, compassionate country, reconciled with its Indigenous history and imbued with values of hard work, self-sacrifice, tolerance and courage.

Finally—I know you are thinking it: he hasn’t mentioned his wife!—I thank my wife, Gillian, and my daughter, Rebecca. Gillian endured much on my behalf in the service of my electorate and of Australia. After losing the Liberal leadership last year, she remarked in a typically understated way, ‘It’s not a positive wor

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Mr Speaker, on indulgence: there are times in this place when we see it at its best, and we have just seen one such time. The reason we are here on this side of the chamber for this last address by the member for Bradfield is very simple: we on this side of the chamber regard him as a decent human being. That is the reason we are here. To have risen to the leadership of your political party is a mark of the esteem in which your colleagues hold you. For the parliament to assemble as one reflects something deeper in terms of their evaluation of the person. That says a lot about you, Brendan.

I am glad that you have set to rest the story of the earring. It occupied so much of the time of the then opposition tactics committee. But you have now put all of those questions to rest by your clear rendition as to the sequence of events and why they occurred. Mind you, I responded quite keenly to your remarks about being confronted by that posse of, I presume, Liberal Party matrons asking you for the removal of your earring. Had you been confronted instead by Labor Party preselectors they would have asked you to add one and to get a nose piercing as well—hence the difference in our political traditions. On the question of hair, mate, in my case I say, ‘Let he who is without sin cast the first stone.’ I am glad you have also set to rest who came up with that extraordinary calumny of the cardboard cut-out of me. I hope it has raised much money at Liberal Party fundraisers.

You mentioned also the importance of Gillian, Emily and Tom and Rebecca. It is right and natural, of course, that you say that on this occasion. But, having spent some time discussing our families together, I know for a fact how much they mean to you. It is a good reflection on you and a good reflection on them that you have been offered to this place with their support. Also in our discussions going back some years you made mention of the impact on you personally of your father dying just before the 2004 election. We spoke at that time, you may remember, because my mother died the day before that election. I often think that in this place and more broadly in the Australian community there is a text to be written on something simply called adult grief. However old we are when our parents die, and however old they may be, it makes it no less searing and no less acute. I remember well our conversations at that time.

As the Leader of the Labor Party, I thank you also for your decision to join with me in the apology to Aboriginal Australians. This was important. Those of us who are experienced in this place know full well the range of views and tensions within political parties on the various matters we discuss and debate in this place, and of course we are conscious of those which existed within your party and the coalition. I think it is a testament to your leadership that you prevailed in that difficult internal discussion within your side of politics, because in fact the national interest was served by that decision. The fact that we were able to gather together as one as a national parliament and speak with one voice on the question of the apology to Indigenous Australians will be something which echoes down the decades way beyond the time when you, I and others present are in this place. Our resolve then was to turn that into a genuine turning point for the long-term future and the relationships between Indigenous and non-Indigenous Australians. At best we have made one small step in that direction, but that small step would never have been taken absent the critical events of that day in this place when you joined with me in that apology, for which I thank you.

In this place we will be remembered for smaller things and larger things. One of those things which may seem to be small in Brendan’s contribution will in time come to be seen as large. Let us call it in this place today the Nelson initiative on hearing. There are something like 500 littlies born each year who have significant hearing impairment. Prior to Brendan badgering me about this, I knew very little about the incidence of hearing impairment in kids. We had no experience of that in my family or my circle of friends and acquaintances, the normal way in which we become familiar with things. So in a number of discussions we have had in my office in the time, as you said, since hostilities ceased, you have raised this with me and we have done some work on it. As you know, we have made an important first step, which is to get the Commonwealth and states to agree that every child in Australia will be screened at birth for their hearing. That is the first step. Is Bruce Shepherd here with us today? I have offered him honorary membership of the Labor Party, given my backing of Brendan Nelson’s initiative on this, the Nelson initiative. The second step is what then happens in terms of the proper and universal provision of cochlear implants to children so diagnosed. That is the next piece of work to be done, and we will work our way through that. This Nelson initiative may be regarded by some as small. Aggregated over the years, thousands and thousands of little people, who become big people, will have normal hearing and normal speech because of this thing that has been done here, and it is a good thing done between us.

I said we were remembered for small things and larger things. One of the larger things for which Brendan will be remembered will be for his role as education minister and as defence parliamentary secretary and as defence minister. These are important and challenging portfolios. Being defence minister of Australia during a time of armed conflict is a doubly challenging enterprise. Each of us who occupy positions of responsibility in this place at a time when our men and women in uniform are under physical threat in foreign fields to which we had sent them understands something of the responsibility which falls on one’s shoulders, and that responsibility was well discharged by Brendan as defence minister.

I conclude where I began. You made reference to the Jesuits. I was never educated by the Jesuits myself—there was not one in Nambour—but the Jesuits’ aphorism ‘give me the child of six and I will give you the man’ is well applied in the life we see before us today in Brendan Nelson. To sum up a parliamentary career and to do so with such obvious, visible and understandable emotion is a hard thing to do in this place, but you have done it well today, Brendan. You will be remembered for it and for the achievements which you have reflected upon as well.

You mentioned before having your ashes interred on Bruny Island. Mate, that is just a bit too morbid! There is a lot of other stuff to do in the meantime. Lighten up. I am sure others will respect that in due season. Am I right, Gillian? Just lighten up a bit. Good. And the kids? Lighten up? Got it. That may be attended to, but I have a suspicion, Brendan, and more than a suspicion, that you will be doing more in the public interest of Australia in the months and years ahead. The parliament salutes you, the Australian Labor Party salutes you and I as Prime Minister of Australia salute you and your contribution to this place as well.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, on indulgence: Brendan, on behalf of the Liberal Party and the coalition, I want to thank you for your years of service to our party, to the electors of Bradfield and to the people of Australia. I also thank you for your remarkable address. You quoted Robert Menzies’ ‘Forgotten people’ speech from 1942. Nothing in our pantheon can equal that, of course, but you gave a speech today which will be cited for decades to come. It was humane and humorous—we always wanted to know about the earring too, Prime Minister, and now we know the answer was ‘cherchez la femme’! It was also as complete as it was compelling. You gave a clear understanding of our past, our history, and a clear vision for the future. And you revealed so much of yourself, the man we know who has served this nation so well for so many years—so passionate, so compassionate, so committed to helping those who are not well off, particularly Indigenous Australians, for whom you have always laboured hard, from your very earliest days as a young medical practitioner.

You served our nation as an education minister, as a defence parliamentary secretary and as a defence minister. You served our nation vitally well in all of those roles. You secured record government investment in the Australian Defence Force—an average of three per cent real annual increase in defence expenditure out to 2015-16. At so many times in the past, investment in our defences has been neglected, and you certainly addressed that with the commitment that you have shown to everything you have done.

As you noted, you oversaw the deployment in our region of Australian troops who helped successfully to restore stability to the Solomon Islands and East Timor. You implemented far-reaching reforms to boost recruitment. You understood, as not all defence ministers have, that the core of our defence forces is the men and women, the human capital—far more important than the steel, the guns and the bombs. You recognised that humanity in our defence forces is our most precious asset.

Your achievements as education minister were truly remarkable. That is testified to by the fact that so many of your initiatives are being continued by our successors in government in the Labor Party. You developed and you implemented the Our Universities: Backing Australia’s Future package. You made the pigs fly, as you described it. You were able to take that on—a comprehensive reform package for our higher education system which increased the Commonwealth investment in that sector by $1½ billion over four years.

But perhaps most importantly you put in place an agenda for higher standards and greater consistency in Australian school education, including requiring publicly available information about performance in schools, plain English report cards and the explicit teaching of values in our schools. Your remarks about that today, as I said a moment ago, will be read and re-read for many years to come—a very keen insight.

You also introduced the Investing in Our Schools Program. Far be it from me to introduce a note of current affairs into these remarks, but that was a very popular and effective program. It had the result, both in your hands and in the hands of your successor, our deputy leader, of investing substantial Commonwealth moneys into school infrastructure that schools and their communities actually wanted.

As our leader—when you took over the toughest job, of leading a political party after a defeat—as a minister, as a colleague and as a friend, you have always been consultative. The Investing in Our Schools Program is a good example of that, in the way you reached out to school communities and said: ‘What do you need? How can I help? I want to listen to you.’ That is an example, or perhaps a piece of advice, that you might be able to share with your friend now that the hostilities have ceased.

I commend you, finally, Brendan, on the touching remarks you made about family. Gillian, all of us understand the sacrifices that spouses of members of parliament make. Brendan spoke eloquently of that. Really you, Gillian, and all the other wives and husbands of members of parliament are the unsung heroes of the struggles we engage in. You feel the blows more keenly than we do, because we can strike back but you simply have to share the pain and support your loved one. Brendan, you spoke beautifully for yourself, but you spoke powerfully for all of us when you spoke of family. On behalf of the Liberal Party, the coalition, the opposition and, joining with the Prime Minister, the two leaders here in the House of Representatives, we salute you, we thank you, we respect you and we know that you will go on to serve Australia well in many capacities in the years ahead—and the business with Bruny Island will be a very, very long way in the future!

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! I thank the House for their good humour, civility and respect and, despite his admission about the cardboard cut-out, it was exactly what the member for Bradfield deserved.

Debate interrupted.