Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Could I pose a question please to the Minister representing the Minister for Immigration and Citizenship, regarding the current detention population: could the minister please confirm how many children are currently being detained by the Department of Immigration and Citizenship as of today?

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

I extend to the Attorney-General my sympathy for the thrashing that New South Wales copped last night, but I give the call to the Attorney.

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

If I can indicate, I will get some specific figures as I am giving an account. The current population, as I understand it, as of two days ago, at least, on Christmas Island was 2,359 people and 44 crew. I understand that at Leonora there were 86 people, including 21 families. It is my understanding that 189 single men were transferred to the Curtin detention centre on 13 and 14 July. I will see what we have for other centres—just bear with me for one moment.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

While the Attorney-General is doing that, perhaps I could assist. On 21 May, the department tabled some detention statistics, which noted that there were 3,612 people in detention on 21 May in all centres, including those which the minister refers to, and there were 452 children, 193 women and 2,967 men. I am just seeking an update on those total figures from those that are regularly published by the Department.

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

I thank the honourable member. I may have to take some of that question on the updated numbers on notice. The most recent figures that I have with respect to children are that 60 unaccompanied minors were transferred to Port Augusta immigration residential housing in April, a number of other unaccompanied minors are being accommodated in Melbourne immigration transit accommodation, and a number of families are being accommodated in Brisbane immigration transit accommodation and an alternative place of detention in Brisbane pending finalisation of their processing. I will take the other numbers on notice.

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

The member for Cook has the call. We will alternate across the chamber—that is the normal process—and the Attorney has just spoken.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Ms Hall interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

No, I do not think the minister does not count as a government spokesperson. The member for Cook has the call.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Could the minister advise how many permanent residency visas have been granted to offshore entry persons since August 2008, and could he further advise how many offshore entry persons have been unsuccessful in their claims for asylum, have completed their merit appeals process and have been returned to their country of origin since August 2008?

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

On indulgence, I will go back to some figures previously asked for. As at 11 June 2010 there were 508 people being treated as minors—that is, under 18 years of age. Eight were in the community on the mainland under residence determinations, four in Queensland and four in Victoria. There were 292 in alternative detention on the mainland, including seven in New South Wales, 38 in Victoria, 68 in Queensland, 56 in South Australia, 63 in Western Australia and 60 in the Northern Territory; one in the community on Christmas Island under a residence determination; and 207 in alternative detention in the Christmas Island construction camp.

With respect to those numbers that have been granted permanent visas, I understand that during 2009 there were 1,133 that were granted permanent visas. The figures I have for 2010 are a little old, but my last figures were 1,108. The removals figures that I had also require updating, but the last removals figures—and I will update these with updated figures from the minister—that were provided to me were that there had been 149 removals, 132 voluntary and 15 forced. But I will get those forced removals.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Are you referring in those removals figures only to offshore entry persons, people who arrived by boat, or do those figures apply to the global detention population, which would include others who have made arrivals by air or other means?

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

I thank the honourable member. On the basis of my information I am not able to answer that. My assumption is offshore entry persons, but I will seek some clarification of that from the minister.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Could the minister provide a status update on the High Court action currently being pursued by a number of asylum seekers whose claims have been rejected or gone through a merit appeals process? Could the minister advise the basis of the action that is being brought, how many people have joined that action and what advice the government may have received in terms of the case?

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

I probably should just point out that the normal custom of the House, which is appropriate to be followed here, is for the call to be alternated from government to opposition. Whilst it is open to any member of the government to seek the call, if the minister seeks the call then, in accordance with the convention, the minister receives the call.

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

In this matter, Justice Hayne in the High Court held a directions hearing on 16 of the 17 matters on 4 June 2010. His Honour made procedural orders putting in place a timetable for the filing of evidence and amended applications. His Honour listed both matters for a further directions hearing on 25 June 2010. His Honour indicated the first available date for a substantive hearing before the full court of the High Court would be in the week of 23 August 2010. However, I am not sure that that date has been allocated by the court. I think there is still some discussion between the parties and the court about that matter.

It seems that the court is likely to identify two cases as essentially representative of the issues in dispute in the number of cases that have been filed. Again, there is some negotiation between the parties. The basis of the claims is a challenge to the validity of the refugee status assessment and the independent merits review process applying to offshore irregular maritime arrivals. I cannot comment on the specifics of the issues raised in the proceedings. Regarding the issue of class actions, the Immigration Act specifically precludes class actions; hence, the filing of the individual matters.

Regarding the issues in dispute, I am advised in accordance with the non-statutory refugee status assessment procedures, which were introduced by the former government in 2001 as part of the excision arrangements, that these applicants’ protection claims were thoroughly examined by an independent decision maker from the Department of Immigration and Citizenship. These claims were considered on a case-by-case basis and each person was found not to be owed Australia’s protection; hence, they have taken court action. These decisions were in turn reviewed by an independent reviewer in accordance with the independent merits review process, introduced by the Rudd government, to ensure greater fairness and integrity in the offshore refugee status assessment.

The government’s position, which we believe is sound but obviously these matters are determined by the court, is that if an offshore entry person is moved from Christmas Island to the mainland it is simply a case of transferring detainees from one place of immigration detention in Australia to another place of immigration detention. The person’s status as an offshore entry person does not change as a result of that transfer. That was based on legislation introduced by the former government.

One of the applicants in the case is, as I understand it, currently on Christmas Island. So in that sense the issue about whether the people are in Australia or on Christmas Island has not been dissected. The challenge is to the process, as opposed to where the people are currently located. Obviously these issues will be discussed in the court case.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

On the matter that the Attorney just raised, I understand that what he is saying is that each of those actions that are being brought before the High Court are individual actions. So the position being pursued by the individual on Christmas Island will be assessed separately to the positions of those claimants who are making their claims on the mainland. I just want to clarify with the Attorney that each of these cases will be considered separately. It is not a class action; they are separate actions being brought by these individuals. So the claim of the person on Christmas Island will be considered in the courts separately to those who are on the mainland and have been transferred?

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

I cannot say whether one of the cases identified as being one of the two to be determined by the court is of that person on Christmas Island. I do not have the information to identify that person. It appears likely, on my briefing, that matter 61 of 2010 and another case known as matter 69 of 2010 will be the leading cases that will be heard together. On 25 June the plaintiffs in matter S116 of 2010 and S121 of 2010 will be given the opportunity to say why their cases should also be referred to the full court for determination. Again, however, I am not sure whether either of those cases relates to the person on Christmas Island. He has indicated that his current view—this is at the time of the directions hearing—was that he could not see that these two additional cases would add to the points of legal principle that the full court needs to resolve in order to establish the legal principle applying to the cases that have been filed. Without speaking on behalf of the court, it seems that they are seeking to identify a common factual base that will enable the court to determine legal principle that can be assumed to have broader application. I cannot say, on the basis of information before me, whether any of those cases so identified by the court relates to the person on Christmas Island.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Before I give the call, I would like to make something clear. Over the course of debate, the proceedings have taken on the character of question time—and that is quite appropriate; there is no reason why that should not be so. However, it is in fact not question time so it is not a circumstance in which the practice would be to call questions from one side then the other. It is in fact a debate. At the conclusion of that debate the resolution will be put. Because it is a debate, the normal practice is to give the call to a government member then to an opposition member, and where more than one government member stands, if the minister seeks the call then the minister will receive the call. I think we need to understand the practice of what we are going through.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

In recent times there have been a number of reports about—and the Attorney referred earlier to this—the number of people who have been transferred from Christmas Island, due to the overcrowding and unprecedented rate of arrivals, to mainland places like Leonora and the recently reopened Curtin detention centre. I understand that the government has received a range of propositions and applications from various places around the country in relation to where other potential detention facilities might be located to cope with the unprecedented rate of arrivals—three boats per week as opposed to three boats per year under the last six years of the coalition government. I would be interested to know from the Attorney in considering these appropriations how many additional places are required in the department’s view to cope with the increase in arrivals and the detention population as it stands and as it is expected to increase over the next 12 months? How many extra beds are they looking for and in what places are they seeking to place those beds?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I was wondering whether the Attorney can provide additional information on developments to further strengthened Australia’s border security.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I repeat the question I asked earlier. How many additional beds will the government need to create to cope with the rate of arrivals?

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

I thank the honourable members for their questions. I went through details of movements to Leonora and to Curtin, and obviously the northern detention centre in Darwin has also been opened. I indicated that a number of families have been placed in other locations in Brisbane and Sydney. Obviously there is an issue occurring now with irregular maritime arrivals coming to Australia. The government has strategies in place to deal with those arrivals, in anticipation that there will be additional arrivals.

Clearly, the government have devoted considerable resources to developing cooperative intelligence arrangements with our neighbours, including coordinating the intelligence in the home affairs unit and specifically in the Customs and Border Protection Service. Obviously there is an anticipation of additional boats seeking to enter Australian waters, and steps are being taken in that regard. However, the circumstances and the predictions as to how they are going to pan out over a longer term period are obviously dependent on a number of factors. In that respect, the planning, as I understand it, is taken on the basis of developing contingency arrangements with the officers of his department to identify potential locations. Given that we have imposed a freeze on the processing of people from Afghanistan and also from Sri Lanka, there will be a need to accommodate those people during the course of the freeze. The minister’s department is taking advice and examining alternative places of detention, and accommodation in the case of families. But, necessarily, there is no specific number given the circumstances that can impact on, firstly, those seeking to arrive in Australia and, secondly, the response once they arrive in Australia.

In that context, and in answering a question from the member for Shortland, I indicate that the government have taken very strong measures. I think I said this the other day in the House. Our policy is one of excision of offshore islands, mandatory detention of persons for the purposes of checking their immigration and their identity, and of conducting security and health assessments. We also have compulsory return of those found not to be seeking asylum. The Minister for Immigration and Citizenship recently indicated that there has been in the order of a 40 per cent rejection rate of asylum claims from persons from Afghanistan. Clearly, we anticipate that at the conclusion of the suspension of the processing of those persons from Afghanistan and Sri Lanka, updated information from the United Nations High Commissioner for Refugees and from in-country information will mean that more of those applications will be rejected.

The government do not believe the opposition’s policy of introducing temporary protection visas will work. I think the history speaks for itself in that respect. There was a significant increase after that was introduced in 1999. Nor do we think the Pacific solution will be effective. We saw that 70 per cent of the people who were part of that were returned. In particular, the Pacific solution introduced by the former government was based on what was effectively indefinite detention on Nauru and Manus Island. I ask the opposition: do they intend, as part of their reintroduction of third-country processing, that there will be indefinite detention on those places or do they intend to process claims within a specified time limit?

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I note that the Attorney raises the issue of indefinite detention, and I will come to that in a moment. In relation to the appropriations, Senator Evans indicated that the estimated number of people to arrive in financial year 2010-11, which begins in just a couple of weeks, will be just 2,000—a 60 per cent decline on this current financial year’s number.

Given that the budget estimates currently include a $1 billion increase from last year when the figures were introduced, can the minister comment on the following. If the current rate of arrivals—three boats per week and 600 people per month—were to continue in the next financial year, what impact would that be on the budget estimates and what would the likely further increase be?

I also go to the issue raised of indefinite detention and the asylum freeze introduced by the government on 9 April. With the asylum freeze, I would be interested to know what advice was given, or if advice was given, to the government regarding the legal position as to the United Nations Convention relating to the Status of Refugees and in particular article 3, which stipulates against discrimination due to a person’s race, religion or country of origin. Given that there is currently a six-month freeze for Afghan asylum seekers and a three-month freeze on assessment for Sri Lankans, and absolutely no certainty one way or the other on whether those freezes are to be extended, how does that sit comfortably with the government’s own stated detention principle that no-one will be detained indefinitely, when it is clear that those subject to those freezes have been discriminated against on the basis of their nationality and are indeed being detained indefinitely with no assessments being undertaken?

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

If this were questions I would rule the first part out of order as hypothetical, but, as I commented before, it is not questions; it is debate.

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

I thank the honourable member. On those detentions: our advice is that, while the Racial Discrimination Act prevents discrimination on the basis of colour, or racial, ethnic or national origin, the Federal Court of Australia has determined that making assessments—as we are in the case of our suspensions—on the basis of nationality is not equivalent to making a determination on the basis of national origin. We are in fact looking at the circumstances existing in Afghanistan and Sri Lanka in light of the state of hostilities in those countries, and at the re-engagement of the democratic system in Sri Lanka after the cessation of hostilities, and looking to receive that updated in-country information.

I would also point out that in contradistinction to the government’s policies of these people remaining in detention during the period of suspension, as I understand it, on the basis of the opposition’s temporary protection visa arrangements these people would actually be released into the community, assuming that they satisfied the assessment criteria. More broadly, the figures quoted in the media about a $1 billion blow-out in processing are wrong. It seems that the media has referred to outcome 4, rather than outcome 4.3 dealing with the processing of irregular maritime arrivals. The total estimated cost for the detention and management of immigration arrivals in 2010-11 is $440 million. That includes Christmas Island and also onshore facilities. The estimated cost in respect of Christmas Island is $213.1 million. These estimates are agreed between the department of immigration and Finance. They are agreed on the basis of an averaging process of numbers, which I understand were the same budget and forecast arrangements that were used under the previous government.

In respect of that, the previous government experienced again a very substantial peak in the costs that they incurred during the 1999, 2000 and 2001 years, which the honourable member spoke of the other day. There was a substantial influx of arrivals into Australia during the period of the former government. I recall that the figure was then an additional $1.5 billion over those three years. These things are not unknown, and the arrangements between Immigration and Finance accommodate that potentially occurring.

I note, for example, that the former government had estimated in its budget in 2002 that the construction cost of the Christmas Island facility that it eventually built would be $153 million. That blew out to $400 million. I also note that the opposition’s proposed arrangements for detention of persons at an offshore place or in another country would necessarily involve a very substantial expense. Indeed, from my observations, I doubt that the opposition has factored in that cost. For instance, it is my understanding that the costs of Nauru were well over $315 million. Again, considering how the opposition is explaining its policies, I wonder how those contingencies would be factored into its costings.

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time agreed between the government and the opposition parties for consideration of this matter has concluded.

Proposed expenditure agreed to.

Resources, Energy and Tourism Portfolio

Proposed expenditure, $1,130,673,000

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I ask the Minister for Resources and Energy and Minister for Tourism when he became aware of the detail of the mining supertax.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Mr Martin Ferguson interjecting

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I did not realise I was going to have to be pedantic. Can I ask the minister if he had a detailed briefing any earlier than two days before the announcement of the supertax on the Sunday before the budget.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Just before I call the minister, I will make the same observation that I made during the previous consideration. Whilst it is totally appropriate for questions to be asked, this process is morphing into a question and answer session. It is in fact not question time. It is time for debate and at the end of the allotted time the debate will conclude and the motion will be put. It is totally appropriate for questions to be asked but I make the observation that this is debate as to a proposed resolution. I call the minister.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

It is appropriate that the shadow minister ask questions but, as a former member of cabinet, he would know that it is not the practice of either side of politics to detail the confidential nature of cabinet processes. He did not do it in the past and nor will I now. I must say that, unlike the former Treasurer, the member for Higgins—and I can recall the tough GST debate when he was going around bagging the then Prime Minister, saying that he had got the GST wrong and that the government should walk away from it—I am not going to dodge it and walk away from a tough debate. This is about Australia’s future. The Minerals Council of Australia argued to the Henry tax review over a period of two years that Australia actually should reform the taxation system and put in place a long-overdue profits based system. The industry argued that the system of state royalties was inappropriate. It also thought it was inappropriate, as state and territory governments had done over a long period, to adjust royalties on a regular basis to suit their short-term budgetary considerations. It also thought it was inappropriate that when times were bad it would have to go and ask state premiers and treasurers for royalty relief or holidays from the payment of royalties so as to enable workers to continue to be employed during the down times. For those reasons we are committed to putting in place a profit based tax system. But I go back to where I started: the member for Groom, as a former member of cabinet of longstanding nature and respect, understands—as do I—that you do not breach cabinet solidarity.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I note the minister’s answer, but it is not the answer that his colleague the Minister for Trade gave this morning where he told his department, therefore publicly, that he learnt about this issue in the newspaper and I suspect, if the minister is honest, that is where he learnt about it as well. My next question is to ask the minister if he can supply me with the names of companies with a market cap of more than $10 billion that support this tax.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I have no intention of responding to media speculation about what other ministers may or may not have said. Perhaps the member for Groom believes everything in the media, I certainly do not. But I do believe the media when they say he is a good bloke. They are right on that, but I am not sure they are always right about the internal workings of government.

I have been engaged in discussions with companies both big and small. Strange, but I approach discussions on the basis that what is discussed in a room stays in the room. That is why companies have always been able to have discussions with me. Just as the member for Groom, as a former minister, did, I have access to a significant amount of confidential and commercial-in-confidence material. I do not particularly care how big or small companies are that talk to me, I have no intentions of talking publicly about what is discussed with me.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

Mr Deputy Speaker, again that is an evasive answer because the Prime Minister has stated in the House that there are mining companies that support this tax. I again ask the minister whether he is aware of any mining company with a market cap over $10 billion who supports this tax, either publicly or in private.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

And as I have said previously—and this is an interesting little game of ping-pong across the chamber—I talk to companies on a regular basis and I have no intentions of disclosing publicly what they have talked to me about confidentially. I have had very clear feedback from a number of companies that they are not intending to put their hand up publicly because of the huge pressure being placed upon them by certain mining companies in Australia and certain peak councils representing the mining industry. It is not merely pressure to say nothing publicly; there is also significant pressure to donate significant amounts of money to fund the campaign against the government.

I do read the media. I do not always believe them, and perhaps I might be wrong on this, but I read an article in a national daily yesterday which referred to significant fundraising efforts out of the Western Australian branch of the Liberal Party relating to the current campaign against the government on the proposal to significantly change and reform the Australian taxation system. It spoke about the view in the Liberal caucus that their deputy leader has not always been that relevant to the future of the coalition. One has said that the member for Curtin ‘has finally found her place in the sun’. There is a report on her good connections to the mining industry in Western Australia—

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order: I would like to know the relevance of this answer in relation to the question.

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

It is not question time—I think I have made that point a couple of times while you have been here—it is in fact a debate, and the minister is thoroughly in order.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I would like to continue, Mr Deputy Speaker. It talked about her very close connections to a number of key business houses up and down—I think it is King Georges Terrace in Perth—

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

St Georges Terrace—I know you don’t know anything about Perth!

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

St Georges Terrace. You know it well, and I would not be surprised if she has you walking up and down the pavement hand-in-hand with her. I did remind her in the House the other day that since this dispute started she had had to buy a bigger handbag to collect her donations. And that is reflected in the article in the national daily yesterday, which said that all of a sudden she has a great place in the sun: good contacts, collecting donations and the party is now expecting her to spread the money across other state and territory branches of the coalition. I can hardly wait for the electoral returns after the next election.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I ask the minister what his estimation of the mining tax is on companies that operate on a historical basis?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I refer the member for Groom to the Treasury documentation.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I refer the minister to the estimation by the Treasurer that companies will pay 48 per cent tax. Does the minister agree?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I think it is more appropriate that the member for Groom attend the session that involves the Treasurer and ask the Treasurer about his views about his estimates.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I am asking about your views.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I take the view that this is about industry paying a fair and appropriate level of taxation to the Australian community and about the opportunity on a one-off basis to develop resources 100 per cent owned by the Australian community.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I have two questions for the minister.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Serious questions?

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I will attempt to bring some sanity back to the debate. One question is on the resource super profits tax. I personally support a rent resource tax; I have some issues with the current proposal in the budget papers. My question to the minister relates to the long-term bond rate being the starting point of the tax and the definition of the resource super profits tax. Has the minister done any modelling in terms of the total revenue take—if in fact the level of the entry point into the resource super profits tax area is in fact increased? In particular, if a level of 10 per cent were placed in the definition, what would that mean in terms of the total take?

My second question is one of jurisdiction, in a sense. The minister would be well aware of some of the issues relating to the Liverpool Plains—for instance, the interface between water issues, particularly groundwater issues but also surface water issues, and the potential impacts of mining to the agricultural area and water resources. I know those areas in Queensland—which the member for Groom would also be aware of—where there are very real concerns about the jurisdiction of state governments. My question to the minister is: given that the Commonwealth has now moved into the policing and the end of valley caps in relation to the Murray-Darling system, does the minister believe that the state based planning processes that are currently in place are sufficient to safeguard the water resource and agricultural areas the Commonwealth is playing a much stronger role in?

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

Mr Ian Macfarlane interjecting

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Let us deal with the last question first. I think, to be fair, the member for Groom also understands the importance of this. As you know, with respect to projects such as those on the Liverpool Plains, other than the operation of the Environmental Protection and Biodiversity Conservation Act, full responsibility for approval of mining has historically rested in the hands of state and territory governments. There has been a serious campaign in the Liverpool Plains area against BHP Billiton by a local community with respect to potential mining activity. We all appreciate that as a result of discussions BHP Billiton has now agreed not to mine on the plains and their mining licence has been adjusted on a voluntary basis to reflect that.

There is then an outstanding question about a potential examination of water related issues, which, as the member for New England would appreciate, I have been having discussions about with our Minister for Climate Change, Energy Efficiency and Water, Senator Penny Wong. I treat the request for such an investigation seriously. I remind the member that he asked the Prime Minister a question in the House about three or four weeks ago concerning this matter and that he was given an undertaking that I would visit the Liverpool Plains area for the purpose of having discussions with the member for New England with respect to these issues. At that time, I would also like to talk to him and the local community about the potential to undertake an independent water study.

It is not proposed at this stage that the Commonwealth government take over responsibilities for these matters. We all appreciate that on an ongoing basis these issues are going to get more and more difficult. It is something that is going to have to involve further state and territory and Commonwealth discussions as we go forward. But, with respect to the specifics of the Liverpool Plains, I am focused on that, as is the government, for good purposes.

In terms of the long-term bond rate, my department has not done modelling related to the tax proposal because that is the responsibility of the Treasury. He appreciates, as does the member for Groom, who has primary responsibility for modelling relating to tax issues. I can confirm, because it is in the public arena, that a number of companies, big and small, have raised with me the proposal with respect to the resource super profits tax and the interface with the long-term bond rate.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Youth and Sport) Share this | Link to this | Hansard source

I question the minister with respect to his portfolio duties regarding tourism. Is the minister aware of the concept of inflation and the fact that the purchasing power of a dollar erodes over time? If the minister is aware of that concept, could the minister outline why funding to Tourism Australia under his stewardship has now fallen to its lowest level since 2003 in real terms? Would the minister also outline why he has provided absolutely no additional assistance to the tourism industry under the Long-Term Tourism Strategy—further, why in fact in real terms this year has the minister not supplemented the additional $9 million that was pulled forward from this year’s budget with new funds for this year? Additionally, would the minister also outline his government’s policy decision to impose $1¼ billion of new taxes on the tourism industry through predominantly the increase in the passenger movement charge as well as other ancillary charges?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I think it is about 700 days since I last got a question from the member for Moncrieff on a tourism related matter. Firstly, on the $9 million, the industry asked that the government bring forward the $9 million to suit a short-term requirement to assist the industry to get through a very tough period. The government responded in a positive way to the request by industry. It was never suggested by industry that having brought it forward we then supplement it. The request has only come after the government agreed to bring forward the $9 million. I made it clear in bringing forward the $9 million that we would continue to seek to assist the industry through the global financial crisis. That $9 million in partnerships with industry and state tourism organisations was turned into $20 million, because in bringing forward the $9 million I was determined to get a multiplier effect by working with industry and state tourism organisations on the basis of at least dollar for dollar so that you got a bigger impact from the investment by government.

Through the January, February, March period—especially the Chinese New Year period—that was of substantial importance to the tourism industry, especially in areas such as tropical North Queensland, where they have been doing it very tough for a long, long time, including under the previous government, because of the collapse in the Japanese market. It is interesting to note that for the March quarter of this year, for the first time since 2005, tourism numbers out of Japan were up by three per cent. I can only hope that, as the Japanese economy strengthens, we return to some growth, but I will never suggest we are ever going to have the figures we previously had out of Japan into areas such as tropical North Queensland. The nature of the market has changed. So in terms that $9 million, the answer is no. The industry knows it because I told them at the time. More importantly, I turned $9 million into $20 million by working closely with industry.

By the way, in terms of government expenditure, I simply remind the member for Moncrieff that he had better be very, very careful travelling around the country creating a view in the minds of people in the tourism industry that the coalition in the lead-up to the next election is going to meet all these half-promises that local groups are asking him for in meetings. Next week, we have the annual meeting of the national Tourism and Transport Forum to be held in Canberra. I remind the member for Moncrieff that he has an outstanding funding commitment to the transport and tourism community. During the course of the forum last year, he talked up—in a very strong way—abolishing the passenger movement charge relating to the movement of people between Australia and New Zealand. I do not know if he has done his sums on the cost, but I have booked it. It is quite a substantial amount of money that the coalition is going to have to come forward with to meet the promise he made to the transport and tourism foundation at its meeting here in Canberra, at Parliament House, last year. I would also say he has been going around the community making a number of other half-promises about restoring TQUAL—about another $30 million over four years. Are you going to meet that commitment, or are you going continue to mislead people about what you may or may not do in government?

My relationship with the tourism industry is upfront. I tell them what I can do and I tell them what I cannot do. I am not particularly worried about that, because I have a view that that is what being a minister is about—not creating misleading expectations that you can do things when you cannot do them. I would also remind the member for Moncrieff that he has been out there making speeches about the need to return the budget to surplus. Our budget parameters return the budget to surplus in three years, half the time expected. You cannot have it both ways, going out there saying we should cut the cloth to suit the current circumstances and then going out there saying we should spend money. People soon see that you are an absolute hypocrite because they see through such half-baked speeches and promises. The member for Moncrieff can come in here and ask all the questions in the world, but it has got to a point where people understand that he is not serious about tourism because he is not prepared to call it as it is. He continues to go round telling them, ‘We’ll do this and do that,’ knowing full well that he has no capacity to do it.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I thank the minister for his earlier answers, where he admitted he was not aware of the proposal until it was announced and that he cannot name—

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: that is a deliberate misrepresentation of my views.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

There is no point of order. The minister will resume his seat.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

He did give an answer which showed that he was not aware of the tax before it was announced—as the Minister for Trade was not aware of it. He is also unable to name a single company that supports this tax, despite the Prime Minister’s statements in the chamber. But he has agreed that companies will be paying 47 to 48 per cent tax, because that is the figure that the Treasurer is using. Can I ask one question that he might be able to answer: can the minister give an assurance that the government will resolve the issues surrounding the supertax by the end of this calendar year?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

They are the same types of assurances that the member for Groom gave the government in the lead-up to last Christmas—that he would deliver the coalition rooms in support of a Carbon Pollution Reduction Scheme. Not only that, he made very strong public statements that the CPRS is the best thing since sliced bread. That is what he said: the best thing since sliced bread. Here we have the member for Groom—who has a bit of standing and respect in the Australian community—fully understanding the complex nature of negotiations, because he himself went through them around the Carbon Pollution Reduction Scheme in the lead-up to last Christmas. Unfortunately, he failed miserably. I know it took him a long time to recover because, at about the same time, a new leader was elected. And, because he dared to stand in support of fundamental change in Australia, structural reform, he was sacked.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Order! I am under the firm impression, as the chair, that the member for Groom asked the minister the question, not vice versa.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

This is not question time, with all respect, Mr Deputy Speaker.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The minister should address the issue.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I am addressing the issue, but the question was rather colourful in nature and intent, and I intend replying in a similar way. In the same way in which the member for Groom approached detailed negotiations and meetings with the government over the Carbon Pollution Reduction Scheme, I approach negotiations around the resource rent tax proposal: with goodwill and with good intent. I simply say to industry that, in many ways, the resolution of this and the timing are very much related to their negotiations and their capacity to engage in good faith and to assist to inform the process. I simply say to the member for Groom: do not always believe what you read in the media.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Youth and Sport) Share this | Link to this | Hansard source

I welcome the fact that the Minister for Tourism has indicated that there is not a single cent of additional funding for Australia’s tourism industry. It helps provide some clarity. I also noticed that the minister refused to address the fact that, under his government, the tourism industry has gone backwards, with $1¼ billion of new taxes, with funding for Tourism Australia cut in real terms to 2003 levels. I also notice that the minister comes from the school of thought that the best defence is offence, and I welcome him to attack the coalition’s strong record with respect to support for the tourism industry as much as he sees fit.

Notwithstanding that, given that the minister has now confirmed that he will not be providing any additional assistance for the tourist industry through Tourism Australia funding and, indeed, does not have any real concern about the fact that his government imposed $1¼ billion of new taxes, I wonder if the minister could indicate whether the TQUAL program, which he spoke about earlier—a program that replaced the $29 million Australian Tourism Development Program; incidentally, Minister, I note you raced around the country for nearly two years announcing various projects around the country under ATDP funding—will be extended given the minister’s particular desire to constantly lecture Australia’s tourism industry about the need to invest in supply-side infrastructure and supply-side attractions. Minister, will the money match your mouth and will your government be doing anything with respect to extending the TQUAL program? Your indication of that or otherwise would be welcomed.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Direct support for Tourism Australia stands steady. Let us go to the question of the tourism industry and how this government approaches it. Firstly, we turned it into a cabinet portfolio because we regard it as a key part of the Australian economy, something the previous government failed to do—and I know what you thought about your junior minister at the time, but I will not go there.

In terms of the tourism portfolio, it is about time the industry and the shadow minister started to think about a whole-of-government approach. When it comes to the tourism industry, you also have to look at transport infrastructure. I just met with six councils from the Ocean Road area this morning. I was shadow minister for transport at the last election, and the most significant contribution they got to the further development of the tourism industry in that area previously was the Geelong Road bypass. We decided to put more in than expected to finish it and to enable the industry to go forward and further develop it, because it was a key hindrance to the development of the tourism industry in that area.

Perhaps more importantly, in terms of the supply-side issues, have a look at the funding given to local councils by our government budget by budget through the department of local government and go through the list of projects and see how much of that money is actually being spent on tourism related projects. There are very, very significant amounts of money across the length and breadth of Australia. When it comes to supply-side issues, unfortunately, the member for Moncrieff is still stuck in the past. He thinks the key to future growth of the tourism industry in Australia is to spend more money on marketing. It is not; it is about attending to a long-term tourism strategy going to supply-side issues, including consideration of the skilling of the industry. How can the industry compete when a trades assistant employed at Gorgon receives $150,000 per year and a chef in the city receives about $82,000 per year? What is the importance of migration? What is the importance of aviation access? How do we get some of these airports to improve their infrastructure?

They are the types of issues that will determine where we go in the tourism sector in Australia—that is, not whether or not we bring forward $9 million out of the Tourism Australia marketing campaign for a short-term opportunity with industry but having a long-term tourism strategy which puts tourism front and centre of the Australian economy. It was never thought about as part of the Australian economy. It was just a leisure opportunity for coalition ministers to travel the country, freewheeling and putting their feet under the table at every up-market restaurant they could at taxpayers’ expense. The world has changed. We treat tourism as a serious part of the economy, not a holiday opportunity, as the coalition did for far too long.

Proposed expenditure agreed to.

Innovation, Industry, Science and Research Portfolio

Proposed expenditure, $2,248,036,000

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

Minister, we were just discussing some parts of the industry portfolio, so I will come back to the R&D tax credit, some stuff on the Automotive Industry Structural Adjustment Program and Commercialisation Australia. I do have some questions around the Green Building Fund and the linkages programs, so I signal those in advance. I appreciate that they are not in the minister’s direct portfolio, so it might be easiest to come back to them.

Minister, in the budget there were some announcements in your direct area of responsibility. I am hopeful you might be able to shed some light on the budget announcement on mediation services relating to the various codes. In your media release you talked about an ‘introduction’, and you might have seen some of my commentary on the ‘introduction’ of services that are largely in place now. Then, in the body of your release, you talked about a continuation of them. Could I have a clarification on whether the $2.7 million is for new resources on top of the resources that were already available for those services and what the aggregate sum looks like? The budget documents actually float another number, a $2 million number, so it is a little hard to follow what is new and what is an extension. Some guidance on that would be helpful. Also, could you tell me the extent to which those services are being taken up and whether you think that will help streamline the process through the consolidation?

I would be grateful for an expansion on the business number and business name registration initiative. I note that a number of portfolios are party to that process—ASIC, the Administrative Appeals Tribunal and the tax office. There is some capital expenditure and the like as well as some for your own department. I would be keen to get a sense of how that is being apportioned, what processes and programs are going to work through that and how it may overcome some of the current business name challenges where, in some states, the ‘&’ symbol does not get recognised. We have had some examples of what I would call ‘ambush marketing’, where it might be ‘Craig & Bruce’s Small Business Advisory Service’, the ‘&’ symbol does not appear on some search engines and someone then gets ‘Craig Bruce’s Small Business Advisory Service’. There have been some problems in that space and I am interested in how they could be overcome by this measure.

The other issue—and it is not directly in your portfolio but I am sure it is something you are aware of—was around the charge on respondents with reporting obligations under AUSTRAC for some of its anti-money-laundering activities. The $500 annual charge and the amount per transaction are really proving to be quite a concern for some of the smaller businesses—newsagents and the like—that handle cash transfer arrangements that are not very high margin. To what extent are you engaged with that subject and how it might be rolled out to deal with the small business impact?

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I thank the member for Dunkley for the questions and the manner in which he has approached this consideration in detail. By way of general background on the mediation services, obviously I think we would share the view of the coalition in preferring to head off disputes rather than letting them develop into fully blown problems in the courts. This is the better approach and that is why we have sought to rationalise the mediation services that are available under the various mandatory codes of conduct.

There is an extra emphasis on that first point of contact to see if we can resolve as many issues there as we can. You can then go into a formal mediation process where, if that does not work, the more formal legal processes have to take their course. We have found through the ACCC, for example, that the mediation services for franchising are of some value. The shadow minister knows that franchising is an area that tends to attract more controversy, misunderstandings and disputes. Anything that we can do to improve our performance in that area is a very important development.

Regarding the program funding, we have got expenses totalling $533,000 in 2010-11, $498,000 in 2011-12, $503,000 in 2012-13 and another $508,000 in 2013-14. What is not absolutely clear to me from the table is the extent to which this is total net new funding or a reallocation of existing funding. I will get back to you on that. I think that is the best way of handling that. Again, it makes sense to try to centralise, or at least coordinate, the mediation services and the skills associated with it under the various mandatory codes of conduct, and that is what we are trying to do.

The business names registration exercise is one of the 27 areas of regulatory reform under the national partnership agreement of the Council of Australian Governments to deliver a seamless national economy. The purpose of the business registration program is to move from eight state and territory systems to a single national system. We have been really encouraged by the cooperation of the states and territories here. I can relate to you the sorts of conversations that were held at the Council of Australian Governments meeting in July 2008 when we accelerated a number of these reforms after having identified them in around February 2008. We compressed some timetables and I remember premiers saying to me: ‘Craig, this is ridiculous. Why would we have all of our own different systems for registering business names?’ There was a lot of cooperation, and that is continuing with the Barnett government in Western Australia, so it is not a matter of political partisanship here. Everyone recognises that we need to put an end to this kind of rail-gauge economics.

I have heard the shadow minister say in the past that some of these reforms are really for bigger businesses and not for smaller ones, but I contend that new businesses that are setting up in Australia these days very often have a strong online presence. Once you have got an online presence, unless you are the Kosciusko Cafe in Cooma, you are probably trying to sell your goods and services across state boundaries.

By the way, the reduction in fees will be dramatic. I have not got the figures in my head, but if you were operating in every state and territory you would have to pay eight sets of fees. Now you will have to pay one, and that will be a very important reduction in red tape and fees. The money that you asked about is basically the Commonwealth putting up money early to get the process underway for this single national system of registration. I will prefer to get back to you about the apportionment of money and take that one on notice, but we did provide for this in the agreement to create a seamless national economy under the national partnership agreement.

The third set of questions you asked were on AUSTRAC. I am conscious of newsagents and other small retail outlets—for example, milk bars and 7-Eleven stores—where these transfers of moneys are an ancillary part of their activity. Where they are an ancillary part of their activity, they are not really making a lot of money out of the exercise. It may be, as much as anything, a matter of trying to attract a bit more foot traffic into the store or into the newsagent so people may buy some books or groceries. I am conscious of that and of the budget measure that involves a levy of $500, and $1.06, or a little over a dollar, per transaction. Can you let me take that one on notice. I have also met, as I suspect you have, with the relevant business interests there, and we will continue to engage in discussions. On the broader issue, I support the idea of a user-pay system for AUSTRAC but, as the Minister for Small Business, Independent Contractors and the Small Economy, we need to have a careful look at these impacts.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

In the interests of clarification, the minister did very well covering the issues over the period of five minutes.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

Yes, I thought the minister was providing constructive input. In relation to the business names issue, could I get some breakdown on the effort? Some questions have been raised with me—though not hostile to the idea; nor am I—about the costs to the states in administering their schemes and how that washed through in that initiative. Where is that administrative burden and cost going to land? I could not work out from the material available to me and in the budget appropriation how that was being factored into that measure. Some insights on that would be good.

Minister, on your point about the smaller operators, I was thinking in particular about A&J Floorsanding Pty Ltd. They are registered and operate in and around Sydney and have for some time. They are doing quite well. Then a totally unrelated business, not A&J but AJ Floor Sanding popped up, and there was an argument that there was sufficient difference in their names simply by not having the ‘&’ symbol. It turned out that it might have been a software problem to do with the ‘&’ symbol. I am curious as to how that may work out and the extent to which the initiative that you announced in the budget will help overcome and protect businesses from ambush marketing.

In relation to other parts of the budget, we have inquired previously about business enterprise centres and the funding program that you are responsible for, Minister, and the work that was going on around performance objectives and KPIs—and I understand there was a process of developing those so there was clarity. How is that going? Do these appropriations foreshadow any new business enterprise centres? You would no doubt be aware that there is a perception that there are some gaps in the marketplace, that some geographic regions are not being serviced. A range of other influences were at play in the way locations were selected in the lead-up to the election—which tends to happen in the lead-up to an election. I am interested as to how that is going. I am also interested in the advocacy for small business within cabinet. Is Senator Carr getting adequate opportunity? I am sure you would like to be around the big table and be involved in those discussions. How is that working its way through? There is a sense that there has been an oversight of small business implications from decisions that are being made. I would like a sense of how that advocacy is being carried by Senator Carr in cabinet and then in the gang of four. I would appreciate your insights on that.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

The member for Dunkley has obviously seen the breakdown of administered expenses and departmental funds for business names registration on page 20 of the portfolio statement. I am happy to provide any further detail we can on that.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

It’s that operating change of arrangements.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Yes, sure. What it involves is building a single national system. You would perhaps be surprised to know that in some jurisdictions the systems are still paper based. I think you are talking about a software problem with the non-recognition of the ‘&’. The problems could even be worse than that in terms of still having paper based systems. The build of this national system is quite a sophisticated exercise. I would hope and expect, being a brand-new system in the 21st century, it will be capable of picking up these sorts of problems. It certainly will be a vast improvement on the systems that are now in place.

I would like to go to the question about the business enterprise centres. I think it was in Senate estimates where there was a line of questioning to departmental officials—I know this did not come from you—as though there was something terribly sinister about a party in opposition deciding to fund a particular array of business enterprise centres, which at that time was 36 out of about 108. This meant, subsequently, further BECs being established. It was using the resources of opposition which, as you would be all too aware, are not extensive. Departmental officials were being asked about their level of involvement in the selection of these BECs. If I had been at Senate estimates I would have said it was nil, because they would have told us where to go if we had approached the department as an opposition and said ‘Could you tell us where we might fund BECs’.

What I did do in relation to that, which I thought was the best effort I could make, was to get a set of gradings, if you like, as imperfect as they might have been, from BEC Australia, who were familiar with them all. They said to us, ‘Look, these ones seem to be going especially well and these ones are going pretty well’. We did not stick to that religiously, but what I was conscious of doing was ensuring there was a reasonable geographic spread and anticipating the likelihood of the coalition asserting that they were all in marginal Labor seats. I wanted to assure myself that they were not. In fact, there was a very reasonable spread across coalition and Labor seats, marginal and safe. We just did the best that we could.

The alternative, with the money I was able to get through our opposition budget processes, was to spread it across all 108 BECs, and they would barely have noticed the addition to their funding. I suppose another consideration is that the department would have had to administer amounts of, say, $25,000 in each of 108 BECs, so you can see the administration costs of that would have been higher. In terms of new BECs being added and so on, we have not in the budget identified any extra funding for BECs, so at this stage we need to stick with the 36 that we are funding.

In terms of small business advocacy, I can assure the member for Dunkley that I have very good access to all of the relevant processes, including the Prime Minister, on small business matters. He was very supportive during the global recession of the small business tax break, and in fact he extended it, increasing it from 30 to 50 per cent. I must go more often to him with proposals, hoping and expecting that he will not only accept them but also augment them, as he did in this case! We do have the formal departmental processes as well, through coordination, comments and so on, where Minister Carr in a discussion would represent those views. In any event, a variety of formal and informal processes are available to me and I make sure that I take every advantage of those. I feel very happy that my views are heard and policies are developed in response.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Before I call the member for Werriwa may I apologise to the member for Werriwa for missing the call before—and you were on my visionary side. I now call the member for Werriwa.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. I can never ever call you one-eyed. Minister, I am one of those who are very fortunate to have a funded BEC operating in my area—the Macarthur-Liverpool BEC, chaired by Bruce Hanrahan, a local solicitor. But, importantly, in my area of the south-west of Sydney I have approximately 10,000 small businesses. Quite clearly, the employment generator—and I suppose this is similar in most people’s electorates—is not going to be another big mining company. It is going to be the establishment of another small business and the development of those small businesses into larger ones. Minister, one of the issues we are often confronted with out there, in view of supporting small business, is particularly what is on offer to small businesses to encourage their development. The issue of tax reduction is always raised, and I know that has been addressed in the budget and I invite you to comment on that. Specifically to your portfolio in relation to small business online support and the small business support programs, these are matters that the BEC has indicated to me—for the people who use their services—have made significant inroads into developing and assisting small business to develop in my region of Werriwa.

I would also like it if you could give us any information about the prospect of growth that is anticipated in the small business sector; how that is being monitored; and what further opportunities that we might have to develop small business, particularly in the innovative sectors. I am approached often about the issue of investment in innovation in the south-west of Sydney. It is an area which is developing. The fact that we have a very good infrastructure arrangement there between road and rail makes it a very clear area for the development of business operations in the south-west. Innovation is one of those areas which are being clearly targeted for localised investment.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I thank my friend and colleague the member for Werriwa for his strong advocacy of small business. During the global financial crisis we had a major forum in his electorate. It was very, very well attended and we were seeking to get tradies involved in the business of Building the Education Revolution and housing projects in the local area. I think that has been pretty successful. Regarding the Macarthur BEC and the other BECs, I met this morning in fact with BEC Australia and while I will not put any strong reliability on these figures—they are very, very preliminary estimates—the funding has enabled an increase in BEC activity of around 45 per cent. Interestingly, that is like a step-up increase. I also believe that the extended reach of the BECs is then built into their base ongoing growth because if you can reach further then more businesses will then seek to avail themselves of these one-stop-shop advisory services.

The member for Werriwa asked about small business tax breaks. Also provided in this budget are two major initiatives for small business in terms of tax breaks. One is the availability from 1 July 2012 of an instant write-off of the value of any eligible asset up to an amount of $5,000. The instant write-off provides a benefit compared with pre-existing depreciation schedules because by writing off the value of that asset in the year in which it was purchased you get a cash flow benefit. Your taxable income is reduced and that is more cash flow for the business and a strong incentive to invest in productive assets. That is for every small business in Australia—all 2.4 million small businesses.

The 720,000 small businesses that are companies would get a head start on the reduction in the company income tax rate from 30c to 28c in the dollar, starting on 1 July 2012. We know that those tax breaks are conditional upon the implementation of the resource super profits tax and, though I am probably whistling Dixie, I would urge the member for Dunkley to prevail upon his leader and change the coalition’s position on that matter, because small business deserves a tax break. It got a tax break from this government during the economic downturn, the small business tax break to which I referred in my earlier remarks, and we believe that as small business is moving gradually into the recovery phase it again deserves some support from the government in the extra incentive provided through tax breaks.

The member for Werriwa asked about small business growth. I think the member for Dunkley would probably agree with me that small business overall is still struggling. The recovery is well under way, but small business has not fully emerged from that, by any means. Hopefully, over time as the recovery gains pace our small businesses will recover. I know small business retailers have been doing it tough in terms of the number of customers coming through the door and, interestingly, the amount that they are prepared to spend. You hear anecdotally all the time that customers these days are looking for discounts, so the margins on small business retailing have been reduced as a result. I think the reduction in hours associated with the economic downturn worked. Small businesses and other business did not so much lay people off as negotiate reduced hours. Reduced hours mean reduced purchasing power, and so those consumers are becoming much more astute and discerning and therefore are seeking bargains—and that means lower margins for small businesses.

In order to give the member for Dunkley a bit more time, I think I might leave it there. I would go on to the R&D tax offset otherwise; but I think in fairness we should give the member for Dunkley a go.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

Thank you, Minister, for your accommodation. Regarding the things in the industry portfolio that I alerted you to, it might be easier if I provide the questions and read the answers in the Hansard.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Yes, and then we will follow them up.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

Is there a chance we might get a reply before the end of next week? After that things move into a different mode. Could you see if you could get the replies back whenever you are able? It is not much use to us if the circus comes to town with electioneering and we have not got back any answers. A timely response would be highly valued.

On the R&D tax credits, we are interested to know how much of the allocated funding will be spent on the administrative side of the new R&D tax credit program for 2010-11 onwards, specifically in relation to the changing staffing arrangements within the portfolio and an education campaign through AusIndustry to provide information to business about the new arrangements. Particularly given the sense that some of the novelty factors in the new requirements might be challenging for small business, I am interested in how that communication is going to be handled.

In the automotive area, can the minister confirm that the structural adjustment side of the government’s Automotive Industry Structural Adjustment Program still has about $43.75 million assigned to it in 2011? We understand that about $7.8 million was paid on this side of the program in 2008-09 and we believe that there is approximately $18.9 million to be paid in 2009-10. It seems rather a large jump to $43.75 million, on the face of it, considering the period of time still to go. Can the minister outline why there is such a comparatively large increase in this financial year compared to the other years? Also, can the minister advise how many companies have received funding under the Automotive Industry Structural Adjustment Program. How many of those companies have merged and, if they have, with whom?

I am interested to know how much revenue the government received from the luxury car tax in 2008-09 and 2009-10. That was not clear in the papers available to us. I know you have an interest in Commercialisation Australia, Minister. How many applications have been made for assistance through Commercialisation Australia since it was established? What is the total amount in funding that has been committed to successful applicants so far under the program?

I have a similar question on the Green Car Innovation Fund. The budget papers seem to suggest the government has withdrawn about $200 million over three years from the Green Car Innovation Fund. I would like the minister to confirm that amount and outline the reasons for the cuts. I touched on the Green Building Fund earlier, and I would like an indication of when the round 4 grants might be available. I would like the minister to provide information on how much will be paid out in grants under round 2 of the ARC Linkages program and confirm that applications for funding under this round closed on 18 November last year. The successful projects were supposed to begin on 1 July but there has been no announcement of any kind and applicants are quite anxious to know whether they have been successful or not.

Finally, I am curious about the funding commitment for the industry adjustment package for the automotive industry. That program is presented as transforming Australia’s automotive industry and it will involve some change in the way it operates. Is the government planning a similar adjustment package for businesses and staff that suffer dislocation as a result of the resource super profits tax? Is there a reference to that in the numbers that are being thrown around about the benefits of this tax? As the minister would know, it is not just the big companies like Rio and Xstrata that will be affected; it is also the small gravel pit operators, sand operators and those extracting fertiliser. Many small and family operated businesses will be deeply affected. I am just wondering whether, given the commitment to a structural adjustment package for the automotive industry, the government has an eye to a similar structural adjustment package for the resources sector. I will leave it at that. I thank the minister for his courtesy and his willingness to engage constructively in this process.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I will give a very brief answer because I am conscious of the desire of other ministers to respond to questions. In relation to the various questions you have asked about different programs, I will seek to respond but I cannot, in good conscience, give a date by which the department may be able to do that. I am not aware of any circuses coming to town, but if Ashton’s Circus is coming to town I am sure you will let me know!

In relation to the resource super profits tax, I do not regard that line of questioning as being serious. We are still going through a consultation process as set out in the response to the Henry review. I would ask the coalition to reconsider its position opposing the resource super profits tax and, in the process, opposing small business tax breaks. The Liberal Party, a once great party that professed to be the party of small business, is now the party of small business betrayal. I think it is time the party rebadged itself, got on board and actually supported the 2.4 million small businesses in Australia that would benefit from the instant write-off of assets valued at up to $5,000 and the 720,000 small businesses that would get a head-start reduction in the company tax rate.

Proposed expenditure agreed to.

Agriculture, Fisheries and Forestry Portfolio

Proposed expenditure, $655,547,000

John Cobb (Calare, National Party, Shadow Minister for Agriculture, Food Security, Fisheries and Forestry) Share this | Link to this | Hansard source

I appreciate the opportunity to question the minister. Minister, I have a series of questions. Firstly, can you guarantee that funding for agricultural research will not be cut as a result of the Productivity Commission review of RDCs? Can you also guarantee that primary producers and industry will continue to have a full say on what research is undertaken, without fear of government interference? By that, I do not mean that the government does not have individuals on the various bodies to have their say as everybody else does. Can you confirm whether the Department of Climate Change, Energy Efficiency and Water has complaints lodged about work undertaken by any of the RDCs? Is it routine for any other department to comment or have input into the performance reviews of any of the RDCs, because the information we have is they have been making comments about what our various agricultural bodies have been looking into.

On the issue of quarantine, has the minister seen a copy of the World Trade Organisation’s final ruling on the New Zealand apples dispute? If so, is there a good reason why it has not been released? Are media reports to the effect that the Minister for Trade has had a copy of it for some three weeks correct? For obvious reasons, we need to know what is in it and when it will be released and why it hasn’t been. If, as rumoured, it is an adverse finding on Australia’s biosecurity, will the government be appealing against that ruling and could you tell us to what extent we entered into the disputes committee’s procedure?

On the issue of China, why has the import risk assessment, the IRA, failed to assess the impact of the Chinese fruit fly? I cannot pronounce the first word, but the second one is Suzuki. What action have we taken? There are reasons why the industry has not looked into it—it has not come up until recently—but are we doing research into the ability of pears and apples to carry it as a host? Irrespective of this current analysis, will we be looking further into its ability to affect us and its ability to be carried, whether it is via America or anywhere else? It is a very pertinent question, particularly given the fact that they have an application currently before us, as you are well aware, which I understand is in the final throes of analysis by the relevant committee. Could you tell us where that is at? Would it be true to say that, as things stand, Chinese and New Zealand apples could be coming to Australia within the next six months?

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

I want to raise the Minister for Agriculture, Fisheries and Forestry’s attention to the issue of Landcare funding and the decision to not proceed with the forecast expenditure, which involves an amount in excess of $10 million. The minister does continue to claim that because funding has gone up by $1 million Landcare funding has not actually been cut. I think we are splitting hairs in that regard, minister, because the feeling on the ground throughout regional Australia is that Landcare has suffered a blow in this budget. Your own budget papers indicate that Landcare is not getting the money that your government intended to give Landcare 12 months ago.

For the sake of clarity, Minister, is it true that funding for Landcare has not been increased at the level that was originally planned by your government? What is the government’s justification for making that decision in relation to Landcare and what impact do you expect that decision will have on the reduction in practical environmental work undertaken by an estimated 100,000 volunteers across Australia and by more than 4,000 Landcare groups? Does the decision to not proceed with that forecast level of spending reflect some change in the government’s position regarding Landcare? Are you focusing on a different form of community based environmental action? I would appreciate some clarity on those points from the minister on behalf of the Landcare volunteers right throughout Australia, who I believe are the great champions of our environment through their practical work.

I will just reflect for a moment, Minister. I am sure you are aware—you have been out in regional areas—that these people are bitterly disappointed. They are seeing this as some sort of diminishing of the government’s respect for the fact that they are prepared to give up their time, normally on a weekend, to get out there and get their hands dirty. These are the practical environmentalists of our nation. They are not the people writing reports; they are actually out there digging holes on a weekend, planting trees, undertaking pest animal and pest weed controls. They are the people who we really need engaged in the process. The reaction they have taken to this budget has been very negative. They believe there is some sort of diminished view of Landcare as a result of the government’s decision to not proceed with the original forecast level of expenditure.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I support the comments made by the member for Gippsland in relation to Landcare. Minister, I think there needs to be some greater clarity on where government policy is actually taking Landcare. We are all, to some degree, concerned about the environment generally and in our case as country members the environment in country areas. Obviously, under your ministry, you cover those areas. There are concerns out there that in the main can be alleviated, but there needs to be greater clarity on just where the real foot soldiers of Landcare and environmentalism at a local level are going and how they will seek direction into the future. I note that in some areas there are differences of view between the catchment management authorities and Landcare groups. Those sorts of issues will always be out there. But there is no doubt—just to reinforce what the member for Gippsland said—that these are the people who we really need on the ground to carry out a lot of these things. Advertisements on TV of what could be happening within their catchment are all very well, but these people, who are volunteers, who are ready to do a whole range of things, should probably be given a greater degree of recognition than they are currently given.

Another question, Minister, is in relation to Liverpool Plains and the interface of that particular area with the prime agricultural land, the groundwater and surface water resources and the potential for massive mining development in those areas. I wonder where you stand, Minister, in relation to the potential offsite impacts on the water systems in the Murray-Darling river system. I am aware there are issues in Queensland in part of the Murray-Darling catchment. The Commonwealth is playing a greater role there and, in my view, it should. But I think there needs to be some real jurisdictional interpretations undertaken as to the state based planning processes for allowing mining activities to proceed. Now the Commonwealth is involved in water resources, it is obviously involved in the production of food in some of these very fertile areas.

Just briefly, the minister may be able to report on another area. I note that there is money in the budget for the science of soil carbon. He may be able to report briefly on progress regarding those management practices that are encouraging the sequestration of carbon and on how government policy will encourage farmers to move in that direction?

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Minister, before I ask the question I am going to ask I will give you a little bit of background information so that you will understand why I have serious concerns about this particular issue. As the first elected conservative in the state seat of Burrinjuck in the New South Wales parliament, in the late 1980s, I raised the very serious issue of the importation of apples and pears from New Zealand and the inherent risk that that would place on Australia’s disease-free status, particularly in relation to fire blight. I raised the issue again in this place, in 1999, 2000, 2001 and 2004, and those issues are all on the record in Hansard.

Given the recent press release by Biosecurity about their recommendations to introduce apples from Japan into this country and the inherent risks associated with that particular cause, can the minister give the apple and pear industry in this country some assurance that he is not going to be influenced by the recommendations of Biosecurity, who have as a matter of record in the past demonstrated their lack of scientific investigation into the actual problems associated with the introduction of apples and pears into this country, in particular from New Zealand? Can the minister also give a guarantee to this parliament, the Australian people and in particular the apple and pear industry that he will not take too lightly the serious ramifications of any recommendation by Biosecurity Australia to compromise the very safe biosecurity regimes that have operated in this country and have prevented disease from apples and pears from other countries coming into this country? I say this in the interests of the very real concerns from apple and pear growers across the country who are, once again, being placed in a situation where, with their limited resources, they have to fight a federal department whose track record has demonstrated time and time again that they are is not interested in the safety of Australia’s disease-free status but are more focused on the easy option of agreeing to pressure from organisations outside of this country in the interests of so-called free trade.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

I think you would agree with this line of questioning as well. I also rise to speak on the very important issue of apples and pears to my electorate of Mayo. The Adelaide Hills probably produce the finest apples in Australia. My apple and pear producers are extremely worried. I wrote to the minister yesterday on the Chinese import risk assessment that the shadow minister so eloquently put in his question to the minister. I am interested in that answer. In particular, is the department looking at possibly reopening that risk assessment given this new bug? I will not try and pronounce the name of the bug—you may be able to assist, Minister, in that respect. I am interested in the New Zealand aspect and the more pressing issue of the risk assessment of the Chinese situation.

The second issue which was raised by the member for New England relates to prime agricultural land. In my area in the Adelaide Hills, the state government is opening up large parcels of land for housing development. Is an assessment being conducted by the federal agricultural department about the impact on our ability to produce food from inappropriate development on prime agricultural land? Certainly around Mount Barker this is a very contentious issue. This is a very important issue: where we choose to put houses and the use of areas that have fertile soil and good water—which are not always available in South Australia. Is an assessment being done on the risk here? I do not think the state Labor government in South Australia is doing enough in that respect.

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Can I deal with the issues raised by the shadow minister first. I suspect I am going to want a few goes at my five minutes to work through the different issues that have been raised. I will deal first with the non-apple issues raised by the shadow minister, then deal with apples and then deal with the different issues that have been raised.

First of all, the shadow minister raised the issue of the Productivity Commission review into the research and development corporations. I believe I can actually give him all the assurances he seeks by simply referring to the National Press Club speech I gave when the Productivity Commission inquiry was launched. There is no desire by government to use this as a mechanism to reduce funding. What we are trying to do is find ways for the money that is made available for research and development through the RDCs to be used far more effectively and efficiently than it has been.

The research and development corporations by and large do a very good job. I do not want to mince words on that; generally they do. For each of them I do believe there are examples where they could use their money more efficiently than they do, which would result in more money being made available for research and development, not less. The key examples that I think you can focus on fairly easily are: first of all, there were a handful of them where executive salaries became completely out of control. I believe that whoever is the CEO of a research body is doing an incredibly important job. When their salaries got beyond the salary of the Prime Minister of Australia, and they were doing that off the back of farmers’ and taxpayers’ money, I think it was not a reasonable call. I spoke to them for a long time, asking them to do something about it. One of them moved a tiny bit but very few of them moved at all, and I do believe it is an appropriate issue for the Productivity Commission to have a look at.

Secondly, there is the issue of co-location. We have more than half-a-dozen of the research and development corporations based here in Canberra, but they all have their own building, they all have their own conference room, they have their own payroll systems under different enterprise agreements and they have their own receptionist. I do not believe for a minute that there are not opportunities to co-locate, streamline and outsource some functions, even if the RDCs all want to keep their separate identities and not amalgamate. I really believe that at the moment there is money that could go to research and development—that farmers believe they are paying for the purpose of research and development and that taxpayers are pretty happy to contribute to in the matched funds—that, though it is not being thrown up against a wall, by any means, is not being used as efficiently as it could be. The intention of the Productivity Commission review is to find a way for the money that is provided to be used more effectively and efficiently than it has been.

There are some people, including some in the electorate of New England, for example, who oppose the levies outright. It is a common view as well among beef producers in that part of the member for New England’s electorate. It is also a common view among a number of grain growers in Western Australia. It is not a view I hold. I am not opposed to the levy system. I actually think it works and works well for these reasons: firstly, if you believe that there should be an Australian government contribution to research and development—and I do—then the people who get the financial benefit from the research and development should pay a higher contribution than the general taxpayer does, and the levy system does exactly that; secondly, research and development is only of any use at all if it makes it from the lab to the farm and if farmers have been involved on the boards. If the farming organisations have had a direct stake in what is being chosen for the purposes of research, I believe that is the best way you can have of ensuring the extension part works—that the research actually makes it from the lab to the farm.

My commitment to the current system is one where the more I have looked at it, the more I think it works. I think it is a smart structure. There are individual issues. Some of them have got more tied up in agri-political activity than I think is warranted for a research body. There are different areas where the money can be used more efficiently than it has been. But as a general rule the model itself is one I support and I have said so publicly previously.

The next issue raised by the shadow minister concerns whether I am receiving information, advice and complaints from other departments on the work of the research and development corporations. The advice that comes to me on the RDCs comes from two sources: it comes from my department and it comes from farmers. That is it; that is the only advice that comes to me. The extent to which other departments have chosen to engage in the Productivity Commission process, for example, I do not know the answer to, but I suspect the Productivity Commission would be able to provide very quickly which departments have made submissions to it. The advice that comes to me comes is from my department and from farmers, and I am not sure that advice on research and development corporations from any other department would be as useful to me as those two sources of information.

We then go to the issues surrounding apples. I will deal with the issue of China and the issue of New Zealand separately because they are very different issues in terms of biosecurity. I first of all thank all members who participated in that discussion on apples for the fact that, without exception, everybody was arguing from a biosecurity perspective. No-one was arguing—in the questions that I heard and the way they were framed—from a protectionist perspective. I think that is a very important message not just for us to relay to each other but for the rest of the world to hear Australian politicians argue.

Australia’s approach to biosecurity and quarantine has always been within the context of us being largely a free-trading nation. But we are also an island nation. There are pests and diseases which do not exist here, and Australia has every right to protect itself from those pests and diseases using the formula of the appropriate level of protection which has been used by both sides of politics for a very long time, which is that the level of protection should be for very low but not zero risk. If we sought zero risk, we know that that would mean that you would take no imports of anything, you would allow no tourists in or out of the nation and you would shoot all migratory birds as they approached the border. The approach of zero risk is one that no-one can deliver in any sensible public policy approach, but to minimise the risk is good and appropriate public policy, and that has had bipartisan support within Australian politics for a long time. I think the discussion we just had, the questions and the way they were framed affirmed that very strongly.

I now go to the biosecurity issues which we are dealing with. With respect to New Zealand, we are talking principally but not solely about fire blight, in terms of the issues which have been raised. Drosophila suzukiiI always have to check that name—is the pest that we are talking about with China.

Honourable Member:

Honourable member interjecting—

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I can spell it if you need that. I will deal with New Zealand first because the biosecurity arguments there are the strongest ones in the sense that they have been around as arguments between the two nations for 70 years. When I was shadow minister for immigration, I took a quick trip to New Zealand as a guest of the then New Zealand government. I was shadow minister for immigration, and every discussion I had with every member of parliament or government agency began with a discussion about the migration of New Zealand apples to Australia. It is a massive issue for New Zealand, but fire blight is a massive issue for Australia, and we have every right to defend ourselves in every international court.

There are protocols around WTO decisions, protocols which—from leaks that have appeared in the international press—it would be arguable that not everybody has followed. But there is a protocol that there is a gap between when the parties receive a ruling or a draft ruling from the WTO and when they are allowed to make it public. We observe those protocols to the letter. The final report is expected to be made public later in the year, possibly in July, but that will have to follow very strictly the WTO rules about when it is allowed to be made public, and the release of it would come not from me but from the Minister for Trade, as he has principal carriage of the issue. (Extension of time granted) The issue of an appeal obviously always depends on legal advice and is a call made by the Minister for Trade in the final instance, not by me, although it is an issue on which we do work closely together.

Without in any way compromising the formalities of the process we are in, I will just say there is no difference between the vigorous way in which this government will defend Australia’s biosecurity in every international court and the way in which every previous Australian government has defended our biosecurity in every international court. I do not know that I can go any further than that without reflecting on information which at this point is still confidential.

With respect to New Zealand, that applies to the fire blight issues surrounding both apples and pears. China is different. Since 1999, pears from China have been allowed into Australia. That means that a large number of biosecurity issues and the science on apples had in fact already been resolved to Australia’s satisfaction since 1999. The issue of the pest whose name I have pronounced once—and I will leave it at that; we will refer to them as the suzukii pest—has been raised by industry recently. I know the shadow minister has met with the peak industry body. The peak industry body were offered a meeting with my office, but it was not at a time they could do, in fairness to them, and we are still finalising another meeting. There is certainly no reticence from me or from them about sitting down and working through this issue.

Any decision on the pest that has been referred to will be made on the basis of the science and will be made at arm’s length from the minister, as previous ministers have done. But a decision will be made on the basis of the science, and if the science says there is a biosecurity problem which has only recently come to light then I have no doubt that the Director of Biosecurity will act according to the responsibilities he holds in that job by making sure that the level of risk that is dealt with for Australia is kept at the appropriate level of very low but not zero. I cannot answer further than that, as the shadow minister would respect, without there being a ministerial direction of that nature to the Director of Biosecurity, and I think we would both agree that to go that distance would be inappropriate.

In terms of particular references that have been made by others, any recommendations obviously will not be taken lightly but extremely seriously. I go to issues first raised by the member for Gippsland and echoed by the member for New England with respect to Landcare, and then there were a couple of other issues that were raised by the member for New England. On Landcare, I believe that part of the way in which the member for Gippsland described the issue is accurate. Some of it is, I think, rhetoric which does not quite match the truth, but some of it is accurate. Is there less money for Landcare? In the forward estimates of this budget, when compared to the forward estimates of the previous budget, the answer to that is yes. Is there more money for Landcare next year than there was last year? Yes. Is there more money again for Landcare the year after that? Yes. So what does that mean? First of all, in dollar terms, in 2009-10 there is $35.1 million for the National Landcare Program; in 2010-11, $36.2 million; and in 2011-12, $39.1 million. Would we all—everybody here—liked to have had a situation where the budgetary constraints were different and we had a whole lot more money for Landcare? Of course we would. But I do not believe it is reasonable to put it in the terms that the member for Gippsland did. He said that this would result in a reduction in practical environmental work. You cannot increase the funds and reduce the practical environmental work.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

Mr Chester interjecting

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

If there is a view that an increase from $35.1 million to $39.1 million in two years is in some way less than other expenditure and a reduction against CPI, there are rates of CPI being projected by the coalition which, I think, do not reflect what their shadow minister for finance or their shadow Treasurer would be saying is the case. But, Member for Gippsland, if you believe that the CPI is going to be running at those sorts of proportions over the next two years, by all means run that argument. But I do not think your economic spokespeople are matching that argument at all.

In terms of Landcare, the member for New England went a little bit further and just asked: where is government policy taking Landcare? I dealt with a lot of these issues in a speech I gave to the National Landcare Conference in Adelaide. I believe Landcare in the future has to work on three pillars: food, environment and climate. I think those three pillars provide the basic framework for the work of Landcare, where work that has now been going for 20 years for the challenges of the past—whether they be soil degradation, salinity or soil moisture problems through drought—will also deal with a whole lot of climate challenges that we will be facing in the future.

There have been areas where government policy in the first two years of government fell short and which we have acted to fix. Initially, when we got rid of the local facilitators, a number of members of parliament—including the member for New England and, I acknowledge, the member for Corangamite—argued vigorously with me that that was an error. We responded to that and we reinstated the facilitators on a local basis.

Secondly, there are the community action grants. We had no small grants program. The only way to be able to access grants was to largely work in with a big project through the catchment management authorities or whatever the NRM bodies are called in the various states—certainly for the member for New England it is the CMAs. There were many small groups that felt they were shut out and could do good, practical work with smaller amounts of money than were being made readily available, so the community action grants were introduced.

On the issues surrounding the Liverpool Plains, a large number of those in terms of final policy carriage, to the extent that there is a federal involvement, go to issues within the Department of the Environment, Water, Heritage and the Arts, through the water portfolio, because the issue of quality of downstream water is something that, to the extent it rests with the federal government, rests with that portfolio. But certainly, within the arms of government, my department does feed in information on those issues.

In respect of this, though, there is an issue which was raised by the member for Mayo—which I have skipped; I am sorry. He refers to fertile soil, which is a similar argument to those about the changes in land use. This is something which does not rest at a federal level, and it is being dealt with very differently by different states. Tasmania, for example, has zoned agricultural land in particular ways to be able to make a zoning decision about preservation of fertile soil. One of the particular features of Australia since white settlement has been that people move where the soil is at its most fertile and then put cities over the top of our best soil. It has been an ongoing practice. Some states are now starting to deal with that in new and creative ways, but I do not want to pretend that land zoning is a federal power; it is not.

Finally, on the science of soil carbon, the work that we are doing on soil carbon is less than we had hoped to do. There was an extra $50 million on the table as part of the package surrounding the Carbon Pollution Reduction Scheme for research and development in agriculture, a good part of which was to go to soil carbon, coupled with a system of incentives whereby farmers would get cash for good work in soils. Some of that is now off the table because we were not able to secure passage of that legislation. Certainly, with the funding that we have available, there is more work being done in soil carbon than there ever has been before. It goes in two ways. One is in terms of measurement—not simply measuring the improvement in the soil but measuring how much carbon still finds its way out. The second is working out ways of integrating that with farm practices. There has been one simple rule that I have put over the programs there under Australia’s Farming Future: when research and development are being done into carbon sequestration, I want there to be an alignment between improved carbon levels in the soil and improved productivity. Regardless of where any other policy gets, if you get a productivity dividend, that is the best way of making sure you get uptake by farmers.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Minister, for the several visits you have made to the north-west coast, in particular, and for your representation of our primary industries. Minister, you are well aware that the forestry sector is a major industry in my electorate. I know the government established a number of funds to support businesses in the forestry sector. Would you please outline what support the government provided in the 2010-11 budget for our forests and wood products industry?

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

Again I would like to thank the minister for his ongoing interest in Corangamite. Minister, you recently announced a trial of drought reform in Western Australia. How did the government decide what measures to include in this trial, and when is it likely that that new system will be rolled out nationally?

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Minister, I have a brief follow-up on an answer you gave, and I thank you very much for your comprehensive answer particularly in relation to apples and pears. Is the agricultural land issue something that you think it is worthwhile the federal department having more of a role in, given the different policies state governments are applying to particularly housing developments and the risk as we go into the future that we are developing land that we should be retaining for food production?

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

My question to the minister follows on from the one from the member for Mayo. It concerns a similar topic, given that in the Adelaide area much of the original agricultural land is slowly being swallowed up by urban development. When you combine that with the effects of climate change on our food production, can the minister comment on what policies and strategies are being implemented at federal level to overcome both of these serious concerns to our food security?

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I will first address the question of the member for Braddon on forestry, and then I will take the different issues raised in order. The 2010-11 budget contains two critical areas of forest industries funding. There is more than $7 million in total for projects available through the Forest Industries Development Fund. This allows businesses in the industry to apply—I know, Mr Deputy Speaker Adams, you have an interest in this—for up to 30 per cent of funding for projects that add value to the forests and wood products industry. I think the fact that there has to be the 70 per cent contribution from the industry itself is an important way of making sure that what is funded is something that industry itself has judged to be in its best interests.

It is expected, because we usually leverage more than this, that we will be able to leverage more than $20 million worth of investment from the private sector and other sources. There are places like the McKay mill and various other places I have visited on different occasions to see how this sort of government investment actually delivers for timber communities and delivers in the long term for jobs, notwithstanding the many challenges that are being faced by the forestry sector.

Similarly, we also concluded the $6.3 million investment for research into the impacts of climate change on our forest systems and industries. The impacts of climate change are often thought of in terms of agriculture and are often missed in terms of forestry. There is research there which is important both in terms of the impact, for adaptation, but also in developing different accounting mechanisms. Forestry does particularly poorly out of the Kyoto protocol, under current accounting mechanisms, where there is a presumption that while a tree is vertical it is full of carbon but the moment it is horizontal all the carbon leaves. That is a method of accounting that does not match the science, and Australia has continued to pursue through international negotiations a correcting of that with a recognition of stored carbon, and research and development is able to contribute to that as well.

The member for Corangamite asked about the trial of drought policy in Western Australia. Essentially what we are trialling there is something that there is never any political pressure on a government to do, which is to ask when there is not a drought, when times are good, whether you should bail out because there is no political pressure or whether that is actually the time to invest. The problem with waiting for the crisis is that you end up paying the banks rather than paying the farmer, and you do not necessarily reward those farmers who have made really tough decisions during good times and therefore have avoided crisis. They then look to their neighbour over the fence and ask, ‘How come they are getting the government money and I am not?’

The strength of this new approach is in being able to say that, with the exception of food-on-the-table money through household support, we will actually come in when times are good. We will help with proper risk management and proper planning and co-invest with the farmer on their own plan in the belief that we are then better able to manage the next crisis by farmers managing much more of it themselves rather than the government coming in at those times with the interest rate subsidy. That subsidy carries a whole lot of incentives which are terribly difficult to justify and which I believe cannot be separated from many of the mental health challenges that exist in many parts of Australia that are doing it particularly tough.

The member for Corangamite also asked when that would be rolled out nationally. It will be reviewed at the end of the new financial year. We expect the nature of that review will take a few months. Following that review, depending on the findings, there would be an opportunity to start to roll it out. It is not the sort of trial where you could do a massive rollout in one hit, for the very simple reason that you do not want to undermine the value of the strategic planning. If you try to do too many farms at once you end up not having enough good-quality people to help with the strategic planning and you end up creating an army of consultants with templates, on which you fill in the blanks, as a way of them getting a whole heap of government money and the farmer getting less than they should. It only works if it is done in an incremental way that then allows good-quality strategic plans to be developed. That means that, even if the trial is successful, I suspect we will be in a transition process for some time as we move from the old system to the new. I would hate to undermine good-quality planning by trying to roll out something too quickly.

The members for Makin and Mayo both asked questions concerning land use, agricultural land and urban development. If the Deputy Speaker turns a blind eye for a moment, this has probably got more to do in some ways with some of the work that is happening under the population portfolio, which I hold but which is not currently before this room because we are dealing with a different set of government appropriations. The issues of food security, where people live and whether our urban planning has been as smart as a nation as it needs to be are all issues that are coming through the consultative process which I announced yesterday in population. They are issues which have always been raised with me as the minister for agriculture, where I have been able to carry the stakeholder concern without ever having any of the policy carriage. In population strategy many of these issues come directly to the forefront. It is not only an issue in South Australia but also an issue in, for example, Western Sydney, where once again the most fertile land is also the land that carries the highest financial value for the next round of urban development. These are significant concerns.

This does not mean we are about to run out of food—and I do not want us to become too alarmist with the debate. We are still a massive food-exporting nation, but the question is: are we using a precious resource in the smartest possible way? It is a level of strategy that previously we have never applied. It is one of the issues that are being raised with me. I do not want to pre-empt the consultative process; I want only to say that it will be one of the issues that is fed in through that portfolio.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

It is fortuitous that I am here, Minister. You will recall that you came to Bundaberg—very graciously, I might add, and very helpfully—and we talked about the problem of bats. Bats are a big problem, especially in fruit-growing areas. Long debate has ensued over how they should be controlled. I for one am not into the wholesale slaughter of wildlife at any cost, but there are other methods, which you have heard about—shooting the scouts. In view of the fact that this is having a big impact on fruit crops on the one hand and in view of the links between bats and viruses in horses on the other, what is your current thinking with regard to that and what negotiations have you had with your state colleagues?

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I thank the member for Hinkler for the question because it goes to one of the great tensions that arise in the policy debate—and he has hit both of them. It is an issue that can have a devastating impact on producers and a tragic impact on people. If we were talking about an exotic, invasive species then the arguments would be simple, immediate and almost entirely contained within my portfolio. But because the question largely goes to native animals the restrictions on action bring in another area of policy in terms of our native biodiversity and therefore the final approval rests not with me but in another portfolio. I simply say that I can ensure the member that on these issues my colleagues are very much aware of the views of the stakeholders that come to me through this portfolio but it would be inappropriate for me to pretend that I have policy carriage in an area where I do not.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

Minister, as you are aware, significant parts of my electorate have gone through quite a remarkable change in landscape over the last decade or so, particularly with farmers embracing new practices such as agroforestry. What is the government’s approach to agroforestry?

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I prefer to refer to it as ‘agriforestry’ although I know the sector calls itself ‘agroforestry’. I do think there are benefits in having the same minister responsible for both agriculture and forestry. Very often the agriculture and forestry sectors have regarded themselves as being in opposition. They seek approval for the same parcels of land. Sometimes that sense of opposition has been pretty accurate. That has often been how things have transpired.

The work that the member for Corangamite has taken me out to see in his electorate is deeply impressive. There is some success with cropping but particularly in grazing. Strategically based high-value timber actually helps with shading. In the examples I have seen in Corangamite you end up with a timber resource being planted on the land and stock numbers can be increased as a result—you are on a smaller parcel of land, your soil is healthier, the shade is more appropriate, you have windbreaks and you also have an asset for the farmer. There are some areas where it will work more effectively than others—where there are mills or ports there is always a market for the timber. This means it is not something that works on every single farm.

But it is something which I think has suffered from the fact that agriculture and forestry, while within the same department, have usually been dealt with by separate ministers. To that end, we have started to align some opportunities where previously that had not happened. The new business plan for Caring for Our Country quite specifically allows the agriculture-forestry mix to receive funding. Similarly, we have someone directly involved with agriforestry on the National Landcare Council to make sure they are feeding into the landcare agenda. There will be parts of Australia where this is not a deal. There will be parts of Australia where the old conflict continues. But there will be parts of Australia, such as Corangamite, where this is a very real opportunity for farmers to effectively give up part of their land for its traditional purposes to plant a new asset. They may well get a benefit of soil carbon from that. Additionally, there are benefits through the growth of the resource itself when it is time for the timber to be harvested. Finally, in the examples I have seen, it has resulted in the land remaining for agriculture having an increase in both its productivity and the total production of that area. You often get talk of win-win outcomes in government. Agriculture and forestry working together is clearly one of those.

Proposed expenditure agreed to.

Consideration interrupted.