Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

Thank you for this opportunity to discuss the substantial, significant budget for Australian industry. This budget sets out a policy framework for Australian industry, manufacturing, energy and resources, skills and training, and science, not just for the forward years but for the decades ahead. It sets a clear path to sustainability, new investment and jobs growth, and provides new opportunities in markets for Australian ideas and products. Our approach underpins a new era for Australia which faces up to our challenges, embraces our strengths and accepts our responsibility for forging a new direction. We have the opportunity to reposition Australian industry towards the jobs and sectors of the future, while increasing the opportunity to advance value-adding manufacturing. This future will be built around new ways of sharing knowledge and know-how and greater links—I emphasise: greater links—between science, research and industry itself. In fact, we will be putting science and research at the centre of the Industry portfolio.

This budget represents the hard work of a government that will not shirk its responsibility to restore the nation's finances after Labor's debt and deficit disaster of the last six years; but it is also a budget that signals a clear new direction for Australian industry towards a future of new opportunities, new markets, new jobs and a new era of confidence in our ability and integrity. We have made it clear that no longer will industry policy be based around handouts, bandaid solutions and throwing around taxpayers' money willy-nilly without any strategic focus or long-term benefit to the nation.

Australian businesses are characterised by a world-class standard of entrepreneurship. We have a stellar record of sparking great ideas and turning those great ideas into real-world applications. We do our Australian businesses a great disservice if we advocate a handout or government led mentality. The government's role is to create the right policy framework and settings to unleash the creativity, ingenuity and practicality of Australians and their businesses. We have a role as a government to be the catalyst, not the gatekeeper.

We are investing in national productivity gains and skilled workers of the future through a $1.9 billion trade support loans scheme which will encourage apprentices to take up a trade but, far more importantly, to finish that trade. Fifty per cent completion rates are simply not acceptable, particularly for young people who need a future that is secure with the training they need. We want to turn out people who can take real jobs and have a secure future. We are putting in place a skills and training network that delivers the trained workers that Australian businesses are calling out for, not simply training young people for the sake of training.

As I mentioned, the government will be putting science and research at the centre of industry policy, and we are developing a strategic approach to science policy which will adopt a whole-of-government outlook to ensure that all portfolios work together to focus on our resources and delivering future jobs. That is all portfolios of government, not just my own very diverse portfolio.

The budget includes an investment of $1.4 billion in the resource sector, centred around the $100 million exploration development incentive, which is otherwise known as a flow-through shares scheme, something the Labor Party promised but in six years of government never delivered. We want to make it crystal clear that we support the energy and resources sector. It is one of our economy's most significant job drivers, and the private sector investment and national revenue of our country depends on it.

Beyond the big headlines, of course, we also want to support our communities by getting rid of the carbon tax, the mining tax and red and green tape. We want to stop the constant tax grabs we saw from those opposite during their time in government that attacked the resources sector as if it were an ATM, never giving it any credit or security for its future. Our government is about forging new links between industry research and science, and that is exactly what we will do.

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

I thank the minister for his introductory comments. The partnership between resources and science is important, and in Australia we are blessed with some of the great institutions that do support the interaction of science and our resources sector. The most important of those, we believe, is Geoscience Australia. I ask the minister to outline to the House the impact of the budget cuts on Geoscience Australia and its interactions with its counterpart organisations in the states and territories.

Geoscience Australia provides a significant body of precompetitive data that helps inform explorers and the industry on the prospectivity and, most importantly, helps to drive the exploration sector in the most meaningful possible way. The discovery of the Gawler Craton occurred out of the PACE program in South Australia, which grew out of the insights that have grown from Geoscience Australia. Geoscience Australia's role in supporting science in understanding the interaction of water and coal gas extraction is something in which our community has a great deal of confidence. Geoscience is not simply a Canberra based organisation. It is a world-leading organisation that has been consistently supported by successive governments, so I am enthusiastic to understand the minister's views and intent behind the cuts to Geoscience Australia.

We also have in our country at the moment a significant and growing issue on the east coast, and that is gas supply—the extraction of gas from coal seams to support the domestic gas supply needs of the east coast. I would like to know from the minister what the Commonwealth is doing to assist that industry to grow. We hear many poorly-thought-through arguments that associate the export gas industry with increasing prices on the east coast. We know our gas prices are being internationalised, but the renovating impact of that LNG investment, in particular in the minister's home state of Queensland, has had a significantly beneficial impact on gas supply. But there are clouds over how advantageous that resource could be for Australia and the lack of willingness in some jurisdictions to see that gas extracted in a safe way. I stress the word 'safe' because that relates organically to my previous question about Geoscience Australia.

These things are connected not just by ideas but they are connected organically—the foot bone connects to the shin bone connects to the knee bone. Good science, through Geoscience Australia, gives our community confidence that we know what we are doing. Good science underpins community confidence that gas extracted from coal seams can be done in the best possible way. On this side of the House we strongly stand for good science not as a dalliance but for good science underpinning good industrial and environmental management practices.

I would like to hear from the minister specifically about the cuts to Geoscience Australia—how those cuts will improve the operation of Geoscience Australia; and the measures that the government will practically take to assist increased gas recovery from the east coast into our pipeline network in the east coast to drive our domestic markets?

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

Can I thank the member for Brand for his questions and also of course for his contributions when the Labor Party was last in government towards supporting the resource sector. He was at times a lone voice there but he punched well above his weight. So I thank him for that. He gave the resources sector some glimmer of hope in what was a very bleak time for them when, as I say, the Labor Party treated the resource sector as a punching bag and source of money or an ATM whenever they ran short.

In answer to his specific question in relation to Geoscience Australia, as the member for Brand knows, I am a great supporter of Geoscience Australia—and he was when he was minister and Martin Ferguson before him. We have moved to ensure that, in terms of their long-term appropriations, they have a very secure and solid future. I will confirm, however, that there was a $27-million reduction under section 31 funding from $62 million in the 2013-14 budget to $35 million in 2014-15. There was also a $1.937-million efficiency dividend imposed on Geoscience Australia.

More to the question, though, we do not expect there to be any long-term impact on Geoscience Australia. There have been some voluntary redundancies that have been taken, but as part of the overall efficiency which we need to achieve from our departments, Geoscience Australia is certainly able to assist in that regard. I have total confidence that Geoscience Australia has the resources it needs to do the job that Australia needs it to do. It is a pre-eminent organisation globally, it is well respected internationally and we certainly need to make sure that it continues to do that work.

In regard to coal-seam gas and the way that industry is progressing in eastern Australia, I have played an active role in trying to assist that industry to overcome some of the myths and blatant lies that are spoken about it. Along, as I say, with members from the opposition, we have from time to time needed to explain to our colleagues exactly what is going on in that industry. It is an industry which has enormous potential. As you, Deputy Speaker Scott, know more than anyone else in this parliament, it can bring about enormous beneficial change in the communities it is involved in. In your electorate of Maranoa and in my electorate of Groom, we have seen 4½ thousand farmers sign up to coexistence agreements with coal seam gas operators. I will give an example of the impact of that for individual farmers. I am sure Peter Thompson will not mind me mentioning his name again, or this number, which he stated in public. One of the Deputy Speaker's constituents, Peter Thompson, and his wife, Nikki, have said publicly that they will receive $6 million from coal seam gas companies in return for allowing those companies to operate on their properties. The reality is that that $6 million is without any investment from the Thompsons or any requirement for the Thompsons to be involved in any work or labour or any risk in terms of capital investment. It is changing the whole economic and social landscape of that region.

Farmers are cooperating and science is being heavily involved to ensure that the underground aquifers are not affected. The cooperation that has been going on between the state government, the local governments, people like Ray Brown from the Western Downs shire and, of course, the Commonwealth government has been exemplary. Unfortunately, that is not the case in other states. At the moment, we are seeing a moratorium in Victoria. Perhaps after the election, again with some encouragement from the Commonwealth government and some assistance from both sides of the House federally, we can encourage some development in that regard. In New South Wales I am more pessimistic. I am unsure how we can progress that issue. I have made a number of attempts, and I did, for a short time, consider a coal seam gas working group to assist there. But I have abandoned that idea.

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

The coalition is committed to driving business competitiveness by supporting business improvement and promoting economic growth through commercialisation of new ideas. I want to ask about the government's commitment to industry policy—more specifically, the delivery of the new Entrepreneurs' Infrastructure Program through a single business service initiative. Mr Deputy Speaker, as you would be aware, unemployment in my region increased to over nine per cent under the previous Labor government, during the Rudd-Gillard-Rudd years. It is absolutely essential that we do things to help the economy in the regions, so, Minister, I ask you to list the programs and the new initiatives that the coalition government is providing for industry to help drive competitiveness and create jobs of the future. Also, focusing on the Entrepreneurs' Infrastructure Program, would you tell me the rationale for the creation of this new and innovative program? What are the primary objectives and components of the program? How much funding will it receive? What progress is being made in the establishment of the EIP?

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for Hinkler for his question. I know that, in the short nine months that he has been there, he has had an enormous impact in terms of encouraging new businesses and new industries to that region. He has certainly ensured that businesses in Hinkler—or potentially in Hinkler, or if he can steal them from anywhere else—are aware that he is more than welcoming of new businesses in his electorate. He is making sure that the 'open for business' sign is well and truly illuminated both here and overseas.

In answering the member for Hinkler's questions, I will say how important it is that we continue to see businesses established and that we attract not only businesses from Australia but also foreign investment. Innovation in Australia is a very, very high priority for this government, as it was last time I held this portfolio, between 2001 and 2007. We want to invigorate people to commercialise their good ideas. A good idea is worth nothing until it is turned into a commercial opportunity, until it is turned into a job opportunity for people—and, in this case, the people of the seat of Hinkler in particular.

We are investing more than $2.25 billion in industry programs over the forward estimates, and this will deliver real outcomes and real jobs. We are certainly not abandoning the industries that those opposite would want you to believe we are. In terms of supporting industries, we have stood behind industries, we are adjusting industries and we are offering industries new opportunities.

The range of programs to assist that innovation, create jobs and provide a streamlined and focused approach to industry policy include, as the member mentioned: the Entrepreneurs' Infrastructure Program, some $484 million manufacturing worth of funding; the Manufacturing Transition Program, some $50 million worth of funding; the growth fund to assist those involved in the auto industry to transition to new long-term jobs, a total of $155 million of which the Commonwealth government contributed $101 million; the Prime Minister's National Industry Investment and Competitiveness Agenda, which will be announced in the months ahead; and the Industry Skills Fund, which, again, is a very important area in giving business the skills they need and their employees the skills they need to be competitive in an evolving and developing industry framework, some $476 million. Some might say the Trade Support Loan is the jewel in the crown of the training support area, some $1.9 billion of trade support loans. People wanting to do apprenticeships and certain traineeships will be able to access loans of up to $20,000 interest-free and adjusted with CPI annually.

The response from industry once we explained the Trade Support Loan scheme to them has been excellent. I was actually out my electorate last Friday doing that and the response was overwhelmingly positive. The cost of providing those loans interest-free is around $480 million in the forward estimates. As well as that, we have got: the Geelong Region and Melbourne North Investment Fund, some $54 million and we are well through that; the Tasmanian Investment Fund of $11 million; and the Automotive Transition Transformation scheme for the auto industry, exclusively for the auto industry, some $550 million.

The member asked about the Entrepreneurs' Infrastructure Program. The new program, aimed at supporting the commercialisation of good ideas, establishes and delivers a straightforward, proactive and effective approach to industry policy through a substantive and more efficient implementation platform which is known as the single business service. It will provide market and industry information and advice to business. It will offer business management advice and skills. Experienced private sector business advisers will give access to research and innovators to re-engineer business operations. It will also connect them to supply chains and potential markets as well as commercialisation advice.

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

Thank you for your observations about Geoscience Australia. Could I ask you to be more specific. You referenced almost $30 million in cuts to Geoscience Australia. You may need to take this on notice, but just how many jobs have been axed in Geoscience Australia? What were the skills that were lost? What work areas have been affected? What is the ongoing program of graduate recruits into Geoscience Australia? These things are important as I know the minister would understand a healthy and vital Geoscience Australia does require consideration of its structures, of its work programs and of its future skill base.

I would also like to ask the minister about the review of the Renewable Energy Target. Minister, we understand that review is taking place chaired by Mr Dick Warburton, a fine Australian and a very significant Australian business leader. I have had the pleasure of meeting with Mr Warburton to discuss that review. But if the minister as the Minister for Energy could advise the House on when we can expect the report of the review on the RET that would be great greatly appreciated. If a date and a time cannot be provided then at the very least give an indication of when we can expect that review to be presented because of the importance of the month of August and the casting of the renewable credit numbers for the next year.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for Brand for his question. I will take parts of his question on notice. In terms of the specific skills that have been removed, I will give the member for Brand the detail of that but I will have to take that part of his question on notice, as I will the part on the graduate program. It is my understanding that there is no effect on the graduate program, but I will supply him with further detail in regards to that.

In regards to the actual staff movements, as of 30 May 2014 62 staff have departed Geoscience Australia. By 30 June this year a total of 76 employees will have departed. By the end of December this year a total of 85 employees will have departed. Five employees have elected to seek redeployment and have commenced their retrenchment period. Nine staff have been offered voluntary redundancies and are yet to indicate their preference to exit or seek employment. Existing and projected average staffing levels at Geoscience Australia are 716 in the year 2013-14 and 620 in the year 2014-15. As I said, though, I am entirely confident that there will be no effect on the capacity of Geoscience Australia.

In response to the member for Brand's question regarding the Renewable Energy Target, I take this opportunity to remind the House both of the coalition's commitment to renewable energy and, more importantly, of the fact that we are the fathers of this scheme. We established the Mandatory Renewable Energy Target. Senator Robert Hill, who was the environment minister at the time, implemented this. It has given an enormous boost to the implementation of renewable energy in Australia. We have seen projects built around Australia off the back of the scheme. In terms of Australia's percentage of renewable energy vis-a-vis the rest of the world, we can certainly hold our heads up.

In regards to the member for Brand's specific question about the review, he is quite right: Dick Warburton is an excellent choice as chairman as someone who has enormous respect in the business community as he has been involved in business a very long time and has been very successful at it. He and his equally as qualified committee are currently considering the impacts of the Renewable Energy Target on Australia's competitiveness and our ability to continue to maintain a target for renewable energy going forward. It is my understanding that the committee will release their modelling towards the end of this month and that they then will work from that point to prepare the report for government, which we would expect to receive some time after that—perhaps in the next few months.

I do not expect the government to be long in responding to that review. In terms of my own time lines, I need to hand down an energy white paper this year. I need to be able to be confident that, firstly, the Labor Party has seen the error of its ways—and it is still not too late yet—and will support the rescinding of the carbon tax. I need to see the carbon tax dealt with before I can have any forward concept on where energy policy is going in Australia. Hopefully that will occur in the next sitting of the Senate in early July. I also need to know where the government intends to set its policy in relation to renewable energy. We expect to see a response to the renewable energy review sooner rather than later, perhaps by the third or fourth quarter of this year.

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

My second question is also on the Entrepreneurs' Infrastructure Program. I want to ensure that the minister is aware of some of the absolutely valuable additions from the Hinkler electorate to manufacturing. We are the biggest producer of heavy vegetables in Australia. All of our agriculturalists know that farm gate returns are simply not high enough so we need those value-added products to increase not only productivity but the return to our farmers to make them viable. Inside my electorate, Minister, we have opportunities for macadamias and sweet potatoes. We already have organisations like Austchilli with David and Trent De Paoli. They are a major exporter of chilli, basil and avocado products all over the world. These secondary level manufacturers help our local producers.

The other thing the minister may not be aware of is that the Bundaberg port is completely underutilised. The opportunities in Bundaberg and in the Hinkler electorate are quite simple. Land is cheap. We have lots of it. There is a lay-down area in Bundaberg as big as the Brisbane port. We could build container ports, build industry or do anything but we need that seed funding to help those things along. Certainly it is low risk. We are below the Barrier Reef and are in a low cyclone risk area. There are opportunities there.

The Bundaberg Foundry, for example, located in Bundaberg just celebrated 125 years of manufacturing. It is still there but it is under pressure from the carbon tax and from red and green tape. They are struggling. Electricity costs are up $1 million. Minister, if you can name a foundry in Australia that is making $1 million a year, I would be very interested.

The Entrepreneurs' Infrastructure Program is incredibly important. Minister, further to my last question on the government's commitment to industry policy and, more specifically, the delivery of the new Entrepreneurs' Infrastructure Program through the single business service initiative, will you advise what the government is doing to ensure that there is smooth transition from the closure of existing programs to the launch of the new Entrepreneurs' Infrastructure Program? Is there a date by which the program will be functioning? Is the government on track to meet that date? How will businesses, particularly SMEs, interact and gain access to the new Entrepreneurs' Infrastructure Program—businesses like Hervey Bay seafood and the Hervey Bay scallop, who could certainly do with an automated shucking machine even though something that would work functionally has not been built yet? How does this new initiative simplify the process for business to seek support? What has the reaction been from major stakeholders to this budget measure?

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I again thank the member for Hinkler and say how impressed I am by the support he gives businesses in his electorate and his knowledge of the issues that they face. I have had the opportunity to visit the city of Bundaberg on numerous occasions. In fact, I remember going there when I was quite young and I remember my attraction to it when I was an older person—fortunately, I managed to break that habit and I do not drink Bundaberg Rum anymore. It is a great product and I certainly do not bemoan it. It has made Bundaberg very famous. The member for Hinkler asked me about the Entrepreneurs' Infrastructure Program.

Opposition Members:

Opposition members interjecting—

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I hear interjections from the other side about handouts. I think we need to be very clear about these programs and how they work. They work to give businesses a hand up and not a handout. I know the Labor Party are infamous for spraying money around with gay abandon and very little purpose. One of the great problems we have had since we took government is dealing with the bandaids they had applied to various industries. I can ask them what commitments and long-term benefits they achieved for the millions of dollars they gave to Alcoa or for the millions of dollars that they gave to GMH to stay in Australia.

Our programs are specifically targeted at producing results. The government's decision to implement the new Entrepreneurs' Infrastructure Program took into consideration the existing status of all current programs that are planned to be phased out of operation. It was almost a grab bag of programs, some of which you, Mr Deputy Speaker, would be shocked to know actually never came into operation. Money was allocated, announcements were made, launches were relaunched but nothing ever happened. I know, you, particularly, Deputy Speaker Scott, would be shocked by that, knowing the value of money! The reality is, though, that we are going to ensure that there are well-targeted programs. To ensure that no business misses out this government has made provision for Commercialisation Australia to operate through until 31 December 2014 and deal with all applications formally lodged before the close of business in 2014.

Additionally, Enterprise Connect will run on a business-as-usual basis until the end of this current financial year and any small- to medium-business owners that were dealing with either Commercialisation Australia or Enterprise Connect will be able to be transferred across to the new Entrepreneurs' Infrastructure Program from early in the new financial year to ensure there is a seamless transition.

The member for Hinkler asked me about the start-up dates in relation to the Entrepreneurs' Infrastructure Program. In line with 2014-15 budget commitments, the Entrepreneurs' Infrastructure Program will operate from 1 July 2014. Its interaction with SMEs and access by SMEs is very simple: business will be able to gain access and interact with the Entrepreneurs' Infrastructure Program in person, on the phone or via the internet or email. Throughout this month of June all details of the program will be placed on the Department of Industry's website.

I was asked how this program works in comparison to previous programs. The reality is, as I have just mentioned, there was when we inherited government an overlapping plethora of small grants and entitlements that were not targeted towards any specific outcome. We are sitting about getting the economic settings right, getting rid of red tape and equipping business by giving them the market, information and skills they need. We must remember that Labor's legacy is one of indecision and change. In the last three years, in fact, there were 14 ministers through the former Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education—and you wonder why small business was glad to see them go.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

I have a number of questions for the minister about the impact of the budget on the auto manufacturing sector. I do thank the minister for inviting me to attend with him the Altona Toyota manufacturing plant in my electorate. I genuinely thank him for that. I am just regretful that future invitations will not be able to be extended for members for Gellibrand, as the Toyota plant will be ceasing operations in future as a result of the actions of this government.

A recent report from Adelaide University stated that Australia was expected to suffer a fall in national employment of around 200,000 as a result of the planned closure of auto manufacturing between now and 2017 and that the greatest job losses will be in Victoria, with an estimated decline of close to 100,000 jobs. How can the minister justify over $1 billion in cuts to the automotive industry in the budget when the government is well aware that these cuts are putting hundreds of thousands of Australian jobs at risk?

The automotive firms and component manufacturers have repeatedly advised the government of the serious consequences of cutting funding from the Automotive Transformation Scheme at what is an already difficult time for manufacturing and supply chain workers. So why is the government cutting over $900 million from the Automotive Transformation Scheme when the minister is well aware that, if passed, these cuts will intensify the financial pressure on the hundreds of firms in the supply chain, firms which have already factored ATS funding into their long-term business and investment decisions?

According to the Prime Minister's announcement, the government's so-called $155 million Growth Fund has been set up for firms and employees in South Australia and Victoria affected by the closure of local manufacturing operations. In April this year an independent study projected that auto closures would result in over 32,000 jobs lost in New South Wales, over 30,000 in Queensland, as well as over 11,000 in WA and almost 500 in the Northern Territory. This is on top of the 23,000 jobs at risk in South Australia and almost 100,000 jobs in Victoria. Economic modelling forecasts a negative annual shock of $29 billion or more by 2017.

Can the industry minister please outline how this so-called growth fund will have any chance of helping auto workers in New South Wales, Queensland, WA and the NT, not to mention how, with just $100 million in Commonwealth funding, this program will have any impact on the 200,000 jobs at risk on a national level.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for Gellibrand for his question and assure him that, if there are future opportunities—and there should be between now and 2018—for visits to the Altona plant, I will invite him. He did, after all, get the best start to life that anyone could get in Australia, by being born in Toowoomba, and I am sure that, deep down somewhere, there is a lot more good that we can make of that. His choice in politics may have been dubious, but I am sure his heart is made of gold.

Regarding decisions made by Australian car manufacturers to cease operation, I draw to point the member for Gellibrand's assertions that our government was in any way responsible for those decisions, most particularly the decision of Toyota. Having known the Toyota management for as long as I have, dating back to 2001, when I was the minister for industry then, I can assure the member for Gellibrand that the government were given very clear indication by Toyota that, in spite of everything we had done and would do, they had made their decision to close. That decision was extremely difficult. The heads of Toyota, both here in Australia and in Japan, came up to Canberra especially to talk to me about that and to also meet with the Prime Minister and explain that decision, but it is a simple fact that, in relation to manufacturing cars in Australia, it is virtually impossible to compete. It needs to be remembered, and perhaps lamented, that the industry arrived at the point under the previous Labor government where it required $5,784 per vehicle, plus tariffs, to continue to operate in Australia.

I am an optimist. I have spent a lot of time in farming, where you have to be an optimist. In fact, I was a farmer longer than I have been a politician. If I looked at a component of my farming operation where taxpayers had to contribute that proportion, which is almost 15 and, in some cases, 20 per cent of the value of the vehicle, I would say, 'There is no hope.' Unfortunately, though, as I say, we lament it, there was no way in which Toyota, Holden, Ford and Mitsubishi—some of whom made those decisions when the Labor government was in power, some of whom made them since we came to power, but the result is the same—could continue. They all arrived at the same conclusion, and that was that the industry could no longer manufacture vehicles in Australia without long-term, substantial government-taxpayer funded subsidies. Unfortunately, because of the complete and absolute mess that the Labor Party left the finances in, the money that we would be paying the auto industry would have to be borrowed by taxpayers from overseas, and that is just sheer insanity. So, whilst we lament that the car industry has made those decisions, we as pragmatic, rational people understand why it made those decisions.

To assist the industry—and our understanding is that there are substantial numbers but certainly nowhere near the numbers that the member pointed out in that report; let us say the numbers are somewhere between 20,000 and 25,000 people to find new work—we have established a $155 million growth fund in conjunction with the South Australian and Victorian governments and the auto industry. There will be $30 million made available for a skills and training program to assist workers to find new jobs outside the industry. There will be a $15 million automotive industrial structural adjustment fund, a $20 million automotive diversification fund for component manufacturers to go into other areas, a $60 million next-generation manufacturing investment program to bring new businesses to those regions and a $30 million regional infrastructure fund to put new regional infrastructure in for communities.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

Thank you, minister, for your statements here this morning. I would ask a couple of questions. One is in relation to ARENA. I understand that a billion dollars worth of taxpayer funds have been committed to nearly 200 ARENA projects across a suite of renewable energy types. I am aware that a billion dollars of government funding has been matched with a further $1.8 billion, I believe, taking the investment in renewables to $2.8 billion as a result of that program. In Queensland we have over $55 million of ARENA funds that have been invested in six different projects.

The government has made it very clear, and rightly so, that we are facing a budget emergency careering towards $667 billion worth of debt, right now resulting in a billion dollars of interest every month, which could blow out to $3 billion. We understand that savings need to be achieved to return that budget back to surplus. What are your plans, as the minister, in relation to ARENA but more so in relation to the 200 projects that were supported under this program? I know that when those opposite were in charge of it there were certainly some high-level failures, probably due to lack of oversight by the former government of those projects. I know a couple of them are sitting at the bottom of the ocean. I am looking at how the government is going to actually deliver real, good outcomes for renewables with this investment.

I also want to ask—and I know the member for Hinkler has asked a couple of questions on it—about the great Entrepreneurs' Infrastructure Programme. It is a brilliant scheme as far as I can see, taking the best of all of the programs that were there and rolling them into one, so that it is almost one point of entry for industry and business. You know, minister—because you have been to my electorate a number of times and spoken with local businesses there—abut the downturn and the impact that has had on the local economy in the Mackay region. That downturn in coalmining has cost thousands upon thousands of jobs but has also seen a significant shift in the way business has to be done locally and what the local manufacturing industry is doing. They were always engaged with the mining sector, but now the taps have turned off somewhat they have to look elsewhere. I am interested to see how that Entrepreneurs' Infrastructure Programme will assist them in that transition to other industries. I think that is going to pay big dividends myself, just having had a look at the cursory information on it.

The other side might have been content with just leaving coalmining to wither and die, but I know that they are not our thoughts on the coal sector. We think it has a bright future. I notice that one of the significant policies you are going to be implementing is the minerals exploration tax incentive program. I am wanting to know a little bit about what the government is going to be doing to reboot the mining sector as well.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for Dawson for his question. Mackay is certainly a wonderful city. Its people are particularly wonderful. There is one in particular my daughter thinks is particularly, particularly wonderful, although he has moved to Brisbane—I have no idea why; perhaps it is to be close to my daughter. But, seriously, my daughter Kate spent some three years in Mackay. She enthused about the city, and more about the fact that it was a city that was prepared to take on the challenges. The region around it, of course, is well known. I am sure the member for Hinkler is aware that it is well known as a very prosperous cane-growing region. They have their good years and their bad, like the coal industry, but there has been a substantial industry built up around it.

I have had the pleasure of accompanying the member for Dawson to the Racecourse Sugar Mill, where there is an excellent renewable energy project going on. The cogeneration project relies, as I say, on the mandatory renewable energy target. I understand it also had some assistance from the government at the time. Prior to losing government in 2007 I had been up there and talked with their officials. So wherever you go you see great industries but you also see renewable energy industries as well.

ARENA has, as the member for Dawson alluded to, allocated in excess of $1 billion for renewable energy projects in Australia. That is over 200 projects supported by taxpayers, with a further $1.8 billion being leveraged from the private sector. So there is approaching $3 billion in projects as a result of the renewable energy programs that have been put in place. Our government will absolutely honour those contracts. Where those projects go on and succeed, we will obviously applaud their success. If projects fail then obviously we will take that money back into the pot. But we certainly expect some great results from those programs that have already been funded under ARENA.

Those opposite have made many mischievous and incorrect claims. and I will address a couple of them later, if time permits. Contrary to the claims we hear from those opposite, Australia is not walking away from renewable energy. In fact, we as a government are very committed to renewable energy. As I said in answer to a question from the member for Brand, we were the government who began substantive funding of renewable energy and also established the renewable energy target.

By way of information, renewable energy is currently contributing around 10 per cent—perhaps more, in fact, depending on how you do the sums and analyse the economists' predictions—of Australia's energy mix and is assisting not only in ensuring energy security but also addressing some of the short-term peak demand loads, particularly on hot days in Australia, through the very significant rollout of solar panels. Again, that is a program that the coalition began in its last term.

I am asked about specific programs. I will just name a few. There are $80 million worth of investments encompassing nine projects in the ACT; $310 million invested in 49 projects in New South Wales; $250,000 invested in a single project in the Northern Territory; $6 million invested in a project in Tasmania; and $140 million in nine projects in South Australia, which I am sure will please the member for Wakefield; $84 million invested in nine projects in Victoria; and $17 million invested in three projects in Western Australia. As well as that, there have been multiple scholarships and fellowships, totalling around $90 million, awarded. Perhaps later in the session I might be able to highlight a couple of individual programs.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Like the member for Gellibrand, I have also been on a tour of a car plant with the minister. I thank him for inviting me at the time, along with quite a few Liberal senators. The member for Hindmarsh was there as well. The rhetoric was somewhat different then, somewhat more optimistic about the car industry's prospects at that time. Sadly, that has proved not to come to fruition.

Government Member:

A government member interjecting—

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

A Labor government would have saved it. But I do not propose to redebate those issues or, for that matter, to give the minister an excuse to give us the lecture about industry assistance only to be followed by government backbenchers asking for grants or tax exemptions for particular industries. It is an interesting approach that the government takes.

What I am concerned about, and this is a genuine concern, is the $155-million growth fund. I am concerned about its adequacy. Another of the things I am concerned about is obviously the closure of Holden components industry will devastate the northern suburbs of Adelaide, and Elizabeth in particular. I am interested to know if the minister, his office or his department have had discussions with the local councils of the City of Playford or the City of Salisbury. In particular, have they had any discussions about local projects like the City of Playford's sports precinct, which is interrelated with the proposal to have a health precinct at Lyell McEwin Hospital? Both these local projects would produce jobs for the local area.

When Holden closes, I am concerned we will have an empty site sitting down there on Philip Highway and it may well be empty for some time. I would be interested to know if the minister is having discussions with General Motors Holden about that site, about its future. I would also be interested to know if the minister has formed a committee with unions, local industry, Holden, the South Australian government and the federal department—as was done with Bridgestone—to help manage the process of skills acquisition of employees being made redundant at General Motors Holden or any of the component companies that supply it and to push job service agencies to get jobs for those redundant employees. It was a very important thing when Bridgestone closed. I would be interested to hear the minister's thoughts about that.

Most of my concerns are of a local nature. We can debate the events last year. I can tell you the effect of them will be catastrophic in my community. I really genuinely would like to hear the minister's thoughts about how my local community can be assisted out of this $155-million growth fund. I do not think it is adequate and I have great fears that the money will be spent in places other than the northern suburbs of Adelaide, in places other than the communities affected.

Mr Zappia interjecting—

My colleague, the member for Makin, inquires how much will be actually allocated to South Australia. They are my concerns and I would be interested to hear by the minister's thoughts on them.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for his question. I plead guilty to being optimistic. As I said: farmer by nature, optimistic by nature. If you go into government, as I know the Labor Party does so regularly, and take a disastrous view of everything, be pessimistic and say it is a catastrophe then what will happen, of course, is what we saw under the previous government—the confidence of the community business community falls, consumer confidence falls, the economy spirals down and then the Labor Party drops back to its old form. There is no problem small enough that the Labor Party cannot throw a huge amount of money at to try and fix with no strategy, no outcomes, no guidelines et cetera. So when the Labor Party sees a problem, the first thing they say is 'throw as much borrowed taxpayers' money as you can possibly get your hands on at it as quickly as possible'. As the member for Dawson said, why do we wonder why we are heading towards $667-billion worth of debt? Why do we wonder why in the six short years that Labor was in government they spent $181 billion more than they earned? In their forward estimates there was a further $123 billion in losses going forward. If they were a company, their shareholders would have shut them down if ASIC had not done it first.

I am asked about the Future Fund and how it will work and what consultations we have had with industry and the unions. As the member quite rightly identified, when it comes to solving the issues in relation to the car industry I am bipartisan in my approach. As he quite rightly said, I invited all those who are interested in being part of a solution to come along and see what we can do. The Premier of South Australia was there, and there were senators from both sides. As the member well knows, there were also trade unions there. I see trade unions as playing an important role in the transition of the car industry. I just hope that their leaders are more optimistic and more helpful than those who sit opposite and bleat and scream and call for us to throw more and more money at a problem.

There will be significant skills programs to assist those workers, and I know that the automotive companies will be involved. I have had extensive discussions with all three companies. I know that the programs that Ford is running, and the associated programs that are running in Geelong and North Melbourne to attract new businesses to those regions, have been very successful. I give the Labor Party its dues: they established that fund and set up a framework for it to work under. We, as a government, have ensured that the framework has been adhered to and that the corporate governance of those schemes has been successful.

We hope that we will have the support of the trade unions and the support of the South Australian government. And—who knows?—perhaps the opposition, when they realise that they are here to help the people they represent and not just whinge, will get behind these programs. I am more than comfortable to have the unions involved in assisting. I know that some of the unions are involved very well. They have been positive. Yes, they have stood up for their members. As an ex-union leader, I know that that is what they should do. But they do need to accept the reality. Unlike those who sit opposite, at times I think the unions do understand. The best thing they can do for the workers in the car industry is to ensure that they transition to new and better jobs.

To answer the member's question, as we put together these programs within these companies I would welcome union involvement. I would welcome the involvement of the local federal members and the state members and senators if they think there are things in those programs, particularly about reskilling people, that we can do better. I would be happy to see them involved.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I have a question for the minister in relation to vocational education and training, the reforms to that sector and also the establishment of the VET Reform Taskforce. But let me start by saying that I am very positive about the changes that are being proposed and being talked about in this sector. I could not be more pleased that this government has been especially proactive in the area of VET.

Our national competitiveness, in my view, and our productivity is very dependent on us having a very strong VET sector. We need to make sure that our workforce of the future has skills that make them job ready so that when they enter the workforce they are ready to be productive and to be contributors on the first day that they enter the workforce.

Across Australia our VET students deserve to know that they are receiving quality training and that what is being provided to them is going to meet their needs and will also meet the future needs of their employers. The providers need to know that they will be treated fairly in the provision of the training that they will be delivering to the sector. So we need to take this opportunity to put a magnifying glass over the VET sector and look at what reforms are needed to make sure that this sector is viable in the future. It is certainly no easy task, but I must commend the minister on the action that he has taken to date in that sector. He has been especially proactive and has set up a number of mechanisms where he can get support and input directly from those who know best—those in the industry. He has embarked on a consultation process, first hand, with the sector by establishing a number of workshops throughout the country to engage with the people who actually know best—training providers, industry representatives, employers and students—to find out what is needed to reform this sector in the future.

I attended workshops in Darwin and in Brisbane and also had the opportunity just recently to facilitate workshops with the member for Grey in Port Pirie and Whyalla, with the member for Forrest in Bunbury and also with the member for Robertson in Gosford. The workshops that were run were certainly eye opening. At each of these sessions in different parts of the country we heard of similar problems with the VET sector relating to the duplication in regulations and administration amongst jurisdictions; inconsistency in auditing; the capacity of the system to meet the current skill needs of the industry; and what was particularly concerning was what seems to be an increased focus on qualifications rather than the quality of the training in the sector and, as a result, the quality of the qualifications.

These sessions were not just about understanding what the issues are, they were also about finding ways for the sector to grow and to prosper. The outcomes—the information that came from those sessions—have been forwarded through so they will be part of the changes for future consideration. I would certainly like to thank everyone who was involved in those workshops. I would like to thank all of the members for the work that they put in to make sure that those who attended were quite representative of the various parts of the sector.

So my question to the minister is: can the minister outline for members the action that the government is taking to ensure that the future of our nation is not just about building infrastructure and building the systems to support that but is also about building the skills of our people, particularly those in the VET sector?

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I want to thank the member for McPherson not only for her question but also for the great job, not only supporting my portfolio in the area of skills and training but, in fact, right across government. She is an incredibly hard-working local member. She has a great practical background from being an engineer by trade and she is one of those people who is set on producing outcomes. The member for MacPherson has certainly continued that attitude since she came into parliament. Again, I thank her for the work that she has done.

She is quite right: as she and I, my office and my department travel around Australia looking at the issues in relation to skills, training, traineeships and apprenticeships we are at times dismayed by the attitude of some people in relation to making sure that we are producing people who are employer ready. That is, people who are skilled up and ready to go into the workforce not only to secure a long-term future for themselves in their chosen profession—I am sure that that profession may change in time, and we all see that even amongst our families—but also making sure that when young people and mature apprentices, who play an important part in our training system, are turned out onto the street looking for a job that there is a job that they can go straight into.

The member for McPherson is right that there has been too much of an attitude—I am not saying that it is overwhelming, but I am saying it is prevalent—where there has been training for training's sake. There has also been an attitude that the only way you can go forward in this world is to go to university and get a degree. I remember very, very vividly the Labor Party giving Brendan Nelson an absolute flogging because he had the courage to say in the House, and I remember him saying it when he was the education minister, that a trade is worth every bit as much as a degree. I remember the Labor Party pillorying the then Minister for Education, Science and Training, Brendan Nelson, for saying that a trade is worth as much as a university degree. I assure those opposite that I believe that as well, and that the people on this side of the chamber believe that too.

Honourable Member:

An honourable member interjecting—

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

Well, if you believe it you should say it a bit more so that the young people in your electorate actually believe that their future can be achieved just as well as any university graduate's by being a tradesperson or trainee, getting a skill and filling an occupation. Do not give them false hope—we hear too often from those opposite that, if it does not go to plan, the government will just subsidise you or pick you up.

The member for McPherson has identified a key area that we will fix, and that is inconsistency in auditing. In fact, we see a whole opportunity within the skills space to streamline it. The member for McPherson and other members of my committee, which is headed up by the member for Dawson, are working with us and with the people out there in the RTOs, the apprenticeship centres and the skills areas to make sure that we streamline this area so that, when we spend money, we actually get results. As I said earlier, in the area of innovation, when we came into office, we found a whole string of programs that in fact had money allocated to them but had never even been implemented. When I asked the department what these schemes did, they said, 'Minister, they haven't started yet, so we can't actually tell you.' What outcomes did they produce? Zero.

Any discussion on skills would be incomplete without me mentioning the government's introduction of trade support loans. These loans, which I mentioned earlier, provide the opportunity for a four-year apprentice to borrow up to $20,000 and, at completion, have $4,000, or 20 per cent, of that loan written off as an incentive. To receive that loan interest free until he or she repays it is a huge incentive. In fact, it is worth probably over $12,000, or more than double the previous Tools for Your Trade scheme. We see from this scheme tremendous support coming back from the trainee community. As I said, I saw it myself in my own electorate. This is a great opportunity for young people to do their trades and be successful.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Minister, firstly, thank you for your introductory statement. I have noted your response to the questions from this side. As you would probably be aware, manufacturing in this country has fallen in terms of employment percentage throughout Australia from about 26 per cent 50 years ago to around eight per cent at the moment. It is very likely those numbers are going to fall even further as a result of losses in the auto industry over the next few years, losses perhaps in the defence industry if decisions are not made sooner rather than later, and losses that will arise, I believe, from the Abbott government's cut to renewable energy programs in this country.

I note that in this budget there is about $7 billion of cuts in higher education, science and research, industry and innovation, of which about $3 billion comes from your own department. Given that we hope for a successful future in manufacturing—and I think there is a general consensus that that will be underpinned by advanced manufacturing—and given the Prime Minister's recent comments whilst overseas that science and innovation is effectively the key to our future, which I agree with, how can you justify not only the cuts to your own department of $3 billion but the $7 billion in cuts across the science and research organisations, which, undoubtedly, go to the heart of innovation in this country?

I heard your responses to questions from the member for Brand earlier on. In particular, you made the comment that you believe that Geoscience Australia still will have the capacity to function and to carry out its responsibilities. I ask also: with the cuts that that organisation is going to receive, in conjunction with my earlier questions how can you assure us that organisations like Geoscience Australia and other similar organisations that will be subjected to these cuts will be able to carry out the work that they do and support industry in this country as they do?

I particularly also note the programs that the previous government had in the way of direct industry assistance, which amounted to some $800-plus million. Those programs have been cut by almost 50 per cent. I noted your comments about the entrepreneurial funding program, and I understand that, but the bottom line is: how do you justify all of those cuts and still expect that there will be able to give industry the support it needs both in science and innovation and in direct assistance to be able to go into the future and perhaps rather than fall in numbers grow in numbers and grow in capacity?

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for Makin for his question. Can I just say from the outset that, if he does not accept that there needs to be cuts to the budget, then is he continuing the old Labor way of continuing to run deficits? In my time in parliament I have never seen a Labor surplus. The reality is that there are members of this parliament who have never seen a surplus in their life from Labor. That is the reality. If the member for Makin says we shouldn't make cuts in this area he needs to now stand up and say where he will make those cuts. If he doesn't, we just assume that Labor will continue on their way with $123 billion worth of deficits in the forward estimates, with the continuation of the debt blowing out to $667 billion, and with the continuation of the pressure that that creates in terms of our economy. He knows and I know that that position is nowhere near sustainable.

I want to correct the member for Makin in terms of his statement that we have cut the science and research budget. We have not cut the science and research budget. Can I read for him from our budget papers that the appropriation available to the science and research areas, including science agencies such as Geoscience Australia and CSIRO, stands at $5,849 million, and that the increase in the budget—increase in the budget—is in fact $16.8 million. So even at a time where I accept we have to have some austerity measures, even at a time where I accept we have to refocus the programs that the previous government was operating, there is an increase. As I have pointed out numerous occasions during this session, programs were never actually implemented. Some programs never got past the great launch and potentially relaunch and the great talk that went on about programs that never actually delivered a thing.

So, yes, we have cut some of those programs, and yes we have put in place a far more focused system of $484 million for the Entrepreneurs' Infrastructure Program, a program where we take the best of Enterprise Connect and Commercialisation Australia and we put it into the Entrepreneurs' Infrastructure Program. This is a program where we make sure that we are giving business what they need to be competitive, to be innovative, to get into global supply chains, to be involved in the new industries and to give their workers sustainable jobs. On top of that of course we have got the industry skills program which further assists those businesses to ensure that they, the business, and their employees have the skills that they need to make the adjustments in front. That is $1 billion worth of programs for innovation, for skilling, for competitiveness, for getting involved in new products, for collaborating with existing businesses—a set of programs that will ensure businesses the opportunity to be competitive in the long term.

But for the benefit of the member for Makin can I just highlight a few areas where we have actually spent new money in the areas of science and research. There is $65.7 million to operate and maintain the CSIRO's new vessel, RV Investigator. I know those on this side of the chamber will not be surprised to hear this, but only the Labor Party could build a boat and not put any money in there to use it. So the boat was going to sit there at port—like a lot of their programs: set up with great fanfare, moored to the dock and not operate. We have actually put some money in to make sure that that boat gets out to sea and does something.

We put $31.6 million into the operation and maintenance of the OPAL nuclear research facility. It is a great facility. It is making great advances in nuclear medicine, which is something we need to continue to do. We have put $28 million into continued investment in Questacon through science for Australia's future to ensure that Australia's children are as excited as much by science as I am.

Rick Wilson (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker Porter, as a former Treasurer of the great state of Western Australia, you would well understand the importance of the resource sector. Minister, you would know that the mining sector contributes about 10 per cent of our GDP, directly employs 270,000 Australians and supports work and income for another 800,000. The Bureau of Resources and Energy Economics released their resources and energy major projects report last month that showed that in the last 12 months a record $57 billion worth of resource projects had been finalised in Australia, with a significant increase in production. I understand this includes 215 million tonnes of iron ore, 43 million tonnes of coal and more than 1,100 petajoules of gas.

Over recent years it is clear that Australians have benefited from the jobs and growth flowing from the high levels of investment in the resource sector, but the Bureau of Resources and Energy Economics also reports that Australia's resource sector is moving into a new phase of sustained output and production following the peak of the current resources investment cycle. The resources sector will continue to drive our economy through this new phase, but it is essential that we do not become complacent. These production phase figures highlight the importance of setting the right policy framework to encourage future investment in the resources sector. There is a need for ongoing progress in removing barriers to investment in the resources sector to encourage investment and confidence, to get rid of the reams of red tape and remove tax slugs that compromise productivity and competitiveness. This output phase will last for decades, delivering sustained and substantial economic benefits for Australian workers and local communities as well as boosting national revenue. Minister, what is the government doing to ensure a long and sustainable future for the resources industry?

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

As the member for O'Connor noted, both Deputy Speaker Porter and he took a vital interest in the development of the resources industry in their previous times. The member for O'Connor has a very strong interest in the resources sector not only because he is the member for O'Connor. Some people would argue that O'Connor is at the heart of the history of the Australian resources industry. The centre for that is in Kalgoorlie, which I have had the opportunity to visit. The Mining Hall of Fame in Kalgoorlie is certainly an apt reminder of the huge debt we owe to the miners and resource investors of Australia going right back to the 1800s.

I also congratulate the member for O'Connor for his transition to politics. He has a background a little similar to mine. We were both farmers once. I guess he is still more active than I am—in fact, I am sure he is; these are no longer the hands of a farmer. I am sure the member for O'Connor still delights in getting out in the paddock and driving the harvester or perhaps crutching a few sheep if he is having a really good day. I congratulate him on his transition to politics and for his advocacy not only for the industries in his electorate but for all members of the seat of O'Connor.

He was quite right when he talked about the importance of the resource sector. The resource sector contributes around 10 per cent of our GDP, employs over one-quarter of a million Australians and indirectly provides income to another 800,000, so over one million people rely on the resource sector for their income and their living. As I said earlier, the resource sector is heaving a huge sigh of relief that the coalition have come back into government and that we have relieved them from the burden of the last six years when they were used as a punching bag by people like the member for Lilley, who constantly attacked successful Australian resource figures. Then, when he had finished degrading their characters quite unfairly, he went on to empty their pockets with things like the ill-fated mining resource rent tax, which had about five iterations. In the end, as we know, it was a great tax introduced by the Treasurer that actually raised no money at all. It chased away billions of dollars worth of investment but did nothing.

The member for O'Connor asked me what we are going to do to support the resources sector. Apart from putting the 'open for business' sign up, apart from reducing red tape and green tape and introducing the one-stop shop, we are going to remove the carbon tax, which will give them a huge boost, and we are also going to remove the mining tax. It will be interesting to watch those people opposite vote against those measures when they know that the people of Australia want them removed and they know that the people of Australia depend on the Australian resource industry and industry in general being competitive.

The member for O'Connor also asked me what policy initiatives we are going to take, which gives me the opportunity to answer the latter part of the member for Dawson's question. We are going to introduce a $100 million Exploration Development Incentive, previously known as flow-through shares. I think it was the member for Wakefield who said it was a subsidy. That just highlights how little those who sit opposite know about the resource industry. The exploration incentive allows individual entities, mum-and-dad Australians, to invest in the R&D, the research and development, of the resource industry in Australia. What better way is there to do it and say to them: 'If you put your money at risk then, just as we do in the research and development area where we provide a tax incentive for people to do that, we will provide you with a tax incentive to invest in one of Australia's great sectors, the resource sector.' So we are putting in place an Exploration Development Incentive and I look forward to returning to Kalgoorlie with the member for O'Connor where I campaigned with him and we promised that if we got into government we would introduce this scheme. Unlike those who sit opposite, we will do that. We will go back to the drilling sheds, where we stood with people who had put their whole livelihoods at risk to go out and explore for minerals, and we will say, 'We promised and we delivered,' unlike those who sit opposite.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

Minister, I am happy if you want to take these questions on notice to give as much opportunity as possible for people who want to ask you questions. I would like to get some information on the Industry Skills Fund that is in the budget papers. I acknowledge that its arrival has heralded the demise of $1 billion worth of programs and I note that the minister indicated earlier that some of his thinking was informed by the fact that some of those programs both had not started and had no enrolments. One would think that would be a fairly logical consequence of not having started, but I would appreciate it if the minister could indicate which of the programs that have been cut had not started and which had had nil outcomes. Secondly, in relation to the replacement Industry Skills Fund, there are industries listed as targeted in the budget papers, in particular, health and biomedical products, and I would like to know if that will also encompass skills programs with a broader health workforce. I am particularly interested in the emerging areas of employment opportunity into the future around issues such as aged care, disability care and the health sector care workforce in general. They had a significant take-up of the National Workforce Development Fund, so whether they are still going to be able to participate in the new fund would be useful information. I am also asking for that information in relation to the ICT sector, because the emerging ICT industry sector jobs have been important as well for many regional areas, including my own. How is the minister going to determine what exactly will be targeted under that program in terms of industry sectors?

The budget paper indicate that there are 121,500 training places and, it says, 74,300 support services, including mentoring and foundation skills. Is it intended to operate two separate programs for those numbers or is the 74,300 within the 121,500 and it is a joint program? What exactly is envisaged in that part of the industry skills fund? I am happy for you to answer those questions now or to take them on notice, Minister.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | Link to this | Hansard source

I thank the member for her question and I will have to take it on notice, unfortunately. I thank the shadow minister for her positive attitude to the changes that are going on within this portfolio. I know there are areas she disagrees with but she is happy to sit down and talk about it. I am happy to supply all that information. The skills fund guidelines are still being finalised but when they are I will be happy to provide you with a full briefing.

Ms Bird interjecting—

Very soon is the answer to that, hopefully by 30 June.

Proposed expenditure agreed to.

Social Services Portfolio

Proposed expenditure, $9,606,728,000

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

One of the biggest surprises for the aged care sector coming out of the budget was the cessation of the aged care payroll tax supplement from 1 January 2015 as found on budget paper No. 2, page 189. It effectively ended the doctrine of competitive neutrality in the sector between the for-profit providers and the not-for-profit providers. It ripped away $652.7 million over four years from the sector. It was a bit of a shock because there was no consultation or sector support for it. The CEO of Benetas, Sandra Hills, expressed in a letter to me on 4 June the following:

The greater issue is the impact that the removal of the payroll tax supplement will have on investment in the sector. Aged care in Australia must have a mix of providers to ensure we remain a competitive, innovative industry that offers the highest quality of services available. Removal of this payroll tax supplement will seriously threaten some providers resulting in less competition across the industry.

She goes on to outline her concerns about the impact on organisational cash flow, future investment, staffing, skills retention and artificial wage constraint.

I have a few significant questions for the minister. What modelling was undertaken into the impact on the aged care sector of this budget measure on viability of providers, their profitability, jobs, workforce and investment? In particular, what has the modelling revealed about the impact on independent providers, small providers and those in rural and regional areas? If no modelling was undertaken, why not?

I understand also there has been some redirection of the workforce supplement into some sweeteners for the viability supplement. Within a few weeks of the budget, leading aged-care services provided some details of the impact on specific providers including in regional Queensland, which saw that particular provider receive an additional $2,900 in the viability supplement but lose $100,000 to $120,000 in the payroll tax supplement. I am sure they can provide you with the details.

I would be interested to know how you intend to deal with the significant impost on the sector. The inaugural report of the Aged Care Financing Authority from 30 June 2013 reports the average net profit before tax across the sector is just 5.6 per cent. How does the government expect the sector to remain viable with this further impost? Has the minister undertaken any specific modelling into the impact on residential pricing? If not, why not? If he has done modelling, what does that show?

I would like the minister to explain why the payroll tax supplement is being ceased on 31 December 2014. Why is it that the minister has actually ended the principle of competitive neutrality which has been accepted by both sides of parliament since 1988? I refer also to the comments of Louise Dudley, the managing director of Bupa care services, he said recently:

I have to go to each of the state governments now and discuss with each one, one at a time, which really is increasing red tape, and that's the opposite of what the government was trying to achieve nationally.

How does the end of competitive neutrality sit with the policy of your government in the reduction of red tape as well?

You would appreciate, of course, that, according to ACFA, we will need to build an additional 80,000 aged-care places over the next decade. This involves an extra $25 billion, according to ACFA. You would be aware, Minister, that the surprise budget announcement actually forced one provider, Japara Healthcare, to halt trading. I wonder how you expect the sector to cope with the increased investment they need to build residential aged-care placements and capital infrastructure in the decades ahead.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

Payroll tax is essentially a state tax. States impose a variety of taxes, including payroll tax. So, effectively, this supplement was the Commonwealth transferring funds to the various states around Australia via the aged-care sector. It is this government's belief that states are responsible for their own tax measures, including payroll tax, and that this is a matter, therefore, for the states. On that basis, the Commonwealth decided that in future we are not going to supplement—we are not going to, in effect, provide a subsidy to—the states in relation to their taxes. That is a matter entirely for the states.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Minister, would you clarify something for many people in my electorate who have been receiving and expressing great concern about some Labor Party material that was circulated, focused on the pension in particular. I understand there have been some flyers put out by Labor Senator Cameron saying, quite inaccurately, that pensioners will lose the seniors supplement. That has now been clarified as not true in that they do not even receive this supplement.

Obviously, it is an appalling campaign and the misinformation has caused great concern. It really does reflect an opposition party with no ideas for the future, no clue, no platform of their own and no alternative budget. We know that pensions will continue to increase twice every year and into the future, even with the re-indexation changes in 2017 locking them into the cost of living, but the scare campaign evidently has had its effect. It has caused great concern about the impact on the pension supplement. Could you confirm the status of that supplement in the budget and whether it will be increasing at all in the future?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I thank the member for Bowman for his question. Indeed, I have seen the flyer that he refers to. Indeed, I have it in my hand at the present time. This is a flyer which is authorised and printed by Senator Doug Cameron, 5 Raymond Road, Springwood, New South Wales.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Is that the only Doug Cameron, or could it be—

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I do not think there are two Senator Doug Camerons, no. Senator Cameron, who happens to also be the shadow minister for human services, I believe, put out this flyer, in which he said, amongst other things: 'Age pensioners lose $876.20 per annum seniors supplement.' One would hope that the shadow minister for human services would actually know the facts of who receives what. Presumably, he has now sought to clarify that.

To come to your question, the age pension will continue to go up and so will the pensioner supplement. Indeed, in March of this year, the age pension increased by $15.70 for singles and by $11.90 for each member of a pensioner couple. That was three months ago. In three months time, in September, the age pension will increase again, as it will in March and September of 2015, 2016, 2017 and 2018—and I could keep going, but I will not take up the time of the chamber—continuing for years into the future. In addition to that, the pensioners will keep the energy supplement, which is up to $361 per annum for singles and up to $546 per annum for couples. In addition to that, if the Labor Party would finally see some reason and allow the repeal of the carbon tax, pensioner households would be also better off as a result of that measure passing the Senate. In addition to that, the pension supplement will continue into the future. Currently that is worth up to $1,635.40 for singles and up to $2,464.80 for couples. The pension supplement will also increase in future.

So in relation to pensioners—contrary to what the Labor Party around the country is seeking to mislead people about—pensions will continue to increase in March and September of each year, not just this year but each year into the future. The pension supplement will continue to be paid and that, too, will increase. As I said, the pensioners will keep their energy supplement of $361 per annum for singles and $546 per annum for couples, and if the carbon tax is repealed there will be an average benefit per household in Australia of some $550. That will vary according to the configuration of the household, but none-the-less that would be an advantage for pensioners as well.

A division having been called in the House of Representatives—

Sitting suspended from 11:41 to 12:02

Now, I can just wrap up in summary by saying that for pensioners, the pension will continue to increase. It will go up twice a year in March and September of each year. The pensioner supplement will continue and pensioners will continue to get paid the energy supplement. And if the Labor Party would get out of the way they would have a major saving through the repeal of the carbon tax.

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

I just draw the minister's attention to the remarks that he made on Gold Coast ABC radio, where it he actually said that he is making changes to the pensioner supplement and is actually seeking to remove it. So either the minister does not know what he is talking about—

Government Member:

A government member interjecting—

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

I am actually quoting the minister on ABC radio on the Gold Coast. Now, obviously—

Honourable members interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Jagajaga is on her feet and she is entitled to be heard in silence.

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

The minister has already indicated that he does not understand the budget, and he has just tried to say, as he said in question time this week, that pensioners are better off under this government. I have to say to the minister that that will come to haunt him. The Assistant Minister for Social Services, Senator Fifield, actually said in Senate estimates just a little while ago, 'The decision to cut the indexation of the pension was put in place in an effort to slow the rate of pension increase.'

I am sure the minister is aware of the report done by the Australian Council of Social Service that shows that pensioners will be around $80 a week worse off over the next 10 years. That is $80 a week over 10 years and, of course, that is because, as the minister himself knows—

A government member interjecting—

I will just remind the minister of a quote I have from him from the Hansard of 20 September 2011 about the importance of using male total average weekly earnings to index pensions instead of using the CPI. At that time the minister—though he was not the minister then—said, 'This enabled pensioners to keep ahead of cost-of-living increases.' Exactly right. The minister got it back in 2011. Now, of course, what we see in the budget papers on page 203 is that the government is going to take $449 million off pensioners. That is what the budget papers say, and this was confirmed just yesterday by Senator Cormann when he said that the budget cuts will result in a cut to the pension.

The question to the minister is: who is right—the budget papers, which say a cut to the pension of $449 million; Senator Cormann, who says that the cuts will result in a reduction in the rate of increase to the pension; or Senator Fifield, saying that the cuts to the indexation of the pension have been put in place in an effort to slow the rate of pension increase? I would suggest to the minister that all of those comments by his colleagues are correct. What is the minister going to say to correct the misleading comments that he made on ABC radio and that he made in the parliament this week?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

The honourable member opposite should quote the entire radio interview and not excerpts from it, because if she quotes the entire radio interview she will see that I pointed out when I came back to that matter that it was the senior supplement. So she should be more accurate in what she says. I ask this question rhetorically: if it is good enough for the Labor Party when in government to index family tax benefit part A by the CPI why is it not appropriate to index pensions and other payments by the CPI as well? There is a great deal of hypocrisy—

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

I rise on a point of order. This is an opportunity for us to ask questions about the budget. The point of order is that these budget papers—which is what this is all about—says that there is a cut of $449 million. That is a cut to the pension, and it is time the minister faced up to it.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

The member for Jagajaga is reiterating the question; it is not a point of order.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, if I could, I would like to respond. Yet again, the member for Jagajaga stands up with these ridiculous debating points.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Resume your seat, Member for Bass. That is not a point of order either. Does the minister wish to continue?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

Yes. First of all, she is inaccurate about the quotation in relation to the radio interviews. Secondly, the Labor Party come in here feigning indignation about indexing payments to the CPI when they themselves in government, when—

Ms Macklin interjecting—

the person on the other side interjecting was the relevant minister, indexed family tax benefit part A by the CPI. That is the reality.

Ms Macklin interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Minister, please resume your seat. This is not going to satisfy any elicitation of information if we have a continual argy-bargy across the chamber.

Ms Macklin interjecting—

Member for Jagajaga, you have asked your question. I ask the minister to resume when there is silence.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

The Labor Party and the member who was just speaking continue to argue mischievously that this government are going to cut pensions, that we are reducing pensions. Can I point out to the honourable member opposite that, in March this year—and as far as I recall we were in government in March of this year—the age pension increased by $15.70 for a single pensioner. How can an increase be a cut? This reminds me of Lewis Carol—this is Alice in Wonderland stuff coming from the honourable member opposite. In Labor language, a $15.70 increase for single pensioners is somehow a cut and an $11.90 increase for each on a couple pension is somehow a cut. Go out on the street and ask ordinary Australians, 'If we give you an extra $11.90, is that an increase or a decrease?' The reality is it is going to be an increase.

Honourable members interjecting—

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I am new to this place, but even I have learnt the rule that we are not to use props in this place or the other place.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

I have already ruled and asked the member for Jagajaga not to continue using props, and I hope she takes that admonition.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

What was the indexation for the $11.90 increase for each pensioner in a couple and the $15.70 increase for single pensioners in March? CPI, the consumer price index. The increase that occurred in March occurred according to the consumer price index. We are saying that in the future we propose to index this, as the Labor Party did when in government, for family tax benefit part A according to the consumer price index. The Labor Party are running around this country trying to scare pensioners by saying that there is going to be no increase in the age pension. There was an increase in the age pension three months ago and there will be another one in another three months time. This great lie from the Labor Party will be found out when pensioners get their next increase in September.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Before I ask the minister a question I want to reflect on the member for Jagajaga's recent visit to Launceston where she continued her all scare and no substance campaign about concessions for pensioners—subsequently found to be false with the Premier of Tasmania saying that the Commonwealth contribution was only relatively small and would be covered in full. She talked to pensioners in Bass about pension cuts that were not true. Yet again we saw the member for Jagajaga engaging in her mendacious campaign, which is all scare and no substance. We see it on display again.

Honourable Members:

Honourable members interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Order! We have a question coming. He has five minutes.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

If I could just thank the minister. During almost all of the 43rd Parliament I was a full-time candidate down in Bass and his door was always open to talk about issues of substance. One of the issues we talked about and that I campaigned strongly on before the last election that always attracted a great deal of interest in northern Tasmania was indexation of the income thresholds for the Commonwealth seniors health card. I can recall talking to large groups of people, including with people from the Association of Independent Retirees. There was a great deal of interest in this issue.

The minister's office staff were always very welcoming and were ready to provide us with details in relation to these matters. I was able to report to the Association of Independent Retirees that the coalition had made a very strong commitment to index the income thresholds for the Commonwealth seniors card. If I recall correctly, we made the same strong commitment at both the 2010 and 2013 elections. How refreshing to see that that promise has translated to a budgeted measure in this year's budget. This measure improves the lives of many Australian senior citizens and it does so in a way that is intended to be fair, clear and consistent. I know the government is being as generous as it can be at this time, given the wider national social context of strong fiscal restoration and recovery.

Ms Macklin interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Member for Jagajaga, please!

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

It is necessary that we engage in a process of strong fiscal recovery, especially after a government that delivered $191 billion in deficits in their six years of government and $123 billion of deficits projected across the forward estimates. We borrow $1 billion every month just to pay the interest on our debt. That is why we have to engage in that strong process of fiscal restoration and recovery.

Our indexation promise is reflective of a government that has both a heart and a strong social conscience. It is matched by a strong desire to help, assist and support all seniors, both pensioners and self-funded retirees alike. Our decision to index the Commonwealth seniors health card is important in my electorate of Bass but will no doubt resonate across the nation. Does the minister have any estimate of how many people will specifically benefit from this measure and how many new cardholders the government expects over the years as a result of this measure?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I thank the member for Bass for his comments and his questions. Indeed, it was my pleasure to spend some time with the member for Bass during the time leading up to his successful election. I wish him great success and longevity in continuing to represent the constituents of Bass. I look forward to working with him for many years into the future to ensure that the good citizens of Bass are well and truly represented in this place.

Yes, I can say to the member for Bass this measure has been budgeted for. The estimates are that by 2018 there will be nearly 27,000 additional cardholders because of these measures. It is interesting the Labor Party is very silent on this measure. There is reason for that—in their whole six years in government they did not index it once. No wonder there is silence coming from the other side.

Ms Macklin interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

The member for Jagajaga's comments are unhelpful.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

So 27,000 additional cardholders benefit under this measure. This is something which is to the advantage of many senior Australians and something which, I am sure, the member for Bass and the other members of the chamber—on this side at least—are very proud of.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I was recently in the member for Bass's electorate and about 100 people were worried about things like senior supplements, age pensions and aged care. There were 100 people in the Launceston town hall. I do not think there would be many votes for him at the next election when it comes to those people.

My question is to the minister on aged care. Minister, one of the first things you did when you came to power was to disable—

Honourable Members:

Honourable members interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Order! Member for Blair, I cannot hear your question. There is disorder. I would ask everybody to be silent so we can hear the member for Blair.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

the workforce supplement, which had been accessed to the tune of about $100 million by aged care providers. The supplement was for consultation and negotiation in dealing with aged care sector to make sure that we had the workforce of the future with adequate remuneration for nurses, carers, IT professionals and administrators of the aged care sector. Minister, one of the first things I would like you to do is explain how you will address the growing pressures in the aged care workforce. We assume you know about the 2010 intergenerational report which showed we need a 300 per cent increase in workers to care for our ageing population by 2050. There are low wages, a lack of career pathways and a lack of professional development being experienced by the sector.

I am eager to know how your government intends to ensure the workforce is there. We see a 25 per cent turnover in this sector; about 96 per cent of the people working in the sector are 45 years of age and older; and about 75 per cent are from migrant backgrounds with 35 per cent having lived in Australia for only five years or less. Minister, would you please explain how giving the workface supplement to aged-care providers with no conditionalities on salaries, professional development, career paths or training will have anything to do with addressing these alarming workforce concerns? Ian Yates, from the Council of the Ageing, stated:

Giving aged-care providers back the aged care workforce supplement over five years will do nothing for the development of the aged care workforce.

Minister, in February this year you met with stakeholders in what was the forerunner to the aged care sector committee. You said you would undertake a stock take of workforce development projects. I ask the minister to provide details of that stock take and outline which projects have been cut in the budget, which you intend to propose to cut and which will remain. How will you address these specific concerns and additional pressures the sector is experiencing in regional and rural areas?

I would also like the minister to outline what alternatives to removing all conditionality were considered by the government. What recommendations did the aged care sector committee make to you? Further, Minister, you answered none of my questions on modelling concerning the aged care payroll tax supplement and addressed none of the issues I raised previously except to say that payroll tax was a matter for the states. In fact, your government has breached the long-held bipartisan approach to the issue of competitive neutrality in the aged-care sector in an unsurprising move, I would say, because your government has had no regard for the aged-care sector since it has been elected.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

The honourable member opposite has very short memory. As I recall—and I was about and he was not—that it was the Howard government that actually moved the very substantial changes to aged care in Australia. It took it out of a cottage industry and into the modern, sophisticated sector that it is today. I encourage the honourable member opposite to have perhaps a closer check with the history of what has happened in this regard.

Coming to the question of the Aged Care Workforce Supplement, I can tell the honourable member opposite that over the five years from 2013-14, $1.5 billion will be redirected to providers through a number of measures. Firstly, a 2.4 per cent increase in care subsidies and grant payments for eligible aged-care programs from 1 July 2014. All programs previously eligible for the workforce supplement will receive this funding. These increases are on top of normal indexation and will replace payments that would have been available under the previous workforce supplement.

Secondly, a 20 per cent—

Mr Neumann interjecting—

Does the honourable member want to listen to the answer or not?

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I want to know what answer you are—

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I suggest you just be quiet and I will give you the rest of the answer!

A 20 per cent increase to the viability supplement will be provided to improve the capacity of over 950 services in regional, rural and remote areas to provide quality aged-care services. All services currently receiving the viability supplement will receive this increase.

Thirdly, additional payments will also be made to providers who committed to wage increases under the previous workforce supplement and who are financially disadvantaged by the re-purposing of this funding and, fourthly, for funding already paid for the workforce supplement in 2013-14 through the transitional arrangements. The government will also roll the conditional adjusted payment paid in residential care into basic care subsidies, including Aged Care Funding Instrument care subsidies. Providers will continue to receive the 8.75 per cent as part of the basic subsidy but will no longer need to complete the annual declaration or annual staff training statements.

We will strengthen and expand the positive aspects of the cap by ensuring that all providers in programs that will receive the 2.4 per cent funding increase will now participate in the National Aged Care Workforce Census and Survey, which occurs every three to four years. And from 2015-16, financial reporting and programs receiving the 2.4 per cent funding increase will be reviewed and, where relevant, strengthened based on advice from the Aged Care Financing Authority. For 2014-15, providers will be still be required to provide financial statements as per current arrangements.

As to the workforce requirements, this government is well and truly aware of the workforce requirements. The basic foundation of this budget is one which actually recognises the ageing of the population in Australia. It recognises the ageing of the population in Australia, and that is going to have a very significant impact on this country. Not only are there going to be larger numbers of older Australians, largely more dependent than those who are in the workforce, there is also going to be a shrinkage of the growth of the workforce in the future. If you look at the major measures in this portfolio, for example, the measures to take the pension age up to 67 by 2023—which I admit the Labor Party was moving to—and to continue that trajectory to 70 by 2035 is a recognition of the ageing of the population.

When the age pension was set in place in this country over a century ago —and there were questions about this earlier—average life expectancy was less than 60. As I recall, it was about 55 for men and about 59 for women. So this is recognition, if you like, of the major demographic shift—the seismic shift in the demography of this country—which will occur over the next 10 or 15 years. That is why we are doing things as we are in relation to the age-pension age in this country.

It is, equally, why we are saying to people under 30 that 'we expect you to earn or learn'. If you do not meet the exemptions, which means you are not a full-time parent, or you are incapable of working for 30 hours or more a week, or you are in training or in a range of other exemptions—in other words, if you are capable of working full-time—then we expect that you are in a job. But if you are not in a job and you are under 30, and you are not within the exemptions, then because of this demographic shift our expectation is that you should be in training to get the job that you can have in the future because we will need every worker we can find in the future. So far as the aged-care workforce is concerned, that is something which is continuing to be monitored by the expert advisory committee, which advises Minister Fifield in that regard.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

As we are moving from the Social Services section of this portfolio at 12.30 to the Human Services segment, out of goodwill I call the member for Franklin, and the first person to be called to speak on Human Services will be from the government side.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

My questions relate to both, with a bit of a crossover, if that is okay. My question is about the Newstart measures for the under 30s, how they are to apply and what is going on with this measure. I am particularly concerned about the revelations in Senate estimates where the social services department confirmed that, with penalties, some people will actually be up to 11 months with no payment whatsoever. Can the minister confirm that that is the case and explain to me how those penalties have come about and how we end up with 11 months with no payment?

I am also very particularly concerned about how this would apply to, say, a young woman under 30 who does not meet one of the exemptions but who finds herself in the early stages of pregnancy. Will she be exempt or will she face somewhere between six and 11 months of no payment whilst she is pregnant? What sort of analysis has the department or the government done of services that these people will need to rely on? I understand that there is some emergency relief money that has been quarantined but that this is not new money or additional money; it is actually existing money within the budget that has been put aside. What sorts of services and support are in place for these people to survive from six to 11 months with no money, particularly pregnant young women who may be caught up in this measure? We are very concerned on this side of the chamber about how this will apply and I would appreciate the minister giving a detailed and frank answer.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

As the honourable member opposite points out, there are a range of exemptions that apply to this earn-or-learn measure: those with a work capacity of less than 30 hours a week, principal carers or parents with 35 per cent or more care of a child, part-time apprentices, Disability Employment Services clients, and stream 3 and 4 job seekers under employment services. They are the ones who have the most difficulty in obtaining a job. So, as I said, this applies primarily to people who are capable of working full time—they are capable of working more than 30 hours a week.

Ms Collins interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Franklin has asked her question.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

There are provisions that relate to pregnant women at the present time. As I recall those—but I am happy to come back to the honourable member with more detail—they relate to the six-week period prior to giving birth, where there are exemptions in relation to the obligations of a person in those circumstances. Those provisions will continue to apply, but, if there is any further detail I can provide to the honourable member, I am happy to provide it after this.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

It being almost 12.30, the Federation Chamber will now consider the Human Services segment of the Social Services portfolio in accordance with the agreed order of consideration.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

I again follow up with the minister on the Commonwealth seniors health card. The indexation of income thresholds for the card is obviously something that seniors advocates have been calling for for a long time. I am very pleased that the measures have been finally put into the budget, something that those opposite had six years to do and never did. These measures will benefit seniors every year into the future.

One other issue that has been brought up consistently within my electorate is the portability of this card. Many self-funded retirees travel overseas to see friends and family and, despite the fact that they do not receive income support payments, they are still limited to six weeks before their card gets cancelled. That means that they have to reapply. It is a fairly long, bureaucratic process, I am told, and results in some administrative overhang that, frankly, many think is not necessary. I would be interested to know: has the government considered the matter of extending the portability period of the Commonwealth Seniors Health Card in this budget?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

Again, I commend the member for Bass for his interest on behalf of constituents in his electorate in relation to this circumstance. Indeed, we have had representations about this matter and have taken those representations into consideration. As a result of that, we have announced some changes in the budget. Indeed, as I recall, one of the bills that was introduced into the parliament this morning covers this matter. Portability will be increased from six weeks, as it currently is, to 19 weeks in the budget legislation. That is more than a threefold increase in the portability time, going from six to 19 weeks, and that will commence from 1 January 2015. So, from the beginning of next year, there will be this increased portability period which will benefit those people in that situation. It promotes greater certainty in their circumstances, and it reduces red tape for the government, so it is a win-win situation both for those who are the recipients of this increased portability and for the government in terms of reducing red tape and the bureaucracy in relation to this matter. It acknowledges the contribution that self-funded retirees have made to this nation, the fact that they have saved and worked throughout their entire lives. Self-funded retirees are a minority of the people in retirement in Australia. That is the reality of the situation. This is a modest measure, indeed, but nonetheless a measure which seeks to recognise their great contribution over a long period of time.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I want to clarify some matters for a lot of people in my electorate who will be showing up at Centrelink offices and other government offices throughout the electorate. I have a low-SES community, and a lot of people show up in person, so this has relevance to the Human Services part of the portfolio as well as the Social Services part of the portfolio. I remind the minister that ACOSS described this budget as a budget to divide the nation, and I also remind him that this year there has been a really substantial drop-off in consumer confidence. Part of the reason for the drop-off in consumer confidence was that the minister was running around the country, really from Christmas onwards, talking about some sort of welfare crisis in the country, and a lot of people in my electorate certainly take deep offence at that.

Mr Nikolic interjecting—

There is not a budget crisis either. These sorts of matters are probably beyond the member for Bass, Deputy Speaker, but let me try and explain it to you anyway.

Minister, I am interested in particular by the HILDA Survey that was put out by the Melbourne institute very recently, which showed that all the language around the welfare crisis in this community is rubbish. It was just designed to scare people, to concoct this budget emergency that does not exist, this big con, so that you can swing the axe harder at people in my electorate by constructing this fake emergency, this welfare crisis. I remind him that HILDA said that, in 2001, 23 per cent of working age people in Australia received a welfare payment each week. In 2011, that had dropped to 18½ per cent. That is one fact. The other fact is that welfare spending in Australia accounted for just 8.6 per cent of GDP in 2013, compared to the OECD average of 13 per cent.

So my first question is: why does the minister think he knows more than the credible people who put together the HILDA Survey? On what planet is this minister more credible than the people who put together the HILDA Survey? That is my first question. The second one relates to this whole thing—and, again, people will be fronting up to offices that he, as the minister, administers and asking this question. They heard the Prime Minister say that there would be no changes to pensions. Of course, there were. And now they hear the minister say and they hear the Prime Minister say that the pension has not been cut. My second question to the minister, then, is: if the pension has not been cut, why do you claim on page 203 of your own budget papers—

Mr Nikolic interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Member for Bass, please!

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

This bloke should have someone read the budget papers to him. I am happy to do that. The quote is:

The Government will achieve savings of $449.0 million over five years by indexing pension and equivalent payments and Parenting Payment Single by the Consumer Price Index (CPI).

If there is no cut to the pension, where are you getting this $449 million from? If that figure is wrong, will you issue a correction?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

There is a crisis all right. It is the crisis that your former employer, the member for Lilley, left this country in. That is the reality of the crisis—a debt of $667 billion. Talk about a crisis—$667 billion.

Dr Chalmers interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Member for Rankin, you have asked your question.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

Were you the chief adviser for voodoo economics, your previous employer?

Dr Chalmers interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Member for Rankin, you have asked your question. If you want an answer, allow the minister to answer.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

So far as the age pension is concerned, I refer the honourable member to page 69 of the portfolio budget statement, which shows, in relation to the age pension—this comes back to member for Jagajaga's questions as well—under, 'Expenses for income support for seniors', age pension 2013-14, $39 billion; 2014-15, $41 billion; 2015-16, $44.5 billion; 2016-17, $47.5 billion; 2017-18, $49.5 billion. In other words, it is going from $39 billion to $49 billion, end of story.

Dr Chalmers interjecting—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Member for Rankin, I did ask you to give the minister courtesy. The minister has concluded.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

Unlike the Labor Party, who believe that the best form of welfare is welfare, the coalition believe that the best form of welfare is a job. A job brings something to a person's life that welfare can never do. It brings responsibility, accomplishment, social encouragement and, of course, financial benefits. These facts are true for all Australians and, in particular, for people with disability. Australians with disability experience significantly lower workforce participation rates than Australians without disability. This means that Australians with disability do not get to experience the benefits that a work life brings to one. Part of the reasons for this is that the DSP has been designed, effectively, as a set-and-forget payment. People with a disability apply for the DSP, they get it and then we forget about them.

I was pleased to see in the budget that the government is taking action to ensure that people with disability on the DSP are no longer forgotten. The members opposite asked me about my constituents. Unlike some of the members opposite, I came to this place directly from the real world. I used to act invariably for people at the lowest end of the socioeconomic spectrum. I spent the majority of my professional life working for people on legal aid. I want to give an example of one such constituent, whom I have maintained an excellent relationship with, whom I had the pleasure of acting for in Mount Gambier. For current purposes, I will fictionally refer to him as 'Vince'.

I was acting for Vince in the Mount Gambier Magistrates Court. Courts, like this place, are open to the public and to other people about to appear before magistrates. On this occasion, I was presenting a guilty plea on behalf of Vince. Amongst other things, I made clear to the magistrate Vince's mild intellectual disability and that he was on the disability support pension. Vince was built like the proverbial. In the gallery at court, awaiting proceedings, was a significant employer in Barker. After I finished on that day, I got a phone call from this employer, who said, 'Tony, that lad of yours that you acted for today—does he want a job?' I said, 'Of course he does, but you've heard both his legal predicament and the issues with his intellectual disability.' This employer said to me, 'Tony, I'm happy to offer him a job.' I am pleased to report that that individual, many years later, remains in that employment. From time to time, we catch up and he says to me, 'You know, I never thought I'd work. I thought I'd be on the disability support pension my whole life.'

This is an example of two things: some people who are on the disability support pension, particularly people under the age of 35, as Vince was, have the capacity to work, but, more importantly, it indicated to me that there are employers who are ready, willing and able to offer employment to people with disability and give to them the dignity of employment that I referred to. So, Minister, I ask this question: could you outline the government's policy to improve the social and economic participation of people with disability in our community?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I thank the member for Barker for his question, and I commend him on his humanitarian outlook, which I have been very impressed with, both in terms of his past life as a lawyer in Mount Gamier, and in the qualities that he brings to his representation of the people of Barker. Indeed, I recall that during last year's Pollie Pedal I had a forum with the Prime Minister and with a number of disabled people and young carers in Barker. One of the announcements in the budget—of bursaries for young carers—directly arose out of that meeting that we had in Mount Gambier in the member's electorate just on a year ago.

Representations like those that the member for Barker brings to this place about real issues concerning real people are things which we in this government are listening to, and we will continue to do so. I was in the electorate of Logan in southern Brisbane last week, where I saw a very impressive operation employing disabled people, where a person who had worked in the abattoirs there had set up a commercial lawn-mowing business. All the people employed in that commercial lawn-mowing business are disabled. In that operation he employs something like a dozen or 15 people driving commercial lawnmowers. He has vast contracts throughout the area for councils, parks and gardens, and things like that. All of those young people, under the age of 35, had moved from being on the Disability Support Pension, onto full-time employment. That just shows that, if we have the desire, there is a way in which we can assist many disabled people.

When I meet with disabled people around this country—as we all have, over a long period of time—they invariably say that they would like to work. People want to participate. They want to be part of the life of this country. They want to be part of the economic life of this country. So we need to find ways to encourage them to do that.

One of the measures in this budget is aimed directly at doing that. We are talking about young people under the age of 35, who are on the DSP and who are capable of working more than seven or eight hours a work—so they can do some work—who are not manifestly disabled. We are not referring to people who quite clearly cannot work but people who are capable, maybe, of doing some part-time work. In the past there has been a requirement that they have a participation plan but there was no requirement for them to follow it up. There was no requirement to go and do some work experience if that was what was in the participation plan. There was no requirement to undertake some form of training if that was what was in the participation plan. So in this measure we are proposing that people on DSP, under 35, who are capable of doing some part-time work, should have a participation plan and that we should follow-up that participation plan with them. In that way we would encourage them to get into work if that is what they are capable of.

This is not going to affect their DSP, so they will still have that safety net. I remember the changes we made back in 2005 in relation to DSP. One of the things that people were concerned about was that if employment did not work out for them the safety net would still be there. That is something which I think is very important in this regard.

Michelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Link to this | Hansard source

The items I would like to raise, please, relate to clarifying the status and delineation of some specific grants that fall within the minister's purview. As I am sure the minister is well aware, some of these programs have moved between portfolios—possibly between Human Services, Social Services and Immigration.

I have had the pleasure of travelling around many parts of the country visiting a range of migrant resource centres and settlement service providers, and I am sure we all agree that these organisations do outstanding work in our community, particularly in helping new arrivals establish themselves in our community. These organisations give the new arrivals not only a sense of inclusiveness but a very real connection to their new country. The strong message I am receiving from many of these organisations is that there is currently a lack of clarity or certainty in relation to some specific grants in the settlement and multicultural services space in particular. I have conveyed these concerns to the minister's parliamentary secretary. The response I received was pre the budget, which is why I am seeking an update now. I wrote to the parliamentary secretary on 1 April stating that several multicultural organisations and migrant resource centres had contacted me expressing concern about the future of the Settlement Grants Program. I asked if the parliamentary secretary could confirm that the Settlement Grants Program was safe and would not be removed or have substantial amounts of funding cut from it in the upcoming budget. I said this information would be greatly appreciated so these organisations could be assured this program would continue to operate. The parliamentary secretary replied on 7 May. The primary paragraph in that response is said: 'As you would be aware, the Australian government is committed to reviewing all spending across government. As soon as the Department of Social Services is in a position to provide advice on the future funding arrangements it will do so without delay.'

I note there was a document that was released with the budget and that the Department of Social Services and the government are working on new ways of delivering grant funding in a range of various. But I am sure, as the minister will appreciate, this uncertainty is not beneficial to many of these organisations around the country who are trying to plan for the future, including for their existing staff and their future staffing levels. So I am seeking some clarity on these matters that can be communicated to these people. As an example, I note the Settlement Council of Australia commentary on the budget. The council said in a newsletter that its members were eagerly awaiting the announcement of the federal budget this year to gain clarity on the funding of settlement services within the portfolio of the Department of Social Services. DSS yesterday, in line with the budget announcement, released information entitled 'DSS Grants—A New Way of Working', which I have alluded to. The council says there are significant cuts to the Strengthening Communities program which was concerning and refers to DSS program information on the settlement services within the new grant arrangements with the grant structure including longer grant terms, simplified reporting and acquittal processes.

The DSS website states they will be offering extensions to the majority of existing service providers with agreements due to finish by 30 June 2014. The feedback I keep getting is about people not knowing, beyond that date, about what is going to happen from that time forward. The Settlement Council's newsletter says the council looks forward to working with the government and DSS to understand and implement the new grant arrangements within the settlement sector. It also says greater security of funding will enable the settlement sector to continue to build on the proud record of the world's leading service delivery to newly arrived migrants and refugees. I would reiterate those remarks.

My question to the minister is about the Strengthening Communities line item in the budget. Can the minister detail all the specific grant programs and funding items impacted by the $33 million cut to the Strengthening Communities line item as stated on page 98 of the Social Services portfolio budget statement? As I said, many stakeholders are saying it is not clear to them what individual line items are included in that funding envelope so that they can plan for the future, particularly beyond this financial year.

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

What we have sought to do with program grants is to reduce the number of areas so that a smaller number of areas include all the various program grants in the future. In relation to settlement services, they will continue. Indeed, the funding for future years will be greater than it has been for this year, which you will see if you look again at page 98 of the portfolio budget statement which you referred to. Settlement services are safe as part of the change bringing settlement services and multicultural matters from the immigration department into the Department of Social Services. This is the new structure, if I can be permitted for a moment to show this to the honourable member, and we can provide a copy of it if the honourable member does not have it. It shows quite clearly that settlement services is part of this new structure. What we are trying to do is to reduce red tape to cut down and make more efficient the way in which programs are operating.

My recollection is that the grants round under DSS will open on 19 June this year, so there will be the opportunity for organisations to apply for grants under that. Part of what we are trying to do, not immediately in every area but over time, is to have grants that go for a longer time in terms of years so there is a great deal more certainty for the organisations and the staff employed by those organisations in the future.

Michelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Link to this | Hansard source

Thank you for that, Minister. My question was that I would just like to know—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

You cannot have supplementaries.

Michelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Link to this | Hansard source

My question was what the specific items—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

No, sorry. You cannot ask a further question.

Michelle Rowland (Greenway, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | Link to this | Hansard source

It is the same question.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

No, you have asked your question in your time.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

The National Disability Insurance Scheme is arguably one of the most significant programs in the history of the Australian government. It is with great celebration in my community in Geelong and in Colac that we have begun to roll out the NDIS.

In fact, I was in Colac on Friday and visited the new office of the Colac National Disability Insurance Scheme and I met with the National Disability Insurance Agency area coordinator, Schree Barry. It really is wonderful to see the investment that is happening in the Colac community and across the Greater Geelong region in my electorate of Corangamite. I am a passionate supporter of the NDIS and this government is a passionate supporter of the NDIS. We have supported the NDIS at every step of the way and we remain committed to rolling out the NDIS in full.

It really is fantastic to see that already the NDIA and the scheme that underpins the NDIA are helping some 2,700 people in the Barwon region in the trial that is being conducted in Barwon. In Colac alone there are about 340 people who have done their plans and are in the process of having these important disability services delivered, obviously, to people with a disability and their families.

This is making a profound difference. There are six people working in Colac and there are another five people to come. The Colac Herald did a terrific little article about the new office that is opening today, and that is a great investment. So there is great excitement in Colac about the investment that the federal government is making in the National Disability Insurance Scheme.

Of course, it was with great pride on 30 April that Prime Minister Tony Abbott, along with Premier Denis Napthine, officially opened the new national headquarters of the NDIA. The NDIA will generate about 450 direct jobs in total for Geelong by 2019-20. Already there have been some 125 jobs created and that number is expected to rise to 300. So not only is this a wonderful scheme for people with a disability, their families and their carers it is also wonderful for jobs in our region—it is so positive for jobs in our region.

Already we are seeing what a difference this is making. A number of weeks ago I visited Kids Plus Foundation in Geelong. This is a wonderful agency, giving help to young children and to babies, principally those with cystic fibrosis and other similar conditions. Up until recently they have had no government funding and now with parents coming along with their NDIS packages under the trial they are getting incredible help. So it is wonderful to see what a significant difference this is making in the Corangamite community and across the Greater Geelong region.

And let us not forget that from 1 July 2014, NDIS trial sites will be in place across all states and territories except Queensland. Queensland will join the NDIS in 2016. New NDIS trials in Western Australia, the Australian Capital Territory and the Northern Territory will assist around 14,000 people with permanent and significant disability, and more than 35,000 people with disability will be assisted through the NDIS trials. Once fully rolled out, the NDIS will assist around 460,000 Australians with a permanent and significant disability, at a cost of $22 billion. So this is a wonderful initiative. I am so proud that we are funding this program and that we are getting on with the job of looking after people with a disability.

I ask the minister today to confirm the government's commitment to the NDIS over the forward estimates and confirm that this is a fully funded policy. Can the minister also confirm that the government has reversed the previous government's decision to apply the efficiency divided to NDIS support packages and the second development fund?

Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I commend the member for Corangamite for her great interest in the NDIS—the National Disability Insurance Scheme. The location of the NDIA—the authority which is responsible for the scheme—is in Geelong. Her electorate of Corangamite includes part of the great city of Geelong, a very impressive and booming city in Victoria as far as a number of these sorts of services is concerned. Her consideration for this is something which is very significant.

The member for Corangamite talked about Colac. I travel everywhere by bike, and the last time I was in Colac I was on my bike as well. Indeed, I met with a group of carers and a group of people interested in disability there. We met at one of the motels in Colac on a Saturday or Sunday morning. There was a large group of people there who were very concerned about these issues regarding disability. On that occasion the Prime Minister and I spent some time with them listening to their stories and what they were concerned about. This was at a time before the NDIS had actually been thought of and brought into operation. It is for those sorts of people, their families, their carers and their friends that the NDIS is a scheme whose time has come.

I pay tribute to the previous government for their commitment to the NDIS. This is something that has been bipartisan in Australia. It is one of those things which happens only every so often in this country where a major social change has come about. We are in the throes of the implementation of it. It is going to take a number of years. The honourable member talked about the trials which are occurring in the Barwon region in Victoria and elsewhere around the country. The whole purpose of those trials is to provide us with the information that can help us to roll out this scheme in a way that will work for the people that is aimed to work for.

The Productivity Commission identified some hundreds of thousands of people who this was intended to apply to. The reality in Australia is that, if you are injured as a result of a vehicular accident, state accident compensation schemes around the country apply to those people. But, if you have a disability through some other cause—through no fault of your own—the reality was that you were not in the same situation as an individual or as family and friends of people injured in that sort of accident. This is aimed at providing equality of treatment, if I can put it that way, and equality of outcomes in terms of the care that can be provided for people who have a disability.

This is a very important development and it is going to take time. There is a parliamentary committee that oversees this process, which the Labor Party, the coalition and others are involved in, because we believe—and we argued this for a long time in the parliament—that this is too important to just be the subject of partisan politics. That is why when we were in opposition we threw our support behind this proposal and that is why now in government we are fully committed to the rollout of it.

The member for Corangamite mentioned the efficiency dividend. The reality is that there was an efficiency divided applied to the NDIS and this was something which we thought was inappropriate in relation to a commitment to rolling out this scheme. In this budget, the efficiency dividend of $44.9 million—which was effectively a cut to the NDIS—has been reversed. I think that is a clear indication that this government is fully committed to the rollout of the NDIS.

If anybody anywhere in Australia ever suggests that the coalition is not committed to the NDIS, they are, frankly, telling porkies. We are committed to the NDIS. We will see it rolled out. We do not underestimate the difficulties involved in the rollout of this scheme. That is why the trial sites are so important to provide the learnings for us over the next few years as to how this can best work. Already there are some results in from the first couple of quarters from various trial sites around the country. Some of those results have been mixed. What we have to learn from that is whether or not, for example, the results which are not as good as we might have thought are simply a product of the start-up of a new system and whether or not these things will be ironed out over time or whether they are longer term issues that need to be addressed in terms of how the system is put into operation. But I assure the member for Corangamite, who is a great supporter of the NDIS, and all members of this House and the parliament and the people of Australia that the coalition is 100 per cent committed to the implementation of the National Disability Insurance Scheme.

Proposed expenditure agreed to.

Proceedings suspended from 13:00 to 15:59

Education Portfolio

Proposed expenditure, $1,329,516,000

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

The question is that the proposed expenditure be agreed to.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

To clarify, I understand that we will be covering higher education, schools and early childhood in the next hour and a half. We propose that we will commence with higher education for the first 45-odd minutes before moving to schools and child care.

We have a number of questions to put to the minister about these appalling attacks on our university and higher education sector. Of course, the Australian public know all too well that they were promised no cuts to education, but in higher education alone we know that this package is such a shambles that it is cutting some $5.8 billion from higher education. We also know that, whilst the education minister repeatedly refers to expanding opportunities for 80,000 extra students, there is no new funding for 80,000 new students—not at all. What the government is planning to do is extend government subsidies to more students by spreading less money more thinly across a greater number of students. This is a preposterous policy position which the minister has put forward. We certainly welcome the opportunity to reiterate some of the concerns which have been raised in the sector but also to ask some questions on how this will be implemented.

I want to share some of the views not just of students, parents and grandparents but of vice-chancellors within the sector already. We know that they have come out in waves against these higher education changes, arguing particularly that these changes will hurt their students. The Vice-Chancellor of the University of Adelaide, in the great electorate of Adelaide, which I am so lucky to represent, says that aspects of these changes are unworkable, they are unduly harsh and:

The compounding interest here [means] we might deliver debts to students of $70,000, $80,000, $100,000 and no-one here wanted that.

We have also, of course, seen the HECS architect, Dr Bruce Chapman, warning that changes could lead to profiteering and stating:

If universities have price discretion they will all take it … and could actually end up charging more than what it actually costs—

to deliver that education.

The University of Canberra's vice-chancellor, Stephen Parker, said:

I also think it is unethical for a generation of leaders who by and large benefited from free higher education to burden the generations behind them …

The Swinburne University vice-chancellor trashed this package when she said:

Deregulation will inevitably lead to much higher fees for our students. Over time, full fee deregulation will lead to a higher education system characterised by the 'haves' and the 'have nots'.

There are many, many other stakeholders who have given damning appraisals of this ludicrous policy put forward by the education minister, but I will not take up the time of the chamber at this point to share all of these many quotes. What I will instead do is ask some questions of the minister, which I hope that he will be able to address in his next contribution.

How does the government justify higher education deregulation in the face of so much opposition? Has the government done any modelling on the impact of deregulated higher fees on students and on the broader economy here in Australia? Does the government envisage universities will use the international student fee rate as their maximum rate and has this been included in modelling? If some universities charge much higher fees than other so-called less prestigious universities, does the government concede that this will lead to a two-tiered system and price students out of certain universities? Doesn't this challenge Australia's current system of fair and equitable access to education? It is unthinkable that the government can, on the one hand, argue that some universities' fees may go up and, as they like to keep saying, that some universities' fees may go down and, on the other hand, not concede that this leads to our national system becoming a two-tiered system at least. I would like to know whether this is the minister's view? And, if not, what modelling has been conducted on the Australian education sector, in Australia, that he can fall back on to guarantee that that will not be the case?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I think the shadow minister's opening remarks were not so much a question as they were a political statement. But I will pick up some of the things that she said in her speech. I am sure then that members of the coalition might want to make a contribution and I will respond to those as well.

The shadow minister asked a series of loaded questions. Let me explain a little bit about the education package in the budget. First of all, there are no cuts to education in this budget—none whatsoever. Over the next four years, higher education increases every year to the point where we will have $900 million more in spending over the next four years in higher education. And there are some elements of the new spending proposals that the shadow minister did not touch on. Obviously, we were met with several funding cliffs when we came to power. The National Collaborative Research Infrastructure Strategy was one of those funding cliffs where Labor had extended the scheme for 12 months and it was an ending program. We were faced with letting that program end or finding the money in the budget to continue it because of the very good work that NCRIS does. I am sure that the member for Adelaide would agree that NCRIS is a very worthwhile scheme to support research infrastructure. I and, I am sure, the member for Adelaide, have visited some of the outstanding examples of where NCRIS is making a difference to research in Australia.

Well, we found that money and we continued to fund NCRIS into the future. We did the same thing with the Future Fellowships program, a program that typically is for mid-career researchers, to ensure that once they have passed through the early stages of being a researcher we do not lose them overseas, poached by excellent universities around the globe—that we can continue to use the skills that they are developing here in Australia. Anyone who attended the Prime Minister's Science Awards at the end of last year would note that a number of the winners were mid-career researchers who had benefited under the Future Fellowships scheme.

Labor again—

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

This won't lead to their mid-careers because you have cut off the resources—

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

There seems to be a stranger in the House, Mr Deputy Speaker. I do not recognise the member for Perth from her posters in the last election campaign. I do not think that she would want to be involved in any misleading or deceptive conduct cases. I think she would find herself to be on the wrong side of the law.

Ms MacTiernan interjecting—

Well, really, Alannah—have you seen those posters of you from the last election campaign? They look nothing like you!

Ms MacTiernan interjecting—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Order!

Ms MacTiernan interjecting—

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

And the—

Ms MacTiernan interjecting—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Perth! This is the Federation Chamber! The member for Adelaide was listened to in quiet and silence and you can listen to the answer in silence, thank you very much.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I would have thought that the member for Perth would want to hear about the Future Fellowships program. I am sure she supports the Future Fellowships program, because I would imagine that UWA—

Ms MacTiernan interjecting—

You have UWA in your electorate? UWA is probably in the member for Perth's electorate. It might be the member for Curtin's electorate, but I am sure she supports mid-career researchers being supported. And I am pleased to say that in the budget process I was able to secure the funds to keep the Future Fellowships program going into the future.

So, to clear up the first of the member for Adelaide's assertions about cuts to higher education: spending on higher education increases in this budget. The total higher education research international and agency spending over the next four years is $48.3 billion, and it is increasing by $900 million. That is an enormous investment by the federal government in higher education and research because we very much value higher education and research.

We have, of course, as part of the budget introduced higher education reforms. There are eight key elements and I will touch on a couple. I would have hoped that the member for Adelaide would support the expansion of the demand-driven system to the sub-bachelor courses—the diplomas and the associate degrees—because that is a new spending measure that is costing the government money. It is costing us $371.5 million over three years. That will give, typically, low-SES students—first-generation university goers—an opportunity to go to university and to get that pathway into an undergraduate degree that will give them the chance to earn 75 per cent, on average, more over their lifetimes because they have a higher education qualification. So that is just one element of the budget measures. As my time has expired, I might turn to the others the next time I get an opportunity.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I have a couple of questions I would like to ask the minister. It is about the funding cuts to the subsidies for different programs. I must say that I was quite stunned to see the extent of the cuts of the subsidy for both engineering and science. Both of these undergraduate courses have now sustained cuts of 28 per cent. That seems to be very peculiar position to adopt a time when I think we would all acknowledge that we need to really ramp up the skills that we have in the nation in engineering and in science. If we are to be a successful nation into the future we are really going to need to skill up in those particular areas. Could you tell us just what your thinking was and what you think the impact might be on these very, very significant cuts to those particular disciplines—bearing in mind that I think you would understand, Minister, that science graduates do not necessarily generate massive income. It is not as if we are going to be seeing enormous earning potential. Indeed, with the 457 visas, even Australian engineering graduates are having trouble earning a decent living these days. I am really concerned about that. I would like you to address what you think and what impact you believe this will have on people electing to go into those areas and indeed the provision of those courses by universities.

You were talking of the work you have done to increase the midcareer opportunities for graduates. Could you give us more explanation why then you have so extensively ramped up the cost of the PhD and master's by research? We have seen a cut to that area of $173 million. I understand that this now equates to a very, very significant increases in costs to those PhD students. Okay, we have put a little bit of money into the midcareer, but what I am concerned about is that we have really made it much more challenging for people to come in and do undergraduate degrees in science and engineering and then at that next level—those that want to go on to masters and doctorates—are now seeing their fees act increased substantially. That is obviously going to be a disincentive and disabler for those people who are not independently wealthy, like so many of the minister's colleagues, apparently. I would ask that you would address those two issues.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

The member for Perth asks about what I think will be the impact on universities of the government's deregulatory approach in the budget. The member for Perth has to understand that this is an entire package of reform. There are elements of it in which the taxpayers will be making savings. So the Commonwealth Grants Scheme will be reduced by 20 per cent. That is definitely true. There have to be trade-offs in the budget for expenses to the taxpayer versus savings to the taxpayer. So while we are, as I said before, increasing spending on things like NCRIS and Future Fellowships and the demand-driven system being expanded to the sub-bachelor courses and of course the Commonwealth Grant Scheme being expanded to the non-university higher education providers, there will be a cut of 20 per cent of grand scheme across the board. I refer the member to the fact that I have established two working groups. One of the working groups will be giving advice to me in the coming weeks about the technical aspects of the clustering arrangements that she talked about. I am looking forward to getting its response.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

So you actually don't know what the impact will be.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Order! You have asked your question.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

The impact of the government's reforms to higher education will be that more young people will get the opportunity to go to university—a lot more, at least 80,000 more. That was the question asked by the member for Perth, and that is the answer. Eighty thousand more people will get to go to university and get the opportunity to improve their standard of living, their health, their longevity and their sophistication, if you like, through education, and they will get a 75 per cent, on average, increase in income. The taxpayer provides, at the moment, about 60 per cent of the cost of educating a student. The student provides about 40 per cent. After our reforms, the impact will be that we will be asking students to contribute about 50 per cent of the cost of their education. As Fred Hilmer, from the University of New South Wales, said, the government will not set these fees. The government will not decide how the universities determine their budgets, their costs and their fees. The universities will decide that.

The member for Perth wants to continue to infantilise the universities. She wants to continue to run the universities from Canberra in terms of the demand-driven system. She probably wants to return to the old system of caps on undergraduate courses. She wants to tell the universities how they can much they can charge and how many students they can enrol. The government's view is that we want to give universities the freedom to make these decisions themselves, to set their own fees and to enrol the number of students that they want in sub-bachelor courses and undergraduate degrees. The effect of that is a massive reform of higher education that will have two very significant impacts. Firstly, it will let more young people into higher education. This will particularly help low-SES families and first-generation university goers, because they typically use the sub-bachelor courses as a pathway to an undergraduate degree.

The second big impact, which the Labor Party is also opposed to, is that it will give our universities the chance to achieve excellence. It will give our universities the chance to compete with their Asian competitors, the Asian universities, which are improving in quality all the time. We have an international education market, which at the moment is worth $15 billion per annum. It was $19 billion under the Howard government. Labor managed to shrink that to $15 billion—quite an achievement in a growing economy—because they do not really support international education. We want to see our universities compete with their Asian counterparts. Five years ago, there were no Chinese universities in the top 200 universities in the world, in the Shanghai Jiao Tong index—none. There are now five universities from China in the top 200. Of the Australian universities, one more has entered the top 200, but all the others' rankings have fallen.

If we do not give our universities the chance to achieve excellence, to compete with their Asian competitors, our international education market will fall and it will dry up. I am not prepared to be the minister that knows that danger is looming and not do anything about it. So I have made the decision to reform higher education to give more students the opportunity to go to university and to free our universities to be the best they possibly can be and to have the best quality higher education system in the world.

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

I have a question for the Minister for Education. Firstly, I would like to give some context for the minister. As the minister would be aware, Lindsay is home to the University of Western Sydney, consisting of 40,000 students across six campuses, with its chancellery housed within my electorate of Lindsay. This great university prides itself on its vision:

To be a university of international standing and outlook, achieving excellence through scholarship, teaching, learning, research and service to its regional, national and international communities, beginning with the people of Greater Western Sydney

I am sure you can see many parallels with what the minister is achieving in the budget.

UWS is a very responsible university. It wants to encourage people right across Western Sydney to learn and to enrol in tertiary education and has broadly welcomed the government's measures. As a response to the intense scare campaign conducted by those opposite, UWS has felt compelled to provide further confidence to their student community and has publicly come out to say that they will be freezing and grandfathering course costs to the student community. However, I would like to know how the minister's budget measures will overcome other potential barriers to accessing a tertiary education.

I would also like to advise the minister that Lindsay is the fourth youngest electorate in Australia. It is predominantly made up of many young, aspirational and hardworking families, working to provide a better future for their children, but there are elements of significant disparity in Lindsay. In Glenmore Park, for instance, in the south-west of the electorate, the median income for a couple with children is $2,474, which is higher than the New South Wales average. Further, 33.5 per cent of people are attending some form of educational institution, be it primary, secondary or tertiary, and 11.1 per cent currently enrolled in university or tertiary education. To the west of my electorate is North St Marys, about 13 kilometres from Glenmore Park. The average income there of a household with children is $1,935, which is $539 per week less than in Glenmore Park and lower than the New South Wales average. In North St Marys, 33.8 per cent of people are attending an academic institution. North St Marys is also home to a high school called Chifley College, which is the lowest SES school in the state: Chifley College Dunheven Campus has a lot of Aboriginal children and also refugee children and has many, many challenges. Only 5.1 per cent of this community go on to tertiary education. Let me repeat: in Glenmore Park, 11.1 per cent of people are currently enrolled in tertiary education; in North St Marys, 5.1 per cent. This is despite North St Marys being closer to the local university campus.

Minister, I understand that with a university education more opportunities become available and your earning potential is substantially higher. In fact, those students will go on to earn 75 per cent more on average than Australians who do not get a higher education qualification. I understand in low-socioeconomic regions there are a range of contributing factors and barriers to accessing education. However, with the disparity I have identified within my own electorate, I think there is a need to make a university education more accessible. Minister, the disparities between the two suburbs could not be clearer. My question is: how will the higher education reforms outlined in the budget increase opportunities for students in my electorate?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I thank the member for Lindsay for her contribution. I can remind her that it was not very long ago that I was out in Western Sydney opening the University of Western Sydney College. Peter Shergold, who is the Chancellor of the University of Western Sydney, is the chairman of one of the working groups that is advising the government on the legislative framework for the reforms that we handed down in the budget. He is doing an excellent job, as are all the vice-chancellors and educators who are assisting the government to bring about very far-reaching higher education reform. I can tell her that Greater Western Sydney will be one of the biggest winners from the government's higher education reforms.

One of the points that the member for Adelaide made before was that she tried to suggest that somehow we would be stopping young people from being able to access university through these reforms. What she failed to mention, but I know that the community understand already, is that every single student, whether in Greater Western Sydney or in Walkerville in her electorate, will be able to borrow every single dollar up-front for the fees that they will pay to go to university. No student will be denied the opportunity to go to university because of cost—not one—because every single dollar can be borrowed from the taxpayer under the Higher Education Loan Program, which used to be the Higher Education Contribution Scheme introduced by Labor—by Minister Dawkins in the Keating and Hawke years—when they had some policy consistency and some policy responsibility. That means that no matter how wealthy you are or how poor you are, you will have exactly the same opportunity to go to university in this country. That is why our system is so very different from the system in the United States. To compare the two is a very false comparison and is extremely misleading.

It does shock me that, in the electorate of the member for Lindsay, Glenmore Park has 11.1 per cent and North St Marys has 5.1 per cent of people enrolled in tertiary education. The University of Western Sydney is an extremely important part of the economic and social fabric of Greater Western Sydney, with its six campuses and it is very determined vision of spreading the benefits of university education to the demographic in that part of Sydney, which is a low-socioeconomic status demographic. Our reforms will mean that people in North St Marys who might not be as well prepared for university education as others and who typically use pathway courses into university will be able to do so because we are lifting the cap on those pathways courses, those diplomas and associate degrees. They will now be under the same demand-driven system as undergraduate degrees. It is costing the Australian taxpayer to bring that about.

We know that the people in Western Sydney typically use diplomas and associate degrees that might be offered at places like the UWSCollege at the University of Western Sydney to train themselves to get the skills that are necessary to then go on and earn an undergraduate degree. The Kemp-Norton report that I commissioned earlier this year and that was handed down a couple of months ago said that students who had done those kinds of pathway courses were much less likely to drop out in the first year of an undergraduate degree and that 24 per cent of students who had not done those courses dropped out in the first year of an undergraduate degree.

When I sat down to think about reform of higher education I decided that I wanted to establish an equitable higher education system that gave those people who were less likely to go to university a greater chance to go to university. When I was at school I assumed that I would go to university, and I did go to university because I went to an academic school and I had every single advantage that a young person could have. So when I sat down I did not decide to have a higher education system that advantaged people like me; I decided that I wanted a higher education system that advantaged people from low-SES backgrounds. That is why we are expanding the Commonwealth Grant Scheme to non-university higher education providers. That will help TAFEs educate more young people to get the same opportunities that I have had in life, to get the start that they need. That is the answer to the member for Perth's questions.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Knowing that the minister has had a bit of trouble with some of the detail around the higher education policy—he is not quite clear on who it will affect and when it will affect them—I thought it would be worthwhile going through the cuts that are included in the higher education budget before asking the minister some questions on one particular one. We have seen in this budget some $5.8 billion in cuts to higher education and university research: $3.2 billion in cuts, by taking the scalpel to HECS, Australia's highly successful and internationally renowned income contingent contribution system; $1.9 billion in cuts to universities by reductions in government core subsidies; $202 million in cuts by indexing university grants to CPI; $172 million in cuts to fund, promote and reward universities for enrolling low-SES students; $173 million in cuts for the training of Australia's research students, the scientists and academics of tomorrow; a $75 million cut to the Australian Research Council; and a $31 million cut to the national regulator.

The question I have is particularly about the consequences of these cuts. I want to focus on the $3.2 billion cut from HECS.

It is clear the government does not know the consequences of this most radical transformation to our higher education system in Australia for 30 years, and we heard that in the minister's non-answer to the member for Perth's question about science and engineering students. We know that the government is flying blind when it comes to the impact of its higher education package on students and on their families. We know that the peak body, Universities Australia, has asked the government to rethink the design of loan repayments and its cuts to the sector. We also know that Bank of America Merrill Lynch chief economist, Saul Eslake, has warned of the consequences of higher interest rates on student loans, particularly for women. Mr Eslake said:

The prospect or repaying university loans whilst raising a family might deter women, while many other prospective students would weigh up the costs against the benefits of education.

He stated:

It would be irrational for people not to consider the cost in relation to their working life in the same way as when you borrow to buy a house.

The changes to HECS will have a compounding effect on students paying extra in fees plus extra in HECS repayments and will start them off on their working lives with a huge debt burden hanging over their heads, a debt burden which I have absolutely no doubt will deter many people from taking up the opportunity of higher education.

Universities Australia has modelled the potential costs of engineering and nursing degrees. They found that at the medium-fee increase scenario with a four per cent interest rate, an engineering graduate working full-time faces a HELP debt of between $98,952 and $113,169 and would repay it over a period of 20 to 25 years. This is compared with $46,000 to $49,000 debt and 14 to 18 years repayment under the existing arrangements.

We know when we look at a nursing graduate that the estimates are equally frightening. The changes to HECS will force university graduates to pay more and to pay sooner. The threshold will be lowered, forcing graduates to pay sooner but will be coupled with increases on HECS bills from higher degrees and increased interest rates. Modelling done on the changes has been published in the Financial Review showing repayment amounts and times will soar, with a typical female taking up to 25 years to repay an engineering degree.

My question to the minister is: will the government provide data based on the Australian higher education system's modelling which they looked at before taking such a radical reform process? Will they provide the data on the effect of the latest fee hikes which were announced in the budget? What will the effect be on Australian students and students who will not become students as a result of these despicable measures?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I listened carefully to the member for Adelaide's latest contribution. I must say, I find it hard to believe that she can reconcile a statement that we are cutting higher education with the facts that are found in the budget papers that clearly indicate that far from cutting higher education, we are increasing spending on higher education by $900 million over the forward estimates. And then I realised that it is possible that the member for Adelaide thinks that an incoming government simply spends on top of what the previous government did. It is possible that the member for Adelaide thinks—and she gave a litany of particular programs—that the new government keeps all the previous government's programs and then just adds its own on top of that, which would obviously be pretty costly.

In 2007, I think she will find that when Labor last, unhappily, won office for six years, they did not just leave the previous Howard government's policies in place and then just add their own on top. They removed many of the Howard government programs. The one in education that leaps to mind was the vouchers for literacy and numeracy. That was an extremely successful program for young people learning how to read and how to count.

Putting that to one side, it can only be reconcilable with her complete lack of understanding of how government works in Australia. I will not get personal because the member for Adelaide has tried to avoid being personal, but I would point out that she probably needs a bit of a refresher course in how government works. She also said that we were cutting the HECS scheme. I remind her that it is now called the HELP scheme. Putting that to one side, the Higher Education Loan Program is not a program that can be cut because it is a loan program.

Whoever turns up to ask for a loan from the taxpayer to go to university, and is given an undergraduate course, is able to access the loan program. That is why, while the current HELP debt for the Commonwealth is about $30.1 billion, it will rise to $51 billion or $52 billion over the coming years. It is not a program that can be cut; it is a program that can be paid back at a fairer interest rate—for example, at the 10-year government bond rate rather than CPI, which is an indexation rather than an interest rate. It is not a program that can be cut, so whichever staff member gave the member for Adelaide that advice before she came into the chamber to contribute should probably be dealt with by her.

The member for Adelaide also talked about modelling. There is a lot of speculation around the fee rises or fee falls after deregulation of the higher education system. There is a lot of speculation; much of it is based on hysteria and scaremongering. I refer the member for Adelaide to the excellent statement by Fred Hilmer, the Vice-Chancellor of the University of New South Wales. He says:

It is up to universities, not Canberra, to decide what fees should apply to which courses.

He said about the very modelling the member for Adelaide cited:

The modelling released today by Universities Australia on the impact on fees of changes to cluster funding rates is based on a fundamental misunderstanding of the way the system works …

The University of New South Wales is a member of Universities Australia, so it must have taken Professor Hilmer quite a lot of courage to publicly point out the massive failure in the Universities Australia modelling.

I refer the member for Adelaide to some excellent modelling that has been done, and which was in The Australian higher education supplement, which is at the back of the paper. In case the member for Adelaide does not know where it is in The Australian newspaper, it is after the business section. She will find it in that part of the newspaper. Andrew Trounson has written an excellent piece, in which he has suggested that fee rises could be as low as $2,163 a year in those courses where fees do rise. So, before the member for Adelaide quotes the speculative modelling or returns to the National Tertiary Education Union's modelling, she might like to go and have a look at the higher education supplement of The Australian. She will find there, that very good piece by Andrew Trounson.

Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

As the minister knows, my electorate of Eden-Monaro is a rural electorate in the south-east corner of New South Wales. In our electorate we have some 10,553 primary school students and we have some 911,000 secondary school students. We have heard from Labor that there have been cuts to expenditure on schools in New South Wales and across the country, but my understand is that we are actually boosting expenditure on schools. I would be interested to know, over the course of the next four years of the forward estimates, how much school expenditure will be increasing in New South Wales. I would also like a general assessment of the spending on independent schools and Catholic schools if the minister has that data to hand. My understanding is that, as opposed to what the Labor opposition have been saying, there has been an increase in spending on schools in New South Wales for both state and private schools.

I know that you well know, Minister, that I was formerly the chief executive of the Australian Chamber of Commerce and Industry. As such, I am particularly interested in skills and training issues. I note that ACCI put out a 2013 pre-election survey in which they canvassed the opinion of employers on the state of the vocational education and training market. ACCI found that, even though the unemployment rate was relatively higher in recent years, more than in four in five, or 82 per cent of, businesses remain concerned with recruiting employees with appropriate skills, while 68.9 per cent of businesses were concerned with recruiting employees with a good level of literacy and numeracy. Further, ACCI found that businesses rated employee productivity performance as their second highest concern, and they noted:

This finding is closely related to the Cost of Training Employees which is rated as the third highest concern.

That was a survey done in May 2013. That is a legacy that the former Rudd-Gillard-Rudd government left this government to fix.

I am interested to know the nature of the integrated policy framework that we are putting in place with regard to vocational education and training to deal with these problems. I note, for example, that we are introducing what I regard as an excellent program of trade support loans of $20,000 for apprentices. I would like to understand more fully from you, Minister, how that deals with the sort of legacy that we have had to fix in this budget for 2014.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I thank the member for Eden-Monaro for his contribution. I might start with his last question first, if he does not mind. Yes, we did inherit a very poor legacy from the previous government around the outcomes for students at school level then going on to have difficulty in vocational education and training—a very difficult legacy. In fact, the OECD PISA study released last year in December showed again that Australia has fallen not just in relative terms against the other nations in the OECD in literacy and numeracy but in real terms. This is a very fundamental problem. I do not blame any particular state Labor or Liberal government for that. This has been a decline over 10 years, but it happened at the same time as a massive increase in spending. There was a 42 per cent increase in spending in schools over 10 years; over the same 10 years, there was a significant decline in the outcomes for our students.

When we came to power, having seen that legacy, we set about doing a few very important things. We decided to focus on the things that really mattered—not just more money in schools, which Labor is obsessed with, but the fundamental root problems in schools in the outcomes for students. We identified those as being, firstly, an improvement in teacher quality. The OECD said that, in eight out of 10 reasons why a student does well or badly in Australia, the classroom to which they were allocated had the biggest impact. One out of 10 reasons was low SES and one out of 10 reasons was every other factor. So we wanted to address teacher quality, and what we can do at the federal level, of course, is address the training of teachers in universities. That is why we have established the Teacher Education Ministerial Advisory Group, to advise me about how to improve teacher training at university and do an international benchmarking study.

Ms MacTiernan interjecting—

We have seen the evidence that shows that, with independent public schooling, more autonomy at the local level has a real impact on the expectations of students about what they might go on to do. I have seen the member for Perth support many of the government's measures around direct instruction or around independent public schools and I am sure she would want to support that, but, rather than be distracted, we have put $70 million aside to expand independent public schooling in Australia. I must say, we are close to securing all jurisdictions being able to take part in that particular program, because we want more autonomy at the local level.

We identified, as you did in your address, that the curriculum is an issue in schools. Rather than accept mediocrity or failure, we decided that we would have a deep look at the national curriculum by appointing two very eminent people to conduct a study of the curriculum and its robustness. We wanted to determine whether it is useful for students and whether it produces the kinds of outcomes that employers need in gaining skills and knowledge, because being at school is not just about gaining skills; it is about gaining both skills and knowledge.

And we want to improve the parental engagement in students' education. In Western Australia we have found that the more autonomy there is in a public school, the more engaged parents are with their children's education. Therefore, the Independent Public Schools Initiative really dovetails into our initiatives around parental engagement. The budget has $1 million a year for ARACY, to assist us with good research and good methods to achieve better outcomes for students.

The member for Eden-Monaro also asked about the misconception that we have cut funding for schools. We have massively increased funding for schools—an 8.7 per cent increase this financial year; 8.9 per cent the following year, 8.9 per cent the following, and 6.6 per cent in 2017-18. We have increased funding. This stands in stark contrast to Labor in the Pre-election Economic and Fiscal Outlook, which cut $1.2 billion from schools, which would have left Western Australia, Queensland and the Northern Territory short—Queensland by $794 million, WA by $120 million, and the Northern Territory by $272 million. We have put that back into the system. In the member's state of New South Wales, spending will increase by 6.7 per cent, 7.8 per cent, 9.4 per cent and 5.7 per cent over the next four years. So New South Wales will be another big winner from the government deliberately living within our means, but being fiscally wise and full of rectitude.

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

One of the less-known budget measures that have slipped through without much public attention is cuts, in the education portfolio, to published career resources. I am particularly concerned about the cut to the Job Guide and the fact that it is no longer being printed or on the website, and about myfuture. The Job Guide will be funded up to the 2015 edition, and myfuture will be funded up to December 2014. These job guides are invaluable resources for career and vocational counsellors, both in schools and in TAFE colleges. Back in the Howard government days, Dr Brendan Nelson, as Minister for Education, Science and Training, helped to bring in some really good policy reforms in the career development area.

Whilst on one hand this government say they are about creating jobs and opportunities for young people, they are taking away the tools that will assist in doing that. My question, Minister, is: what is the rationale for this? What are you putting in place to replace these really valuable resources, which I have used in a previous life? And how do you expect to help young people to find work and to undertake appropriate courses of study without having resources available for those people and for counsellors to provide counselling and advice on careers and education?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I thank the member for Shortland for her question. I am sure it is a well meant one, because the member for Shortland is a conscientious local member of parliament. The myfuture and Job Guide, which the member refers to, were left unfunded by the previous government beyond the 2014-15 financial year.

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

They could have been refunded.

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

They could have been refunded—the member for Shortland is correct—but the government's decision was that myfuture and Job Guide would not be continued to be funded after 2014-15. We did that, firstly, because we are in a budget emergency which requires us to make difficult decisions about what should and should not continue to be funded. Secondly, we did that because, with respect to those two particular measures that some students use to decide their careers and their futures, there is a plethora of information now available for young people, particularly provided by the private sector. Therefore the question has to be whether the government should be spending taxpayers' money on myfuture and the Job Guide when the private sector has been filling that space extremely successfully for the last 10 years. For example, there is information about careers on state and territory websites—Victoria and Western Australia have their own dedicated career websites, two state government portals for advising young people about their careers. But other examples in the private sector include Seek, CareerLounge, My Career, Career Hunter, Student Edge, SkillsOne and Hobsons Course Finder. So there are many different places that students can get the advice that they need about future careers. Of course, young people these days use social networking, social media, to find out a great deal about the careers that they might wish to pursue. So I am confident that the myfuture and job guide will be quite correctly replaced by the private sector filling that space, as they have already been doing in the last 10 years, and I think that for the use of taxpayers' funds where the private sector is doing a job equally or better than the government, it is the wrong use of taxpayers' funds to replicate what the private sector can do as well if not better.

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

My electorate of Lindsay is in the outskirts of Sydney. Being in the outskirts of Sydney one of the biggest challenges we have is that two-thirds of our working population have to commute every single day for jobs—one-third all the way into the city and one-third into greater Western Sydney. The Abbott government is already contributing a lot of resources and a lot of funding to assist the north-west and the south-west growth sector—$3.5 billion in fact to actually build some major construction work that will be in the south-west of Sydney.

I also have within the electorate of Lindsay one of the colleges of TAFE New South Wales, Western Sydney Institute. The Western Sydney Institute of TAFE has some 94,000 students in it that they provide every year qualifications to within Australian frameworks. They all also offer open training and distance learning opportunities for people there as well. So as Western Sydney grows there is a growing demand on workplace jobs, actual jobs, that are going to provide solutions for people to be ready to go—vocational jobs. But the Western Sydney Institute of TAFE is also really wonderful in the way it works with the University of Western Sydney providing is crucial gateway courses. So people who are not necessarily got the best UAI can gateway from TAFE into university, which I think is really fabulous initiative that these two training organisations do together—to provide vocational outcomes for people right across Western Sydney. When we look at all this together, my question to the minister is: why is the government extending Commonwealth subsidies to private universities and the non-university higher education institutions?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

The member for Lindsay has identified a very excellent part of the higher education reforms that we are proposing, and that is to give more young people from areas like Western Sydney the opportunity to use different pathways into higher education. The Commonwealth Grant Scheme has been applied to the 39 universities for many decades. The government's decision has been that we want to expand that to the non-university higher education providers, many of which are very high quality and are offering as good if not better courses and career opportunities for young people. When we come to decide the amount should be funded to those different institutions that are non-university, the percentage that we pay them might well be lower than what universities are paid. That is why we have a working group advising us on what, for example, that percentage should be, because universities do research. Being a university, one of the definitions is that they do research as well as teaching, whereas a lot of the non-university higher education providers, like TAFEs, do not do research but do teaching and do it very well.

The ones in Western Sydney, like the TAFE that the member for Lindsay talked about, will be big winners in the government's higher education reforms. They will be big winners because some of their courses will be funded under the new demand-driven system for diplomas and sub-bachelor courses, so there will be an injection of funds to TAFEs through that method. They will also be winners because, for the first time, they will be able to access the Commonwealth Grant Scheme, and that will give them an opportunity to get an injection of funds that way. Around Australia—certainly in my state of South Australia—state governments have been cutting TAFE funding. So they have very much welcomed the decision by the government to expand that.

I was very pleased to see in The Australian Financial Review on Monday an article by Tim Dodd about this very subject that the member for Lindsay raises, headed 'SA Labor backs coalition on higher education funding'. The article reads:

SA Higher Education Minister Gail Gago said on Saturday the federal government's plan to recognise and fund sub-bachelor degrees delivered by the SA TAFE system was welcome.

Of course, the same thing would apply to the TAFEs in Greater Western Sydney. The article goes on:

"The extension of funding of sub-bachelor program's to TAFE SA and other registered higher education providers provides an opportunity for TAFE SA to access Commonwealth funding for its diploma and advanced diploma courses on an equal footing with universities," she said.

"TAFE SA already works closely with a number of universities in terms of providing opportunities for students to transfer to university and have recognition for their studies in TAFE SA and the recognition and funding of these sub-bachelor programs delivered by TAFE SA is welcome."

This is not a Liberal minister. This is a minister in a Labor state government, in the state from which the member for Adelaide, the shadow minister, comes. I do not think they are from the same faction, though. I think Gail Gago is in the left and the member for Adelaide is in the right. I am not sure. They do not tend to talk closely in South Australia, but I am sure the member for Adelaide can inform us. In any event, this is a minister in a state Labor government who is supporting the federal government's proposals. Why is she doing that? Because they are good proposals. They are very good, and Gail Gago has worked out that what the government is doing is expanding opportunity to a great deal more students around Australia to get a higher education qualification. This will mean that students in Greater Western Sydney will have the chance to go to university, get a degree or a diploma or do a course, and then go on to earn 75 per cent more, $1 million more, over their lifetime than people without a higher education qualification.

In the time available to me, I will not try and start a new subject, but I might get a chance to comment on it in a minute. There are many, many Australians who are pleased to support students at university by subsidising their education. At the moment, they subsidise it 60 per cent. As only 40 per cent of Australians have a university degree, that means that a great majority of the population are subsidising students to get the chance to earn 75 per cent more than them over a lifetime. It is a generous act on behalf of the Australian taxpayer. Rather than whingeing about it, the member for Adelaide should be thanking the taxpayers of Australia for the subsidies that they provide to students around the country.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Can I just point out that we were, 15 minutes ago, due to commence questioning on the schools budget. On this side, we have a range of important questions about school funding, school cuts, youth programs, chaplains and the curriculum review. I know that this government have a shameful record on education. I know that they do not want accountability about this appalling record when it comes to education, but perhaps they could stop wasting time with these ridiculous dorothy dixers taking up every moment that is available.

Government Members:

Government members interjecting—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Order, members on my right!

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I will be asking the minister questions. We know that the budget outlines $80 billion in cuts to schools and hospitals. Its estimates also reveal that $30 billion of these cuts will come from schools. We saw that in this exchange between Senator Wong and Mr Ray, deputy secretary of Treasury, in an estimates hearing:

Senator WONG: Can you confirm that, with that figure, broadly you are looking at around 30 for schools and 50 for hospitals?

Mr Ray: It is a little bit under 30 for schools and a bit over 50 for hospitals.

So it is $80 billion in cuts to schools and hospitals, confirmed by this government's own Treasury department.

Now, with school cuts, this means that the game is up for this government. The public service has confirmed the biggest-ever cuts to schools that we have seen in this nation, and we know that there will be devastating consequences: less disability support, subject choices drastically limited, school support officers and teachers' assistants cuts, sport and music programs cut, remedial support cut and class sizes increased. But the government has made these cuts without any understanding of the impacts. We know that Senate estimates revealed that despite starting work on its $80 billion cuts to schools and hospitals before Easter, the government still has no idea of the impact on the classroom and had not done the work to look at the potential impact.

The education department could not say how many schools would close, how many teachers would be sacked or give any indication of the impact on students. It is absolutely frightening that the government would make the largest-ever cuts to our schools with no idea of the consequences.

Before the election, Tony Abbott promised that there would not be cuts to education but now it is clear that he simply does not care what damage these cuts will do. The government have walked away from the commitments that they have made time and time again, including the so-called 'unity ticket' before the election—and didn't they pull one over the Australian public with that!

What we do know is that the Liberal state governments have said that they do care about these huge cuts from the Abbott government. We have seen New South Wales, Victoria, ACT and SA all commit to meeting their responsibilities under the six-year Gonski agreements—something that this government has failed to do. We have seen New South Wales Liberal Premier Mike Baird say that education cuts were 'a kick in the guts'. He said:

… what services would they like us to cut …. you cannot outsource your problems to the states …

Similarly, we have seen the New South Wales education minister, Adrian Piccoli, speak out against these cuts to education. We have seen the Victorian Treasurer, Michael O'Brien, say:

When we handed down the Victorian budget last Tuesday we put extra money into Victorian hospitals and extra money into Victorian schools. We didn't put that extra money in so that the federal government can take money out.

And we have seen the Queensland Treasurer, Tim Nicholls, say that the federal budget was an attack on Queensland's health and education services.

We have also seen the New South Wales National's conference just last weekend call for the government to fund the full six years of the Gonski review. And we have seen these attacks to the indexation of schools, which the now minister himself said, in opposition, were a 'frightening prospect'—to have indexation of three per cent. He is now happy to see indexation of just 2.5 per cent moving forward.

So my questions in relation to these huge funding cuts are: how many Liberal and National backbenchers have raised concerns about the breaking of the Gonski agreements and the $30 billion cuts to schools? How can the government justify making $30 billion in cuts to schools without any assessment of the impact they will have? Can the minister guarantee that no school will close as a result of these cuts? Or can the minister outline exactly how much worse off each school will be because of these cuts? On what evidence about the cost of delivering high-quality school education did the minister base the government's school-funding model from 2018, which will index funding at just 2.5 per cent? And can the minister justify a school-funding model that cuts funds to schools in real terms and which schools have warned will lead to reduced programs and quality, and higher fees?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I do not know where one begins with the member for Adelaide asking me dorothy dixer questions and then accusing the government of doing the same thing, because the consideration-in-detail process is supposed to be an opportunity to elicit detail out of the budget—out of the appropriations. The member for Adelaide has chosen to give set piece speeches in each of her contributions, with all the rhetoric that she could really save for Q&A or 7:30 or even in parliament speaking on the bills, rather than wasting the time of the Federation Chamber in consideration in detail by giving rhetorical speeches and not actually asking questions.

So if she has run out of time and not managed her time well it is because she has wasted the time of consideration-in-detail process by giving pointless and asinine speeches about the government's policies rather than actually asking questions. I suppose it is because she does not have as much experience in the opposition as she should have. But, nevertheless, I will attempt to help her with the misunderstanding that she has about how the school funding agreements work.

School funding agreements go for four years with the states and territories and the non-government sector—whether that is the Catholics or the independents. The forward estimates go for four years as well. So there is a coincidence: there is a four-year funding agreement; there are four years of forward estimates. Over the forward estimates, spending on schools increases very substantially. As I said in response to the member for Eden-Monaro's questions, spending in all schools, including recurrent and capital spending, over the next four years is: an 8.7 per cent increase in 2014-15; 8.9 per cent in 2015-16; 8.9 per cent, again, in 2016-17; and 6.6 per cent in 2017-18. So there are no cuts to school education in the federal government's budget. In fact, the opposite is true. We are increasing spending and we have our own programs such as: programs like the independent public schools initiative costing $70 million; programs like the response to whatever the curriculum review hands down; programs like $1 million a year to help us with parental engagement; and when the TEMAG, the Teacher Education Ministerial Adviser Group, hands down its report to me, funds have been set aside to be able to respond to that. So we are increasing spending.

The Labor Party's rhetoric is not matched by the reality of how they behaved in government. In the Pre-Election Economic and Fiscal Outlook, the previous minister, the now Leader of the Opposition, ripped $1.2 billion out of schools. So, ironically, while the shadow minister pretends that they were funding a new school funding model, in fact in Western Australia, Queensland and the Northern Territory they were defunding the school funding model. It took me as the Minister for Education not only to deliver a national agreement on the national school funding model over four years, bringing the Northern Territory, Queensland and Western Australia into the model, but also to find the $1.2 billion so that the model would work. And I did so.

Beyond the next four years, the member for Adelaide likes to raise fantastic figures. I will tell her that in 2017 we will sit down with all the jurisdictions and renegotiate a new school funding agreement. That will lead to more money in 2018 and more money in 2019 because obviously spending will increase on schools in line with the CPI and enrolments. But I am not sure that the Labor Party can continue to pretend that the rivers of gold, the fantastic amounts of money that they used to talk about in government, will ever materialise, in spite of what the Leader of the Opposition said on 31 March in Perth in answer to a question from a journalist:

JOURNALIST: You have committed and you still will commit to the next election for those years five and six?

SHORTEN: Yes.

JOURNALIST: That will cost I think about $7 billion additional is that what you're prepared for that?

SHORTEN: We budgeted for this when we were in Government and furthermore, what does it cost Australia if we short change our kids?

He likes that kind of rhetoric. Unfortunately, this was not followed up. On 22 May at Moonee Ponds he was asked: 'If you're bent on restoring this funding, what's the solution for finding the savings to provide it, or would it be deficit funded?' Mr Shorten said:

We'll reveal all our policies in good time before the next election.

So he has stepped away from that commitment.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

My question is to the minister. Minister, I am very fortunate to have an institution, namely the University of Queensland, in the electorate of Ryan. The university over the years has—

Ms Kate Ellis interjecting—

We are on education. You wasted all that time. That is not my fault.

Ms Kate Ellis interjecting—

Stop interrupting, you are wasting time again. You are deliberately wasting time. You do not want answers. Let me ask my question.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Adelaide has had her chance. The member for Ryan has the call and will be heard.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Excuse me, we divided up the time so that the first 45 minutes was on higher education and the second was on schools.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The member for Adelaide will resume her seat. The member for Ryan has the call, this is consideration in detail on education, and she will be able to ask her question—

Ms Kate Ellis interjecting—

in silence!

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I was saying, Minister, that the university has produced many outstanding graduates who are now leaders in their fields—in every aspect of business, governance and the different aspects of the lives that we lead. They are very impressive. The University of Queensland, through its research, is now in the top 10 per cent of universities in the world for the commercialisation of research projects. I would like you to elaborate, please, on that.

Mr Perrett interjecting—

That interjection is just completely off the planet.

Ms Kate Ellis interjecting—

I really object to the opposition deliberately wasting our time when we have serious questions. Minister, how are the policies and measures that you have introduced helping the University of Queensland rate even higher across the world?

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I am glad that the member for Ryan finally got her chance to ask a question in spite of the interference being run by the member for Adelaide. The member for Adelaide knows that members of the government can ask any question they like during the 1½ hours of consideration in detail for education. She is welcome to divide up the time for higher education, schools and child care. She may well ask a question on child care, next, to the excellent assistant minister. But I would point out that she used most of that first hour asking about universities and then ran out of time for schools.

I am not the time manager for the member for Adelaide—that is a matter for her—but she does not get the chance, also, to tell the members of the government what they can ask questions about. If she casts her mind back to 7 September last year, she might notice that Labor did not win the election. That is why members of her party are sitting on that side of the House. So she gets to ask the questions that she wants to ask, and members of the government get to ask the questions that they want to ask. If she does not like the process she should not take part in the process, because there are lots of members of the government who would like to ask questions and would like to hear the answers.

The member for Ryan asked about the University of Queensland, an excellent university in both research and teaching. I can tell her that in the budget, research funding over four years, including for ARC and AIATSIS, is $11 billion. So we are massively investing in research in this budget. I have spoken earlier in the consideration in detail about how we faced funding cliffs for the National Collaborative Research Infrastructure Strategy and the Future Fellowships program. I found money for both of those programs, in spite of Labor only funding them for 12 months. Those were more of the landmines that Labor left for the incoming government, because even they had worked out that the public had lost faith in them as a government. They left two funding cliffs in NCRIS and the Future Fellowships, and I found the money and funded it.

So we are actually investing more money in research over the next four years, and universities like the University of Queensland will benefit from that, because they have an excellent reputation in research. That is why I can tell the member for Ryan that Michael Gallagher, the Executive Director of the Group of Eight, gave an excellent speech at the EduTECH Higher Education Leaders Congress in Brisbane on 4 June 2014. I recommend it to the member for Moreton because it was in his city. And I recommend it to the member for Adelaide, who might not have had the opportunity to read it. Right at the end of that speech—if she only wants to read one paragraph—on page 17 of 17, Michael Gallagher said:

The 2014 Higher Education Budget reforms are necessary. They are logical, coherent, sustainable, equitable and inevitable … My guess is that the detractors of micro-economic reform in Australia’s higher education industry will find themselves on the wrong side of history in resisting efficiency improvement and innovation, as they will be in opposing the redistributive measures of the package and, curiously, supporting socially regressive subsidies from general taxpayers to more advantaged segments of the community.

Unfortunately, I can tell the member for Ryan, that is exactly where Labor has found themselves in this debate. They have found themselves on the wrong side of history. They have found themselves supporting socially regressive subsidies from general taxpayers to more advantaged segments of the community. They have found themselves opposing the redistributive measures of the package, like the expansion of the demand driven system to the sub-bachelor courses, and the expansion of the Commonwealth Grant Scheme to non-university higher education providers and the Commonwealth scholarships fund. This is the biggest Commonwealth scholarships fund in Australia's history and will give many, many more students in both regional and rural Australia, as well as the cities, the chance to go to university.

Research universities like UQ will benefit substantially from what their own Group of Eight describes as a 'logical, coherent, sustainable, equitable and inevitable' package of higher education reform. It will allow them to put more effort and their own money into research and to determine the areas of research that they are best at and the courses that they offer that are their highest quality courses and fund and support those, rather than simply have every offering in order to be able to chase the revenue, which is how the previous government had established the university system. That is why these higher education reforms will make a substantial difference to young people from low socioeconomic status backgrounds in particular and allow universities like UQ to compete with their Asian counterparts.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Knowing how desperate the government are to avoid accountability on schools and education questions, I am going to ask a range of questions on both schools and child care and ask that those which the government does not answer in this place be taken on notice.

My first point is around the school chaplains program. I note that the budget allocated $245 million for the National School Chaplaincy Program but that this minister decided to declare that this funding would only be available for religious chaplains and that welfare officers and other qualified counsellors would not receive funding under this program. We note that there are many indications of the government's hypocrisy—firstly, that it talks about school autonomy on one hand and on the other hand says that it will not give principals the option of deciding that a welfare officer is best for them. How does the government justify cutting funding for qualified welfare staff that so many schools rely on? Has the government undertaken an impact assessment of this change? I also note that the minister was bragging about reducing compliance on these school chaplains. How will the government ensure that the program standards and safeguards will be maintained? Why didn't the government consult with school principals and parents before making this decision? How many schools will lose welfare officers as a result of this government's decision? If the government needs to take this on notice, I understand, but can it provide a list of each school which previously had access to a non-religious welfare officer under this program?

I also have a range of questions around the almost $1 billion in cuts to child care which this government has announced, including the $157 million cuts to family day care. Why did the government refuse to consult with the family day care sector before deciding to axe this essential support, which Family Day Care Australia estimates will make families have to pay an extra $35 a week in their family day care fees? What plans does the government have to make up for any loss of supply due to the cutting of these funds? Has the government undertaken any analysis on the areas of Australia that are most likely to be impacted by the changes? How will the government provide assurances that services have educators in areas where family day care is critically important?

Regarding the appalling changes to and attacks against the means-tested childcare benefit which this government is so proudly bragging will only impact people who earn $42,000 or more, how can the government continue to push for a paid parental leave scheme that will deliver $50,000 cheques to millionaires whilst cutting the existing childcare benefit that people who earn just $42,000 a year rely upon? How will the government save $230.4 million from these measures if it is continuing to try and argue that black is white and this is not a savings measure and a cut? I ask the government to provide the House with a breakdown of how this figure of 500,000 families that will be worse off as a result of this measure was calculated. If the government has done no such analysis on the impact on families of various income levels, will it at least now do it and provide it to the House as this bill goes through?

Regarding preschool, I notice that the government are backing away from support for universal access in our preschool system, citing that they do not want to undermine the Productivity Commission report, yet they are very happy to undermine and pre-empt that report when it comes to slashing childcare benefit and childcare rebate for hundreds of thousands of Australian families. I ask: will the minister guarantee the continuation of federal funding for preschools? Will the minister make a commitment to an ongoing partnership with state and territory governments to fund preschool programs?

I will also go to the Minister for Education when it comes to his attacks on all of the youth unemployment prevention programs which are so critically important in our schools at a time when the government is at the same time attacking Australians for being too reliant on welfare and threatening to leave young people with absolutely nothing to live on for six months. Why is it that every youth unemployment prevention program is being cancelled in his portfolio?

I also note the Prime Minister's recent comments about industry involvement in schools. I ask the government: if trades in schools and linking with industry is so important to jobs and Australia's future productivity then why are trades training centres and partnership brokers programs, which are providing an effective way of bringing industry in and of providing a pathway to work experience and employment beyond school, all being cut by this government that promised no cuts to education and seems to delight in delivering record cuts in that same portfolio. (Time expired)

Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I propose to not take five minutes so that the Assistant Minister for Education will have the opportunity to respond on childcare issues. I am hoping the member for Adelaide will regard that as a helpful proposal because if she speaks again that means that the assistant minister will not get the opportunity to respond at all.

The shadow minister asked about Youth Connections. Youth Connections was a program that had 74 per cent of its participants aged under 17. It is therefore the responsibility of the states and territories to provide that kind of assistance that Youth Connections provided. It was duplicating effort. There are lots of great programs, Commonwealth programs, state programs and territory programs but it is not the Commonwealth's responsibility to provide them all. The states and territories have to take responsibility for the things that are their area of responsibility.

Too often the great chasm between Labor and Liberal is shown up in just this kind of example where, in Labor's world, the Commonwealth should pay for and do everything. If they have to borrow the money from overseas, they have no problem with that. In the Conservative Liberal and Nationals parties' world, we need to live within our means and we need to pay back the debt. Areas that are properly the responsibility of the states and territories should be delivered by the states and territories. That goes for the school chaplaincy program as well.

The school chaplaincy program was initiated by the Howard government. It was a chaplaincy program. When the Labor Party came to office there was quite a tussle between Julia Gillard as the then Minister for Education and the Prime Minister at the time, Mr Rudd. Mr Rudd supported the chaplaincy program. Julia Gillard opposed the chaplaincy program. She wanted to kill the chaplaincy program. Kevin Rudd saved the chaplaincy program. The compromise between these two individuals was that it would be expanded to welfare officers and counsellors. Welfare officers and counsellors in schools are quite properly the domain of state and territory governments. Now that we are in government, we have returned the chaplaincy program to which original intention, which is a chaplaincy program.

If states and territories want to continue to fund welfare officers and counsellors then they are perfectly at liberty to do so. I would welcome them doing so but that is a decision that they should make and not be infantilised by the Commonwealth making these decisions on their behalf. I will end on that note and allow the Assistant Minister for Education the opportunity to respond.

Sussan Ley (Farrer, Liberal Party, Assistant Minister for Education) Share this | Link to this | Hansard source

I thank the member for Adelaide, the shadow minister, for her questions. I am happy to address some of the key points she has raised. The answers to all of those questions she raised around childcare benefit and childcare rebate could be found in the speech I made to the House both on the introduction of the bill earlier last week and the summing up speech this afternoon. I am happy to go over them again in the order that they were asked. I will address first the family day care matter.

It is interesting because the shadow minister was in fact the minister in 2012 when the Australian National Audit Office did an audit of the Community Support Program, which assists family day care. This was a program that was only in existence after 2006 following which it exceeded its budget allocation significantly year after year. In fact, it was spiralling out of control in excess expenditure. So the audit office highlighted problems and recommended a review. The minister, now the shadow minister, sat on her hands and did nothing. It was a part of Labor's mess that we had to clean-up on coming to government.

The shadow minister asks about consultations with the secretary. I am happy to inform her that yesterday I had a very wide-ranging, productive discussion following on from earlier conversations, earlier discussions and earlier meetings between ourselves, the department and the sector. But I would like to let the shadow minister know that yesterday I had a particularly productive session with family day care stakeholders. The reality is that although this is a budget measure this year, this is not coming in for 12 months. There are no changes for 12 months and we will work together with the sector to support and to have strong family day care. With no changes the 12 months, the transition is workable, manageable and well-supported by the sector.

Remember that Labor did nothing to fix this problem. There were several problems that Labor did nothing to fix, but the main problem that we dealt with in the House today was the bill that we put through the lower House that paused the thresholds for the child care benefit and the child care rebate. Speaker after speaker, including the shadow minister in her question just now, referred to these changes as 'cuts'. In fact, they are not cuts. It is disingenuous, it is misleading and it is scaremongering to the parents Australia to describe something that pauses a threshold, which is a level of income at which you qualify for a certain benefit, as a cut when it simply is not.

People listening to the member for Adelaide would assume that the hourly rate of child care benefit that they are entitled to in the various circumstances they have their children in are actually going to reduce. In fact, they are not. They are going to increase. That is because the quantum of that subsidy directly to the parents will continue to be indexed. The shadow minister knows that. In making political point after political point and rhetorical flourish after rhetorical flourish, she is in fact simply stating untruths.

The sheer hypocrisy of the stance that has been taken by Labor really is—and I know it is an overused word—breathtaking. That is because contained in the bill that went through the House today was the measure to pause the child care rebate. This was a measure that was introduced by Labor in its last budget. It was desperate to find savings. It knew that the sixth surplus that it predicted was not going to happen. There were six non-surpluses in a row. So it pulled savings out of midair—savings from everywhere. There were $106 million in savings from pausing the child care rebate. They paused the child care rebate for six years, but they did not actually put the legislation through to effect that. We were left to do the dirty work and to pick up the pieces.

As I said in the House today, it gives me no pleasure to be bringing in the savings that we know, as a responsible government, that we have to make. It gives me no pleasure at all, but I perfectly understand that the job has to be done. By putting in place Labor's own measure—which it did not have the guts to legislate and then made excuses about—and another sensible, moderate measure that simply lasts for three years until we get the budget back under control, we are participating in putting Australia back on a sustainable path. If anybody is interested in the child care needs of the modern economy in which we all live and work, then they must surely be interested in the health of that economy, in the productivity of that economy, in the participation of women in the workforce, in the health of families and in the quality of child care for children. All of these things are front and centre.

I acknowledge that all members of the House want those things. We completely disagree on how we will get there. We absolutely take responsibility for the work that we are doing, the Productivity Commission inquiry that we are having and the new policy ideas that will come in just a few months, which will look into bringing in legislation with new initiatives next year. There is an exciting future. I do hope that the shadow minister is not going to hold us back.

Honourable Member:

An honourable member interjecting—

Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

I do not have four minutes! In Eden-Monaro, which is a rural seat, we have some 2,000-plus preschool students. That is 5.7 per cent of the population, so it is larger than the national average. I understand that, through the course of the last six years, childcare fees have increased by some 53.2 per cent overall. That is just a shocking figure. I want to ask the assistant minister what we are doing to rein in that sort of increase and what is the state of the Productivity Commission review?

Sussan Ley (Farrer, Liberal Party, Assistant Minister for Education) Share this | Link to this | Hansard source

In the interests of time and following on committees and considerations, can I say to the member for Eden-Monaro that I congratulate him on his representation of a diverse rural seat and acknowledge that the numbers of rural and regional members on our side of the parliament mean that we do understand the needs of rural and regional child care. It is going to be extremely important with our Productivity Commission review. I will specifically tasked the Productivity Commission to look at rural and regional models of child care that work.

Yes, it is a shocking legacy and really summed up, and really summed up as the before Eden-Monaro has in one sentence: costs went up 53 per cent coupled with out-of-pocket expenses for families that went up 40 per cent. What a shameful legacy left by Labor. I am already working with my state and territory counterparts to reduce the regulation and red tape that surrounds child care operators and surrounds family day care, surrounds out-of-school care and adds to cost but does not add to quality. We are focusing on the relationship between the educator and the child, the early learning, the nurturing, the care but not all the book work. We believe that that will help relieve the upward pressure on costs. We look forward to your participation in the consultations that the Productivity Commission will have in the weeks and months ahead.

Proposed expenditure agreed to.

Environment Portfolio

Proposed expenditure, $1,723,004,000

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

Let me make this point to begin with: the meta-position for this budget is framed by six consecutive deficits which had accrue to a total of $240 billion of funds that were spent over and above that which the Australian government received in revenue. Just to remind the House: $27 billion, $54 billion, $47 billion, $43 billion, $18 billion and $49 billion. That is the massive national task against which this budget is framed. So each and every portfolio has had to work to find greater efficiencies. This portfolio has been part of that process.

Mr Perrett interjecting—

However, I am absolutely delighted that all up in a very difficult and challenging budget environment so as future generations would not have to pay back the consumption of this generation, we have been able to secure $3.5 billion of new expenditure programs. There is $2.55 billion for the Emissions Reduction Fund. This is a fund which will actually reduce emissions. It is about doing things where you pay on achievement. It is not about the $30 billion of funds which were paid out by the previous government without in most cases any test whatsoever. I will remind of the member for Moreton that in fact there was $9.2 billion being paid to zinc, aluminium, cement, general manufacturing firms with no strings attached by their government. The second thing is, they were paying—

Mr Perrett interjecting—

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

Order, Member for Moreton!

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

The second thing is they were paying $5.5 billion to brown coal generators with no strings attached. I want to repeat that: they were paying $5 billion to one small sector with no strings attached. That is probably the largest transfer of funds in Australian history to one small sector of the economy within one short period of time. There was $1.3 billion of subsidies to the coal sector when they said that they were clamping down on emissions. None of which made sense. By contrast, the first of our major new expenditure items compares with a $30 billion set of transfer payments from the Commonwealth to firms under the previous government. We spend $2.55 billion, we withdraw a $30 billion set of transfers from the Commonwealth to the private sector, which in almost every case were being done with no strings attached whatsoever.

The second of the significant areas of new expenditure is $525 million over four years for the Green Army. This is a project aimed at achieving two simple things. Firstly, it is about ensuring that there is employment.

An opposition member interjecting—

Actually your side is giving bipartisan support, dummkopf. It is about ensuring that there is bipartisan support—

An honourable member interjecting—

I am pleased to hear that—for a program which provides employment and does good local environmental things. That could be boardwalks, riverbank restoration, riparian recovery, sand dune restoration or protection of threatened species, whether it is habitat restoration or breeding programs—practical things.

The third of the areas in which there has been a significant contribution in this budget is a global figure of more than $500 million for two capital equipment programs—for the acquisition of a supercomputer for the Bureau of Meteorology, which is about better advice with regard to cyclones, floods and fires, and for the acquisition of a new icebreaker, which is critical national infrastructure not just for research but for upholding our position and maintaining our bases in our Antarctica, without which we would place at risk our sovereign claim over the Australian Antarctic Territory. Both of those items were unfunded. They were not given funding by the previous government. Both were overdue. Both have been funded. The final figure will be determined through a tender process, but I can safely say that, between the two, we have provisioned over $500 million. All up, it has been a very effective budget round, against a difficult national backdrop.

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Link to this | Hansard source

I thank the minister for his opening, particularly his reference to the Emissions Reduction Fund. The Prime Minister in the parliament earlier this month, and during his trip to North America, in particular, sought to equate the Emissions Reduction Fund and the direct action policy of the new government to the Clean Power Plan announced recently by President Obama. Can the minister outline the similarities?

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

I would be delighted to. The first thing is that the American program sets out a simple proposition: it allows us to reduce emissions without a carbon tax, without a cap-and-trade scheme, without an emissions trading scheme. In fact, the last time that there was an attempt to introduce such a scheme in the United States, when all three arms of the American system were aligned on a party basis—a Democrat congress, a Democrat Senate and a Democrat presidency—one of the leading Democrat candidates for the Senate, Joe Manchin, from West Virginia, took the cap-and-trade bill, tied it to a tree and shot it. That was really the last time that we saw any action in the United States towards a cap-and-trade scheme.

By contrast, what we see now is that the White House plan, which we endorse and support and value and appreciate, as a critical global contribution, takes a very different approach. It does not, to the best of my knowledge and reading, mention cap-and-trade, an emissions trading scheme or a carbon tax at any point in the documentation. I stand to be corrected, but on my reading that is a very clear position. Beyond that, what does it seek to do? It seeks to encourage two primary things. It seeks to encourage energy efficiency and the cleaning-up of coal fired power stations. Compare that with the carbon tax that we currently have in Australia. What you see here is a transfer of $5½ billion from the taxpayer to the brown coal generators, largely within Victoria.

However, in the United States the system is very clear: they are seeking to clean up the power stations, to provide incentives to engage in gasification, drying, potentially carbon capture and, most likely, reuse. They are also looking at cleaner transmission. They are also looking at general plant efficiency. All of these things are precisely the outcomes which we are considering under the Emissions Reduction Fund. It will depend upon proposals that are the most cost-effective and the cheapest, but it is absolutely clear that the power sector is already looking at those sorts of options.

The other thing I want to say about the United States is: we have long said that you cannot have an effective functioning global agreement without an agreement between the US, China, India and the EU. So what we see in the United States is a fundamental step towards an agreement at the end of 2015 at the Paris UNFCCC conference. This is something to be welcome and embraced. But let us not kid ourselves that this is anything other than an alternative to a carbon tax. The White House papers could not be clearer that this is not a carbon tax. They do not make any mention of a carbon tax, a cap-and-trade or an emissions trading scheme.

The other point I want to make here is sometimes there is reference to China as if China had a broad based functioning carbon tax. Let me give three examples: the city of Shenzhen gives away 100 per cent of its permits for free—in other words, there is no charge; the city of Shanghai gives away 100 per cent of its permits for free; and the city of Beijing gives away 99.9 per cent of its permits for free. The difference between what we have here in Australia and what we see in China is the difference between a bowling ball and a pea.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

I am pleased to have the opportunity to ask a question of the minister this afternoon about the Bureau of Meteorology. I was pleased to hear him make reference to its important role in his opening remarks. The Bureau of Meteorology plays a critical role right across the nation. Australians of all walks of life rely on the bureau for their day-to-day weather forecast. Importantly, it also plays a role in forecasting extreme and unexpected weather events and, indeed, emergencies which we see in our nation whether they relate to flooding or extreme heat—which can lead to fire—or other extreme forms of weather. The bureau plays a critical role in ensuring that Australians are aware of those events in advance to the greatest extent possible.

The bureau is particularly important in rural and regional areas where so much of the livelihood of rural and regional Australians is affected by the weather in farming and in the utilisation of our arable land. The bureau's advice of expected rainfall and temperature conditions is very important to the planning of those businesses.

It is also the case that, over the years, weather forecasting technology has improved from the early days where there was probably a very limited reliance on technology to now where in real time on the Bureau of Meteorology website you can observe the different forecasts as they pertain to different postcodes right around the nation in different regions. Again, the atmospheric conditions are so critical.

As our population is increasingly concentrated around large metropolitan areas, there is obviously an increased impact from extreme weather events because more people are affected by those events as they occur. The bureau's good work in forecasting those events is well known, which makes it one of the most highly respected institutions in the nation.

Against that background, I did want to ask about the government's efforts in computing technology. I understand that the government has made some moves recently to invest in super computing technology, and I am very interested to understand the likely impact of technology on boosting Australia's forecasting capabilities and of the benefits that will be derived from that technology more generally.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

To the member for Banks, let me start by acknowledging his fundamental role as one of the lead architects of the Georges River recovery plan. Whilst he was a candidate, he worked hard to recognise that this was a fundamental local environmental issue. It is about the health of the river. It is about the health of the fringing communities. In particular, the green army program was announced at a Georges River site. We committed to a significant Georges River recovery plan and I am very hopeful that, in fact, the green army legislation will pass through the Senate, if it has not already, in the coming hours. The consequence of that will be that this program will be ready to roll out and the Georges River will include some of the first projects in the country.

Having said that, the broader challenge raised by the member is of forecasting for Australia's urban and regional communities. In Sydney itself, only some years ago there was a massive and catastrophic hailstorm. In Toowoomba and the Toowoomba Range, we witnessed the most tragic of flood events only a few short years ago. The lesson from that is that early warning and early intervention are absolutely critical. So we as a government have provisioned to acquire a new supercomputer. This will be the eighth supercomputer in the series since they first began to be adopted. The hope is that there will be two key steps over the coming two years. Next year, we are due to acquire new satellite capacity, and the following year we are due to acquire a new supercomputer. It was a project that was, sadly, unfunded. It should have been funded. It was overdue to be funded and there was a black hole in the budget. Nevertheless, we have made space in order to find that funding. We have funded it fully. The funding is set aside to ensure that, once the tender process is complete, the supercomputer will be acquired.

Why is it important? It is important for rural communities because it provides early warning in relation to fire, flood and cyclone. In particular, the fire authorities currently use the existing supercomputer to provide early warnings about wind shifts, which are absolutely fundamental to fighting the fire and even more fundamental to protecting the lives of people in particular communities and firefighters. In the end, there will be fewer lives lost, we hope, as a consequence of this. What is the capacity upgrade? It is a tenfold increase in capacity. That allows us to run more cycles, to look at more activities on a commensurate basis and to give earlier warnings—in short, more data, more frequently, more accurately. That is what the supercomputer is about. For our urban customers, for the population of Australia, they can see if there is the risk of flash flooding, as we saw, tragically, in Toowoomba. If there is the risk of a hail event, precautions can be taken such as placing cars undercover. We cannot stop all of the effects of weather, but we can give people the opportunity to mitigate. That is a quick summary. It is an important acquisition and, at the end of the day, it is about better data for Australians and about saving lives.

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Link to this | Hansard source

I ask the minister a couple of questions about the Emissions Reduction Fund. Firstly, can the minister point to any modelling, conducted either internally by the department or under contract by an external organisation, around the likely abatement achieved through the Emissions Reduction Fund and its contribution to the five per cent target? In particular, does that modelling distinguish between abatement that is or is not consistent with internationally agreed methodologies? Regarding the Carbon Farming Initiative legislation that the minister introduced to the parliament today as the vehicle for this fund, obviously this essentially expands the land sector specific framework beyond the land sector to cover a whole range of other sectors that the minister would like to see covered by the Emissions Reduction Fund, including household and community energy efficiency and a range of others.

The economics of the potential abatement from these other sectors will obviously be different potentially to the economics of the land sector, yet, as I understand it, the government's intention is to asses all of the sectors on the same lowest-cost model. I am just wondering whether the minister can outline how the government intends to deal with those cost variations between those different sectors; and how an average weighted price disclosure, which is intended to provide the price signal for potential bidders, will have any validity if the contracts are highly variable.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

I am delighted to answer the questions from the member for Port Adelaide. It is good to see him on his feet. He has not actually asked a question in 9½ months in question time, but I have not embarrassed him in public about that fact.

Let me deal with part 2 of the question first in relation to the Carbon Farming Initiative extensions. The answer is very simple: we are using the lowest-cost purchasing model. That is the way to purchase abatement, and we are shamelessly, clearly, openly, purchasing abatement on the lowest cost. That was what we said we would do on 2 February 2010 and we have never deviated from that model. We have continued that through to this particular approach, and the answer is very simple: the clean energy regulator will produce a weighted average price for abatement and the way that purchasing will occur will be up the cost curve. So, as volume needs to be purchased, each successive unit will be acquired and, then at such time as the regulator has acquired all of the units which it needs to acquire, we will see a final price and that weighted average price is released. We are not differentiating by sectors and we have always said we would not do that.

As an example, if you have $100 to acquire units, you could acquire on a differentiated basis two units at $50, because you wanted to support a particular sector but you would only get two tonnes of abatement. Or you could acquire 20 units at $5 per tonne, if that were the cheapest. We will without doubt, without question, be purchasing the lowest-cost abatement. That was always our intention and that is how you can get the maximum efficient result for Australia. I think that that is very important.

Secondly, it is important to put this in the context that the world has two primary approaches. One is a carbon tax based system which is, for example, the European system—although they have high caps relative to actual production. They have more than 100 sectors carved out as being trade exposed, and many have said that the net contribution to emissions reduction is likely to be minimal, if not negligible, between now and 2020 such as the head of Point Carbon's research desk—Point Carbon being, arguably, the leading trading house in relation to the European scheme.

The alternative scheme, the clean development mechanism, produces abatement as an offset, which is then purchased on a lowest-cost basis. At the moment there are about 1.4 million tonnes of genuine abatement credits which are available internationally. The evidence is clear that the clean development mechanism, which is a model for what we are doing here, has produced genuine, low-cost abatement.

The second half of the question was in relation to the Emissions Reduction Fund. I will point the member to the work of Energetics. I will also point the member to the fact that the white paper sets out expectations. The modelling on which that was based is also set out in terms of the budget. The budget sets out a projected cash flow.

The full $2.55 billion will be available from day one. We have changed. We have made a policy change here: instead of the $2.55 billion being phased over four years, it has all been brought forward and is all available from day one. A projected cash flow has been set out, which is based on, obviously, the analysis of the department. What we cannot do of course is release the projected price, because that is commercial-in-confidence and would prejudice a Commonwealth tender. That work has been done. It has been done not just by us in terms of analysis; it has also been done by firms such as Energetics. What does it mean? We will achieve our targets and will achieve them easily. Most significantly, we will achieve them without a carbon tax.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. My question will be to the minister, and I am sure that you would be capable of answering the question, as you indicated earlier, but I will make sure I address it to the minister! It is in relation to the Swan and Canning rivers in Perth, but first I want to provide the minister with some context, obviously, on environmental issues in my electorate of Swan—environmental volunteering and some previous approaches to the environment in my electorate.

As the minister might know, Swan is like an inland peninsula, surrounded by rivers on three sides while on the eastern side there is a series of small lakes and swamps. It is a very environmentally sensitive area; it is a bit of a jewel in the electorate because there are not many people who are aware of it. But I know that the minister has been down there; he visited it with me some time ago. I do appreciate that and the people of Swan appreciated his taking the time to come and look at that particular jewel down in the electorate.

The people of my electorate interact with the local environment all the time and environmental issues are therefore particularly important in the electorate. I do remember that one of the first times I went down to the Canning River regional area, we were in the process of releasing some swans that had been injured. An environmental group in Victoria Park had retrieved them, saved them and brought them back to health, and we went down one Sunday morning and released them back into the Canning River. The only real negative to that was that about half a dozen planes flew over the top as we were doing it and scared them! But at the same time, the high aircraft usage over that area does have an effect on the environment down there.

The wetland areas were degraded over time, which has created many issues. Some of the degradation that we are still dealing with today includes use as a rubbish tip, which was on Burswood Island; dumping of toxic waste at Castledare in Wilson—chemicals being dumped in the area; asbestos being dumped in the area; and all of this, obviously, was not helped by antisocial behaviour like the dumping of shopping carts from the Carousel shopping centre.

There has also been an issue with the introduction of non-native species and weeds, which have taken over large areas and which have caused problems for aquatic life in the river systems. They have also reduced the biodiversity. A serious example of this is the hydrocotyle weed, which is one of the things that I showed the minister when he came down and looked at the Wilson Lagoon. That was introduced to the river in the 1980s. For those who do not know, hydrocotyle is an imported pet weed. It was initially in fish bowls but it was released into the local river area, unfortunately. In the right conditions it can double its biomass in three days to a week, creating a green mat over the entire area—particularly on the Wilson Lagoon. Since then it has caused major problems, and periodically there have been very bad years of growth; for example, 1992 and 2013-14 have been extremely bad years.

SERCUL, which is one of the local volunteer environmental groups down there—I am sure the minister is aware of them—has in the past directed over $77,000 to tackling the hydrocotyle over the past decade. The Two Rivers Catchment Group has directed $27,000 as well over the same time, but a greater investment is needed to finally get on top of this issue because it is causing enormous damage to the environment down there. This was at the heart of our proposal to the minister for the Swan-Canning River recovery program.

Much of the work to remediate the environment will need to be done at the local level by local groups. And even when the funding is delivered the larger body of work also tends to be done at the local level. The majority of the action involves weeding, revegetation and removal of the hydrocotyle, which is a pretty difficult issue. I went down there myself with one of the Wilson Wetlands groups and with a group of schoolchildren from Wilson Primary School. I put on some waders and went out into the lagoon and removed some of the hydrocotyle in there. It is an extremely long process which will require a lot of time from the local environment groups.

In the past, the Howard government's appreciation of the need for environmental action at the local level has been a strong focus. The focus under Labor has been solely on climate change and offshore credits, neglecting on-the-ground action down in the areas. This was epitomised by the reduction that NRM had in their funding under the last government.

But just to get on to the question: can the minister outline the government's Coastal River Recovery Initiatives program and the areas that will be targeted? And what funding has been allocated for the Swan-Canning rivers, and how will this improve the environmental health of the waterway?

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

I thank member for Swan for a comprehensive question. All up the government's coastal rivers recovery plan is $9.3 million. Of course, there is $1 million that has been allocated for the Swan-Canning River recovery plan. I will come to that in more detail in just a second. In addition, particularly with the member for Boothby here, there is $1 million for the River Torrens. He was a champion and a fighter for that. I also note that the member for Bass, who is here, was an inveterate campaigner for the $3 million for the Tamar River recovery plan. His river was dirtier than yours! So three of the key components of the National Coastal Rivers recovery plan are represented around the table in the chamber this evening. There was also $3.3 million for Tuggerah Lakes for recovery there as well as $1 million over four years for the Yarra River recovery plan.

Turning to the Swan and Canning rivers, there are three components which are addressed in the $1 million. Firstly and most significantly is weed removal, eradication and revegetation, as set out by the member. The hydrocotyle, as you have shown me, is a fundamental problem. Both rivers can be threatened by it. Each river has lagoon systems where the water is not running so quickly. I have with you inspected the site, seen the challenge and it was precisely because of those site visits and the support of the community and the state that we determined that this was a genuine and necessary problem. I know it affect electorates of all persuasions. The Labor-held electorate of Perth will also benefit significantly from this program, as it should. At the end of the day it is about maintaining and improving the health of one of our fundamental urban riparian assets.

The second component of the Swan River recovery plan is community education. It is about ensuring that the sorts of shopping trolley issues and urban pollution issues to which the member for Swan refers are mitigated—that they are reduced,. The lessons around the country are very clear: if you engage your school children early, if you engage your secondary school students, then you can have an impact on the community as a whole. We cannot guarantee 100 per cent community compliance, because that is the nature of who we are and what we are as a society, but we can make a dramatic difference.

The third of the changes is in relation to community action, and that is supporting particular community groups to engage in on-the-ground physical work. It could be replanting, it could be riparian recovery, it may be the development of habitat for threatened species in particular along the Swan and Canning rivers.

Only a few short hours ago I did sign-off on a brief allocating the funds to the Perth NRM. But after consultation with the member, the significant condition which I had placed on it is twofold. Firstly, the condition is that there will be zero dollars used by the Perth NRM for administration—100 per cent of the funds, $1 million of the $1 million allocated, must be used for cleaning up river in the three ways outlined. That is a direct consequence of the rightful demands of the member for Swan that every dollar goes to cleaning up the Swan and Canning system.

The second condition is that the allocations are notified to myself beforehand. That allows proper consultation and openly I say with the member here to ensure that he and other community representatives believe that all recipient bodies are appropriate bodies with full probity attached to them. We will, of course, do our probity checks but I wanted to make sure that there is a second line of defence. I think the member. This program would not have occurred without the support of people such as the member for Bass, the member for Boothby and the member for Swan and this project would certainly not have occurred without the tireless and indefatigable advocacy of the member for Swan.

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Link to this | Hansard source

I want to ask the minister a couple of questions about the National Water Commission, which has been abolished under this budget. As the minister knows, this is an independent statutory authority that has been in place since well before the election of the Rudd government—I think for 10 years or so—that was set up as part of the intergovernmental agreement with COAG on national water issues. Its functions include triennial assessments of the performance of the states, implementing the National Water Initiative, advising and reporting on performance of the water industry more broadly under the National Water Initiative, delivery of the planning report card on the status of water plans that are in place across the country and delivery of national performance reports on the performance of both urban and rural water utilities. As the minister also knows, the Water Services Association of Australia and the Australian Water Association have both expressed grave concerns about the abolition of the National Water Commission.

Some of these questions were asked in Senate estimates without any clear answer. I wonder whether the minister can provide some more clarity around which functions currently undertaken by the water commission will be discontinued. For those that will continue to be undertaken, by whom will they be undertaken? If those decisions have not yet been made—if the minister is not able to answer those questions in detail—when will those decisions be made and announced to the parliament and, perhaps more importantly, to the sector and to the community? As I have outlined, the functions of the water commission involve very significant interaction with the states and territories but also with the water industry, represented by the two associations I referred to. I wonder whether the minister can detail the consultation undertaken with those bodies prior to the decision to abolish the water commission. Also, what discussions have taken place, in regard to those questions I have raised, with the states and particularly those party to the intergovernmental agreement, since the decision was announced to abolish the water commission?

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

In response to the member for Port Adelaide's question, let me begin with two overarching principles: I began this discussion of the portfolio budget by framing it in the context of the $240 billion deficit overrun which occurred over the last six years. This is done against the backdrop of an extraordinarily expensive national budgetary crisis which we have faced, so it is something that we have always intended to address and which we said we would address. The second background item here is that the Murray-Darling Basin Agreement has been completed. Much of the preparatory work for that has been done by the National Water Commission and we have seen, with the grand achievement of the Murray-Darling Basin Agreement having been endorsed by all relevant states, that we now have an operating system which we can all be proud of.

The role of the National Water Commission—as somebody who was integrally involved in helping to establish it—was first and foremost aimed at ensuring that we would reach the Holy Grail of a Murray-Darling Basin agreement. That was its raison d'etre, its purpose, its reason for existence. We have achieved that primary outcome. Institutions at a governmental level are not necessarily meant to live forever. It is sometimes a mark of their success that they have achieved their outcomes. In a government with over 900 different agencies, organisations or commissions, if they can then be slimmed down to a number which might well end up being half of that then I think that is a sign of success.

In this particular case, we think that the National Water Commission achieved its outcomes. The Murray-Darling Basin Agreement was a fundamental outcome. We are proud of what has happened. I particularly want to congratulate my Parliamentary Secretary, Senator Simon Birmingham, a senator for South Australia. He worked to complete the task which had begun at COAG in 2004 with the Intergovernmental Agreement on a National Water Initiative. That task has been significantly achieved.

In terms of the monitoring and reporting, I can make a statement to the parliament that the functions will overwhelmingly be adopted by the Department of the Environment. They will be brought within the relevant water unit. I think they are well-equipped and capable of handling those functions and will do that with great distinction.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Minister, can I first of all thank you for your commitments to the Tamar River. As I recall, the genesis of the three-year plan that has just been approved in the budget was on a famous day, 4 July 2012, on a very cold morning in Launceston, when there were good discussions with some key stakeholders that have resulted in the plan to deliver a healthier Tamar River.

I am mindful of the time limitations so I will quickly ask you about the status of the process to procure a new icebreaker to replace the ageing Aurora Australis. Can you outline the government's commitment in the budget to our Antarctic program, update on the status of the icebreaker and explain how the government's commitment to Antarctica will benefit Tasmania?

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

To the member for Bass, let me make this point. Firstly, as I noted earlier, you were personally an absolute champion, an indefatigable champion, for the Tamar River recovery program. Secondly, as one of the Tasmanian team, the member for Bass, along with all others advocated for the replenishment of the Antarctic program.

There are two parts to this: the capital acquisition and the research. The interesting thing is that the need for a new icebreaker was self-evident. The Aurora Australis is the best part of two decades old. It has really reached the end of its operation lifetime, which will be strung out for longer perhaps than it should be, but I am assured that all the safety protocols can be met. Nevertheless, we have needed for some years now a new icebreaker. In this budget we made the commitment to acquire a new icebreaker, and the funding has been set aside. There was a black hole—critical national infrastructure was not funded. It is now funded. The exact amount will be subject to a tender but, as I have said elsewhere and earlier, a global figure of $500 million covers the cost of the icebreaker and the Bureau of Meteorology's supercomputer easily.

What will this do? It will allow us to have a world-class research platform. It will allow us to have a world-class logistics and supply vessel. It will enable us to reinforce the bases at Mawson, Davis and Casey. In particular, it will allow us to ensure that our sovereignty is established beyond any point of doubt whatsoever. Under the Antarctic protocols and treaties, what is fundamental is usage, and if you are not maintaining a presence and usage then you place at risk your claim for sovereignty. For all those reasons, the new icebreaker is fundamental. But in terms of scientific research we could not have a more valuable fundamental platform.

This brings me to the second part of our commitment. There are three programs which we have endorsed which are going to assist with the long-term research and logistics capability of our Antarctic program and are all about establishing Tasmania as the global gateway for Antarctic activity. Firstly, we have reaffirmed the $25 million for the cooperative research centre on Antarctica. Secondly, we have established the global gateway partnership between the University of Tasmania, the CSIRO and the magnificent staff at the Antarctic Division—all world-class researchers, but I am particularly proud of the researchers at the Antarctic Division led by Tony Fleming.

The third thing we have done is to provide $48 million for the extension of the Hobart runway. That $48 billion serves many purposes. It serves purposes for general commerce, general tourism and general trade within Tasmania, but in particular it equips the runway to be a logistics hub for activity in and out of the Antarctic. When you put the new ship, the new research and the runway together, this is the biggest single investment in Australia's Antarctic program in Australian history. This is a very important step forward. It is critical. It is the right thing to do for the environment. It is the right thing to do economically, because many other countries have expressed deep interest in having Hobart or Tasmania as their logistics hub for Antarctic activities. And it is the right thing to do in terms of our national strategic interest.

Just before I conclude, I want to thank all the members of the department and my office who worked on the budget. The department staff were led by Matt Whitfort. He and his team did an extraordinary job during the process of the budget preparation. Within my office, I want to thank my chief of staff, Wendy Black, and Tamay Rigzin, as well as all the other staff.

Proposed expenditure agreed to.

Agriculture Portfolio

Proposed expenditure, $485,125,000

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

This is my first roll of the dice in the Federation Chamber in this process of the budget. Agriculture has been a vital industry and will be a vital industry for where our economy goes. It is a statement of fact that, if we did not have an agriculture industry, then we would not have the nation that we currently see. This nation was in the past strongly reliant on its development through agriculture, and I believe that that is coming back to the fore again.

I have been extremely happy with the process that agriculture has been going through since we attained government. I feel there has been a real return to the Australian people because of that. I note with some interest that, in the quarter ending in March, we had a 19.3 per cent increase in agricultural income, and it was 19.3 per cent in the same quarter in the previous year. This shows a trend, and this trend is underwritten by a whole range of factors that we have been concentrating on intently.

One of the issues is re-establishing the live cattle and sheep trade in a form that is bringing real dignity back into people's lives. I was happy to see that in Western Australia the other day they were getting up to $153 for sheep. This brings substantial change to people's lives, who get the dignity of a substantial cheque coming through the door on the sale of sheep. This allows them to reinvest in their property and brings dignity into their lives by allowing them to do some of the things that everybody else takes for granted—maybe it is renovations around the house, maybe it is buying themselves a new car.

This is the sort of outcome you would expect for people who go through the privations of living remote to many social services. If their job is one where they cannot get all the social services that one would expect, living in an urban environment, then we hope that the quid pro quo is a reasonable return for their endeavours. I am also happy to see that, in the timber industry, we are getting a large pick-up in the export of timber. We had a record number of live cattle moved in April, over 170,000. Prior to that—I think in the month before that—we had a record amount of frozen beef, 108,000 tonnes. When you stack all these things against each other, you can see that agriculture is not only starting to provide a real return to the people on the land but also managing to help our nation.

I will give one classic anecdote about that. Back in the month of January, we suspected that the nation would make a $100 million loss, a $100 million deficit. We actually made a $1.4 billion surplus—a $1½ billion turnaround. That was predominantly driven by agriculture. We had an excellent crop coming off in Western Australia—we got about 6.2 million tonnes of that onto the ships—and we had good outcomes in the live cattle trade, the live sheep trade and the export of frozen beef, chilled beef and chilled mutton.

Let me turn to some other areas. We have managed to finalise a free trade agreement with Korea, which has brought about a substantial reduction in tariffs, especially in the beef sector, and ultimately they will go down to zero. We have finalised a trade agreement with Japan, which has brought about a substantial reduction in tariffs. We are currently in the throes of negotiating the Chinese one. I have had discussions with the Chinese departments, and Minister Gao from China was here in the last fortnight. We were very focused on what we are doing there. Some of the increases in exports to China have been incredible. They have been 500 per cent in a year in some sectors. There has been an exponential increase in beef exports. These all augur well for a good outcome.

On the back of that we have also had to work closely on drought policy. We have been managing to deliver good outcomes on drought policy, good outcomes on infrastructure and great outcomes with the recent $100 million further investment in research and development in agriculture. That basically takes our total to around $700 million a year. I look forward to participating in this process over the next 45 minutes. We will see how we go.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

This is the Minister for Agriculture's debut in this process, as he mentioned. I congratulate him on his tie. I do not know whether that counts as blue, but it is close enough. May the Blues have a great win tonight!

I advise the minister that this should be a pretty painless 45 minutes for him. The minister and I have talked often about our best endeavours to take a bipartisan approach to this portfolio. We together believe it is too important an area of public policy to be playing political games with. We are very conscious of the very short political cycle at the federal level—three years—and the need for long-term planning and certainty in this sector.

I am a little bemused though by the minister's own scorecard, claiming that everything that has happened in a positive sense in agriculture over the last 10 months has been due to the good work of the Abbott government. I challenge him throughout these 45 minutes to tell me how the rise in timber exports, the increases in frozen beef exports—and he mentioned that about four times—the bumper wheat harvest and the free trade agreements, signed or otherwise, are as a result of anything he has done.

He will of course claim some success in the live trade. He is always very keen to mention that. He mentioned that four times as well. I often think that for the minister if it does not moo it does not matter. This is a very diverse portfolio. I understand how important the beef industry is in this portfolio but there are other dimensions, Minister, to the agriculture portfolio, including forestry and fisheries, which you decided not to include in the name of the portfolio.

The minister can attempt to claim credit for all of these things but he will need to provide over the next 45 minutes some evidence of something he has done that led to the outcomes he has been talking about. Of course he will say that things have improved in the live trade sector. I have said many times that the pause in the live trade sector was unfortunate and I regret it. I would like to think that, if I were the minister at the time, there would have been other alternatives available to the government. I often also make the point that this country probably would not have the best animal welfare system in the world now—ESCAS—if it were not for the pause. It is doubtful that the industry would have ever embraced ESCAS if the industry had not been paused. Those opposite when they were in opposition always criticised ESCAS, but now in government whenever they are in a battle with those who have as their key focus animal welfare they invoke ESCAS as the great system that Australia possesses now as a defence against those charges.

I believe the government has got off to a pretty slow start in agriculture, and I am here to help in any way I can. I think the agriculture white paper, while possibly justifiable, presents policy inertia for the country at a time when we are really in a hurry. We have hundreds of reports on reviewing the industry, reviewing our outlook and reviewing where we need to go as a sector. I think it is just time that we got on with it rather than spend a year trying to reinvent all those reports through the white paper. I notice the member for Hume here. He is the author of one of those very good reports. Maybe if the minister had just spoken to the member for Hume, we could all have saved some time.

I am excited about the Agriculture portfolio and the agriculture sector. I believe that what I have described as the dining boom presents this sector with enormous opportunities. The extent to which we capitalise on those opportunities will depend on how hard we work at those aspirations. We do need strategic plans, proper assessments of where we are going, and we need a big injection of infrastructure in our supply chains. The dining boom is not going to deliver for Australia because we are lucky. The dining boom will only deliver for Australia if we put in the effort, have the correct strategic plans, we attract the investment we need in those supply chains and government policy is set correctly. Of course, it will not be just about larger volumes. It cannot be just about volumes. To pluck a number out of the air, we might be able to increase volumes threefold, but that will not bring us the dining boom as I aspire it to be. It is high yields and high-value products which will deliver off the back of the dining boom, and that is where we need to focus. R&D will be very important. (Time expired)

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

I think it is important to reply in kind at the first available opportunity to what the shadow minister has brought about. Today one was the monkey grinder and the other was the clown—

An honourable member: Organ grinder!

Right. But I do commend the shadow minister because I do believe that there is a general view that agriculture policy is similar to defence policy. It has to be consistent. We do not want wild oscillations of policy, because people on farms do not plan for three years, they plan for 30 years, and therefore we need consistency. I am sure the endeavours of both sides will be to make good decisions better rather than make holistic changes that create major uncertainty.

I would also like to commend the work that has been done over such a long period of time by John Cobb, who is here today. He has had very strong involvement at a personal level, owning a farm, in agri-politics and also in politics itself. However, I have to take up one thing straightaway. People ask: 'What are some of the major changes?' I will give you a major change between when the Howard government finished and when the Rudd-Gillard-whomever government finished. When the Howard coalition government finished, the budget in agriculture was $3.48 billion. In the last Labor budget it was $1.6 billion. So the Labor Party cut $1.88 billion over their tenure. This is a substantive change for our attention. I look forward to the opposition's policy showing reinvigoration for that. How their policy addresses some of the issues rests a lot on the shadow minister's shoulders. One thing I do want is real competition—competition of ideas—because that helps progress where agriculture goes.

I can quickly point to some clear changes. When we came in, we had the concessional farm finance package, which I acknowledge the Labor Party drew up but they just never signed it off. Because it was never signed off, it could not be delivered. We had a package which was not signed off and was not actually designed for the people who were to use it. We had to completely recalibrate it. Because we wanted to get all the states and territories signed off, we had to go around to get them all to sign off. To the extent it was designed, it was inoperable, because it wasn't signed off by all the states and territories. We had to do that and we had to reallocate money. So we had the same amount of money, God bless them, going to Tasmania—that is fair enough—as we had going to Queensland. One area was in the middle of a drought and the other area wasn't suffering the privations of a drought. We did that. It was the coalition that did that, and the people are getting that money because we organised that.

The next thing is we also found money for water—that is definitely something that we did; $10 million—and we have been receiving strong support in that policy initiative, because people like the capacity of getting new watering points out on their place. That is something we did.

On 4 March we got the changes to the interim farm family payment, and now over 1,400 farming families who have been doing it tough have been receiving payments in access of $900 a fortnight. It is amazing when people say, 'You haven't actually done anything in agriculture. You haven't got any money out.' That is an awful lot of money and it has been going out, and we have been doing that. So we did that.

The free trade agreement to Korea was not signed off; we did that—that was another thing we did. The progress that has been made with the ag white paper, which was a clear statement by the coalition of their intent to have a holistic and very discerning view on where agriculture goes and create a policy format that becomes not a direction of the— (Time expired)

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

I will invite the minister before closing tonight to give the parliament an update on the white paper, the timing of the initial paper, the final paper and maybe some information about the process leading up to the completion of that document. I will ask the minister next time he gets to his feet to tell me exactly where. He has cited live trade, timber exports, frozen beef, bumper wheat harvests—and I assume he was referring to WA—and the free trade agreement. I ask him how what he describes as reconfiguration of the concessional loans package brought any of those outcomes; how additional money for water infrastructure, as he calls it, has brought any of those outcomes; how the family payment—and of course there has always been a family payment, Minister—has brought any of those five outcomes; and how the free trade agreement, which is not yet ratified, has brought any of those five outcomes you boasted about and claimed credit for tonight.

I have got so many questions to ask. I wasn't sure where to start but you have taken us to the concessional loans scheme, so it is probably as good a place as any. You said, Minister, that you reconfigured Labor's concessional loans scheme. It is untrue to say that the states were not signed up. There was one outstanding state, Western Australia, when I left office—and you do not need to look to your advisers; I can confirm that for you, Minister; I can assure you that that is the case. It is true that you took money off some states and transferred those amounts of money to other states—and of course the losers were the smaller states of WA, Tasmania and South Australia. You say that that was a ridiculous arrangement, because some of those states obviously were not suffering bad drought—partly true, Minister. But you have to recall that the concessional loans scheme wasn't a drought package; it was a drought relief package and, when it was constructed, the farm sector in Australia was not facing severe drought. It was never a drought package. Yes, if drought was one of reasons farmers were struggling to deal with their debt, then that would feed into that process. So it is wrong to say that, Minister, and you know it is wrong.

My question to you specifically on this is: what methodology was used to determine which states would receive the amounts taken from the smaller states? What consultation was undertaken with the smaller states before that money was taken? More particularly, the money you took away was more than the money you distributed to Queensland and New South Wales—a substantial difference; $40 million, if I remember correctly. You made a commitment that that $40 million would be put back into the concessional loans system—that is, the original concessional loans scheme. I ask you: has that money been put back; and, if not, do you still guarantee that that $40 million will be returned to that particular package?

I take you to your package, Minister, what I call the drought concessional loans scheme, which you implied tonight is assisting farmers as we speak, but, as I pointed out in question time today, on my last advice—and I would be very surprised if it has changed—not one farming family or farm enterprise has been a beneficiary of that drought concessional loan package since its implementation. I remind you that you first announced that scheme late in February. We are now well into June and that has not been bedded down. You stand here and criticise the design of Labor's concessional loans scheme, which, as you know, is flowing to farm enterprises and farm families, and yet your own scheme is not flowing. So I would really appreciate answers to what I think are very, very reasonable questions.

On the issue of the transitional or family payment, you know that welfare payment has always been part of drought. It is the one thing that has survived the COAG reforms. You should not claim that that is a big step up by this government. We were happy to support the changes you made and facilitate them to the parliament, but you might tell me whether it is true that those who are in receipt of those payments are therefore denied certain social services under the rural counselling scheme. I was just outside Emerald last week and I was informed that people are being denied certain services under what is generally known as the rural counselling scheme because they have taken up the offer under that family payment arrangement. If you would confirm that for me, it would be very much appreciated.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

Australia is incredibly fortunate to have a very high status of freedom from a vast array of exotic pests and diseases. If any of those were to establish themselves here in Australia, it would potentially decimate large sections of our primary industry sector. You only have to look at the Varroa mite and the colony collapse disorder that has affected the bee industry overseas and the screw-worm fly, which exists as close as Papua New Guinea. There was an isolated outbreak in Wagga; fortunately, it was snuffed out. Carnal bunt is a fungal disease of wheat found in the USA, and there is a vector insect, the glassy-winged sharpshooter, which introduces Pierce's disease, can decimate the wine and grape industry and is afflicting the North American grape industry. Recently, we have had the Asian longhorn beetle, the brown mulberry longhorn beetle and Japanese soya beetles identified in some wood products. There were some press releases about it. You can see what potentially could have happened to apples, pears and stone fruits. Some months ago, a chocolate banded snail outbreak was also identified. So there are all these exotic pests and diseases.

Our overseas colleagues and trading partners say that a lot of this is just a beat-up, but really it is a major threat to our isolated flora and fauna. Minister, in light of these ever-present threats that exotic pests and disease pose to us, how important is it to get the correct government structures and governance in place for our national biosecurity efforts?

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I call the minister.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Madam Deputy Speaker, I am on my feet at the table. Why would you not be calling me?

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Because the last time you jumped to your feet—

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Madam Deputy Speaker, I am sorry. You must go government then opposition.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Excuse me, the last time you spoke you did not have the call. I had not given the call to you and you had spoken twice. I have given the call to the minister. Please resume your seat.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

If you do not call me, Madam Deputy Speaker—

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Resume your seat.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

You cannot do this.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Resume your seat.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

No, you must give the opposition the call on this occasion. You might want to seek advice from the clerks. I am happy to give you that opportunity.

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

Don't let them bully you, Madam Deputy Speaker.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I give the call to the minister to respond to questions so far.

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

I intend to address some of the issues that were brought up by both the shadow minister and the member for Lyne. I have now been advised by the department that, when we had carriage of the concessional farm finance package, there were only three states—Queensland, Western Australia and Victoria—that had signed off on it. The statement made by the shadow minister of 'all but one' is incorrect. We had three. In the Commonwealth of Australia there are more than three states, last time I checked, so we had to get the others to sign off. We had to progress this deal. There is always an issue with picking up the paperwork from the Labor Party and trying to finish the job off. They never get there. It is always like a packet of poo tickets caught in the corner. You have to try to fix it up, sweep it up together and try to make some sense out of it.

What we also had was this complete confusion. Yes, there was a presumption that the number of farmers we had in Tasmania—and Tasmania is a great place—was the same as the number of farmers we had in New South Wales. It was an absurdity. After we got everybody signed off, we had to redesign the whole thing to make it work.

With regard to some states, and I refer to Western Australia, they placed conditions on how they were going to lend the money in that concessional farm finance package out. It did make it vastly more restrictive than other states, and it was difficult for those farmers to get access to it. So what did we do? When we got the $320 million package through, we made it so that it was generic—so that people could get an equivalent loan in different states and territories. This is the sort of process you do to try to make a program work.

Moving on to biosecurity: biosecurity is terribly important. I think that, throughout the room, people understand that if we do not maintain our most competitive advantage—that is, our clean, green image—then we have real concerns. That is why, even in the last week, we have been on the front foot making sure we deal with the detection of three beetles. It might sound innocuous, but they were not George, Paul and Ringo. We had the longhorn beetle, the mulberry beetle and the sawyer beetle and these have the capacity to devastate our timber industry, as they have devastated Canada's. We have been on the front foot. We have been ventilating this issue. We have been making sure that we track it down. We have been getting the quarantine in place and collecting all but, we believe, a few pallets that are around Adelaide. This is where we have to make sure we have the competencies in that field that are so apparent in the Department of Agriculture. I am happy; we stand behind that program and are making sure the Department of Agriculture has a front-line role in all the mechanisms of connection so that we can detect these issues.

If we had an incursion of foot-and-mouth disease, the person who brought it in would probably not even realise they had it. They could have been backpacking in Nepal. If they brought it in, we would have to shut down the beef industry, the sheep industry, the wool industry, live cattle exports—the whole lot. The whole lot would shut down. It is absolutely imperative that we keep up our image and we are doing that.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

That was a filibuster, but I agree with the minister that our clean, green, safe image is our greatest competitive advantage. I challenge the minister when he is next on his feet to tell us what any initiatives of the government—this government—have added, in the course of the last ten months, to biosecurity in this country.

The minister likes to talk about concessional loans in the areas where he feels confident, and of course he has some advice about three states. My advice was different. We will have to agree to disagree on that, Minister. But you did not answer my specific question, so I am therefore going to come to some conclusions about the answers. You chose not to guarantee this House that the $40 million would be returned to the original concessional loans package; therefore, I can only come to the conclusion that that money is back off to consolidated revenue and will be denied to the farm enterprises of this country.

You did not deny that no-one in this country is a beneficiary of your drought farm financing package so, on that basis, I assume the answer to that is 'yes'—that is true: no-one is yet a recipient. You did imply that it is all fixed now and ready to go but my advice is still is that it is only Queensland farmers that have access to that scheme, so if you are not prepared to tell me otherwise then I think it is reasonable for me to assume, and for farming families out there across the country to assume, that that is also true. I would invite you to answer those questions.

Of course, you did not advise me that consultation was undertaken with the smaller states before that money was ripped away from them so, again, I can only assume that you are confirming by your silence the assertion I have made.

I want to move on to research and development. I made the point at the end of my opening remarks that it is research and development and innovation that, more than anything, is the extension that will bring us the real opportunities in the dining boom. I do note, and I congratulate the government, for fulfilling its election commitment to put an extra $100 million into R&D—over a four-year period, I should mark. But that is a welcome thing. I invite more detail from the minister about how that money will be spent, and I also ask the minister: what the net effect of R&D is in agriculture, given that it seems he did enhance R&D spending on one side but cut R&D funding to organisations like RIDC—the Rural Industries Development Corporation—to organisations like the CSIRO and to various CRCs in this country? Indeed, this includes certain higher learning institutions. So I do ask the minister whether he can tell us what the net contribution to R&D in the agriculture sector will be as a result of those two sides of the formula?

I would also ask him about another very important area, and that is regional sustainability. It was a great disappointment to me that resource sustainability did not form part of his terms of reference for his agricultural white paper. I just do not understand how you can talk about agriculture's future in this country and the opportunities in Asia without talking about how we produce more food with the same limited and, in some cases depleted, people, land and water resources. That leads me to questions on a bill that has just been introduced today, and that is the government's Carbon Farming Initiative. He might want to address my primary concern in that area, and that is the likely noncompetitiveness of the agriculture sector when bidding for funding under that scheme.

I would expect, Minister, that there are many other areas of the economy which will be able to abate carbon much more cheaply and competitively than will the agriculture sector. Therefore, I am concerned in this reverse auction-type arrangement that the government proposes in the parliament, that the agriculture sector simply is not going to be able to compete for funding under the new Carbon Farming Initiative, and therefore will be cut off from assistance under that scheme.

In addition, I understand that the R&D component of the former regime will be reduced, if not abolished, further undermining the capacity of agriculture to secure credits under that scheme. So if the minister could help us better understand that, that would be very much appreciated.

John Cobb (Calare, National Party) Share this | Link to this | Hansard source

Initially, I mostly want to speak on the APVMA, which is a semiautonomous body but which has the ability to affect agriculture profitability, efficiency, ability to export and what we allow to come into Australia enormously.

Twenty-five years ago Australia was the first place that chemical and veterinary medical companies came to get their products registered because if it was accepted here then it was accepted right around the world. It was efficient, it was fast and it was very well-respected. That has changed to an enormous degree. We are now the last place that chemical and veterinary medicines are brought to be registered. It must be remembered that we are not a big market in the scheme of things and a lot of companies feel that they do not need to cater for some of the things that we do need.

I realise that, and I appreciate the shadow minister falling in with us on the amendments to the legislation that got rid of the issue of having to automatically re-register chemicals on a time frame. That was ludicrous, and it is good to be shot of it. However, that does not make or force the APVMA to meet time frames, which they have never done—they have ignored them in the past. It has not meant that they have to take notice, particularly with chemicals, of countries that are as good as the USA and Canada, who do not want to kill their population or their animals or their plants either. They do very good work. The APVMA is not forced to make use of work they have already done. They always reinvent the wheel—the legislation allows them to. But as they have not done it at any time recently why would they want to do it now?

I think that the only way that the bureaucracy will do what they do not want to do is if they are forced to by competition. I am interested to know if we as a government are looking at making some of the testing contestable so that outside sources can come and do it—certainly as well and, I am sure, a damn sight faster than the APVMA does. They have enormous ability to help agriculture, which is not actually its job—its job is to protect people—by being fast and efficient, and a hell of a lot faster and more efficient than they are now. The fact that this is totally cost recoverable means that they feel no pressure to get a move at of the best of times.

I am very interested to know if we are looking at contestability and what we are doing? It is obviously not good enough for a government to say that this is an autonomous body and they are a creature of government. We either force them to do what they should do well by making it contestable or by legislating to make them. I am very interested to hear where we are going on this. I appreciate the amendments to the legislation, but, to me, one of the biggest things facing agriculture is the bureaucracy and the bodies which we pay for and control working with agriculture and not seeing themselves as regulators and agriculture as their creature.

One other question I have is: where we are up to in assisting the Queensland government in dealing with their issues of Johne's disease the north with cattle?

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

I take this brief opportunity to simply reinforce the questions that I have put to the minister on the various concessional loans schemes. My additional question is: can the minister advise the House what will happen to the $40 million budgeted this financial year under the Drought Concessional Loans Scheme, given that it is hardly likely that he is going to be able to spend that money this fiscal year?

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

To the member for Calare: I would not jump the gun that he has actually got these amendments through the Senate. It is actually stalled in the Senate. We have got ourselves a bit of a—

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

It has stalled in the Senate, Minister? That is news to me.

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

So we have got a few problems over there, and that is not the first piece of legislation that has stalled over there by reason of the Labor Party.

I just want to quickly go through a couple of the things that were also brought up by the member for Calare. With regard to APVMA, I acknowledge that there is a strong desire in some instances by people wanting the minister to have a greater determination in what is available. This would move away from the belief in the independent scientists having complete oversight. As I have said before, I have to be little bit cautious because, if I had greater oversight, then maybe I would approve the use of DDT. But I do hear what you are saying. We do have the discussions with the independent scientists, especially in more recent times on fenthion, to try to make sure that we can get the greatest amount of information that we can possibly get on how we can work with growers so that we can assist them.

If there was to be a greater say for the minister it would require a legislative change and I think quite some discernment into what latitude you gave the minister, because just as you can assist people you could also end up in a position—hopefully neither myself nor the shadow minister but maybe somebody else who have a completely different view on the world—where they would go beyond where the independent scientist wish to be and would start banning things that would otherwise have no reason to be banned.

I have had discussions lately my office with a major chemical provider and it works both ways. He was saying that we were to quick and that it was not given the proper oversight and therefore the major chemical company felt that they were exposed because Australia in some instances is too quick in its registration of chemicals and they did not believe that their intellectual property was well protected in that space. However, I do note and I have noted from my own ministerial advisory council, precisely the issue is the member for Calare brought up, and that is that people want a greater capacity for APVMA to use existing knowledge as has been determined overseas and also to not completely go back over covered ground in registration of certain chemicals. I am having that discussion with APVMA via my department on precisely that.

With the issue of Johne's disease, there has been a request by Queensland for us to include in our levy structure a levy to assist Queensland in the eradication of bovine Johne's disease. I have a hesitancy to do that because, first of all, the Auditor-General has told me to have hesitancy because I am not allowed to. Apart from that, it opens a bit of a Pandora's box that every state then, when they want a levy, will arrive at the door of the federal government to impose it. Queensland has an alternate capacity to create a levy to control bovine Johne's disease themselves. I do not want to start picking up their washing.

Going back to the issue of concessional loans, as I have said, Western Australia being a classic example, if on the concessional farm finance package, which I commend the shadow minister for now calling the drought package— (Time expired)

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

I have spoken many times in this and other chambers about the opportunity in agriculture. I know the minister has spoken about that earlier, as has the member for Hunter. In the time that remains, my question for the minister is: how will the agricultural white paper help the farmers of Australia to capture the fast-growing opportunities in agricultural markets in Asia?

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

I thank the member for Hume, who I know has a very strong and very deliberate understanding and passion in agriculture. The white paper has received close to 680 submissions. It has had more submissions to it, I believe, than any other white paper that has ever been—in recent memory, anyhow—before the parliament. So I am informed. I am willing to be corrected, but that is the mail I am getting at this point in time. We have had around 25 face-to-face meetings—

Opposition Members:

Opposition members interjecting—

Barnaby Joyce (New England, National Party, Minister for Agriculture) Share this | Link to this | Hansard source

Does it? How many has it got?

An opposition member: Over a thousand.

Okay, I stand corrected. If you are correct, it is 18c.

With his information we have the capacity to deliver a policy platform, because ultimately this becomes a policy document. I have carriage of it but I do not have the passage of it through cabinet. It becomes a document of the Prime Minister. As I have said before, if you vote against it, it is called a 'career move'!

An honourable member: Stop it!

You are using time up! I want to get back to his concessional loan issue—I think it is only fair. With the white paper, we have had the issues paper out, we are eminently about to release the green paper, which is the range of alternatives, and from that we intend the white paper and its conclusion will be drawn down around about November or December. With this it will be able to cover everything from infrastructure, such as we are currently driving towards inland rail, creating greater connectivity between mining infrastructure and agricultural infrastructure. Also as part of that purpose I have been appointed as the Minister for Agriculture to be chairman of the dams committee. We all know that water is wealth and when the Prime Minister decides to have a dams committee and there must be an intention to build dams.

Our nation in 1980 had about 4½ megs of storage per person. We are down to around 3½ now. If we continue on our way we are going to be down to about 2½ megs of storage in 2050. That is just insufficient. Australia has to take the next step in dams. This will be something that I hope we get, because I know the Australian people want us to take the next step—overwhelmingly. There will always be a contingent that lives with the benefaction of dams and the benefaction of so many resources, but they never want anyone else to advance their position. But I believe this nation in the dams committee, which is also an integral part and is meshed within the white paper, is going to be so very important in advancing agriculture in new parts of this nation, especially in the North.

I note that the member for Flynn is here. In the Fitzroy catchment are some of the better dam sites in this nation. We have already been dealing with it. One of the biggest inhibitors of us actually progressing the dams issue in so many instances is excessive environmental green tape. We have the engineers that can do it, we have a workman who can do it, we have the plant operators who can do it, we have the farmers who can benefit from it and we have the hydroelectricity we can generate off it. The biggest impediment is ourselves. We have got to make sure that we reduce that impediment. Not remove that impediment completely, but reduce that impediment in certain areas to do something that allows us to progress.

In the member for Flynn's electorate, Nathan Dam is held up by the boggomoss snail. This boggomoss snail is almost but not quite as powerful as the Booroolong frog, which managed to stop Chaffey Dam for I do not know how many years. But the boggomoss snail has been having a whale of a time and it is holding up a fundamental mechanism for the advancement of the economy in the Fitzroy Basin for both flood mitigation for the development of jobs and also doing something that the Australian people have always wanted to do, and that is move water from one catchment into the Murray-Darling. We can do that. We have the capacity to do that. Likewise, a dam that was in my area on the Apsley River was stopped by Neville Wran. (Time expired)

Proposed expenditure agreed to.

Debate adjourned.

Federation Chamber adjourned at 19:04.