Michael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

Supply Bill (No. 1) 2020-2021, together with Supply Bill (No. 2) 2020-2021 and Supply (Parliamentary Departments) Bill (No. 1) 2020-2021, seeks appropriations to facilitate the continuation of normal government business.

These bills are necessary to ensure the proper functioning of government services and the continuation of vital programs in an environment of global economic uncertainty resulting from the coronavirus pandemic. This economic uncertainty impacts the forecasts on which the federal budget depends. Consequently, the government has decided to reschedule this year's federal budget to 6 October 2020. This will also ensure that the 2020-21 budget can set out the path to economic recovery.

This delay of the budget does not, however, stand in the way of timely and comprehensive responses to the present health and economic challenges. This week the government has brought forward a wide-reaching package of legislation, including the expenditure, tax relief and streamlined regulatory measures, to support its coronavirus economic response.

Supply Bill (No. 1) 2020-2021 provides for appropriations for a proposed expenditure on the ordinary annual services of the government for the first seven months of 2021. This is slightly longer than the customary five-month contingency that has been provided in some recent supply bills. In the present uncertain circumstances, it is important that supply arrangements include enough contingency and ensure adequate time for parliamentary scrutiny of appropriation bills.

The bill seeks approval for appropriations from the consolidated revenue fund of just over $76.3 billion. The appropriations proposed in this bill are broadly based on seven-twelfths of the estimated 2020-21 annual appropriations. The 2020-21 estimates are largely the 2019-2020 base adjusted for economic and program specific parameters and the effect of decisions announced as part of MYEFO or included in the 2019-20 additional estimates appropriations bills, plus of course the COVID-19 related measures.

The bill must be passed in this session to ensure funding is available to all entities from 1 July 2020, thereby ensuring the continuity of program and service delivery. The seven-twelfths allocation are adjusted where necessary for programs or agencies that are expected to face additional pressures in the first seven months of the financial year.

I want to emphasise that this bill seeks provision only to fund government expenditure on an interim basis until the 2020-21 budget appropriation bills have passed. Therefore, no new measures for the 2020-21 budget are included in this bill. The bill also provides an advance to the finance minister, a provision of $16 billion, to provide the government with the capacity to allocate additional appropriations for urgent and unforeseen expenditure. This ensures sufficient appropriations are available to meet unforeseen costs, which may include responding to the need for increased medical services and to the need to provide capacity for further economic stimulus, should that be required, and supporting the ongoing business of government. In light of the size of this, it is proposed to institute additional transparency measures on its use. This will include a regular media release which reports and reconciles the use of the AFM provision. Details of the proposed expenditure are set out in the schedule to the bill, the EM and the various portfolio statements.

Supply Bill (No. 2), along with Supply Bill (No. 1) and the Supply (Parliamentary Departments) Bill (No. 1), seeks appropriations to facilitate the continuation of normal government business. Supply Bill (No. 2) 2020-2021 provides for appropriations that are not for the ordinary annual services of governments, such as for capital works and services, and for payments to states, territories and local governments for the first seven months of 2020-21. The bill seeks approval for appropriations from the Consolidated Revenue Fund of just under $6.7 billion. The appropriations proposed in this bill are broadly based on seven-twelfths of the estimated 2020-21 annual appropriations. The 2020-21 estimates are largely on the 2019-20 base adjusted for economic and program specific parameters and the effect of decisions in MYEFO or included in the additional estimates appropriation bills, plus the COVID-19 related measures. The seven-twelfths allocations are adjusted where necessary, where organisations are expected to face additional pressures in the first seven months of the year—for example, further capital funding for the national medical stockpile. The supply bills also take into account terminating programs.

The bill also establishes the debt limits for 2020-21 for general purpose financial assistance payments and national partnership payments. The debit limits in the bill reflect a full year of the estimated 2020-21 limits so that agreements with other governments can be established with certainty for the full year. Again, the bill must be passed in this session to ensure funding is available to all entities from 1 July 2020, ensuring the continuity of program and service delivery.

As with Supply Bill (No. 1), this bill seeks provision only to fund government expenditure on an interim basis until budget appropriation bills have been passed. Therefore, no new measures, I emphasise, for the 2020 budget are included in this bill either. The bill also provides an advance to the finance minister, a provision of $24 billion, to provide the government with the capacity to allocate additional appropriations for urgent and unforeseen expenditure. This ensures sufficient appropriations are available to meet unforeseen costs, which may include responding to the need for additional and more costly medical equipment driven by international competition and to the need to provide capacity for further economic stimulus, should that be required, and to support the ongoing business of government. In light of the size of the AFM, it is proposed to institute additional transparency measures on its use. This, again, will include a regular media release which reports and reconciles the use of the provision. Again, details of the proposed expenditure are set out in the schedule to the bill, the EM and the various portfolio statements.

Finally, the Supply (Parliamentary Departments) Bill (No. 1) 2020-2021 provides appropriations for the first seven months of 2020-21 for the operations of the Department of the Senate, the Department of the House of Representatives, the Department of Parliamentary Services and the Parliamentary Budget Office. This bill seeks approval for appropriations from the Consolidated Revenue Fund of just over $150 million. The appropriations proposed in this bill are broadly based on seven-twelfths of the estimated 2020-21 annual appropriations, which are largely the 2019-20 base adjusted for economic and program specific parameters. The bill must be passed in this session to ensure funding is available to these departments from 1 July 2020, thereby ensuring the continuity of our parliament's operations.

As with the other supply bills, I want to emphasise that this bill seeks provision only to appropriate money to fund government expenditure on an interim basis until budget appropriations bills have been passed. Again, no measures for the 2020 budget are included in this bill. This arrangement, importantly, allows for Appropriation (Parliamentary Departments) Bill No. 1 2020-21 or a similar bill to be passed when parliament resumes sitting, if necessary. Again, details of the proposed expenditure are set out in the schedule to the bill, the EM and the various 2019-20 statements. I therefore commend the bills to the House.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with the resolution agreed to earlier, the question is that these bills be now read a second time. I give the call to the shadow Treasurer

Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Thanks very much, Deputy Speaker, for the opportunity to speak on and support these supply bills—Supply Bill (No. 1) 2020-2021, Supply Bill (No. 2) 2020-2021 and Supply (Parliamentary Departments) Bill (No. 1) 2020-2021. We support them for the usual reasons but also because in this case, considering some of the extraordinary measures in them, they are a sensible contingency for the next seven months to make sure that the usual operations of government can continue and that we can update the advance to the finance minister provisions so that we can allow for what are extremely uncertain times when it comes to the provision of public funds over the next little while.

As the assistant minister said a moment ago, they provide seven months of funding for the year, with a couple of exceptions around the National Disability Insurance Agency and full-year funding for Services Australia, the tax office and the health department, which is obviously crucial right now, and also for the measures specifically associated with the coronavirus response. They appropriate some large sums. Again, that is a sensible contingency given the position that we find ourselves in.

I want to speak in a little more detail about the advance to the finance minister provisions. These have existed for some time but have been updated in the usual way in the bills that are before us. The advance allows the finance minister to appropriate money in unforeseen circumstances or when there's otherwise been an error, perhaps, or when there's funding which is supported which has not yet been appropriated in the other ways. The provisions are usually for a reasonable amount but a modest amount. For example, there was a $295 million advance and a $300 million advance in recent times. These supply bills are proposing that there be a much more substantial advance to the finance minister—really, an unprecedented amount. We have supported that on this side of the House, consistent with what we've been saying all day about the other bills, which I was able to talk about at length this morning. We are being as responsible and constructive and supportive as we can be. We recognise that this is not business as usual in the economy, so it shouldn't be business as usual in politics either. So we have engaged with the government on aspects of these supply bills. I wanted to recognise, in particular, the work of the shadow finance minister, Katy Gallagher in the other place, working with her counterpart, Mathias Cormann, the finance minister. They have had their heads together for some time on these matters and have been able to negotiate quite effectively. Senator Gallagher, who is far better as shadow finance minister than her predecessor ever was, has done a great job in securing some commitments from the government. They've been mentioned by the minister opposite in his contribution a moment ago.

For example, when the government uses the advance provisions, they now need to issue a press release, so that there is some transparency involved in that, after every single use of the advance. Secondly, if there's an advance greater than $1 billion, it requires approval from the opposition, via Senator Gallagher in the other place, with some sort of exchange of letters so that that is approved by us. You can imagine lots of circumstances, unfortunately, in the current climate where there might need to be a big health expenditure. If it is more than $1 billion, Senator Cormann would write to Senator Gallagher. They would exchange letters quickly, and the advance could take place. We think it's an important step, given the magnitude of the money involved here, that there is that extra layer of agreement and consultation between the government and the opposition. We think that those measures together will enhance transparency and scrutiny and will improve the process of relying on that advance, particularly now when there is so much focus on what else we might do, whether it be in health spending or other types of spending, to help Australians get through a very difficult period.

I will touch on one other issue. As I said, I had an opportunity earlier today to talk about the broader economic stimulus measures. I will add one more point. In addition to the agreement that's been struck between the government and the opposition on the additional transparency for this advance mechanism, we do think it important that the government consider, more than they have to this point, releasing some kind of updated economic forecast and budget forecasts. We understand, and we said so publicly on the day that the government announced that they wanted to push the budget back, that there are severe workforce issues in the Commonwealth Treasury and the Department of Finance. We are cognisant of those. When the government pushed back the budget to October we said that we recognise that there are issues there and that it would be difficult to do a full, comprehensive budget on the original time frame. At the same time, we do think it would be very important to not keep the Australian people in the dark for the 10 months between the mid-year update last December and the budget in this coming October.

We need Australian businesses and the broader Australian community to know what the Commonwealth Treasury thinks is going to happen in the economy and in the budget. This is crucial. We can't have people in the dark for such a long period about what the Treasury thinks. One of my concerns here is it's really important that the vacuum is not filled in the absence of credible Treasury forecast by all kinds of other guesstimates that we have to rely on. It's not a partisan point or a heavily political argument that we're having. I've engaged on it with the Treasurer and with the Treasury secretary, and we had the opportunity to engage with the Prime Minister on it in the cabinet room yesterday. We want the professionalism of the Commonwealth Treasury applied to giving the Australian people, Australian businesses and decision-makers of all kinds in the economy the capacity to know what the Treasury thinks is happening. The regular monthly updates in the budget are not enough. They're backward looking. We need a forward-looking sense of what's happening in the budget and what's happening in the economy. So as part of the constructive process that has happened here to agree to these supply bills and the advance to the finance minister provisions, ideally, the government would also reconsider their position on providing other kinds of forecast as well, so that people can have a sense of what the Treasury thinks about the state of the economy and the state of the budget.

That doesn't prevent us from supporting these supply bills for all the usual reasons but also the additional reasons of urgency and uncertainty right now. We are pleased to do so. We thank Senator Cormann and Senator Gallagher for their negotiation that led to this outcome. Other colleagues no doubt will avail themselves of the opportunity to speak about the supply bills and also about the coronavirus measures more broadly.

Debate interrupted.