Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Hansard source

by leave—I move opposition amendments (25) to (47) on sheet 5684 together:

Payment recommendation criteria

(25)  Clause 52, page 46 (lines 26 to 29), omit subclause (2), substitute:

        (2)    The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a payment unless Infrastructure Australia has advised under section 116 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(26)  Clause 52, page 47 (lines 12 to 15), omit subclause (5), substitute:

        (5)    The Communications Minister must not make a recommendation under subsection (4) in relation to a payment unless Infrastructure Australia has advised under section 117 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(27)  Clause 52, page 48 (lines 1 to 4), omit subclause (9), substitute:

        (9)    The Energy Minister must not make a recommendation under subsection (8) in relation to a payment unless Infrastructure Australia has advised under section 118 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(28)  Clause 52, page 48 (lines 16 to 19), omit subclause (12), substitute:

      (12)    The Water Minister must not make a recommendation under subsection (11) in relation to a payment unless Infrastructure Australia has advised under section 119 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(29)  Clause 64, page 55 (lines 14 to 17), omit subclause (2), substitute:

        (2)    The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a payment unless Infrastructure Australia has advised under section 116 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(30)  Clause 71, page 59 (lines 27 to 30), omit subclause (2), substitute:

        (2)    The Communications Minister must not make a recommendation under subsection (1) in relation to a payment unless Infrastructure Australia has advised under section 117 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(31)  Clause 78, page 63 (lines 13 to 16), omit subclause (2), substitute:

        (2)    The Energy Minister must not make a recommendation under subsection (1) in relation to a payment unless Infrastructure Australia has advised under section 118 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(32)  Clause 85, page 67 (lines 13 to 16), omit subclause (2), substitute:

        (2)    The Water Minister must not make a recommendation under subsection (1) in relation to a payment unless Infrastructure Australia has advised under section 119 that:

             (a)    the payment satisfies the relevant BAF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(33)  Clause 90, page 71 (lines 6 to 9), omit subclause (2), substitute:

        (2)    The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant unless Infrastructure Australia has advised under section 116 that:

             (a)    the grant satisfies the relevant BAF evaluation criteria; and

             (b)    if the grant will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the grant will not be made in relation to a project that requires the payment of an upfront fee.

(34)  Clause 95, page 74 (lines 9 to 12), omit subclause (2), substitute:

        (2)    The Communications Minister must not make a recommendation under subsection (1) in relation to a grant unless Infrastructure Australia has advised under section 117 that:

             (a)    the grant satisfies the relevant BAF evaluation criteria; and

             (b)    if the grant will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the grant will not be made in relation to a project that requires the payment of an upfront fee.

(35)  Clause 100, page 77 (lines 15 to 18), omit subclause (2), substitute:

        (2)    The Energy Minister must not make a recommendation under subsection (1) in relation to a grant unless Infrastructure Australia has advised under section 118 that:

             (a)    the grant satisfies the relevant BAF evaluation criteria; and

             (b)    if the grant will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the grant will not be made in relation to a project that requires the payment of an upfront fee.

(36)  Clause 105, page 80 (lines 19 to 22), omit subclause (2), substitute:

        (2)    The Water Minister must not make a recommendation under subsection (1) in relation to a grant unless Infrastructure Australia has advised under section 119 that:

             (a)    the grant satisfies the relevant BAF evaluation criteria; and

             (b)    if the grant will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the grant will not be made in relation to a project that requires the payment of an upfront fee.

(37)  Clause 177, page 135 (line 27) to page 136 (line 2), omit subclause (2), substitute:

        (2)    The Education Minister must not make a recommendation under subsection (1) in relation to a payment unless the EIF Advisory Board has advised under paragraph 171(1)(a) that:

             (a)    the payment satisfies the relevant EIF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(38)  Clause 177, page 136 (lines 15 to 18), omit subclause (5), substitute:

        (5)    The Research Minister must not make a recommendation under subsection (4) in relation to a payment unless the EIF Advisory Board has advised under paragraph 171(1)(b) that:

             (a)    the payment satisfies the relevant EIF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(39)  Clause 177, page 136 (line 31) to page 137 (line 2), omit subclause (8), substitute:

        (8)    The EIF designated Ministers must not make a recommendation under subsection (7) in relation to a payment unless the EIF Advisory Board has:

             (a)    given advice under subsection 171(6) about the payment; and:

             (b)    if the payment will result in the creation or development of an asset—advised that the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    advised that the payment will not be made in relation to a project that requires the payment of an upfront fee.

(40)  Clause 184, page 141 (lines 9 to 12), omit subclause (2), substitute:

        (2)    The Education Minister must not make a recommendation under subsection (1) in relation to a payment unless the EIF Advisory Board has advised under paragraph 171(1)(a) that:

             (a)    the payment satisfies the relevant EIF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(41)  Clause 184, page 141 (lines 25 to 28), omit subclause (5), substitute:

        (5)    The EIF designated Ministers must not make a recommendation under subsection (4) in relation to a payment unless the EIF Advisory Board has:

             (a)    given advice under subsection 171(6) about the payment; and:

             (b)    if the payment will result in the creation or development of an asset—advised that the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    advised that the payment will not be made in relation to a project that requires the payment of an upfront fee.

(42)  Clause 191, page 145 (lines 22 to 25), omit subclause (2), substitute:

        (2)    The Research Minister must not make a recommendation under subsection (1) in relation to a payment unless the EIF Advisory Board has advised under paragraph 171(1)(b) that:

             (a)    the payment satisfies the relevant EIF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(43)  Clause 191, page 146 (lines 7 to 10), omit subclause (5), substitute:

        (5)    The EIF designated Ministers must not make a recommendation under subsection (4) in relation to a payment unless the EIF Advisory Board has:

             (a)    given advice under subsection 171(6) about the payment; and:

             (b)    if the payment will result in the creation or development of an asset—advised that the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    advised that the payment will not be made in relation to a project that requires the payment of an upfront fee.

(44)  Clause 195, page 149 (lines 5 to 8), omit subclause (2), substitute:

        (2)    The Education Minister must not make a recommendation under subsection (1) in relation to a grant unless the EIF Advisory Board has advised under paragraph 171(1)(a) that:

             (a)    the grant satisfies the relevant EIF evaluation criteria; and

             (b)    if the grant will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the grant will not be made in relation to a project that requires the payment of an upfront fee.

(45)  Clause 252, page 188 (lines 13 to 16), omit subclause (2), substitute:

        (2)    The Health Minister must not make a recommendation under subsection (1) in relation to a payment unless the HHF Advisory Board has advised under paragraph 246(1)(a) that:

             (a)    the payment satisfies the relevant HHF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(46)  Clause 258, page 191 (lines 12 to 15), omit subclause (2), substitute:

        (2)    The Health Minister must not make a recommendation under subsection (1) in relation to a payment unless the HHF Advisory Board has advised under paragraph 246(1)(a) that:

             (a)    the payment satisfies the relevant HHF evaluation criteria; and

             (b)    if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the payment will not be made in relation to a project that requires the payment of an upfront fee.

(47)  Clause 263, page 194 (line 29) to page 195(line 2), omit subclause (2), substitute:

        (2)    The Health Minister must not make a recommendation under subsection (1) in relation to a grant unless the HHF Advisory Board has advised under paragraph 246(1)(a) that:

             (a)    the grant satisfies the relevant HHF evaluation criteria; and

             (b)    if the grant will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

             (c)    the grant will not be made in relation to a project that requires the payment of an upfront fee.

We think this is a very important series of amendments to this bill which will improve it. The amendments ensure that any project recommended by a relevant minister must have taken into account the running costs of the project and prohibits any upfront fees being charged on a project, as we have seen occur in New South Wales where the government has required project proponents to pay upfront fees to the government. The wording is set out most clearly, for example, in subclause 25:

The Infrastructure Minister must not make a recommendation … unless Infrastructure Australia has advised … that:

…            …            …

(b) if the payment will result in the creation or development of an asset—the owners of the asset will meet all the whole-of-life asset costs, including operational costs; and

(c) the payment will not be made in relation to a project that requires the payment of an upfront fee.

As Senator Sherry would now know, being in government—as I certainly experienced in government—one of the real traps in providing capital funding to particular projects is the issue of ongoing running costs of the project. We think there is a real risk to the budget in future and to the recurrent expenditures in the budget in future, if there is no account taken of ongoing running costs, and who is going to pay for them, in the assessment of projects. We had a dramatic example of this problem with the Labor Party’s glib promise at the last election to provide computers to everybody in schools. It is a promise that has not been honoured in full and there has now been a massive blow-out in the total cost of that promise because they did not properly allow for the associated running costs of such a capital expenditure, with the government having to find another $800 million to ensure that these computers can actually be used. That is a classic case of not taking full account. I saw, in sitting around the NSC with Defence projects, that taking into account ongoing running costs is critical.

We think this is a very important series of amendments and we see no reason why the government would not want to support them. In relation to the prohibition of upfront fees, that has been raised with the coalition by a lot of firms in the development and examination of this legislation. As I understand it, without this prohibition there is a risk of superannuation funds being involved in these projects because they cannot make such payments. That is the advice as I understand it. In any event, we think the practice of these upfront fees being paid to governments is wrong and should be prohibited. I commend this set of amendments to the Senate.