Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Hansard source

I table a revised explanatory memorandum relating to the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011. I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

National Broadband Network Companies Bill 2010

The National Broadband Network Companies Bill 2010 and the other bill that I am introducing today, the Telecommunications Legislation Amendment (National Broadband Network Measures – Access Arrangements) Bill 2010, build upon the Government’s historic announcement of 7 April 2009 that it would establish a company, NBN Co Limited, to build and operate a new superfast National Broadband Network.

These bills enshrine in legislation the policy commitments the Government made in its NBN announcement and provide clarity and certainty to NBN Co Limited, industry and the wider community.

The NBN will connect up to 93 per cent of all Australian homes, schools and workplaces with fibre-based broadband services and connect other premises in Australia with next generation wireless and satellite broadband services. The NBN will better position us in an increasingly digital world to prosper and compete; and better enable Australian businesses to compete on a global scale.

In April 2009, the Government also indicated that it would legislate to establish:

• operating, ownership and governance arrangements for NBN Co Limited; and
• the regime to facilitate access to the NBN for retail service providers.

The Government has consulted extensively on the legislative arrangements for NBN Co Limited, releasing exposure drafts of the bills in February 2010 and also consulting through the Implementation Study on the NBN. The bills that I am introducing today have been amended in light of those processes.

The first bill in the package, the NBN Companies Bill, sets out obligations on NBN Co Limited to limit its operations to, and focus them on, wholesale-only telecommunications. It also sets out arrangements for the eventual sale of the Commonwealth’s stake in the company once the NBN roll-out is complete, including provisions for independent and Parliamentary reviews prior to any privatisation, and for the Parliament to have the final say on the sale. The bill also creates a power for the Governor-General to make regulations concerning future private ownership and control of NBN Co Limited, and establishes other relevant reporting, governance and enforcement mechanisms.

As such the bill deals with arrangements for both today and into the future. In particular, it makes sure that NBN Co Limited will be tightly bound to respect its wholesale-only mandate, thereby promoting competition and better services for all Australians.

The Bill covers NBN Co Limited, NBN Tasmania and any company NBN Co Limited controls. The bill specifies that NBN Co Limited must supply services only to carriers or service providers or specified utilities and transport authorities. Supply to utilities and transport will support the rollout of smart infrastructure management technologies. The broader power in the exposure draft of the bill, that enabled the Minister to allow NBN Co Limited to supply services to specified end-users, has been removed.

The bill creates a power for the Communications Minister and the Finance Minister to order internal separation of NBN Co Limited’s business units, including powers to order it to transfer or divest its assets. These powers provide additional safeguards that can be brought into play, if necessary, to ensure NBN Co Limited operates in a manner that is transparent and supports effective competition.

Taking into account the recommendations of the Implementation Study on the NBN, the Commonwealth will retain full ownership of NBN Co Limited until the rollout of the NBN is complete. This will ensure that during the rollout NBN Co Limited remains focussed on achieving the Government’s policy aims, and not on the different risks and rewards that private sector equity investors would require.

After the Communications Minister has declared that the rollout is complete, the Productivity Minister may direct the Productivity Commission to undertake a 12 month inquiry into a number of matters, including the regulatory framework for the NBN, and the impacts of a sale of NBN Co Limited on the Commonwealth Budget, consumer outcomes and competition. Within 15 sitting days of the Productivity Commission inquiry report being tabled, a Parliamentary Joint Committee on the Ownership of NBN Co Limited is to be established, according to the practice of Parliament, to examine the report of the Productivity Commission inquiry. This Joint Committee will report to both Houses of Parliament within 180 days of its appointment. After it reports, the Finance Minister may, by disallowable instrument, advise that conditions are suitable for an NBN Co Limited sale scheme.

There is no longer a requirement that NBN Co Limited must be sold within five years of it being declared built and fully operational.  Rather the timeframe for any sale is left to the judgment of the Government and Parliament of the day, enabling both to have due regard to the role the NBN is then playing, market conditions and any other relevant factors.

The bill also confirms that NBN Co Limited should be subject to the same range of obligations as other Government Business Enterprises. For example, NBN Co Limited is not a public authority and NBN Co Limited is not subject to the Public Works Committee Act 1969 as was the case with earlier Government owned carriers like Telstra, OTC and Aussat, and is currently the case with Australia Post.

Together with the NBN Access Bill, the NBN Companies Bill delivers on the Government’s commitment that NBN Co Limited will operate on a wholesale-only, open and equivalent access basis, delivering long terms benefits for competition and consumers.

Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011

The Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2011 (the NBN Access Bill) accompanies the National Broadband Network Companies Bill. Together, the two bills form a package to promote competition and better telecommunications services for all Australians.

The NBN Access Bill will establish clear open access, equivalence and transparency requirements for NBN Co Limited. It will also extend supply and open access obligations to owners of other superfast networks that are rolled out or upgraded after the introduction of this bill to Parliament.

The bill establishes rules for the supply of services by NBN Co Limited. All of NBN Co Limited’s services will be declared services under the Trade Practices Act 1974, and subject to enforcement under that Act. The bill also establishes a new category of Standard Access Obligations for NBN Co Limited.  These obligations are designed to guarantee:

• the supply of declared services to access seekers;
• interconnection of facilities to the NBN; and
• access to conditional access customer equipment, as needed, to providers of retail telecommunications services.

The bill provides as a general rule that NBN Co Limited must not discriminate between access seekers. However, consistent with commercial and efficiency considerations, NBN Co Limited will be permitted to negotiate with individual access seekers to vary standard terms and conditions, but only under clearly specified criteria and subject to ACCC oversight. Different terms will be permitted in relation to the creditworthiness of an access seeker, consistent with current trade practices law. Different terms will also be permitted on grounds or circumstances as specified by the ACCC. Finally, NBN Co Limited may offer different terms to access seekers where this aids efficiency, and access seekers in like circumstances have an equal opportunity to benefit from any variations.

The concept of differentiation that aids efficiency already exists under Part IIIA of the Trade Practices Act. It recognises that a blanket requirement to offer equal treatment to all access seekers can lead to inefficient outcomes. For example, some service providers may want to make changes to standard services to reflect their existing products and processes, and being required to re-engineer these could be both costly and disruptive.

Submissions on the draft bill called for clearer definition of conduct that aids efficiency. The bill therefore requires the ACCC to publish guidance material on allowable discrimination, to provide greater certainty for industry.

If NBN Co Limited can offer different terms from those set out in published offers, it follows that access seekers need to know what variations to standard terms are available, to judge whether they are in like circumstances and be able to receive those varied terms. To address this, NBN Co Limited must supply the ACCC, within seven days of entering into an agreement containing different terms and in a form approved in writing by the ACCC, clear information on the deal. The ACCC must then publish this information, redacting such commercial-in-confidence information as it considers is necessary, and maintain a register of NBN Access Agreement Statements on its website.

Submissions on the draft bill released in February this year expressed concern that NBN Co Limited could offer volume discounts that would favour the largest carriers and service providers. The bill does not prohibit volume discounts that aid efficiency, but restricts NBN Co Limited from offering a volume discount unless it is in accordance with the terms and conditions which it has set out in a Special Access Undertaking which has been approved by the ACCC. This will ensure that available volume discounts are in the long-term interests of end-users.

Finally, the bill makes specific arrangements for carriers who build or upgrade certain fixed-line superfast access networks after the introduction of this bill to Parliament. Carriers must offer a Layer 2 bitstream service over such infrastructure and will be subject to access, non-discrimination and transparency obligations in relation to that service, based on those applying to NBN Co Limited. These requirements will commence on proclamation or otherwise 12 months from Royal Assent, giving industry time to adjust. These arrangements do not apply to point-to-point services to government and corporate users.

Provision is also made to simplify the making of industry codes and standards for fibre infrastructure and services. Once in place, these codes and standards will ensure new fibre networks are built consistent with the technical specifications for the National Broadband Network.

These amendments have been included to ensure that end-users have access to the same high-quality superfast broadband services, regardless of the network provider, and to promote a level regulatory playing field for the telecommunications industry.

The NBN Access Bill, together with the NBN Companies Bill which it supports, demonstrates this Government’s commitment to structural reform of the telecommunications market, and to ensuring that the NBN meets the Government’s key objectives that NBN Co Limited operate on a wholesale-only basis and offer open and equivalent access. By doing so, the NBN will provide a platform for vibrant retail-level competition that will bring better services to all Australians.

Tax Laws Amendment (2010 Measures N

This Bill amends various taxation laws to implement a range of improvements to Australia’s tax laws.

Schedule 1 amends the eligibility criteria for accessing the film tax offsets by expanding access to film tax offsets in two ways.

Firstly, the amendments reduce the minimum qualifying expenditure threshold for the post, digital and visual effects offset from $5 million to $500,000.

Secondly, the amendments remove the requirement for films with qualifying expenditure of between $15 million and $50 million, to have at least 70 per cent of the film’s total production expenditure as qualifying Australian production expenditure in order to qualify for the location offset.

These changes, which will apply from 1 July 2010, are estimated to increase expenditure on the film tax offsets by $6.9 million over the forward estimates period.

These changes are aimed at attracting offshore productions to Australia and expanding opportunities for Australian post, digital and visual effects providers to bid for international work.

The amendments are also expected to increase employment opportunities and to assist in building capacity and expertise in the local film industry, which will in turn provide benefits for domestic productions.

The change to the location offset in particular will also reduce compliance costs for affected taxpayers.

Schedule 2 amends Division 247 of the Income Tax Assessment Act 1997 to adjust the benchmark interest rate used in the taxation of capital protected borrowings provisions to the Reserve Bank of Australia’s Indicator Lending Rate for Standard Variable Housing Loans plus 100 basis points for capital protected borrowings entered into, amended or extended after 7:30 pm (AEST) on 13 May 2008. These changes to the benchmark interest rate were first announced on 13 May 2008 and revised on 11 May 2010.

This Schedule also amends Division 247 of the Income Tax (Transitional Provisions) Act 1997 to provide for transitional arrangements for capital protected borrowings entered into at or before 7:30 pm (AEST) 13 May 2008, to 30 June 2013. This allows capital protected borrowings entered into on or before 13 May 2008 to apply the existing benchmark interest rate until 30 June 2013 or the life of the product, whichever is earlier.

These amendments advance the Government’s commitment to ensuring the tax system is as fair and efficient as possible. The new benchmark interest rate provides a more appropriate basis for apportioning the expense in capital protected borrowings between interest on a borrowing without capital protection and the cost of capital protection, while taking in to account industry concerns over the credit risk borne by lenders for the cost of capital protection that is paid on a deferred basis.

The amendments are expected to produce $170 million in net savings over the forward estimates period. These changes are another demonstration of the Government’s commitment to finding savings in the Budget to help tackle inflationary pressures.

Schedule 3 extends the main residence CGT exemption to cover a CGT event that is a compulsory acquisition or other involuntary realisation of part of a main residence. The extended exemption will apply where part of a main residence, the part being some or all of the dwelling’s adjacent land or structure, is compulsorily acquired without the dwelling itself also being compulsorily acquired. This will mean that taxpayers will not be worse off where part of their adjacent land or structure is compulsorily acquired than if the compulsory acquisition had not occurred.

Schedule 4 allows complying superannuation funds and retirement savings account providers to deduct the cost of providing terminal medical condition benefits to superannuation fund members and retirement savings account holders.

Currently, complying superannuation funds and retirement savings account providers are able to claim deductions for insurance policies or some of the cost of providing benefits relating to the death, permanent incapacity and temporary incapacity conditions of release, but not those relating to the terminal medical condition’s condition of release. This condition of release was introduced on 16 February 2008, when this measure will commence.

This amendment will address an anomaly in the law and provide certainty to industry. It will ensure consistent tax deductibility for superannuation funds and retirement savings account providers for the cost of providing benefits to members in the event that a member or retirement savings account holder retires due to ill-health or death benefits are provided.

Finally, Schedule 4 also amends certain sections of the Income Tax Assessment Act 1997 to reflect the drafting convention that the term ‘individual’ should be used when referring to a human being.

Schedule 5 amends the 1999 GST Act to allow non-profit sub entities to access the GST concessions available to their parent entity.

These changes clarify the GST law to be consistent with the approach the Commissioner of Taxation has taken in interpreting the law to allow non-profit sub-entities to access these concessions.

As part of this amendment non-profit sub-entities will be allowed to access the higher registration turnover threshold of $150,000 for non-profit bodies.

This measure will apply from the start of the first tax period after Royal Assent.

Schedule 6 amends the Taxation Administration Act 1953 to provide that it will not be mandatory for the Commissioner of Taxation to apply a payment, credit or running balance account surplus against a tax debt that is a business activity statement amount, unless that amount is due and payable. This amendment applies on and from 1 July 2011.

The amendment reduces compliance costs and unnecessary complexity for taxpayers.

Schedule 7 provides for an expansion of the Education Tax Refund so that school uniforms are included as eligible expenses.

The Government introduced the Education Tax Refund on 1 July 2009 to help families with the cost of education.

The Refund allows eligible families to claim 50 per cent of their eligible education expenses up to $390 per child each year for primary school kids or $779 per child each year for those in secondary school. This is indexed each year and covers the cost of computers, textbooks and trade tools for secondary school uniforms.

Extending the Education Tax Refund to uniforms will provide valuable assistance to Australian families and further help ease their cost of living pressures.

The Refund will be available for school uniform expenses incurred from 1 July 2011, with the first refunds paid in the 2012-13 financial year.

The Government is providing relief to family budgets while ensuring we return the budget to surplus by 2013.

Full details of the measures in this Bill are contained in the explanatory memorandum.

Debate (on motion by Senator Jacinta Collins) adjourned.

I move:

That the Tax Laws Amendment (2010 Measures No. 5) Bill 2010 be listed on the Notice Paper as a separate order of the day.

Question agreed to.