Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I table a revised explanatory memorandum relating to the Telecommunications Interception and Other Legislation Amendment (State Bodies) Bill 2012 and move:

That these bills be now read a second time.

I seek leave to have a second reading speeches incorporated into Hansard.

Leave granted.

The speeches read as follows

CORPORATIONS AMENDMENT (PROXY VOTING) BILL 2012

Today, I introduce a Bill that will clarify a requirement in the Corporations Act 2001 relating to executive remuneration.

During 2011, the Government enacted reforms to strengthen Australia's remuneration framework through the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011. As part of these reforms, key management personnel and their closely related parties were prohibited from participating in the non-binding shareholder vote on remuneration.

However, an exception was provided to allow the chair of an annual general meeting to vote undirected proxies in remuneration related resolutions where the shareholder provides informed consent for the chair to exercise the proxy. Some confusion has arisen about whether this exception applies to the non-binding vote on remuneration.

The Government's intention on this matter is clearly set out in the Act passed last year and its associated extrinsic material. Additionally, ASIC announced last year that if companies are concerned about this issue, they could apply to ASIC for relief. However, for the avoidance of any doubt, the amendment in this Bill makes it clear that this exception also applies to the non-binding vote required under section 250R.

While it has always been the case that the Chair could have voted undirected proxies where the shareholder provides informed consent, the Government has made this clarification, so that no harm or cost or disruption was caused from any confusion arising from the original Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011.

There is no doubt that at no-time was any Company Chair at risk as a result of the confusion surrounding the original Amendment, however the Government has responded to and worked closely with stakeholders to ensure that this Bill makes it absolutely clear that the exception allowing the chair to vote undirected proxies also applies to the non-binding vote on remuneration.

Finally, I can inform the chamber that the appropriate approval of the Ministerial Council for Corporations have been obtained as required under the Corporations Agreement.

SKILLS AUSTRALIA AMENDMENT (AUSTRALIAN WORKFORCE AND PRODUCTIVITY AGENCY) BILL 2012

Introduction

In the 2011-12 Budget, the Government took important steps to build Australia's future workforce and good jobs for the future. We delivered one of the largest skills packages in our nation's history – a $3 billion investment over six years to ensure that industry has the skilled workers it needs to grow and prosper, and that more Australians than ever before will be able to access training, and the life opportunities that come through skills and employment.

To secure Australia's long term prosperity the Government's Building Australia's Future Workforce package provided the framework for a new skills and participation agenda that:

The Building Australia's Future Workforce package is built on Labor's already significant investment in Vocational Education and Training (VET). In the three financial years from 2008 to 2010, we invested $11 billion in VET.

A new partnership with industry

In the 2011-12 Budget, the Government responded to requests from its industry and union partners to improve the linkages between skills funding and industry needs and to increase the focus on workplace productivity in Australia.

The Australian Industry Group, the Australian Council of Trade Unions, and the Australian Chamber of Commerce and Industry have all argued for a more integrated approach to tackling Australia's skills and productivity challenges.

In its national workforce development strategy, Australian Workforce Futures, Skills Australia recommended a new partnership approach to workforce development at government, industry and enterprise level. And in its most recent report, Skills for Prosperity – a Roadmap for Vocational Education and Training, Skills Australia also recognised that more than any other education sector, the training sector "connects learning with the labour market, the workplace and community development".

It was in this context, that we announced the creation of a new industry-led national workforce and productivity agency, to expand on the successful role of Skills Australia and provide independent advice on the skills and workforce development needs of industry sectors and regions.

I am pleased to introduce the Skills Australia Amendment (Australian Workforce and Productivity Agency) Bill 2012 to implement the Government's commitment to establishing this new agency, which replaces Skills Australia from 1 July 2012.

The aim of the new agency is to improve long-term workforce planning and development to address skills and labour shortages, and contribute to improvements in industry and workplace productivity. It will give industry a stronger voice and ensure the Government's investment in training delivers the skills that industry and the economy need, in the right place at the right time.

Importantly, the agency will have the ability to advise the Government to direct funding to areas of critical industry need, and will be an authority on workforce development policy. It will build on the strengths of Skills Australia, and collaborate with industry associations, Industry Skills Councils, unions and employers to ensure a shared, practical approach which meets sectoral, regional and small business industry needs.

It will also have a key role in advising the Government on policy direction and expenditure priorities for the $558 million industry-focussed National Workforce Development Fund. This gives industry a place in the drivers' seat for a substantial Australian Government investment in workforce development. Under the Fund, industry will co-invest in the skills our economy needs most, providing around 130,000 training opportunities for job seekers and people who already have jobs but need to learn new skills.

Description of the Bill

Because of the strong role of Skills Australia in the past, the Government has retained in this bill, the effective governance structure and legislative framework of that body. The amendments in the bill are therefore simple, but they make important changes to enhance the object and functions of the Skills Australia Act 2008 to reflect the expanded role of the agency from 1 July 2012.

These broadened functions will give the agency a stronger research, analysis and advisory role, and specifically provide for it to address improvements in Australian workforce productivity. They will also ensure the agency can advise the Government on the allocation of Commonwealth industry skills funding, including the National Workforce and Development Fund.

The bill provides for an expansion in the size of the agency, compared to the current size of the Skills Australia membership, and an expansion of the current membership criteria. This reflects the transition to a balanced, fully representative union and industry-led body, and will allow for the agency to meet its significant skills and workforce development agenda from July this year.

This bill represents the Gillard Labor Government's commitment to working in partnership with industry and unions to make this nation stronger and more prosperous for all Australians.

TAX AND SUPERANNUATION LAWS AMENDMENT (2012 MEASURES NO.1) BILL 2012

This bill amends various taxation and superannuation laws to implement a range of improvements to Australia's tax laws and retirement savings system.

Schedule 1 ensures that a health supply by a health care provider paid for by an insurer, statutory compensation scheme operator, compulsory third party scheme operator or a government entity under a health funding arrangement, is treated as a GST-free supply.

GST-free treatment applies where the underlying supply from the health care provider to the individual is a GST-free health supply. For example, if the Department of Health and Ageing pays a doctor to treat a veteran then the supplies will be GST-free.

This will avoid increased compliance costs that would otherwise arise for taxpayers in multi-party arrangements involving supplies of health related goods and services.

These amendments restore the intended operation of the GST law following the Department of Transport decision, ensuring that multi-party arrangements involving relevant health related supplies of goods and services are GST-free.

These amendments apply from 1 July 2012.

Schedule 2 ensures that the non-commercial activities of government related entities are not subject to GST. The amendments restore the policy intent of the GST law concerning government appropriations following the 2009 Full Federal Court decision in TT-Line.

These amendments ensure that a payment under a government appropriation is not subject to GST if it is made between government related entities for non-commercial activities.

For example, a payment made by a State Department of Education from State Government funds will not be subject to GST if it is paid to a public school.

The amendments will ensure that government entities do not face an increase in compliance costs and do not have to change their budgetary processes and practices.

These amendments apply from 1 July 2012.

Schedule 3 pauses the indexation of the superannuation concessional contributions cap for one year.

The general concessional cap is indexed annually in line with movements in full-time average weekly ordinary time earnings. The cap only changes, however, when the cumulative indexed amount reaches $5,000 or greater.

It was expected that indexation would increase the general concessional contributions cap from $25,000 to $30,000 in 2013-14.

This Schedule pauses the indexation of the cap in 2013-14, which means that the cap is now not expected to increase to $30,000 until 2014-15. As a result, the increase in the higher concessional contributions cap for individuals aged 50 and over, and the non-concessional contributions cap will also effectively be paused in 2013-14.

Schedule 4 gives eligible individuals the option to have excess concessional contributions taken out of their superannuation fund and assessed at their marginal tax rates, rather than incurring the potentially higher effective rate of excess contributions tax.

This measure will make the concessional contribution caps fairer by giving most individuals who exceed their concessional contributions caps a second chance.

This measure applies to excess concessional contributions of $10,000 or less made in the 2011-12 and later financial years.

This measure is expected to benefit just over 30,000 individuals who exceed their concessional contributions caps over the forward estimate period.

The ATO will handle the majority of the administration process to minimise the additional compliance cost on funds and the individuals.

Successful passage of this bill will make the concessional contributions caps fairer.

Schedule 5 includes a further exception to the secrecy provisions in Division 355 of Schedule 1 to the Taxation Administration Act 1953.

This measure is part of a broader package of superannuation measures aimed at making it easier for superannuation funds and their beneficiaries to locate and consolidate unnecessary and lost superannuation interests and benefits.

This measure will allow the ATO to disclose superannuation information to superannuation entities, exempt public sector superannuation schemes, retirement savings account providers and their administrators.

This measure will expand the types of accounts to be displayed on the ATO online search facility. It will also permit tax officers to disclose information where it is for the purpose of assisting a beneficiary of a superannuation fund to find, consolidate, transfer, cash or otherwise manage their beneficiaries' superannuation interests and superannuation benefits.

From 1 July 2012, this Schedule will enable individuals to view their superannuation accounts which are reported to the ATO on member contribution statements, as well as lost accounts and other superannuation monies held by the ATO. It will also enable funds to search online for their members' superannuation accounts known to the ATO, including lost accounts and ATO held monies.

The Office of the Australian Information Commissioner has been consulted on these amendments, and has indicated that it is not opposed to the extended use of the TFNs as a means of promoting efficiency in the superannuation system where there is a likelihood of significant benefits for individuals and personal information is protected.

Schedule 6 delivers on one of the central elements of the Government's Securing Super package, announced during the 2010 election campaign. It requires employers to report to employees, on payslips, not only how much super they will be paying, but also when they will actually pay it. This measure comes into force after the date of proclamation.

This measure will address a huge problem, in that a significant minority of employers fail to pay their super.

During 2010-11 the ATO investigated 17,943 employee complaints, raised superannuation guarantee entitlements for nearly 279,000 employees, raised $517 million and collected $269 million in superannuation guarantee charge, and collected $139 million in penalties.

Employees worst affected tend to be those who are most vulnerable, that is, low-income, casual and part-time workers.

Giving employees more information about their super is important. While the ATO proactively audits high risk employers, it cannot monitor all superannuation contributions. For this reason, the system depends crucially on employees monitoring their contributions.

But, currently, employees do not receive information on their contributions in time to take action. The law used to require employers to report their contributions within 30 days of making them, but the Opposition, when in Government, abolished that requirement in 2004.

That is why the Gillard Labor Government is taking strong action to make sure employers do the right thing.

Under the broader Securing Super package, employees will receive information on their payslips about when their super will actually be paid into their account, and quarterly or six-monthly notification from their super fund about their contributions.

This Schedule will enable employees to know when they can check with their fund that their contributions have been made. And the measure will reduce the time it takes to identify unpaid contributions. It will allow the ATO to take compliance action more quickly, and improve the chances of recovering the unpaid super.

All businesses like to paid on time by their customers. If the business next door isn't paying their fair share, they have an unfair advantage relative to the business doing the right thing. This is not good for competitiveness.

In terms of timing, the Government is seriously considering the recommendation of the House of Representatives Standing Committee on Economics. If the industry can meet the 1 July 2013 deadline for introducing the reporting of actual contributions, then the new requirements should apply from that date. Otherwise, we will consider an interim measure.

The measure has the public support of a range of industry groups, including ASFA (the Association of Superannuation Funds of Australia), AIST (the Australian Institute of Superannuation Trustees) and the ACTU.

Lastly, Schedule 7 provides the Commissioner with a legislative discretion to delay refunding an amount to a taxpayer, pending integrity checks of their claim.

These amendments are in response to the Full Federal Court decision in Commissioner of Taxation v Multiflex Pty Ltd, that the Commissioner is required to pay a GST refund within the time taken to process a taxpayer's return, and the Commissioner has no additional time to check the validity of the claim, even in cases where the Commissioner suspects it might be incorrect, including due to carelessness, recklessness or fraud.

The amendments seek to restore what had been the Commissioner's administrative practice, before the Multiflex decision, of retaining certain amounts whilst undertaking refund integrity checks of a taxpayer's claim.

The changes seek to strike a balance between a taxpayer's right to receive a prompt refund and the Commissioner's obligation to protect the integrity of the tax refund system. Following public consultation on the draft legislation, a number of changes were made to ensure the right balance is struck.

In particular, the amendments in Schedule 7 only allow the Commissioner to delay a refund claim if it is reasonable, and he must tell the taxpayer of that decision within 14 days (or 30 days, depending on the relevant tax) or otherwise pay the refund. Taxpayers will also be able to object where payment of the refund has been delayed for more than 60 days. These features provide taxpayers with more rights than previously available under the Commissioner's administrative practice.

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

TELECOMMUNICATIONS INTERCEPTION AND OTHER LEGISLATION AMENDMENT (STATE BODIES) BILL 2012

The Telecommunications Interception and Other Legislation Amendment (State Bodies) Bill 2012 makes amendments to four Commonwealth Acts to facilitate telecommunications interception and access powers for the Victorian Independent Broad-Based Anti-Corruption Commission (the IBAC).

The Bill will:

Independent Broad-based Anti-corruption Commission

Victoria will abolish the existing Office of Police Integrity and is establishing the IBAC. The IBAC will become the body responsible for overseeing the Victoria Police.

However, the IBAC will have a broader jurisdiction as it will also be responsible for investigating, exposing and suppressing corruption involving or affecting all public officials in Victoria.

The amendments contained in Schedule 1 are the first pre-condition to be met before the Attorney-General can declare the IBAC to be an interception agency for the purposes of the Interception Act.

The ability to be able to access information under the Interception Act is imperative in investigations of serious corrupt conduct.

People participating in corrupt conduct often do so using clandestine communications methods in a bid to avoid detection by law enforcement.

Accordingly, these powers are critical to ensure that the IBAC is able to access information which proves that corrupt conduct is occurring.

Other States such as New South Wales, Queensland and Western Australia have already established anti-corruption Commissions which can access these Interception Act investigative powers. The inclusion of such a Commission in Victoria increases the application of the interception and access regime nationally.

The Interception Act already strictly regulates how agencies that receive intercepted information are able to use and communicate that information – this is important in ensuring that privacy and oversight considerations are part of the interception regime. Accordingly, there are detailed provisions which set out the circumstances in which interception agencies can use and communicate intercepted information.

Consequential amendments

Schedule 1 to the Bill also contains consequential amendments to the Taxation Administration Act 1953, Privacy Act 1998 and Crimes Act 1914 to replace references to the OPI with references to the IBAC.

The Crimes Act currently allows a constable or Commonwealth officer to make available to OPI documents or seized things, to be used by OPI for specific purposes, including preventing, investigating or prosecuting an offence against a Victorian law. The Bill will remove the reference to the OPI and provide the IBAC with access to such documents or seized things, for the same specific purposes.

The amendments to the Taxation Administration Act will allow the Australian Taxation Office to disclose taxpayer protected information to the Vic IBAC for law enforcement purposes, including investigating serious offences and enforcing the law.

The amendments to the Privacy Act will include the Vic IBAC within the definition of 'enforcement body' which is used in the National Privacy Principles in relation to the law enforcement exemptions to the use and disclosure, and access and correction obligations.

Victorian Inspectorate

To oversee the functioning of the IBAC, Victoria has established the Victorian Inspectorate.

Schedule 2 to the Bill makes amendments to the Interception Act to ensure that the Victorian Inspectorate is able to receive and use intercepted in support of its oversight and complaints handling functions.

Victorian Public Interest Monitor

The Bill also makes amendments to support the establishment of a Public Interest Monitor in Victoria (Victorian PIM).

This body has been established to represent public interest during applications for a range of covert warrants by Victorian agencies.

This is not the first time the Commonwealth Government has recognised the role of a public interest monitor. The Queensland Monitor currently has an oversight role for control orders under the Criminal Code and in applications for interception warrants by Queensland interception agencies.

Schedule 3 of the Bill will enable the Victorian Monitor to receive information about an application for an interception or surveillance warrant by a Victorian agency so that the Victorian Monitor may:

i. appear at an application before a person who is eligible to issue a warrant

ii. make submissions and ask questions, and

iii. require the person issuing a warrant to take the submissions of the PIM into account when considering the application.

Conclusion

This Bill is an important step in ensuring that a State body responsible for detecting, investigating and prosecuting serious criminal activity is able to access investigative tools imperative to support their functions.

This Bill balances access to communications with appropriate record keeping and independent oversight to ensure the ongoing protection of privacy for individuals.

I commend the Bill.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.