Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Hansard source

I present three government responses to committee reports as listed at item 14 on today's Order of Business, as well as the government's response to the report on the Foreign Affairs, Defence and Trade References Committee on the planned acquisition of the F-35 Lightning II Joint Strike Fighter. In accordance with the usual practice, I seek leave to incorporate the documents in Hansard.

Leave granted.

The documents read as follows—

Australian government response to the Senate Economics References Committee Report: Insolvency in the Australian Construction Industry

May 2017

Economics References Committee

Insolvency in the Construction Industry

Government r esponse

Recommendation 1 •   The committee recommends that ASIC conduct a review of administrators' and liquidators' reporting requirements and the range and extent of information it requires to be reported and, where necessary, make changes that will ensure the regulator is able to fully inform itself, the parliament and the public with complete, relevant and up-to-date data on insolvencies.

– the amendment of Form EX01 in December 2014, through which external administrators report to ASIC on potential insolvent trading; and

– the promotion of the electronic lodgement of relevant information through providing functionality for external administrators to lodge receipts and payments information in 'structured data'.

Recommendation 2 •   The committee recommends that the government provide an additional budget appropriation to ASIC in the 2016–17 budget and over the forward estimates, if required, which is sufficient to ensure that ASIC has the capacity to conduct analysis and provide a wide range of relevant, up-to-date insolvency data.

Recommendation 3 •   The committee recommends that ASIC require all external administrators' reports to be lodged electronically in the schedule B format.

Recommendation 4 •   The committee recommends that ASIC make better use of external administrators' reports and other intelligence in order to improve the standard of publicly available information, provide early warning to industry participants about repeat and concerning insolvent practices and lead to a more effective market.

Recommendation 5 •   The committee recommends that the ATO and ASIC increase their formal cooperation with superannuation funds to coordinate measures around early detection of non-payment of superannuation guarantee.

– about the operation and viability of participants in the superannuation guarantee system;

– relevant to identifying and addressing superannuation guarantee non-compliance; and

– to better target activities by government agencies to address superannuation guarantee non-compliance by employers.

Recommendation 6 •   The committee recommends that privacy provisions which may inhibit information flows between the ATO and APRA regulated superannuation funds be reviewed and that the ATO seek advice from the Office of the Australian Information Commissioner as to the extent to which protection of public revenue exemptions in the Australian Privacy Principles might facilitate improved information sharing.

Recommendation 7 •   The committee recommends that the ATO continue to actively monitor the tax liabilities of businesses in the construction industry in order to ensure that debts owed to the Commonwealth are paid.

Recommendation 8 •   The committee recommends that if necessary, the government make an additional budget appropriation to the ATO in the 2016–2017 budget for the purpose of enabling the ATO to recover the outstanding tax liabilities of construction industry businesses.

– Data and analytics (MYEFO 2015-16): this enables the ATO to use data more effectively, including data they receive as part of the reportable taxable payments measure.

: The government will provide $61.9 million over four years (including capital of $12.2 million) to the ATO to upgrade its data analytics capability.

: This measure will enable the ATO to improve taxpayer compliance and reduce compliance burdens by pre-populating additional information in their returns.

: Improved data analysis capability will help the ATO in better detecting and deterring non-compliance. Compliance activities enabled by improved analytics are estimated to raise additional revenue of $222 million over the forward estimates period.

Recommendation 9 •   The committee recommends that construction industry participants, particularly those representing the interests of subcontractors, develop partnerships with mental health support organisations to provide ready access to support, counselling and treatment for people in the industry who may suffer from the adverse mental health effects of the financial distress caused by contractual disputes and insolvency in the construction industry.

– The MATES in Construction (MIC) programme targets the male dominated building and construction industries using a community development model to create self-sustaining suicide prevention structures on site, and to de-stigmatise mental health and wellbeing issues, while encouraging workers in the industry to seek help for a range of issues. The MIC model focuses on making better and more useful connections between workers in the industry and external professionals; and

– The OzHelp Foundation seeks to build the capacity of workers in the building, construction and mining industries to recognise warning signs of mental health issues and suicide, and to facilitate access to support services and improve referral pathways for mental health and suicide prevention services.

Recommendation 10 •   The committee recommends that the government fund an independent analysis of the effects of the high rate of insolvency and related issues on productivity and innovation in the construction industry.

Defining and Profiling Phoenix Activity (2014)Quantifying Phoenix Activity: Incidence, Cost, Enforcement (2015)Phoenix Activity: Recommendations on Detection, Disruption and Enforcement (2017)

Recommendation 11 •   The committee recommends that ASIC, in consultation with ARITA, work out a method whereby external administrators can indicate clearly in their statutory reports whether they suspect phoenix activity has occurred. For example, to serve as a red flag to ASIC, include a box in the reporting form that external administrators would tick if they suspected phoenix activity.

– the period over which the company traded while insolvent;

– the extent of alleged insolvent trading;

– the grounds upon which they believe the director suspected that the company was insolvent at the time debts were incurred; and

– the evidence available to support the allegation of insolvent trading.

Recommendation 12 The committee recommends that consideration be given to amending confidentiality requirements in statutory frameworks of agencies participating in the Phoenix Taskforce to permit dissemination of relevant information to the ATO.

Recommendation 13 •   The committee recommends that more resources, including specific purpose budget appropriations be directed to whole–of–government strategies aimed at preventing, detecting and prosecuting instances of illegal phoenix activity.

Recommendation 15 •   The committee recommends that licensing regulators should undertake random financial health spot–checks throughout the life of a licence-holder's licence. Where a business fails to meet the standards required, it should be required to show cause as to why its licence should not be conditioned, downgraded, suspended or cancelled, depending on the extent to which the business has not met required standards.

Recommendation 16 •   The committee reiterates Recommendation 17 of the Economics References Committee’s June 2014 report of its inquiry into the performance of ASIC in these terms: 'The committee recommends that ASIC, in collaboration with the Australian Restructuring Insolvency and Turnaround Association and accounting bodies, develop a self-rating system, or similar mechanism, for statutory reports lodged by insolvency practitioners and auditors under the Corporations Act to assist ASIC identify reports that require the most urgent attention and investigation'.

Recommendation 17 •   The committee recommends that ASIC look closely at its record on enforcement and identify if there is scope for improvement, and if legislative changes are required to advise government.

Recommendation 18 •   The committee recommends that the government ensure that ASIC is adequately resourced to carry out its investigation and enforcement functions effectively.

Recommendation 19 •   The committee recommends that the Legislative and Governance Forum for Corporations give consideration to recommending amendments to the Corporations Act to ensure that the Director Penalty Regime covers GST liabilities.

Recommendation 20 •   The committee recommends that section 596AB of the Corporations Act 2001 be amended to: –   remove the requirement to prove subjective intention in relation to phoenixing offences; –   introduce a parallel civil penalty contravention in similar terms; and –   extend the application of the section to all forms of external administration, not merely liquidation.

Recommendation 21 •   The committee recommends that ASIC and the ATO continue to develop and implement programs designed to monitor the integrity of the payment system, with the aim of referring relevant matters to relevant law enforcement agencies.

– comply with all applicable laws and other requirements relating to the security of payments;

– ensure payments are made in a timely manner and are not unreasonably withheld;

– have a documented dispute settlement process that details how disputes about payments to subcontractors will be resolved and must comply with that process; and

– ensure that disputes are resolved in a reasonable, timely and cooperative way;

Recommendation 22 •   The committee recommends that state and territory government departments and agencies responsible for administering their security of payment legislation closely scrutinise the practice of providing false statutory declarations and where necessary, launch prosecutions as a practical deterrent. Recommendation 23 •   The committee recommends that each state and territory government department or agency responsible for the relevant security of payments act should follow the example in Queensland and publish publicly available, identified information concerning the outcome of payment disputes. Recommendation 24 •   The committee recommends that it be made a statutory offence to intimidate, coerce or threaten a participant in the building industry in relation to the participant's access to remedies available to it under security of payments legislation. Recommendation 25 •   The committee recommends that state government departments and agencies responsible for the relevant security of payments act provide education, awareness and support for industry participants who may wish to access remedies available to them under the relevant legislation.

– examine security of payment legislation of all jurisdictions to identify areas of best practice for the construction industry;

– take into account any reviews and inquiries that have recently been conducted in relation to security of payments, including the December 2015 report by the Senate Economic References Committee on Insolvency in the Australian Construction Industry and the draft legislation developed by the 2003 Cole Royal Commission into the Building and Construction Industry; and

– consider how to prevent various types of contractual clauses that restrict contractors in the construction industry from obtaining payments for work that has been completed.

Recommendation 26 •   The committee recommends that industry groups should also be proactive in educating and training members on the relevant payment systems. This should include streamlining complaints and dedicated help lines.

Recommendation 27 •   The committee recommends that adjudicators of payment disputes under the relevant security of payments act should be required by law to be independent and impartial.

Recommendation 28 •   The committee recommends that following completion of the steps recommended in chapter 10 in relation to Project Bank Accounts on construction projects where Commonwealth funding exceeds $10 million, the Commonwealth enact national legislation providing for security of payment and access to adjudication processes in the commercial construction industry. Recommendation 29 •   The committee recommends that commencing as soon as practicable, but no later than 1 July 2016, the government undertake a two year trial of Project Bank Accounts (PBAs) on no less than twenty construction projects where the Commonwealth’s funding for the project exceed $10 million. Recommendation 30 •   The committee recommends that after the trial has concluded, a timely evaluation of the trial of PBAs on Commonwealth funded projects be conducted with a view to making the use of PBAs compulsory on all future Commonwealth funded projects and mandating extending the use of PBAs to private sector construction projects. Recommendation 31 •   The committee recommends that, while the Commonwealth trial of Project Bank Accounts is underway, the Attorney-General refer to the Australian Law Reform Commission for inquiry and report a reference on statutory trusts for the construction industry. This inquiry should recommend what statutory model trust account should be adopted for the construction industry as a whole, including whether it should apply to both public and private sector construction work.

Recommendation 32 •   The committee recommends that the Council for the Australian Federation and state and territory regulators continue to develop external equivalence for licences in the building and construction industry Recommendation 33 The committee recommends that each state and territory licensing regime contain three key requirements: 1.   that licence holders demonstrate that they hold adequate financial backing for the scale of their intended project. This capital backing requirement should be graduated, with increased levels of proof required for more significant projects; 2.   that on registration, licence holders provide evidence they have completed an agreed level of financial and business training program(s), including principles of commercial contract law, developed in consultation with industry bodies; and 3.   that licence holders demonstrate that they are a fit and proper person to hold a licence.

Recommendation 34 •   The committee recommends that automated cross-agency data sharing should trigger an alert when an individual: declares bankruptcy; is convicted of fraud; is disqualified as a director; or liquidates a company. This alert should require the relevant state or territory regulator to satisfy itself that the licence holder remains a fit and proper person.

Recommendation 35 •   The committee recommends that the government, through the work of the Legislative and Governance Forum for Corporations establish a beneficial owners' register.

Recommendation 36 •   The committee recommends that section 117 of the Corporations Act 2001 (Cth) be amended to require that, at the time of company registration, directors must also provide a Director Identification Number. Recommendation 37 •   The committee recommends that a Director Identification Number should be obtained from ASIC after an individual proves their identity in line with the National Identity Proofing Guidelines.

Recommendation 38 •   The committee recommends that the Australian Securities and Investment Commission Act 2001 (Cth) be amended to require ASIC to verify company information.

Recommendation 39 •   The committee recommends that ASIC and Australian Financial Security Authority company records be available online without payment of a fee.

Recommendation 40 •   The committee recommends that ASIC focus enforcement action on business advisors specialising in pre-insolvency advice who advise firms to restructure in order to avoid paying their debts and obligations. Recommendation 41 •   The committee recommends that ASIC publish a regulatory guide in relation to the nature and scope of pre-appointment advice given or taken by companies.

Recommendation 42 •   The committee recommends that the Corporations Act 2001 be amended to align with section 64ZB(8) of the Bankruptcy Act 1966. Recommendation 43 •   The committee recommends that firms who provide business advice be prohibited by way of an amendment to the Corporations Act from buying into the companies they are advising via debt acquisitions.

Recommendation 44 •   The committee recommends that the government, through the work of the Legislative and Governance Forum for Corporations, give serious consideration to extending the jurisdiction of the Federal Circuit Court of Australia to include corporate insolvencies under the Corporations Act.

Australian Government response to the Joint Select Committee on Northern Australia report:

Scaling up—Inquiry into opportunities for expanding aquaculture in Northern Australia

June 2017

Preamble

The Australian government welcomes the opportunity to respond to the report of the Joint Select Committee on Northern Australia titled Scaling up: Inquiry into opportunities for expanding aquaculture in Northern Australia, published in February 2016.

The report examines the aquaculture industry in Northern Australia and highlights issues such as the obstacles to import production replacement by local producers and areas where the industry is placed to benefit from increased demand for seafood and products derived through aquaculture.

Several of the issues considered in the report are not new and activities, including research, revision of existing legislation and provision of financial and technical support, are already underway to address several of the recommendations identified in the report.

The Australian Animal Health Laboratory works with veterinary and human health agencies globally to ensure Australia's biosecurity infrastructure remains strong and Australia's multi-billion dollar livestock and aquaculture industries, as well as the general public are protected from emerging infectious disease threats.

Through its Infrastructure Investment Program, the Australian government is providing significant investment in infrastructure development and improvements across Western Australia and the Northern Territory. At a broad level, the program seeks safety, economic and social improvements for all Australians through the support of local and national infrastructure.

The Environment Protection and Biodiversity Conservation Act 1999 provides the legal framework to protect and manage nationally and internationally important flora, fauna, ecological communities and heritage places. Based on the guiding principles of ecologically sustainable development, the act aims to balance the protection of these crucial environmental and cultural values with economic and social needs.

The Commonwealth Marine Reserves, declared in November 2012 and currently under transitional arrangements, are intended to provide biodiversity conservation while allowing for ecologically sustainable use. Potential aquaculture activities in Commonwealth marine reserves are considered when consistent with reserve zoning, management prescriptions and the acceptability of impacts on reserve values.

The Australian government is keen to support further exploration of opportunities for development in Northern Australia, which ensure the waters and land of Northern Australia remain healthy, abundant with native species and a resource for generations to come.

Recommendation 1

The committee recommends the establishment of an Australian Pearling Industry Recovery Taskforce to fund a research program focussed on identifying the causative agent of the oyster oedema disease and possible remedial actions to reduce the incidence, and mitigate the impacts of the disease.

Australian g overnment response

The Australian government partly agrees to this recommendation.

The Australian government has invested in research to understand oyster oedema diseases through the Fisheries Research and Development Corporation, which has in turn invested in oyster oedema research through its Pearl Industry Partnership Agreement and the Aquatic Animal Health and Biosecurity Subprogram. The pearling industry also contributes significantly to this work through direct and indirect contributions.

More broadly, there are past and current projects addressing this disease. An example of which is a current project using molecular techniques to identify pathogens that may be associated with the disease, and to develop diagnostic tests to facilitate early detection and management. The project commenced in July 2013 and is due for completion in late 2016.

Further research on oyster oedema could be supported through existing mechanisms, including through the Pearl Producers Association, the Pearling Industry Partnership Agreement and the Aquatic Animal Health and Biosecurity Subprogram, if considered to be a high priority for investment of available resources. Once the cause of oyster oedema is determined further research can be undertaken to identify ways to mitigate the impacts of the disease.

Additionally, the Australian government recently announced a $3 million investment in a Future Oysters Cooperative Research Centres Project. The project commenced in July 2016 and aims to improve disease management for Pacific Oyster Mortality Syndrome. Findings may have future applications in managing other oyster-related diseases, like oedema.

Recommendation 2

The committee recommends that the Department of the Environment, in collaboration with the Queensland Government, fund a program to review and expand the science relating to the environmental impact of aquaculture in areas adjacent to the Great Barrier Reef. The review should include research organisations with recognised expertise in this area including, but not limited to: the Commonwealth Scientific and Industrial Research Organisation, the Australian Institute of Marine Science, and James Cook University.

The research should be an examination of:

Australian g overnment response

The Australian government notes this recommendation.

Integrating science into decision-making is a key principle of good environmental policy. The research identified in the recommendation will be important prior to any large scale expansion of aquaculture adjacent to the Great Barrier Reef.

The Reef 2050 Plan is based on the best available science and guides the management and protection of the reef for the next three and a half decades. This plan was developed following comprehensive consultation with scientists, communities, traditional owners, industry and non-government organisations. Implementation of the plan continues to be informed by advice from two specially established advisory committees. These are the Independent Expert Panel, chaired by the former Chief Scientist Professor Ian Chubb and the Reef Advisory Committee, chaired by the Chairman of the Australian Institute of Marine Science, the Honourable Penelope Wensley.

Any decision to fund a dedicated program to review and expand the science relating to the environmental impact of aquaculture in areas adjacent to the Great Barrier Reef would require reallocation of existing resources. No aquaculture research is currently being undertaken, nor planned to be undertaken by the National Environmental Science Program Tropical Water Quality Hub. This has not been raised as a priority for the Tropical Water Quality Hub through the previous two calls for research priorities.

Recommendation 3

The committee recommends that the Department of the Environment and the Great Barrier Reef Marine Park Authority support the Queensland government in determining the need for and the positioning of special aquaculture development zones. These zones should be identified using criteria, considering:

Australian g overnment response

The Australian government notes this recommendation and recognises the establishment of aquaculture development zones on land and in state waters is a matter for state and territory governments. The Australian government supports the development of aquaculture industries.

Under the Reef 2050 Plan, the Australian and Queensland governments work closely and jointly to deliver the best possible outcomes for the future protection and management of the Great Barrier Reef. This relationship is formalised through the Great Barrier Reef Intergovernmental Agreement and reflects the shared vision as outlined in the Reef 2050 Plan. The Great Barrier Reef Ministerial Forum, which includes Australian and Queensland government ministers, facilitates and oversees implementation of the objectives of the agreement.

Recommendation 4

The committee recommends that the Great Barrier Reef Marine Park Authority, in accordance with the planned actionsoutlined in its Regulatory Plan 2014-2015, revoke the Great Barrier Reef Marine Park (Aquaculture) Regulations 2000 (Cwlth).

Australian g overnment response

The Australian government agrees to this recommendation.

The Australian government is in the process of revoking the Great Barrier Reef Marine Park (Aquaculture) Regulations 2000.

Recommendation 5

The committee recommends that the Department of the Environment ensures the framework for developing offsets in the Great Barrier Reef is comprehensive, transparent and accessible for potential aquaculture investors. The framework should allow potential investors to accurately estimate:

Australian g overnment response

The Australian government agrees to this recommendation.

The Great Barrier Reef Marine Park Authority, Department of the Environment and Energy and the Queensland government are working collaboratively to develop offset guidance specific to the Great Barrier Reef World Heritage Area. Work is underway through the Reef Trust and the National Environmental Science Program Tropical Water Quality Hub to develop an offsets calculator for proponents seeking to deliver offsets through the Reef Trust. Policy and research efforts will ensure that there is a high degree of transparency and consistency in the science underpinning the use of such tools.

Recommendation 6

The Committee recommends that the Queensland government conduct a survey of crocodile egg numbers in Northern Queensland to determine the sustainability of crocodile egg harvesting.

Australian g overnment response

The Australian government notes this recommendation.

Saltwater crocodiles are protected internationally under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). To access international markets, any harvest of crocodiles and eggs must be assessed as ecologically sustainable under the Environment Protection and Biodiversity Conservation Act 1999.

The Queensland government has a Saltwater Crocodile Wildlife Trade Management Plan to December 2017 approved under the Environment Protection and Biodiversity Conservation Act 1999. The plan allows for the export of crocodile products from Queensland for commercial purposes. The plan provides that juvenile crocodiles (hatchlings) and eggs are sourced from interstate to supply the crocodile farms in Queensland.

Recommendation 7

The committee recommends that the Fisheries Research and Development Corporation should consider introducing a 'northern node' as an avenue for providing funding research relevant to Northern Australia.

Australian g overnment response

The Australian government notes this recommendation.

The Australian government has regional structures in place to provide funding for research and guiding investment in Northern Australia through the Fisheries Research and Development Corporation. The corporation supports a network of Research Advisory Committees, including one