Murray Watt (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Hansard source

The government does not support the amendments proposed by the Greens, and I will quickly run through why. One of the amendments seeks to increase the annual disbursement amount from what will be the Disaster Ready Fund from $200 million per year to $300 million per year. I inform Senator Pocock that, fundamentally, the reason for us opposing this amendment is to preserve, if you like, the principal of the fund so that it has enough money in it to be invested and to keep generating the return that we would then be spending on disaster mitigation going forward.

The Future Fund Management Agency has considered the proposal in your amendment and advised that it would likely deplete the fund. It would essentially be taking out too much every year from that principal, rather than making sure that there were funds left to be invested. The bill's $200 million per year limit for resilience mitigation has been set for long-term sustainability of the fund, making sure that we can deliver sufficient funding for disaster resilience, while not overdrawing the fund. None of us, I think, would want to get to a point where this fund is fully depleted and unable to invest in that disaster mitigation going forward, and $200 million a year is the amount that we're advised can be spent from the fund every year without depleting it.

Aside from that, that figure lines up with what has been recommended for investment in disaster mitigation at the federal level by the Productivity Commission. They delivered a report in 2015 which recommended that the Commonwealth invest up to $200 million per year on resilience projects and for that to be matched by the states and territories. That's what we're proposing to do here. The amount also lines up with figures that the Insurance Council of Australia has called for to be invested in mitigation, which hopefully will provide some level of insurance relief to Australians as well.

This is far from the only investment that our government is making in disaster resilience. While I appreciate Senator Pocock's desire to see even greater investment in disaster mitigation, our position is that we're keen to do that but not necessarily only through this fund. In addition to the funds that this bill will provide for, we've recently committed $800 million with the New South Wales government to the New South Wales Resilient Homes Program for home buybacks and house raising and mitigation. We've also committed $750 million with the Queensland government for a similar program in Queensland. So there is significant money for betterment funding of infrastructure to bring it to a higher standard in both Queensland and New South Wales.

The second proposal put forward by Senator Pocock in her amendments is essentially around the investment strategy to be used by the Future Fund. The government is not able to support this proposed amendment to introduce what would be a prohibition on certain types of investments from the Future Fund. However, the finance minister will work with the Future Fund and the Department of Finance to explore options for investments within the Future Fund that better align with the government's commitment to net zero by 2050.

The legislation governing the Commonwealth's investment funds requires the board to maximise returns over the long term, consistent with best practice for institutional investment. The board integrates environmental, social and governance considerations into its decision-making process by assessing the potential impacts of ESG matters on the risk and return of the portfolio. The board also exercises its ownership rights associated with investments according to the board's ESG policy, which considers a range of issues, including climate change, human and labour rights, sustainable supply chains, corruption and bribery. For those reasons, we'll be opposing the amendments.