Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The committee is considering an amendment, which is on revised sheet 5503, moved by Senator Siewert. The question is that the amendment moved by Senator Siewert be agreed to.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Members may recall that late last night I moved this amendment that relates to lifting the current tax-free ceiling on fringe benefits for public benevolent institutions, charities, not-for-profit hospitals and other relevant not-for-profit organisations. People will recall that I have highlighted already the value of the not-for-profit sector to the Australian community.

I find it very timely that today, in the Australian, Frank Quinlan, Executive Director of Catholic Social Services, has an opinion piece that talks about tax changes for church and charitable organisations. I will quote just a few parts of the comments that he makes in highlighting the importance to the community sector of raising this ceiling. He says:

For many, the term salary packaging conjures images of highly paid executives enjoying luxury cars, restaurant meals and other fringe benefits while avoiding paying their fair share of income tax.

But this scenario is far from the reality for the many people working in the charity and community sector.

He then says:

The salary-packaging program is voluntary, and is more administratively burdensome than paying simple salaries, but is attractive to the agency because it has the net result of delivering more services per dollar of funding received from all sources.

He goes on to say that the problem for the now Labor government, however, goes well beyond this current legislation. That goes to the issue I was talking about yesterday, which is the longer term viability of the sector. He says:

They have inherited a community sector facing many challenges. Demand for services has never been higher. Competition for staff has never been greater. The long-term impact of competitive tendering during the past 20 years has squeezed far greater efficiencies from community services than have been achieved in government during the same period.

He continues:

However, even bigger questions arise from this crisis. Why is the community sector dependent upon special taxation arrangements, inconsistently applied exemptions and the good will of its workforce for viability? Should a sector that is delivering essential services to the most vulnerable members of the community have to rely on people of goodwill working for low salaries in programs that are in great demand but never adequately funded?

He asks:

Have governments delivered the reforms required in their own operations to allow the sector to flourish?

This points to the longer term crisis that the community sector is facing, which goes to the issues I raised yesterday in my speech in the second reading debate. However, the point here with this particular amendment is that we need to acknowledge that the community sector is facing a crisis. It has a number of problems in attracting and retaining staff to deliver its services. I would remind the chamber that the sector represents over $50 billion worth of services to the Australian community, without which I do not believe we could function as a civil society.

The sector is saying that it needs this issue dealt with now, while we deal with the sector. That sector plays a vital part in the community in which we all live. Raising the cap now will not fix all of the sector’s issues, and I am not claiming that it does. However, the Greens are saying that, while the longer term issues are being dealt with, this will go a long way to relieving some of the tensions and pressures on the sector in the short term to enable it to deliver better salaries and support for its staff.

I was pleased that there is an acknowledgement, I believe, from government, as I articulated yesterday, reading from the media release by Senator Ursula Stephens, that they are:

… dedicated to a new era of partnership with the not-for-profit sector …

and that they:

… will continue to find new ways to support and promote the crucial work of the staff and volunteers within the sector in helping disadvantaged Australians.

I say to government and to the opposition: this is one new way—in fact, just a new amendment to an old way—of helping the sector right now in delivering increased salaries and better support for our community sector. That is why I moved the Greens amendment, which raises the cap to $40,000 for not-for-profit institutions and also deals with the issue of raising the cap for not-for-profit hospitals and other not-for-profit organisations.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

What I recall about the brief discussion last night that preceded this one was really a rather hysterical contribution by the Greens and Senator Siewert in which the opposition was accused of having a ‘bleeding heart’. If having a bleeding heart means putting pensioners and patriots first and foremost, that is an accusation that we will have to accept, because it certainly appears that there is a problem with the Greens in putting the interests of our seniors and our veterans first.

Whilst there is an attempt to address their focus on ferns and frangipanis rather than pensioners and patriots, in this amendment the Greens have failed to articulate the cost of this. There is an inclination from me and from the opposition to support these amendments because they are very important issues and they should be looked at more thoroughly, but we cannot accept these amendments in the absence of competent financial modelling, because to do so would be economically irresponsible. We cannot support the proposed changes unless there is some financial modelling which can be provided to us. If you have any, Senator Siewert, that you would like to provide to us—or, indeed, if the government does—we are happy to consider them, but until we have financial modelling we cannot support this amendment.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That is really a statement of defeat from the opposition. It cannot, of itself, do an analysis of a perfectly straightforward amendment because it is in opposition and it does not have access to the modellers that it previously had, so, rather than look at the merit of the amendment, the opposition is going to vote it down.

This is Senator Bernardi talking about the failure of the Greens, for goodness sake, to look after pensioners and veterans. He is talking across the chamber here to the Greens, who have pursued a proper remuneration for pensioners who live below the poverty line from the Howard government, which did nothing for them over 11 years and which left them languishing in poverty. Of course, they still are, because nor was anything done about their basic income and ability to get themselves good services in the current 2007-08 budget under the Labor government. The Greens have been fighting and will continue to fight a campaign for much better conditions and much better remuneration generally to come out of this parliament. We did not see that under the Howard government and so far we have not seen it under the Rudd government. Senator Siewert’s amendment here speaks for itself. It is easy for Senator Bernardi to debase this debate with throwaway terms like ‘ferns and frangipanis’. Frankly, it is a serious debate, Chair—you will appreciate that—and it deserves better than that sort of comment.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I would like first to address the issue of the modelling and the cost. Senator Bernardi, I am not sure if you were in the chamber when I articulated in my speech on the second reading yesterday that, according to the tax estimates by the Australian government for welfare services—and I am basing this on current prices from 1998-99 to 2005-06—the cost at the present time of the capped exemption for fringe benefits tax for public benevolent institutions is in fact $250 million, of a total expenditure of $25,000,000,740. So, as you can see, as I said last night, it is a relatively small proportion. If you just do the straight maths of increasing the cap by about a third, we are estimating that it is going to cost between $80 million and $100 million. Considering the value of the services that are delivered by this sector, which are worth over $50 billion—and I repeat again that that is a highly conservative estimate, based on the cost to the community services; if government were to deliver those, you would have to increase that price substantially—the Greens argue very strongly that an increase of expenditure of around $80 million to $100 million is a very, very cheap way to deliver these critical services to the Australian community.

As for the comments about my ‘hysterical’ outburst yesterday, let us put it in context. We are reinventing a little bit of history here, which is what I articulated last night. The Greens were the first party to come out and advocate for a rise in the pension for our pensioners. Let us make no mistake about this amendment. I was accused of supporting the government. I have actually looked at this legislation and understand what they are trying to do with the seniors card. If people’s incentives or benefits through the seniors card are altered with this change, they are certainly not pensioners, because pensioners will not come anywhere near meeting the ceiling on expenditure. So stop using emotive language, saying, ‘This is you cheating pensioners.’ It is a different issue.

Last night I said that if you are going to have a bleeding heart—and I am really happy that you changed from the way you were before—please deal with the issues that are actually affecting our community. As I said last night, because of the changes to the child support formula, right now there are hundreds of thousands of single parents, both mothers and fathers—although 85 per cent of single parents are mothers—who are suffering. When that legislation was changed, we knew this was coming down the track. But we did not know the size of the impact, because adequate modelling was not done. The interaction with Welfare to Work was not done. Where was the concern for the thousands of the lowest paid and lowest income earning members of our community? Where was the concern for the kinship carers that were impacted tremendously by Welfare to Work provisions? Where was the care for pensioners when their income in real terms keeps falling behind? That is the point I made.

As I said, I am really glad that there has been a change of heart, and one of the ways that you can demonstrate it is by supporting this amendment. As I said, the figures that we have been able to get hold of to date show that at this stage the expenditure is $250 million. That would go up by $80 million to $100 million. That is cheap. That is a cheap way of buying all the resources and commitment and support that the community sector give to this community. I think I have heard general support around the chamber for the community sector and the absolutely crucial and valuable work that they do. This is a way that we can support that work while the long-term solutions are found.

I am not pretending that this is the way that we can deal with the crisis that faces the sector. It releases a bit of steam from the pressure points that the community sector are facing. But if we do not address this issue we are going to be seeing a community sector more and more in crisis. As I said last night, I have been inundated with emails from people saying, ‘Good on you,’ and giving me examples—I articulated some of them last night—of what the issues are that are facing the sector and how important it is that we start addressing these issues.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

Senator Siewert, no-one doubts your genuine and very real interest in this sector and your concern about the welfare of people. Please do not misinterpret what we say in that regard. But we have to be mindful that this is a new era. This is a time when we are looking forward. You should stop looking in the rear-vision mirror at what has been done before and start to look at what can be done in the future.

One thing we cannot resile from is the simple fact that we have to make prudent financial decisions based on good information. I respect the fact that you have quoted a cost of $80 million to $100 million, but, with all respect, we cannot rely on that. We need some actual modelling on the financial implications of the suggested amendment. So we empathise, in principle, very strongly with the intent of your amendment. Do not get me wrong on that. But we need to know the financial impact of the amendment before we can consider supporting such a measure. In the absence of that financial modelling on the costs, we cannot responsibly support the amendment.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It is going to be interesting to see the opposition arguing for its own amendments, the many amendments that it will move in the next three years, if it is going to want the level of financial modelling that Senator Bernardi is calling for. Senator Siewert has pointed out that the Greens amendment is going to save much more money, through the delivery of services, than the alternatives—if the government is going to consider delivering those services. The fact is that there is a very clear and cogent argument here that this is the right thing to do. The end result is the delivery of services and the assurance of services that would be much more expensive if you were to look for alternatives.

If the opposition wants to vote this down it is doing the wrong thing by the community sector and by the people whose services are at stake here. If the opposition is going to argue in this place: ‘We’ll vote against this because we don’t know what we’re doing; we don’t have the fine assessment of the costs of doing this,’ it is going to find itself in difficulty bringing forward innovation to legislation over the next couple of years and it is going to find itself voting against much-needed innovation in the Senate. This is a meritorious amendment and it ought to be supported.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I will just add to that. While I would like to continue just to look forward, as Senator Bernardi has said, unfortunately the fact is that these organisations are dealing with people who are suffering as a result of policies that were brought in when the opposition was in government. So, as much as I do not want to look in the rear-vision mirror either, the fact is that we are dealing with the legacy of some of the policies that were brought in. These organisations are dealing with that. I am not saying all of them, so do not try and misquote me, but certainly they are dealing with some of the consequences of the policies that were brought in—that is, they are dealing with families who are struggling to make ends meet and are some of the most disadvantaged in our community.

I find it disingenuous, I must say, to say that there is not enough modelling to show what the cost of this is going to be. I was quoting Treasury figures to show the cost of this. I am quoting published figures when I quote the value of this sector to the community. Hiding behind modelling and the lack of it is, I think, disingenuous. You can go and say to the community sector, ‘We would have supported it but we didn’t have the modelling.’ You did not have the modelling when you brought in a whole lot of other changes either but you brought them in anyway. I am sorry; you cannot just wipe the past, because we live with the consequences now. These organisations are dealing with the consequences now. What is $80 million to $100 million to the $50 billion that the sector contributes? As I said, I think that is a conservative value.

This sector is there slogging it out day-in, day-out, 24/7. You are hiding behind the lack of modelling to support this so you can say, ‘We would have supported it but they haven’t done the modelling.’ If you had been doing the job at the time, this would have been indexed. And it has not been. I do not want to get into a brawl across the chamber about this, because I think this should be above politics, but you have now suddenly discovered that there are people out there who are suffering, when some of us have known that for years and years. Those who work with these people have known this for years and years, and it is time that we did something about it. This is one way that we can start to deliver these services. You know what? I do not need the modelling to tell me that if these sectors have to fold up—if these sectors cannot carry out the work they do with, for example, the aged—the government will have a hell of a bigger bill in years to come. I do not need to model it to tell you that. Anybody can tell you, without the modelling, that if the sector cannot continue their work government will be picking up the bill—and it will be a lot more than $100 million. This community sector is worth more than petty bickering around whether there is a model to tell how much extra this will cost when we know a ballpark figure.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Just a reminder, Senator Siewert, please address your remarks through the chair.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Link to this | Hansard source

I remind those who are interested in this debate that we are here this morning discussing the Australian Greens amendment on indexing the threshold for fringe benefits. I concur with so much of what Senator Siewert has said, but I have to say from the outset that, unfortunately, the government cannot support this amendment. I would like to explain why that is the case. First of all, this is not the right place. This is not the right legislation to discuss such an important issue. The idea that we would deal with such a significant issue for the sector in such a piecemeal way does the sector a great disservice. This is a Families, Housing, Community Services and Indigenous Affairs bill. The intent of the bill, and the reason that we have it here before us, is to address the consequences of the previous government’s decision in respect of the use of the gross value of reportable fringe benefits on the not-for-profit sector and to restore the use of the net value of fringe benefits in the definition of adjusted taxable income for determining family assistance.

The amendment to this legislation that you have brought before us actually belongs in a financial bill, the taxation bill. Having said that, so much of what you said this morning is of critical importance to the sector. You quoted Mr Quinlan, from the Catholic Social Services, in his opinion piece in the Australian today. The issue that he raises in that article is fundamental to the way in which the government wants to deal with the sector in the future. The question that he posed about why the community sector would have to be dependent upon these special taxation arrangements, inconsistently applied exemptions and goodwill for its workforce viability is a profound question that we want to address.

In respect of the way in which we are intending to engage with the sector in the future, let me outline some things that will perhaps give you some assurance that we are not going to hang the sector out to dry. First of all, at the recent ACOSS conference I announced that we were going to work towards the development of a national compact with the sector, and that would be about re-engaging in a respectful working relationship and partnership with the sector on service delivery.

Secondly, we have announced that we will refer to the Productivity Commission a reference around developing a tool to measure and understand both the social and economic contributions of the sector. When we do understand those in real terms, and the extent to which the sector contributes to the social, environmental and economic life of the nation, we will all be able to advocate much more strongly for the sector.

Thirdly, Senator Murray and Senator Allison provided a reference on the regulatory framework, compliance and transparency around the charities and not-for-profit sector to the Senate Standing Committee on Economics. The terms of reference go to a range of issues that you raised here this morning and last night in your second reading contribution, so I think the sector itself will be able to articulate very clearly to government its real concerns and what they see as better ways that the government can respond to the real pressures that confront the sector.

Finally, on the issue of the complexity of the interaction of the tax and income support systems, which we have referred to the comprehensive review of Australia’s future tax system being led by the Treasury secretary, Mr Henry: the review will examine the issues and make recommendations to create a tax structure that will deal with them quite specifically for the sector but more broadly for Australia. As the Prime Minister has said, this will be a root and branch review of the Australian taxation system, and I will be advocating very strongly that the sector’s interests are very clearly considered in that review. So, at this stage, we will not support your amendment—not because we do not believe that what you are proposing is critically important but because it cannot be done in such a piecemeal way. To do it in this way would actually be a disservice to the sector.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I thank the minister for her answer. While I do not disagree with any of the measures that the minister has just outlined in terms of dealing with the long-term issues and the re-engagement, the compact—the minister is probably aware that it is something the Greens have been advocating for a long time—the issues around the Productivity Commission, the referral to a committee and the Henry review are all really good initiatives, but none of them are going to deliver right now.

Some of these initiatives are two or three years down the track—18 months, I think, at best. Even if the Senate committee delivers before that, it will be some time before the government responds. So we are talking about measures that are a couple of years down the track, when the crisis is now. Organisations, charities and not-for-profits are struggling to keep their staff. So many of their staff are walking out the door or retiring, and they cannot find replacements. Try telling the sector when their staff are walking out the door and they are struggling to make ends meet: ‘It’s okay. We’ll fix up your problems in two or three years time.’ I have had anecdotal feedback that for some organisations that will be too late. This may not be the best piece of legislation to deal with this issue, but this is a crisis that needs to be dealt with now, so we should grab what is available—and that is certainly what I have done.

This issue came up in the committee inquiry into the legislation, and the committee review focused on it. This amendment is one way that the government can take pressure off the community sector while it carries out its reviews. The Standing Committee on Finance and Public Administration made a recommendation around this issue. I acknowledge that the committee did not say that the issue had to be dealt with straightaway, but the committee raised it as an issue that needed to be dealt with. I think it should be dealt with now and not put off to the never-never. As I said before, we need to provide some short-term relief for this situation, and this amendment is one way of achieving that. I do not resile from the fact that there needs to be work done in the longer term. I said that in my contribution to the debate on the second reading. I also said it last night, and I am saying it now. I acknowledge the work that the government is doing, but it is not enough to deal with the immediate crisis.

I would like to ask the minister: what is the government’s response to the committee’s recommendation on this issue? If I understand the committee’s recommendation properly, they thought it should be dealt with in a shorter time frame than that set out by the minister in these four initiatives.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Link to this | Hansard source

Thank you, Senator Siewert, for your observations. In relation to the concerns of the sector, you would know that I have been in very deep conversation with representatives of the sector on this and other issues for well over a year now and that I have been working towards a much broader approach to how we will deal with these issues.

These issues have been raised with me in every forum around Australia that I have been involved with. The not-for-profit roundtable presented very coherent arguments on a range of regulatory issues, not just on fringe benefits tax. There is also the work that is being done by the Australian Centre for Philanthropy and Nonprofit Studies at the Queensland University of Technology and Professor Miles McGregor-Lowndes. All have contributed to a deeper and more fundamental understanding of the sector, its role, its contributions and its challenges. My advice from the department, which may be helpful to you in the short term, is that the 2007 tax expenditure statement reports that the current capped FBT exemptions for PBIs, certain public and non-profit hospitals and the partial rebate for certain non-profit, non-government bodies have an estimated revenue cost of $740 million in 2008-09; $775 million in 2009-10; and $805 million in 2010-11. So we would be talking about a significant and substantial impost if we were to change the fringe benefits threshold in the way in which you are proposing in this legislation.

My concern for the sector is that we need to find some way of responding in the short term, and that is not going to be at the fringes of the fringe benefits tax. We will try to provide some substantive support for the sector, probably in the next budget or the budget after that, which is when we will be able to do something substantial and sustainable that will have a long-term impact for the sector.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I thank Senator Stephens for that submission to the committee. Frankly, I am glad that she is the parliamentary secretary for this matter, because she does have an understanding of it. She is obviously very sympathetic to the sector and has her heart in the matter, and that is fundamental to this portfolio.

I want to raise a couple of issues. The first is in relation to the comment that this is not the place for Senator Siewert’s amendment to be brought forward, because it is a piecemeal approach. I have just had a quick look at the legislation, and it deals with more than a dozen different adjustments to legislation or to other matters. It is a piecemeal bill itself. It is trying to pick up on a whole range of issues and to fix them in one way or another. It is the ideal place for Senator Siewert to bring forward this amendment. The Greens are not the generator of the major legislation in this field. It is the task of the crossbench and smaller parties to take the opportunity where they can to improve legislation, and that is exactly what Senator Siewert is doing here. It is the proper place for it.

The second matter concerns the costing. Senator Stephens has just talked about projections for the next three years of less than $1 billion each year. Let us put that into the context of tax cuts, which largely benefit the wealthy in this country, of $507 billion over the coming three years from the last budget and this year’s budget. You suddenly get a sense of proportion of the priorities of what is a self-proclaimed fiscally conservative Rudd government in the matter. I would have thought the priority should be in this area, not in the multibillion dollar tax cuts which have been afforded to people—as you know, Mr Temporary Chairman Murray—who are in the top income-earning brackets in our country. And, by the way, it is an inflationary matter at that, which is not going to help at all the sector that Senator Siewert is coming to the aid of.

Finally, there is the business of this being done on the run and not being properly costed. I do not want to anticipate an order of the day, but we will be dealing again with the Tax Laws Amendment (2008 Measures No. 1) Bill 2008 a little later in committee, and we dealt with that last night. There we have a classic case of a multimillion dollar windfall to investors from the big end of town that is not costed and potentially has the perverse outcome of making greenhouse gas emissions into the atmosphere worse, not better. It has been done totally on the run; it has been done for vested interests by those who have an enormous amount of lobbying power in this parliament—much greater than the social justice sector that we are dealing with in this legislation. I challenge Senator Bernardi or any member of the opposition to say what the costing on that is. The government does not know, and certainly the opposition does not. But that is going to go through a little later, if I have my ear to the ground right. So we have this extraordinary dissonance or disjuncture of argument: when it comes to the social sector, let us make it comprehensive, let us wait a year or two, let us make sure that we have our costings right and that it is all integrated and in an omnibus bill, do not do it piecemeal; but when it comes to the big end of town—no problems—rush it in, have no costing, no due diligence and no discussion with the community; both parties will get together and push it through. I ask you.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I would like to request the minister to table the figures she just quoted, because the figures that I quoted were from the Australian Institute of Health and Welfare report, Australia’s welfare 2007, and her figures are clearly different from the figures that are available from that survey. So I would appreciate those figures and I wonder if she could provide a breakdown of those figures that she quoted, because, as I said, they are substantially different from the figures that the Australian Institute of Health and Welfare quoted in their report.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Link to this | Hansard source

I am quoting from the Treasury’s 2007 Tax Expenditure Statement. I have with me only the summary, so I am not too sure whether or not it breaks it down by sector, but I can find that out for you.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

That is one of the issues that the community and the sector have—that often these figures are not broken down, so the figures that we have to rely on are the figures from the Australian Institute of Health and Welfare. This goes to the issue of how budget estimates are done, and I do not want to spend too much time reflecting on that. But that is the problem, and when Senator Bernardi says, ‘Do some modelling’, we are providing figures that are publicly available and that the sector uses for its decision making. So, that is perhaps an issue that also needs to be addressed.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Link to this | Hansard source

Thank you for that, Senator Siewert, because that is exactly what we are doing—having deep, long, extensive discussions with the representatives of the sector, with ACOSS, with the not-for-profit roundtable and with some of the academics who are researching these issues. We do need to understand, so once that work is done I am happy to share some of it with you.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I thank the parliamentary secretary representing the minister for that. I am aware of the discussions that are going on with the sector and I applaud that because the sector certainly needs that sort of engagement and support. My concern is that while the talks go on the crises that I have been talking about are facing the sector and are not being adequately dealt with. The parliamentary secretary will know, from her engagement with the sector, that those are real, pressing issues right now and there needs to be something done in the shorter term to deal with those issues. I appreciate that they picked up on the unintended consequences. In fact, last night we passed the amendment dealing with the issue of gross versus net FBT, but that is only a part of it. That issue had not hit the sector—it was coming down at them but it had not quite hit them—but the sector is nearing crisis in terms of being able to attract and keep staff. So, even without the FBT issue that was about to come down on top of them—although it was starting to impact a little, because I am aware of examples where staff decided not to take jobs because they had been advised by Centrelink of the forthcoming changes to FBT—that was not a factor, at that time, in the issues that are facing the sector.

Again, I repeat that talking is good, but it is not the only thing that needs to be done. We need to turn it into action. What is going to be done in the short term to help aged-care providers, for example, deal with the issues of their staff leaving, of not getting paid and of the decreasing real value of their take-home package because this cap has not been indexed from 2000? As I understood it, it was, at the time, the government’s intention to index. That is what I have been told. It did not happen, so while the cap remains at $30,000, as I said last night, if it had been indexed it would now be worth $38,000. That was if it had been indexed with CPI. If they had used AWOTI, it would be over $43,000. That is a real impact on people who are working in these sectors. They are saying, ‘Please, can you deal with this now while you deal with the longer term issues?’ They really appreciate that the longer term issues are being dealt with, but it is no use dealing with the long-term issues if some of these organisations are going to have to cease providing the services that are being provided now.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

It is becoming very clear that we are not going to get any agreement on this particular set of amendments, but I think we agree that the Greens, the government and the opposition want to undertake a comprehensive review of taxation matters as they apply specifically to this sector of the community. I know the government has the Henry review and the opposition has the Ergas review. We support the reference of these issues to the economics committee so that we can have a full examination of them. The opposition welcomes Senator Stephens’ comments and commends the use of the Productivity Commission in reviewing this area. It just begs the question: why is the Productivity Commission sidelined in other important reviews, such as the motor vehicle manufacturing industry review? That is a subject for another time.

Senator Siewert, we all want to see a result here. We want to see that people will not be substantially disadvantaged by, as you mentioned, unintended consequences. That is what we have tried to address, and we made those amendments last night. In the absence of financial modelling that is agreed to across the parties—and we have had two very different figures quoted; I understand where you are getting your information from, Senator Siewert, and I understand where Senator Stephens is getting her information from—the fact is we should work collaboratively on getting the best result here and make it happen as expediently as possible. I am very happy to work with you in that regard and to try and bring something back into this chamber later in the year, so that people are not disadvantaged. I mean that quite genuinely and I am sure the government would as well. I think we need to address these issues as comprehensively as we possibly can, and I would like to think that we can do that by working together, but not on these amendments, because we do not have all the information we need.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Obviously, I am disappointed that the opposition is indicating that it will not be supporting these amendments now. I do appreciate the sentiment that Senator Bernardi has just expressed. You can guarantee that I am not going to let this issue drop, because it needs to be dealt with urgently as a short-term measure, as I have already said—and I will not go back over it again—while the longer term issues are being discussed. As I said, we support the longer term issues. I think it is a very good move, but we do need to deal with this issue immediately. I thank the senator for his indication of intent to discuss this further—if I interpret what he has said properly. I look forward to that. I hope we can find some way of working with government, because I think this issue should be above politics. We should start addressing it as a matter of urgency, so that people in the sector can actually move to some modicum of a degree of better salary and better resources with which to carry out the vital work that they do.

Question put:

That the amendment (Senator Siewert’s) be agreed to.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Greens amendment (3) was really consequential on the previous amendments.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Senator Siewert, may I interrupt you, because you need to be clear on this matter. My understanding is that that amendment can stand alone, but if it were consequential to the previous one you would need to drop it.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Sorry, Mr Temporary Chairman, the running sheet is a bit misleading. Amendment (3) is in fact not consequential to amendment (2); it relates to indexation. I move Greens amendment (3) on sheet 5503 revised:

(3)    Schedule 6, page 42 (after line 27), after item 20, insert:

20G  After section 124A

Insert:

124AA Indexation of amounts

        (1)    This section applies to the dollar amounts mentioned in the following provisions:

             (a)    subsection 5B(1E) (method statement, step 2)

             (b)    subsection 5B(1E) (method statement, step 3, paragraph (b));

             (c)    subsection 65J(2B) (method statement, step 2, paragraph (b)).

        (2)    The dollar amount mentioned in the provision, for an indexation year whose indexation factor is greater than 1, is replaced by the amount worked out using the following formula (rounded to the nearest $100):

        (3)    The indexation factor for an indexation year is the number worked out using the following formula:

        (4)    The AWOTE amount for a quarter is the estimate of the full-time adult average weekly ordinary time earnings for persons in Australia for the middle month of the quarter published by the Australian Statistician in relation to the month.

        (5)    If the Australian Statistician publishes an estimate of full-time adult average weekly ordinary time earnings for persons in Australia for a period for which such an estimate was previously published by the Australian Statistician, the publication of the later estimate is to be disregarded for the purposes of this section.

        (6)    The indexation factor is to be calculated to 3 decimal places, but increased by .001 if the fourth decimal place is more than 4.

        (7)    In this section:

AWOTE means full-time adult average weekly ordinary time earnings for all persons in Australia.

indexation year means the financial year commencing on 1 July 2009, and each subsequent financial year.

This amendment relates to indexation of the cap. I appreciate that we have exercised these issues extensively during the previous debate but, as I articulated during the debate, the cap has not been indexed since 2000. The Greens are therefore seeking to put in place an indexation mechanism so that the cap is not left at the $30,000 limit. Of course, it would have been preferable if the indexation were occurring to a cap that was in fact $40,000 rather than $30,000. I will not go through the arguments again because, as I said, I think we have covered them pretty extensively. I commend this amendment to the chamber because it will go part way to dealing with the issues that we have previously discussed.

Question negatived.

The Temporary Chairman:

I advise you, Senator Siewert, that the last amendment falls away because it is consequential. The question now is that the bill, as amended, be agreed to, subject to a request.

Question agreed to.

Bill, as amended, agreed to, subject to a request.

Bill reported with an amendment and with a request; report adopted.