Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The committee is considering the Nation-building Funds Bill 2008 and Senator Milne’s amendment (1) on sheet 5645. The question is that Senator Milne’s amendments be agreed to.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

The existing evaluation principles for the funds provide an appropriate framework for expenditure. They require projects to address national infrastructure priorities, demonstrate high benefits and effective use of resources, efficiently address infrastructure needs and demonstrate that they achieved established standards in the implementation of management. The principles enable environmental considerations to be assessed as appropriate, such as evaluating benefits and the costs of the projects. The bill provides for appropriate parliamentary scrutiny of the evaluation criteria for each fund, which will be tabled in parliament as disallowable legislative instruments. Therefore, on balance, we will not be supporting the Greens amendments.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am quite sympathetic to the Greens amendments. I understand what Senator Milne and the Greens are trying to achieve. I cannot support it, because I believe it is too prescriptive. But I urge the government to give a commitment that, when considering these nation-building funds and these projects, there will be clear criteria to achieve the goals of reducing greenhouse gases and to take climate change into account. If those criteria are not taken into account then these funds could be used for projects that are contrary to the goals that the government has espoused for dealing with carbon pollution.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Obviously, the evaluation of projects under the nation-building funds will conform to broader government policy. I think the most obvious area is the area of climate change. For example, we have seen the introduction of the carbon trading scheme. Obviously, the assessment of projects will conform to that. But, again, I do not want to put that cart before the horse. They are issues on climate change that will be addressed on another occasion with another debate before the Senate when that policy response is concluded.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am not going to delay the Senate by speaking on this again except to say that the evaluation criteria in our amendment would require Infrastructure Australia to include assessments of greenhouse gas emissions and oil consumption implications in any matter of advice prepared under the section. That requires that filter to be put across every project. Frankly, if you have a whole-of-government approach to climate change and you are serious about greenhouse gas emissions then you would be accepting this. Though you say, ‘Of course it is going to be taken into account,’ I know it is not the case. If you did take it into account in relation to a coal port, for example, you would be required under this amendment to identify the likely greenhouse gas impact and to give some appraisal of that. You might still decide against it, but at least you would be forced to look at it. The same applies in relation to new freeways and so on. You would be forced to look at the likely ramifications of the increased number of vehicles and so on. That gives you a better criterion by which to compare that to, say, a public transport investment.

I accept that the government and Senator Xenophon are not going to support this. I did not hear from the coalition but, consistent with what they said before about the principles, I am assuming that they also do not support it. I am disappointed about that because I have an inherent feeling that we are going to end up with the case that, when it suits the government, they will take greenhouse gases into account; when it does not, they will not. We are going to end up investing in infrastructure which is 20th century, hugely emissions-intensive and which undermines our effort to move to a low-carbon economy, a much more efficient transport and freight system and a much more efficient way of living in terms of energy and emissions. However, nobody can say that the parliament did not have the opportunity at this time of climate emergency to actually put into legislation the priorities that they say they espouse. I think this is another signal to the community that the government is on a go-slow on climate change.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Just to clarify for Senator Milne: your supposition is correct that the arguments I put earlier in relation to your previous amendment apply to this one and, on balance, the opposition is not in a position to support your amendment.

Question negatived.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move Greens amendments (2) and (3) on sheet 5645 together:

(2)    Clause 120, page 93 (after line 9), after subclause (1), insert:

     (1A)    The BAF evaluation criteria must include criteria in relation to:

             (a)    climate change mitigation and adaptation and biodiversity conservation;

             (b)    preparation for the global oil production peak and expected decline in oil production.

(3)    Clause 120, page 93 (after line 9), after subclause (1), insert:

      (1B)    The BAF evaluation criteria must require Infrastructure Australia to include assessments of the greenhouse gas emission and oil consumption implications of a matter in any advice prepared by under subsection 116(1), 117(1), 118(1) or 119(1).

As I have addressed these amendments in my previous remarks, I ask that the question be put.

Question negatived.

I move Greens and opposition amendment (9) on sheet 5693:

(9)    Page 204 (after line 9), at the end of the bill, add:

Schedule 1—Amendment of other Acts

Infrastructure Australia Act 2008

1  At the end of section 5

Add:

        (6)    On receiving any advice or other document prepared by Infrastructure Australia under subsection (1) or (2), the Minister must cause a copy of the advice or other document, as the case may be, to be laid before each House of the Parliament within 3 sitting days of that House after the day on which the Minister receives the advice or other document, as the case may be.

This amendment adds a schedule which gives effect to the amendment that was passed earlier in relation to the joint house committee and the requirement for advice to be tabled.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I indicate the opposition’s support for this amendment. This is an amendment to the Infrastructure Australia Act 2008, which, as Senator Milne has indicated, is in a sense consequential to ensure the tabling of relevant documents prepared by Infrastructure Australia. I commend the amendment to the Senate.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

The government will not be supporting the amendment, but we have well canvassed the issues in earlier discussion.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Support.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

I am told that there are also amendments to amendment (9), which are included in the same grouping, you might say: Australian Greens amendment (4) on sheet 5645 and opposition amendment (70) on 5684, which both amend Greens and opposition amendment (9). I hope we are singing from the same song sheet. If you intend to move those amendments, they need to be moved so that amendment (9) becomes amended before I put it. Senator Milne, do you understand where we are?

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yes, I do. If I could just seek your advice, Chair: the Australian Greens will be opposing the opposition’s amendment on the Productivity Commission. The Australian Greens are seeking to amend the previously moved amendment in relation to the appointment of members of Infrastructure Australia, so we are amending the previous amendment in relation to that. And then we put the schedule? Is that right?

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Yes. What I am saying, Senator Milne, is that we must put your amendments to amendment (9) so that then it becomes an amended amendment.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

In that case, I move Australian Greens amendment (4) on sheet 5645:

(4)    At the end of Schedule 1, add:

2  At the end of subsection 8(2)

Add:

    ; and (f)    2 members are people with specific expertise and experience in one or more of the following fields:

                   (i)    climate change mitigation and adaptation;

                  (ii)    the global oil production peak and expected decline in oil production.

This amendment is in relation to the appointment of members of Infrastructure Australia. Essentially, this amendment is adding two members to it, those being people with specific expertise and experience in one or more of the following fields: climate change mitigation and adaptation; and global oil production peak and expected decline in oil production.

Perhaps, Senator Minchin, this may explain it for you. The opposition and the Greens have agreed to a joint house committee, membership of the joint house committee and so on, but this is where we may well disagree. I am just moving now that the two members—not of the joint house committee but in relation to the advisory body—are to be people with specific expertise. Basically, it is two members of the Infrastructure Australia evaluation board who have climate change and global experience.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

As I indicated, we support the first part, in relation to amendment (9), but we do not support the proposition in amendment (4)—that is, to add two members with specific expertise, as indicated. I think that is consistent with our previous remarks in relation to these issues of climate change and global oil production peak. I will not prolong the discussion. I indicate that we do not support that particular amendment.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The question is that Greens amendment (4), which is an amendment to Australian Greens and opposition amendment (9), be agreed to.

Question negatived.

We will now move to opposition amendment (70), amending Australian Greens and opposition amendment (9).

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move opposition amendment (70) on sheet 5684:

(70)  At the end of Schedule 1, add:

Productivity Commission Act 1998

2  At the end of Part 4

Add:

Division 3—Nation-building Funds projects

        (1)    The Commission must, as soon as practicable after the end of each financial year, prepare and give to the Minister a report on the projects approved during that financial year under the Nation-building Funds Act 2008.

        (2)    A report under subsection (1) must include but is not limited to:

             (a)    the productivity benefits expected to result from the projects; and

             (b)    any cost-shifting by a State or Territory that is expected to result from the projects; and

             (c)    any other matter connected with the projects to which, in the opinion of the Productivity Commission, attention should be directed

        (3)    The Minister must cause a copy of a report prepared under subsection (1) to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.

Amendment (9) relates to schedule 1, amendments of other acts, so our amendment seeks in that context to provide for an amendment to the Productivity Commission Act 1998, as set out in our particular amendment. That amendment is very important and I hope will be supported because it seeks to address those two critical issues I talked about earlier: how we ensure that we are objectively measuring the productivity benefits of the infrastructure investments proposed from these funds and how we ensure that we minimise and expose to the light of day the potential for cost shifting to the Commonwealth by a state or territory.

We believe the best way to do that is to, as in this amendment, amend the Productivity Commission Act to require the Productivity Commission at the end of every financial year to prepare a report on the projects approved during that financial year under these nation-building funds acts. That report would include, but not be limited to, the productivity benefits expected to result from the projects, any cost shifting by a state or territory expected to result from the projects and other matters connected with the projects to which, in the opinion of the commission, attention should be directed. We think the Productivity Commission is the best placed independent and objective analytical body to undertake what we think are necessary public interest functions with respect to expenditures from these funds.

We have heard much from the Rudd Labor government about the importance of their infrastructure spending for enhancing productivity in this country. We take them at their word. We support those objectives. It was always an objective of our government to enhance productivity in this country, and there is no denying that good infrastructure projects can enhance the productivity of this country. But we do believe that that needs to be measured, not asserted. The best way to measure the outcome of projects that are approved and acted upon by the government under these nation-building funds is to have the, appropriately named, Productivity Commission assess the productivity benefits, which the government asserts are its priority, its whole objective, in these infrastructure investments. But the government has not indicated to us how it is going to have objective, publicly reportable measures of the productivity benefits to be gained from these multibillion-dollar investments. Here is the perfect way to do it. We think this is a very important part of this whole approach to infrastructure investment.

The other critical factor, which we have talked about before, is how we go about ensuring that we avoid a situation where there is, in effect, no net new investment in this country. Australia will gain nought from any outcome which involves the Commonwealth simply replacing state and territory investment. We have already seen the New South Wales government indicating that it is going to withdraw some of the projects that it had in its infrastructure forward plan because now it is going to submit them to the Commonwealth and get the Commonwealth to pay for them. That means there will be no net new investment in Australia if that were to occur.

We have to do all we can to identify that risk, and the best way, again, for that to be done is by the federal government body best equipped to identify, through economic analysis, the risk of that sort of thing occurring. There is no other proposition before the Senate or the parliament to identify cost shifting, a risk that could well result from the advent of these nation-building funds. So I do commend this amendment to the Senate because I think it will be a very important part of the transparency and accountability of the public funds involved.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am just indicating the Greens will not be supporting this amendment. The Productivity Commission is notoriously conservative and actually wrong when it comes to climate policy. As I indicated before, my fear is that there will be a complete contradiction in the government’s policy here in terms of on the one hand having a climate objective and on the other hand wanting infrastructure projects. My fear is that the infrastructure projects will undermine climate policy unless they are aligned. If this were referred to the Productivity Commission, that would be absolutely guaranteed to be the outcome.

The Productivity Commission do not understand climate change. They have got it notoriously wrong up until now. In climate circles they are best remembered for their 2005 paper on energy efficiency where they deemed that there were no opportunities in energy efficiency on the basis that, if there were, people would have taken them up. They have not—therefore they do not exist. It is completely in contradiction with everything. Everyone knows that the lowest hanging fruit in terms of climate policy is energy efficiency.

In their response to the critique of climate policy, in their Garnaut submission and so on they have been absolutely outrageous. In the Stern review, Stern concluded that, because a life today is equivalent to a life tomorrow, there should be a zero discount rate applied. The Productivity Commission obviously decided that that was not the case and determined that the value of a human life in 50 years time is a tiny fraction of its current worth. That is a complete nonsense. Their submission to the Garnaut report can only be said to be offbeat—they suggest, in looking at the analysis of emissions trajectories, that global emissions could peak as late as 2030. That demonstrates to me that they have absolutely no idea about, and have completely failed to come to terms with, climate policy.

The Productivity Commission are also actively undermining the government’s own mandatory renewable energy target policy. While the government’s policy is 20 per cent by 2020, they recommend that it not exist at all, that we get rid of the mandatory renewable energy target. If it was left up to the Productivity Commission, I can guarantee that the infrastructure projects would not take into account either peak oil or climate change and would seriously undermine any effort the government made to make progress on climate.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

The Labor government is not supporting the amendment, although not for the same reasons as Senator Milne has outlined. Frankly, what are we doing here? Do we want some infrastructure investment in this country? I am just looking through these amendments. We have ensured that we will have an independent assessment panel for these projects. We are adding a ministerial reporting regime on projects. We are adding joint committee oversight. We are adding a competitive neutrality examination. I mean, frankly, we will make a decision to build a bridge and the river will have dried up by the time we have finished all of these examinations! I mean, let’s get a bit real here. And now we are adding the Productivity Commission! This is the most extraordinary set of processes being added to an otherwise robust independent assessment process. This is far more than we ever saw under the previous government. In fact, if this stuff ever sees the light of day it would be fascinating to do a comparative study in red tape on infrastructure investment in this country.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Minchin interjecting—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

It would be fascinating to do a comparative international study about the level of red tape being added to infrastructure investment—very necessary infrastructure investment—in this country, and do a comparison with what is going on in other countries. I mean, really! The now Liberal opposition are insisting on the most wide-ranging set of criteria, assessments and oversights that I have ever seen—and, I can say pretty confidently, that I would ever have seen outside of any Stalinist state on the face of the globe. This sort of stuff that we are adding to the infrastructure assessment here would make Korea and China look happy; it really would! In fact, it probably exceeds that. So, if these amendments ever see the light of day, in terms of this bill, it will indeed be a fascinating examination of the development of infrastructure. And do not forget: there is a whole range of project evaluations, local zoning, planning requirements and environmental requirements—it would be fascinating to see whether even Korea or China would exceed us in a project assessment.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

What’s Korea got to do with it?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

North Korea.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Yes, North Korea, sorry—or Cuba. I think we have just got to get a bit real here, frankly. Anyway, we oppose this amendment. That will do. Let’s get on with the vote.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I think Senator Minchin has been called many things in his career; I do not know if ‘Stalinist’ has been one of them! One of the Rudd government’s mantras has been to have an evidence based approach to their decision making, and I think that is to be commended. What this amendment seeks to do is to ensure that the Productivity Commission ticks off on the productivity benefits expected from projects, after they have been approved—this is not going to slow down the project; it is a separate exercise—and also examines whether there has been any cost-shifting from any state or territory government. In the New South Wales minibudget, not so long ago, there were some state projects which I think the state of New South Wales is now hoping that the Commonwealth will fund through this infrastructure fund. I think it is important that the issue of cost-shifting be assessed. I understand the government’s concerns about red tape, but I would have thought that this is a necessary check and balance, and I support the amendment.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Just briefly, Mr Temporary Chairman: I was not sure what Senator Sherry’s tour around the world was about—what relevance that had to this discussion—except that he cites some of what I would assume he means are undemocratic regimes. The point of the amendments that we have previously discussed is to bring some democratic oversight to expenditures by the central government. Perhaps in undemocratic regimes they do not have parliamentary oversight of expenditure. What we are saying is: in the great democracy of Australia, with a strong parliament, we should have parliamentary oversight of these expenditures. But, of course, that has nothing to do with the amendment that we are considering. The amendment that we are considering relates to the Productivity Commission’s role, and I do not think Senator Sherry has actually read the amendment. This is a report on the projects already approved. This is not introducing any sort of pre-approval red tape. This is about what happens after you have approved projects. This does not delay any project. This just says, ‘Once the government has exercised its authority, approved projects and approved the spending, then’—as Senator Xenophon rightly said—‘we have an evidence based approach conducted by the expert body, the Productivity Commission, to see whether in fact the objectives are being achieved in relation to productivity and whether in fact there has been any cost-shifting by state or territory governments.’ Senator Sherry’s arguments had nothing to do with the amendment before us.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

With due respect, there is another assessment being added into this process. I am very well aware that it is after the project has been approved. But the important point to make is that it is very likely that, in many cases, if not most, this assessment will be carried out and completed before the project construction commences. So we will have a finding, then there will be a debate around that finding and then, inevitably, there will be calls for a reassessment of the project, even if it has been given the—

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

It might be a good idea.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Senator Minchin interjects, ‘It might be a good idea.’

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Well, it’s better than wasting the money, isn’t it?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Then, on your logic, why wouldn’t you carry out this process at the beginning of the assessment rather than after the approval of the project? You didn’t think about that one.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Because then you’d accuse us of red tape.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Well, I have accused you of red tape, and we are right, Senator Minchin: you have added the most Byzantine, complex set of new requirements, oversights, committee examinations—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Too like the South Australian Liberal Party.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Senator Conroy, you are not helping the debate.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

A Stalinist regime would struggle to come up with the web of compliance that you have constructed in this legislation via your amendments.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

They didn’t have compliance in Stalin’s regime; Stalin just used to do it.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

They had a lot of red tape as well as doing it. You tended to get an authorised approval for construction of something in the Soviet Union and it took a long time, even once Stalin had approved it. But, anyway, I have made the point: we do not support this amendment, which is yet another amendment to another process.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The question is that Senator Minchin’s amendment to opposition and Greens amendment (9) be agreed to.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The question now is that amendment (9) moved by Senator Milne be agreed to.

Question agreed to.

Bill, as amended, agreed to.

NATION-BUILDING FUNDS (CONSEQUENTIAL AMENDMENTS) BILL 2008

Bill—by leave—taken as a whole.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I have two separate amendments to move, consequential upon the decision of the Senate, by virtue of this debate, not to abolish the Communications Fund. As a result, there is a consequential amendment to omit the Telstra Corporation Act 1991 in relation to schedule 2, page 16, line 11. Then there is a separate amendment, amendment (2), in relation to the bill standing as printed. Can I ask that they be dealt with separately?

The Temporary Chairman:

Yes.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move opposition amendment (1) on sheet 5687:

(1)    Schedule 2, page 16 (line 11), omit “Telstra Corporation Act 1991”.

The opposition also opposes schedule 2 in the following terms:

(2)    Schedule 2, page 16 (lines 12 to 26), items 51 to 56 TO BE OPPOSED.

As I said, these are consequential upon the debate and outcome we had in relation to the Communications Fund.

The Temporary Chairman:

The question is that amendment (1) on sheet 5687 moved by Senator Minchin be agreed to.

Question agreed to.

The Temporary Chairman:

The question now is that schedule 2 stand as printed.

Question negatived.

Bill, as amended, agreed to.

COAG REFORM FUND BILL 2008

Bill—by leave—taken as a whole.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move Greens amendment (1) on sheet 5679:

(1)    Clause 7, page 4 (line 21), at the end of subclause (2), add “and should ensure that, where relevant, grants require:

             (a)    national infrastructure priorities to be addressed;

             (b)    high benefits to be demonstrated and effective use of resources;

             (c)    climate change mitigation and adaptation and biodiversity conservation;

             (d)    preparation for the global oil production peak and subsequent decline in oil production;

             (e)    infrastructure needs to be efficiently addressed;

              (f)    demonstrable achievement of established standards in implementation and management.”.

This amendment relates to insisting on climate change mitigation and peak oil being included in assessments of the grants. We have already had this debate and I do not think I need to argue for it anymore. What I am intending to do is clear. It is similar to what I have done before.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Just briefly, can I indicate that, on balance, the opposition is not in a position to support the Greens amendment for the reasons outlined earlier.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Likewise, we have had a debate about this amendment and the government will not be supporting it.

Question negatived.

Bill agreed to.

Nation-building Funds Bill 2008 and Nation-building Funds (Consequential Amendments) Bill 2008 reported with amendments; COAG Reform Fund Bill 2008 reported without amendment; report adopted.