Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The committee is considering the Australian Business Investment Partnership Bill 2009 and a related bill. The question is that the bills stand as printed.

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

I was not sure whether Senator Fielding was going to move some of his amendments.

The Temporary Chairman:

Well, he is not here at the moment, Minister, so that may be somewhat difficult.

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

I think he has some amendments he wants to move. But maybe I could indicate the government’s view towards Senator Fielding’s amendments before he formally moves them. I see Senator Fielding has now arrived. I defer to my colleague Senator Fielding.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Mr Temporary Chairman, I just want to clarify: I thought the running sheet had someone else before me, but I am happy to move my amendments.

The Temporary Chairman:

For the benefit of senators, I indicate that no amendments have actually formally been moved at this stage.

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

I would like Senator Fielding to speak to his amendments, if not to move them. Senator Xenophon is in a press conference—surprisingly!

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

by leave—I move Family First amendments (1), (3) and (7), on sheet 5785 revised, together:

(1)    Clause 4, page 2 (after line 25), after the definition of enforcement resolution, insert:

lending criteria means the criteria used by a provider of financing or refinancing to decide whether or not to provide financing or refinancing.

(3)    Clause 8, page 5 (line 11), omit “and (5)”, substitute “, (5) and (5A)”.

(7)    Clause 8, page 6 (after line 17), after subclause (5), insert:

Lending criteria

     (5A)    ABIP Limited must be satisfied that the lending criteria applied by ABIP Limited in assessing the application for financing or refinancing under the arrangement are no less prudent than the lending criteria for investment grade loans that the members of ABIP Limited (other than the Commonwealth) would apply when deciding whether to enter into such an arrangement in the ordinary course of their business.

These amendments concern legislating lending criteria. This is all about making sure that up to $28 billion from the public purse has good governance around it, and is not left it to regulations. To have the very key area of lending criteria determined not by this parliament but by regulation I think would be very dangerous. So the amendments Family First have put forward here are to legislate the lending criteria. It makes sense that the lending criteria are no less strict than those required by other commercially competitive banks. So that is what we are seeking to do with these amendments. It is prudent and it makes sense to do it as the parliament rather than leaving it to regulations, and that is what these particular amendments are about.

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

Could I indicate that, as to clause 8, page 6, lines 8 to 11 of Senator Fielding’s amendments, the government very reluctantly will support that. Clause 8, page 6, lines 16 and 17 we, equally reluctantly, support. We welcome clause 8, page 6, after line 17—the amendment that ensures that lending criteria are of a high standard and that the standard is set down in law. As I indicated, we reluctantly support the absolute time limit on time of loans, and we reluctantly support the limit to commercial property. But we do expect the Senate’s cooperation if ABIP is required to lend outside commercial property to support jobs. If that circumstance arises, we will return and we will need to deal with that very speedily because of the structure of the legislation that we are putting in place today. So we would hope that we can expect the chamber’s cooperation on that matter.

The Temporary Chairman:

Before you begin, Senator Fielding: I will just clarify that we are dealing with amendments (1), (3) and (7), on sheet 5785.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I was just about to make sure that the focus of this particular debate was just on that one set of amendments: (1), (3) and (7). The crux of it is that ABIP Ltd must be satisfied that the lending criteria applied by ABIP Ltd in assessing the application for financing or refinancing under the arrangements are no less prudent than the lending criteria for investment-grade loans that the members of ABIP Ltd, other than the Commonwealth, would apply when deciding whether to enter into such an arrangement in the ordinary course of their business. That is what we are focusing on from there.

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

These are very sensible amendments and the Greens will be supporting them.

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

I will be supporting Senator Fielding’s amendments. I think they strengthen accountability and provide an additional safety mechanism for taxpayers.

Question agreed to.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

by leave—In relation to the Australian Business Investment Partnership Bill 2009, I move amendments (2), (4) and (5) on sheet 5785 as revised:

(2)    Clause 7, page 5 (line 4), after “Limited”, insert “, and approved by the Minister,”.

(4)    Clause 8, page 6 (lines 8 to 11), omit paragraph (3)(b), substitute:

             (b)    is an arrangement of a kind:

                   (i)    that all the members of ABIP Limited agree, in writing, that ABIP Limited may enter into; and

                  (ii)    that the Minister approves in writing, provided that:

                      (A)    the time provided for by section 46B of the Acts Interpretation Act 1901 for the disallowance of the Minister’s approval has expired and the approval has not been disallowed by either House of the Parliament; or

                       (B)    the Minister’s approval has been specifically approved by resolution of each House of the Parliament.

(5)    Clause 8, page 6 (before line 12), before subclause (4), insert:

     (3A)    An approval under subparagraph (3)(b)(ii) is not a legislative instrument, but is a disallowable instrument for the purposes of section 46B of the Acts Interpretation Act 1901.

These amendments go to, I suppose, an area that has been a little contentious—what ABIP can actually refinance, or what types of loans they can provide. The whole premise of ABIP as it was put forward in the public’s mind was about helping commercial property funding. The idea here is that there is a tightening of funds and there could be some circumstances where commercial property comes up for refinancing. They are very complex issues. One partner of a syndicate might, for various reasons, pull out. It could be because an overseas bank or financier, having had restrictions or limitations placed on them, is unable to refinance their portion of a particular loan for commercial property.

The whole idea was that the focus would be on commercial property. In the legislation it also said the financing could be for other things, and I think that makes it too open ended. Parliament would be giving broad approval without knowing what these other things were actually for. I do not want to overly focus on the other things as we could get quite emotive and raise a few items that could be considered other things. I think it is very prudent that, if you are going to have up to $28 billion of funds from the public purse, there needs to be some confidence about what it is going to be used for. What we have to do is make sure it is for commercial property, but if ABIP and the minister believe they need to do financing in areas other than commercial property, then it really has to come back to parliament basically to make sure that approval is given before ABIP actually makes the loan. That is what those amendments (2), (4) and (5) on sheet 5785 are actually doing.

Question agreed to.

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

by leave— In relation to the Australian Business Investment Partnership Bill 2009, I move amendments (1) to (3) on sheet 5794:

(1)    Clause 4, page 2 (after line 7), after the definition of ABIP Limited, insert:

ACCC means the Australian Competition and Consumer Commission established by section 6A of the Trade Practices Act 1974, and includes a member of the Commission or a Division of the Commission performing the functions of the Commission.

(2)    Clause 4, page 3 (after line 5), after the definition of loan, insert:

member of the Commission has the same meaning as in the Trade Practices Act 1974.

(3)    Page 10 (after line 30), after clause 16, insert:

16A ACCC’s functions

        (1)    The ACCC’s functions under this Act are set out in this section. In performing these functions the ACCC may exercise any of the powers it has under the Trade Practices Act 1974.

ACCC to prepare competition impact statement

        (2)    The ACCC must prepare a competition impact statement in accordance with this section.

        (3)    The statement must identify the potential costs and benefits to competition and consumers of exempting ABIP Limited and its activities from competition laws.

        (4)    The ACCC must give to the Minister a copy of the statement not later than 3 months after the commencement of this Act. As soon as practicable after the Minister is given the copy, the Minister must cause it to be laid before each House of the Parliament.

ACCC to monitor competition exemption

        (5)    The ACCC must prepare a competition exemption report in accordance with this section as soon as practicable after 30 June of each financial year:

             (a)    that commences on or after 1 July 2010; and

             (b)    in which a financing arrangement is entered into under section 8.

        (6)    The report must:

             (a)    identify the costs and benefits to competition and consumers of exempting ABIP Limited and its activities from competition laws; and

             (b)    express an opinion as to:

                   (i)    whether the benefits to competition and consumers of ABIP Limited and its activities during the preceding 12 months outweighed the costs to competition and consumers; and

                  (ii)    if under subparagraph (i) the opinion is expressed that those benefits outweighed those costs during the preceding 12 months—whether there have been any material changes in circumstances such that the costs or potential costs to competition and consumers of ABIP Limited and its activities now outweigh the benefits to competition and consumers.

        (7)    The ACCC must give to the Minister a copy of the report as soon as practicable after preparing it. As soon as practicable after the Minister is given the copy, the Minister must cause it to be laid before each House of the Parliament.

Identifying costs and benefits

        (8)    In identifying and reporting on the costs and benefits to competition and consumers, the ACCC must have particular regard to the matters set out in Part IV of the Trade Practices Act 1974.

Interpretation

        (9)    In this section:

exempting ABIP Limited and its activities from competition laws means specifying, and specifically authorising, the conduct referred to in subsection 16(1) for the purposes of subsection 51(1) of the Trade Practices Act 1974.

These amendments relate to the ACCC monitoring the exemption granted to ABIP and the ACCC being required to prepare a competition impact statement. I discussed this during my second reading contribution. I have had discussions with the government and I believe that the ACCC has an important role in monitoring the exemption and its impact on consumers and in identifying the costs and benefits for competition and consumers of exempting ABIP from competition laws. I am grateful to associate Professor Frank Zumbo from the University of New South Wales for his advice and suggestions.

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

A good man.

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

A good man; I endorse that. I believe that this will enhance the accountability provisions in this bill and it is important that the ACCC have a role here to monitor this exemption.

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

The government supports Senator Xenophon’s amendments.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Family First supports the amendments to make sure there is appropriate monitoring and reporting on the competition exemption.

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

The Greens also support Senator Xenophon’s amendments.

Question agreed to.

We have had some extensive debate on the important amendment from the Australian Greens which would put a cap on salaries of $1 million for those who are to benefit out of the loans arrangements that are facilitated by this legislation. The minister has said that our amendments do not go far enough in terms of restricting what the Prime Minister has described as obscene take-home payments. I want to be more direct with the minister about this. The Greens will not be supporting this legislation if the government does not agree either to the amendment that we have put forward or to an alternative which satisfies us that the government is taking action, as have many similar countries around the world. The debate on this legislation is now going to go into the next period of sittings. I expect that the Prime Minister will engage in discussions with the Greens to come up with a provision which at least deals with the potential for CEOs of development organisations to have millions of dollars going to them in one way or another in take-home moneys from corporations which have at-risk loan arrangements guaranteed through the government.

I hope that the government understands clearly how important this measure is as far as the Greens are concerned. I make this offer to the government that we have serious negotiations about how to bring in an amendment, if the government cannot support this amendment, which does put a cap on those beneficiaries of the loan arrangements that are in here at the taxpayer’s expense. It is a serious matter and we want it taken seriously. We want action on it. I can do no more than make this public appeal, having written to the Prime Minister a number of times to get some action from the government on the matter.

Progress reported.