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

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I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

CRIMINAL CODE AMENDMENT (FIREARMS TRAFFICKING) BILL 2015

The Coalition Government at the 2013 election made a commitment to the Australian people to implement tougher criminal penalties for gun-related crime.

The criminal misuse and trafficking of firearms is a deadly crime and an ongoing threat to the safety of our communities.

Although there is no single group which dominates the sale and supply of firearms to the illicit market, the illicit use and possession of firearms is a significant element of organised criminal activity in Australia.

We all know that money and power are key drivers for organised crime. Firearms are regularly used as an enabler to protect interests and commit acts of violence.

The imperishable nature of firearms and the ongoing supply of firearms to the illicit market mean they remain a serious threat to the Australian community.

Now, more than ever, we must do everything in our power to ensure the ongoing safety and security of all Australians.

That is why the Government is introducing increased penalties to disrupt the illicit firearms market in this country.

This Bill will introduce a mandatory minimum sentence of five years imprisonment for offenders convicted of trafficking firearms or firearms parts under the Criminal Code Act 1995.

Mandatory minimums send a strong and clear message that gun-related crime and violence will not be tolerated.

The mandatory minimums will capture all offenders who engage in the illicit firearms trade, not just those who trade in large numbers of firearms or parts.

Regardless of the number of articles they have trafficked, it is vital to put in place substantial penalties on all trafficking offenders with the aim of preventing even one more firearm from entering the illicit market.

However, these mandatory minimum sentences are not without safeguards. They do not include specified non-parole periods, nor do they apply to minors, which means the courts will retain the discretion to set custodial periods consistent with the particular circumstances of the offender and the offence.

In addition to the mandatory minimum sentence, the Government is also increasing the maximum penalties for firearms trafficking from 10 years' imprisonment and/or 2,500 penalty units to 20 years' imprisonment and/or 5,000 penalty units.

The increased maximum penalty is necessary to ensure that the serious offences of trafficking firearms within Australia, and into and out of Australia, are matched by appropriate punishments.

Conclusion

This Bill introduces amendments to reflect the seriousness with which this Government views gun-crime, and the gravity of supplying firearms and firearm parts to the illicit market.

The combination of mandatory minimum penalties and increased maximum penalties will send a strong message to the community that the illegal trafficking of firearms will not be tolerated and will act as a strong disincentive for people seeking to illegally import firearms and their parts into Australia.

SOCIAL SERVICES LEGISLATION AMENDMENT (BUDGET REPAIR) BILL 2015

The Government outlined its fiscal strategy in the 2014–15 Budget, and reaffirmed it in the 2015-16 Budget: the aim is to strengthen the Government's balance sheet by redirecting spending to boost productivity and workforce participation, while maintaining strong fiscal discipline.

This is augmented by the Government's budget repair strategy which holds the objective of achieving – on average – budget surpluses over the course of the economic cycle.

We are committed to fiscal discipline in the Social Services portfolio. While significant savings from this portfolio have been secured through recent Federal Budgets, we must continue with our efforts to spend our Social Services budget more effectively to reduce the long-term pressures, to make available resources that will better target support to those who need it most, and to ensure that Australia's social security safety net is sustainable for future generations.

This Budget Repair bill gives further active support of our Government's collective efforts towards budget repair, including through implementation of savings measures to secure the Budget position.

The bill will reintroduce several measures improving the fairness and sustainability of the pension system.

The first measure was announced in the 2015 Budget. From 1 January 2017, the bill will reduce from 26 to six weeks the length of time the Age Pension, and a small number of other payments with unlimited portability, will generally be paid at the basic means-tested rate while the person is outside Australia.

After six weeks, payment will be made on a proportional basis according to the length of the pensioner's Australian working life residence – a concept representing the length of time the person has resided in Australia between age 16 and Age Pension age.

Pensioners overseas on the implementation date will stay under the current 26-week rule until they return to Australia. Subsequent trips will be under the new six-week rule. Those pensioners with 35 years or more of Australian working life residence, and those already exempt from the proportional payment rules – such as some recipients of the Disability Support Pension – will not be affected.

It is not considered reasonable for taxpayers to pay pensions indefinitely to people outside Australia, without regard to their period of residence in Australia, for anything other than short absences. This measure will therefore reinforce and strengthen the residence-based nature of Australia's social security system.

This bill also takes the opportunity to reintroduce some measures from the 2014 Budget, all of which are currently before the Senate in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014. The reintroduced measures will no longer proceed as part of that 2014 bill.

Two of these reintroduced measures are to cease the Pensioner Education Supplement and the Education Entry Payment.

Pensioner Education Supplement was introduced in 1987 to assist single parents with the ongoing costs of education. At the time, this was in recognition of the difficulties single parents experienced in obtaining employment after being in receipt of the then Sole Parent Pension for up to 16 years. Since then, eligibility has been selectively extended.

Despite its name, the Pensioner Education Supplement is not available to people receiving the Age Pension. The most common payment type whose recipients also receive Pensioner Education Supplement is Parenting Payment Single (43 per cent), followed by Disability Support Pension (41 per cent) and Carer Payment (9 per cent).

As at the end of September 2015, Pensioner Education Supplement provided fortnightly payments to around 46,000 people studying full-time or part-time in secondary or tertiary education while on income support payments.

The Education Entry Payment was introduced in 1993 to help remove financial barriers to education by providing assistance to certain long-term payment recipients with the up-front costs of study when they begin approved education courses. In 2014-15, around 83,000 recipients received an Education Payment worth $208 per year, paid annually as a lump sum.

When they were introduced, both of these payments aimed to assist long-term income support recipients who had been out of the workforce for a long period of time by helping them improve or re-build their skills to be more competitive in the labour market.

However, since the introduction of these payments, several policies have been introduced to reduce the length of time that income support recipients, including single parents who have capacity to work, remain out of the workforce. Policy changes include varied eligibility and participation requirements for Parenting Payment, recognising that, as their children age, parents' capacity to work increases.

There have also been a number of changes to assessment and eligibility criteria for payments for people with reduced capacity to work, requiring these people to work or look for work in line with their capacity. These individuals are assisted into the workforce through services, such as jobactive, which can help jobseekers develop skills that they need to look for, find and remain in work.

The Government remains committed to providing incentives for income support recipients to improve their employment prospects through study or training. However, more appropriate channels of Government-funded study and training assistance for income support recipients are available through employment service providers, the Higher Education Loan Programme, FEE HELP and VET FEE HELP tuition loan programmes.

Additionally other income support payments, including Youth Allowance (student) and Austudy, are particularly targeted towards students, taking into account their particular circumstances and needs. These student payments will continue and will not be affected by the removal of the Pensioner Education Supplement and Education Entry Payment.

The removal of the Pensioner Education Supplement and Education Entry Payment will contribute to ensuring the long-term sustainability of the income support system by improving the Commonwealth's fiscal position. The measure to cease Pensioner Education Supplement is expected to save $252.4 million over the forward estimates, and the cessation of Education Entry Payment is expected to save $64.4 million over the forward estimates.

Ceasing these supplements will also help to simplify the income support system by reducing the number of payment supplements, consistent with the recommendations of the McClure review of welfare, A New System for Better Employment and Social Outcomes.The review highlighted that the current 20 main payment types and 53 payment supplements result in an income support system that is complex, confusing and difficult for individuals to understand.

This bill also reintroduces elements of the 2014 Budget measure, Maintain eligibility thresholds for Australian Government payments for three years. These changes will:

Under the current rules, income free areas and means test thresholds are indexed annually in line with movements in the Consumer Price Index. Not indexing the value of these free areas and thresholds for three years will mean that increases to payments that would have occurred on either 1 July or 1 January of each year of the three-year period will not occur. The specific customer impacts of pausing these various means test thresholds depend on payment type and people's circumstances. Payments will not be reduced unless customers' circumstances change, such as their income or assets increasing in value.

The indexation of these thresholds will recommence in 2019.

Of course, pausing indexation is a lever that has been used by successive governments to realise Budget savings and help slow the growth in social security expenditure.

These changes will help achieve the long-term sustainability of the payments system, while ensuring Australia has a targeted means-tested income support system that provides financial assistance to those most in need, while encouraging self-provision.

Reintroducing the amendments in this new bill reflects the Government's ongoing commitment to the measures. All of the changes in this bill are important measures to support the sustainability of the social security system and the nation's Budget.

SOCIAL SERVICES LEGISLATION AMENDMENT (FAMILY MEASURES) BILL 2015

This bill will introduce two family-related measures from the 2015 Budget, which will simplify the family payments system and achieve combined savings of $219.4 million over the forward estimates.

Firstly, from 1 January 2016, families will be eligible for Family Tax Benefit and additional payments that rely on Family Tax Benefit eligibility for a period of six weeks when outside of Australia. Currently, Family Tax Benefit Part A recipients who are overseas are able to receive their usual rate of payment for six weeks, and then the base rate for a further 50 weeks. This change will achieve savings of $42.1 million over the forward estimates.

This measure will align the portability rules for Family Tax Benefit Part A with those for Family Tax Benefit Part B and most other income support payments. It is consistent with the principle that the primary purpose of family assistance payments, which is to assist Australian families with the costs of raising children in Australia.

At the same time, the Government acknowledges that families have business to attend to overseas from time to time – such as going on vacation, visiting family members and therefore an appropriate amount of time will still be allowed overseas while retaining eligibility for their payments. Families will also be able to remain overseas for a further 13 weeks without needing to reapply for their FTB.

However, these measures make clear that for payments to continue, families in receipt of Family Tax Benefit A will need to maintain a strong connection to Australia.

Family Tax Benefits are linked to other payments, this measure will have flow-on effects to other payments that rely on Family Tax Benefit eligibility including Child Care Benefit, Child Care Rebate, Double Orphan Pension, Schoolkids Bonus and Single Income Family Supplement if the family is outside the portability period.

Importantly, this change will not impact individuals who are members of the Australian Defence Force or Australian Federal Police who are deployed overseas, assisted by the Medical Treatment Overseas Program, or unable to return to Australia for a specified reason (such as a serious accident, or natural disaster). The Secretary of the Department of Social Services will retain discretion to increase the six week timeframe, up to three years. This ensures those who serve our country overseas, travelling for medical reasons or delayed for reasons not of their own doing are not unfairly impacted by these changes. This ensures that equity remains at the heart of our social security system and continues to support those most in need and provides peace of mind for people serving our country overseas. This will ensure that their families will not be worse off whilst they selflessly serve all of us abroad.

The second measure in this bill will seek to wind back the Large Family Supplement from 1 July 2016. This will help the Government achieve savings of $177.3 million over the forward estimates.

The Large Family Supplement is only a small component of the overall Family Tax Benefit Part A currently around $12.46/fortnight for the fourth and each subsequent child thereafter.

Evidence from the National Centre for Social and Economic Modelling in 2002, 2007 and 2013 consistently found that each additional child in a family costs less than a first child. The most recent research found that, on average, a second child costs 83 per cent of the cost of the first, while a third child costs 69 per cent of the cost of the first. The reason for this is that families experience 'economies of scale', in which fixed costs are spread among more children. That is, after the first child, many items have already been purchased and can be reused by subsequent children. This highlights the appropriateness in this modest change to the FTB Part A payment structure.

Removing the Large Family Supplement has also been supported by both the Henry Review and the National Commission of Audit.

The Henry Tax Review in 2010 recommended that the Large Family Supplement be abolished, as the policy rationale behind the payment was not strong. The National Commission of Audit reiterated this position in 2014 by stating that the basic rates of FTB Part A payment were sufficient for the costs of raising children.

Ceasing the Large Family Supplement delivers on the recommendations of both of these reviews and the change therefore achieves a legitimate objective of better targeting family payments to those most in need of assistance by removing a non-essential component of FTB Part A. This again reinforces the logical and evidence based approach that the Government takes to achieving policy outcomes.

Importantly, this change is also in line with the recommendations of the McClure Review. As noted above, this removes a non-essential component of FTB Part A. This is at the very heart of what the McClure Review stated. The removal of one supplement helps to simplify what is such a complicated system for families. These families are often left confused about what social security payments they are eligible for. Whilst this is a small start, it highlights the Government's commitment to undertaking meaningful welfare reform and simplifying the system in a coherent manner. This will ensure those eligible for income support payments, family assistance payments and other forms of social security will be able to better understand the system.

Despite the reduced costs associated with successive children, the Government acknowledges the significant costs incurred when raising children. Therefore families affected by this change will continue to receive per-child Family Tax Benefit Part A payments. This will continue to help cover the costs associated with raising children.

These provisions ensure that fairness remains at the centre of these reforms. Fairness has been and always will be at the heart of our social security system. This realignment of the portability rules is a logical change. It ensures that portability rules for most income support payments remains consistent across the board. This is important in simplifying what is already a confusing social security system.

These two Budget measures, along with the reform package introduced recently by the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015, will improve the sustainability of family payments, while providing continued support to those most in need of assistance.

In 2015-16, the Government will provide around $20 billion in Family Tax Benefit payments the second biggest item of expenditure within the Social Services portfolio, and the fourth biggest in the Commonwealth Budget. A modest save of $177.3 million is a reasonable and prudent measure to help ensure Family Tax Benefit remains affordable and the Government can continue to assist families in raising their children.

These measures are sensible, practical and aimed at ensuring the sustainability of our system, and guarantee that payments are targeted to those most in need. Sustainability and fairness are at the heart of these reforms and I urge all members to vote for these measures to ensure that the Government is in a position to support those most in need now and into the future.

I urge those opposite to listen to the evidence found within the Henry Tax Review and National Commission of Audit report and to ensure the sustainability of our social security system. These measures will also ensure portability measures for FTB Part A recipients are in line with most other income support and family assistance payments.

TAX LAWS AMENDMENT (IMPLEMENTATION OF THE COMMON REPORTING STANDARD) BILL 2015

Mr Speaker, I am pleased to introduce this Bill to implement the Common Reporting Standard for the automatic exchange of financial account information.

This Bill is a key part of the international fight against tax avoidance; and a key component of this Government's commitment to ensure Australians pay their fair share of tax.

The Common Reporting Standard is an international framework developed by the Organisation for Economic Co-operation and Development (OECD), working with non-OECD G20 countries, to tackle and deter cross-border tax evasion.

Cross-border tax evasion is a problem faced by jurisdictions all over the world. International cooperation and sharing of information between tax authorities is essential to tackling it.

By participating in this international effort, we are enabling the Australian Tax Office to gather information on Australians who may choose to dishonestly hide foreign income offshore.

Globalisation and other technological advances have made it easier for individuals to hold investments in offshore financial institutions, which increases the opportunity for tax evasion.

The Standard will help ensure all taxpayers pay their fair share of tax by providing tax authorities with information on individuals with offshore accounts, regardless of where their financial accounts are located.

When the Standard is implemented certain financial institutions in Australia will collect information on foreign residents' accounts and report it to the Australian Taxation Office. The Australian Taxation Office will provide the information to the foreign resident's tax authority.

In return, the Australian Taxation Office will receive information on Australian residents' offshore accounts. It will use this information to verify if the offshore income has been declared.

The Standard is comprehensive in the different types of investment income to be reported, such as interest, dividends, and income from certain insurance contracts. In addition, financial institutions will also report account balances and sales proceeds from financial assets.

The Standard is also comprehensive in the different types of account holders covered, such as individuals and the controlling persons of companies, partnerships and trusts.

The Standard will build on the Australian Taxation Office's current information exchanges. In 2014–15, total tax liabilities raised as a direct result of exchange of information with Australia's treaty partners was approximately $255 million.

G20 Leaders endorsed the Standard under Australia's Presidency and committed to begin to exchange information by 2017 or end-2018.

To date, over 95 jurisdictions have committed to implement the Standard, including former tax secrecy jurisdictions, such as Luxembourg, Switzerland, the British Virgin Islands, the Cayman Islands, the Isle of Man, Guernsey and Jersey.

People that do not comply with their Australian tax obligations undermine the integrity of the tax system. The Standard will improve the integrity of the tax system by engendering confidence in the community that taxes are not being evaded.

The Standard will also encourage greater voluntary compliance as taxpayers will now be safe in the knowledge that it has just got a whole lot harder to hide funds offshore without the Tax Office tracking you down.

I commend the Bill to the House.

Debate adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.