Mitch Fifield (Victoria, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

I table an addendum to the explanatory memorandum relating to the Security and Critical Infrastructure Bill 2017. The addendum takes account of recommendations made by the Parliamentary Joint Committee on Intelligence and Security in response to concerns raised by the Scrutiny of Bills Committee. I also table two supplementary explanatory memoranda relating to the government amendments to be moved to these bills.

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Whether in government or in opposition, Labor has consistently worked to ensure that our security agencies have the powers and resources they need to keep our community safe and that our laws are adapted to meet the changing security threats that we face. Consistent with its commitment to national security, Labor supports the Security of Critical Infrastructure Bill 2017 and the Security of Critical Infrastructure (Consequential and Transitional Provisions) Bill 2017.

We support these bills because we recognise the need to manage national security risks arising from the possibility of malicious foreign involvement in our critical infrastructure. Labor believe that these bills strike an appropriate balance. They impose only the necessary and relatively minor regulatory requirements needed to improve the management of the national security risks that threats to our critical infrastructure pose. The Security of Critical Infrastructure Bill provides a risk based regulatory framework to manage national security risks from foreign involvement in Australia's critical infrastructure. The bill focuses primarily on the risk of sabotage, espionage and coercion in Australia's highest risk, critical infrastructure sectors of electricity, gas, ports and water.

Labor recognises that foreign involvement in the economy, and in Australian infrastructure, plays an important and beneficial role in supporting economic growth, creating employment opportunities, improving consumer choice and promoting healthy competition while increasing Australia's competitiveness in global markets. However, with increased privatisation, outsourcing and offshoring of supply chain arrangements, and the shift in Australia's international investment profile, critical infrastructure is increasingly exposed to the risk of sabotage, espionage and coercion. This bill is an appropriate step to inhibit malicious conduct undertaken covertly which may have implications for Australian society.

Labor will always ensure that critical infrastructure assets, where they are partly owned by foreign entities, are still subject to control and direction by the Commonwealth. It is fundamental to the maintenance of the security, safety and prosperity of Australians that critical assets are required to provide relevant information to government and that, in times of emergency, they can be directed to ensure that the needs of Australian society are met. This was a sentiment shared by state and territory governments and industry and peak organisations who expressed support for the bill in submissions to the PJCIS.

The bill designates water, electricity, gas and ports above a certain threshold as critical assets. The bill defines a critical water asset under proposed section 5 as:

… a water or sewerage system or network that is used to ultimately deliver services to at least 100,000 water connections or 100,000 sewerage connections under the management of a water utility.

It is axiomatic that all Australians require a clean and reliable supply of water and that disruption to Australia's water supply or water treatment facilities could have major consequences for the health of citizens and the economy.

Similarly, the bill, in subclause 10(1)(a), establishes the test for criticality of an electricity asset as:

(a) a network, system, or interconnector, for the transmission or distribution of electricity to … service at least 100,000 customers …

Electricity generation is fundamental to the proper functioning of the economy and is a basic necessity for all Australians. It is clear that electricity assets which provide transmission and distribution services form a core part of the nation's critical infrastructure.

Clause 12 of the bill defines a critical gas asset as:

(a) a gas processing facility that has a capacity of at least 300 terajoules per day …

(b) a gas storage facility that has a maximum daily quantity of 75 terajoules per day …

(c) a network or system for the distribution of gas to ultimately service at least 100,000 customers or …

(d) a gas transmission pipeline that is critical to ensuring the security and reliability of a gas market …

It is self-evident that gas in Australia is an important energy source. It is an increasing export commodity and a required element for a wide range of industrial, commercial and residential uses. Gas is particularly important for gas-powered electricity generators, which account for 20 per cent of Australia's electricity, and manufacturing, which relies on gas for approximately 40 per cent of net energy. These are numbers that, as Australia transitions to a clean energy economy, we expect to grow. Accordingly, the protection of gas infrastructure as a critical asset will grow, not diminish, over time. By defining the level of criticality, the bill limits the regulatory burden to Australia's highest risk critical assets.

The bill will supplement the existing FIRB mechanism through which the Commonwealth can respond to risks. However, because the FIRB mechanism applies to foreign investment above certain thresholds at the time of the proposed transaction, it is not possible to use it as a mechanism to address risks in outsourcing or offshoring of assets owned by domestic entities or where sales fall outside of the FIRB's screening thresholds. Accordingly, the creation of the security of critical infrastructure framework will improve upon existing safeguards which protect critical assets.

In practice, the Security of Critical Infrastructure Bill will add to the work currently undertaken by the Critical Infrastructure Centre, which collaborates with asset owners, asset operators and state and territory regulators to identify risks, implement asset-specific mitigation strategies and develop sector-wide best-practice guidelines. The CIC engages with asset owners and operators through the Trusted Information Sharing Network, TISN, and directly as needed. This is a welcome addition to the regulatory architecture that protects and maintains assets critical to Australia's security and continuing economic and social wellbeing.

The PJCIS conducted an inquiry into this bill. We spoke to a range of stakeholders and other interested parties. The committee made nine recommendations, the majority of which relate to the implementation of the bill rather than its design or intentions. I note that in the government's response to the committee's report, which was tabled just now, the government has accepted all of the committee's recommendations and has circulated amendments and a supplementary explanatory memorandum in the chamber to give effect to these recommendations. Labor too supports the recommendations of the committee.

Regulatory schemes such as that proposed in the bill work best in the presence of an active and productive dialogue between government and the affected industry participants. Industry, government and the community all benefit when asset owners know in advance what is required of them and therefore can take the necessary steps without government needing to resort to regulatory intervention. The PJCIS report recommends sensible steps to ensure that such a dialogue is established in the implementation of this bill. It responds to evidence that was provided to the committee from industry stakeholders. I would like to take the opportunity to thank those stakeholders for their contribution to the committee's work. I commend these bills to the Senate.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Security of Critical Infrastructure Bill 2017 introduces, in essence, two new measures: a register of critical infrastructure and ministerial directions powers. The bill will apply to approximately 140 assets in the high-risk electricity, water, gas and ports sectors. According to the explanatory memorandum, the bill focuses primarily on the risk of sabotage, espionage and coercion in Australia's highest-risk critical infrastructure sectors and provides 'a risk based regulatory framework to manage national security risks from foreign involvement in Australia's critical infrastructure'.

The purpose of the register is to provide a more detailed understanding of who owns and controls critical infrastructure assets. I'll make some observations about ownership of critical infrastructure later in my speech. The register requires reporting entities who are either direct interest holders or the responsible entity of critical infrastructure assets to provide interest and control information and operational information within a certain time frame. The explanatory memorandum states:

This information will assist the Government to identify who owns and controls the asset, its board structure, ownership rights of interest holders, and operational, outsourcing and offshoring information.

I note the government has proposed several amendments to this bill that implement recommendations made by the Parliamentary Joint Committee on Intelligence and Security.

In January 2017, the Australian government established the Critical Infrastructure Centre and stated that the centre was established in response to the complex and evolving national security risks to critical infrastructure. But it ought come as no surprise to the Australian people that the government has abjectly failed to meaningfully consider one of the biggest threats to critical infrastructure in this country, and that is climate change. It's not just the direct risk of increasing levels of climate risk that will be the problem in the future. In a submission to the Critical Infrastructure Centre in March 2017, the CSIRO wrote:

We provide the following comments to note that the discussion paper is silent on the potential effects of global environmental change, particularly climate change, in systematically altering the risks faced by critical infrastructure from the range of security-related sources …

The CSIRO went on to say in their submission:

… climate change may be exacerbating some of the drivers of the key security risks addressed in the current paper, for example, placing greater pressure on foreign interests to consider espionage, sabotage or even coercion, because of growing pressures on the resources of those foreign interests.

It's not only this bill that doesn't mention climate change as a risk; in fact, the government's Critical infrastructure resilience strategy: plan is astoundingly silent on climate change. Australia ought not, and the government ought not, ignore the risks to national security and the risks to infrastructure posed by the disruption of our planet's climate. The ARC's Centre of Excellence for Climate Extremes recently stated:

Australia lags behind the US and some European countries in examining, assessing and responding to climate change risks in terms of national security. Vulnerabilities associated with national security and climate change are already increasing and exist now. These are not "future issues" that can be left for a decade before strategies are considered. The creation of a high-level taskforce to examine risks associated with climate change and national security is urgent and overdue.

It is important to acknowledge that the 2016 Department of Defence white paper did identify climate change as one of the six key drivers in the development of Australia's security environment and as 'a major challenge for countries in Australia's immediate region'.

While that's the case, it appears the government has no plan and no appetite to do anything about our vulnerabilities in the areas of national security and infrastructure caused by climate disruption. Instead, it's been left to the Australian Greens, through the mechanisms available to us in this parliament, to establish two inquiries, which are currently running through Senate committees, into the impact of climate change and the threats posed by climate change to infrastructure and our national security.

I say to senators that we in the Australian Greens understand the political imperatives behind ramping up fear of attacks by terrorists or other hostile forces on the Australian people and on our infrastructure. We understand what has been a bipartisan approach, in effect, by the Labor and Liberal parties in this area. But I say to the Labor and Liberal parties: don't turn a blind eye to threats to national security and threats to our infrastructure posed by a disrupted climate that is caused by humans emitting greenhouse gases, which continue to rise and have been rising for the last couple of hundred years.

Climate change is one of the biggest threats to our country's way of life. It is a threat to everything we do. It is a threat to the way we work, live and play. It's a threat to our health system and our education system, the way we support people with disabilities, our transport systems, our energy systems, our road networks and our ports. It is a threat to our way of life. It's driving mass displacement of people around the world, and we're not immune to those displacements here in Australia. The displacement, for example, of the Syrian people was driven, at least in part, by an unprecedented drought between 2007 and 2013. It displaced a large number of Syrian people from the country in Syria to the cities, which made the cities unsustainable and ultimately led to a mass displacement of Syrian people, which caused Australia, under then Prime Minister Tony Abbott, under pressure from the Australian Greens, to create a special intake of 12,000 Syrian people. They were displaced in part by a drought that we know was more likely to have occurred as a result of climate change.

So, while the Australian Greens are comfortable with supporting this legislation and will be supporting it, we need to understand that this government has been putting the blinkers on and has effectively considered the threat posed to our country's infrastructure by terrorism and hostile forces as the only threat worthy of legislation of the type we're debating today. That paradigm, that mentality, lets down our country. It lets down our people and it lets down the very infrastructure that the government purports to want to protect.

The outcomes from the two Senate inquiries that are currently running, thanks to being advocated for and moved by the Australian Greens, will make very interesting reading. At some of the hearings, we've discovered that, within the departmental bureaucracy of this country, there is significant acknowledgement and concern about the threats and risks posed by climate change to our infrastructure and to our way of life. The problem we've got is that that acknowledgement does not seem to percolate through to the highest levels of government. That's a real problem for our country and it's something that the Australian Greens will continue to advocate for and will continue to drive debate on in this place. If we were to not do that, if we were to join the rest of the Senate in staying silent on the threats and risks caused by climate change, ultimately we would be letting the Australian people down.

This bill and the materials associated with it make it very clear that foreign involvement in Australia's critical infrastructure creates risk. You can't read this bill, and the materials associated with it, in any other way. So I want to place on the record that this is one of the reasons—certainly not the only one—that the Australian Greens are proposing the nationalisation of some infrastructure assets that are currently in private hands. For example, we need to start returning Australia's electricity grid to public hands The privatisation of much of our energy generation infrastructure and much of our electricity transmission infrastructure has been an abject failure. It's failed to deliver system reliability, it's failed to play a meaningful role to date in bringing Australia's emissions down and it's failed to deliver reliable electricity at the lowest possible cost to the Australian people. That's why we're proposing to begin returning some of our energy infrastructure assets into public hands by nationalising the five privately owned interconnectors.

As a senator from Tasmania, where we've learned in just the last few days that the state government is engaged in legal action against the owners of Basslink over the outage a couple of years ago that's been discussed at length in debate in the Senate, I say that Basslink, being privately owned, has not delivered for Tasmania. Senators would be aware that, when Basslink was first proposed by Hydro Tasmania back in the late nineties and ultimately the early 2000s, the Greens advocated against Basslink. We said we should be investing in making Tasmania energy self-sufficient. Having 100 per cent renewable energy was a legitimate aspiration for Tasmania prior to Basslink, which, of course, just provided another lifeline and another market opportunity for the dirty brown coal generators of the Latrobe Valley. We said that if we could embed 100 per cent renewable energy into all the goods and services that we produce in Tasmania it would give us a massive competitive advantage over the rest of the country and the rest of the world. We didn't support that investment and the $90 million-plus per annum that Hydro Tasmania is still paying as a facility fee.

If we'd been heeded back then, we wouldn't have had the energy crisis that Tasmania has had. The batteries nearly ran flat and the dams nearly ran empty because of the incompetence of the Hodgman Liberal government and the then energy minister, Matthew Groom. Instead, we could have shown Australia and the rest of the world what leadership on renewable energy looks like. Of course, history shows that Hydro Tasmania, despite some internal contention, went ahead and recommended to government that Basslink be put in place—and, as I said, that threw a much-needed lifeline to the dirty brown coal generators of the Latrobe Valley. That drove Australia's emissions profile up and it drove Tasmania's emissions profile up—when we have the best network of hydro-electric power in the country, renewable energy and ultra-low emissions that we could have actually used to drive prosperity, wellbeing and competitive advantage for our state.

So we make no bones about it. We want to see the five privately owned interconnectors in Australia nationalised, returned to public hands, because neo-liberalism and laissez-faire capitalism have abjectly failed the people they purport to serve. That failure is for a number of reasons but ultimately one of the key drivers has been a failure to price in the environmental and social impacts that are delivered by the private companies who own infrastructure and other assets under the current system of laissez-faire capitalism. Of course we need to price in things like carbon, environmental toxins and social harm, and the Australian Greens are very determined to keep working and advocating for those things to happen.

As part of that, as I said, we want to make sure that we begin renationalising, or, in some cases, simply nationalising, many of the energy assets that exist in this country. If the government is so concerned about the foreign ownership of and foreign influence on infrastructure assets, perhaps the government needs to ask itself whether or not it, on behalf of the Australian people, would be better off owning those assets itself. We in the Australian Greens have asked ourselves that question, and we have answered that question with a resounding yes.

Many pieces of infrastructure in this country that are currently in private hands would deliver far better returns for the Australian people if they were put back into public hands and public ownership. The infrastructure in this country was created by the blood, sweat and tears of Australian workers, and its privatisation has abjectly failed to deliver for the people that it was supposed to serve. It's time for a mature debate in this country about the ownership of our infrastructure, the risks to that infrastructure of foreign ownership—which this legislation, in some ways, is designed to mitigate—and, most crucially, whether or not that infrastructure would be better off in public hands.

We call on the government and the Labor Party—who, to date, to my knowledge, haven't intervened or participated in this debate—to get on board with the discussion, because it's beyond time that we had this conversation in Australia; it's beyond time that we had this conversation in this parliament. As with so many other things, like the issues of a royal commission into banks and a federal anticorruption authority, it will be the Australian Greens that will drive the debate and, in having that debate, will ensure that we consider the ultimate public good.

If we can remove the interests of corporations and other vested interests that impact so grievously on our political conversation in this country, if we can remove consideration of corporate profits and consideration for the people who are the corporate mates of so many Labor and Liberal people in this country—and that, I acknowledge will be a very hard ask—if we can do the job we're supposed to do, which is to act in the interests of the greater public good, if we can have a respectful conversation and bring the Australian people along with us, then I have no doubt that we will land in a place where we will see much of the infrastructure that's been privatised over the last few decades returned to public hands.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Let me put it on the record: One Nation is totally opposed to any sale of our assets. I have said, for the last 22 years, that neither our infrastructure, such as water, sewage, telecommunications and electricity, nor our defence services should ever, in any way, shape or form, end up in the hands of foreigners; these services should always remain in the hands of the government and be produced at a reasonable cost for the people of Australia.

I find it amazing that we have before us the Security of Critical Infrastructure Bill 2017. It basically says that owners and operators of prescribed ports, electricity and water assets will be required to provide information detailing the operational and ownership control arrangements of their assets. The government may direct these owners and operators to do, or not do, certain things with respect to their asset when there is a perceived risk to national security. That beggars belief. I can't believe that—'a perceived risk to national security'—when we've allowed our most important assets to be sold to foreign ownership.

Let's go back here:

Both Federal and state governments have put the issue of privatising government assets firmly on the agenda.

At the time it was former coalition federal Treasurer Joe Hockey who:

… indicated at the recent meeting of COAG that the states should look closely at privatising infrastructure …

It was not just the coalition but also the Labor Party in Queensland. Under a then Labor government, it:

… started the recent process by privatising the Port of Brisbane in 2010 (selling a 99-year lease for what is now a seemingly cheap $2.1 billion) in order to replenish its empty Treasury coffers.

That's what it comes down to, empty Treasury coffers, because neither side can actually manage the cheque book. When it gets to this point they say, 'Let's just sell off the assets.' That is clearly what happened with this selling off of our assets and the rising costs of electricity.

Apart from the renewable energy and the billions of dollars we're paying to prop it up, the cost is escalating, because these companies own the power plants, just like what happened in South Australia. A foreigner owned the power plant in South Australia. It has the highest cost, along with Queensland, in the world for electricity—privatisation.

Have a look at the recent article titled 'Australian port sold for $7.3 billion to consortium; China fund among backers'. It states:

A consortium of global and domestic funds, backed by investors including China Investment Corp, agreed to buy Australia's busiest port for a higher-than-expected A$9.7 billion … a sign that tough equity markets are helping fuel appetite for infrastructure.

We're selling stuff to Canada on the superannuation. It goes on to say:

The sell-off is part of Australia's more than A$100 billion privatization program, where state and federal governments are trying to cut debt and bankroll capital works by selling "mature" infrastructure assets—

that they will control. Let me tell you something: I'm not an economist, but the fact is that companies buy these infrastructure projects to make money out of them. It's not about providing a service and feeling good about it. It's all about what they can make out of it. A lot of the time they don't even pay tax in this country, but we're allowing them to take over important assets. What about the 99-year lease of the Darwin Port? This is where crucial product comes into our country, into our ports, and they own the ports. They can charge whatever they want from when they have ownership and we've got no control over it. More about ports:

New South Wales (under a Coalition Government) followed Queensland's lead by selling Port Botany and Port Kembla in 2012 and raking in a healthy $5.1 billion … The NSW Treasurer, Mike Baird, has also just announced that expressions of interest are open for a 98-year lease for the Port of Newcastle.

And you had the then Victorian opposition leader, Daniel Andrews—Labor—who proposed to 'sell a long-term lease of the Port of Melbourne as the cornerstone of their Project 10,000'. They can't manage money, so they're selling all the assets. These assets are owned by the people, and yet governments are selling them off.

This is what I was saying about Canada:

… The Future Fund, and Canada's Ontario Municipal Employees Retirement System will each get a fifth of Port of Melbourne following the sale, which is packaged as a 50-year lease.

Everyone around the world thinks that Australia is a good investment but the Australian government itself. Then, just recently, didn't we hear the coalition government talking about using our trillion-dollar fund to go to America and buy infrastructure over there? We're investing over there but we're not investing in our own country with our dollars. What about us? People are screaming out for the infrastructure that we need here. These bills beggar belief.

You're selling off all our important assets. You allowed the sale of Cubbie Station—another important landmark owned by Australians—and it was sold to the Chinese. Cubbie Station is important for its water, and yet we've sold it. We've sold so much of our land to foreigners. Our public housing is being sold to foreigners, putting it out of the hands of Australians who want to own their own homes but can't afford to.

This is not just one side of politics; this is both sides. We have seen it for years and years. Both the coalition and Labor have done absolutely nothing about it. You keep speaking the same old rhetoric all the time. Once you're in opposition, you blame the other side as if they're the ones that have caused it. You're both to blame for this. You both have actually destroyed this country. You're getting rid of our important infrastructure. That's why electricity costs are going up and up and up. You're selling off our ports. You've sold off land in this country. You've put in place legislation to stop the foreign ownership of housing here, but you don't follow through. All you've done is to put more and more red tape on it, to make it look as if you're doing the right thing, but you don't follow through. You're tying us up so tightly in this country but you're not addressing the real concerns of the Australian people. So stop blaming each other and do something about it.

By introducing this bill, yes, you're calling for accountability. But the horse has bolted. Now what are we going to do about it? Well, we'd better address this for security reasons. Is that going to stop you from allowing foreign ownership of our most important assets in this country? I don't think so—because you're trying to catch up, because we're in so much debt. Look at where you are wasting the moneys, in a lot of these bureaucrats' wages, as I pointed out. You were paying the CEO of Australia Post $5.6 million a year, which was ridiculous. What a lot of these CEOs get paid is over the top. The number of public servants and all these consultants' fees that you've been paying are over the top. I cannot believe that you've got to the stage where you've got to sell our assets—the taxpayers' assets—to balance the books!

One Nation will be supporting this bill. But I had to have my say over this, because it beggars belief that you've allowed things to get to this stage. I'd suggest that you really have a good look at who is putting in to buy up our assets in this country, and say, 'No!' Start holding on to our assets for the Australian people. You've given so much control to other countries, it's an absolute disgrace!

Mitch Fifield (Victoria, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

I thank colleagues for their contributions. We are all in agreement that critical infrastructure is integral to our prosperity. Secure and resilient infrastructure does underpin the effective functioning of our society. It ensures we have continuous access to essential services for everyday life, such as food, water, energy and communications. The Security of Critical Infrastructure Bill 2017 and the Security of Critical Infrastructure (Consequential and Transitional Provisions) Bill 2017 support the government's efforts to safeguard Australia's critical infrastructure. They will supplement existing federal, state and territory regulations and ensure that the government has the necessary powers to protect Australia from the national security risks of sabotage, espionage and coercion stemming from malicious foreign involvement in our critical infrastructure. The bills reflect consultation with states and territories and industry stakeholders. Importantly, they will also incorporate all nine recommendations made by the PJCIS. I thank members of the committee for their comprehensive review of the bills. Amendments have already been circulated to give effect to these. Earlier I also tabled the government's response to the committee report. We indicated in that that we accept all nine of the committee's recommendations. I'm pleased that the government, the opposition and the committee could work together to progress this important legislation.

The bills align with the government's clear intention to continue to cooperate and collaborate with all levels of government, regulators, owners and operators of critical infrastructure. They strike an appropriate regulatory balance by acknowledging the shared responsibility for managing national security risks while empowering the Commonwealth to intervene to mitigate a risk where existing regimes cannot be used. With these bills the government is taking the necessary steps to strengthen the security and resilience of Australia's critical infrastructure. I commend the bills to colleagues.

Question agreed to.

Bills read a second time.