Dr LAWRENCE(12.10 p.m.) —I welcome the opportunity, although it is a bit belated now, to speak on the Natural Heritage Trust of Australia Bill 1996. This bill is actually a 25-page ransom note. In plain English, it says, `Pass the Telstra (Dilution of Public Ownership) Bill 1996 or the Australian environment will suffer.' That is what it says. It is pure and simple blackmail and this bill, as I said, is the ransom note. The Minister for the Environment (Senator Hill) was at it again yesterday at the launch of the state of the environment report when he said that no extra funding for the environment would be available unless Telstra was sold, despite the fact the report laid out in detail where there are deficiencies in the environment today.

Very clearly, the subtext of this bill is that the coalition considers the environment expendable. It is a great shame that the crucial environmental and land management projects that are described in the bill, and they are only part of what is required, will clearly not be funded. Some $318 million, as allowed for in the bill, could be well spent on a national vegetation initiative over the next five years and $163 million, as allowed for in the bill, could usefully be committed to the rehabilitation of the Murray-Darling Basin.

There is a need, and we agree, for a national land and water resources audit and the government should encourage the further development of a comprehensive national reserve system. The coasts and clean seas initiative is also a worthy pursuit. We on this side of the House do not question the need for such environmental funding at all, in fact our support for these projects is absolute. After all, they are mainly Labor programs and built on existing programs. But, unlike the coalition, we have never placed conditions on their funding. This is a very important point: Labor never held environment funding hostage as this bill does.

The Labor Party considers the environment vital and it is vital government expenditure that should now and in the future be funded directly from the consolidated revenue fund. That is the way it should be done. We see no reason at all, and none has been given, to depart from the conventional funding approach. We see no reason to establish a natural heritage trust fund at all. We see no reason for this legislation to be before the parliament.

It is common practice before any trust fund is established that its proponents demonstrate, or at least attempt to argue, that alternative arrangements are unsuitable. What is unsuitable about consolidated revenue arrangements? The government has not argued its case because it cannot. The bill is just plain unnecessary.

Since coming to office, the Howard government has shown no interest at all in providing national leadership on environment matters. The signals to date indicate that their preferred approach is to remove the environment from the Commonwealth's agenda. The coalition does not even want it discussed unless it can be used as a blackmail tool. Again, we saw that yesterday with the release of a very significant report, and all the minister wants to talk about is the sale of Telstra.

The government not only on this issue but also on a whole range of other issues has shown no leadership at all on important environmental matters of national significance. Instead of protecting the environment their record is full of steps taken to roll back environmental protection, and after such a short time too. It seems that Senator Hill is always a couple of decisions behind the Minister for Resources and Energy (Senator Parer). Under Senator Hill's stewardship to date, the environmental agenda has been sidelined even before it got a proper hearing. The two classic examples are the proposal to undertake uranium mining in Kakadu and the government's very defensive greenhouse position, and there are many other cases.

Senator Parer is not the only government minister who manages to roll Senator Hill on the environment. The Minister for Primary Industries and Energy (Mr Anderson) has been successful in toppling Senator Hill on woodchips and in divvying up the responsibilities referred to in this bill. Just to deal briefly with the woodchip issue, Senator Hill has already demonstrated considerable political impotence. He gets rolled by the development ministers regularly and he has shown no commitment at all to progressing the national forest policy.

The government's moves to date to disallow the current woodchip export regulations are evidence of the coalition's plans to clearly give up the reins on forest policy, to take no national leadership role, by handing it over to the states and returning to the bad old days of individual export licensing and a no holds barred approach to forest management. Basing decisions, as they are at the moment, on assertions by forest industry groups and ignoring the conservation movement on this question flies in the face of good policy and flies in the face of the `State of the Environment' report's indication of significant threats to biodiversity from current land clearing and forestry practises. Apparently Senator Hill believes the Commonwealth should exit the field. That is not national leadership; that is a government which is abandoning its responsibilities.

It is important, I think, to mention these developments because they set the climate within which the heritage bill is to be debated. For example, the government's attempt to remove export controls on minerals: yes, that was promised during the election campaign. But the environmental consequences were never spelt out, and I doubt whether many in the community understood just what they were. Fortunately we were able to prevent that happening. But that attempt had been made in a very underhand way, without any community debate at all.

As I have said, we have also seen moves to increase the volume of woodchips exported—against all reasonable scientific advice. Also, we have seen a very defensive negotiating position on greenhouse emissions with talk of jobs in energy intensive industries, without looking at alternative technologies, without looking at the benefits of energy efficiency—very short-sighted indeed. Of course, we have been alarmed by the apparent decision to abolish the Environment Protection Agency.

These things all cast a gloomy cloud over the development of a progressive environment policy. This legislation will apparently be the government's only commitment to the environment—and we will see that it is a very hollow commitment at that. The trust is an empty shell that will never be filled. In some ways, there is very little point in having this legislation before the House.

Yet those in the coalition are asking the public to believe that they are born-again greenies. They did that during the election campaign and some members of the public fell for it, much to their regret and chagrin now, I might say. Those in the coalition government complain about being frustrated by the parliament, as if the parliament were some sort of obstacle between them and their wishes. Indeed, they appear to be saying, `If only parliament would let us sell Telstra, our wonderfully crafted environmental credentials would shine through.' The fact is that the coalition government's record on the environment to date is pathetic, neglectful and dishonest.

There are lots of shortcomings too in this legislation. There are significant issues associated with the trust planned to be established by this bill which, I think, need to be clarified, even if there were a source of funding. In particular, the opposition is concerned that, once the parliament has passed the bill to establish this so-called perpetual trust, there is actually no mechanism within the bill for the parliament to scrutinise the trust's operations or to review the program's effectiveness—an extraordinary proposition.

The government is effectively removing the parliament's control over an important part of Commonwealth expenditure, and yet we were told that the parliament would be pre-eminent and the executive would take a back seat on some of these questions. But here we see the parliament being removed entirely from scrutiny of very important programs.

Also, trust funds notoriously have a number of obvious shortcomings—and I quote from the Commonwealth financial management handbook, which lists:

. . . significant legal and accounting problems associated with a fund and the general question of whether or not the trust fund's existence unduly derogated from parliament any control of that expenditure —

as a significant argument against their establishment. They really must be in exceptional circumstances. After all, trust funds in and of themselves restrict parliamentary scrutiny.

It is difficult to see, as I said earlier, how a government which purports to be committed to the supremacy of the parliament over the executive could actually draft a bill which would diminish the parliament's ability to vet expenditure over $400 million a year. The establishment of this trust and its capacity to remove environment funding from the parliamentary and budgetary process should be resisted by this parliament and by all environmentally concerned Australians.

The opposition believes that the bill is deficient in this area and in many others. We are also concerned about the composition of the trust's board—and I hope members opposite have actually had a look at this bill; it is very curious indeed. It provides for the board to include only two people: the Minister for the Environment and the Minister for Primary Industries and Energy. If there is to be a trust, we believe that the limited board should be expanded to include other important stakeholders, particularly from the environment movement. I would wonder too what would happen if there were some deadlock between the ministers; how would you resolve that? Two people deadlocked would be an unhappy prospect for the environment movement if they were not able to resolve the matter, and yet there is no appropriate mechanism in this bill to resolve deadlocks.

In addition to reducing the parliament's control over important expenditure, trust funds are also very rigid. As the Commonwealth financial management handbook states:

The purpose for which a trust account was established cannot be changed. If at some stage it proves necessary to expand or to modify the purposes of a trust account, the account must be closed, the balance repaid to the Consolidated Revenue Fund and a new trust account established with the modified purposes . . . a new appropriation of the CRF would also be required for the payment to the new trust account.

So it is not a very flexible vehicle either. The government's claim, therefore, of establishing a perpetual trust is nonsense. It is not possible for the government, or anyone else for that matter, to predict the environmental problems of Australia in the future or, indeed, the priority they should be assigned. The nation's environmental priorities will change in the future. The trust will need to be modified and, consequently, will have to be closed and the balance repaid to consolidated revenue. These requirements indicate the futility of establishing a perpetual environment trust in the way described in this bill.

Clearly, the superior approach is to fund environment programs directly from the consolidated revenue fund. We have heard no argument why that should not be done. This is the funding approach clearly favoured by the opposition and, indeed, applying in the past to environment and other funding.

One of the things about this bill worth mentioning in passing is that it makes reference to the Financial Management and Accountability Act 1996 as a way of ensuring proper financial accountability of the trust. I might say that that is a bill we have not yet seen. So the parliament is being asked to take on trust that there will be adequate precautions taken, and yet we do not know in what they will consist.

We have further technical concerns with this bill, particularly the bill's references to investment in natural capital, as it is called. The government has persistently described a range of programs to be funded in this bill as capital projects. The Australian Bureau of Statistics document Government finance statistics, Australia—concepts, sources and methods 1994—which I think is a reliable source—defines capital transactions as:

Payments or receipts for the acquisition, construction or sale—

and I repeat: acquisition, construction or sale—

of non-financial assets which are to be used for more than one year in the process of production. All other non-repayable transactions are regarded as current.

Using this definition, let us just examine one by one the five projects referred to in this bill. The national vegetation initiative, you would have to say, is something that is not going to be a one-off capital expenditure in the way described. It is something that will need to go on. In the past it has been funded as a recurrent expenditure and has all the characteristics of normal recurrent expenditure. Similarly, the Murray-Darling Basin initiative is not a one-off acquisition, construction or sale of a non-financial asset. It is basically an ongoing long-term program. The national land and water resource audit is definitely recurrent expenditure and does not have any of the characteristics ascribed to capital.

While you might say that the national reserve system, particularly in acquisition, may have some of those features, there are others that do not, particularly the management aspect. And the coast and clean seas initiative, by anyone else's definition, would be seen as recurrent and not capital expenditure. So despite the coalition's rhetoric, there is no element of this bill which can be simply defined as capital expenditure.

You might wonder why they do it. The bill's shonky definition of capital expenditure actually exposes the government's attempts to hide the inherent contradiction between the coalition's privatisation election promise and its environment election promise: and it is an unhappy compromise. The coalition's privatisation policy asserts that `proceeds of privatisation will not be used to fund recurrent expenditure.' So they just redefine it. They change the meaning of the word. The government clearly faces a dilemma. How can it reconcile its privatisation election promise with its environment election promises? The simple fact is—this bill demonstrates it—that they cannot. The promises are contradictory. So what do they do? They ignore the facts and blindly assert that the projects represent an investment in natural capital. This is clearly blatantly misleading. Not only are they breaking an election promise; they are also prepared to change government accountancy definitions to cover their tracks and hope that the Australian people will be none the wiser.

The Telstra environment scam—I think that is the only way you can describe it—exposes the government's intention to use smoke and mirrors accounting tricks to hide their broken promises. It really requires a fantastic leap of faith to accept the proposition, for example, that the national land and water resources audit is capital expenditure.

As I have already indicated, the coalition has made a big song and dance about its commitment to the environment. Mind you, it is sounding a bit limp lately. When the smoke clears, this supposed commitment will not have been translated into expanding and strengthening the environment department. Indeed, we are told that sections of the department are likely to be abolished, including the EPA, a very important section.

It seems odd that the environment minister will be the minister responsible for preparing and tabling the trust's annual report—that is what this bill tells us—but he will be responsible, it turns out, for less than 20 per cent of the trust's funds. It starts to lose the character of an environment fund. The remaining 80 per cent will be managed by Minister Anderson's department. The only initiative Senator Hill will be responsible for is the national reserve system—less than 20 per cent.

It is misleading to refer to the trust as an environment package. In fact, if you look at it closely, it is a land management package with a very small environment component—and that in the face of this baseline data which we now have about the need to repair the Australian environment.

A critically important policy area such as the environment clearly requires an ongoing commitment from government for certainty of funding from the consolidated revenue fund. That is our very clear position. Anything short of this exposes a lack of commitment and a desire to downgrade the importance of the environment portfolio. I don't think any other conclusion can be reached.

Throughout the election campaign the coalition boasted about its $1 billion environment package—it had a certain ring to it— and how it actually doubles Labor's commitments. Senator Kemp, who was the shadow minister at the time, was particularly erroneous in his claims. For instance, on 1 February 1996 on Melbourne radio he said:

Our commitment over five years is at least twice the commitment that Labor made.

In the same interview he said:

What we are saying is that there are, on top of all the projects that are currently being funded in the environment, on top of those we've announced major new initiatives and those particular ones, those five major ones, are going to be funded through the Natural Heritage Trust, which in turn will be funded from the privatisation of Telstra.

Note, interestingly, that he didn't say `part privatisation' at that point. Maybe he let something slip. This was then, and is now, an absolute con of the Australian community. The accurate picture of the two parties' environment commitments firstly must incorporate Labor's forward estimates and it must also compare the expenditure over the same period of time, something Senator Kemp was conveniently not doing.

The following figures convincingly debunk the coalition's claims that their environment commitment was twice the commitment Labor made. It was something that appealed to the conservation movement. The Labor Party's total commitment to environment and land management programs over the four years 1996-97 to 1999-2000 was indeed $1,588 million. That is what we committed. That funding amount represents Labor's forward estimates of some $609 million plus Labor's land management forward estimates of $509 million plus Labor's land package announced before the election of $470 million. Over the four years this translates into some $397 million per year towards environment and land management programs—responsible promises.

The coalition is committed to $1,970 million over four years. That comprises Labor's budgeted environment expenditure—after all, they said they would maintain that—of $1,118 million plus the $852 million worth of promises they made during the election campaign. If you work this out, over the four years that translates into some $493 million per year on environment and land management programs.

The annual difference, therefore, between the coalition's environment commitment and Labor's environment commitment is $96 million. That is what you ask to sell Telstra for—$8 billion to buy $96 million extra per year. That is a very generous interpretation indeed, because it assumes that the current government will actually leave the existing programs and expenditure in place. In my view, the difference will disappear altogether after the budget when the coalition cuts many core environment programs, such as the Environment Protection Agency, and slashes departmental running costs.

On the landcare side, we have already seen some cuts which are having effects in regional Australia. I am sure members will be aware of the fact, for instance, that Landcare Tasmania have already been told that they are about to lose 25 per cent of their funding from the Commonwealth government. This would mean the loss of three full-time regional landcare officers, a vegetation adviser, an education officer, a river engineer and parts of the whole farm planning program. You cannot lose 25 per cent of your funds without that sort of effect. In my view, by the time we get to the budget a lot of these funds will already be gone and that $96 million difference will have disappeared. In other words, the increase is a mirage. It will never eventuate in any case because Telstra won't be sold. So we have a promise here that can never be met.

Despite their election commitment to match Labor's budgeted funding for the environment on top of the Natural Heritage Trust, Senator Hill—and he has been questioned on this—has actually refused to rule out massive cuts to current environment program expenditure. Indeed, even given their promises we expect to go backwards in the first financial year. That is your promise.

When asked in the Senate, Senator Hill basically avoided the question. Is he saying that the expenditure in the Natural Heritage Trust of Australia is sacrosanct—that one little bit—but other environmental programs can be damned? What he is saying is that the only way to guarantee any expenditure on the environment is to sell Telstra, and existing programs will be undermined.

The other important difference between Labor and the coalition government is that Labor's expenditure was secure. It was not contingent on the sale of Telstra. Those figures I have just outlined and the certainty of cuts to the environment in the budget clearly debunk the coalition's claims that this is `the biggest and best environment package in Australia's history'. Senator-elect Bob Brown described it very correctly as `a modest package'. Indeed, it is a modest package dressed up in trust fund clothes. We simply should not fall for that trick. In reality, it is a funding mirage—it will never eventuate because Telstra will never be sold. The Australian people simply do not want it to be sold and they do not accept that link.

The government is also fond of claiming that green groups support the Telstra-environment link. We have had that said here by many ministers. They continually cite the Surfriders Association as a conservation group which supports them. The Surfriders Association may be called a conservation group, but it normally would not attract that description. I do know they have an interest in water quality.

The truth is that the list of groups opposing the link is long, and their opposition is very strong, and growing. Take the Friends of the Earth, which put out a media statement on 18 June 1996 when they saw this bill. I will quote from the statement, headed `Telstra blackmail fails again', at some length because it summarises the community's opposition to the government's plan very succinctly:

The release of the Federal Government's National Heritage Trust Bill without funding is another cheap attempt to blackmail the opposition parties into supporting the partial sale of Telstra.

Got it in one! They go on to say:

This is a shameful and transparent attempt to force people into accepting the government's proposition that to oppose the sale is to oppose funding for the environment.

An extraordinary proposition when you think about it—

There are funding options, including diversion of a portion of the Telstra dividend into the Trust Fund. The government is holding the environment to ransom in the hopes of achieving its privatisation agenda.

That argument, I think, can be supported. They continue:

Friends of the Earth, a national environment organisation, has consistently opposed the cynical deal that would link funding of the Trust Fund with privatisation of a publicly owned asset. Like the majority of the Australian public, we believe that funding for the environment should come from core funding sources. We strongly reject Senator Hill's statement that to oppose the sale means a `lack of understanding of the environment crisis facing Australia'. We are all in agreement about the depth of the crisis—we disagree on the `remedy'—we need long term commitment, no short-term deals.

It is clear from this that the government's Telstra-environment ruse has been exposed. The green groups are not convinced and the opposition will not be blackmailed into passing this bill, anymore than we will be into agreeing to part-privatisation of Telstra.

As I have outlined, the opposition has a number of major concerns with this bill. First, its objective is not to ensure the Australian environment is protected and conserved—that is its last objective. Its objective is to ensure that the Telstra bill is passed by the Senate. It is such a transparent ruse that I do not believe anyone will fall for it. The opposition will certainly not succumb to this blackmail and we, therefore, are going to be moving amendments to remove any reference to Telstra from this bill.

Secondly, the opposition questions the bill's reference to capital programs, as I have already outlined. The initiatives to be funded by the partial sale of Telstra are simply not capital programs. Reference to these initiatives as capital projects has the potential to set a very unhealthy precedent. The coalition has blurred the capital definitions in the hope of disguising the fact that they are breaking a significant election promise made in their privatisation policy. The opposition will move amendments to remove from the bill any mention that these initiatives are capital projects, simply because they are not.

Thirdly, as I indicated, the opposition is concerned about the proposed management of the fund. The Natural Heritage Board is not really a `board' at all; in fact, it is more like a junta. As it stands, this bill would hand over the environmental policy reins to two ministers and forever eliminate any opportunity for parliamentary scrutiny of their activities. That is the extraordinary outcome. That is unprecedented, undemocratic and just plain wrong. We see the need for the board to be expanded and to allow greater community input. After all, the community is asked to take on many of the projects that are outlined in the bill.

Fourthly, the trust's establishment removes environment funding, as I have said, from parliamentary and budget processes. This, in my view, should be resisted by the parliament and by all environmentally concerned Australians. Why should we not know what is going on with these very important projects in the same way as we do with others?

The opposition calls on the minister to ensure that the trust's expenditure is part of the normal budgeting processes, including Senate estimates. I understand that further funds might be put under the control of the trust. We could have the position where eventually all environment and land management programs are outside parliamentary scrutiny. In my view, the trust must be accountable to parliament. It is irresponsible of the government to have drafted a bill which diminishes the role of parliament in this way. To ensure that the parliament maintains some influence over environmental matters, the opposition will amend the bill at least to include a sunset clause.

I think this bill has been thrown together by the government for the sole purpose of forcing the parliament's hand on the Telstra sale. The opposition finds this objectionable. Therefore, I move:

That all words after "That" be omitted with a view to substituting the following words:

"the House is of the opinion that the Bill should be withdrawn and redrafted to provide, in the interest of certainty, for $1 billion from the Consolidated Revenue Fund to be credited upon enactment to the Natural Heritage Trust of Australia Reserve".

With that amendment, the bill might be marginally respectable; without it, it is simply a ransom note—and that is blackmail.

Mr Langmore —I second the amendment and reserve my right to speak.