EDUCATION LEGISLATION AMENDMENT BILL 2008

The Education Legislation Amendment Bill 2008 makes amendments to the Indigenous Education (Targeted Assistance) Act 2000, the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Act 2005 and the Schools Assistance (Learning Together—Achievement Through Choice and Opportunity) Act 2004 consequential on the Schools Assistance Bill 2008. The bill also makes a technical amendment to correct an incorrect cross-reference.

The bill repeals the States Grants (Primary and Secondary Education Assistance) Act 2000 which appropriated funding for government and non-government schools for the 2001 to 2004 funding period. As such, this Act is no longer required.

While many of the amendments in the bill are technical or consequential amendments, a particularly important component of the Education Legislation Amendment Bill 2008 is contained at item 6 of Schedule 1 which continues the operation of the Indigenous Education (Targeted Assistance) Act 2000.

In the first sitting week of this Parliament, the Rudd Government apologised to Indigenous Australians for the laws and policies of successive Parliaments and governments that have inflicted profound grief, suffering and loss on our fellow Australians. At the time, the Prime Minister made the point that this is not the end of the Government’s commitment, but the start. If Australia is to be truly reconciled there must first be an acknowledgement of past wrongs, but this must be followed up with actions to close the gaps between Indigenous and other Australians.

By putting in place appropriations for another four years under the Indigenous Education (Targeted Assistance) Act 2000 the Australian Government can continue working with a range of stakeholders to develop and implement innovative measures to close the gaps. The Act provides an excellent vehicle to action good ideas. Indeed, in a truly bipartisan way, the Act maintains commitments to initiatives introduced by the opposition including the Indigenous Youth Mobility Program and the Sporting Chance program. We have also built our own election commitments into the Act including funding an expansion of intensive literacy and numeracy programs for Indigenous students, professional development support to assist teachers to develop Individual Learning Plans for their Indigenous students, an additional 200 teachers in the Northern Territory and the provision of three new boarding college facilities for Indigenous secondary school students in the Northern Territory.

The Act will appropriate more than $0.5 billion between 2009 and 2012 for Commonwealth lead initiatives and partnerships aimed at achieving better educational outcomes for Indigenous Australians. In addition, a further $109 million is estimated to be spent over the next four years augmenting ABSTUDY entitlements through the Away from Base for ‘mixed-mode’ delivery program assisting Indigenous students access tertiary education.

As a transitional provision until other elements of our intergovernmental financial relations reforms are introduced in 2009, the Education Legislation Amendment Bill 2008 appropriates over $160 million across 2009 to 2012 to assure preschool and training providers that the Australian Government recognises that Indigenous students need extra assistance if the gaps are to be closed. These appropriations will eventually be phased into the new early childhood and training arrangements. New arrangements for non-government schools are captured through the Schools Assistance Bill whilst new arrangements for Government schools will be provided for in the proposed State Finances Bill.

The Australian Government is working with States and Territories, through the Council of Australian Governments, to develop a shared set of aspirations and policy directions which will provide the basis for our school funding arrangements and our reform initiatives over the coming years.

The new framework will connect educational investment in schools, teachers and families with a new commitment to transparency. This will involve strengthened reporting systems, against ambitious and clear performance targets including goals to halve the literacy and numeracy gaps within a decade and to halve the gaps in the Year 12 or equivalent attainment rate by 2020.

In 2006 gaps between the achievement of Indigenous and non-Indigenous students against literacy and numeracy benchmarks ranged from 13% for Year 3 reading to 32% for Year 7 numeracy. The $779 million to be appropriated under the Indigenous Education (Targeted Assistance) Act 2000 through this bill is only one part of an Education Revolution being initiated by this Government. Social inclusion and closing the gaps will be central to the billions of dollars collectively invested in schools and school communities by the Australian Government in partnership with school systems, parents and other stakeholders.

Closing the gaps can be achieved by working together to reveal those approaches that are making a difference for Indigenous students and by effectively implementing those approaches through our partnerships. The Education Legislation Amendment Bill 2008 can make an important contribution to closing the gaps between the education outcomes of Indigenous and non-Indigenous Australians.

SCHOOLS ASSISTANCE BILL 2008

To best meet the challenges of the future, Australia needs a school system which delivers excellent outcomes for all students and which connects educational outcomes with opportunity for all students to achieve their full potential. This system must be high-quality, transparent, well-funded and it must focus on the needs of individual students.

The Education Revolution has at its core a commitment to a school system that enables all students to acquire the skills and knowledge that they need to participate effectively in society and the globalised economy. To support this goal, it is critical that we move forward from the historical focus on the public/private divide, to a deeper debate about how we improve the fundamental quality of school education.

We need an ambitious national strategy to improve our schools, driven by the twin goals of excellence and equity. Social disadvantage continues to be highly significant in determining the life chances of too many children. Disadvantage should not be destiny. In raising educational outcomes across the board, we need to ensure that areas of disadvantage are targeted and receive the support they need, regardless of sector.

The impact of disadvantage is not restricted to any one sector, and nor should our response be restricted. There are schools that struggle with limited resources trying to serve disadvantaged communities in both the government and non-government sector. The future of Australian schooling will require resources to be targeted to the areas where they will have maximum impact on educational outcomes.

The Australian Government is working with States and Territories, through the Council of Australian Governments, to develop a shared set of aspirations and policy directions which will provide the basis for our school funding arrangements and our reform initiatives over the coming years.

The new framework will connect educational investment in schools, teachers and families with a new commitment to transparency. This will involve strengthened reporting systems, against ambitious and clear performance targets. It will be guided by our overriding objective of creating a schooling system in which every school can deliver a high quality education that is responsive to the needs of individual students. New ‘National Partnership’ payments will encourage further improvements in the priority areas.

The non-government school sector is a vital part of this national reform agenda. The Government recognises that schools need certainty and stability.

Funding for non-government schools will be appropriated under the Schools Assistance Bill 2008. The funding arrangements for the non-government schools sector for 2009 to 2012 will remain largely the same as those currently in place so as to deliver on the Government’s 2007 election commitment that no school will lose a dollar.

This will also allow time for the arrangements between States and non-government schools to be put in place to ensure that in future funding arrangements, the States will be able to take a lead role in delivering improved outcomes across the entire schools system.

The Schools Assistance Bill 2008 will appropriate funding of an estimated $28 billion for the non-government school sector for the years 2009 to 2012. This bill will maintain the current SES funding and indexation arrangements to ensure that total recurrent funding for schools over 2009 to 2012 will not fall below 2008 levels.

There will be additional funding for all non-government schools where 80 per cent or more of the students are Indigenous and for non-government schools in remote and very remote areas where 50 per cent or more of the students are Indigenous.

Strategic recurrent assistance for schools with Indigenous enrolments, previously funded under the Indigenous Education (Targeted Assistance) Act 2000, will also be appropriated under this bill.

The incorporation of a number of schools funding elements for Indigenous students into a single, streamlined Supplementary Assistance element will reduce reporting and red tape for schools and provide increased flexibility for schools to put in place long-term approaches that have proven successful.

The provisions of the bill, including the provision of maximum recurrent funding to schools with a high proportion of Indigenous students and the Indigenous Funding Guarantee, provide a real opportunity to close the gap in educational outcomes for Indigenous students.

The bill continues to provide for targeted funding for teaching of languages other than English, English for new arrivals to Australia, literacy and numeracy and students with special learning needs and for students in country areas.

A central element of the bill and funding arrangements for 2009 to 2012 is a simpler, but strengthened and better focussed performance information and reporting framework for non-government schools. These requirements for non-government schools will be consistent with the conditions required of the states and territories under the National Education Agreement covering government schools.

Information and reporting requirements in the bill focus strongly on five requirements central to good reporting to parents, the community and government - national testing, national reports on the outcomes of schooling, provision of individual school information, reports to parents and publication of school information. This is in contrast to the legislation for the previous four year funding period that imposed over twenty requirements spanning a range of policy areas, necessitating a high level of regulation, monitoring and red tape on systems and schools.

This bill will ensure certainty of funding for non-government schools from 2009 to 2012, it gives additional support for schools servicing Indigenous students and provides a framework for ensuring a high quality, consistent and accountable school sector across Australia.

INTERSTATE ROAD TRANSPORT CHARGE AMENDMENT BILL 2008

The Interstate Road Transport Charge Amendment Bill 2008 enables nationally agreed new Heavy Vehicle registration charges to be applied to heavy vehicles registered under the Australian Government’s Federal Interstate Registration Scheme (FIRS).

The new charges are set out in the 2007 Heavy Vehicle Charges Determination, which was unanimously endorsed by Commonwealth, State and Territory Transport Ministers at the Australian Transport Council meeting in Canberra of 29 February 2008.

The new heavy vehicle charges are one component of the Rudd Labor Government’s broader heavy vehicle productivity and safety agenda.

The bill will ensure that Federal Interstate Registration Scheme charges are consistent with state and territory registration charges as of 1 July 2008.

National consistency in heavy vehicle regulation is important for our nation.

Heavy vehicles operate right across our country transporting freight across state and territory jurisdictions.

There are approximately 365,000 Heavy Vehicles operating in Australia. Industry needs to be certain that it can operate nationally, without excessive red tape or confronting access issues at state borders.

In 2006 Heavy Vehicles moved a total of 1.69 billion tonnes of freight, representing 70% of the total domestic tonnes carried by all transport modes.

Successive Governments at both Commonwealth and State and Territory levels have supported the principle of cost recovery from the heavy vehicle industry for road construction and maintenance costs incurred through the collection of Heavy Vehicle Charges.

In a speech given on 28 June 2007 entitled The Coalition Government’s Transport Reform Agenda, the Member for Lyne, then Federal Transport Minister and Leader of the Nationals said:

The National Transport Commission will develop a new heavy vehicle charges determination to be implemented from 1 July 2008.

The new determination will aim to recover the heavy vehicles’ allocated infrastructure costs in total and will also aim to remove cross-subsidisation across heavy vehicle classes.”

Recovery of road expenditure under the nationally agreed heavy vehicle charges is achieved through a combination of a fixed registration charge, collected by the states and territories and a road user charge collected by the Australian Government. This bill deals only with the registration charges.

The most recent heavy vehicle charge determination was introduced in 2001. It established charges to recover past expenditure from the heavy vehicle sector, that at the same time, lowered registration fees for some larger trucks, effectively cross subsidising them.

Registration charges were indexed while fuel charges were not.

As a result of this, the amount of money raised does not recover the cost of providing infrastructure for heavy vehicles.

This was confirmed in the December 2006 Productivity Commission Report into Road and Rail Infrastructure Pricing.

The National Transport Commission estimates that the current under - recovery is in excess of $100 million per annum.

In April 2007, the Council of Australian Governments directed that as part of an overall transport reform package, Australian Transport Ministers should require the National Transport Commission to prepare a new heavy Vehicle Determination.

That determination was to deliver revised charges for introduction in 2008, which fully recovered the heavy vehicle industry’s share of aggregate government road expenditure, to index those arrangements so as to not lead to further under recovery, and to remove cross subsidisation across heavy vehicle classes.

During 2007, the National Transport Commission undertook a comprehensive consultation process which informed its final recommendations.

A six week consultation process on the draft Regulatory Impact Statement was undertaken. This process involved written submissions, provision of industry briefings and a series of focus group consultations with industry, trade unions, state and territory governments, peak industry associations and freight customers.

As a result of these consultations, the National Transport Commission made a number of changes to its recommendations, which were discussed with industry and jurisdictions.

The Determination proposed by the National Transport Commission recommended a new set of registration charges which rebalance the relative contribution of different heavy vehicle classes.

These new charges will result in larger trucks, the B doubles and road trains, paying more in registration charges. To assist the industry adjust, these increases will be phased in over three years.

They will also result in a reduction in charges for smaller trucks.

No longer will owners of smaller trucks have to subsidise the B doubles and road trains.

These changes better align charges to the impacts of those vehicles on our roads.

The Determination also increases the Road User Charge from 19.633 cents per litre to 21cents per litre, indexed annually.

After consulting with the industry, the Government has decided to delay the increase in the Road User charge until 1 January 2009.

As I outlined earlier, this charge is not part of the bill before the House, but a separate Declaration under the Fuel Tax Act 2006.

The Rudd Government has decided to supplement the Determination with a $70 million, four year Heavy Vehicle Safety and Productivity Package that will fund:

• Trials of technologies that electronically monitor a truck driver’s work hours and vehicle speed;
• The construction of more heavy vehicle rest stops and de-coupling areas along our highways and on the outskirts of our major cities to assist truck drivers rest ; and
• Bridge strengthening projects and upgrades to linkages between existing Auslink freight routes enabling access to those roads to more productive heavy vehicles.

The Government will consult with industry and state and territory Governments to determine the best combination of projects for the use of the $70 million package.

Since taking carriage of an issue that we inherited from the previous Government, the Government has been carefully listening to the views of the industry.

Our decision to implement the $70 million safety and productivity package, and to delay the implementation of the Road User Charge until 1 January 2009 were taken after consultations with industry.

On 29 February, Stuart St Clair from the Australian Trucking Association said:

“The trucking industry and working families will benefit from the Australian Government’s decision to delay increasing the fuel tax paid by trucking operators…”

“Minister Albanese has listened to the industry and delivered a strong result for trucking operators and Australian Families…”

The heavy vehicle industry needs to pay it’s fair share of road construction and maintenance costs.

It is also important that the very largest trucks pay their full share and that they are no longer subsidised by smaller trucks.

The new charges will be fairer to both those in the industry and to the wider community. Importantly, the new charges deliver the Council of Australian Governments’ requirement for full and ongoing cost recovery.

The new charges will encourage state and territory Governments to facilitate access to the road network to higher productivity heavy vehicles.

This, in turn, would make better use of the nation’s infrastructure - a key element of the Rudd Labor Government’s plan to raise productivity, fight inflation and maintain economic growth.

I commend the bill to the Senate.

ROAD CHARGES LEGISLATION REPEAL AND AMENDMENT BILL 2008

The purpose of the Road Charges Legislation Repeal and Amendment Bill is to restore uniformity to heavy vehicle registration charges in Australia and to update the heavy vehicle road user charge to ensure the Australian heavy vehicle fleet pays its way for its share of road infrastructure costs incurred by Governments.

It is one of two bills to implement the 2007 Heavy Vehicle Charges Determination, which sets a new road user charge and new heavy vehicle registration charges for heavy vehicles throughout Australia. The Determination was unanimously agreed by transport ministers at the Australian Transport Council meeting in February 2008.

Recovery of road expenditure associated with the heavy vehicle industry is achieved through a combination of a fixed registration charge, collected by the states and territories, and a road user charge collected by the Commonwealth through the Fuel Tax Act 2006.

The bill repeals the Road Transport Charges (Australian Capital Territory) Act 1993 as well as making consequential amendments to the Road Transport Reform (Heavy Vehicle Registration) Act 1997 to remove links to the former Act.

The bill also amends the Fuel Tax Act 2006 to set the road user charge rate at 21 cents per litre, in line with the 2007 Heavy Vehicle Charges Determination. Amendments to the Fuel Tax Act will also establish a mechanism to allow adjustment of the road user charge by regulation. These regulations would be subject to review by this Parliament in the normal manner.

This bill does not deal with changes to registration charges under the Federal Interstate Registration Scheme. These changes are dealt with in the accompanying Interstate Road Transport Charge Amendment Bill 2008 No. 2.

There are approximately 365,000 Heavy Vehicles operating in Australia.

Successive Governments at Commonwealth, State & Territory levels have supported the principle of ‘cost recovery’ from the heavy vehicle industry for its fair share of road construction and maintenance costs incurred by Government through the collection of Heavy Vehicle Charges.

In April 2007, the Council of Australian Governments required the Australian Transport Council to devise a new charges determination for implementation on 1 July 2008 that fully recovers infrastructure costs from the heavy vehicle industry, ends cross-subsidisation between heavy vehicle classes and indexes charges to ensure costs continued to be recovered.

The House should note that, in a speech given on 28 June 2007 entitled The Coalition Government’s Transport Reform Agenda, the then Federal Transport Minister and Leader of the Nationals said:

The National Transport Commission will develop a new heavy vehicle charges determination to be implemented from 1 July 2008.

The new determination will aim to recover the heavy vehicles’ allocated infrastructure costs in total and will also aim to remove cross-subsidisation across heavy vehicle classes.”

In developing the 2007 Heavy Vehicle Charges Determination, the National Transport Commission proposed a revised road user charge and amended registration charges that remove cross subsidies between the smallest heavy vehicles in the fleet and the larger trucking combinations.  These changes would address a $100 million under-recovery of heavy vehicles share of road construction and maintenance expenditure

After consulting with industry, the Government decided to delay the increase in the road user charge until 1 January 2009.

The revised heavy vehicle charges bring a new level of fairness to the recovery of road construction and maintenance costs from heavy vehicles. These revised charges remove the unfair registration charge cross subsidies that see operators of small heavy vehicles subsidising the road construction and maintenance costs attributed to the largest heavy vehicles.

It is unreasonable to expect operators of small heavy vehicles to subsidise the road costs of the largest heavy vehicles. Those opposing measures to implement revised national heavy vehicle charges are condemning operators of small heavy vehicles to a continued and unfair burden.

Instead, by ensuring that heavy vehicles pay their fair share of road construction and maintenance costs, we are ensuring that the tax payer is not left to foot the bill of the damage and wear and tear that heavy vehicles do to our roads. And neither is the ACT.

All states have now implemented the revised heavy vehicle registration rates, with the Northern Territory currently introducing the new national charges into their Parliament.

The Commonwealth, however, is yet to introduce new registration charges for Federal Interstate Registration Scheme vehicles. This is despite the fact that these vehicles represent just three per cent of heavy vehicles and that registration revenue from these vehicles is returned to states and territories in full.

The Road Charges Legislation Repeal and Amendment Bill will also repeal legislation that is currently preventing the ACT government setting its own heavy vehicle registration charges.

A key element of the Inter-Governmental Agreement for Regulatory and Operational Reform in Road, Rail and Intermodal Transport entered into between the Commonwealth of Australia and the States and Territories requires that the Commonwealth ‘repeal any road transport legislation that has been enacted by the Commonwealth for the ACT as soon as practicable’.

Repealing the Act will enable the ACT to implement the revised heavy vehicles charges determination within their legislative framework in the same manner as the other States and Territories have already done. This will bring Australia closer to uniform national heavy vehicle registration charges.

The Road Charges Legislation Repeal and Amendment Bill also amends the Fuel Tax Act 2006 to increase in the road user charge from 19.633 cents per litre to 21 cents per litre.

I would like to take this opportunity to clearly explain that this measure does not re-introduce indexation of the fuel excise tax.

Truck operators to do not pay fuel excise the way the rest of Australian motorists do. Like all motorists they pay 38.14 cents per litre at the bowser for their fuel however, they receive a fuel tax rebate of 18.51 cents per litre. The balance (19.63 cents per litre) represents the road user charge. This is not a tax - instead it is a mechanism to recover costs from the industry for its share of road infrastructure costs.

Nor does this bill implement indexation of the road user charge.

The 2007 heavy vehicle charges determination included recommendations for a mechanism to allow automatic adjustments to the road user charge to minimise the impact of possible future price shocks that have accompanied heavy vehicle determinations to date.

The bill allows the government to implement a mechanism to adjust the road user charge by regulations. These regulations are not protected from disallowance. Should the government of the day decide to declare regulations to adjust the road user charge, the Parliament will have the opportunity to scrutinise these regulations at the time.

The increase in the road user charge proposed by this bill ensures that heavy vehicles over 4.5 tonnes pay their fair share of road construction and maintenance costs. No more and no less.

If heavy vehicles don’t pay their fair share of road construction and maintenance costs, these costs must be met by the rest of the community.

In addition, ongoing under recovery of heavy vehicle charges provides a strong disincentive for states and territories to allow wider access to their road networks for high productivity vehicles.

This puts at significant risk any further expansion of high mass limits networks and the ability of the heavy vehicle industry to innovate and develop new, safer and more productive vehicles to take advantage of these networks

The Rudd Government maintains its commitment to supplement the Determination with a $70 million, four year Heavy Vehicle Safety and Productivity Package that will fund:

• the construction of more heavy vehicle rest stops along our highways and on the outskirts of our major cities to assist truck drivers rest ; and
• trials of black box technologies that electronically monitor a truck driver’s work hours and vehicle speed.
• bridge strengthening projects and upgrades to linkages between existing Auslink freight routes;

The Government has consulted with industry and state and territory Governments to determine the best combination of projects for the use of the $70 million package.

That package can only be funded through from the passage of this bill and the Interstate Road Transport Charge Amendment Bill (No 2) 2008.

In closing, I would urge those opposed to these measures to take a moment to seriously consider the impact on the 25 per cent of those heavy vehicle operators who stand to benefit from reduced registration charges as a result of the introduction of revised heavy vehicle charges.

These operators will no longer have to subsidise the road construction and maintenance costs of the biggest heavy vehicles.

And let’s not forget that operators of the biggest heavy vehicles stand to gain from revised charges too. By ensuring that they pay their fair share of road construction and maintenance costs, states and territories are far more likely to open up their networks to these higher mass vehicles because they will be assured that they will recover the costs of the damage that these vehicles will do to these new networks.

The new charges will encourage state and territory Governments to facilitate access to the road network to higher productivity heavy vehicles.

This, in turn, would make better use of the nation’s infrastructure - a key element of the Rudd Labor Government’s plan to raise productivity, fight inflation and maintain economic growth.

I commend the bill to the House.

TEMPORARY RESIDENTS’ SUPERANNUATION LEGISLATION AMENDMENT BILL 2008

The Temporary Residents’ Superannuation Legislation Amendment Bill 2008 implements the Government’s measure to help reduce the number of lost accounts and unclaimed money in the superannuation system which can arise when temporary residents depart Australia without taking their superannuation with them.

The Government is concerned by the growing amount of superannuation which has been identified as lost over the past decade. The Tax Office’s 2006-07 annual report shows that the number of superannuation accounts reported on the Lost Members’ Register grew from 5.7 million to 6.1 million in that income year. These inactive accounts total approximately $12 billion in assets.

While temporary residents who depart Australia are able to take their superannuation with them as a departing Australia superannuation payment, many do not do so. This contributes to the total amount of lost monies in the system.

The amendments contained in this bill seek to address the lost account problem by requiring superannuation funds to pay the unclaimed superannuation of departed temporary residents to the Tax Office.

The Government has consulted on the measure by releasing a discussion paper in May of this year and engaging in consultation with key stakeholders on the draft legislation. The Government’s final policy reflects many of the suggestions made during the consultation process.

The amendments provide that the superannuation of a temporary resident will effectively become unclaimed and payable to the Tax Office after the individual has ceased to be the holder of a temporary visa (that is, their temporary visa has been cancelled or has expired), and they have departed Australia and at least six months has passed and they have not claimed their superannuation.

Departed temporary residents will retain the ability to claim their superannuation benefits through the existing departing Australia superannuation payment process, before it becomes unclaimed.

Departed temporary residents who have not claimed their superannuation and have unclaimed superannuation paid to the Tax Office, can claim back their money at any time. The individual (or if they have died, their legal personal representative or beneficiary) can apply to the Tax Office for the amount to be paid to them or to be transferred to a super fund in certain circumstances.

This provides consistent or better treatment to temporary residents compared to that in many other countries (where temporary residents may be unable or limited in accessing compulsory social security contributions).

Generally, the amount that is claimed back from the Tax Office will be subject to the departing Australia superannuation payment withholding tax. This is consistent with existing arrangements as the withholding tax already applies when a temporary resident claims their superannuation after departing Australia.

This measure will be administered by the Department of Immigration and Citizenship and the Tax Office. The Department of Immigration and Citizenship will provide the Tax Office with information to assist the Tax Office in identifying departed temporary residents who have left unclaimed superannuation behind.

The Tax Office will then issue notices to super funds identifying departed temporary residents. Funds which receive such notices will be required to report and pay any unclaimed superannuation they hold for a departed temporary resident to the Tax Office by a certain day. The first notices are proposed to be issued in March 2009 requesting payments from funds by April 2009. In future, it is proposed that the Tax Office will issue notices at least twice a year.

The Tax Office will also have the ability to revoke a notice it has sent to a fund where it is appropriate in the circumstances to do so (for instance, if the individual returned to Australia on a new temporary visa prior to the six months lapsing).

The superannuation of Australian and New Zealand citizens, current holders of permanent or temporary visas, and those applying for permanent residency, will not be paid to the Tax Office. Instead, their superannuation will remain in a super fund. Certain types of temporary visas can also be prescribed in the regulations to be excluded from the measure if it is appropriate in the circumstances to do so and to cater appropriately to any specific visa classes. For instance, retirement visa holders (subclasses 405 and 410) will be excluded from the measure so that their superannuation will remain in the fund and not be paid to the Tax Office.

At this stage, state and territory public sector funds will not be captured by the measure although the Commonwealth will enter into discussions with state and territory governments to examine the scope to include such schemes in the future.

The Tax Office will have the ability to refund overpayments that have been wrongly made by super funds. Individuals will also have review rights.

This measure will commence from a date to be fixed by Proclamation. This will occur in sufficient time for the Tax Office to send the first notices out to funds in March 2009 and to receive payments of unclaimed superannuation from funds in April 2009.

Full details of this measure are contained in the explanatory memorandum.

SUPERANNUATION (DEPARTING AUSTRALIA SUPERANNUATION PAYMENTS TAX) AMENDMENT BILL 2008

The Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008 forms part of the Government’s temporary residents’ superannuation measure.

Under the measure, departed temporary residents will retain the ability to claim their superannuation benefits through the existing departing Australia superannuation payment process, before it becomes unclaimed.

This provides consistent or better treatment to temporary residents compared to that in many other countries (where temporary residents may be unable or limited in accessing compulsory social security contributions).

The departing Australia superannuation withholding tax currently applies to amounts claimed by departed temporary residents. The tax aims to ensure that taxation concessions provided to superannuation are appropriately targeted to those who retire in Australia. The amendments contained in this bill make a small increase to the departing Australia superannuation payment withholding tax rates by 5 percentage points to further recoup the taxation concessions provided to departed temporary residents.

NATIONAL RENTAL AFFORDABILITY SCHEME BILL 2008

This bill establishes the Australian Government’s National Rental Affordability Scheme.

The National Rental Affordability Scheme is a key part of the Government’s $2.2 billion affordable housing package, which will increase the supply of affordable rental homes, help people save for their first home, lower housing infrastructure costs, and build new homes for homeless Australians.

With this bill, the Government is delivering on one of its key 2007 election commitments - to increase the supply of affordable rental housing for Australians and their families.

There are now 1.1 million Australian households in housing stress.

Almost 700,000 of these households are renters.

Many of these renters are low and moderate income earners.

These are people who are either moving house or cutting back on essentials to keep a roof over their head.

They are renting in a private rental market where rent rises are outstripping wages growth and inflation.

This is having an enormous impact on families, key workers, young people and pensioners.

The rental affordability pressures are driven by a poor supply of affordable rental properties.

The National Rental Affordability Scheme is a major supply-side initiative to make rental properties more affordable by encouraging large-scale investment in rental housing for low and moderate income earners.

The National Rental Affordability Scheme will create up to 50,000 new rental properties across Australia at a cost of $623 million in the first four years.

The Scheme will offer institutional investors and other eligible bodies annual rental incentives every year for 10 years, provided the conditions of the Scheme continue to be met.

The incentive is made up of a Commonwealth contribution of $6,000 per dwelling per year and a State or Territory contribution in the form of direct financial support or in-kind contribution to the value of $2,000 per dwelling per year.

Incentives will be indexed to the rental component of the Consumer Price Index.

The Scheme is deliberately targeted to low and moderate income households.

Incentives are only available to providers on condition that dwellings are rented to low and moderate income households at 20 per cent below market rates.

More than 1.5 million households will be eligible for tenancies under the Scheme, including key workers: entry level police officers and teachers, carers, apprentices, cleaners, hospitality staff and child care workers.

The Scheme provides a new opportunity for all levels of government, the business sector and not for profit organisations to work together to increase the supply of rental housing.

The Government expects the Scheme will facilitate new and creative partnerships between institutional investors, developers and community housing providers. Involvement of both investors and the not for profit charitable sector is crucial to its success.

The Scheme also presents a new investment opportunity for investors - creating a new asset class of investment in residential property.

If market demand remains strong, another 50,000 incentives will be made available over five years from July 2012.

The Government acknowledges the efforts of the National Affordable Housing Summit Group who, over the last four years has helped develop the idea on which the Scheme is based.

The Summit Group is a coalition of the Housing Industry Association, the Australian Council of Trade Unions, the Australian Council of Social Services, National Shelter and the Community Housing Federation of Australia. The Group, particularly Professor Julian Disney, Adrian Pisarski, Dr Ron Silberberg and Grant Bellchamber, as well as Carol Croce and Carrie Hamilton, have generously offered their time and expertise to assist the Government to implement the Scheme.

This bill provides for the making of the National Rental Affordability Scheme by regulations.

The regulations will further the object of the bill, which is to provide incentives to encourage large-scale investment in affordable housing. This will increase the supply of affordable rental dwellings and reduce rental costs for low and moderate income households.

It is desirable for most of the administrative detail of the Scheme to be in the regulations rather than in the bill.

This provides the Government with the necessary flexibility to address changing circumstances, including the process for determining market rent, tenant eligibility criteria and acceptable periods of vacancy, as well as the reporting requirements for the Scheme.

The bill provides for the regulations to prescribe a Scheme that deals with the approval of participants, the approval of rental dwellings, and providing incentives to an approved participant if certain conditions are satisfied.

Importantly, the bill and the regulations will allow for eligibility under the Scheme to be recognised from as early as 1 July 2008.

The regulations are currently being drafted by the Office of Legislative Drafting and Publishing and an exposure draft will be made available as soon it is prepared to assist with understanding the scope and operation of the Scheme.

Further, the bill provides for the Scheme to include an allocation process. Under this process, the Secretary may make an allocation for a 10-year incentive period in respect of a rental dwelling on certain conditions.

Some of these conditions (the mandatory requirements) are set out in whole or in part in the bill itself. These mandatory requirements cover the conditions relating to eligible rental dwellings, eligible tenants and the maximum rent that can be charged, as well as the permitted vacancy rates.

To preserve the integrity of the Scheme, an incentive may be offset or recouped in the circumstances provided for by the Scheme. The bill also provides that the Scheme may provide for variations, transfers and revocations of allocations.

In relation to receiving incentives, the bill provides for the Secretary either to issue a certificate in relation to a refundable tax offset or make a payment. Unless a participant is an endorsed charitable institution, the incentive is to be made available in the form of the refundable tax offset.

The National Rental Affordability Scheme is totally new in the Australian context. It is an innovative approach to reducing the number of Australians living in rental stress.

The Government will review the Scheme in the early years of its implementation to ensure it is adequately focussed on those Australians in rental stress. We will also test whether or not there is scope for simplifying the Scheme or reducing the administrative burden on providers, and whether there are evolving issues of non-compliance that need to be addressed.

We may need to make improvements to the Scheme before it is expanded.

With this bill, the Australian Government is delivering on one of its most ambitious housing reforms - to establish a National Rental Affordability Scheme. The Scheme will increase the supply of rental dwellings and reduce the costs of renting in the private market for low and moderate income Australians and their families.

NATIONAL RENTAL AFFORDABILITY SCHEME (CONSEQUENTIAL AMENDMENTS) BILL 2008

The National Rental Affordability Scheme is designed to encourage large-scale investment in affordable housing.

The Scheme offers tax and cash incentives to providers of new dwellings on the condition that they are rented to low and moderate income households at 20 per cent below market rates.

The incentive comprises a Commonwealth contribution in the form of a refundable tax offset or payment to the value of $6,000 per dwelling per year, and a state or territory contribution in the form of direct financial support or an in-kind contribution to the value of at least $2,000 per dwelling per year.

The incentive will be provided for a period of 10 years to complying participants, and will be indexed in line with the rental component of the Consumer Price Index.

The National Rental Affordability Scheme Bill 2008 establishes the National Rental Affordability Scheme. The explanatory memorandum to that Bill provides further information on the Scheme.

The National Rental Affordability Scheme (Consequential Amendments) Bill 2008 amends the Income Tax Assessment Act 1997 to enable entities participating in the National Rental Affordability Scheme to claim a refundable tax offset in their annual tax return. These entities include companies, superannuation funds and unit trusts.

The bill also amends the Income Tax Assessment Act 1997 to ensure that state and territory contributions to entities participating in the Scheme, whether in cash or in-kind, are non-assessable and non-exempt income for taxation purposes. In addition, the bill ensures that there are no capital gains tax consequences from the receipt of incentives under the scheme.

The bills implementing the National Rental Affordability Scheme fulfils one of the Government’s important election commitments.

The Scheme aims to assist institutional investors, developers and not-for-profit groups to deliver 50,000 rental dwellings over the next four financial years by creating a new residential property asset class for property investors.

If market demand remains strong, the Government will make available another 50,000 incentives for a further 50,000 affordable rental dwellings over five years from July 2012.

The Government is strongly supportive of the work of the not-for-profit sector. Where the National Rental Affordability Scheme is consistent with the objectives of a not-for-profit body, the Government welcomes their participation.

The sector’s involvement is important to the successful implementation of the Scheme. Under the right circumstances, not-for-profit groups could be tenancy managers, developers or owners of NRAS dwellings, as well as being members of consortiums. To ensure their participation, the Government is making its contribution available as a cash payment for endorsed charities.

If problems arise as a result of the genuine involvement of the not-for-profit sector in the National Rental Affordability Scheme, the Government will consider what steps are required to better assist them to participate in this Scheme.

The National Rental Affordability Scheme is one of a number of measures the Government is implementing to improve the affordability of housing for families and individuals with low to moderate income levels.

Other measures include establishing the Housing Affordability Fund. This Fund will be used to streamline development approval processes, and reduce infrastructure charges and regulatory costs.

Another measure is the audit of Commonwealth land to facilitate improved housing supply through the identification of surplus Australian, State and Territory land for possible release for housing development.

The Government is also establishing the National Housing Supply Council to provide research, forecast and advice to the Australian Government and the Council of Australian Governments on issues relating to the adequacy of housing and land supply to meet future housing needs.

Finally, the Government’s program called A Place to Call Home will deliver 600 new dwellings for homeless people.

Full details of the measure in the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 are contained in the explanatory memorandum.

WATER AMENDMENT BILL 2008

The current severe and prolonged drought, the onset of climate change and the consequences of past decisions and practices are placing an enormous strain on the communities, industries and natural environment of the Murray-Darling Basin.

Since pre-Federation times, water resources management in the Murray-Darling Basin has been characterised by tension between governments and competing interests, particularly between upstream users and downstream users.

It is time for effective action to address the challenges we are seeing. It is time for the Commonwealth to provide national leadership for present and future generations.

Today I am putting forward reforms in the Water Amendment Bill 2008 that reflect a new era of cooperation and collaboration between Murray-Darling Basin governments for Basin-wide water resource management.

In response to concern about many of Australia’s river systems, the Council of Australian Governments agreed in 1994 to reforms for Australia’s rural and urban water industries.

In 1995, as partners to the Murray-Darling Basin Commission, governments introduced a Cap on diversions of surface water from the Murray-Darling Basin. This Cap was based on historic levels of use.

We have, however, the situation today where science, and the evidence of what we can see for ourselves, is clearly telling us that our rivers and aquifers are stressed and over-allocated.

This Government was elected on a platform of ending the blame game and buck passing between Canberra and the States and Territories. We have reinvigorated the Council of Australian Governments with a major reform agenda, underpinned by more effective working arrangements. We have established a policy and financial framework to address Australia’s long-term challenges.

One of those challenges is to secure a sustainable water supply in the face of a changing climate and the pressures of economic development.

Cooperative partnerships between the Commonwealth and State and local Governments, farmers, industry and the community are the key to addressing this challenge.

We took a major step forward in March 2008, with the Memorandum of Understanding on Murray-Darling Basin Reform, signed by the Prime Minister and the Premiers of New South Wales, Victoria, South Australia and Queensland, and the Chief Minister of the Australian Capital Territory.

The central principle of the Memorandum of Understanding was to improve planning and management by addressing the Basin’s water and other natural resources as a whole, in the context of a new Federal-State partnership.

The agreement embodied the sound principles of Commonwealth-State relations by assigning a Basin-wide planning and management role to the Commonwealth, while providing for clear participation by Basin States in decision-making and affirming the autonomy of Basin States to manage water within their catchments.

In July 2008, as promised, an intergovernmental Agreement on Murray-Darling Basin Reform was signed by First Ministers, which built on the principles of the Memorandum of Understanding. In the intergovernmental Agreement, Governments committed to a new culture and practice of Basin-wide management and planning, through new governance structures and partnerships.

Today I present historic governance reforms in the Water Amendment Bill 2008 that are possible only because Basin State governments have agreed to propose legislation to their Parliaments providing for a referral of certain powers to the Commonwealth Parliament in accordance with section 51(xxxvii) of the Constitution.

The matters covered include:

• the transfer of current powers and functions of the Murray-Darling Basin Commission to the Murray-Darling Basin Authority;
• the strengthening of the role of the Australian Competition and Consumer Commission by extending the application of the water market rules and water charge rules; and
• enabling the Basin Plan to provide arrangements for meeting critical human water needs.

The Commonwealth Bill is being introduced into the House at this time as the bills to refer power to the Commonwealth have entered both the New South Wales and South Australian Parliaments. I look forward to the referrals by the Victorian and Queensland Parliaments, so that this bill can be considered in another place.

The bills being considered by State Parliaments refer specific powers and a limited, defined subject matter amendment power to the Commonwealth. In relation to the amendment power, the Commonwealth has committed to securing the agreement of States before proposing any amendments to the Commonwealth Parliament. Reflecting the co-operative underpinnings of the referral, any amendments proposed by the Commonwealth would be consistent with the principles of the intergovernmental Agreement on Murray-Darling Basin Reform signed by First Ministers.

The Water Amendment Bill 2008 represents an historic agreement for the long-term reform of water management in the Murray-Darling Basin. It introduces a new era of cooperative arrangements between the Commonwealth and the states, so that governments, industry and the community can face head-on the challenges of water scarcity and water security.

Thanks to this strong collaborative approach, together we are putting in place a much better system for managing the Basin in the national interest. We will now be in a position to make the hard, but necessary decisions, to ensure a sustainable future.

A key element of the Water Act is the preparation of a whole of Basin Plan by the independent, expert Murray-Darling Basin Authority in the context of clear accountability to the Commonwealth Minister.

Central to the Basin Plan will be sustainable diversion limits on surface water and groundwater use in the Basin to ensure the long-term future health and prosperity of the Murray-Darling Basin and to safeguard the water needs of the communities that rely on its water resources.

Further to the Water Act, this bill introduces governance arrangements for the new Murray-Darling Basin Authority that take account of the need to work closely with the States.

It is imperative for Commonwealth, state and local governments to share a common understanding of the problems in water and to respond in a comprehensive and coordinated way.

This bill provides Basin States with a clear and important advisory role in the preparation of the Basin Plan through a new Murray-Darling Basin Ministerial Council and the Basin Officials Committee. The Basin States will also have a major role in putting the Basin Plan into effect.

While it is important that the States have a seat at the table, final approval of the Basin Plan will rest with one government, the Commonwealth, acting in the national interest.

The States will also retain a decision making role through the new Ministerial Council in relation to specific functions that will be moved from the Murray-Darling Basin Commission into the new Murray-Darling Basin Authority.

This bill delivers on our election commitment to bring the Murray-Darling Basin Authority and the Murray-Darling Basin Commission together into a single body. This ensures there will be a single body responsible for overseeing water resource management in the Murray-Darling Basin. This body will be the Murray-Darling Basin Authority, an independent, expert agency established by the Commonwealth. The Authority has the functions and powers, including enforcement powers, necessary to ensure that Basin water resources are managed in an integrated and sustainable way.

The Authority will have autonomy to prepare the Basin Plan, the first-ever single Basin-wide water resource management plan. The Commonwealth Minister, in approving the Basin Plan including the new sustainable cap on water diversions, will be accountable to the people of Australia through this Parliament.

The Basin Plan will take account of future climate change and address the legacy of past over-allocation. It will also set out arrangements for securing the critical human water needs of people reliant on the River Murray.

A properly functioning water market will be essential to help the irrigation industry manage future reductions in water availability.

The Australian Competition and Consumer Commission will play a key role in improving the functioning of the water market in the Murray-Darling Basin by monitoring and enforcing compliance with water charge rules and water market rules.

The rules will reflect the water charging and trading principles in the National Water Initiative, ensuring that the water market in the Basin works efficiently and that there are no inappropriate barriers to trade.

This bill strengthens the role of the ACCC by:

• providing for the water charge rules and the water market rules to apply to all water service providers and transactions. This means that all users will be assured of a uniform approach to regulation irrespective of the structure of their water service providers; and
• extending the reach of the water charge rules to enable the ACCC to determine or accredit determination arrangements for all regulated water charges. This will promote a uniform approach to the regulation of rural water charges to the benefit of water providers and users.

The bill also allows for individual States and Territories to choose to extend the geographic reach of the rules and the ACCC’s new powers beyond the Basin, so they are not necessarily limited to the Murray-Darling Basin.

The bill will allow markets to operate much more effectively in allocating water between competing uses, improving water use efficiency, and delivering water to its highest value uses.

This Government has recognised that a new approach to water resource management is required to deal with the pressures of climate change, economic development and environmental degradation in the Murray-Darling Basin.

The Water Amendment Bill 2008 will implement governance arrangements that, in the long term, will improve the use and management of the Basin’s water resources, and will protect and enhance the Basin’s social, environmental and economic values. 

These reforms are for the medium to long term. The first Basin Plan will commence in early 2011. The Government recognises the severity and urgency of the current condition of the Basin.

The Commonwealth Government is complementing its governance reform with our $12.9 billion Water for the Future program which has four priorities: tackling climate change, supporting healthy rivers, using water wisely and securing our water supplies.

In delivering Water for the Future we are setting a new standard in national leadership and co-operative relations with state and territory governments.

In July 2008 when the intergovernmental Agreement on Murray-Darling Basin Reform was signed, the Commonwealth announced investments of close to $3.7 billion for significant water projects in South Australia, New South Wales, Victoria, Queensland and the Australian Capital Territory. These projects will improve irrigation efficiency, raise the productivity of water use and make water savings that will be returned to the rivers of the Murray-Darling Basin.

What Australians want in the Murray-Darling Basin is action. This Government is responding with immediate practical measures to take the stress off the rivers of the Basin. For the first time in the history of Federation, the Commonwealth Government is buying water entitlements from willing sellers in the water market, to tackle over-allocation in the Murray-Darling Basin so that rivers and wetlands will get a greater share of water when it is available.

The bill revises the risk assignment framework for the Murray-Darling Basin. Where States have also adopted these new arrangements in legislation, the Government intends to recognise the State adoption through an amendment to the bill, if a State Parliament passes the relevant legislation before the Water Amendment Bill leaves this House. I note that the New South Wales Legislative Assembly has passed such provisions.

The Government has already established the statutory position of the Commonwealth Environmental Water Holder to manage water entitlements that we purchase, or recover through infrastructure efficiency measures. Our environmental water entitlements will be used to protect and restore wetlands of international importance, as well as rivers and wetlands that support listed migratory and threatened species.

We are accelerating specific infrastructure and water savings projects to return flows to rivers and wetlands, and to secure water supplies for townships, communities and irrigators.

This Government is making wise investments to create efficient irrigation areas and return water to our rivers. We aim to secure a long-term sustainable future for irrigation communities, in the context of climate change and reduced water availability into the future.

We are working with irrigation communities to buy out water entitlements from areas willing to move out of irrigation, facilitated by a price premium reflecting the value of water savings from closure of infrastructure such as supply channels.

We are working with State Governments to co-fund the purchase of appropriately located irrigation properties and their water entitlements to enhance environmental outcomes in the northern basin.

We are also committed to freeing up water trade in the Basin to allow water to go to where it brings most benefit, as agreed under the National Water Initiative.

Governments and the community need to have a clear understanding of the volume of water in storage across the Murray-Darling Basin. To this end, we have initiated the first comprehensive, detailed and externally reviewed audit of both public and private water storages in the Basin. The audit will be updated every three months and the information will be publicly available.

These are practical measures which are part of our long term plan to deal with a highly stressed river system, which is suffering from the impacts of over allocation and climate change.

Closing remarks

The Commonwealth is responding to the enormous challenges we face in the Murray-Darling Basin with national leadership and decisive on-ground actions. These things have never been done before and they will require us to make some difficult decisions, but that does not detract from the fundamental need to take action now.

I can introduce the Water Amendment Bill 2008 because the Rudd Government has reached an historic agreement with Basin States to refer certain Constitutional powers to enable the Commonwealth to manage the waters of the Murray-Darling Basin as a single system, in the national interest. This is much needed, long overdue reform in governance that will put the Murray-Darling Basin on the right footing to face the challenges that lie ahead.

This bill implements governance reforms that are complemented by the $12.9 billion investment under our national water plan, Water for the Future, which is already being rolled out.

Many Basin communities are doing it tough. They have been under stress for a number of years. With reform in governance and substantial but wise investment, the Commonwealth is working with Basin communities and Basin governments to deliver a sustainable future.

• Education Legislation Amendment Bill 2008

   Schools Assistance Bill 2008

• Interstate Road Transport Charge Amendment Bill (No. 2) 2008

   Road Charges Legislation Repeal and Amendment Bill 2008

• Temporary Residents’ Superannuation Legislation Amendment Bill 2008

   Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008

• National Rental Affordability Scheme Bill 2008

   National Rental Affordability Scheme (Consequential Amendments) Bill 2008

• Water Amendment Bill 2008