Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 6 June 1994
Page: 1315

Senator SCHACHT (Minister for Small Business, Customs and Construction) (4.18 p.m.) —I table the explanatory memoranda relating to these bills and move:

  That these bills be now read a second time.

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

  Leave granted.

  The speeches read as follows


The National Environment Protection Council Bill is an important landmark in the history of environment protection in Australia. It marks the commitment of the Commonwealth and the states and territories to work cooperatively to develop national environment protection measures. These measures aim to give all Australians the benefit of equivalent environmental protection and to ensure that investment decisions by business are not distorted by variations in environmental standards between Australian jurisdictions.

Establishment of the National Environment Protection Council and development and mandatory application of national environment protection measures is part of the Intergovernmental Agreement on the Environment endorsed by the Council of Australian Governments in May 1992.

The Intergovernmental Agreement represents an important turning point in Commonwealth/State relations in the environment field in the interests of ecologically sustainable development. The objects of the Agreement bear repeating. It provides a framework to facilitate:

a co-operative national approach to the environment;

a better definition of the roles of the respective governments;

a reduction in the number of disputes between the Commonwealth, the states and territories on environmental issues;

greater certainty of Government and business decision making; and importantly

better environment protection by integrating environmental considerations into the decision making processes of all governments at the project, program and policy level.

The National Environment Protection Council Bill is the first part of a package of complementary State and Commonwealth legislation to give effect to Schedule 4 of the Intergovernmental Agreement. For ease of reference the text of the Intergovernmental Agreement is appended as the Schedule to the bill. The states and territories have agreed to introduce complementary legislation to establish the Council, following which State and Territory, then Commonwealth legislation will be introduced in participating jurisdictions for the mandatory application of national environment protection measures made by the Council.

The bill before the House establishes the National Environment Protection Council, a Ministerial Council drawn from all participating states, territories and the Commonwealth. Although a signatory to the Intergovernmental Agreement, the Western Australian Government has indicated that it will not be participating in the Council at this stage. While this does not invalidate the national scheme, automatic application of national environment protection measures in Western Australia will not be guaranteed.

The Australian Local Government Association, as a signatory to the Intergovernmental Agreement, is entitled to observe the deliberations of the Council.

The Ministerial Council is empowered to make national environmental protection measures which, through complementary implementation legislation, will apply as valid law in each participating jurisdiction.

The National Environment Protection Council may make measures in relation to:

  (i)ambient air quality;

  (ii)ambient marine, estuarine, and freshwater quality;

  (iii)noise related to protecting amenity where variations in measures would have an adverse effect on national markets for goods and services;

(iv)general guidelines for the assessment of site contamination;

(v)the environmental impacts associated with hazardous wastes;

(vi)motor vehicle emissions; and

(vii)the reuse and recycling of used materials.

National Environment Protection measures may be a combination of:

(i)goals or desired essential outcomes to guide management strategies;

(ii)guidelines on means of meeting desired outcomes;

(iii)standards or quantifiable characteristics against which environmental quality is assessed;

(iv)protocols or processes for measuring environmental characteristics to determine whether desired outcomes are being achieved.

Consistent with the principles of ecologically sustainable development, and to ensure simplicity and effectiveness of administration, Council must develop measures through a public consultative process having regard to a number of factors as specified in the bill. Important among these is the need to have regard to regional environmental differences, the environmental, economic and social impacts of the measure and whether it is the most effective means of achieving the desired environmental outcome.

In making a final decision on a measure, Council must have regard to the impact statement relating to the measure; the public submissions received and to advice from a committee of Commonwealth and State officials. Decisions by the Council, which is chaired by the Commonwealth, will be by a two thirds majority.

National environment protection measures will be disallowable instruments only in the Commonwealth Parliament as agreed in Schedule 4 of the Agreement. They will apply automatically in each participating jurisdiction after the conclusion of the disallowance period, provided, of course, that there has been no motion of disallowance.

As well as making national environmental protection measures the Council has an important role to play in reporting annually to Parliament on its activities, and its overall assessment of the implementation and effectiveness of national environmental protection measures in all participating jurisdictions.

The Council will be assisted by a statutory committee of Commonwealth and State officials and by a small secretariat staffed by Commonwealth public servants but established as a separate service corporation accountable to the Council.

It is not proposed to create a substantial new bureaucracy for the development of national environment protection measures. Rather the Council Secretariat will draw upon work being carried out in existing environmental agencies throughout Australia. The cost of establishing NEPC and developing NEPMs will be shared between Commonwealth and state governments on a 50-50 basis.

Mr President, the introduction of this bill is an important step in the process of developing harmonious environmental law in Australia to achieve national outcomes. The National Environmental Protection Council provides the means whereby the Commonwealth can work in partnership with the states and the states and territories can work in partnership with each other to share expertise, resources and decision making to benefit environmental protection in Australia.

I present the explanatory memorandum to this bill.


Repeal of the Automotive Industry Authority Act 1984.

The Automotive Industry Authority was established in 1984 to guide the automotive industry through the substantial changes imposed on it by the introduction of the Car Plan.

The focus of the Car Plan has been on industry restructuring and the promotion of an internationally competitive automotive manufacturing sector. Reviews in 1988 and 1991 have maintained this approach through the continuation of a policy of reduced assistance complemented by various mechanisms to promote rationalisation and increased economies of scale from export production.

The automotive industry has responded to this policy with the rationalisation of manufacturing activity and is emerging as an efficient manufacturer and exporter of world class vehicles and components. The Automotive Industry Authority has made a substantial contribution to this development.

The Government remains committed to maintaining an Australian automotive manufacturing capability. It is cognisant of the strategic value of this capability not only in terms of direct employment and productive capacity in the automotive sector but also as a catalyst for the development of new technologies and new production techniques relevant across Australian manufacturing.

The key issue now is whether the industry is able to continue to improve its competitiveness within the existing policy framework and administrative arrangements under the Car Plan. Many of these factors that affect the industry's competitiveness cut across a number of Commonwealth Portfolios and may require a response at State level.

It is true that as a result of the reviews undertaken in 1988 and 1991, the policy and administrative structure itself has become progressively less complex. The direction for automotive policy is to work with the industry to not only monitor its response to existing policy but to also address the basic industry development and business environment issues which impact on its performance. The decision to repeal the Automotive Industry Authority Act reflects these changing demands.

In future, activities relating to automotive policy development and implementation, consideration of strategic issues impacting on the automotive industry, delivery of generic programs to automotive firms and monitoring will be consolidated within the Department of Industry, Science and Technology.

In repealing the legislation, the Government has allocated the equivalent of the Automotive Industry Authority's annual appropriation of $1.1 million to cover the costs of winding down the Authority, meeting financial obligations and relocating staff. Following this initial expenditure, there will be an ongoing saving of $600,000 annually.

I commend the bill to honourable senators and I present the explanatory memorandum to this bill.


The purpose of this bill is to give effect to changes to operational rules applying to Pooled Development Funds announced as part of a wide range of measures by the Prime Minister on 4 May 1994 in the White Paper on Employment, Industry and Regional Development. The PDF Program, which was introduced in June 1992, is a mechanism for channelling patient equity capital to small and medium sized enterprises.

PDFs are concessionally taxed investment companies that may be established under the Pooled Development Funds Act 1992 for the purpose of investing in equity in eligible businesses.

The Program arose out of a recognition that there are imperfections in the capital markets and that small and medium sized firms often have difficulty in obtaining equity capital, especially those that are in the early stages of development. The availability of development capital for such firms is unduly constrained by several factors, with the main ones being a tendency to excessive risk aversion and short-term investment outlook by many suppliers of capital, the lack of a ready market for trading in their equity securities, and some general adverse perceptions about the risk of such investments.

The Program has not had the anticipated impact on creating a pool of investment funds, as only $35 million has been raised by PDFs. This is because there is a view that the incentive available under the Program is not sufficient to compensate for the risk associated with this class of investment, and because some of the operational rules have been seen as being overly restrictive.

Our Government is committed to ensuring that the Program makes an impact in ameliorating the difficulties faced by small and medium enterprises in accessing capital. It was with this object in mind that the Prime Minister announced the changes to improve the tax incentive under the Program, and the flexibility of the PDF operational rules.

Under the revised taxation arrangements the existing incentives available under the PDF Program have been improved by reducing the concessional tax rate from 25 per cent to 15 per cent on the profits PDFs derive from investing in businesses. It should be noted that the tax rate on the profits of a PDF derived from non-SME investments, such as interest earned from securities, will remain at 25 per cent. The Treasurer will be introducing legislation to give effect to this measure. Those amendments will have a financial impact but there is none that will arise as a result of the amendments contained in this bill.

This bill introduces a range of measures to revamp the Program by freeing up the rules under which PDFs operate in line with the experience of the scheme and having regard to the views of the development capital industry. The rules are to be relaxed in the following ways:

  (a)a PDF will be able to invest in companies with total assets up to $50m, which is an increase of $20m above the existing limit of $30m for investee businesses;

  (b)a PDF will no longer be restricted in its investments in start-up businesses;

  (c)PDFs will be allowed to invest up to 30 per cent of their raised capital in any one investee business. This is an increase from the existing 20 per cent limit;

  (d)the PDF Registration Board will be given a discretionary power to allow PDFs to invest more than the prescribed 30 per cent limit in any one SME investment under conditions agreed by the Board; and

  (e)individual ownership in PDFs will be raised from 20 per cent to 30 per cent, except for banks and life offices for whom there is no limit, and the Board's discretionary power to vary this restriction has been retained.

The amendments also increase the percentage of raised capital that a PDF must invest in investee companies from 50 per cent to 65 per cent.

The eligibility criteria defined in the PDF Act are essentially unchanged. A company applying for PDF registration must convince the PDF Registration Board that it can and will raise capital and use that capital to purchase new equity in Australian companies in a manner consistent with the various operational rules applying to PDFs. An applicant must provide the PDF Registration Board with investment and capital raising plans.

The new arrangements will apply to existing PDFs.

The new tax rate and PDF operational rules will apply from 1 July 1994.

Honourable senators, the Government is aware of the vital contribution to employment, economic growth, and export potential made by the small and medium business sector. The PDF Program is but one element of a range of measures that the Government has introduced to assist this sector. I believe that the Program is an important initiative that will improve the accessibility of small business to capital, and assist in economic growth.

I commend the bill to honourable senators and I present the explanatory memorandum to this bill.


In the White Paper on Employment and Industry, the Government undertook to suspend the Training Guarantee for two years. The Government believes that employers have recognised the value of training and will continue to play their role in increasing Australia's skills base.

This bill gives effect to that undertaking while still allowing employers who have not met their obligations in the current year to take advantage of the carry forward provisions which were recently introduced. It also provides employers with some incentive to provide training during the two years of suspension.

Those of you who have read the White Paper will be aware that the Government has also undertaken to abolish the Training Guarantee if employers make a credible commitment to providing the training places required in the White Paper strategy.

The suspension will be for the two financial years 1 July 1994 to 30 June 1995 and 1 July 1995 to 30 June 1996.

The main effect of the bill is to remove any requirement on employers to pay any training guarantee charge relating to the two years of suspension.

A further provision reduces the minimum training rate from the current 1.5 per cent to 0 per cent for the two years of suspension.

This second provision will have the effect that employers who elect to postpone a shortfall from the current year (1993/94) will be able to offset the shortfall with any training expenditure they incur in the two years of suspension.

Similarly, any excess in those two years may be carried over and set off against a shortfall in 1996/97.

I present the explanatory memorandum for the Training Guarantee (Suspension) Bill 1994 and I commend the bill to the Senate.

  Debate (on motion by Senator Panizza) adjourned.

  Motion (by Senator Schacht) agreed to:

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