Senator VANSTONE (Justice and Customs) (6:29 PM) —I table a revised explanatory memorandum relating to the Taxation Laws Amendment Bill (No. 2) 1999 and the Primary Industries (Excise) Levies Bill 1999 and four associated 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—

CIVIL AVIATION AMENDMENT BILL 1998

In July 1996 the Government announced that the Civil Aviation Safety Authority (CASA) would conduct a complete review of the civil aviation legislation in Australia, with the objectives of harmonising it with international standards of safety regulation and making it shorter, simpler, and easier to use and understand. This was also an election commitment in the Government's "Soaring into Tomorrow" aviation policy statement. The Morris `Plane Safe' Report and the Seaview Commission of Inquiry both supported the need for a review of Australian regulations and standards.

The purpose of this bill is to facilitate the findings of the review and provides for the introduction of a new set of regulations that are harmonised with civil aviation laws internationally.

The existing act contains various references to the "Civil Aviation Regulations". These references will be changed to "the regulations" or "regulations made under this act" or similar. In recognition of the fact that the safety regulation of aviation activities should not be based fundamentally on the commercial nature of an activity, it is proposed that the term commercial be removed from the act by replacing "domestic commercial flight" with "regulated domestic flight".

The amendments also provide for new powers in relation to the retention and destruction of goods seized by CASA during the course of investigating breaches of the Civil Aviation Act 1988 and regulations.

The power to retain seized goods for longer than 60 days and the power to destroy seized goods, are vested in courts. CASA must apply to courts for orders to retain or destroy the goods as the case may be. The former is required to assist in prosecutions for offences against the act or regulations and is needed in cases where difficulties arise when proceedings are delayed.

The discretion to destroy dangerous goods seized is proposed because in practice, it is not always possible to return seized goods to their owner, and the airline or Customs do not want to accept the responsibility for the goods after the matter is finalised.

Unless such goods are forfeited to the state under legislation relating to property used in the commission of an offence, CASA is required to store them indefinitely. This storage is expensive and has no purpose other than to ensure that CASA does not unlawfully dispose of goods which it does not own. The amendments proposed will permit a CASA investigator to apply to a court for an order that the goods be destroyed where the owner cannot be located or has refused to take possession of the goods.

Clarification of CASA's ability to classify the fees charged by CASA under the Civil Aviation (Fees) Regulations as debts due to CASA is also included in the bill. Where regulations made under the act require the payment of a fee, and the fee is not paid by the due date, then the regulations should be able to prescribe a late payment penalty to be added to that fee. Consequently, a provision which enables the making of regulations which prescribe limited late payment penalties to be imposed is also included.

The financial impacts of the proposed amendments have been assessed as being low. The regulatory changes which the bill facilitate, streamline many CASA requirements of industry and will assist in the manufacture of aircraft in Australia. The bill has no direct Budgetary impact. It is envisaged however, that the regulatory changes which will follow from the bill will reduce the costs borne by CASA in administering the civil aviation regulatory regime.

The amendments proposed in this bill will facilitate the long awaited introduction of a regulatory regime for the Australian aviation industry which is not only harmonised with international practice but clear, concise and outcome focused. The Government's commitment to deliver this objective has been realised.

TAXATION LAWS AMENDMENT BILL (No. 2) 1999

The bill amends the income tax law to give effect to measures announced in previous Budgets and in other Government statements.

This bill also honours a commitment made by the Prime Minister on 8 December 1997, when he announced, as part of the Investing for Growth Statement, a package of measures which are aimed at making Australia a more attractive regional financial centre by building on Australia's existing advantages to ensure its participation in the increasing global trade in financial services.

The amendments relate to the exemption from interest withholding tax available under section 128F, the offshore banking unit concessional tax regime, the foreign investment fund and the thin capitalisation provisions of the Income Tax Assessment Act. These measures were first introduced into Parliament on 2 July 1998 and subsequently lapsed when Parliament was prorogued. Since that time consultation with Industry bodies has continued and the re-introduced measures reflect that dialogue. These changes were announced by the Treasurer on 13 August 1998. The exemption provided by the bill from the controlled foreign company measures represents an extension of the previously announced exemption from the foreign investment fund measures.

To ensure taxpayers are not disadvantaged by the delay in implementation, the amendments are to continue to apply from 2 July 1998—the original date of introduction. The exemption from the foreign investment fund measures will continue to have effect for notional accounting periods of foreign investment funds ending on or after 2 July 1998. The exemption from the controlled foreign company measures will also have effect for statutory accounting periods of controlled foreign company ending on or after that date. The amendments are estimated to cost $22 million in a full year.

This bill contains consequential amendments arising from changes to the capital loss rules in Taxation Laws Amendment Act (No. 2) of 1997. The technical amendments will not affect the practical effect of the debt forgiveness provisions. These amendments apply to debts forgiven after the date of introduction of this bill.

The Income Tax Assessment Act 1997 is being amended to set a common base for the depreciation deductions for plant that can be claimed by exempt entities which first become taxable on or after 4 August 1997 in relation to plant they already own, and by taxable entities which purchase plant from an exempt entity in connection with the acquisition of a business on or after 4 August 1997.

The remaining measures will prevent franking credit trading and dividend streaming, as announced in the 1997-98 Budget. These include a holding period rule and related payments rule for shares and interests in shares to ensure that only taxpayers who bear the economic risk of ownership of the shares or interests will be entitled to franking rebates and credits under the dividend imputation system and the intercompany dividend rebate. These benefits will also be denied on trust and partnership distributions which are equivalent to interest on a loan. One measure limits the source of franking credits available for trading.

The amendments to trust and partnership distributions and those implementing the related payments rule and the limiting the source rule apply from 7.30 pm AEST, 13 May 1997. The holding period rule generally applies to shares and interests in shares acquired on or after 1 July 1997, with special provisions relating to trusts applying from 3.00 pm AEST 31 December 1997.

On 10 October 1996 the Treasurer announced the Government's intention to amend the Income Tax Assessment Act 1997 to allow deductions for gifts of $2 or more to the Menzies Research Centre Public Fund.

The Menzies Research Centre Public Fund will undertake research into economic, social, cultural and political policies to enhance the principles of individual liberty, free speech, competitive enterprise and democracy. The Centre will publish and disseminate the results of the research to the public.

Full details of the measures in the bill are contained in the explanatory memorandum circulated to honourable senators.

I commend the bill to the Senate.

PRIMARY INDUSTRIES (EXCISE) LEVIES BILL 1999

The Primary Industries Levies Amalgamation legislation will introduce administrative efficiencies and make the law more accessible those involved in agriculture, fisheries and forestry by:

. amalgamating 40 primary industry levy and charge acts;

. providing a framework for future levies and charges to be imposed by regulation;

. making minor technical amendments to improve levies and charges legislation.

This legislative package includes two main bills:

. the Primary Industries (Excise) Levies Bill 1998; and

. the Primary Industries (Customs) Charges Bill 1998

and three related bills which are required to amend related existing legislation to take account of changes that will result from the passage of the two main bills.

Primary industries levies and charges are imposed and administered by the Commonwealth at the request of, and on behalf of, industry organisations. They are generally only increased or introduced at the request of industry peak bodies.

Many rural producers lack the size to individually undertake activities such as promotion or research and development which are necessary to the longer term development of their industries. The Government has long recognised this situation and provided a mechanism in the form of primary industries levies and charges to enable the collection of industry moneys to fund research and development, marketing and promotion, residue testing, and animal health programs.

These activities play a valuable role in contributing to the international competitiveness of Australia's agricultural, fisheries and forestry industries and underpinning the exports of these sectors. The major delivery system for rural research and development, the Research and Development Corporation model, is financed by industry levies and matching Government contributions. The National Residue Survey program and the various animal health programs funded by levies play a crucial part in guaranteeing the integrity of our products in export markets. The marketing and promotion programs funded by primary industries levies and charges have established the "Australian" identity of so many of our products overseas and helped to build consumer awareness and loyalty.

Industry has been consulted about the amalgamation package and is supportive because the proposed legislation will streamline the process of amending levy rates and introducing new levies. As members will recall the Government has established a set of principles for primary industry levy proposals. The principles require extensive consultation at grass roots level by industry bodies prior to a levy proposal being considered, so that a genuinely representative view is obtained.

This legislative package represents a major step forward in the administration of primary industries levies and charges and has several important benefits.

It will enable the Government to better service industry by simplifying the processes and reducing the long leadtimes surrounding changes to levies and charges and being more flexible and responsive to industry requests for such changes as well as for new or additional levies. It will introduce new efficiencies to the public sector by streamlining and improving the administration of levies and charges legislation. Finally it will reduce the call on the time of Parliament for the often involved process of making changes to levies and charges, by reducing the number of imposition acts that will have to be amended to affect changes in the future from the current 40 to two.

The purpose of this bill is to:

. amalgamate 27 existing primary industries levy acts;

. provide a framework for future levies to be imposed by regulation; and

. make minor technical amendments to improve levy legislation.

I must emphasise at the outset that the amalgamation of existing levy acts does not involve any fundamental change to the levies imposed by those acts and does not result in the imposition of any new or additional levies. The existing levy acts are replaced by Schedules to the bill.

Schedule 27 of the bill will allow the Governor-General, on the advice of the Minister, to make regulations imposing additional levies on primary industry products, whether or not they are already subject to levies. The Government intends that such additional levies would only occur following a request from industry. This will apply not only to those industries which already have levies in place, but also to industries which do not currently have levies in place, but at some stage in the future see sufficient benefit in these to approach the Government to request their introduction.

The Government intends that such regulations will be required to be accompanied by a report setting out the extent to which the proposed levy or charge complies with the Government's general principles for new primary industry levies and charges, when tabled in Parliament and will be subject to disallowance by Parliament. In addition, the Office of Regulation Review examines new levies through its regulation impact process and a Regulation Impact Statement is required for each new levy or charge.

As with existing levies, the operative rates for any new or additional levies will not be able to be set in excess of the maximum rates contained within the Schedules to the bill. These maximum rates are broadly in line with the maximum rates for levies of similar products and can only be changed by Parliament.

I mentioned that the bill also includes some minor amendments. These amendments are for administrative reasons only and do not change the original policy intentions of the legislation. Nor do they affect existing levy rates.

A minor but important technical amendment will correct the unforeseen consequences of legislative amendments in 1996 and 1997 to the Dairy Produce Levy (No. 1) Act 1986 which, in redefining the imposition of the Corporation, promotion, research and Australian Animal Health Council levies, inadvertently removed the provision for the collection of these levies beyond 30 June 2000. There was no policy basis for ceasing the collection of these levies on 1 July 2000. This amendment is needed to ensure the legislation reflects the Government's current policies with respect to the continued collection of dairy levies. Industry has been consulted on this matter and supports the proposed amendment.

Other minor amendments include:

. providing a threshold exempting growers from paying coarse grain levies where their total liability is less than $50 in a levy year, bringing the provisions of the coarse grains levy into line with other grain levies;

. placing a limit on the delegated authority for the determination of declared value of deer velvet to senior officer level within the Department of Agriculture, Fisheries and Forestry; and

. in the case of the levy on rice, providing for consultation with state marketing authorities in any State in which they exist.

PRIMARY INDUSTRIES (CUSTOMS) CHARGES BILL 1999

The purpose of this bill is to:

. amalgamate 13 existing primary industries charge acts;

provide a framework for future charges to be imposed by regulation; and

. make minor technical amendments to improve existing levies and charges legislation.

The structure of this bill is similar to the Levies bill. Schedules 1-13 replace the current charge acts.

Schedule 14 allows the Governor-General, on the advice of the Minister, to make regulations imposing additional charges on primary industry products, whether or not they are already subject to charge. The same safeguards for the Levies bill will also apply.

PRIMARY INDUSTRIES LEVIES AND CHARGES (CONSEQUENTIAL AMENDMENTS) BILL 1998

The purpose of this bill is to:

. repeal 40 existing levies and charges acts;

provide for amendments to various acts consequential on the repeal of those levies and charges acts and the enactment of the new levies and charges bills;

. provide for transitional arrangements to ensure a smooth and orderly transition from the old levies and charges acts to the new levies and charges bills; and

. make minor technical amendments to improve levies and charges legislation.

A minor technical amendment will extend to the Australian Capital Territory (ACT) and Northern Territory (NT) the corresponding exemption from levies and charges that applies to the States, thereby removing any potential criticisms regarding discriminatory treatment of the territories in existing legislation and would be consistent with the treatment of these territories in the Primary Industries Levies and Charges Collection Act 1991.

NATIONAL RESIDUE SURVEY (EXCISE) LEVY AMENDMENT BILL 1999

The purpose of this Bill is to:

. provide for amendments to the National Residue Survey (Excise) Levy Act 1998 as a consequence of the repeal of levies and charges Acts and the enactment of the new levies and charges legislation; and

. introduce a minor technical amendment to remove the 1 July 2000 sunset clause on the relevant National Residue Survey dairy levies.

NATIONAL RESIDUE SURVEY (CUSTOMS) LEVY AMENDMENT BILL 1999

The purpose of this bill is to provide for amendments to the National Residue Survey (Customs) Levy Act 1998 as a consequence of the repeal of levies and charges Acts and the enactment of the new levies and charges legislation.

NAVIGATION AMENDMENT (EMPLOYMENT OF SEAFARERS) BILL 1998

The Government is revising the Navigation Act 1912 to bring it up to date and into line with practices that are relevant to the operation of a modern and efficient shipping industry. This is being done in two stages. Stage 1, which is to be implemented through the Navigation Amendment (Employment of Seafarers) Bill 1998 now before the House, is aimed at removing employment related provisions in the act, which are inconsistent with the Workplace Relations Act 1996 and the concept of company employment. Stage 2 will involve a comprehensive rewrite of the act to make it a more efficient and effective regulatory tool.

The Navigation Act has its origins in the British Merchant Shipping Act of 1894, and the employment related provisions were originally intended to cover situations where the majority of the crew of a ship were employed on a casual basis, with crew contracted to serve on a particular ship for a particular voyage. At the end of the voyage the crew was paid off with the employer having no further commitment regarding the employment of individual crew members. With the shift to company employment a number of provisions in the Navigation Act are no longer relevant.

There is no doubt that both shipping and the legislation under which it operates are much in need of reform. The key element of the Government's policy to reform the Australian shipping industry is the introduction of company employment for all seafarers. This was a major recommendations in the 1997 report by the Shipping Reform Group titled `A Framework for Reform of Australian Shipping'.

Under company employment the terms and conditions applying to seafarers are matters for negotiation between the seafarers and their employers. Legislative backing for such arrangements, which can be tailored to the needs of individual companies, can be obtained through the Workplace Relations Act.

Not only are most of the current highly prescriptive employment provisions in the Navigation Act unnecessary, they are also inimical to the development of productive and trusting working relationships between seafarers and their employers.In summary, the major amendments in the bill will abolish the Marine Council and its functions, and will also remove provisions dealing with:

. prohibition on demanding or receiving fees for the supply of seamen;

. prohibition on using the crew of a ship engaged in overseas voyages for handling cargo or ballast while the ship is in an Australian port;

requirements to enter into a prescribed form of `articles of agreement' covering conditions of employment; and

. certain procedures for the discharge of seamen from service on a ship and methods for paying their wages.

Abolition of the Marine Council

The Marine Council has previously dealt mainly with issues concerning the suitability of seamen for employment at sea and whether there is just cause to suspend a seaman from employment on ships. The Council may, for example, be called upon to consider what to do about seamen who report late for work. Under company employment it is the responsibility of the employer to deal with these matters and there is no need for a Government appointed body to perform such tasks.

Accordingly, the bill provides for the repeal of sections 47, 48, 138 and 424.

Fees for the Supply of Seamen

At present section 32 of the act prohibits demanding or receiving fees for the supply of seamen. This provision originally came from the British Merchant Shipping Act of 1894 and was intended to prohibit demanding payment from seamen for finding them jobs. This practice was generally known as crimping.

There are many ship management and crewing agents around the world today that specialise in managing crewing matters, including supplying seamen, on behalf of shipowners and charge them for such services. Given this situation and the normal employment practices in Australia, section 32 is no longer appropriate and the bill provides for its repeal.

Use of crew for handling cargo or ballast

The question of what limits should be placed on the work to be carried out by a ship's crew is a matter that should be determined by negotiation between employers and their seagoing employees.

While as a general rule shore side stevedores carry out the loading and unloading of ships, there can be circumstances where it may be quite appropriate for the crew to handle goods that could fall under the broad description of cargo. Examples include the cleaning of holds, where the crew would need to handle residues of cargo and the loading of ships' stores.

In any event, it is not appropriate for restrictions of this sort to be in the Navigation Act and the bill provides for the repeal of section 45 of the act dealing with this matter.

Requirement to enter into a prescribed form of `Articles of Agreement'

Articles of Agreement are in effect a contract of employment between the master of a ship, on behalf of the employer, and each member of the crew. The Navigation Act prescribes in great detail the procedures and content of Articles of Agreement. As such, this aspect of the Navigation Act is inconsistent with the aims of the Workplace Relations Act which are to give employers and employees a high degree of flexibility in making employment arrangements best suited to their needs.

Articles of Agreement are provided for in ILO Convention 22, which dates back to 1926 when most seafarers were employed on a casual basis and the articles were the only legal instrument available to protect their interests. Given the moves in Australia to company employment and the aims of the Workplace Relations Act, it is quite appropriate for Australia and other parties to that convention to interpret it in a manner consistent with its own present day employment legislation.

While the bill removes the prescriptive elements covering Articles of Agreement, it still leaves a requirement in section 46 that a ship shall not be taken to sea unless the employer has entered into an agreement with the master and seamen. Legislative backing for such an agreement can be obtained through the Workplace Relations Act. In line with this approach, the bill substitutes a redrafted section 46, and provides for the repeal of sections 46(2), (2A), (4), 4(A), 50, 53, 54, 55, 56 and 57.

Procedures for the discharge of seamen and methods of paying wages

Division 9 contains very detailed requirements covering procedures for discharging a seaman from serving on a ship. These procedures are no longer appropriate to company employment arrangements.

However, some aspects of sections 61, 63, and 68 in Division 9, are relevant to assessing the nature and extent of a seafarer's service for the safety purposes covered by the International Maritime Organisation's Convention on the Standards of Training, Certification and Watchkeeping. These matters will in future be covered by Marine Orders made pursuant to section 15 of the Navigation Act. The bill provides for the repeal of all sections in Division 9.

Division 10 contains another very detailed set of provisions covering how wages are to be paid to seafarers. One such provision is contained in section 70, under which a seaman has the right to have a up to three fourths of his or her wages paid to a grandparent, parent, wife, husband, brother, sister, child, or grandchild. Clearly, arrangements for paying wages to seafarers are matters that can, and should, be covered under company employment agreements.

The bill provides for the repeal of all sections in Division 10 except sections 83, 85, 91 and 94, which deal with the rights of masters and seamen in respect of claims for wages and repatriation to their home port if the ship on which they are serving is lost or wrecked, or the owner or operator goes bankrupt during a voyage.

Sections 132 and 132B contain provisions related to sick leave, which should be the subject of negotiations between an employer and seafarers, rather than being prescribed in the Navigation Act. Accordingly, these sections are to be repealed under amendments in the bill.

Other significant amendments

Given the move to company employment there are several other provisions in the Navigation Act that are no longer appropriate and the bill provides for their repeal. Probably one of the most pedantic and unnecessary provisions in the act is the one that requires that the crew of a ship licensed to engage in the coasting trade be given access to a ship's library.

With this in mind, the bill provides for the repeal of this and other provisions covering matters such as determinations by a government official of the home port to which a seamen is entitled to be returned after completing service on a ship, and reports to the Australian Maritime Safety Authority concerning the code of conduct applying to seafarers.

It is interesting to note that a text book on shipping law written by two British barristers has noted that no other body of workers, except perhaps children, has been given the same protected position as seamen. While conditions in the shipping industry a hundred years ago might have justified the detailed employment provisions that have found their way into the Navigation Act, this is not the case today when Australian seafarers enjoy exceptionally good working conditions.

There can be no doubt that legislation covering Australian seafarers needs to be greatly simplified and brought into line with that applying to other industries in this country.

I commend the bill to the Senate.

Debate (on motion by Senator Quirke) adjourned.

Ordered that the Civil Aviation Amendment Bill 1998 , the Taxation Laws Amendment Bill (No. 2) 1999 and the Navigation Amendment (Employment of Seafarers) Bill 1998 be listed on the Notice Paper as separate orders of the day.

Sitting suspended from 6.30 p.m. to 7.30 p.m.