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Wednesday, 19 June 2002
Page: 2079


Senator IAN CAMPBELL (Manager of Government Business in the Senate) (9:31 AM) —I table revised explanatory memoranda relating to the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Bill 2002, the Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Bill 2002, and corrections to the explanatory memorandum and an additional explanatory memorandum to the New Business Tax System (Consolidation) Bill (No. 1) 2002, and I 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—

DISABILITY DISCRIMINATION AMENDMENT BILL 2002

This bill is the same in substance as the Disability Discrimination Amendment Bill 2001 which the Attorney-General introduced on 27 September 2001, and which subsequently lapsed when the Parliament was prorogued.

This bill is an important precursor to the formulation of disability standards for accessible public transportation services and facilities.

It is an essential element in ensuring that the standards, when implemented, operate in a fair, balanced and effective manner, both for people with disabilities and for public transport operators and providers of such services.

Under the Disability Discrimination Act 1992, the Attorney-General may formulate disability standards in a range of areas.

Last September, the Attorney-General released for public information a final draft of the Disability Standards for Accessible Public Transport, together with accompanying draft Guidelines.

When implemented, these disability standards will greatly assist in breaking down social and economic barriers faced by people with a disability or mobility problem, and their carers and friends.

The standards will also benefit many older Australians and parents with infants in pushers or prams, who need or want to use public transport services and facilities.

A lack of accessible transport services and facilities is a significant barrier for people with disabilities.

People with disabilities are much less likely to be able to drive and are often faced with unreliable or expensive modes of transport.

The disability standards for accessible public transport will be the first of their kind and, as such, they represent this Government's strong commitment to improving the lives of people with disabilities.

The development of the standards has been a major initiative, involving extensive consultation over a long period to ensure that a broad range of views were canvassed across the public transport industry, the disability community, government agencies at all levels and other interest groups.

The Attorney-General proposes to formulate and table these disability standards, in accordance with the Act, when this bill is passed.

Section 55 of the Disability Discrimination Act currently empowers the Human Rights and Equal Opportunity Commission to grant temporary exemptions from the operation of provisions of the Act.

This power does not currently extend to exemptions from disability standards.

The Government is keen to ensure that the disability standards are implemented in a practical and balanced way.

This aim would not be realised if the standards were to give rise to unnecessary uncertainty on the part of transport operators and providers about their compliance obligations.

This is particularly the case where an operator believes that they may not be required to comply with a particular requirement because to do so would cause unjustifiable hardship to the operator.

A mechanism to allow for temporary exemptions from part or all of the standards, where appropriate, will provide the means by which up-front certainty about compliance obligations can be assured.

This bill will therefore amend the Act to allow the Human Rights and Equal Opportunity Commission to grant exemptions from disability standards dealing with public transportation services and facilities.

Extending the Commission's power to enable it to grant exemptions from these standards is consistent with the Commission's current power to grant exemptions from provisions of the Disability Discrimination Act.

The bill also provides that, before granting an exemption from the disability standards, the Commission must consult a body prescribed in the Regulations.

The body prescribed for that purpose will be the National Transport Secretariat.

The Secretariat is jointly funded by all jurisdictions and reports to the Australian Transport Council.

The Secretariat will be able to provide the Commission with invaluable technical advice in respect of an application for a temporary exemption from a requirement of the disability standards.

The Australian Transport Council has agreed to the Secretariat taking on this role.

The Commission will also be able to consult with any other body or person it considers appropriate to consult, as is its current practice.

If the Commission decides to grant an exemption to an operator or provider where, for example, unjustifiable hardship would be imposed in complying with a requirement of the standards, the exemption will provide protection from a complaint about a breach of that requirement.

Like an exemption from the provisions of the Act, an exemption from the disability standards in relation to public transport services can be for a period of up to 5 years, and an application can be made to the Commission for this to be extended.

An exemption may be granted from particular requirements of the disability standards under terms and conditions specified in the exemption instrument.

An exemption might be granted, for example, on condition that an operator meet the targets it has set for itself in an Action Plan.

The Disability Standards for Accessible Public Transport will spell out in greater detail rights and obligations under the Disability Discrimination Act.

They will provide transport operators with information to assist them in complying with their obligations under the Act.

They will also provide a practical means of working towards meeting a key objective of the Act—to eliminate, to the extent possible, discrimination from public transport services, on the ground of a person's disability.

Already, as we go about our daily business, we are becoming more familiar with signage, facilities and infrastructure which remind us about the requirements of people with disabilities.

They also remind us of how important it is to do what we can to facilitate the participation of people with disabilities in community life so that they may enjoy the many opportunities it has to offer.

We can assist by removing some of the barriers that may prevent them from doing this.

That persons with disabilities have the same fundamental rights as the rest of the community is an important principle enshrined within the Disability Discrimination Act.

The disability standards will help to promote increased recognition and acceptance within the community of that principle.

They will also further our standing within the international community as leaders in taking practical steps to reduce discrimination against people with disabilities.

The bill provides for amendments that will help to set in place effective arrangements which represent a sensible and balanced approach to eliminating, as far as possible, discrimination against people with disabilities, while ensuring that industry is not unduly burdened in the process.

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HORTICULTURE MARKETING AND RESEARCH AND DEVELOPMENT SERVICES (AMENDMENT) BILL 2002

The bill seeks to amend the Horticulture Marketing and Research and Development Services Act 2000 (HMRDS Act) to deem Horticulture Australia Limited (HAL) in its capacity as the export control body under the HMRDS Act to be a Commonwealth agency for the purposes of section 16 of the Customs Administration Act 1985 (Customs Act).

Currently HAL has the function of administering export controls on behalf of horticultural industries as the company has been declared the export control body under subsection 9(2) the HMRDS Act.

HAL commenced business on 1 February 2001 taking over the functions previously undertaken by the Horticultural Research & Development Corporation, the Australian Horticultural Corporation and the Australian Dried Fruits Board. HAL is an industry owned company that the Commonwealth has entered into arrangements with for delivery of marketing and research and development services to the horticulture industry.

The AHC previously administered export controls on behalf of horticultural industries. During the period of its operation the AHC could access information from the Australian Customs Service (ACS) EXIT database to enable it to exercise appropriate management over export control powers.

As HAL does not meet the criteria of a Commonwealth Agency under Section 16 of the Customs Act, the ACS has advised HAL that it is no longer able to provide information from its EXIT database to the company. Yet the intention of the HMRDS Act is that the export control body (namely, HAL) should be able to exercise similar (but no greater) powers to those exercised by the former AHC and thus should be able to obtain access to Customs EXIT database information.

The proposed Horticulture Marketing and Research and Development Services Amendment Bill 2002 amends the HMRDS Act to deem HAL, in its capacity as the export control body, to be a Commonwealth agency for the purposes of Section 16 of the Customs Administration Act 1985. This amendment will ensure that HAL can exercise appropriate management over current export control powers in place and any future export controls that may be put in place, by being able to access information in the ACS EXIT database to show evidence of any breaches that may have occurred in contravention of the export controls.

This bill does not create any new administrative burden and has no financial implications for the Commonwealth.

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WORKPLACE RELATIONS AMENDMENT (PROHIBITION OF COMPULSORY UNION FEES) BILL 2002

Freedom of association is the cornerstone of the Government's vision for more productive and more prosperous workplaces. On first coming to office, the Government amended the legislative regime to properly reflect this principle. The Workplace Relations Act 1996 provides, for the first time, broad legislative recognition of the freedom to join or not to join an industrial association.

This fundamental freedom has been offended by recent union attempts to impose so-called `bargaining agent's fees'. These require non-union members to bear a cost for union negotiations at their workplace. In many cases the fee demanded has been set at $500 per year, well above the level of annual union dues. This suggests that many compulsory fee demands are being made with premeditated coercive intent.

Clauses purporting to require payment of compulsory union fees by non unionists have already been included in hundreds of federal certified agreements.

Union attempts to justify these fees on a `user pays' basis are a distortion of that principle. Compulsory fees for an unrequested service do not constitute `user pays'. User pays involves an exchange that is freely entered into by willing and properly informed parties. The Government believes that industrial associations should be subject to the same standards as ordinary businesses, which are prevented by fair trading legislation from providing unrequested services and then demanding payment for those services.

In May 2001, a bill to address the imposition of compulsory union fees on non-members in a workplace was before the Senate when Parliament was prorogued for the Federal election.

In the Coalition's 2001 workplace relations election policy the Government again committed to introducing legislation to prohibit trade unions involved in workplace bargaining from imposing a compulsory fee on non-union employees. The Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Bill 2002 gives effect to that commitment.

The Bill will amend the certified agreement and freedom of association provisions in the Workplace Relations Act 1996. The amendments address clauses in certified agreements that purport to require payment of bargaining services fees. They also address conduct designed to compel people to pay such fees.

In October last year, a Full Bench of the Australian Industrial Relations Commission found bargaining fee clauses in certified agreements, despite their acknowledged coercive intent, do not contradict the strict letter of the freedom of association provisions of the Workplace Relations Act 1996. That application by the Employment Advocate exhausted the legal avenues to have these clauses removed from certified agreements.

A subsequent judgment of the Federal Court in a case involving Electrolux and the AWU suggests that bargaining service fee clauses are not enforceable under the Workplace Relations Act 1996 because they do not deal with a matter pertaining to the relationship between an employer and employees. This is the current state of the law and reinforces the Government's policy that bargaining services fees are not appropriate matters to include in a certified agreement.

The continued presence of such clauses in certified agreements lends them unwarranted legitimacy. Accordingly, the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Bill 2002 provides that bargaining fee clauses in certified agreements are void, and will give the Commission the power to remove such clauses on application by the Employment Advocate, or a party to the agreement. In addition, the Bill will prevent the Commission certifying an agreement containing a clause requiring the payment of a fee for bargaining services.

There is also a need to prevent unions or employers from using other methods to create an impression that employees are legally obliged to pay compulsory union fees. Hence the Bill will prohibit the making of false or misleading representations about a person's liability to pay a compulsory union fee.

The Bill will not prevent people making voluntary contributions, provided there is no coercion or misrepresentation. The Bill will also not prevent an industrial association from demanding payment of a bargaining services fee that is payable to the association under a contract for bargaining services that has been entered into without recourse to coercion or misrepresentation. The Bill specifically recognises the possibility of a contract for bargaining services between an industrial association and a person who is not a member of the association.

Compulsory bargaining fees are not a legitimate way for trade unions to attempt to bolster their membership.

Australian laws recognise an important statutory role for registered industrial organisations, and confer upon them significant rights and obligations. But that legal standing cannot be at the expense of the right of individual employers and employees to freedom of association and to protection from coercive or discriminatory conduct.

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SUPERANNUATION LEGISLATION (COMMONWEALTH EMPLOYMENT) REPEAL AND AMENDMENT BILL 2002

This Bill proposes amendments to a number of Acts that deal with superannuation arrangements for Commonwealth civilian employees and office holders.

To a large extent the provisions of the Bill were originally included in a package of legislation intended to give choice and flexibility to Commonwealth civilian employees. That package was rejected by the Parliament in the last Sittings. However, included in that package were provisions that gave extra options and greater flexibility to Commonwealth civilian employees in their superannuation arrangements. Because of this the Government has decided to bring forward a new Bill incorporating those provisions.

The Bill includes additional benefit options for employees who leave Commonwealth employment to move to the private sector as a result of sale or outsourcing and flexibility for retiring employees who wish to provide increased benefits for their families after their death.

As a result of this Bill Commonwealth civilian employees who also have other employment will find it easier to consolidate their superannuation.

Most of the Bill relates to the Commonwealth Superannuation Scheme, known as the CSS, which is provided for in the Superannuation Act 1976. The CSS has been closed to new members since 1990 when it was replaced by the Public Sector Superannuation Scheme which is known as the PSS. The PSS is provided for under the Superannuation Act 1990. The majority of the rules for the PSS are included in the Trust Deed made under the Act. An amending Trust Deed will be made to apply many of the CSS changes proposed in this Bill to the PSS.

Currently the Superannuation Act 1976 does not allow for the payment of reversionary benefits from the superannuation schemes under those Acts on the death of a pensioner where a marital relationship which has lasted less than 5 years commenced after age 60 and after the pensioner retired. The Act will be amended to remove the restriction and provide for a pro-rata benefit to be paid where the relationship had existed for less than three years.

The Superannuation Act 1976 will also be amended to provide an option for members on retirement to elect for a lower initial rate of pension so that a higher rate of reversionary pension can subsequently be payable to a surviving eligible spouse or eligible child. That Act will also be amended to allow for additional superannuation amounts to be paid into the CSS Fund on behalf of members in certain circumstances so that members can consolidate their superannuation in the one fund.

The Superannuation Act 1976 and the Superannuation Act 1990 will be amended for a number of other purposes. Currently, there are restrictions on the options available on involuntary retirement under those Acts where membership ceases in the circumstances of the sale of an asset or transfer of a function. The Bill will remove those restrictions and provide for an additional option to become available where a person ceases membership in those circumstances but is not entitled to involuntary retirement benefits.

The Bill also includes amendments to those Acts to simplify the rules of the schemes and the administration of those rules. These changes are not intended to disadvantage scheme members and in many cases with be beneficial or will provide more flexibility or more certainty for members.

The Bill amends the Administrative Appeals Tribunal Act 1975, the Law Officers Act 1964 and the Workplace Relations Act 1996 which provide, among other things, for the terms and conditions of employment for certain persons. The amendments ensure that the superannuation arrangements for persons who leave the CSS or the PSS to join the Judges' Pension Scheme under the provisions of those Acts will comply with the Superannuation Guarantee arrangements.

Financial Impact

Although the Bill includes provisions that provide for new benefit options there is no financial impact as these benefits are currently being paid under other arrangements, for example, under the act of grace arrangements.

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SPACE ACTIVITIES AMENDMENT BILL 2002

The Space Activities Amendment Bill 2002 is a bill to amend the Space Activities Act 1998.

This bill implements new arrangements relating to liability, insurance and safety. It will provide greater protection to the public and industries underlying flight paths, improve the competitiveness of Australia's space launch industry, and increase opportunities for non-profit, scientific and educational organisations to engage in space science research. The bill also implements a number of minor matters to enhance the operation and efficiency of the Space Activities Act 1998.

The act established a licensing regime to regulate space launch and re-entry activities from Australia, and overseas launches of space objects in which Australian nationals have an ownership interest. It ensures that space launch activities will only be undertaken where the applicant has presented a strong case to demonstrate the safety of the proposed activities. The act also ensures that such activities do not compromise Australia's foreign policy obligations or national security, that procedures to protect the environment are in place, and that the commonwealth complies with its obligations under united nations conventions.

This bill will enhance existing liability and insurance arrangements for space launches. In doing this, it will afford greater protection to key economic assets, including Australia's offshore oil and gas facilities. Proposed amendments will require proponents undertaking launch activities to procure insurance for each launch up to a defined maximum probable loss or $750 million, whichever is the lesser. Beyond this, the Commonwealth will accept liability of a further $3 billion in respect of Australian nationals. The Commonwealth is already liable for damages to foreign nationals under international law.

These amendments bring insurance requirements for launch activities in Australia into line with international standards.

This bill will also apply a stronger test of risk to space launch activities, which is that risk should be `as low as reasonably practicable' or ALARP. Adoption of the ALARP principle will ensure that applicants for authorisations under the act demonstrate that they have achieved the lowest practicable risk within the bounds of reasonable cost.

The bill implements new arrangements to license scientific and educational institutions conducting research-based launch activities. These arrangements will provide for an alternative application process and fee structure, which is less onerous and better suited to the modest scale and limited risks associated with scientific and educational launches and returns.

A number of minor administrative and technical amendments are included in the bill, including defining the point at which the act becomes effective, clarifying the fee regime, and making provision for an annual review of a space licence. These amendments will improve the operation and efficiency of the act.

Passage of this bill will facilitate the development of Australia's space industry by putting in place the regulatory framework needed to create a competitive environment and encourage space research. Passage of the bill will also ensure that the Australian space safety regime is amongst the most stringent in the world and that our insurance and liability arrangements are appropriate to the needs of space launch activities in Australia.

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INTERNATIONAL TAX AGREEMENTS AMENDMENT BILL (No. 1) 2002

This bill will provide legislative authority for the domestic entry into force of a new comprehensive taxation agreement with the Russian Federation and a Protocol amending the Australia-United States double taxation convention. The bill will insert the text of these agreements into the International Tax Agreements Act 1953 as schedules to that Act.

The bill includes consequential amendments following changes to the treatment of equipment royalties paid to US residents arising from the Protocol. The amendments will apply generally to deal with all cases where a domestic law royalty payment is not treated as a royalty for the purposes of a tax treaty.

The Russian Agreement and US Protocol were signed on 7 September 2000 and 27 September 2001 respectively. Details of the agreements were announced and copies made publicly available following the respective date of signature.

The Government believes the conclusion of the Russian Agreement will strengthen trade, investment, and wider relationships between Australia and Russia. The Russian Agreement will enter into force when diplomatic notes are exchanged advising that all of the necessary domestic processes to give them the force of law in each country has been completed.

The US protocol reflects the close economic relations between Australia and the United States and is a first step in building a competitive and up-to-date tax treaty network for Australia. It will significantly assist trade and investment flows between the two countries. The US Protocol will enter into force when both countries have formally ratified it.

The enactment of this bill, and the satisfaction of the other procedures relating to proposed treaty actions, will complete the processes followed in Australia for those purposes.

Full details of the measures in this bill are contained in the presented explanatory memorandum.

I commend the bill.

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TAXATION LAWS AMENDMENT (MEDICARE LEVY AND MEDICARE LEVY SURCHARGE) BILL 2002

This bill amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999 to increase the Medicare levy low income thresholds for individuals, married couples and sole parents in line with movements in the Consumer Price Index. The individual low income threshold for Medicare levy surcharge purposes is similarly increased. This means that more people will be exempt from the levy and surcharge.

The bill also increases the Medicare levy low income threshold for pensioners below the age pension age to ensure that where those pensioners do not have a tax liability they will also not have a Medicare levy liability.

There are also minor technical amendments to the Medicare Levy Act 1986 and the Income Tax Assessment Act 1936 relating to the Medicare levy.

The increases in the Medicare levy low income thresholds will apply to the 2001-2002 year of income and later years of income. The technical amendment to the Medicare Levy Act 1986 will apply to the 2000-2001 year of income and later years of income. The technical amendment to the Income Tax Assessment Act 1936 will apply to the 1997-1998 year of income and later years of income.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

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CUSTOMS TARIFF AMENDMENT BILL (No. 1) 2002

Customs Tariff Amendment Bill (No. 1) 2002 contains amendments to the Customs Tariff Act 1995.

I will briefly outline the changes of substance.

Item 1 of Schedule 1 of the bill inserts a new subsection 7(3) into the Customs Tariff to specify that a reference in the Interpretation Rules to “Notes” includes a reference to “Additional Notes”. The Interpretation Rules form the basis for the classification of goods in the Customs Tariff. This amendment will ensure that Additional Notes, which are inserted into the Customs Tariff by the Australian Government, have the same legal force as international Section and Chapter Notes.

The second amendment in Schedule 1 inserts a new Additional Note into Chapter 21 of the Customs Tariff to specify that “salsas”, a kind of sauce, are to be classified in heading 2103 with other sauces. This amendment will clarify the classification of these goods and ensure their treatment in Australia is consistent with international practice.

The third amendment in Schedule 1 inserts a post 2005 phasing rate of duty in item 59 in Schedule 4 of the Customs Tariff to ensure that the correct rate of duty applies to second hand Passenger Motor Vehicles (PMV's). Item 59 provides for the importation of second hand PMV's without the payment of the penalty rate of duty of $12,000, subject to Departmental by-laws.

The Customs Tariff Amendment (ACIS Implementation) Act 1999 legislated phasing rates of duty for PMV's and components but not for second hand vehicles covered by item 59. Without this amendment, new PMV's would be subject to a duty rate of 10% post 2005, but second hand vehicles to 15%.

The amendments in Schedules 2 and 3 of the bill are made to ensure the correctness of detail in the Customs Tariff. These amendments are of an editorial nature, correcting format and typographical errors. They derive mainly from amendments contained in Customs Tariff Amendment Act (No. 5) 2001. This Act implemented approximately 800 changes to the Customs Tariff following the second review of the Harmonized System by the World Customs Organization.

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EXPORT MARKET DEVELOPMENT GRANTS AMENDMENT BILL 2002

The Export Market Development Grants Amendment Bill 2002 delivers on the Government's election promise to increase the minimum grant available under the EMDG scheme from $2,500 to $5,000, in order to improve small business access to that scheme.

The EMDG scheme supports the export promotion activities of eligible businesses under $50m per annum turnover, by partially reimbursing the expenses that these businesses incur in promoting their exports.

The scheme, administered by Austrade, is a proven success in assisting small business to export, and supports this Government's goal of doubling the number of Australian firms exporting by 2006.

In financial year 2000-01 the scheme paid grants averaging around $46,000 to some 3000 businesses, 688 of which received a grant for the first time. These businesses generated $4.4 billion in exports and employed over 52,000 Australians to fill their export orders. And 23% of these grants went to businesses in rural and regional Australia, highlighting the fact that the scheme is providing effective assistance to businesses around Australia that are seeking to develop export markets.

As mentioned in the Government's 2002 Trade Outcomes and Objectives Statement, Australia's export performance has been excellent over recent years. In 2001, we exported $154 billion worth of goods and services—an 8 per cent increase on the previous year, a 54 per cent increase on 1996.

But the key thing to remember about this result is that it was actually achieved by a very modest number of exporters. Even experienced trade people are surprised to hear that only some 25,000 Australian companies export.

That represents just 4 per cent of the total number of businesses in this country—a proportion that's pretty low by comparable international standards.

This means that, despite our improved export performance, Australia needs to continue to encourage more firms to export if we're to remain globally competitive and, therefore, prosperous at home.

Late last year, the Coalition released its trade policy, Australians Exporting to the World—the centrepiece of which was our aim to double the number of Australian exporters by 2006. In April this year, the Government signed an historic agreement with the States and Territories that sets out a comprehensive plan to achieve the doubling target.

Enhancing community understanding of the benefits of trade is the very first element of that plan. We need to create a true and widespread export culture in this country—one in which the achievements of our exporters are acknowledged, rewarded and, most importantly, emulated.

Austrade has been given the lead role in the Government's commitment to double the number of Australian companies exporting by 2006, working closely with the other tiers of government, industry associations and the private sector.

We will be pursuing a targeted program to help introduce a new breed of Australian exporters, particularly small businesses, to export markets through coaching, mentoring, financial assistance and in-market support.

Ensuring that the EMDG scheme is accessible to these small businesses and new exporters, and is targeted towards their needs, is a key part of this program.

Since 1996, the Government has continually improved the access of the small business sector to the EMDG scheme.

In 1997 the Government:

· reduced from $30,000 to $20,000 the minimum expenditure required to access the scheme, and

· gave the tourism sector access to the full 50% grant rate.

Last year the Government extended the scheme for five years, and following a thorough review, further improved small business access to it by:

· reducing from $20,000 to $15,000 the minimum expenditure required to access the EMDG scheme

· reducing the period that related family members need to be employed in a business before their travel expenses are eligible from five years to one year, and

· removing the current requirement that intending first-time claimants must register with Austrade before applying for a grant and made a number of other changes to make the scheme more flexible and more in line with industry needs.

The Government also took steps to improve the access of rural and regional small business to the scheme, by ensuring that related domestic costs— including those of business people flying from regional destinations to capital city airports on the first leg of an overseas promotional visit—are included in the EMDG Overseas Visits Allowance.

As well, the Government asked Austrade to review and modify Grants Entry requirements with a view to improving small business access. Small business will now find that the paperwork required in applying for a first EMDG grant has been considerably reduced.

The EMDG Amendment Bill 2002 furthers our strategy of making the scheme better targeted towards the needs of small and medium business and new exporters.

This Bill raises the minimum grant under the EMDG scheme from $2,500 to $5,000, to be provided to claimants spending between $15,000 and $25,000 on eligible export promotion expenditure. This will:

· make the EMDG scheme more attractive to small business, increasing the incentive to apply and thus increasing the scheme's impact in encouraging smaller businesses to invest in export, and

· ensure that the benefit of the grant received always outweighs the cost of preparing and processing the application.

The increased minimum grant will apply from the 2001-02 grant year onwards.

I commend this Bill improving small business access to the EMDG scheme to the Chamber.

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PETROLEUM (SUBMERGED LANDS) AMENDMENT BILL 2002

The proposed amendments in this Bill to the Petroleum (Submerged Lands) Act 1967 will implement recommendations from the review of the Act and its incorporated legislation for compliance with competition policy principles. Completed in 2000, the review was conducted as part of a national review of legislation governing exploration and development of the offshore petroleum resources.

The review accorded with commitments given in the Competition Principles Agreement of the Council of Australian Governments. Under that agreement, all governments agreed to remove restrictions on competition on an ongoing basis unless those restrictions could be shown to be in the public interest and of benefit to the overall community. The terms of reference for the review also required a focus on reducing compliance costs on business, where feasible.

The review concluded that the nation's offshore petroleum legislation is free of significant anti-competitive elements which would impose net costs on the community. The legislation does embody restrictions on competition, for example in relation to safety, the environment or the manner in which resources are managed. However, these were considered appropriate given the net benefits they provide to the community as a whole.

The review did identify one element of the current legislation where scope exists to enhance competition. This relates to the total period for which the holder of an exploration permit can retain the permit. The holder of an exploration permit that is awarded as of now can hold the permit for anywhere between 6 years (if there is no renewal) to a theoretical maximum of 46 years, or longer if extension provisions are applied. The review concluded that, in the interests of making exploration acreage available to subsequent explorers more quickly, a limit should be placed on the number of times an exploration permittee can renew the title. This Bill proposes that, in the future, exploration permits be able to be renewed no more than twice, establishing a total maximum period of 16 years, ignoring the possibility of extensions in some circumstances. The change will be prospective and will not apply to permits awarded before 1 January 2003.

By preventing unexplored acreage from being tied up for long periods, this reform will encourage increased exploration for petroleum in Australia's marine jurisdiction. Without such exploration and the discoveries that can flow from it, Australia will not be able to maintain its current high level of liquid fuel self-sufficiency nor meet the growing demand for gas.

On one other element of the current legislation, the review concluded that scope exists to reduce potential compliance costs for industry. This relates to the number of times the holder of a retention lease can be asked to review the commerciality of a discovery held under that retention lease. A retention lease is a holding right available if a petroleum discovery is currently uneconomic for exploitation but is likely to become economic within 15 years. Currently the holder of a retention lease can be asked to review the commerciality of a discovery twice within the 5 year term. This was considered excessive. Accordingly, the Bill proposes a maximum of one review per 5 year term. This will be adequate for the titleholder to assess factors material to whether a discovery remains uncommercial, and to demonstrate this to the regulator.

The petroleum industry will welcome the reduction in potential compliance costs that will stem from this change. Together with the limit on exploration permit renewals, this reform shows the Government is determined to ensure that Australia remains one of the most attractive places in the world to explore for and develop petroleum resources.

Moreover, the Government will not be resting on its laurels. Indeed, it is well known in petroleum industry circles that the Government is working on rewriting the entire Petroleum (Submerged Lands) Act 1967 and incorporated Acts. The Government expects to be in a position to present a rewritten Act for consideration by the Senate at a later point in time. Nevertheless, the Government believes it is in the interests of the Australian community and the petroleum industry to bring forward from the rewrite the amendments to the Act that are proposed in this Bill.

I commend the Bill to the Senate.

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STATUTE LAW REVISION BILL 2002

The Statute Law Revision Bill 2002 continues the work of repairing the Commonwealth statute book, which began in 1996 with the Statute Law Revision Act 1996 and was continued by the Statute Stocktake Act 1999.

The Bill deals with two aspects of repairing the statute book.

The Bill corrects minor clerical and drafting errors in various current Acts. The kinds of errors being corrected are spelling mistakes, mistakes in punctuation, mistakes in the numbering or lettering of parts of Acts (for example, incorrect numbering of subsections or incorrect lettering of paragraphs) and misdescribed amendments. A misdescribed amendment is one that either incorrectly describes the text to be amended or specifies the wrong location for the insertion of new text. In general, these amendments do not affect the operation of the law. Although the intended effect of the amendments is usually clear, it can be confusing or misleading to leave these errors uncorrected. In particular, misdescribed amendments can affect the accuracy of Government and commercial consolidations of Acts.

For instance, an amendment that purports to require a new provision to be inserted after a non-existent provision would probably be given some meaning by a court if the general intention of the amendment was clear. However, consolidating the Act may be difficult, because the proper location of the new provision is not clear.

Correcting errors of these kinds does not change the law. However, it ensures that consolidated Acts can be published, and without confusing mistakes. In some cases, this may have a significant impact on the accessibility of legislation.

The Bill also replaces existing references to “the Standards Association of Australia” with reference to “Standards Australia International Limited”, with effect from 1 July 1999, when the name change took effect.

The Bill, while not changing the law, makes many useful improvements to the statute book.

NEW BUSINESS TAX SYSTEM (CONSOLIDATION) BILL (NO. 1) 2002

As part of the Government's reform of business taxation, this bill introduces an innovative and comprehensive consolidation regime for resident entities that comprise a wholly-owned corporate group. The consolidation regime represents a significant change to the taxation of corporate groups. Because of its magnitude, the measure will be enacted progressively via a series of bills.

The consolidation regime is optional, although a choice to consolidate is irrevocable. Where a group makes such a choice, all its eligible resident wholly-owned companies, trusts and partnerships, including wholly-owned entities acquired in the future, must be included in the consolidated group.

The proposed regime will promote business efficiency, improve the integrity of the Australian tax system and reduce ongoing income tax compliance costs for groups that choose to consolidate. The proposed amendments will address the efficiency and integrity problems in the current taxation of wholly-owned groups. These include:

· high compliance costs;

· the double taxation of gains which are taxed when realised and taxed again on disposal of the underlying equity;

· tax avoidance through intra-group dealings; and

· value shifting to create artificial losses where there is no actual economic loss.

After extensive consultation, the Ralph Review of Business Taxation recommended, in A Tax System Redesigned, that a consolidated regime for wholly-owned groups be introduced for income tax purposes.

In December 2000 an Exposure Draft was released which contained the general principles for consolidation. In February of this year a further streamlined Exposure Draft was released taking into account submissions on the earlier Exposure Draft. The accompanying Explanatory Memorandum to the 2002 Exposure Draft provided a comprehensive overview of the regime as a whole. It discussed proposed legislative amendments not included in the Exposure Draft at that time. Throughout this period significant private sector contribution was made to the consolidation regime's development by both submissions and on-going consultative groups.

The consolidation regime will treat wholly-owned corporate groups as a single entity, rather than on an entity by entity basis, for income tax purposes. This `single entity rule' means that, when subsidiary entities join a consolidated group, they lose their separate income tax identities. Instead, each such entity is treated as a part of the head company of the consolidated group for the purposes of determining income tax liability.

As a result of the single entity rule, the group lodges a single income tax return and the assets and liabilities of the subsidiary members are treated as those of the head company. For income tax purposes, during the period an entity is treated as part of the head company of the group, the actions of that entity are taken to be the actions of the head company and all intra-group transactions are ignored.

This bill contains the core rules necessary to treat a subsidiary entity as a part of the head company of a consolidated group. It also contains the rules dealing with the formation and membership of a consolidated group, including provision for eligible companies, trusts and partnerships to access the benefits of consolidation. It also explains the notification requirements that will apply when an entity becomes, or ceases to be, a member of a consolidated group.

The bill sets out rules to determine the cost, for income tax purposes, of assets, including membership interests, when one or more entities join or leave a consolidated group. Broadly, the head company's cost for the assets of a joining entity reflects the cost to the head company of acquiring that entity. This alignment between the cost for the membership interests in an entity and the entity's assets is preserved where a subsidiary member leaves the group. Special transitional rules that will allow groups to retain the subsidiary members' existing costs for assets, will be included in a later bill.

This bill also deals with the transfer of a joining entity's losses to the head company of a consolidated group, and how these losses may be subsequently used by the head company. A head company's use of transferred losses is subject to an annual limit which is intended to approximate the amount of losses that could have been used by the transferor entity outside the group. Concessional rules apply to increase the rate at which the head company can use certain transferred company losses where a group consolidates during the transitional period 1 July 2002 to 30 June 2004.

Another component of the bill allows the transfer of a joining entity's franking account to the head company of a consolidated group. During the period of consolidation, the head company will maintain a single franking account for the group while the franking accounts of subsidiary members become inoperative.

The head company of the consolidated group retains any losses and franking credits transferred to it by a subsidiary member if that subsidiary should later leave the group.

Foreign owned groups of Australian resident entities currently access existing grouping provisions despite not having a single resident head company. To prevent these groups having to restructure, the bill allows the Australian resident entities to form a Multiple Entry Consolidated group. The bill also determines the membership of the group in those circumstances.

In general, the head company will be liable for the income tax-related liabilities of the consolidated group. However, where a head company fails to satisfy a group income tax-related liability on time, the bill provides rules for the recovery of this group liability directly from other members of the group unless certain exceptions apply.

The bill also contains consequential amendments that ensure that the members of a consolidated group are treated as a single entity for the purposes of PAYG instalments once the head company of a consolidated group is given an instalment rate worked out from its first head company assessment. There are also transitional rules setting how instalments are payable by a consolidated group's members until that time.

Amendments in this bill generally remove certain existing grouping provisions, including those allowing the transfer of losses between wholly owned groups, from 1 July 2003, subject to special rules applying to consolidated groups that have a substituted accounting period. Consequently, wholly-owned groups that do not choose to consolidate will, in general, no longer have access to grouping rules outside of consolidation. However, loss transfer will continue to be available where the transfer involves an Australian branch of a foreign bank.

The proposed amendments to implement the consolidation regime are necessary to ensure greater consistency in the taxation of wholly-owned groups in Australia. The existing grouping provisions of the Income Tax Assessment Act 1936 and 1997 allow groups of companies to currently obtain benefits of single entity treatment for some purposes. However, for other income tax purposes, the existing income tax law continues to require each entity to account separately for intra-group transactions and intra-group debt and equity interests. The proposed regime will remove such inconsistencies for consolidated groups by permitting intra-group transactions to be ignored for income tax purposes..

Further, the proposed consolidation regime will provide a basis for more robust investment decisions in Australia by improving the consistency and transparency of the taxation of wholly-owned groups, reducing ongoing costs of compliance and providing fairer, more equitable outcomes. For this reason the consolidation measure has wide-spread support among Australian corporate groups.

The consolidation regime will apply from 1 July 2002.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

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DIESEL FUEL REBATE SCHEME AMENDMENT BILL 2002

This bill extends the eligibility provisions of the Diesel Fuel Rebate Scheme to retail and hospitality businesses who use diesel and like fuels to generate power for their own use where there is no ready access to a commercial supply of electricity. It gives effect to a policy initiative announced by the Government during the 2001 election campaign and will principally benefit small business operators in remote areas of Australia by providing a rebate of the customs or excise duty paid on diesel and like fuels used by them to generate power for their own use.

The extension of the Diesel Fuel Rebate Scheme will mean that small retail/hospitality businesses will now be able to claim a rebate in relation to their commercial operations. Examples of the types of businesses generating their own power that will benefit from the measure include caravan parks, tourist resorts and road houses.

Businesses will need to use diesel and like fuels in the course of carrying on an enterprise to qualify for the rebate, in the same way as is required in the eligibility provisions for the marine and rail transport categories in the Diesel Fuel Rebate Scheme.

This bill provides that the rate of rebate applicable to diesel fuel for electricity generation by retail and hospitality businesses will be the same as that applying to Primary Production. The rate is currently equal to the full amount of excise paid on the fuel.

The extension to the Diesel Fuel Rebate Scheme will apply only in relation to diesel fuel that is purchased on or after 1 July 2002.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

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AUSTRALIAN PROTECTIVE SERVICE AMENDMENT BILL 2002

This Bill will transfer responsibility for the Australian Protective Service from the Secretary of the Attorney-General's Department to the Commissioner of the Australian Federal Police.

Last year, the Government initiated a high level review of Australia's security and counter-terrorism arrangements.

This review identified some significant gaps in Australia's legislative framework.

In addition to these significant reforms the Government has also reviewed the relationship between Australia's key counter terrorist agencies to ensure that Australia can best meet the demands of the new terrorist environment.

As a result, the Government proposes that the Australian Protective Service become an operating division of the Australian Federal Police.

The Australian Protective Service is the Commonwealth Government's specialist protective security provider.

The Service provides counter terrorist first response (CTFR) at major airports and security services at Parliament House, the office of the Prime Minister, the residences of the Governor General, the Prime Minister and high office holders, sensitive Defence establishments, foreign diplomatic missions, and the Australian Nuclear Science and Technology Organisation.

The Service operates under competitive arrangements, where private security agencies may bid against the Service for certain Commonwealth guarding activities.

The proposed amendments will allow the closest possible coordination between two of Australia's key counter terrorist agencies.

Better coordination between the Australian Federal Police and the Australian Protective Service will strengthen both organisations, and their ability to fulfil their counter-terrorism responsibilities.

This initiative consolidates and enhances the Government's national security initiatives that are currently being implemented following the terrorist attacks in the United States.

This include the commitment of $14 million for the 2001/2 financial year to the Australian Protective Service to expand and improve airport security, including expansion of the Explosive Detection Canine Program. Ongoing funding will be provided over future years.

The upgrade in airport security will result in the deployment of additional specially trained Commonwealth uniformed protective service officers. The enhanced security capability expands from Sydney and Melbourne airports to Adelaide, Perth, Canberra, Darwin, Hobart, Cairns, Brisbane, Coolangatta and Alice Springs airports.

This upgrade of security standards and staffing levels at 11 major airports is expected to be completed by 30 June 2002.

Under the new arrangements, which are intended to take effect from 1 July 2002, responsibility for the Australian Protective Service would transfer from the Secretary of the Attorney-General's Department to the Commissioner of the Australian Federal Police.

The current relationship of the Secretary of the Attorney-General's Department with the Australian Protective Service would cease.

The Commissioner of the Australian Federal Police would be in control of the Australian Federal Police through the Australian Federal Police Act 1979 and the Australian Protective Service through the Australian Protective Service Act 1987.

The Australian Protective Service would be established as a Statutory Agency and the Commissioner of the Australian Federal Police would be the Agency Head.

The Australian Protective Service would continue to be governed by the Australian Protective Service Act 1987, and the powers and duties of the Australian Protective Service would remain unchanged.

Following the amendments to the legislation it will be business as usual for the Australian Protective Service and its approximate 1000 staff, which include managers, administrative officers, protective service officers and the recently appointed air security officers.

The current competition arrangements applying to the Australian Protective Service would be preserved, including arrangements allowing private security agencies to bid against the Australian Protective Service for the Commonwealth guarding contracts.

Employees of the Australian Protective Service would remain public servants and retain their conditions and entitlements under the Public Service Act 1999 and various industrial awards.

No provisions governing Australian Federal Police employees would apply to Australian Protective Service employees.

Nothing in the proposed arrangements would affect Australian Federal Police employees and their relationship with the Commissioner.

The Government will explore steps to further align the Australian Federal Police and Australian Protective Service, following the passage of this Bill, having regard to current competition and efficiency arrangements applying to the Australian Protective Service.

This will be done in full consultation with the employees of the two organisations.

The legislative changes contained in this Bill are relatively simple.

The Australian Protective Service Act 1987 would be amended to transfer responsibility for administering the Act from the Secretary of the Attorney-General's Department to the Commissioner of the Federal Police.

This amendment would be made by replacing references to the Secretary and the Attorney-General's Department with references to the Commissioner and the Australian Protective Service respectively.

The Act would establish the Australian Protective Service as a Statutory Agency and would ensure that the new Agency is consistent with the Public Service Act 1999 and the Workplace Relations Act 1996.

Additional minor amendments would: update obsolete terminology used in the Act in line with the Public Service Act 1999; clarify the distinction between employees of the Australian Protective Service and “protective service officers”; broaden the delegation powers of the Australian Protective Service Director so that the Director can delegate powers to administrative employees as well as protective service officers; and clarify that General Orders are not only subject to the Australian Protective Service Act 1987, other Acts, regulations and section 24 determinations (as per the current provisions), but are also subordinate to the Public Service Commissioner's Directions, the Prime Minister's Public Service Directions and the Public Service Classification Rules.

The financial aspects of the alignment of the Australian Protective Service with the Australian Federal Police may be reflected in Appropriation Bills 1 and 2, where the appropriation for the Australian Protective Service will be simply redirected within the Attorney General's portfolio from the Department to the Australian Federal Police, both of which are prescribed agencies within the portfolio under the Financial Management and Accountability Act 1997.

The Attorney General's Portfolio Budget Statements will also reflect the necessary movements from the Department to the Australian Federal Police.

In addition, we propose to amend the Financial Management and Accountability Regulations to reflect this change in alignment.

While the control of the Australian Protective Service would be transferred to the Commissioner of the Australian Federal Police by 1 July 2002, the Australian Protective Service would still be a separate agency to the Australian Federal Police, employing separate staff.

As I have noted, any further steps required to implement the decision to make the Australian Protective Service an operating division of the Australian Federal Police will be developed in consultation with relevant parties.

The move of the Australian Protective Service to the Australian Federal Police is a win-win for both agencies and provides for greater operational coordination of Commonwealth law enforcement resources.

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BANKRUPTCY LEGISLATION AMENDMENT BILL 2002

The Bankruptcy Legislation Amendment Bill 2002 largely replicates the Bankruptcy Legislation Amendment Bill 2001 which I introduced on 7 June 2001 and which subsequently lapsed when Parliament was prorogued.

This bill differs in one substantial respect from the 2001 bill, in relation to the provision of a cooling-off period, which I will address later.

Bankruptcy is designed to give people in severe financial difficulty relief, as a measure of last resort, from overwhelming debts.

Bankruptcies trebled in the decade to 1997-98, and have remained at high levels since then.

Almost all of the increase has been in the non-business consumer bankrupt category.

Clearly, greater numbers of consumer debtors are choosing bankruptcy as a way of resolving their financial problems.

The Government is concerned to ensure as far as possible that these people are properly informed when making such an important decision as entering into bankruptcy.

The Bankruptcy Legislation Amendment Bill 2002 will amend Australia's bankruptcy laws to address concerns that bankruptcy is “too easy” and to better balance the interests of debtors and creditors.

The reforms contained in these bills are designed to encourage people contemplating bankruptcy to consider the seriousness of the step they are about to take and to consider alternatives to bankruptcy.

The abolition of early discharge is consistent with this purpose.

The reforms were developed following more than two years of consultation with various stakeholders in the personal insolvency field.

In particular, there has been consultation with members of the Bankruptcy Reform Consultative Forum, a peak consultative body I established in 1996 to facilitate better consultation between the Insolvency and Trustee Service of Australia (ITSA) and key groups with a stake in the bankruptcy laws.

As I said in this place last year, the Senate Legal and Constitutional Legislation Committee has reported into the 2001 Bankruptcy Bills, and the Government welcomed the Committee's report.

The Committee recognised that the proposed amendments will achieve the Government's aim of preventing people using bankruptcy in a mischievous or improper way and encouraging people who can or should avoid bankruptcy to consider other options.

The reforms propose to give the Official Receiver discretion to reject debtors' petitions that are a blatant abuse of the bankruptcy system, when it is clear that the debtor is solvent and has singled out one creditor for non-payment, or where the debtor is a repeat bankrupt.

The exercise of this discretion will be subject to external administrative review.

The bill will strengthen the trustee's powers to object to the automatic discharge from bankruptcy of uncooperative bankrupts.

The strengthening of the trustee's objection to discharge powers is directed at the intentional failure by a bankrupt to cooperate with his or her trustee and at deliberate attempts by the bankrupt to impede the trustee's administration of the estate.

Reforms relating to objection-to-discharge provisions will overcome a deficiency in the present law which can encourage a bankrupt to cooperate with the trustee only at the last moment, that is, when a review hearing is imminent.

Another reform in the bill will confirm the Court's power to annul a bankruptcy even if the debtor was insolvent when petitioning.

This measure is directed at high income earners who have chosen to not pay a particular creditor, for example the Australian Taxation Office, and then petitioned for bankruptcy to extinguish the debt.

The bill makes clear that in such a situation the Court would be able to annul the bankruptcy as an abuse of process, despite the fact that the petitioning debtor technically was insolvent.

The bill proposes to raise by 50%, to about $47,000 after tax, the income threshold for debt agreements to encourage more people to consider the debt agreement option as an alternative to bankruptcy.

The practical utility of debt agreements is restricted at present by the relatively low income threshold which applies: raising it will make the debt agreement alternative available to a much larger group of debtors.

The 2001 bill proposed to double the threshold but in light of the recent increased take up of debt agreements the Government has decided that a 50% increase will adequately enhance access to the debt agreement alternative to bankruptcy.

Other changes to improve the operation of the Act include further streamlining meetings procedures, simplifying the mechanism for changing trustees and bringing controlling trustees and debt agreement administrators under the regulatory purview of the Inspector-General.

Amendments will allow creditors to permit a bankrupt to retain `sentimental' property and require trustees to realise property within a six year time period. Finally, other changes will clarify the qualifying requirements to become a registered trustee, allow trustees, rather than the Court, to consent to debtors travelling overseas and impose conditions on that consent, and will allow trustees, rather than the Official Receiver, to determine hardship under the income contribution scheme.

This bill contains one significant change from the 2001 bill, which is the Government's decision not to proceed with the introduction of a cooling-off period.

This decision was taken after careful consideration of the issue, and followed re-canvassing the views of stakeholders in the personal insolvency industry and, in particular, taking due note of the recent sharp rise in the number of debt agreements.

Debt agreements were introduced in 1996 as a low cost, simple alternative to bankruptcy for debtors with low incomes, few assets and relatively low levels of debt.

The take-up rate was initially slow but the number of agreement proposals has risen sharply since mid 2001 to around 430 per month, well over double the rate of 2000-01.

The Government sees this as clear evidence that, increasingly, people in financial difficulties are considering—and choosing—debt agreements as an alternatives to bankruptcy.

Thus, a key purpose of the cooling-off period proposal—to encourage people to consider the consequences of, and alternative to, bankruptcy— is being achieved to a noticeable degree by the debt agreement process.

In addition, this process will be accessible to more debtors as a result of the proposed increase in the income threshold.

Stakeholders in the insolvency industry when re-consulted late last year expressed concern about the administrative complexity a cooling off period would introduce into the bankruptcy process.

The majority of them also doubted that many debtors would change their mind during the cooling off period.

Finally, concerns were also expressed from financial counselling organisations that undesirable pressure may be put on debtors by creditors during the cooling-off period.

Accordingly the Government has decided that the cooling-off proposal should not now proceed.

In summary the Bankruptcy Legislation Amendment Bill 2002 will amend Australia's bankruptcy laws to address concerns that bankruptcy is “too easy” and to better balance the interests of debtors and creditors.

It will encourage people contemplating bankruptcy to consider alternatives to bankruptcy.

By restoring fairness to the bankruptcy system, we will promote confidence in it.

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BANKRUPTCY (ESTATE CHARGES) AMENDMENT BILL 2002

The Bankruptcy (Estate Charges) Amendment Bill 2002 is the second and smaller bill in the Government's bankruptcy reforms package.

It will address an anomaly in the incidence of the realisations charge and the interest charge.

Registered trustees who are controlling trustees are already subject to those charges.

The bill will impose the charges on solicitors who are controlling trustees.

The bill also will provide for the commencement of the Bankruptcy (Estate Charges) Amendment Act 2001

This Act was enacted last year, but its commencement was linked to the commencement of the Bankruptcy Legislation Amendment Bill 2001, a bill which lapsed when the Parliament prorogued before the 2001 Federal election.

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MIGRATION AGENTS REGISTRATION APPLICATION CHARGE AMENDMENT BILL 2002

This bill amends the Migration Agents Registration Application Charge Act 1997 to increase the amount of the charge limit for registration applications by migration agents.

A migration agent is someone who uses or purports to use his or her knowledge or experience in migration procedure to give immigration assistance to a visa applicant.

Under the Migration Act 1958, such a person must be registered with the Migration Agents Registration Authority.

The Migration Agents Registration Application Charge Act 1997 imposes a charge on an individual who makes a registration application.

However, the amount of charge that is actually payable is set out in the Migration Agents Registration Application Charge Regulations 1998.

The regulations prescribe different charge amounts depending on whether an individual acts on a commercial or a non-commercial basis and whether the individual is applying for initial or repeat registration.

At present, some of the charges set out in the regulations are close to the maximum charge limit permitted by the act.

The amendments in the bill will not increase the charge payable—this is done by regulation.

The charges in the regulations are set at a level appropriate to provide adequate resources to the Migration Agents Registration Authority to carry out its statutory responsibilities.

The Migration Agents Registration Authority is funded by an appropriation equivalent to the sum of registration application fees that have been collected under the charge act and regulations.

I commend the bill to the chamber.

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MIGRATION LEGISLATION AMENDMENT (MIGRATION AGENTS) BILL 2002

This bill amends the Migration Act 1958 to improve arrangements for the regulation of migration agents.

The act provides a scheme for regulating the migration advice industry and those who seek to practice as migration agents.

The regulatory framework requires the registration of people who provide various kinds of assistance to visa applicants.

This process of registration is administered by the Migration Agents Registration Authority, the MARA.

The MARA is given power under the act to refuse registration applications and to caution, cancel or suspend the registration of persons who are not people of integrity or otherwise not fit and proper to provide assistance to visa applicants. These applicants are a particularly vulnerable client group.

These decisions are based on a number of factors set out in the legislation, including amongst other things, the person's knowledge of migration procedures, whether they have a criminal record and aspects of their professional and financial history.

The primary aims of this bill are to expand the powers of the MARA to take action on integrity issues and to reduce uncertainty in the registration process for agents.

The expansion of the MARA's powers provided by this bill will allow investigation of complaints against migration agents even if they are no longer registered.

Under the act as it stands the MARA is forced to abandon this kind of disciplinary action when a person who is the subject of a complaint de-registers or does not re-register.

The consequence of this is that migration agents who have acted improperly can leave the industry with an apparently untarnished reputation.

One agent who de-registered in 1999 was the subject of numerous unresolved complaints, a number of them quite serious.

The agent de-registered when the MARA requested to meet with him in the course of investigating these complaints.

As a result, the MARA was unable to make any findings or take action against the agent.

In fact, the MARA cannot presently reveal anything adverse about a former agent in these circumstances.

These new provisions will prevent such agents from avoiding the disciplinary provisions of the scheme simply by deregistering or allowing their registration to expire.

Using these powers the MARA will be able to bar a former agent from re-entering the industry for up to 5 years and to make public the reasons for its decision.

These provisions will operate in a similar way to the MARA's current disciplinary and publication powers in relation to registered agents.

The provisions ensure that agents are accorded procedural fairness and have the opportunity to make submissions before the MARA makes a decision barring the person from returning to the industry.

The MARA's decision will also be reviewable on its merits by the Administrative Appeals Tribunal.

Under the regulatory framework, migration agents are required to seek registration each year in order to keep working in the industry.

The MARA currently receives around 2000 repeat registration applications each year.

Under the carry-over provisions of this bill, an agent's existing registration will be taken to continue until the MARA makes a decision on their repeat registration application.

This provision will give certainty to agents going through the process of re-registration.

Currently, if an agent's registration has expired, they are not able to practice until the MARA has approved their repeat registration application.

The bill also provides that if the MARA has not made a decision within ten months, the migration agent's registration application will be deemed to have been granted.

These provisions will deal with those situations where some time might elapse before the MARA is able to make a decision on an agent's repeat registration application.

An example of where this might occur is where a previous decision of the MARA to suspend or cancel the agent's registration is the subject of review proceedings, and that decision has been stayed pending a full hearing of the matter.

The deemed registration at ten months will ensure that the normal cycles of registration and repeat registration are maintained including compliance with obligations to undertake continuing professional development.

The bill also provides a mechanism to end uncertainty over some kinds of activities that were never intended to be captured by the regulatory scheme.

These amendments will allow regulations to be made setting out specific circumstances in which registration as an agent would not be required when providing advice on visa related issues.

For example, it would be possible to use these powers to clarify the status of employers who provide advice to actual or intending employees on immigration matters related to their employment.

Employers who provide this kind of advice to their own employees were never intended to be regulated by this scheme.

In summary, the amendments made by this bill will significantly enhance client protection as well as improve the regulation of the migration industry.

The professionalism of this industry is a subject of some interest to all members of the parliament, and I am confident that these measures will enjoy support from all sides.

I commend the bill to the chamber.

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NEW BUSINESS TAX SYSTEM (IMPUTATION) BILL 2002

As part of the Government's reform of business taxation, this bill introduces a new simplified imputation system which will replace the current imputation system. The measure provides further evidence of the Government's commitment towards business tax reform.

After extensive consultation, the Ralph Review of Business Taxation, recommended redesigning of the company tax and imputation system to achieve:

· integrity through the entity chain;

· simplification of the franking account;

· refunding excess imputation credits; and

· the reduction of the company tax rate.

This bill introduces the simplification proposals into the tax laws. Measures such as refunding excess imputation credits and the reduction of the company tax rate have already been introduced by the Government and been passed by Parliament.

The simplified imputation system will apply from 1 July 2002.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

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NEW BUSINESS TAX SYSTEM (OVER-FRANKING TAX) BILL 2002

This bill forms part of the package of three bills that will give effect to the Government's reform of business taxation in respect of the imputation system.

The purpose of this bill is to provide for a mechanism that ensures that companies frank distributions that they make in accordance with the benchmark rule.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

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NEW BUSINESS TAX SYSTEM (FRANKING DEFICIT TAX) BILL 2002

This bill forms part of the package of three bills that will give effect to the Government's reform of business taxation in respect of the imputation system.

The purpose of this bill is to ensure that, in essence, a company makes good the over-imputation of franking credits that it makes to its shareholders when making franked distributions to them. This will be the case where the company attaches more franking credits to shareholder distributions than the tax that it has actually paid. Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

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FAMILY AND COMMUNITY SERVICES LEGISLATION AMENDMENT (AUSTRALIANS WORKING TOGETHER AND OTHER 2001 BUDGET MEASURES) BILL 2002

This Bill gives effect to the legislative measures in the Australians Working Together Package of measures announced as part of the 2001-2002 Budget. The measures in this Bill, along with other administrative measures in the package, are a first step towards building a modern and responsive social support system for people of working age.

Australia's welfare system is not adequately meeting the needs of Australian communities. There are a large number of jobless families and jobless households. Many households of working age rely heavily on income support, and there are inadequate incentives and rewards for self reliance.

Australia is not alone in this need for change— across OECD nations, changes in labour markets and demographics has driven a move away from passive income support systems to more active labour market policies and reform of welfare arrangements

In 1999, the Government set up a Reference Group, chaired by the CEO of Mission Australia, Patrick McClure, to provide advice on possible approaches to welfare reform. The report of the Reference Group set out a number of recommendations, both short and long term, for reforming the welfare system.

The Australians Working Together—Helping people to move forward (AWT) package announced in the 2001-2002 Budget is a first step in welfare reform.

AWT is a whole-of-government package of measures to be phased in gradually over four years. The package is consistent with the five areas for action identified in the McClure report:

· individualised service delivery;

· a simple and responsive income support structure;

· incentives and financial assistance;

· mutual obligations; and

· social partnerships.

AWT is a balanced package comprising expanded assistance, improved financial incentives and assistance to work and train, and modest changes to requirements.

The Government has undertaken extensive consultations with community representatives, peak organisations and lobby groups on AWT implementation in all state and territory capital cities and in rural and regional locations. There was strong endorsement of the package as a whole and evidence that communities are willing to work with Government to overcome any local barriers to the effectiveness of the package.

While AWT is only the first step in a longer term process of welfare reform that will take a number of years to complete, it is nonetheless a significant step forward that will deliver better outcomes from our social support system.

The working credit will make a real difference to working age customers who are trying to get into the workforce. It will give incentives for them to try out a job, whether it is full-time, part-time or casual, by letting them build up credits at times when they have little or no income, which they can use to let them keep more of their payments.

If payments do eventually stop after they use up their working credit, it will be easier for people to get back on payment if they lose the job in the following 12 weeks. Their work efforts will also be encouraged by letting them keep for 12 weeks certain benefits such as concession cards and supplements that are normally only available to people on payments.

The measurement of earnings for income testing purposes will also be simplified and made consistent across workforce age payments. This will help customers better understand how their payments are worked out and when to tell Centrelink about their earnings. It will also assist in the accurate and efficient operation of the working credit. The new treatment will mean that earnings in a person's entitlement period (usually a fortnight) will be taken into account evenly over that period. It will replace the complex averaging rules currently applied to earnings of pension and parenting payment customers, and the arrangements for allowance customers where their entitlement ceases once they start full-time work.

From 1 July 2003, parenting payment customers with a youngest child aged 13-15 will be subject to a part-time participation requirement. The requirement will be to undertake one or more of a broad range of activities designed to lead to, or overcome barriers to, increased economic participation, for up to a maximum of 150 hours in a 6 month period.

Parents, both partnered and single, who remain out of the workforce and on income support for long periods often face great difficulty in returning to the workforce later on when children are older, due to lack of recent experience, skills, contacts or confidence. This can create a significant risk of poverty and long term welfare dependence for both themselves and their children.

The introduction of a part-time participation requirement will encourage and help parents prepare to return to work as children grow older, the usual situation for most parents with school aged children.

The Government will encourage and support people whilst they undertake approved language, literacy and numeracy training by providing a fortnightly supplement of $20.80 to help with the incidental costs associated with attending that training.

Poor language, literacy or numeracy skills make it more difficult to get a job. Training for people lacking these skills is an important part of helping them to re-enter the workforce. The supplement will be available from 20 September 2002.

The new Personal Support Programme (PSP) commences operation on 1 July 2002.

The PSP will assist people with multiple non-vocational barriers to employment such as homelessness, drug and alcohol problems, domestic violence or mental illness. These are people who, because of their personal circumstances, are generally unready to benefit from the employment assistance currently available.

The new programme will not only focus on employment outcomes but will also help participants to stabilise their lives and enable them to become involved and contribute to the community over time.

Amendments are made to the activity testing provisions for newstart and youth allowance so as to enable people to participate in PSP in order to satisfy their activity test obligations.

Activity testing arrangements for PSP customers will be administered sensitively, having regard to individual circumstances and the multiple barriers faced by these customers.

For many people, the biggest barrier to getting more involved in training and other activities is the cost of child care. By simplifying procedures for accessing child care special fee assistance currently provided under the Job, Education and Training program, a wider range of families will receive much-needed assistance with the cost of child care. More parents will be able to get help to meet the `gap' fee for child care.

The Bill also provides for the closure of access to mature age allowance and partner allowance. Non-activity tested allowees can face a greater risk of long term dependence than activity tested customers as there are currently no measures in place to require, encourage or facilitate participation.

No new claims for mature age allowance or partner allowance will be able to be made from 1 July 2003. Customers who are already receiving those payments at that time will not be affected by these changes.

The Bill introduces more flexible participation requirements for newstart allowees, aged 50 and over. People who would formerly have been eligible for mature age or partner allowance will be able to claim newstart allowance which will have a more flexible approach to the application of the activity test. There will also be access to an expanded range of services and programs.

This measure assists older people on income support to improve their labour market prospects through assessment of barriers, development of a Participation Plan and referrals to programs. The new participation framework maintains the current focus on economic participation for those with the capacity to undertake paid work but provides a broader range of acceptable activities to accommodate those with limited prospects of employment in the short-term. While it is important that penalties still be applicable in situations where people fail to comply with their statutory obligations without a reasonable excuse, the new arrangements provide for any residual part of that penalty to be waived when a failure to comply is rectified.

Customers aged at least 50 who are complying with an activity agreement that does not require the person to undertake job search will have similar portability rules to those that currently apply to recipients of mature age and partner allowance.

This Bill also contains amendments to enable customer information to be used for the purposes of the Family Homelessness Prevention and Early Intervention Pilot. The aim of the Pilot is to identify families at risk of homelessness by using relevant Centrelink data. These families would then be assisted to regain stability in their housing and financial circumstances, and to access community services, labour market programs and employment.

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TAXATION LAWS AMENDMENT (SUPERANNUATION) BILL (No. 2) 2002

The Government announced last year in its superannuation policy statement “A Better Superannuation System”, a range of measures designed to enhance the overall attractiveness, accessibility and security of superannuation.

With the introduction of the Taxation Laws Amendment (Superannuation) Bill (No. 2) 2002, and associated amendments through the Superannuation Industry (Supervision) Regulations and Retirement Savings Account Regulations, the Government will have delivered on a significant proportion of these commitments.

Over recent years there has been a growing realisation throughout Australian society of the importance of retirement planning and saving for the years ahead. Superannuation is seen as a vital element in planning for a comfortable and secure retirement.

The Government recognises that it is essential that superannuation is safe, easily understood and fair for every Australian. Amendments in this bill together with the proposed amendments to the Regulations will help achieve the aim of a safer, fairer and less complex superannuation system.

This bill introduces amendments to the superannuation guarantee law to require employers to make specified levels of superannuation contributions on at least a quarterly basis on behalf of their employees to avoid the superannuation guarantee charge.

Currently an employer has until 28 July following a financial year to make the required level of superannuation contributions on behalf of its employees, or be subject to the superannuation guarantee charge. While the majority of employers currently make superannuation contributions quarterly or more often, the law will be amended to require all employers to make contributions at least quarterly.

A number of enhancements to the superannuation guarantee law will also be made by this bill to facilitate the introduction of the new quarterly contribution regime.

Other measures contained in this bill will make superannuation more attractive and support retirement incomes policy including:

· allowing a working person the opportunity to make personal undeducted contributions to a superannuation fund until age 75;

· reducing the superannuation and termination payments surcharge rates from 15% to 10.5% over the next three years;

· allowing contributions to be made (by third parties) on behalf of children who are under the age of 18 and otherwise do not receive superannuation support; and

· increasing the fully deductible amount available to the self-employed for personal superannuation contributions made to complying superannuation funds or retirement savings accounts. Self-employed who claim an income tax deduction for personal superannuation contributions will now have an increased limit where full deductibility is available for the first $5,000 of contributions plus 75% of the excess over $5,000 up to the taxpayer's age-based deduction limit

Full details of these measures and some minor technical corrections are contained in the explanatory memorandum.

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SUPERANNUATION GUARANTEE CHARGE AMENDMENT BILL 2002

The Superannuation Guarantee Charge Amendment Bill 2002, in conjunction with the Taxation Laws Amendment (Superannuation) Bill (No. 2) 2002, establishes the basis for requiring employers to make at least quarterly superannuation contributions on behalf of their employees. These amendments will enable the superannuation guarantee charge, which underpins the compulsory superannuation arrangements, to be imposed on a quarterly basis.

Full details of the measures in this bill are included in the explanatory memorandum for the Taxation Law Amendment (Superannuation) Bill (No. 2) 2002.

Ordered that the following bills be listed on the Notice Paper as separate orders of the day:

Disability Discrimination Amendment Bill 2002

Horticulture Marketing and Research and Development Services (Amendment) Bill 2002

Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Bill 2002

Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Bill 2002

Space Activities Amendment Bill 2002

International Tax Agreements Amendment Bill (No. 1) 2002

Taxation Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2002

Customs Tariff Amendment Bill (No. 1) 2002

Export Market Development Grants Amendment Bill 2002

Petroleum (Submerged Lands) Amendment Bill 2002

Statute Law Revision Bill 2002

New Business Tax System (Consolidation) Bill (No. 1) 2002

Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002

Diesel Fuel Rebate Scheme Amendment Bill 2002

Australian Protective Service Amendment Bill 2002.

Ordered that the resumption of the debates be made orders of the day for a later hour.

Ordered that the following bills be listed as four orders of the day as follows:

(a) Bankruptcy Legislation Amendment Bill 2002

Bankruptcy (Estate Charges) Amendment Bill 2002

(b) Migration Agents Registration Application Charge Amendment Bill 2002

Migration Legislation Amendment (Migration Agents) Bill 2002

(c) New Business Tax System (Imputation) Bill 2002

New Business Tax System (Over-franking Tax) Bill 2002

New Business Tax System (Franking Deficit Tax) Bill 2002

(d) Taxation Laws Amendment (Superannuation) Bill (No. 2) 2002

Superannuation Guarantee Charge Amendment Bill 2002.

Debate (on motion by Senator Ludwig) adjourned.


Senator Harris —Madam President, I seek clarification. One of the bills that appears on the list I do not believe the Clerk read out. That is the Family and Community Services Legislation Amendment (Disability Reform) Bill 2002. Is that not included?


Senator Ian Campbell —Senator Harris is correct. There is a difference between the red and the list that was read by the Clerk.