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Wednesday, 23 June 2004
Page: 24780


Senator ABETZ (Special Minister of State) (5:51 PM) —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—

AUSTRALIAN ENERGY MARKET BILL 2004

I am delighted today to be introducing landmark legislation for the energy sector in Australia.

Energy plays a vital role in the Australian economy, and contributes significantly to our international competitiveness. Industry depends upon secure, reliable and competitively priced energy to underpin its investment decisions. Australia's electricity and gas prices are among the lowest in the developed world. It is important to Australia's competitive position in this area that we pursue the required energy market reforms.

The arrangements in this legislation pave the way for the establishment of a truly efficient, competitive, Australian energy market. These measures put into action the Energy White Paper, released by the Prime Minister yesterday.

The bills I am tabling today represent the practical implementation of the findings and recommendations of the Independent Review of Energy Market Directions (the Parer Review), commissioned by the Council of Australian Governments (COAG).

The Ministerial Council on Energy, which I chair, has had responsibility for overseeing the Parer Review. The Review identified the strategic issues for the Australian energy market and the key policies required from the Commonwealth, State and Territory Governments.

The 11 December 2003 MCE report to COAG was the culmination of twelve months of work. The recommendations contained in the report constitute a substantial response to the Parer Review and agreement to these policy initiatives has been formalised through a new intergovernmental agreement—The Australian Energy Market Agreement.

The bills before the house are part of a new national legislative framework which has been developed on a collaborative basis, with all States and Territories. Over the next few months, complementary legislation is to be introduced into all Australian Parliaments.

The package of legislation I am introducing today provides for new institutional and governance arrangements for the Australian energy sector. It will improve the quality, timeliness and national character of the energy markets.

This legislation will apply first in relation to the national electricity market. A revised template electricity law is to be passed by South Australia.

All other governments, with the exception of Western Australia and the Northern Territory, will pass application acts applying this law in their own jurisdiction.

The Australian Energy Market Bill 2004 is the Commonwealth's application of the South Australian template electricity laws. The Australian Government will be applying the electricity laws, including the Electricity Code, in a similar way to its current application of the Gas Code as a Commonwealth law. This arrangement will enable the energy market rules to apply consistently across all participating government jurisdictions.

This bill is also forward looking in that it provides a mechanism to enable other energy laws to be applied consistently across Australia. This would be done only with the consent of all governments, as provided for in the Australian Energy Market Agreement.

South Australia will also pass a law establishing the Australian Energy Market Commission. The core functions of this body will be to continue to develop the market rules, carry out reviews of the market and undertake other functions as conferred on it under energy laws. These functions in the first instance will relate to the template electricity laws as set out in the National Electricity Law and Code.

A highlight of the cooperative legislative framework is the new arrangements which are to apply to the regulation of Australia's energy market.

The Parer Review found that the current multiplicity of regulators creates a barrier to competitive interstate trade and adds costs to the energy sector. There are currently 13 regulators operating across every layer of commercial activity. The Australian Government has worked with State and Territory governments to achieve a reform package that will see a significant reduction in the regulatory burden facing market participants and investors in the energy sector.

To streamline and improve the quality of economic regulation, lower the cost and complexity of regulation facing investors and enhance regulatory certainty, all governments have agreed to establish a single, national energy regulator—the Australian Energy Regulator (AER). The Trade Practices Amendment (Australian Energy Market) Bill 2004 seeks to implement this agreement.

Initially the AER will have responsibility for the economic regulation of wholesale electricity and transmission networks and key rule enforcement functions. It will undertake the regulatory and enforcement functions previously exercised by the Australian Competition and Consumer Commission (ACCC) and the National Electricity Code Administrator.

The AER will be exercising powers as a result of the application of the National Electricity Law and National Electricity Code as a law of the Commonwealth through the Australian Energy Market Bill 2004. The AER will also have functions conferred upon it by the States and Territories where they are also applying the National Electricity Law and Code.

The responsibilities of the AER are to be extended to include gas transmission by 30 June 2005. Further, all governments have agreed that the AER will be responsible for the regulation of distribution and retailing (other than retail pricing) by 2006, following development of an agreed national framework.

The AER will be a separate legal entity but will operate as a constituent part of the ACCC for matters such as staffing and financial arrangements. These proposed amendments to the Trade Practices Act 1974 establish the AER as a body corporate constituting three members—a Commonwealth member, who is also an ACCC Member, and two State/Territory AER members. The AER is to be assisted in the performance of its functions by staff and consultants made available to the AER by the Chair of the ACCC.

The Parer Review also found that the process for making changes to the National Electricity Code is complex, both in its conception and the way in which the system has worked in practice.

Accordingly, the Trade Practices Amendment Bill incorporates amendments that will facilitate the streamlining of the code change process and any subsequent process relating to industry access code approval or authorisation under the Trade Practices Act 1974.

In particular, the amendments enable the ACCC to make use of consultations undertaken by the Australian Energy Market Commission during the amended code change process, avoiding unnecessary duplication.

I commend this bill.

—————

TRADE PRACTICES AMENDMENT (AUSTRALIAN ENERGY MARKET) BILL 2004

This bill is the second part of the package that I have outlined in the previous second reading speech.

I commend this bill.

—————

HIGHER EDUCATION LEGISLATION AMENDMENT BILL (No. 2) 2004

I am pleased to be able to announce to honourable members the first major commitment of new funding to be provided by the Budget following the passage last year of the legislation underpinning the Government's higher education reform package Our Universities: Backing Australia's Future.

The Our Universities: Backing Australia's Future package will deliver to universities $2.6 billion over the next five years, including funding for more than 34,000 new university places. It is a substantial and vital commitment to public funding of higher education.

This bill now before us will not only build on this commitment to public funding, but will also clarify the transition to the new framework of legislative arrangements, and further enhance the central importance of students within the higher education experience.

Firstly, the bill amends appropriation amounts in the new Higher Education Support Act 2003 to provide for the Government's 2004-05 Budget measures for higher education.

One of the important Budget measures in this bill is a commitment of $4.9 million over four years to the Australian Maritime College. This funding will be used to develop a new campus at Point Nepean, Victoria including providing 40 places each year. The campus will offer courses in marine and coastal conservation.

This bill also provides funding of $18 million over three years to the University of Western Sydney to support capital costs for a new medical school. This will enhance and improve the teaching hospital capacity and delivery of health and medical services in western and south-western Sydney.

This bill also provides for an additional 12 medical school places at James Cook University in Queensland, and an additional 400 undergraduate nursing places nationwide.

Through this bill the Government will also provide $12.4 million over four years for continued transitional assistance for regional tertiary institutions whose funding for research purposes would otherwise be reduced as the result of the application of performance-based formulae for allocating research funds. The measure is part of the Australian Government's ongoing commitment to science and innovation through the Backing Australia's Ability package.

The bill also provides for a number of legislative keeping measures. It amends HESA to increase the maximum funding amounts for the Commonwealth Grant Scheme, Other Grants and Commonwealth Scholarships to reflect supplementation for price movements and other technical adjustments for the years 2005-2008. It updates the funding amounts in the Higher Education Funding Act 1988 to update appropriations for 2004 to reflect revised over enrolment estimates.

The bill also makes technical amendments to HESA which will enhance the implementation of the higher education reforms in for the remainder of this year and into 2005.

These changes include enabling guidelines to be made concerning the grievance handling procedures for non-Table A providers of academic as well as non-academic matters; enabling guidelines to be made concerning the conditions which may be applied to student contribution amounts and tuition fees for student cohorts; and clearly defining the meaning of courses of study in relation to combined and double degrees.

The bill ensures that Open Learning Australia is subject to all the necessary provisions in HESA so that FEE-HELP can be appropriately administered for OLA students, and that OLA is required to comply with the relevant Quality and Accountability requirements.

The Bill amends the Higher Education Support (Transitional Provisions and Consequential Amendments) Act 2003 to clarify the definition of `institution' to specifically exclude the National Institute of Dramatic Art (NIDA) from the grandfathering provisions. The Government's commitment to NIDA students will be achieved through other means.

The Bill also amends the Australian National University Act 1991, to enable the ANU to comply with the National Governance Protocols.

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

I commend the bill to the Senate.

—————

FAMILY AND COMMUNITY SERVICES AND VETERANS' AFFAIRS LEGISLATION AMENDMENT (SUGAR REFORM) BILL 2004

The Australian Government recognises that the sugar industry continues to face serious difficulties as a result of a number of factors, including low world prices, a corrupt world market and increasing competition from major producers such as Brazil. The Australian Government also understands that the sugar industry is vital to many rural and regional communities in coastal Queensland and northern New South Wales.

On 29 April 2004, the Prime Minister announced that the Australian Government will provide up to $444.4 million over four years for a comprehensive range of measures to help the sugar industry to reform and to assist individual cane farmers and their families who are in need.

A key issue raised by many in the sugar industry during consultations was the need to ensure that sugarcane farms can more readily be handed from one generation to the next. Accordingly, the Australian Government is introducing legislation that will facilitate intergenerational transfer in the sugarcane industry. The scheme will provide sugarcane growers who satisfy certain criteria with a window of opportunity to gift their farm without attracting the `gifting' rules that apply to social security and Veterans' Affairs payments. This measure will support sugarcane growers dealing with challenge and change while, at the same time, increasing the involvement of young people in setting the future directions of the sugar industry.

Key features of the scheme include:

the net value of the farm enterprise cannot exceed $500,000;

sugarcane growers (or their partners) must be age pension age (or will reach that age during the 3 year window);

the income from all sources for the three years prior to the transfer can be up to the maximum rate of age pension that would have been payable in the same period;

the transfer must be made by way of gift and must divest the sugarcane grower of all interests in sugarcane farming (excluding the family home);

sugarcane farms gifted during the `window' will be excluded from the normal gifting provisions. Transfers made prior to the start of the scheme will not be eligible;

standard assets test provisions will apply to all other assets;

standard income test provisions will apply;

the next generation must have had an active involvement in the farm for the three years prior to the transfer;

the retiring farmers must have owned the property for at least 15 years or been actively involved in farming for 20 years. They must have been in sugarcane for at least the last two years.

The scheme commences from Royal Assent.

Other important elements of the Sugar Industry Reform Program 2004 include a $146 million Sustainability Grant to the industry and up to $75 million in funding for Regional and Community Projects. The Sugar Industry Reform Program 2004 also includes:

income support for up to 12 months for those growers and harvesters and their families most in need;

business planning assistance for growers, harvesters, and cooperative and smaller mills;

generous re-establishment grants and retraining assistance for those wishing to leave the industry;

restructuring grants for growers to undertake on-farm improvements; and

crisis counselling for those involved in the sugar industry.

Furthermore, in recognition that the sugar industry must take the lead in its own reform, the Australian Government will establish an Industry Oversight Group and local Regional Advisory Groups to develop and implement comprehensive plans for change.

Ordered that further consideration of these bills be adjourned to the first day of the next period of sittings, in accordance with standing order 111.

Ordered that the Higher Education Legislation Amendment Bill (No. 2) 2004 and the Family and Community Services and Veterans' Affairs Legislation Amendment (Sugar Reform) Bill 2004 be listed on the Notice Paper as separate orders of the day.