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Wednesday, 11 August 2004
Page: 26110


Senator RIDGEWAY (11:27 AM) —I move Democrat amendment (5) on sheet 4361 Revised 2:

(5) Page 4 (after line 11), after clause 3, insert:

5 Review of operation of Act

(1) The Minister must cause an independent review of the operation of this Act to be initiated annually by the Free Trade Agreement Review Board (FTARB), on the anniversary of the day on which this Act receives the Royal Assent.

(2) The FTARB is to be selected and appointed in accordance with subsection (3).

(3) The Minister must, before the first annual review required by subsection (1), by writing determine a code of practice for selecting and appointing the FTARB members and acting FTARB members which sets out general principles on which selection and appointment is to be made, including but not limited to:

(a) merit, including but not limited to:

(i) experience in assessing economic impact of free trade agreements;

(ii) experience in assessing social impact of free trade agreements;

(iii) experience in assessing cultural impact of free trade agreements; or

(iv) experience in assessing environmental impact of free trade agreements;

(b) independent scrutiny of appointments;

(c) probity;

(d) openness and transparency.

(4) The persons undertaking the review required by subsection (1) must consult:

(a) the Commonwealth and the States; and

(b) a broad range of persons with expertise in or experience of relevant disciplines;

and the views of the Commonwealth, the States and the persons mentioned in paragraph (b) must be set out in the report to the extent that it is reasonably practicable to do so.

(5) Each review required by subsection (1) must be completed within 3 months of the initiation of that review.

(6) The Minister must cause to be tabled in each house of the Parliament a written report of the review within 5 sitting days of that House after receipt of the report.

(7) The report must contain analysis of and, if required, recommendations to, the Parliament as to the impact of each chapter of the Agreement on Australian interests.

I was beginning to wonder whether we would get to this today. I will begin by outlining the reasons for the Australian Democrats moving an amendment to review the operation of the act. For those who have not had a chance to look at sheet 4361 Revised 2, let me say that amendment 5, about the review of the operation of the act, is about making sure that the way in which we deal with the enabling legislation and therefore the free trade agreement is through a process of both accountability and parliamentary involvement.

The specific amendment essentially seeks to instruct the minister to establish a free trade agreement review board and require that that board should report annually to parliament on the operation of the agreement and certainly, for very good reasons, on the impact of the agreement. The debate today, and certainly last night, indicated quite clearly that one of the things that we are not debating on this occasion, and should be, is the free trade agreement itself. The government keeps reminding us that we are talking about two bills—the enabling legislation, essentially, to make sure that we can deliver on our pact with the United States. It is appalling and an indictment that this parliament is excluded from the process of debating this particular issue. It is probably the most significant issue that this parliament has dealt with in a long time—certainly during my time here in parliament. Quite frankly, it should have come down to the free trade agreement being put on the table so that we got to debate the details of that. Unfortunately, it is having to be looked at in other ways.

The amendments are put forward to improve the enabling legislation so as to make the agreement more reflective of the wishes of the Australian people and—more importantly—to protect the national interest, the interests of Australians. In regard to the benefits of the agreement—we had this discussion yesterday when the debate started—the minister was very clear in his view that any sort of analysis of environmental, social and cultural benefits and so on could not be dealt with in any sort of quantifiable way. But this applies also to any analysis of the economic benefit. A number of reports give very different understandings of the net benefit.

I am mostly concerned about the broader question. If we put a balance sheet in front of us, we seem to have only one column, and that is the column that talks about the net benefit. There is no column that talks about the net environmental, cultural or social losses we could expect. Why is that? It is because, way back in March, the government was not interested in instructing the consultants it engaged to undertake analysis of the possible net losses or net gains in relation to the social, environmental and cultural policies of this country. What sort of national interest test is it when the only thing the government looks at is the economic bottom line? Hence the amendment that is being put forward is about instructing the minister—and, more importantly, the government—to look at being accountable, not just to the Australian people, but also to the parliament, in giving the parliament a role in reviewing how the free trade agreement is implemented over the coming years.

The result is a foregone conclusion because the ALP has decided—disgracefully—to cave in on this issue. The Australian Democrats feel that it is necessary to put in place some safeguards to ensure that the free trade agreement has as little impact as possible, particularly on social, environmental and cultural policies, as I mentioned. We are proposing the establishment of a board to monitor the impact of this dreadful agreement and its likely consequences while it is in place. Under the amendment, the minister must cause an independent review of the operation of the act to be initiated annually by the new review board, and the members of the review board will be selected according to a strict process that will ensure independence, transparency, and appointment on merit.

This amendment has been drafted according to standard Democrat `appointment on merit' terms. We do not want another situation where the government just appoints the people it knows, those on whom it can rely to give it the result it wants. There must be a proper process to ensure that the best qualified people are appointed to undertake a thorough, detailed and objective annual review of the impact of this agreement.

It is worth restating some of the comments by my colleague Senator Murray regarding appointment on merit, because it is an important issue. In proposing that there be a review board, it is also essential that we do the right thing and ensure that the review is conducted by the right people for the job. Every Democrat senator has at one time or another called for an end to jobs for the boys. Essentially, wherever appointments are made to the governing organs of public authorities—whether they are institutions that are set up by legislation or independent statutory authorities or quasi-government agencies—the processes by which these appointments are made should be transparent, accountable, open and honest. I think the public deserves to see how this process operates in practice.

One of the main failings of the present system is that there is no empirical evidence to determine whether the public perception of jobs for the boys is correct—and, as the appointments themselves are not open to sufficient public scrutiny and analysis, it is no wonder. It is still the case that appointments to statutory authorities in this country are largely left to the discretion of ministers with the relevant portfolio responsibilities. There is no umbrella organisation that sets out a standard procedure regulating the making of appointments and, perhaps most importantly, there is no way to have external scrutiny of the procedure and the merits of the appointment by an independent body.

On well over 23 occasions in this chamber, and certainly over the last few years, the Democrats have put up amendments designed to compel ministers to make appointments on the basis of merit. Every time those amendments have been put up, not only have they been opposed by the government, but Labor has joined the government to block this important reform. So why do we keep doing it? We do so because appointment on merit is a principle that should be accepted. We are committed to ensuring that appointments to governing organs and public authorities are based on merit and that the process by which these appointments are made is transparent, accountable, open and honest so that the public gets to see what is going on.

An independent body should be given the responsibility of scrutinising government appointments against a set of established criteria. This is a system that works well in the United Kingdom. Lord Nolan headed the 1995 Committee on Standards in Public Life and managed to persuade the UK government to accept that appointments should be based on merit. In many respects this process would go a long way to ending the privilege and patronage associated with government appointments in Australia.

The key principles Lord Nolan set out at that time to guide and inform how such decisions are taken are as follows. A minister should not be involved in an appointment where he or she has a financial or personal interest. Ministers must act within the law, including the safeguards against discrimination on grounds of gender or race. All public appointments should be governed by the overriding principle of appointment on merit, except in limited circumstances. Political affiliations should not be a criterion for appointment—a very important principle. Selections on merit should take account of the need to appoint boards and include a balance of skills and backgrounds. Finally, the basis on which members are appointed and how they are expected to fulfil their roles should be explicit and the range of skills and backgrounds that are sought should be clearly specified. In response to the committee's recommendations, the UK government subsequently created the Office of the Commissioner for Public Appointments. That office has a similar level of independence from the government as has the Auditor-General, to provide an effective avenue of external scrutiny.

We have used the Nolan committee's recommendations in our amendments for the last five years because they are tried and tested. I think the government ought to take that on board in this particular case. But meritorious appointments are the essence of accountability, and until the notion of jobs for the boys or jobs for the girls—whatever the case may be—is nipped in the bud there is not that much moral difference between our system and the political patronage that is prevalent in countries where nepotism and favouritism run rife.

Again, it is a question of being able to get the government to see the wisdom in the creation of a free trade agreement review board to not only report annually but provide some accountability in identifying what the problems are going to be. I think it is wise for the government to do this on a regular basis so that we know up front what the problems of the free trade agreement are going to be, instead of waiting for a disaster to happen somewhere down the road and, as usual, for the government to announce after the fact that we will provide compensation.

Compensation does not provide assistance to people out there who have a mortgage, who have to feed the kids and who have to send their kids to school. Quite frankly, as Senator Hill mentioned earlier, if we are talking about creating more jobs then, as part of an admission that the free trade agreement may well lead to structural change, we ought to know well beforehand what those structural changes are going to be and we ought to be building mechanisms into the enabling legislation to ensure that that occurs and that we can identify those changes fairly quickly and respond to them as quickly as we need to—not leave many of our industries, and certainly the environment and social policy in this country, open to being changed or exposed to the pressures being brought to bear by the largest economy in the world.

That is essentially what we are doing in relation to the free trade agreement. Some may see it as a great boon, but when the Australian economy is only the size of the economy of Pennsylvania state it does raise some questions about whether or not we will have equal weighting when it comes to consultations and the resolution of disputes. I previously raised with the minister the issue of the consultation process being triggered, and he was not able to provide any answers. I hope that we do not go down the path of just dealing with that but that we identify readily and up front what the consequences are going to be and that the parliament is involved in the process. It cannot just be left to the executive government.

We are not dealing with the free trade agreement; the executive government got to deal with that. What we get to deal with is the enabling legislation. This parliament is effectively being told to stay out of the debate in relation to the free trade agreement. What a cop-out that has been. I think the parliament, which represents the Australian people, ought to be involved in this important debate. If the government is not going to change its ways then it ought to make sure that there are amendments in the enabling legislation that guarantee that the parliament will be involved and that we can identify what those consequences are and respond as appropriate.