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Thursday, 14 June 2007
Page: 15


Senator ABETZ (Minister for Fisheries, Forestry and Conservation) (10:03 AM) —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—

ABORIGINAL LAND RIGHTS (NORTHERN TERRITORY) AMENDMENT (TOWNSHIP LEASING) BILL 2007

The purpose of this Bill is to establish an office of Executive Director of Township Leasing to hold 99 year leases over townships on Aboriginal land in the Northern Territory.

In February 2005, the Northern Territory Government proposed that the Australian Government amend the Northern Territory Aboriginal Land Rights Act to facilitate 99 year leases of Aboriginal townships to allow for certainty of land tenure for housing and commercial development.

The Government initiated the township leasing scheme in amendments to the Northern Territory Land Rights Act last year to enable Aboriginal people to have the same opportunities as other Australians living in towns.

Traditional owners of the town of Nguiu on the Tiwi Islands in the Northern Territory have in principle agreed to arrangements for a 99 year lease of the township.  The formal grant will proceed once the statutory processes of the Land Rights Act have been completed.

A senior traditional owner of Nguiu said:  “We will now be legally entitled to play a direct role in the administration and development of our town, now and into the future.  We have not been in that position since Nguiu was first established nearly 100 years ago”.

Negotiations for other township leases are underway and it is expected that further leases will be agreed in the near future.

It was the Government’s understanding that the Northern Territory Government would establish an entity to hold township leases, issue sub-leases, collect rent and administer township leases.  However, this has not yet occurred.

The Land Rights Act contains provisions allowing the Commonwealth to establish an entity to hold township leases.  These provisions were inserted into the amendment bill last year to anticipate the possibility that a Northern Territory Government entity would not be in place when the first township lease was ready to be granted.

The Government is therefore acting to establish a mechanism through which the Commonwealth can hold and administer township leases.  The Bill allows for the appointment by the Governor-General of an Executive Director of Township Leasing for a term of up to five years.  The terms and conditions of the Executive Director would generally be set by the Remuneration Tribunal.  The Bill allows for the termination of the appointment of the Executive Director by the Governor-General in certain circumstances.

The Bill provides that the Executive Director would be assisted by Departmental officers as well as consultants engaged by the Executive Director.  The Bill also contains reporting requirements for the Executive Director.

It remains the Government’s view that township leases would best be administered by the Northern Territory Government.  The amendments made to the Northern Territory Land Rights Act last year allow for the transfer of township leases from the Commonwealth to the Northern Territory.  Accordingly, the Bill provides for the repeal of the provisions related to the Executive Director if and when township leases held by the Commonwealth are transferred to an entity established by the Northern Territory Government.


FINANCIAL SECTOR LEGISLATION AMEND-MENT (RESTRUCTURES) BILL 2007

This Bill will facilitate the adoption of a non-operating holding company as the ultimate holding company of a financial group in Australia.

This Bill will provide greater flexibility for financial groups in choosing a corporate structure to manage their risk exposures and comply with prudential requirements.  The Bill will also provide financial groups with the opportunity to improve their business efficiency and international competitiveness.  As a result, the Bill further enhances prudential regulation of the financial sector in Australia to the benefit of both consumers and business.

Adopting a non-operating holding company at the head of a financial group can allow the group to more efficiently and effectively meet prudential requirements.  This is because it enables the appropriate allocation of risk between prudentially and non-prudentially regulated businesses of a financial group through organising different types of activities into separate business lines.  This can aid in partially quarantining risks in the various parts of a financial group, for example, through separating entrepreneurial investment activities from a group’s banking operations.

Since the Government’s reforms to the Banking Act in 1998, banking groups headed by a company which is an authorised deposit-taking institution have had the option of substituting a non-operating holding company at the top of the group.  However, financial sector transfer, income tax and some corporate laws have acted as a disincentive to restructuring because they do not treat the restructuring as merely an internal rearrangement which in economic substance, it is.

The Bill amends the Financial Sector (Transfers of Business) Act 1999 by introducing a new part dealing with restructures.

An authorised deposit-taking institution, general insurer or life insurance company will be able to apply to the Minister for approval to restructure a group headed by one of these prudentially regulated entities. The Bill will provide the Minister with the power to approve and grant consequent relief from specific statutory restrictions in the Corporations Act which currently impede the adoption of a non-operating holding company structure.  The relief will be set out in a restructure instrument issued by the Minister.

The Minister will also be provided with the power to approve the transfer of assets and liabilities between two bodies of a financial group to allow for the reorganisation of different types of activities into separate business lines.  For example, such a reorganisation could allow a group to separate its banking and non-banking businesses.

Any relief allowed by the Bill will be limited to nominated specific restrictions in the Corporations Act and does not in any way relieve an entity from meeting its general obligations under that Act and other relevant legislation.

The Bill also makes consequential amendments to the consolidation membership rules, the franking rules and the capital gains tax regime in the income tax law.  These amendments remove tax impediments that would otherwise discourage restructuring.

Full details of the measures in this Bill are outlined in the explanatory memorandum.


HIGHER EDUCATION LEGISLATION AMEND-MENT (2007 BUDGET MEASURES) BILL 2007

The Bill amends the Higher Education Support Act 2003 (HESA) to provide for the Australian Government’s 2007-2008 Budget commitments.

This Bill will fundamentally reshape the higher education landscape.  The era of universities being forced into a ‘one-size-fits-all’ model is now over.  These reforms will allow more world class universities to emerge and encourage excellence and specialisation in the sector.

This Bill will amend the Act to simplify university funding structures and give universities greater scope to adjust their student numbers and course mixes to respond to student demand and address skills needs.

It also provides for the creation of the new Diversity and Structural Adjustment Fund for universities.  The Fund will give more support for structur-al reform and promote greater specialisation, diversity and responsiveness to local labour market needs.

Through the Fund, the Australian Government will allocate $209 million over four years to universities that can identify strategies to better meet student and employer demand.  The Fund will particularly focus on addressing the capacity of universities to meet local labour market needs.

Institutions could use the funding to diversify, specialise their disciplines, build on existing dual sector activities, create new dual sector activities, respond to local labour market needs, or provide learning and teaching enhancement projects.  Priority will be given to universities in regional areas and smaller metropolitan universities which can demonstrate the greatest need for structural reform and the greatest input on local labour markets.  $67 million in new funding will be provided to universities through the Diversity and Structural Adjustment Fund.

This Bill simplifies university funding structures and provides additional funding for key disciplines in areas of skills need.  Funding for the Commonwealth Grant Scheme will be increased for particular disciplines and the number of clusters will be reduced from twelve to seven.

The revised cluster funding model addresses key pressure points identified by the sector in the recent review of the Higher Education Support Act 2003.

This Bill will deliver funding increases in 2008 for Mathematics and Statistics, Allied Health, Engineering, Science and Surveying, Clinical Psychology, Education, Nursing, Behavioural Science and Social Studies and Medicine, Dentistry and Veterinary Science.

Reflecting the higher salaries that business graduates expect to receive over a lifetime, the maximum student contribution for accounting, administration, economics and commerce units and the Commonwealth Grant Scheme subsidy will be aligned with law.   It will be a decision for each institution as to whether it raises the student contribution for the disciplines.  The change will affect students who commence studying at higher education providers in 2008.  Students studying prior to this date will be able to continue under the existing arrangements until the end of 2012.  Universities will be compensated during the transition period.

This Bill will also introduce three-year Commonwealth Grant Scheme funding agreements from 2009.  Institutions that finalise a three-year agreement during 2007 will be able to take advantage of this arrangement from 2008.  The new three-year terms replace the current one year terms and give Australian universities better scope to plan for the future and also cut down on administrative costs.  The agreements will reflect improved requirements for governance, financial accountability, quality and data reporting.

This Bill will also provide for the relaxation of caps on Commonwealth supported places and dom-estic full fee paying undergraduate student places.

For Commonwealth supported places, Table A and B providers will be provided with full additional funding for over-enrolments of up to 5% of funding, up from the current discretionary allowance of 1%.  There will be no penalties for over-enrolments above 5% and universities will receive the full amount of student contributions from all Commonwealth supported students they enrol.  The current arrangements which guarantee that there will be no Commonwealth Grant Scheme funding penalties for universities which under-enrol by up to 1% of funding will be continued.  Funding will automatically reduce for under-enrolments beyond the first 1% of funding.  However, a new minimum funding guarantee will mean that there will be no Commonwealth Grant Scheme funding reductions for under-enrolments beyond 5% of funding.

This Bill removes the caps on the proportion of domestic full fee paying undergraduate places in each course.  Universities, however, will still be required to offer their Commonwealth supported places in a discipline cluster before offering full-fee places.

With unmet demand for a place at Australian universities at historically low levels, and further new Commonwealth supported places to be funded in 2008, the additional flexibility will mean that students who are able to complete a course will generally not be prevented from going to university by caps on places.  Relaxing the caps on university places will allow universities greater flexibility to change their course mix and student numbers.  The reforms will support greater diversity and specialisation in the sector and will encourage the emergence of more world class institutions.

Through this Bill, the Australian Government is also increasing the number of Commonwealth Scholarships available and extending their coverage.  The number of existing Commonwealth Scholarships will be increased from around 8,500 to 12,000 at a cost of $91.4 million over four years.  Two thousand of the new scholarships will be available to students who may not otherwise qualify for a higher education place, to study two-year associate degrees as a pathway to full degrees.  This is over and above the additional Commonwealth Scholarships being provided to Indigenous students.

Participation rates for students in rural and regional areas have been largely unchanged over the last decade.  These additional scholarships will provide more help to students who really need it.

The current administrative arrangements will also be changed to ensure that scholarships are offered before or at the same time students are offered a place.  This will help students make better informed decisions about which offer to accept. Scholarship funding will now be paid directly to the student by the Australian Government.

The increased number of scholarships will help to build the nation’s skills base for the benefit of our future prosperity.  This measure is further evidence of the Australian Government’s commitment to making the Higher Education sector more responsive to student demand by making a university degree even more accessible for students.

To improve higher education access for Indigenous people, the Australian Government has created a new access scholarship.  $27.7 million will be provided annually for up to 1,000 Indigenous higher education students, particularly those who need to relocate from rural and remote areas, to receive a one-off payment of $4,000 to take up an undergraduate or enabling course.  These students will also be eligible to receive Commonwealth Scholarships to assist them with their accommodation and education costs.

This Bill also provides an additional $77 million to universities over the next four years to improve teacher education programmes so that all three and four year bachelor degree teacher education students receive a minimum of 120 days in-school teaching experience, and meet new entry level teaching standards.

The Australian Government has made an unprecedented investment in higher education through the 2007-08 Budget package.  This package builds on the Our Universities: Backing Australia’s Future package which provided an additional $11 billion to the sector over 10 years from 2004.

This Bill will promote a more diverse and internationally competitive sector, with both specialised and broader institutions.  Together with the landmark ongoing $5 billion Higher Education Endowment Fund, provided from the 2006-2007 Budget surplus, this Bill will promote excellence and quality in Australian universities for years to come.  It will provide a more flexible framework for universities to meet the needs of students and employers and additional funding to improve access to tertiary education.  I commend the Bill to the Senate.

Debate (on motion by Senator Abetz) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.

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