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Thursday, 7 December 2017
Page: 10098


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (15:47): I table the explanatory memorandum relating to the bills 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—

TREASURY LAWS AMENDMENT (ENHANCING WHISTLEBLOWER PROTECTIONS) BILL 2017

This Bill amends the Corporations Act 2001 and the Taxation Administration Act 1953 to improve Australia's corporate and tax whistleblower protections.

First, it will extend the corporate whistleblower protection regime in the Corporations Act.

Second, the Bill introduces new protections for tax whistleblowers, not available under the existing law.

The importance of protecting corporate whistleblowers has been recognised for many years. However, legislative protections under the Corporations Act since 2004 have been sparingly used and are increasingly perceived as inadequate, having regard to recent advances in the public sector, other parts of the private sector and overseas.

As part of the Government's tax integrity package, new arrangements to better protect those who blow the whistle on non-compliance with taxation laws were announced in the 2016-17 Budget.

Together these reforms will help protect whistleblowers who often expose themselves to significant personal and financial risk in order to help play a critical role in the early detection and prosecution of corporate or tax misconduct.

These reforms will also improve practices within Australian businesses, including in the areas of corporate governance and integrity. Officers, employees and taxpayers will now be aware that there is a significantly higher likelihood that misconduct will be reported.

The amendments in Part 1 of the Bill extend the corporate protection regime to a broader class of people, and expand the types of disclosures that will be eligible for protection.

In addition, the Bill strengthens the whistleblower regime in a number of ways, including by preventing companies from using the protections as a defence for failure to commence an internal investigation, or to take appropriate action in response to a disclosure. The Bill also makes it easier for a whistleblower to seek redress for detriment or damage that is caused as a result of a disclosure, or a suspected disclosure, and permits anonymous disclosures, which are currently not protected under the existing law. Finally, the Bill mandates that all large companies have a whistleblower policy.

These reforms will encourage the Australian business community to assess corporate governance frameworks, and to take stock of current whistleblower practices and procedures.

The Legislative and Governance Forum on Corporations was consulted in relation to the amendments and has approved them as required under the Corporations Agreement 2002.

Part 2 of the Bill amends the TAA 1953 to introduce tax whistleblower protections that are broadly consistent with the Corporations Act amendments.

This taxation reform is aimed at introducing arrangements that protect individuals who report breaches or suspected breaches of taxation law or misconduct in relation to an entity's tax affairs. Importantly, the new protections give whistleblowers clarity regarding those to whom they can make protected disclosures. Authorised recipients include the Australian Taxation Office and persons who are in a position to take action or investigate the alleged misconduct, such as an entity's tax agent or senior person within the entity whose tax affairs are the subject of disclosure.

The new tax whistleblower regime protects the identity of eligible whistleblowers through strict protocols on the sharing of a whistleblower's identity. The regime also allows for anonymous disclosures to be made.

The regime also protects whistleblowers from victimisation and provides them with access to remedies including compensation should they suffer detriment as a result of making a disclosure or if their identity is revealed.

The tax whistleblower regime is intended to encourage whistleblowers to disclose information relating to actual or suspected non-compliance with taxation laws to the ATO and those eligible recipients who are able to take action or investigate the alleged misconduct.

Full details of the measure are contained in the explanatory memorandum.

EXPORT CONTROL BILL 2017

Agricultural exports are an economic powerhouse for Australia, worth around $48 billion in 2016-17. We are among the top ten agricultural exporting countries in the world - exporting around two-thirds of our agricultural production annually.

Future opportunities to grow Australia's agricultural exports are bright. We sit on the edge of one of the strongest growing regions of the world.

Strengthening the competitiveness and productivity of Australia's agriculture sector is a key undertaking of this Coalition Government. From day one we have delivered practical policies and genuine investment to transform agriculture in this nation.

We demonstrated this commitment through the Agricultural Competitiveness White Paper - a $4 billion investment in our farmers and our competitive strengths in agriculture. We have been working to create a better business environment for farmers—and to build the infrastructure needed to support continued growth—through a whole raft of policies, which our agriculture sector is responding to with enthusiasm.

Maintaining market access is becoming increasingly complex and challenging - consumer demand changes and we are not the only country competing for lucrative overseas markets.

To realise opportunities for growth in our region and globally, we need our trading partners' continued confidence in the safety of Australian produce and that they are receiving what they purchased. Appropriate regulation provides assurance to our trading partners and deters that small minority whose conduct would undermine the integrity of the system and, in doing so, damage Australia's trading reputation.

We need to ensure there are appropriate regulatory settings in place to help drive productivity and increase returns at the farm gate in the future.

Over the 35 years since the Export Control Act 1982 commenced, the legislation governing agricultural exports has ballooned into a complex web of regulation to meet the needs and challenges of our dynamic international trade environment.

As a result, a total of 17 Acts and more than 40 legislative instruments are now part of the legislative framework that regulates the production and export of Australian agricultural products.

For example, under the existing legislation, a meat exporter needs to comply with requirements under the Australian Meat and Live-stock Industry Act 1997 and its regulations, the Export Control Act 1982, the Export Control (Prescribed Goods General) Order 2005 and the Export Control (Meat and Meat Products) Order 2005 to sell Australian meat into international markets.

The Agricultural Export Regulation Review conducted by the Coalition Government found that while this serves our exporters well and provides our trading partners with confidence that our exports meet their import requirements, there is scope for this regulatory framework to be modernised to make it more cohesive.

The rules for exporting need to be simpler and easier to understand and comply with.

The Export Control Bill 2017 will streamline and consolidate existing legislation concerning export certification while maintaining the standard of regulation that our trading partners expect.

The bill will make export requirements easier to understand, administer and use through reduction of complexity, duplication and ambiguity.

It will provide our exporters more opportunity to innovate and the confidence to pursue lucrative export opportunities, particularly for new and emerging industries.

The bill will also allow the Australian Government to certify a greater range of agricultural goods for export reflecting not only the importance of trade, but the increasing calls on the Australian Government to certify a broader range of agricultural goods.

The bill will incorporate existing regulatory powers that underpin our export certification into a single Act. It will introduce a broader range of monitoring, investigation and enforcement powers and include a clearer basis for the performance of verification activities across the supply chain.

These changes will improve the options for managing compliance of exporters of agricultural goods. By providing a range of compliance tools and sanctions, non-compliance can be dealt with in a swift and proportionate way—ensuring that those doing the wrong thing don't bring the system down for everyone.

This gives trading partners a further level of assurance of the integrity of Australia's export system, which upholds our international reputation as a reliable supplier of safe, high quality, premium agricultural produce.

This bill is another step in the right direction for Australian agriculture - supporting the Coalition's commitment to increase access to high-value premium markets for Australia's agriculture sector.

This bill ensures that Australian agricultural exports can continue to capitalise on the international markets of the future and meet the challenges and opportunities that come with changing demand and consumer preferences.

Extensive work has been undertaken with stakeholders throughout the development of the legislation, including industry, state and territory governments and our trading partners. The outcome is a bill that is robust, effective and meets the needs of those who use the system.

Stakeholder engagement will continue during the development of the rules and policies that support the bill so that we all have the benefit of the best export system and each set of rules is tailored to each commodity sector so that there is no greater regulatory burden than necessary.

This suite of reforms is another demonstration of the Coalition Government's commitment to opening more overseas markets and supporting the agricultural sector which feeds and clothes millions and is now is the largest contributor to Australia's national GDP growth.

For Australian farmers, reliable access to overseas markets means increased profitability and certainty for further investment in their properties and people.

For the Australian economy, it means more jobs, more exports, and higher incomes in a competitive and profitable agricultural sector.

For the Australian community more broadly, it means stronger regional communities and a more prosperous and productive Australia.

ELECTORAL LEGISLATION AMENDMENT (ELECTORAL FUNDING AND DISCLOSURE REFORM) BILL 2017

I am pleased today to present this bill, that will significantly reform the electoral funding and disclosure regime in the Commonwealth Electoral Act 1918. Reform is necessary to support the integrity of Australia's electoral system, and Australia's sovereignty, by ensuring that only those with a meaningful connection to Australia are able to influence Australian politics and elections through political donations. It will also ensure that the Commonwealth's electoral funding and disclosure regime keeps pace with international and domestic developments and provides transparency for Australian voters.

The Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 will improve the consistency of the regulatory treatment of all political actors. This includes political actors that have emerged in the Australian political landscape, who neither endorse candidates nor seek to form government, yet actively seek to influence the outcome of elections through their campaigning activities. While this is a positive indicator of the strength of Australian civil society and civic engagement, it is important that these actors are subject to the public accountability of more traditional actors, such as registered political parties or candidates.

The Electoral Act has long recognised that a range of political actors participate in Australian elections. These include political parties and their associated entities (which include unions and fundraising entities), candidates, and third party campaign groups. This bill makes several changes to the regulation of political actors, which are necessary to keep pace with modern campaigning and to assist the implementation of restrictions on foreign interference.

Firstly, a registration regime will be introduced for all third party campaigners who incur political expenditure above the disclosure threshold. Political expenditure includes the production of material that is "intended or likely to affect voting in an election". These groups are already required to report annually to the Australian Electoral Commission on this expenditure. A registration scheme will improve transparency for voters and complement this Government's reforms to the authorisation of electoral matter - enabling voters who receive material attempting to influence their vote to look up an entity on the register. Registration will also assist the AEC's compliance and education activities, by identifying political actors and providing a contact person for AEC communications. Registration of third party campaigners reflects current practices in other jurisdictions, including the UK, Canada and New Zealand.

In the 2015-16 financial year, which included the last election, third party campaign groups spent almost $40 million on election advertising, polling, and campaigning. It is clear that elections are no longer just fought between political parties and candidates, and it is appropriate that all participants who choose to expend significant amounts of political expenditure are subject to transparency.

In recognition of the prominent role that third party campaign groups play in public debate and their growing influence in elections, a new category of political campaigners who incur significant political expenditure (such as those who spend more than $100,000 in a financial year) will have disclosure obligations in-line with other prominent political actors, such as political parties. The creation of this new "political campaigner" category enables significant political actors to be subject to greater transparency, befitting their significant expenditure, while providing less onerous compliance measures for smaller third party campaigners.

The relevant disclosure obligations applicable to all political actors will also be expanded to require reporting of directors' names, political memberships and the details of government grants and contracts received.

Additionally, the bill will clarify the current definition of 'associated entity' to include the activities of groups who operate to the benefit of political parties.

The requirement to register and disclose will not curtail in any way the freedom to participate in political activity. Instead, it will provide transparency, allowing Australian electors to access better information when evaluating the efforts of those who seek to influence Australians' voting decisions, and the outcomes of Australian elections.

There has been growing concern amongst the community about foreign interference with our domestic political landscape. Media reports of foreign donations to parties, candidates and third parties have affected the perceived integrity of elections, which is critical to our peaceful democratic government. The need to address this concern was highlighted by the Joint Standing Committee on Electoral Matters in its Second Interim Report on the Inquiry into the Conduct of the 2016 Federal Election, which recommended that legislative action be taken to prohibit foreign donations.

To keep foreign money out of Australian elections, political parties, candidates, Senate groups and significant political campaigners will be banned from receiving foreign gifts over $250, or any money transferred from foreign accounts.

Because many third party campaigners (such as charities) also carry out non-political activities, they will not be prevented from receiving foreign gifts. Instead, third parties will be prevented from using foreign money for political expenditure. It is important that third party campaigners are covered by the measures in the bill to level the playing field. Banning foreign gifts to political parties, but allowing third parties to use foreign gifts to incur political expenditure, would have the effect of allowing foreign interests to fund political campaigning by some entities but not others.

A special exemption has been provided for significant political campaigners, where they are registered charities, or registered organisations under Fair Work legislation, to afford these entities the less onerous compliance measures required of third party campaigners. This reduces the regulatory burden on such organisations while maintaining the integrity of the foreign donations ban.

As a consequence, this bill does not restrict the ability of charities to receive foreign gifts for non-political purposes. Nor does it restrict the political activities that charities can engage in with contributions from Australians.

To maintain the integrity of the foreign donations ban, no entity will be permitted to use foreign money for their political expenditure. Foreign interests do not have a legitimate role in Australian elections, so they should not be funding things like election advertising, or handing out how-to-vote material at polling booths - regardless of whether these activities are carried out by a political party or any other entity. This approach is consistent with foreign donations bans in other jurisdictions.

Appropriate anti-avoidance measures are also included in the bill so that funnelling foreign donations through an intermediary, setting up a shell company in Australia, or splitting donations to avoid thresholds are banned.

The bill also contains improvements to the public election funding regime. Public election funding is payable in relation to any candidate who received more than four percent of the total first preference votes cast in an election. While this qualification requirement remains unchanged, the bill will limit public election funding to demonstrated electoral spending, which will prevent political actors from profiteering and achieving private gain by standing candidates.

The bill introduces reforms to one of Australia's oldest pieces of legislation - the 99-year-old Commonwealth Electoral Act 1918 - to improve the funding and disclosure regime for the benefit of the Australian public and Australian voters. This will improve public confidence in Australia's political process by increasing the accountability of those involved in political finance and election campaigns. It will also restrict foreign influence on Australian political actors, including campaigners, through restrictions on foreign donations.

Ordered that further consideration of the second reading of these bills be adjourned to 5 February 2018, in accordance with standing order 111.

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