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Financial Framework Legislation Amendment Bill (No. 2) 2012
- Parl No.
Fawcett, Sen David (The ACTING DEPUTY PRESIDENT)
- Question No.
Fifield, Sen Mitch
Financial Framework Legislation Amendment Bill (No. 2) 2012
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- Start of Business
- Social Security Amendment (Supporting Australian Victims of Terrorism Overseas) Bill 2011
- Appropriation Bill (No. 5) 2011-2012, Appropriation Bill (No. 6) 2011-2012
- Parliamentary Counsel and Other Legislation Amendment Bill 2012
- National Vocational Education and Training Regulator (Charges) Bill 2012
- Broadcasting Services Amendment (Digital Television) Bill 2012
- Financial Framework Legislation Amendment Bill (No. 2) 2012
- Migration (Visa Evidence) Charge Bill 2012, Migration (Visa Evidence) Charge (Consequential Amendments) Bill 2012
- National Water Commission Amendment Bill 2012
- AUDITOR-GENERAL'S REPORTS
- QUESTIONS ON NOTICE
Friday, 22 June 2012
Senator FIFIELD (Victoria—Manager of Opposition Business in the Senate) (13:50): As I rise to speak, I should note that we have just seen the 12th package of bills guillotined in this place as a result of the government's guillotine motion passed earlier in the week. Senator Edwards, I know, was extremely keen to speak on the Broadcasting Services Amendment (Digital Television) Bill 2012, but that right for him as a senator to speak has been denied, yet again. I just thought it important to note that as we commence this particular debate.
The bill before us, the Financial Framework Legislation Amendment Bill (No. 2) 2012, is probably one of the drier pieces of legislation which comes before this place. I see one of the clerks raise an eyebrow. I do appreciate that all pieces of legislation are equally scintillating for the clerks. They can find beauty and elegance in each piece of legislation!
This bill seeks to make technical amendments to 21 acts across six portfolios. It forms part of an ongoing program of improving the financial framework as issues arise. The coalition supports in principle the program. This is the 10th financial framework amendment bill since 2004. It seeks to correct anomalies, add clarity and ensure consistency across government acts. It also aims to ensure that legislation is up to date and properly reflects actual and efficient financial practices. The program also seeks to ensure that financial arrangements are consistent with constitutional requirements. Some have suggested to me that this is tedious work. It may well have its arduous elements but it is nevertheless important work.
This bill is, as I indicated, broad in its reach, covering some 21 acts, but the amendments, although technical, are important and vigilance is required. We always have to be mindful of unintended consequences or inequitable outcomes, which is why it is important that all pieces of legislation, regardless of how innocuous they may seem, receive the scrutiny of this place. We obviously do not want to see changes that will inadvertently make people worse off.
The coalition has examined closely the amendments—Senator Cormann in particular has paid close attention to these. A number of amendments affect the agriculture portfolio. In addition, other amendments which have been closely examined relate to the validation of certain benefits under the Defence Force Retirement and Death Benefits Act 1973. They were made as a result of Commonwealth administrative breaches. There are also amendments proposed across various superannuation related acts—and I know that is an area of policy that you, Mr Deputy President, take a close interest in. These would put in place provisions for the Commonwealth to recover inadvertent overpayments in line with provisions under the Financial Management and Accountability Act 1997. Other amendments in the superannuation area would allow payments made between a recipient's death and the time when the Commonwealth is notified to be recoverable from the deceased person's estate.
There are also provisions under the Taxation Administration Act 1953 which would allow the Commissioner of Taxation or their delegate to make discretionary recoverable advance payments. This relates to benefits that may be in dispute but for which entitlement is likely to be established or re-established. This would only be applied if the Commonwealth were satisfied that the eventual costs associated with halting payments would be greater than if the advances were made. This is designed to require considerations of efficient, effective and economical factors in making payments consistent with the FMA Act.
In the agriculture portfolio, there are amendments which clarify the arrangements around Commonwealth support payments to industry bodies. These payments are subject to a limit of 0.5 per cent of an industry's annual gross value of production, known as GVP. They are based on data prepared by the Australian Bureau of Agricultural and Resource Economics and Sciences, ABARES. In practice, the most up-to-date ABARES data may not be available until after the payments are required. As a result, payments made could inadvertently exceed the 0.5 per cent limit. The amendments would allow for determinations to be made by 31 October. If the amount paid ultimately exceeds 0.5 per cent, the recipient body will pay to the Commonwealth an amount equal to the excess. If an amount has not been determined by 31 October, the payment will be based on the industry's GVP from the previous year. The shadow minister for agriculture, Mr Cobb, has been consulting with relevant groups and organisations and no concerns have emerged.
In the agriculture portfolio again there are also amendments which put in place more efficient ways of recovering administrative costs associated with making payments to agencies. Under the National Residue Survey Administration Act 1992, there are amendments which align payment approval requirements with actual practice. The NRS is entrusted with monitoring for harmful residues in Australian agricultural products and is funded through industry levies.
In relation to amendments in the DFRDB and other areas of superannuation, it is important that the government commits to fully communicating any changes to scheme members—for example, the changes associated with provisions to recover overpayments for a deceased person's estate. The amendments under schedule 2 of the bill in relation to the DFRDB scheme, importantly, have provisions in place to offset debts owed by members as a consequence of previous administrative breaches.
The changes in this bill are obviously reasonable. There has been a genuine effort to improve the efficiency of the financial framework, and that is welcome. This bill is in nature technical. The work behind it, I am sure, has been forensic. I do say, however, that it is a pity that the good and hard work of the Commonwealth officers behind this bill and their diligence are not reflected by the executive government in its broader management of Australia's finances. You do, for instance, have a government that refuses to subject the $50 billion NBN project to a cost-benefit analysis and is prepared to risk $10 billion of borrowed taxpayers' money on speculative clean energy projects. I see Senator Whish-Wilson here in the chamber; that $10 billion program will be one of Senator Brown's legacies. It was part of the price that the Greens extracted from the government to support them and to become part of the formal governing alliance of Labor and the Australian Greens.
If I can provide Senator Whish-Wilson with any initial advice as he comes to this place it is that he learns from the mistakes of his immediate predecessor, Senator Brown. Senator Brown was someone who really had no regard for the value of a dollar, particularly a dollar compulsorily acquired from the Australian taxpayer. Every single dollar that is put to a purpose by the Commonwealth is an opportunity cost. If you spend a dollar on something it means that there is a more worthy cause that that particular dollar cannot be spent on. I hope Senator Whish-Wilson, with his background in finance, brings an economic rigour to bear in the Australian Greens, which has so far to date been absent.
The current government has demonstrated itself over its five years in office—it does feel a lot longer than that, I must say, not just for us on this side but for the Australian public as well—to be remarkably consistent in one respect, and that is in relation to profligacy. I well recall the former Prime Minister, Mr Rudd—who is, as we know, on the comeback trail; we will probably see him resuming that position in the not-too-distant future—when he was the opposition leader. He was the official opposition leader rather than the Prime Minister's shadow, which he is at the moment. I remember at that time that Mr Rudd was at an ALP National Conference—Senator Evans will correct me if I am wrong—where, referring to the Howard government, he said, 'This reckless spending must stop.' Now that was said against the backdrop of a government that had delivered 10 budget surpluses, a government that had eliminated $96 billion of Labor government debt, a government that had established the Future Fund and a government that had lived within its means. But let us just put all that aside for one second. Mr Rudd said, 'This reckless spending must stop.'
Also at that time Mr Rudd—and I remember the television ads with him standing in a bright room—said to camera: 'Some people call me an economic conservative. It is a badge I wear with pride.' And we were all meant to believe that Mr Rudd was just a younger, fresher version of Mr Howard. The Australian public were meant to believe that. Back then, we had Mr Rudd accusing the Howard government of reckless spending. We had Mr Rudd saying that he was an economic conservative—a badge that he wore with pride. He was misleading and deceptive to the Australian public. If the ACCC had jurisdiction over the comments of politicians—and I am not suggesting for a second it should—he would have been done for misleading and deceptive conduct, without a doubt.
We recall Mr Swan's first budget, where he stood up and proudly proclaimed that he was going to be delivering a budget surplus in, I think, excess of $15 billion. He also proudly proclaimed that the budget surplus as a percentage of GDP would exceed the target of 1.5 per cent that he himself had set for the government. As we know, the final budget outcome for the first financial year of this government was a deficit, and it has been followed by deficits every year since. This government has delivered four solid budget deficits and it is well on its way to delivering a fifth budget deficit. Mr Swan has forecast a budget surplus. It is a wafer-thin one. At best you would say it is a technical surplus, but there is absolutely no confidence in the community or on this side of the chamber that that budget will ultimately, when we see the final budget outcome in September next year, after the next election, deliver a surplus. There is no confidence at all that it will be anything other than another budget deficit. It is something that annoys me greatly, for a number of reasons. The first is that as someone who worked—
The ACTING DEPUTY PRESIDENT ( Senator Fawcett ): Order! Senator Fifield, I draw your attention to the requirement to be relevant to the bill.
Senator FIFIELD: Thank you, and I am being relevant to the bill, because this bill is in relation to financial framework legislation. I am talking about the broad context of the financial management of this government. What frustrates me greatly in relation to this government's financial management—the broad financial framework, the grand architecture of this government's fiscal policy—is that the previous government worked extremely hard to pay off $96 billion of debt that was inherited. I know, because I worked on a Treasurer's staff. I saw how hard that was. I know, because I served as a senator during some of the time of the Howard government. I know how difficult it was to pay off that $96 billion and how it took the previous government the best part of a decade to pay off that money. It was done without any help from the Australian Labor Party. Every savings measure that was put forward was rejected. You would think that if you were responsible for racking up that debt in the first place you might feel some responsibility for actually repaying that debt. That did not happen, and already we are approaching a net debt of $145 billion. This government has already exceeded, in a little over four years, the debt that was accumulated under the Hawke-Keating government. So that annoys me, because I know how hard it is to repay debt, and I tend use the rule of thumb that for each year of bad government it takes three years of good government to undo the damage.
Another reason the profligacy of this government annoys me is in relation to my own portfolio—disabilities. The parliament is united, I am pleased to say, on supporting the establishment of a National Disability Insurance Scheme. The Productivity Commission has estimated, on advice updated by the Australian Government Actuary, that there would need to be an additional $7.5 billion per year to eliminate waiting lists for supported accommodation, aids and equipment, and other things that people with disability need. In the Commonwealth budget $1 billion was allocated towards the National Disability Insurance Scheme, on which the Productivity Commission, over the forward estimates—the period that the $1 billion covers—recommended that $3.9 billion be spent. So there is a shortfall there.
The current government is forecast to spend, in the next financial year, above $7 billion on its annual debt interest costs. That means that if different decisions had been taken over the course of this government—if the government had not gone into deficit, if it had not gone into debt—there would be the funds to fully cover the resources required for a National Disability Insurance Scheme. I come back to a point I made earlier, and that is that for every dollar spent there is an opportunity cost. We see that most clearly with the $7 billion plus per annum being spent on the government's debt interest bill. Every dollar of that $7 billion plus is a dollar that is going towards absolutely nothing—not to a bridge, not to a road, not to a school, not to a supported accommodation place but to absolutely nothing. That is what that $7 billion plus a year buys you: absolutely nothing.
I know it is in vogue now to say that going into debt does not really matter, and of course there are occasions when Commonwealth budgets go into deficit. But as far as possible a government should live within its means. As far as possible a government should be a careful steward of each dollar of taxpayers' money, because there is a cost to not being a good steward. The government can find $10 billion for Senator Bob Brown's legacy scheme, a scheme that will pick losers. It is bad enough when governments try to pick winners, but this scheme consciously, deliberately, goes about picking losers. Government should make sure that it focuses on its core business. For me, the core business of government is to assist people who find themselves facing additional challenges for reasons beyond their control. That core business is compromised when governments are profligate, when governments waste the taxpayers' money.
I hope that the government can bring the same rigour, the same evidence based approach, that is shown in the Financial Framework Legislation Amendment Bill (No. 2) 2012 to its conduct and management of the Commonwealth's finances so that maybe they can achieve what Kevin Rudd wanted, and that is to be economic conservatives. I live in hope, but I will not be holding my breath.