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Wednesday, 2 November 2011
Page: 8012

Senator CHRIS EVANS (Western AustraliaMinister for Tertiary Education, Skills, Jobs and Workplace Relations and Leader of the Government in the Senate) (17:31): 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—


General Introduction

People smuggling trades on falsehoods and on the exploitation of people who seek protection or asylum in this country.

Successive Australian governments have condemned people smuggling ventures whether organised by individuals or by transnational criminal networks.

People smugglers have no humanitarian motives. Their only motives are profit, and planning and launching ventures without regard for the safety of the children, women and men whose lives they put at risk.

No one in this Parliament will forget the tragic scenes of the vessel known as SIEV 221 crashing against the rocky cliffs of Christmas Island on 15 December 2010, resulting in the deaths of at least eight children and 22 adults and many others never recovered from the sea. Nor do we ever forget the sinking of SIEV X some 10 years ago which claimed the lives of 353 asylum seekers, including 146 children, 142 women and 65 men. These and many other tragedies resulting from people smuggling ventures should have never occurred.

The effective prosecution of people involved in organising and facilitating these inherently dangerous voyages sends a clear message that the Australian Parliament does not tolerate people smuggling.

While we work with our regional partners, the UNHCR and other organisations to bring refugees to Australia through appropriate channels, we must ensure people smuggling operations that bring people to Australia continue to be effectively criminalised.

The purpose of this bill is to give clarity to the laws that have criminalised people smuggling and aggravated people smuggling offences for more than a decade. This bill does not affect the rights of people seeking protection or asylum in Australia.

People smuggling offences contribute to Australia's implementation of its obligations to criminalise people smuggling under the Protocol against the Smuggling of Migrants by Land, Sea and Air supplementing the United Nations Convention on Transnational Organised Crime.

Clarification of the phrase ' no lawful right to come to Australia '

The purpose of this bill is to make it clear that the phrase 'no lawful right to come to Australia' refers to requirements under Australia's domestic law that people must have a visa that is in effect to lawfully come to Australia, or fall within one of the limited exceptions to that rule outlined by the Migration Act. For example a New Zealand citizen with a valid passport is exempt from requiring a visa to come here.

This is the way the provisions have been consistently interpreted since their introduction in 1999. Amendments to the Migration Act in 1999 made it an offence to organise or facilitate a group of five or more persons coming to Australia if those persons did not have a lawful right to come to Australia.

No impact on the rights of asylum seekers

The amendments expressly clarify the operation of people smuggling offences in the Migration Act.

The offences deal with the serious crimes of people smuggling and aggravated people smuggling, and do not affect the treatment of individuals seeking protection or asylum in Australia. As such, the amendments are consistent with Australia's obligations under international law and do not affect the rights of individuals seeking protection or asylum, or Australia's obligations in respect of those persons. This is confirmed by advice provided to the Government by the Attorney-General's Department.

Retrospective application

This bill does not alter any of the elements of the existing people smuggling offences in the Migration Act.

The amendments would apply retrospectively from December 1999 when the words 'lawful right to come to Australia' were first inserted into the people smuggling offences in the Migration Act. Retrospective application is necessary to avoid uncertainty about the validity of previous convictions and to maintain current prosecutions.

The effect of the retrospective application is to clarify an existing understanding of the laws, and to ensure convictions for people smuggling offences already made as well as prosecutions underway, are not invalidated.

There are exceptional circumstances that justify retrospectivity for this bill. Those circumstances are that it would not be appropriate to risk a significant number of prosecutions being overturned as a result of a previously unidentified argument in relation to the words 'no lawful right to come to Australia'.


This measure is critical to ensure Australia's laws criminalising people smuggling are clear and effective and reflect the Parliament's intention when the laws were put in place.


The Higher Education Support Amendment Bill (No. 2) 2011 amends the Higher Education Support Act 2003 to implement 2011-12 Budget measures and update maximum payment amounts to provide for indexation and other variations.

The Bill also clarifies the Government’s policy in relation to Australian citizens studying at an overseas campus of an Australian provider and their eligibility for Commonwealth support and income contingent loans.

The 2011-12 Budget included:

additional funding of $1.2 billion over four years to fund growth in university enrolments;

an extra $550 million for improved indexation for universities, to put them on a more sustainable funding base;

$500 million for the Regional Priorities Round of the Education Investment Fund; and

additional funding of $109.9 million over four years for regional loading to help overcome the higher costs of regional campuses.

The Budget also included a reduction in HECS-HELP upfront discounts, providing savings of $479 million to assist in paying for the Government’s increased investment in higher education.

From 1 January 2012, the Government will lower the HECS-HELP discount for upfront student contribution payments of $500 or more from 20 per cent to 10 per cent.

Currently students can make a full up-front payment of their student contribution amount by paying 80 per cent of this amount for all of their units in a course of study with the same census date. The Commonwealth pays the remaining 20 per cent of the student contribution amount.

Students can also pay only part of their student contribution up-front and receive a 20 per cent discount for any payments totalling $500 or more for units in a course of study with the same census date.

The reduction in the upfront discount will affect students who can afford to pay upfront and choose to do so. It will not affect students who fund all of their university studies through HECS-HELP deferred loans and it will not affect university revenues.

The HELP voluntary repayment bonus, applied to payments of $500 or more, will also be reduced from 10 per cent to 5 per cent.

Students can make a voluntary repayment towards their HELP debt to the Tax Office at any time. Voluntary repayments of $500 or more currently attract a 10 per cent bonus on the payment amount. Effectively the Government pays this 10 per cent by removing it from the Student’s debt.

The decreased bonus for voluntary repayments will apply to all HELP debts.

This savings measure will help the Government to maintain its commitment to fund a demand driven supply of undergraduate places and to ensure low income people get the opportunity of higher education.

The Act will be amended to provide for an increase in funding for over enrolment of Commonwealth supported places that has occurred in 2011.

Funding for over enrolment of Commonwealth supported places was raised from 5 to 10 percent above funding for allocated places for 2010 and 2011 as a transitional measure prior to the introduction of the demand driven funding system for higher education funding from 2012.

From 2012, the Government will fund all undergraduate Commonwealth supported places provided by public universities.

The Bill increases the maximum amounts for other grants under section 41-45, and Commonwealth scholarships under section 46-40 of the Act to provide for indexation and other variations effecting the 2012-14 years, and to include the 2015 funding year.

There is currently ambiguity in the Act about its application to Australian citizens studying at the overseas campuses of Australian universities.

This has resulted in a small number of Commonwealth supported places being offered by Australian universities to Australian citizens studying at overseas campuses. These students have also been able to access the HECS-HELP scheme.

As students are only required to pay back their HECS-HELP debt if they file an Australian tax return, there is a higher risk that HECS-HELP debts incurred offshore will not be repaid, or not repaid for a longer period of time.

The Bill amends the Act to clarify that Australian citizens are not entitled to Commonwealth support or access to an income contingent loan when they are undertaking their course of study primarily overseas.

Current students will not be affected. Universities that currently have students in Commonwealth supported places at overseas campuses will be able to maintain the status of these students for the duration of their current courses.

The Bill reflects the Government’s continued commitment to growing Australia’s higher education sector and to expanding opportunities for Australians to obtain a high quality higher education.


I am pleased to introduce this legislation which will bring into affect a key part of the Government’s National Health Reforms. The establishment of the Independent Hospital Pricing Authority will help to deliver a more sustainable, efficient and transparent health system for Australians.

The introduction of this Bill and, once enacted, the establishment of the Pricing Authority build on this Government’s strong track record in delivering health reform and will complement the work of the Australian Commission on Safety and Quality in Health Care and the National Health Performance Authority.

This Bill is a direct result of the Government’s Council of Australian Governments agreement with all states and territories. The final terms of this agreement were signed on 2 August.

There are a number of critical elements of these reforms - including 1,300 more sub acute beds across Australia, new targets and reward funding for emergency departments and elective surgery, transparent performance reporting through the MyHospitals website and the establishment of Local Hospital Networks and Medicare Locals to improve local governance.

In total the agreement will mean an additional $19.8 billion for hospitals over this decade from the Commonwealth Government. $1 billion of this has already flowed to states for new sub acute beds and faster access for patients to services.

The Commonwealth will be a true partner in the hospital system with a commitment to funding 50 per cent of the growth funding for hospital services. This will be fully implemented from 1 July 2017, with a 45 per cent commitment from 1 July 2014. This extra growth funding will apply to the increase in the cost of services - as well as the increasing demand for new services with the ageing of the Australian population.

This commitment to growth is vitally important as the states would not have the capacity to fund the increasing cost of services on their own - particularly since the Commonwealth’s share of hospital funding has been dropping over the past decade. This agreement will once and for ever put that to an end.

This also creates a better incentive for the Commonwealth to invest in primary and preventative health services to keep people healthy and out of hospital.

However we were not going to agree to extra funding without critical reform. Currently, the Commonwealth provides funding for public hospitals through a block grant, negotiated through Health Care Agreements. It is up to the individual states to determine how this funding is distributed across public hospitals and health services.

The previous health agreement negotiated in 2008 provides $64 billion - which is a lot of money for the Commonwealth not to know what services are being funded, or the level to which they are funded. It is without significant levers to drive change and improvement across those public hospitals.

So in this new health system there will be no more billion dollar block grants: no more blank cheques with no accountability for where that money is spent.

This is why the reform agreement will deliver activity based funding across the country from 1 July 2012. Local Hospital Networks will be paid for the services that they actually provide.

This is a major microeconomic reform that will help to increase the efficiency of services because the introduction of price signals will mean there is an incentive for hospitals to maximise the services they deliver at or below the efficient price. This will ensure that more services can be delivered locally.

It will also be important for growing areas of Australia where often under the old system public hospital funding does not catch up with the demands that they have.

And it is important to taxpayers that their funding is transparently reported - with funding according to services provided paid directly to Local Hospital Networks through a new National Health Funding Pool. This means Australians will know what is being bought through our massive investment in hospitals -what services are delivered, by which Local Hospital Network they are delivered, and at what cost. The reform will also help to identify underperforming hospitals so that those causes can be remedied - and the lessons of highly performing hospitals can be shared.

The introduction of Activity Based Funding was a key recommendation of the National Health and Hospitals Reform Commission. They also concluded that the introduction of activity based funding would result in efficiencies of between $500 million and $1.3 billion - the equivalent of which would be hundreds of extra hospital beds.

It is also of interest to the private health sector - where activity based funding has been in operation for some time. Once in national operation across public hospitals there will be unprecedented amounts of information available. In the future this will help to consider smarter deployment of resources. This is a system that has been successfully deployed in Victoria and South Australia previously.

However a key difference from the system currently in place in Victoria and SA is that the price for services will be determined independently from Government and health department bureaucrats.

That means that the decision will be based on an assessment of the costs, facts and projections - rather than the political or budgetary interests of the government at the time. This is done by creating a new Authority - at arm’s length from all levels of Government - to independently determine the efficient price.

The Authority will have strong independent powers: it will be for public hospitals what the independent Reserve Bank is for monetary policy. This is unprecedented for the public hospital system.

The result will be a thorough and rigorous determination without fear or favour to Governments. The Government is confident that the Authority will provide the health system with the stability and robustness that the Reserve Bank has provided for monetary policy for decades.

And because the Government will fund growth at a fixed percentage of the price that the Pricing Authority determines - the funding that hospitals will receive won’t come down to the traditional blame game negotiations - but rather what is actually needed to be invested. The umpire’s ruling will be final and the Commonwealth will pay its share of growth on that basis. In deciding the efficient price, the Authority will take submissions from the public, stakeholders and governments and then make its own determination of what an efficient price is.

It will have regard to core principles such as access, clinical safety and quality, efficiency and effectiveness and the financial sustainability of the system. It will also consider the actual costs of delivering services in a wide range of hospitals and the expected changes in the costs of services from year to year.

These reforms will help to ensure that hospital financing can dynamically adjust to:

shifting populations;

local demographic characteristics;

changing costs of delivering medical services from technological and clinical innovation; and

the complexity and location of delivering hospital services.

The IHPA will also have a role in determining amounts for block funding - which will be used in hospitals that have low levels of activity and therefore would not be able to meet their community service obligations on activity based funding alone. This will provide important protection for rural hospitals, and for specialised units such as bone banks. .

The Authority will also determine loadings to apply on top of the national efficient price - taking into account factors for legitimate and unavoidable variations in the cost of service delivery - including those driven by hospital size, type and location.

The Bill outlines specifically the functions of the Authority that give effect to the COAG agreement. These include:

Determining the national efficient cost and price for health care services provided by public hospitals;

Developing classification systems for health care and other services;

Determining adjustments to the national efficient price to reflect legitimate and unavoidable variations in the costs of delivering health care services;

Formulating data standards and requirements relating to public hospital functions and costs, to be provided by states and territories; and

Providing assessments or recommendations in regards to health care cost-shifting and cross-border disputes.

The last point is particularly important - as the Australian health system has never had a mechanism before to help resolve cost shifting and cross border issues in a definitive, long lasting and nationally consistent manner.

The membership of the Authority is prescribed in this legislation. The Chair will be appointed by the Commonwealth, the Deputy Chair appointed with the agreement of the states and territories, and seven remaining members appointed on agreement of the Commonwealth, states and territories.

COAG agreed last Friday two important appointments to this Authority - the Chair who will be Mr Shane Solomon and the Deputy Chair who will be Mr Jim Birch. Both have extensive experience in health administration and in activity based funding in Victoria and South Australia respectively.

At least one member of the authority will have particular health care expertise in rural and regional areas. This will ensure the Pricing Authority understands the challenges that our country’s expanses pose as we strive to deliver world leading health care to all Australians.

There will also be two important committees established under the legislation - for clinical expertise and for jurisdictional representations. Having appropriate clinical expertise will be crucial to classifying hospital activity in clinically meaningful ways. Likewise it will be important for the Authority to have dialogue with representatives from the states, territories and the Commonwealth - particularly so that the implementation of the new arrangements happens successfully.

As specified in the COAG agreement, there will be an interim Authority established as Commonwealth executive agency. This will be until the permanent body is established as a statutory authority through this bill.

Both the Chair and Deputy Chair will start work with the interim Authority to ensure a smooth transfer to the statutory authority once that starts operation.

Consistent with COAG’s original decision in April 2010 and re-affirmed in the National Health Reform Agreement, the Pricing Authority is to be established as an independent, statutory authority under the Financial Management and Accountability Act 1997, providing assurance as to its operational autonomy and integrity.

A Chief Executive Officer will be responsible for the day-to-day management of the Pricing Authority, appointed by the Pricing Authority in consultation with the Minister. The Chief Executive Officer will serve on a full time basis for a period of up to five years and is eligible for re-appointment.

In carrying out its primary functions, the Pricing Authority will inevitably come into possession of confidential material, including personal information.

The Bill establishes stringent safeguards to protect that information by creating an offence for unlawfully disclosing that information. This recognises the potential seriousness that flows from improper use of such information.

This legislation is already a bipartisan bill - as it comes to Parliament based on the COAG agreement reached with three states with Liberal Premiers. However the Government also hopes that this can be a bipartisan bill in the federal parliament and that the Leader of the Opposition will see the importance of reforming the health system.

We know that he is already a supporter of activity based funding. We know this because he said so just last week to the dinner of the Australian Medical Association in Parliament House:

“I’m pleased that we are moving towards a system of case mix or efficient price funding because in the end it’s important that if people do more, they get more. We have to fund activity which is what case mix funding does. Block funding tends to fund inactivity.”

That wasn’t the only time either. On 15 February 2011 he described it as “a positive step”, and on 5 August 2010 he said that he would implement such a system if he won the last election. However that last pledge had to be taken with a grain of salt since he also promised to cut all the funding we had allocated to make this happen.

But even earlier than that - he supported these reforms way back when he was health minister, saying on 18 September 2007 it meant a “focus on services rather than on global budgets”.

So this is yet another test of the Leader of the Opposition. Does he support what he has been clear he thinks is the right policy - or will he continue his cheap and cynical approach of opposing all reform that this Government works on?

I hope for the sake of the millions of Australians who rely on public hospital services that he chooses the former. Patients, doctors and nurses have been waiting too long for the efficiency, transparency and proper funding that this bill will help to deliver.

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

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