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Notice given 2 December 2005

1415  Senator Evans: To ask the Minister representing the Minister for Employment and Workplace Relations—With reference to Job Network placements for Indigenous Australians:

(1) What is a Job Network placement; and (b) what is the duration of a placement.

(2) (a) Is it a paid placement; (b) are wages subsidised by the Government; (c) what is the percentage and/or amount of this subsidy; and (d) what is the average job placement wage.

(3) What are the differences between the active participation model, and what existed previously for job placements.

(4) For each year since the inception of the Job Network to date, how many Job Network placements have been achieved for Indigenous Australians.

(5) Page 3 of the department’s submission to the House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs inquiry into Indigenous employment includes a table of job placements since 1998, which shows that there was a significant decline in the number of placements in 2003: (a) can an explanation be provided for this decline; and (b) was the decline due to the shift to the active participation model.

(6) With reference to the Australian Bureau of Statistics report, ‘National Aboriginal and Torres Strait Islander Social Survey of 2002’: (a) are Job Network placements included in the 2002 Indigenous employment figures; and (b) have the figures always been included; if not, when were they first included.

(7) (a) How many Job Network placements for Indigenous Australians have resulted in ongoing long-term employment; and (b) when were these figures obtained.

(8) (a) What is the relationship between Job Network placements and Community Development Employment Projects (CDEP); (b) are CDEP participants encouraged to seek work through a Job Network placement; and (c) how many CDEP participants have moved from CDEP to a Job Network placement for the financial years 2003-04 to 2005-06 to date.

1418  Senator Evans: To ask the Minister representing the Minister for Employment and Workplace Relations—

(1) In relation to the funding provided for the Welfare to Work package, shown on pages 133-134 of Budget Paper No. 2: (a) how do those figures relate to the figures provided by the department in response to written questions W156, W157, W158 and W159 provided to the Employment, Workplace Relations and Education Legislation Committee during estimates hearings in June 2005; and (b) how do the program and payment cost figures provided in those answers relate to the Department of Education and Workplace Relations funding figures in the budget paper for the following initiatives: (i) increasing participation of parents, (ii) increasing participation of people with a disability, (iii) increasing participation of the very long-term unemployed, and (iv) increasing participation of the mature aged.

(2) Can the Minister confirm that in response to W156, relating to the initiative entitled ‘Increasing participation of people with a disability’, the department has provided figures showing net additional estimated program costs that total $302 million over the 3 financial years to 2008-09.

(3) Can the Minister confirm that in response to W156, the department has provided figures showing net estimated payment savings that total $590.5 million over the 3 financial years to 2008-09.

(4) Can the Minister confirm that the budget paper shows a net additional cost of $481.9 million over the 4 financial years to 2008-09, or $449.3 million over the 3 financial years to 2008-09.

(5) Can the Minister explain the discrepancy between the figures provided in W156, which show a net saving of $288.5 million (total of (2) and (3) above) in relation to the initiative entitled ‘Increasing participation of people with a disability’ for the 3 financial years to 2008-09 and the $449.3 million net additional cost as provided in the budget paper over the same period.

(6) Do the funding figures in the budget paper include other funding items beyond those identified in W156; if so, can these be identified, along with the value of each of these items for each financial year from 2005-06 to 2008-09.

(7) Can the Minister confirm that in response to W157, relating to the initiative entitled ‘Increasing participation of parents’ the department has provided figures showing net additional estimated program costs that total $386.3 million over the 3 financial years to 2008-09.

(8) Can the Minister confirm that in response to W157, the department has provided figures showing estimated net payment savings that total $424.5 million over the 3 financial years to 2008-09.

(9) Can the Minister confirm that the budget paper shows a net additional cost of $282.4 million over the 4 financial years to 2008-09, or $255.9 million over the 3 financial years to 2008-09.

(10) Can the Minister explain the discrepancy between the figures provided in W157, which show a net saving of $38.2 million (total of (6) and (7) above) in relation to the initiative entitled ‘Increasing participation of parents’ for the 3 financial years to 2008-09 and the $255.9 million net additional cost as provided in the budget paper over the same period.

(11) Do the funding figures in the budget paper include other funding items beyond those identified in W157; if so: (a) can these figures be identified; and (b) what is the value of each of these items for each financial year from 2005-06 to 2008-09.

(12) (a) Can the Minister explain why the funding for the initiative entitled ‘Increasing participation of parents’ increases each financial year to $163 million in 2007-08 and then falls to just $2.2 million in 2008-09; and (b) what are the reasons for such a dramatic drop in funding for this initiative in 2008-09.

 

 (13) Can the Minister confirm that in response to W158, relating to the initiative entitled ‘Increasing participation of the mature aged’, the department has provided figures showing net additional estimated program costs that total $71.3 million over the 3 financial years to 2008-09.

(14) Can the Minister confirm that in response to W158, the department has provided figures showing estimated net payment savings that total $18.6 million over the 3 financial years to 2008-09.

(15) Can the Minister confirm that the budget paper shows a net additional saving of $5.6 million over the 4 financial years to 2008-09, or a saving of $1.5 million over the 3 financial years to 2008-09.

(16) Can the Minister explain the discrepancy between the figures provided in W158, which show a net cost of $52.7 million (total of (13) and (14) above) in relation to the initiative entitled ‘Increasing participation of the mature aged’ for the 3 financial years to 2008-09 and the net savings of $1.5 million as provided in the budget paper over the same period.

(17) Do the funding figures in the budget paper include other funding items beyond those identified in W158; if so: (a) can these be identified; and (b) what is the value of each of these items in each financial year from 2005-06 to 2008-09.

(18) Can the Minister confirm that in response to W159, relating to the initiative entitled ‘Increasing participation of the very long term unemployed’ the department has provided figures showing net additional estimated program costs that total $310.6 million over the 3 financial years to 2008-09.

(19) Can the Minister confirm that in response to W159, the department has provided figures showing estimated net additional costs that total $34.7 million over the 3 financial years to 2008-09.

(20) Can the Minister confirm that the budget paper shows a net additional saving of $359.9 million over the 4 financial years to 2008-09, or a saving of $355.2 million over the 3 financial years to 2008-09.

(21) Can the Minister explain the discrepancy between the figures provided in W159, which show a net cost of $345.3 million (total of (18) and (19) above) in relation to the initiative entitled ‘Increasing participation of the very long term unemployed’ for the 3 financial years to 2008-09 and the net savings of $355.2 million as provided in the budget paper over the same period.

(22) Do the funding figures in the budget paper include other funding items beyond those identified in W159; if so: (a) can these be identified: and (b) what is the value of each of these items for each financial year from 2005-06 to 2008-09.

1419  Senator Murray: To ask the Minister representing the Minister for Revenue and Assistant Treasurer—

(1) The Australian Prudential Regulatory Authority (APRA) is currently considering changes to the regulation of mortgage risk: (a) is APRA seeking to differentiate between how big banks and small banks manage residential mortgage risk; if so, why; and (b) is the risk the same, regardless of the size of the bank in question.

(2) (a) Is APRA considering differentiating the risk weighting of residential mortgage risk; if so, why; and (b) will this reduce the motivation by banks to diversify such risks across specialist risk insurers such as Lenders Mortgage Insurance providers; if not, why not.

 

 (3) With reference to the changes currently under consideration by APRA on residential mortgage risk insurance: (a) will these changes encourage large banks in Australia to self-insure their residential mortgage risk; if not, why not; and (b) why is this a desirable outcome.

(4) Under the changes proposed by APRA, could an unintended consequence be that the big banks will garner a very substantial competitive advantage over the smaller banks, building societies and credit unions; if not, why not.

(5) Has APRA done a full and complete assessment of the long-term implications of the changes that are proposed under the Basel II accord, including detailed financial modelling of extraneous shocks to the Australian banking system; if so, what are the results of these findings.

(6) (a) How might small and community banks be affected by implementing Basel II; (b) if they are put at a competitive disadvantage, how does APRA plan to change the current domestic capital rules without increasing the burden on those smaller institutions; and (c) will risk-based pricing be introduced into the Australian residential mortgage market in the future as a result of the changes under consideration by APRA pertaining to Basel II; if so, how.

(7) (a) Will the current APRA proposals introduce market distortions and in so doing, create a competitive pricing advantage for some participants; (b) would this lead to predatory pricing by some participants, particularly Australia’s largest banks, which are all arguably advantaged by the aforementioned proposals.

1422  Senator Chapman: To ask the Minister representing the Minister for Revenue and Assistant Treasurer—With reference to comments made by the Chairman of the Australian Prudential Regulation Authority (APRA), Dr John Laker, to the Economics Legislation Committee during estimates hearings on 2 November 2005:

(1) Is the Minister aware that APRA is proceeding with the implementation of the Basel II prudential and capital accord in the Australian financial services sector, yet has publicly stated that it is unable, at this stage, to accurately assess the ‘real-life’ impact of these fundamental changes on the lending market for residential mortgages, in terms of mortgage pricing and the availability of housing finance.

(2) Why is APRA, as a statutory authority, able to proceed with the full implementation of this accord in the absence of any comprehensive and documented analysis that identifies the full set of its economic and financial sector ramifications and without a level of public scrutiny.

(3) Has APRA made a full and complete assessment of the long-term implications of the changes that are proposed under the Basel II accord, using real-life examples of what would happen if the economy received a sharp exogenous shock.

(4) If such an analysis exists for the Australian context, whether within APRA or another arm of Government, will the Minister make this publicly available in the near term before the full implementation of Basel II is completed.

(5) (a) Is the Minister aware that one of the likely ramifications of the APRA Basel II implementation will be to limit the ability of smaller financial institutions (lenders) to make housing finance available at competitive rates; and (b) will this provide a competitive advantage for the major banks.

 

 (6) (a) Is the Minister aware that the Basel II reforms progressively being implemented by APRA effectively will penalise lending institutions which seek to use risk mitigants such as Lenders Mortgage Insurance (LMI) to diversify the risk of their residential mortgage portfolio by limiting the capital concessions available to lenders who avail themselves of this risk offset mechanism; and (b) is this counter-intuitive at a point in the housing cycle where appropriate risk mitigation by housing finance lenders would seem to be highly desirable.

(7) Is the Minister aware that these changes may provide an opportunity for the major banks to ‘self-insure’ their mortgage portfolio risk rather than seek risk mitigation through either LMI or other risk mitigating instruments.

(8) Is it a likely consequence that interest and other costs will rise for borrowers who use smaller lending institutions which rely on mortgage securitisation to facilitate residential mortgage lending (which in turn can only be made available if the mortgage is insured through LMI or an equivalent).

(9) Is the Minister aware that three jurisdictions (the United States of America, the United Kingdom and the European Union) are undertaking, or about to commence, reviews of the practical, real-life implications of the Basel II accord and may amend its full implementation to suit specific sovereign requirements.

(10) Will the Minister seek to coordinate the key financial regulators and economic policy advisors to ensure that the implementation of Basel II in Australia enshrines the fundamental need to diversify residential mortgage risk so that Australia’s financial system stability can be assured.

(11) Will the Minister outline the processes for consultation between the peak regulators and the financial services sector in order to ensure this level of market stability and the mechanisms by which this consultation can be made completely transparent and accountable.