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Monday, 19 November 2012
Page: 9029

Senator McLUCAS (QueenslandParliamentary Secretary for Disabilities and Carers and Parliamentary Secretary to the Prime Minister) (17:19): I table four revised explanatory memoranda relating to the bills, and 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—


In 2010 the Gillard Labor Government made an election commitment to better protect the entitlements of Australian employees impacted by the insolvency or bankruptcy of their employer.

This commitment, entitled the Protecting Workers’ Entitlements Package, provides the strongest protection of employee entitlements working Australians have ever seen.

We made this commitment because Labor is the party of work and what work provides for us, financially but also for our families and sense of well being in society.

Today, I rise to introduce a bill which embeds our commitment to this package as it relates to the Fair Entitlements Guarantee.

In doing so the Fair Entitlements Guarantee Bill 2012 will replace the existing General Employee Entitlements and Redundancy Scheme (GEERS) and enshrine the Fair Entitlements Guarantee in legislation.

The bill will provide certainty for Australian employees who find themselves without a job and left out of pocket when their employer becomes insolvent or bankrupt and cannot pay them the employment entitlements they are owed.

On this side of the chamber we know that employees who lose their job through insolvency or bankruptcy of their employer have enough to worry about. They have to worry about where their next mortgage repayment will come from. They have to worry about how to buy the children new clothes or pay school fees. They have worry about what money will cover unexpected bills or an unexpected emergency. Those of us on this side of the chamber believe that these individuals should not have to worry about being paid what they have already earned.

It will be a good day for working Australians when this bill passes and they have certainty that their entitlements are protected even if the company they work for enters liquidation and cannot pay them what they are owed.

This bill will protect Australian employees under circumstances which are brought about through no fault or choice of their own.

This bill will ensure that Australian employees who are victims of employer insolvency or bankruptcy, where employment entitlements are owed, are supported by a Government that supports Australian workers.

In doing so, this bill also enshrines Labor’s commitment to the Australian sense of a fair go by providing a legislative framework employees can rely on and an entitlement which, unlike the employment entitlements those opposite advocate for, cannot be scrapped with the flick of a pen.

Eligible entitlements

Under this bill, eligible employees will be covered for unpaid entitlements including:


Annual leave;

Long service leave;

Wages; and

Payment in lieu of notice.

In the majority of cases, employees will be entitled to an advance for unpaid entitlements as provided for in the relevant industrial instrument under which they are employed.

The bill will protect redundancy pay, up to a maximum of 4 weeks per year of service. This will mean that most employees will receive all of the redundancy entitlements they are owed.

The bill will only enable payment of unpaid wages for up to 13 weeks and will provide payment in lieu of notice at 5 weeks.

This bill also strengthens the recognition of eligible entitlements for employees who continue to be employed following the appointment of an insolvency practitioner. Under current arrangements, some employees lose out if they continue working through the administration of the company and neither the administrator nor GEERS covers their unpaid entitlement.

From now on if you are an employee in this situation you will be entitled to receive unpaid entitlements accruing right up to your last day of working. No longer will there be a gap in entitlements paid.

Where an advance for entitlements is made, the Commonwealth is empowered for recovering advances from the dividends payable once companies are wound up. In doing so this bill proposes that the Commonwealth have the same rights as creditors in the winding up or bankruptcy of the business that the employee would have otherwise had. This measure strengthens the Government’s commitment to working Australians and the taxpayer. It also makes clear that those companies who enter insolvency or bankruptcy due to irregular business practices can no longer avoid paying the entitlements of hard working employees.

Eligible employees

I want to make it clear that this bill establishes an important legislative safety net for genuine employee redundancy. It is not a scheme which can be used recklessly by employers seeking to purposely renege on their employer obligations. Under the bill, employees will only be eligible for an advance in genuine cases where they have lost their job as a result of the insolvency or bankruptcy of their employer.

Some people will not be eligible for advances under this proposed legislation. The bill maintains existing arrangements under GEERS that advances will not be payable to people that are excluded under the Corporations Act - contractors, directors and family members of a director.

This bill mirrors existing GEERS arrangements that assistance will not be available to support business restructures or where insolvent entities are able to pay employee entitlements within a reasonable period.

The Government has also taken the opportunity to simplify the assessment of transfer of business arrangements. To this end, from 1 July 2014, only where a claimant’s entitlements and service are recognised by the new employer will they be ineligible for financial assistance under the bill.

This measure will overcome operational barriers in assessing claims and reduce unnecessary delays in employees receiving their entitlements.

To further reduce complexity, this bill will also remove the existing eligibility arrangements for employees affected by Deed of Company Arrangements (DoCA) or equivalent bankruptcy proceedings. Employees often get very little say in how these DOCA arrangements are structured and it simply is not fair that they be disadvantaged when they don’t work well enough to save their job.

The bill maintains existing arrangements under GEERS that a claim for assistance will need to be made within 12 months.

The bill also clarifies that to be eligible for assistance under the bill, a claimant must have met the residency requirements as at the date of termination, as this is the most relevant date to assess what level of assistance an employee is entitled to receive.

The bill also includes three important areas where capacity for flexibility is needed. By outlining the circumstances and conditions that must exist before flexibility can be used, the bill contains the following key areas:

ability to make payments in administration prior to liquidation;

early advance of a payment; and

a regulation making power to enable regulations to be made to facilitate payments to people who are not employees.

Reviews and appeals

Ensuring a fair and transparent decision making process is a key part of this bill. A person that makes a claim for an advance can be confident that their claim will be assessed in a just and transparent way.

Where a person does not agree with a decision in relation to their eligibility for an advance or the amount of an advance they are eligible for, they will have the right to apply for a review of the decision. As is currently the practice under GEERS, where a decision is able to be reviewed, the Department will review the initial decision and advise the applicant of the review decision and the reasons for the decision.

Importantly, under this bill where a person does not agree with a review decision they may apply to the Administrative Appeals Tribunal for an external review. The Administrative Appeals Tribunal will conduct an impartial and timely review. This change to the review process will improve transparency and accountability.


I am proud that we are meeting the election commitment to better protect the entitlements of Australian employees impacted by the insolvency or bankruptcy of their employer. Protecting Workers’ Entitlements Package provides the strongest protection of employee entitlements working Australians have ever seen.

Today, Labor delivers on that commitment and with the passing of this bill the Government will deliver on its pledge to Australian employees by providing a clear, fair and robust legislative framework to protect the entitlements Australians work so hard for every day.

The Fair Entitlements Guarantee Bill I am introducing today is supported by the Labor Government and a range of stakeholders. We hope those opposite will also support this bill so as to ensure even stronger protections for working Australians across our Nation.

I commend this bill to the Senate.



This bill amends various taxation laws to implement a range of improvements to Australia’s tax laws.

Schedule 1 makes a small but important amendment to the definition of ‘eligible no-till seeder’ for the purpose of the conservation tillage refundable tax offset in Subdivision 385 J of the Income Tax Assessment Act 1997. Currently, in order to access the offset, a primary producer must purchase a no till seeding tool and a cart.

This requirement was included following consultation on the initial measure to ensure that farmers could access the offset on the cart as well. However, it is the ground-engaging tool component that delivers the benefits of conservation tillage practices, while the cart simply carries the seed and fertiliser.

Concerns raised since that initial legislation was passed suggested that the requirement to purchase both the cart and the tool together creates a financial barrier to participation in the tax offset, or conversely could encourage wasteful behaviour.

The amendment remedies this by ensuring that an eligible no-till seeder can comprise either the tool alone or the combination of the cart and the tool. The measure will apply from the same time as the original measure, 1 July 2012, to the benefit of primary producers wishing to upgrade just their seeding tool.

Schedule 2 phases out the mature age worker tax offset (MAWTO) from 1 July 2012 for taxpayers who were not already 55 or older on 30 June 2012, that is, those born on or after 1 July 1957.

Those currently eligible because they were aged 55 years or older on 30 June 2012 are unaffected by the change and remain eligible for the MAWTO.

By closing off the MAWTO to new recipients and investing in better targeted participation programs the Government will improve value for money while protecting those who have built the MAWTO into their household budgets.

The Government is encouraging workforce participation by older Australians through the $26 million Mature Age Participation - job seeker assistance program. This will provide eligible mature age job seekers aged 55 and over with a peer based environment in which to develop their IT skills, undertake job-specific training and prepare for work.

The Government’s $41 million response to the Final Report of the Advisory Panel on the Economic Potential of Senior Australians includes $10 million for new Jobs Bonuses that will encourage businesses to employ older Australians who want to stay in the workforce. The $1,000 bonuses will be paid to employers who recruit and retain a mature age jobseeker for three months.

The Government is also providing a $15.6 million extension of the successful Corporate Champions program to provide support to employers who wish to promote mature aged employment at their workplace.

Schedule 3 amends the excise law by putting in place a robust and sustainable compliance regime for gaseous fuels (liquefied petroleum gas - LPG, liquefied natural gas - LNG, and compressed natural gas - CNG) that recognises that the fuel tax regime applied to these fuels is different from that applying to liquid fuels.

The liquid fuels ― petrol and diesel ― are all subject to fuel tax before leaving licenced premises and entering the market. Fuel tax is subsequently removed if the fuel is used for non-transport purposes by way of fuel tax credits.

However, LPG and LNG that are destined for non-transport use are subject to automatic remissions of tax while non-transport use CNG receives an exemption when it enters the market.

As a result of the different approach for gaseous fuels where untaxed gaseous fuels can be held on unlicenced premises, a different administrative approach is required to ensure that fuel excise is paid when it should be.

The amendments ensure that for duty-free gaseous fuels there are requirements on suppliers, whether licensed or unlicensed, for record-keeping and providing access to ATO officials. There is also an appropriate penalty regime to encourage compliance.

This regime will have lower compliance costs for the gaseous fuels industry than applying fuel tax to all gaseous fuels that enter the Australian market, with subsequent fuel tax credits where appropriate. Businesses that currently comply with their excise and excise-equivalent duty obligations should already be keeping the required records.

The remaining amendments in Schedule 3 clarify the tax treatment of gaseous fuels used in forklifts and make it clear that gaseous fuel not directly used in fuel manufacture is subject to duty.

The amendments in Schedule 4 make clear how fuel blends will be treated in the future. This is done by clarifying the Commissioner of Taxation’s power to make legislative instruments to deal with these situations, rather than relying on legislative rules for exemption. This will provide certainty for the industry, as well as a more flexible and robust approach.

The amendments commence on 1 December 2012.

Schedule 5 amends the list of deductible gift recipients (DGRs) in the Income Tax Assessment Act 1997. Taxpayers can claim income tax deductions for certain gifts to organisations with DGR status. DGR status will assist the listed organisation to attract public support for their activities.

Schedule 5 adds one new organisation to the Act, namely, The Diamond Jubilee Trust Australia. The Diamond Jubilee Trust Australia has been established to raise funds in Australia for the commemoration of Her Majesty Queen Elizabeth II’s Diamond Jubilee. It will collect funds for the purpose of delivering charitable projects for the support and advancement of individuals of all ages, with a focus on the poor and disadvantaged, through supporting the work of the Queen Elizabeth Diamond Jubilee Trust in the UK.

Schedule 6 amends the wine equalisation tax producer rebate provisions to ensure that a wine producer cannot claim a rebate for wine used in manufacture, unless the previous producer or supplier provides a notice that a previous producer is not entitled to the rebate on that wine.

The changes protect the integrity of the rebate by removing the opportunity existing under current legislation for multiple rebates to be claimed on the same quantity of wine. The Government has responded to the wine industry’s concerns about inappropriate access to the rebate.

The amendments reduce the amount of rebate a producer can claim for acquired wine used in manufacture, unless a notice is received. The amendments provide a voluntary system of notification, where notices state the extent to which the rebate has not been claimed on a sale of wine.

The amendments also prevent multiple claims of the rebate with respect to wine purchased from a New Zealand participant.

The amendments apply to assessable dealings on or after 1 December 2012 or the day on which this Act receives Royal Assent, whichever is later.

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

I commend this bill to the Senate.

Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill 2012

This bill amends the Water Act 2007 to facilitate adjustment of the long-term Sustainable Diversion Limit (SDL) under the Basin Plan, within clearly set limits, and with a clearly defined process to provide transparency to this Parliament and the community. This mechanism will allow jurisdictions to work together collectively to improve on the socio-economic and environmental outcomes of the Plan.

I am committed to making a Murray-Darling Basin Plan to be presented to the Parliament that delivers a healthy river, strong communities and sustainable food production. The Basin Plan involves far reaching reform of water management so that the Basin is managed as a single connected area and in the national interest. It is clear that there will be a continuing need to adapt management of the Basin’s water resources over the next decade to respond to opportunities to obtain and enhance environmental outcomes, with, at least, no worse socio-economic condit­ions and vice versa. It is my view, therefore, that the Basin Plan should include an SDL adjustment mechanism. The mechanism will allow the outcomes of work to improve river management rules, infrastructure upgrades and the removal of constraints on the delivery of environmental flows to be integrated into the Basin Plan.

The inclusion of an SDL adjustment mechanism in the Basin Plan, which will be facilitated by this amendment, has been sought by all Basin governments. Stakeholders also raised the need for such a mechanism as part of the 20 week public consultation on the Basin Plan. The House of Representatives Standing Committee on Regional Australia, in its July 2012 Report into certain matters relating to the proposed Murray-Darling Basin Plan, also recommended the Commonwealth develop a mechanism to adjust SDLs automatically.

This amendment will allow the adjustment mechanism in the Basin Plan to operate as effectively as possible.

It is not the purpose of the bill to create the legal possibility of a mechanism. This already exists under the section 23 of the current Water Act. However, all jurisdictions and the Murray-Darling Basin Authority (the Authority) have now agreed that it is desirable for the Basin Plan to include an improved adjustment mechanism. The bill sets out the broad parameters for the mechanism, how it is intended to operate, and introduces transparency in the process, requiring any use of the mechanism to be reported formally and publicly to the Parliament.

Under the Water Act, the Basin Plan itself is a disallowable instrument and parliament will have the opportunity by that means to consider the precise elements of the SDL adjustment mechanism that will be written into the Basin Plan.

The current version of the Basin Plan includes an adjustment mechanism in accordance with the current act. As the legislation currently stands Parliament would not be notified of any adjustments, as well as these adjustments not being disallowable. This bill improves transparency while maintaining the position that amendments would not be disallowable.

The Water Act requires that the Basin Plan include an SDL for the water resources of the Murray-Darling Basin. This bill allows the Authority to make adjustments to the SDL in accordance with the provisions of the Plan. The adjusted SDL must continue to reflect an environmentally sustainable level of take, which is defined in the Water Act to include several elements.

It is envisaged that criteria to be specified in the Basin Plan will reflect the intention of all Basin Governments that the mechanism must operate on a no-detriment basis. The adjustments would then not be able to weaken the social, economic and environmental outcomes inherent in the Basin Plan.

Projects that enable environmental water to be used more efficiently, thereby reducing the need to remove additional water from productive use, must achieve equivalent environmental outcomes to those in the Basin Plan. Projects to enable improved environmental outcomes, must maintain or improve the socio-economic circumstances of basin communities compared with the Basin Plan.

Initiatives to recover more environmental water are likely to focus on things like improving the efficiency of on-farm irrigation or off-farm irrigation water delivery systems. The savings recovered by these initiatives will enable improved environmental outcomes to be achieved without impacting on irrigated production. These projects would be in addition to those already approved or planned to contribute at least 600GL towards the recovery of the proposed 2750GL, through the current Sustainable Rural Water Use and Infrastructure Program.

It is envisaged that governments would consider new investment in additional projects - called efficiency measures, in conjunction with action to address particular constraints in the system, thereby enabling the best use of any additional water recovered for the environment. The government’s intention is that all ‘impact neutral’ water recovered under these efficiency measures can only be credited towards delivering environmental outcomes beyond those envisaged under a 2750GL reduction.

The water savings identified through projects - called supply measures, to make environmental watering more efficient, will mean the proposed 2750GL recovery volume can be reduced. These proposals will need to achieve equivalent environmental outcomes to those under the 2750GL reduction proposed in the plan. An example of a supply project could be installing works on a significant floodplain site to deliver improved environmental outcomes at that site but by using less water.

Projects of the sort that could in the future deliver efficiency or supply measures are already underway in many communities throughout the Basin. Some of these I have described above. However, there is always room for innovation. This bill allows for projects like those above that are familiar to communities and industry, as well as for innovative ideas, to be considered. As is standard practice, projects will be put forward by the community, stakeholders, industry and/or Governments. Projects will be developed over time and in consultation with funding bodies, and will undergo thorough assessment in the business case stage and also due diligence checks. This means projects will be well understood by the time they are considered and assessed by the Basin Officials Committee and the Authority.

The adjustment of the SDL will need to be based on the best available science, involving the use of models and assumptions generally accepted by professional hydrologists and other experts at the time the calculation of any adjustment is made.

The bill allows the Authority to determine that criteria set out in the Basin Plan have been met for the purpose of adjusting the SDL after considering advice from the Basin Governments through the Basin Officials Committee.

This bill provides that an adjustment may be made within a specified variance threshold; a maximum of five per cent of the SDL of Basin water resources as a whole, though the variance at individual water resource plan areas or parts of water resource plan areas may be more or less than this.

The bill will allow the Basin Plan to require the adjustments to be reflected in the State water resource plans, including during the generally ten year accreditation period of these plans. Having these State plans include a mechanism to reflect the outcomes of projects to use less environmental water and recover more water for the environment without impacting on the local economy means, that the outcomes of projects will be given effect in water resource plan. The precise mechanism for this would be included in the Basin Plan.

The bill requires Minister to table in Parliament the notice of adjustment and the amendment. The amendment will be a non-disallowable instrument reflecting its technical nature and that the criteria for any adjustments will be included in the Plan itself, which is a disallowable instrument. In addition to the explanatory statement that accompanies all legislative instruments, the bill requires that a notice be tabled with any amendments. This notice must include detailed information on the changes to the SDL at the water resource plan area level and at the Basin wide level, together with an outline of the material on which the Authority based its decisions in determining that the criteria in the Plan have been met in relation to whether to adjust the SDL and the amount of the adjustment.

In closing, these amendments to the Water Act 2007 will provide a simplified but certain and transparent process for making adjustments to the SDL within the Basin Plan, and enable the potential benefits of these far-reaching reforms to be fully realised.

I commend this bill to the Senate.


On 1 July 2008, the Australian Government reformed wheat export marketing arrangements with the abolition of the single desk and the establishment of the Wheat Export Accreditation Scheme (the Scheme) administered by Wheat Exports Australia (WEA). Previously Australian farmers could not choose who would export their wheat.

The abolition of the single desk has led to improved productivity and created new global export markets for Australian growers. This has led to improved job opportunities in rural and regional centres. There are now 26 accredited exporters with 19 of these being active in the last marketing year.

As promised by the government when the reforms were introduced, an independent review of the arrangements was undertaken by the Productivity Commission in 2010. The Commi­ssion found that the Scheme had served industry and the nation well, but that the industry was now mature enough to move to a deregulated model.

The government agrees in-principle with the Commission's recommendations. However, after carefully considering the views put forward by industry, it has decided to introduce the next set of changes through a staged approach which will provide a more efficient transition to full market deregulation in the longer term.

The first stage was the introduction of a 'lighter-touch' accreditation scheme to be applied until 30 September 2012. This change has reduced the level of 'red tape' for exporters while still meeting grower concerns about 'fit and proper issues' and maintaining the link with the access test for port operators that many exporters believe is critical. It is, however, not a 'softer-touch' as WEA still has the capacity to respond to any issues that may relate to the accreditation of an exporter.

Passage of the Wheat Export Marketing Amendment Bill 2012 will implement the next stages of the government response and complete the transition to a fully deregulated bulk wheat export market.

The bill will abolish the Scheme and the Wheat Export Charge (WEC) on 30 September 2012. WEA will continue in operation until 31 December 2012 to complete outstanding tasks such as preparation of its final Annual Report and also the Report for Growers.

Abolishing the Scheme will ensure that the benefits to industry provided by accreditation during the transition to deregulation are not undermined in the longer-term by the direct and indirect costs of continuing with a scheme that has served its purpose. These costs include the WEC and the administrative and regulatory burden of accreditation, as well as the negative impact of unnecessary regulation on efficiency and competition in the wheat industry over time.

The recent strong export performance has led to the WEA Special Account holding more funds than are required to fund the operation of WEA. As this represents an overpayment of industry funds, the government will look to amend the regulations and set the WEC rate at zero as soon as possible.

However, the Account will still hold surplus funds when WEA is abolished. The Department of Agriculture, Fisheries and Forestry will be repaid $500 000 owing from a previous funds transfer that was not used. The remainder will be reinvested in the wheat industry after consultation with relevant stakeholders.

The government agrees with the Commission's recommendation to retain the access test until 30 September 2014. The link between the access test and the ability to export bulk wheat will remain during this period. This action responds to concerns among some growers and traders about possible anti-competitive behaviour with respect to grain port terminal access.

Retaining the access test until 2014 will give the industry sufficient time, and appropriate incentives, to adjust to the new trading environment. It will also allow for some new features of the competitive environment to be institutionalised, while minimising the chances of damaging future investments or undermining reasonable returns to existing asset holders.

The bill will facilitate the removal of the access test requirements for grain port terminal operators on 30 September 2014. The market will then move to full deregulation, with all aspects of the industry subject to general competition law administered by the Australian Competition and Consumer Commission (ACCC). This will bring the wheat export market into line with other agricultural commodity markets and promote further competition in the wheat export industry, leading to increased productivity and profitability.

To provide certainty for growers and bulk wheat exporters about security of access to grain port terminal services in the longer-term, the access test will only be abolished if the industry has a non-prescribed voluntary code of conduct covering grain export terminal operations in place. The code must include continuous disclos­ure rules and be consistent with ACCC guidelines for voluntary codes of conduct. The Minister for Agriculture, Fisheries and Forestry will determine if the code of conduct is of a standard that will allow the abolition of the access test.

The implementation of an industry code of conduct will give growers certainty that, irrespective of which exporter they sell to, their product will gain access to grain port terminal services. It will reinforce Australia's international reputation as a reliable wheat supplier and give overseas customers certainty that all Australian exporters will be able to meet supply commitments. It will also help ensure that these facilities have the necessary throughput to attract the level of return on investment required to keep them viable.

The government is aware of some concerns from parts of the wheat industry that a lack of access to market information on stocks and flows of grains is impacting competitiveness. The government is willing to help industry find a solution, potentially through the voluntary code of conduct. It is already working with Grain Trade Australia and the wider industry to develop the code and strongly encourages all industry sectors to engage in this process.

If an acceptable code is not approved, the requirement for bulk wheat exporters that are grain port terminal service providers to pass the access test in order to be able to export will continue.

The bill reflects the government's commitment to promoting competition within the wheat export industry. Australian producers are the most innovative and efficient in the world. Passage of the bill will further develop a wheat marketing system that rewards this and provides benefits for all industry sectors.

I commend this bill to the Senate.

Debate adjourned.

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

(1)   Fair Entitlements Guarantee Bill 2012

(2)   Tax Laws Amendment (2012 Measures No. 5) Bill 2012

(3)   Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill 2012

(4)   Wheat Export Marketing Amendment Bill 2012