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Thursday, 5 February 2009
Page: 403

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Senator SHERRY (Minister for Superannuation and Corporate Law) (11:11 AM) — 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—


This bill contains a key component of the Nation Building and Jobs Plan the Government announced yesterday - the new Energy Efficient Homes program.

The program provides a $2.7 billion time-limited investment in the modernisation of Australia’s housing stock - a measure that will see almost all Australian homes insulated by the end of 2011.

Ceiling insulation is typically the most cost-effective energy improvement that can be made to homes, providing real, tangible and immediate benefits to Australian households.

An uninsulated roof cavity can lose up to 40 per cent of a building’s heat, and in many cases could deliver reductions of more than 2.5 tonnes of greenhouse gases per year for the life of the dwelling.

A typical household could also save around $200 in their energy costs each year through the installation of insulation. Despite this, up to 40 per cent of Australia’s homes do not have insulation.

The Energy Efficient Homes program will see ceiling insulation offered to all uninsulated owner-occupied homes over the next two and a half years.

In the majority of cases homeowners will not need to pay a cent — they can simply make a phone call and the Government will arrange for the installation of insulation in their roof.

The Government is aware that those in rental properties and those who have already installed insulation in their homes will also want to play their part.

This bill includes enhancements to two existing energy efficiency programs: the Low Emissions Plan for Renters and the Solar Hot Water Rebate.

The Low Emissions Plan for Renters program provides rebates to landlords installing insulation in their rental properties.

The rebate was set at up to $500 and limited to 300,000 rental homes.

This bill provides for an increase in the maximum rebate to $1,000 until 30 June 2011 and removes the cap on the number of properties that can be insulated under this program.

This is an additional investment of more than $600 million and represents an unprecedented opportunity for landlords to do the right thing by their tenants and install insulation in their rental properties.

This bill will also increase the maximum Solar Hot Water Rebate — from $1,000 to $1,600 — for households who do not access the insulation program and who replace their existing electric hot water systems with a solar and heat pump hot water system before 30 June 2012.

Households that access this rebate could save $300 to $700 each year on their energy bills.

The Energy Efficient Homes package will see an additional $3.9 billion invested in the fight against climate change and delivers on the Government’s household energy efficiency commitments in the Carbon Pollution Reduction Scheme White Paper.

Once fully implemented these measures could reduce cumulative greenhouse gas emissions by as much as 49.4 million tonnes by 2020 - that is the equivalent of taking more than one million cars off the road.

This investment in energy efficiency will modernise Australia’s existing housing stock and contribute to meeting Australia’s 2020 target for emissions reductions.

In addition to long term environmental benefits, this package supports the jobs of tradespeople and other workers employed in the manufacturing, distribution and installation of ceiling insulation and solar and heat pump hot water systems.

And there is already some early indication from business that our plan will have an impact.

Let me read a quote from one insulation fitter, on ABC Radio yesterday, who said:

   “Our own company… had to lay off a shift in one of our plants just before Christmas. We’ll be putting that shift back on.”

This bill also provides the enabling funding necessary to see this package implemented immediately and effectively.

This includes $50 million allocated over the forward estimates to ensure that the one-off payment for working Australians is delivered expeditiously.

With carefully designed initiatives like those contained in this bill, there’s no reason we cannot emerge from this global recession stronger and more prosperous than we were before it.

The Energy Efficient Homes plan has a role to play in supporting jobs now and building the low pollution economy, and the growth and prosperity, that Australians deserve for the future.

I commend the bill.


The unfolding global economic story reminds us daily that we find ourselves in the midst of the most significant global economic crisis since the Great Depression.

Its severity has grown since the release of the Government’s $10.4 billion Economic Security Strategy in October last year, and has become even more serious since the Mid-Year Economic and Fiscal Outlook I released in November.

Projections of world growth, including by the International Monetary Fund, continue to deteriorate to a much greater extent than many envisaged at that time.

The largest advanced economies in the world are already in recession, bringing the loss of millions of jobs.

This global recession, the slow down in the mining sector and among our trading partners, particularly China, has serious consequences for Australian jobs and growth.

While we find reassurance in knowing that Australia is better placed than almost any other developed economy to withstand this fallout, we also know we are far from immune from it.

Although Australia has weathered the early stages of the global recession better than many other countries, the weight of the global recession is now bearing down on the Australian economy.

The global mining boom that drove large increases in the terms of trade and in our national income, has come to an end.

Australian growth, as a result, is expected to be significantly weaker than previously anticipated.

Growth for 2008-09 has been revised down from 2 per cent in MYEFO in November to 1 per cent in UEFO, and unemployment will be higher.

And that is precisely why the Government has introduced the National Building and Jobs Plan, incorporating:

(1)   $28.8 billion to build the schools and roads and homes and communities and energy efficiency we need for future prosperity;

(2)   And $12.7 billion to boost consumption so we can support jobs now

Jobs now, and the building blocks of growth and prosperity for the future - that’s the absolute essence of the Nation Building and Infrastructure Plan the Prime Minister and I announced yesterday.

It’s a plan that we expect to boost growth by around ½ per cent in 2008-09, and ¾ to 1 per cent in 2009-10, and support up to 90,000 jobs over that period.

There is no guarantee our economy will not deteriorate further - even slower growth remains a genuine threat.

The only certainty here is that our country will be worse off, and more Australians will be out of work, if we do not act in the way I will outline today.


The Nation Building and Jobs Plan is based on the reality that now is not the time for half measures.

It is a time to be bold and to get on with it.

It is weighted towards productive investment.

It meets the crucial conditions for effective fiscal stimulus; it is temporary, timely and targeted.

It will allow the swift construction of the schools and roads and communities we need for future prosperity.

And like the Economic Security Strategy - which boosted demand in December and January 2008 - this Plan will keep Australia ahead of the curve.

The measures we are introducing today are critical and they are urgent.

Our Plan seeks to support jobs and growth immediately, through a further round of targeted tax and transfer payments.

It also lays foundations for higher productivity and future prosperity through a program of infrastructure investment.

The plan will contribute to our long-term productivity reform agenda - an agenda that embraces the education revolution, investing in advanced infrastructure, COAG reform, and making the transition to the low carbon economy of the future.

The infrastructure investment in this bill accounts for $28 billion of the overall $42 billion cost of the Plan - more than two thirds of it.

This investment will provide lasting benefits to local communities and to our national economy, as well as supporting Australian jobs during these tough times.


The bill that I introduce to the House today will fund the largest and most ambitious school modernisation program in Australian history.

This is the centrepiece of our Nation Building and Jobs Plan.

The Building the Education Revolution program will fund a $14.7 billion investment in educational infrastructure over three years.

It will benefit each and every one of Australia’s 9,540 schools.

Every single community, every single school, every single P&C - all with a role in the nation’s economic future.

This is a critical investment in the education revolution.

Nothing is more central to our longer term economic and social development than the education of our children.

We cannot provide our kids with a 21st century education if they are stuck in cramped, decaying classrooms, designed for a generation of Australian children that left school many years ago.

Schools that were built in the 19th and 20th centuries reflect the design standards, equipment and needs of a different era.

Under the Building the Education Revolution program, we will invest $12.4 billion in the construction of assembly halls, knowledge centres, indoor sports centres, performing arts centres, and similar major improvements for all Australian primary schools, special schools and K to 12 schools.

Funds will be allocated to reflect school size, with $250,000 provided to small primary schools of up to 50 students, and up to $3 million for large primary schools with more than 400 students.

A further $1 billion in 2009-10 will be available for the construction of science laboratories and language learning centres in approximately 500 secondary schools, based on assessed need.

Primary and secondary schools will also be able to apply for one-off funding of up to $200,000 for maintenance and infrastructure, at an estimated cost of $1.3 billion over two years.

This package of investment will provide tangible benefits to all local communities and will provide a major boost to key educational infrastructure for Australia’s children.


This bill also contains vital measures to tackle the crisis in affordable housing inherited by this Government after years of under-investment.

Improving the supply of affordable housing is a key part of achieving the Government’s goal of halving the level of homelessness by 2020.

Across Australia, individuals and families in the bottom 40 per cent of earners are struggling to find affordable housing.

For these people the social housing system is a key element of Australia’s social safety net.

A cumulative real cut of $3 billion to public housing over the last ten years has reduced the social housing stock and contributed to the state of poor repair.

As a result, many people who needed public housing have been forced into the private rental market.

This has contributed to a situation where 150,000 of the poorest households in Australia pay more than half their income in rent in the private rental market.

The Commonwealth Social Housing Initiative will provide up to $6 billion to the States and Territories to fund construction of approximately 20,000 new dwellings.

This is a significant investment that will accelerate progress on our 2020 goal - and reduce the number of low income households paying more than half their income in rent.

The Commonwealth Social Housing Initiative will also provide an important immediate stimulus to the housing construction sector through $400 million for repairs to get existing social housing up to scratch.

We have received strong support on this initiative from industry, for example from Peter Verwer of the Property Council of Australia, who said:

“Every dollar that goes into construction sector has a multiplier effect - it is spent three times over in the economy. This makes for an ideal measure of a well thought-out stimulus package.”


A third nation-building priority in this bill is community infrastructure.

There is a desperate need for renewing and upgrading the infrastructure of local communities around our nation.

Our nation has a large backlog of essential infrastructure projects in local communities.

Much of our community infrastructure was built in the 1950s and 1960s and is in urgent need of renewal.

That is clear from the response to the $300 million Regional and Local Community Infrastructure Program (RLCIP) that the Prime Minister announced at the inaugural meeting of the Australian Council of Local Government in November last year.

The competitive component of that Program - $50 million for Strategic Projects - is already heavily oversubscribed.

That’s why the bill I introduce to the House today includes a $500 million investment over two years to help councils to invest in critical local projects through the Community Infrastructure Fund.

This will include community halls, tourism infrastructure and sport and recreation facilities.

It is in addition to the $300 million investment announced last year, and it will provide an important boost to local economies of regional centres, towns and suburbs right across the nation.

The bill also provides an additional $390 million over two years for Black Spots, Boom Gates and Regional Infrastructure.

This will bring forward and boost capital expenditure in regional areas.

It will also improve safety for motorists and passengers. I note the remarks yesterday of Wendy Machin from the National Roads and Motorists’ Association:

“The NRMA warmly welcomes this additional funding, particularly the fact that a substantial proportion of the money will be immediately available to be spent this financial year. Black Spot funding has been a major factor in improving road safety on many roads around Australia - additional funding for these projects is fantastic.”

This and the other community initiatives the Government announced yesterday will provide an immediate boost to jobs and businesses in regions right across Australia, as well as providing a lasting benefit to local communities.


There’ll be no quick fix to this global recession and many of its effects are still to be felt.

But the Government is doing what it can to help see Australia through.

This is the first in a package of six legislative bills to give effect to its Nation Building and Jobs Plan, announced on 3 February 2009.

It shows the Government will do whatever it takes to support Australian jobs during these difficult times, while still laying the foundations for the next generation of prosperity.

With the Rudd Government’s dedicated nation building program, with initiatives like those I have outlined today, with national unity and with purpose, there is no reason we cannot emerge from this global recession stronger and more prosperous than before the global financial crisis began.

I commend the bill.


The Prime Minister and the Treasurer have provided clear context for the Government’s decision to further support economic growth and jobs through the Nation Building and Jobs Plan.

Demand in the economy needs to be fostered, and our economic circumstances provide the opportunity to boost necessary economic and social infrastructure. We are particularly pleased with the Building the Education Revolution initiative which will offer all Australian schools the opportunity to enhance their level of amenity with expected flow-ons for educational outcomes.

However, our Nation Building and Jobs Plan goes beyond the roll-out of key infrastructure investment. The Government will provide $12.7 billion in tax bonuses and payments to low- and middle-income Australians as part of its Plan to help provide further immediate stimulus to the economy and to continue to support Australian households.

Widespread support will be provided to households through bonus payments under the tax and transfer system, including additional support and incentives for people to engage in education and training. These payments will complement those made in the Economic Security Strategy and seek to broaden the spending base covered in the Government’s overall response to the economic crisis. Approximately 12 million individuals will benefit from the bonus payments, which will not be taxable and will not count for income testing purposes.

The Household Stimulus Package includes five key bonuses.

Back to School Bonus

Our Back to School Bonus will assist over 1.5 million families and 2.8 million children in meeting the costs of education during these difficult times through a one-off bonus of $950 per child to families with school-aged children between four and 18 who are eligible for family tax benefit Part A. In addition to those who will receive the back to school bonus because they are eligible for family tax benefit Part A, the Government has decided to extend the bonus to children aged 18 or under on 3 February 2009 who receive carer payment or disability support pension. This $2.6 billion bonus will provide an immediate boost to consumption to help support growth and jobs.

Single Income Family Bonus

To give additional assistance to families with children that have one main income earner, the Government will provide a $950 one-off payment to approximately 1.5 million families who are entitled to family tax benefit Part B. This measure complements the $950 Tax Bonus for Working Australians announced as part of the Government’s Plan, which is provided for in a separate bill.

Training and Learning Bonus

The Government will further support education and training through a $513 million Training and Learning Bonus, comprising two elements. A one-off bonus of $950 will be paid to eligible students, those returning to study or training, and to certain other income support recipients to assist with costs for the 2009 academic year. The Government will also provide a temporary additional incentive for eligible social security recipients to return to education and training in the form of a $950 supplement to the education entry payment and relaxation of the eligibility criteria. The Training and Learning Bonus will assist Australia’s recovery by providing for a more equipped workforce into the future.

Farmers Hardship Bonus

The Global Financial Crisis is not just a city phenomenon. Our regions and rural areas will also feel the impact of the slowdown. So as part of our Nation Building and Jobs Plan, we will provide support for growth and jobs in rural and regional areas already experiencing difficult times. The Government will provide $20.4 million in 2008-09 for a one-off bonus payment of $950 to farmers and small business owners receiving Exceptional Circumstances related income support payments. These payments will benefit approximately 21,500 recipients.

These one-off bonuses are necessary to provide an immediate stimulus to the economy given the severity of the global downturn. It is a critical part of the Government’s National Building and Jobs Plan.


A key part of the Government’s Nation Building and Jobs Plan is to provide financial support to taxpayers.

The measures contained in this bill do just that.

This bill delivers the Government’s Tax Bonus for Working Australians, announced by the Prime Minister and Treasurer on 3 February 2009.

The plan was introduced to assist the Australian people deal with the most significant economic crisis since the Second World War and provide immediate economic stimulus to boost demand and support jobs.

This measure, at a cost of $8.2 billion, provides financial support to around 8.7 million taxpayers and is one of five key $950 one-off payments for low and middle income households and individuals.

The Government is providing these cash payments to immediately support jobs and strengthen the Australian economy during a severe global recession.

To immediately stimulate the economy in the shortest possible time, the five groups of one-off cash bonuses will be paid in March and April 2009.

The Tax Bonus for Working Australians will be paid to resident individual taxpayers who had taxable income of up to $100,000 and who paid income tax for the 2007-08 financial year, after taking into account any tax offsets and imputation credits.

A payment of $950 will be paid to those who had a taxable income of up to and including $80,000 for the 2007-08 income year.

A payment of $650 will be paid to those who had a taxable income exceeding $80,000 to $90,000.

A payment of $300 will be paid to those who had a taxable income exceeding $90,000 up to and including $100,000.

Eligibility for the payment will be determined by the Commissioner of Taxation with all payments being made automatically by the Australian Taxation Office.

The bonus will be available from April 2009 to Australian resident taxpayers who have already had their tax returns assessed.

This will be the vast majority of eligible taxpayers.

Taxpayers who have not yet lodged their 2007-08 tax returns will have their bonus paid following the ATO’s assessment of their returns.

Importantly, taxpayers should lodge their 2007-08 tax return by 30 June 2009 to be eligible for the bonus payment.

I commend the bill.


This bill provides for consequential amendments to various Acts in relation to the tax bonus payment provided for in the Tax Bonus for Working Australians Bill 2009.

It ensures that the tax bonus payments are not to be treated as income for tax and welfare-related purposes.

In particular, the bonus payment will be non-assessable and non-exempt income, which means that it will be disregarded for income tax purposes.

In addition, the payments will not be treated as income for the purposes of social security and family assistance benefits paid by Centrelink.

The bill also makes other consequential amendments relating to the administration of the bonus payment.

I commend the bill.


The outlook for the global economy has deteriorated sharply.

As a result of the Global Financial Crisis, the global economy is now facing a much deeper and more protracted recession than previously expected.

Advanced economies are expected to experience the sharpest collective decline in Gross Domestic Product in the post-war period.

The key emerging economies of China and India are now forecast to slow markedly, with growth in China is expected to halve in just two years.

And as a result, the global commodity boom, which has provided significant stimulus to Australian growth and incomes over recent years, is winding back.

With the weight of the global recession now bearing down on the Australian economy, growth is expected to be weaker than anticipated, and unemployment will be higher.

It will also impact directly on the budget bottom line.

The Global recession has wiped out $115 billion of tax receipts across the forward estimates and moved the budget into temporary deficit.

To support jobs and growth in the face of the global recession, the Rudd Government has announced the $42 billion Nation Building and Jobs Plan.

This will temporarily add to the deficit.

This bill will ensure that the Government can raise the funds required to meet this temporary deficit.

The Commonwealth Inscribed Stock Act 1911 provides the Treasurer with a standing authority to borrow.

This standing authority to borrow is limited to $75 billion.

This amendment proposes to supplement that limit by providing that, in special circumstances, the Treasurer may increase the cap by $125 billion.

The current global recession, and its impact on Australia, is clearly such a special circumstance.

The overwhelming majority of the increase in net debt is due to the collapse in tax receipts as a result of the global recession and the unwinding of the commodities boom.

Rises in payments, also associated with the slowing economy, are contributing to net debt.

The Government’s measures to support jobs and growth will also contribute.

Australian Government net debt will remain very low by international standards.

At the end of the forward estimates Australia’s net debt is forecast to be just 5.2 per cent of GDP, while the average net debt for OECD countries in 2010 is estimated to be around 45 per cent of GDP.

The Government remains committed to its medium term fiscal strategy of achieving budget surpluses, on average, over the cycle.

As soon as the economy recovers, and grows above trend, the Government will take action to return the budget to surplus.

These surpluses will be drawn upon to retire debt as rapidly as economic circumstances permit.

But now, in the face of a deep and protracted global recession, the government must be focused on supporting jobs and growth, while investing in nation building infrastructure - and we make no apology for that.

Debate (on motion by Senator Sherry) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.