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Wednesday, 29 March 2006
Page: 1

Senator MINCHIN (Minister for Finance and Administration) (9:31 AM) —I table the 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—


This bill amends the Australian Broadcasting Corporation Act 1983 (the ABC Act) to abolish the staff-elected director and deputy staff-elected director positions.

The position of a staff-elected Director is uncommon amongst Australian Government agency boards. The position at the ABC was introduced in 1975. It was abolished in 1978, reintroduced in 1983 and given legislative backing in 1985.

The position of a staff-elected Director is not consistent with modern principles of corporate governance and a tension relating to the position on the ABC Board has existed for many years.

This tension is manifested in the potential conflict that exists between the duties of the staff-elected Director under the Commonwealth Authorities and Companies Act 1997 to act in good faith in the best interests of the ABC, and the appointment of that Director as a representative of ABC staff and elected by them. The election method creates a risk that a staff-elected Director will be expected by the constituents who elect him or her to place the interests of staff ahead of the interests of the ABC where they are in conflict.

This matter was recognised in the June 2003 ‘Review of the Corporate Governance of Statutory Authorities and Office Holders’, otherwise known as the Uhrig Review, at pages 98 and 99. That Review concluded, “the Review does not support representational appointments to governing boards as representational appointments can fail to produce independent and objective views. There is the potential for these appointments to be primarily concerned with the interests of those they represent, rather than the success of the entity they are responsible for governing.”

There is a clear legal requirement on the staff-elected Director that means he or she has the same rights and duties as the other Directors, which includes acting in the interests of the ABC as a whole. The Government is of the view that there should be no question about the constituency to which ABC Directors are accountable.

The bill resolves these tensions by abolishing the staff-elected Director position. This change will contribute to the efficient functioning of the ABC Board, is in line with modern corporate governance principles and will provide greater consistency in governance arrangements for Australian Government agencies.

The bill is intended to give effect to the abolition of the staff-elected Director position as close as possible to the expiry of the term of the current staff-elected Director.

Despite the abolition of the staff-elected Director position on the ABC Board, the Government expects the ABC Board and management to continue to take the interests of staff into account in its deliberations.

I commend this bill to the Senate.


The Migration Amendment (Employer Sanctions) Bill 2006 sets out a scheme of sanctions on employers and labour suppliers who knowingly or recklessly engage illegal workers.

The Government has long had concerns about those who seek to work illegally in Australia.

Our current estimate is that there are around 46,000 visa overstayers in Australia.

We believe that a substantial proportion of these people are working illegally to support their stay here.

In addition, a small proportion of the millions of other temporary entrants to Australia each year may work illegally during their stay.

The traditional approach to dealing with the problem of illegal workers in Australia continues to be quite successful.

This approach includes highly effective visa processing arrangements for overseas visitors, students and other temporary residents.

These arrangements prevent the majority of potential illegal workers from entering Australia in the first place.

In other words, unlike many other countries, we deal with most of the problem before it actually becomes a problem.

However no matter how good Australia’s visa arrangements are, there will still be some people who seek to take advantage of our desire to attract genuine visitors, students and other temporary residents.

This requires the Government to allocate significant resources towards locating and removing illegal workers and overstayers. 

In the 2004 to 2005 program year there were over 18,000 non-citizens located either in breach of visa conditions or unlawfully in Australia.

Many of these people were also working illegally in Australia.

The Government believes that illegal work causes a number of problems for the Australian community.

First, it takes job opportunities away from Australian citizens and lawful migrants.

Second, the cost of detecting illegal workers is an unwelcome burden on the taxpayer.

Finally, in some cases illegal work is linked to organised crime, particularly in the sex industry.

The Government is particularly concerned about circumstances in which women may be trafficked into Australia to work illegally in conditions of sexual servitude, forced labour or slavery.

Despite the recent success of our immigration compliance activities, the Government believes that the further statutory reforms contained in this bill are required.

The Government’s immigration compliance strategy has been designed on the basis of voluntary compliance.

The Government believes that there needs to be provision for imposing sanctions on the small number of employers and labour suppliers who deliberately engage or refer non-citizens without the right to work in Australia.

This bill introduces the required fault-based criminal offences.

The proposed offences will only apply where the employer or labour supplier knew the person was an illegal worker, or was reckless to that fact.

Framing the offences in this way ensures that they can be focused on the employers and labour suppliers of concern to the Government, without imposing any additional burden on business generally.

For example an employer will only be “reckless” if there was a “substantial risk” that the employee was an illegal worker.

Recklessness might be proved in a prosecution where a number of basic conditions are satisfied.

It would be easier to prove where the employer operates in an industry where there are relatively high proportions of illegal workers.

These include the construction, hospitality, cleaning, taxi and sex industries.

Another element that might go to proving recklessness is where the employer in question has previously been warned about employing illegal workers and has been given guidance on how to check work rights.

A further element could be that the job applicant says something that indicates they may not be entitled to work - for example that they are only visiting Australia.

The bill also deals with the various employment-like relationships that feature in illegal work in Australia.

The concept of “allowing” an illegal worker to work is broadly defined to capture work relationships that are commonly used in industries where illegal workers are found.

The Government is very concerned that those involved in illegal work in the sex industry should not be able to hide behind devices designed solely to distance themselves from their employees.

That is why this bill includes specific provisions for situations where “landlords” rent premises, intending those premises to be used to provide sexual services.

A feature of the bill is the much higher penalties for offences where aggravating circumstances are present, such as where the illegal worker is in a condition of sexual servitude, forced labour or slavery.

The trafficking of people, particularly women and children, to work under these conditions is a despicable crime.

The Government is determined to deal with anyone who knowingly participates in this kind of criminal activity.

This includes employers who may be willing to take advantage of the victims of sexual servitude, forced labour or slavery.

In summary, this bill deals with some very serious issues in Australian society, but does so with an eye to ensuring that only those employers and labour suppliers who are of genuine concern will be affected by the offences.

The bill is the product of a long period of consultation and development and deserves the support of all members of this Parliament.

I commend the bill to the chamber.


Australia has a proud heritage in health and medical research. Australian health professionals, scientists and academics have helped to improve the quality of life of millions of people in Australia and throughout the world.

Since September 1936, the National Health and Medical Research Council (otherwise know as the NHMRC) has played a pivotal role in funding and supporting health and medical research in Australia. The NHMRC’s role, responsibilities and functions were eventually enacted through legislation in 1992.

In 1999, the Government undertook to increase annual funding for health and medical research through the NHMRC from $165 million in 1998-99 to more than $350 million in 2004-05. Further, the Minister for Health and Ageing announced on 21 March 2006 that the Australian Government will provide a further $9.8 million for health research into chronic diseases, Indigenous Health and the recovery process of older Australians who have been hospitalised. This brings the Federal Government’s investment in health and medical research through the NHMRC to more that $490 million this year, more than double the 1999 figure.

The Council has provided high quality advice on medical research, health ethics and health. A number of recent reviews have, however, identified governance concerns. These are:

  • the Governance of the National Health and Medical Research Council report published by the Australian National Audit Office in February 2004; and
  • the Sustaining the Virtuous Cycle For a Healthy, Competitive Australia: Investment Review of Health and Medical Research - Final Report published by the Investment Review of Health and Medical Research Committee in December 2004.

In response, this bill improves the NHMRC’s corporate governance, including reporting and accountability frameworks, congruent with the principles of good governance as adopted by the Australian Government in 2003 following the Review of Corporate Governance of Statutory Authorities and Office Holders by Mr John Uhrig, AC.

It is proposed that, from 1 July 2006, the NHMRC be established as a statutory agency for the purposes of the Public Service Act 1999 and as a prescribed agency under the Financial Management and Accountability Act 1997.

The new agency will remain within the Health and Ageing Portfolio, with reporting and accountability frameworks that clearly separate the NHMRC roles and functions from those of the Department of Health and Ageing. The bill’s provisions strengthen the NHMRC’s independence, promote clear lines of responsibility for governance and financial accountability and allow the Council to focus on issues relating to medical and biological research and advice.

Previously, the NHMRC’s Chief Executive Officer has had a cumbersome accountability framework with three concurrent lines of reporting, including:

  • the Minister for Health and Ageing
  • the Secretary of the Department of Health and Ageing and
  • the Council itself.

Under this bill, the Chief Executive Officer will report directly to the Minister for Health and Ageing, while keeping the Secretary of the Department of Health and Ageing informed on a ‘no surprises’ basis. These changes will provide the NHMRC with clearer delineation of responsibility and accountability in management, advice and strategic development. The NHMRC will retain its name and will include the CEO, staff, Council, Principal Committees and working committees.

Whilst the accountability and reporting structure has been streamlined, the roles and functions of the Council, the Principal Committees and working committees have not been altered. The Council will continue to provide independent expert advice and inquire into medical research and health related issues, including issuing guidelines and advising the Government and community on matters relating to:

  • the improvement of health;
  • the prevention, diagnosis and treatment of disease;
  • the provision of health care;
  • public health research and medical research; and
  • ethical issues relating to health.

The proposed legislation prescribes that membership of the Council consist of 19 members, with provision for additional expert members as required from time to time. Whilst this represents a reduction from the current 29 Council members, requirements for appointments, including qualifications and experience, remain largely unaltered. This will enable the Council to be more effective whilst retaining its high level of expertise.

The administrative requirements for appointment processes have also been streamlined. Whereas, previously it has taken up to 8 months to complete some appointments, more effective consultation and administrative processes will help to ensure appointments can be made in an efficient and timely manner. The term for Council membership will continue to be 3 years.

The new agency will be financially autonomous, with direct appropriations, and the CEO will be responsible and accountable for the financial and day-to-day operations of the agency. As the biotechnology, health and medical industries in Australia continue to strengthen and grow, the provisions included in this bill will enable the NHMRC to:

  • be more responsive to emerging health priorities and issues;
  • explore innovative collaborations and industry joint ventures; and
  • provide greater transparency and accountability in its operations.

The Research Committee will continue to recommend funding for research proposals and monitor the use of research funding. The Research Committee, as with all Principal Committees of the agency will report to the CEO on operational and financial matters, but will report to Council on technical matters concerning health and medical research.

The bill will not affect the level of funding the Government has allocated for health and medical research, but provides for a more effective, efficient, accountable and responsive agency. These changes will see the NHMRC better placed to operate as a leader in Australia’s internationally recognised health and medical research sector.


The Superannuation Legislation Amendment (Trustee Board and Other Measures) Bill 2006 will consolidate and revise the governance arrangements for the Commonwealth Superannuation Scheme (the CSS), the Public Sector Superannuation Scheme (the PSS) and the Public Sector Superannuation Accumulation Plan (the PSSAP) with effect from 1 July 2006.

To make these changes the bill will amend the Superannuation Act 1976, the Superannuation Act 1990, the Superannuation Act 2005 and the Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006.

The consolidation of the governance arrangements for the Australian Government’s civilian employees’ superannuation schemes under a single Board is being undertaken consistent with the governance principles of the Review of the Corporate Governance of Statutory Authorities and Office Holders, which is known as the Uhrig Report.

Following the release of the Uhrig Report, an assessment in relation to the CSS Board, which is the trustee of the CSS Fund and responsible for the administration of the CSS, and the PSS Board, which is the trustee for the PSS and the PSSAP and the administration of those schemes, recommended changes to those governance arrangements.

The assessment recommended that the membership of the PSS Board be increased from 5 to 7, which is consistent with the Uhrig Report’s best practice principles that boards have from 6 to 9 members. The assessment also recommended that consideration be given to the establishment of a single Board for the CSS, the PSS and the PSSAP.

The bill therefore transfers the powers and functions of the CSS Board to the PSS Board, which is renamed as the Australian Reward Investment Alliance, and abolishes the CSS Board. The Australian Reward Investment Alliance is to comprise 7 members, giving it the same membership as the CSS Board and two more than the current PSS Board. This reflects the recommendations of the Uhrig assessment and the Board’s broadened role as the trustee of three superannuation schemes.

As a transitional measure, the 2 members of the CSS Board who are not members of the PSS Board will fill the 2 additional positions on the Australian Reward Investment Alliance. The bill includes consequential and transitional provisions to ensure that any references to the CSS Board and the PSS Board in any Act, delegated legislation or relevant documents, for example insurance contracts, can be read as referring to the Australian Reward Investment Alliance. The seamless transfer of the assets and liabilities of the CSS Board to the Australian Reward Investment Alliance is also provided for in the bill.

The consolidation of the governance arrangements for the CSS, the PSS and the PSSAP under one Board will provide significant opportunities for efficiencies in the management of the CSS, the PSS and the PSSAP.

It will also offer an opportunity for the Board to adopt one investment mechanism for the ongoing management and investment of the three funds, which would assist in its management of the CSS. This is particularly significant for the CSS because it is a closed scheme with a decreasing contribution base where net benefit payments exceed contributions received.

The bill will modify the application of the Income Tax Assessment Act 1997 to provide for the effective deferral of any capital gains tax liability that would otherwise result from the pooling of assets of the CSS Fund with those of the PSS and the PSSAP Funds already pooled in the PSS Investments Trust. The provision of the capital gains tax rollover reflects the essentially involuntary nature of the transaction.

Ordered that further consideration of these bills be adjourned to the first 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.