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Monday, 7 September 2015
Page: 6175


The following document was tabled by the Clerk pursuant to the order of the Senate of 20 June 2001, as amended:

Entity contracts for 2014-15—Letter of advice—Prime Minister and Cabinet portfolio.



GOVERNMENT DOCUMENTS (pursuant to Senate standing order 166)

1. Finance—Advances provided under the annual Appropriation Acts—Report for 2014-15—Letter of advice. [Received 21 August 2015]

2. NBN Co Limited—Report for 2014-15. [Received 24 August 2015]

3. Airservices Australia—Corporate plan 2015-20. [Received 28 August 2015]

4. Indigenous Business Australia (IBA)—Corporate plan 2015-16. [Received 28August 2015]

5. National Health and Medical Research Council (NHMRC)—Corporate plan 2015-16. [Received 28 August 2015]

6. Equal Employment Opportunity (Commonwealth Authorities) Act 1987—Clean Energy Finance Corporation—Program report for the period 17 April 2014 to 17 April 2015. [Received 1 September 2015]

7. National Environment Protection Council (NEPC) (formerly National Environment Protection Council Service Corporation)—Report for 2013-14. [Received 1September 2015]

STATEMENTS OF COMPLIANCE WITH SENATE ORDERS (pursuant to Senate standing order 166)

Indexed Lists o f Departmental a nd Agency Files (continuing order of the Senate of 30 May 1996, as amended)

Communications portfolio. [Received 28 August 2015]

Defence portfolio. [Received 4 September 2015]

Department of Employment. [Received 21 August 2015]

Department of Social Services. [Received 21 August 2015]

Fair Work Ombudsman. [Received 28 August 2015]

Industry and Science portfolio. [Received 26 August 2015]

Safe Work Australia. [Received 21 August 2015]

Lists o f Entity Contracts (continuing order of the Senate of 20 June 2001, as amended)

Agriculture portfolio. [Received 4 September 2015]

Attorney-General's portfolio. [Received 26 August 2015]

Communications portfolio. [Received 28 August 2015]

Defence portfolio. [Received 1 September 2015]

Department of Human Services. [Received 3 September 2015]

Education and Training portfolio. [Received 3 September 2015]

Environment portfolio. [Received 26 August 2015]

Finance portfolio. [Received 1 September 2015]

Foreign Affairs and Trade portfolio. [Received 1 September 2015]

Immigration and Border Protection. [Received 3 September 2015]

Industry and Science portfolio. [Received 31 August 2015]

Infrastructure and Regional Development portfolio. [Received 21 August 2015]

Social Services portfolio. [Received 2 September 2015]

Treasury portfolio. [Received 31 August 2015]

List of Departmental and Agency Appointments a nd Vacancies (continuing order of the Senate of 24 June 2008, as amended)

Agriculture portfolio—Correction. [Received 3 September 2015]

Statements of Departmental a nd Agency Unanswered Estimates Questions o n Notice (continuing order of the Senate of 25 June 2014)

Agriculture portfolio. [Received 26 August 2015]

Special Minister of State. [Received 1 September 2015]

Committee Reports (pursuant to Senate standing order 38 (7))

Economics References Committee—Report—Corporate tax avoidance: You cannot tax what you cannot see (part 1)—Corrigendum. [Received 21 August 2015]

Environment and Communications References Committee—The Fin-Fish aquaculture industry in Tasmania—Report, dated August 2015, Hansard record of proceedings, documents presented to the committee, additional information and submissions. [Received 21 August 2015]

Economics References Committee—Future of Australia's naval shipbuilding industry—Interim report, dated 28 August 2015.[Received 28 August 2015]

Recent allegations relating to conditions and circumstances at the Regional Processing Centre in Nauru—Select Committee—Taking responsibility: conditions and circumstances at Australia's Regional Processing Centre in Nauru—Report, dated August 2015, Hansard record of proceedings, additional information and submissions. [Received 31 August 2015]

Intelligence and Security—Joint Statutory Committee—Australian Citizenship Amendment (Allegiance to Australia) Bill 2015—Advisory report, dated September 2015. [Received 4 September 2015]



Economics References Committee—Privatisation of state and territory assets and new infrastructure, dated July 2015. [Received 1September 2015]

The response read as follows—

Australian Government response to the Economics References Committee report: Privatisation of State and Territory Assets and New Infrastructure

July 2015


On 30 October 2014, the Senate referred the matter of privatisation of state and territory assets and new infrastructure to the Senate Economics References Committee for inquiry and rep01t by 2 March 2015. The committee was to examine:

Incentives to privatise state or territory assets and recycle the proceeds into new infrastructure, with particular reference to:

(a) the role of the Commonwealth in working with states and territories to find nation-building infrastructure, including:

    (i) the appropriateness of the Commonwealth providing finding, and

    (ii) the capacity of the Commonwealth to contribute an 15per cent, or alternative amounts, of reinvested sale proceeds;

(b) the economics of incentives to privatise assets;

(c) what safeguards would be necessary to ensure any privatisations were in the interests of the state or territ or y, the Commonwealth and the public;

(d) the process for evaluating potential projects and for making recommendations about grants payments, including the application of cost-benefit analyses and measurement of productivity and other benefits;

(e) parliamentary scrutiny;

(f) alternative mechanisms for finding infrastructure development in states and territories;

(g) equity impacts between states and territories arising from Commonwealth incentives for future asset sales; and

(h) any related matter.

On 2 December 2014, the Senate granted an extension to the Committee to report by 20 March 2015. On 19 March 2015, the Committee tabled its final repo1t.

The report contains three recommendations and includes a dissenting report from Government Senators. The report also includes a section containing additional commentary by the Australian Greens. The Australian Greens state that they support the overall intentions of the majority report's recommendations but propose several revisions to those recommendations in order to take account of the issues they have raised. As the revisions do not materially alter the majority report's recommendations, the Government's response does not separately respond to those recommendations.

Government Response

The Australian Government has considered the three recommendations contained in the report and provides the following responses.

Recommendation 1

The committee recommends that proper and rigorous analysis of total costs associated with privatisation projects be conducted when privatisation is proposed by governments at any level. In addition, appropriate public consultation should be undertaken, including consultation around transactions costs and the costs of creating an appropriate regulatory environment and compliance with those arrangements.


The committee has recommended that any privatisation be based upon rigorous analysis of all costs and be proceeded by public consultation. This is what governments ordinarily do as part of considering any option for privatisation. State and territory governments are responsible for selecting the assets they consider appropriate to be sold in order to participate in the Initiative. As a consequence, they are ultimately accountable to their constituents for the assets that they decide to divest and the pricing and service outcomes resulting from them.

Recommendation 2

The committee recommends that prior to privatisation of assets, governments at all levels introduce appropriate regulatory arrangements and safeguards, including safeguards against anti-competitive behaviour to ensure that future costs are known and established.


Appropriate regulatory arrangements and safeguards against anti-competitive behaviour are important considerations for governments undertaking privatisation. State and territory governments can, and have, put in place mechanisms to address competition issues that may result from the privatisation of assets. Commonwealth legislation also exists to address monopoly pricing and access issues as well as anti-competitive behaviours.

Recommendation 3

The committee recommends that the link between privatisation of assets and infrastructure funding under the Asset Recycling Initiative should be removed. This would provide an environment where: states and territories are encouraged to consider the merits of privatisation on a case by case basis; decisions to fund infrastructure projects are based on the community and economic need; and the Commonwealth contributes funding based on the merits of proposed infrastructure projects while considering the equitable distribution of funds across states and territories.

Not agreed.

The Asset Recycling Initiative is designed to encourage states and territories to invest in additional infrastructure, while recognising the reality of constrained fiscal positions at every level of government.

The Initiative seeks to encourage states to fund new productive capacity enhancing infrastructure by unlocking capital from existing mature assets, which would be transferred to the private sector. The Initiative also explicitly seeks to encourage private sector funding of green field infrastructure wherever possible, by requiring funding and financing options to be considered as one of the three eligibility criteria for new infrastructure proposals.

The Asset Recycling Initiative does not prevent state or territory governments from considering the merits of a privatisation or making decisions to fund new infrastructure based on community and economic need. The Initiative provides adequate time for all of these aspects to be properly considered. Moreover, the existence of the Initiative has clearly not discouraged community debate on the merits of individual asset sales or proposed new infrastructure projects. All infrastructure projects to be funded under the Initiative must demonstrate: a clear net positive benefit; enhance the long term productive-capacity of the economy; and, where possible, provide for enhanced private sector involvement in both theĀ·funding and financing of the infrastructure.

Through the Initiative, the Government is responding to the needs of the economy by building infrastructure that will drive economic growth, create jobs and improve productivity. This investment aims to generate significant additional state and private sector participation to build the infrastructure that Australia needs and will lay the foundations for future growth.