Senator DI NATALE
As I was saying just before question time, we are dealing with this omnibus bill which is a political tactic—wrapping up a whole range of measures into one piece of legislation to avoid scrutiny. It has bypassed normal Senate process, we have not had a public inquiry, we have seen a deal to radically overhaul parts of this legislation which has not received any scrutiny and now we are debating this because an hours motion has been passed so that we stay in this place and pass this bill under the cloak of darkness. That is how we got here.
Let's look at some of the specific elements of this bill and at the merits of whether these changes are warranted. Specifically, I want to talk to the half a billion dollar cuts to the Australian Renewable Energy Agency that the coalition have put forward and that the Labor Party have now agreed to. Let's recognise the context in which these cuts are occurring. Last month was the hottest August ever on record. The past 11 months have been the hottest months for each of those respective months on record. That is the hottest year on record on the back of the previous year which was then the hottest year on record. We are breaking these records at an alarming rate. We are on the precipice of runaway global warming where our capacity to be able to mitigate these changes is slipping away from us. And let's look at what we are doing in response. We know that the Abbott government took away a price on pollution. We are the only country in the world to have a price on pollution and then remove it. We saw another grubby deal between the coalition and the Labor Party to slash the renewable energy target. And, now, we are taking half a billion dollars out of clean energy.
To give the coalition credit, their targets are pathetic when it comes to emission reduction. They are not based on science. So to achieve those paltry targets will not require much. At least the Labor Party have showed a little bit more ambition. They went to the last election campaign with a 50 per cent target for renewable energy by 2030 and economy-wide emissions reductions of 40 per cent below 2000 levels—not where it needs to be but certainly an improvement on past policy. Yet, their prescription for allowing us to achieve a 50 per cent renewable energy target is to, firstly, slash the renewable energy target and, secondly, to take money out of clean energy by taking out half a billion dollars from ARENA. This is magic pudding stuff. We are going to achieve our targets on renewables by taking money away from it and by reducing the targets that we know are the only mechanism in place to help us get there. They might as well join the tinfoil hat brigade from One Nation because their policy has as much merit as theirs.
We had the numbers in the Senate to block these cuts. We had Senator Xenophon who, I know, said that he did not support the cuts to the Australian Renewable Energy Agency. We had Senator Hinch who expressed a similar opinion. Had the Labor Party joined with the Greens and with the crossbench, ARENA would now have half a billion dollars in additional investment. That is the impact of these cuts.
Let's look beyond the issue of renewable energy to the issue of family payments. The cuts, specifically, to family tax benefit A. We learned in this deal made a minute to midnight between the government and the Labor Party that there will be a cut in family tax benefit A for households of over $80,000. We have not had the opportunity to investigate those cuts to interrogate which families will be affected and exactly what impact they will have. Let's also remember that this is in the context of a tax cut, agreed to again by the coalition and Labor Party, for families on incomes over $80,000. So all of us in this place who are on significantly higher incomes are getting a tax cut while both the Labor Party and Liberal Party have decided to take away family tax benefit support for households at $80,000 and over. It is a tax cut for people earning many hundreds of thousands of dollars—it is still there—while we attack some of the more vulnerable people in this community. That is worth $1.6 billion. That was the agreement negotiated—again, between the two old parties. It is the biggest source of spending cuts in this bill. It will hit people hard. There is no scrutiny whatsoever for a deal struck at a minute to midnight. Yes, we are pleased that a number of people have been spared the cut to the clean energy supplement. That was effectively a cut to Newstart—to some of the poorest and most vulnerable people in society.
ACOSS shared their disappointment during a public hearing that the Greens led, because we were denied the opportunity to have a formal Senate inquiry. This is what ACOSS had to say about the changes:
While people on income support payments have been spared from the proposed cuts, low income families will still be hurt by the loss of the Energy Supplement from family payments. A single parent family with two teenage children will lose $284 a year, or $5.50 a week.
That was the deal that the Labor Party struck with the coalition. The loss of the energy supplement, in the words of ACOSS, follows a series of cuts to these payments over the last few years, and ACOSS say that we simply cannot afford to further cut family payments. That is what we are dealing with right now.
You look at the youth payment cuts which remain before the parliament, and ACOSS say that that would result in an unemployed young person losing $47 a week and having to wait four weeks for payments. That is the deal that Bill Shorten said was consistent with Labor values—cuts to the most vulnerable people in society, slashing renewable energy investment; that is now what represents Labor values.
We know, of course, that there are some challenges in the budget and that this bill is designed to address some of the challenges in the budget. But why balance the budget on the back of some of the country's most vulnerable people? Why balance the budget on the back of cuts to clean energy when there are alternatives?
We put forward a number of those arguments to both the government and opposition and said: work with us to make Australia a fairer place and a more innovative nation that is actually leading the charge when it comes to tackling climate change rather than being a climate change laggard.
Let's, for example, start with the diesel fuel rebate. If we were to take away the diesel fuel rebate for the fossil fuel industry, if we were to take away those massive perks that the mining industry gets through accelerated depreciation, over $10 billion would be saved to help address some of the structural long-term issues within the budget. We do not need to take it out of the pockets of ordinary Australians.
We agree with the Labor Party—in fact we led the charge when it came to negative gearing. If only the government would listen to those many voices within the community—in fact most mainstream economists—to end the inequitable and distorting effect of negative gearing, coupled with those massive perks through the capital gains tax system and the discounts allowed, again, we could raise billions of dollars.
The government talks about the difficulties within the health system and has attempted through this bill to abolish Medicare funded dental care for kids—one of the proudest achievements of the Greens through the 2010 parliament. Rather than cutting Medicare funded dental care for kids—and I note the government has said they plan to bring forward specific legislation to deal with that issue at a future time—why not take away the inequitable, inefficient and distorting private health insurance rebate and reinvest that into the public health system? That is how you address spending. That is how you address the issue of structural problems within the budget.
This legislation that will make this country less fair. It will increase those structural inequality issues that we know are now embedded within our tax system. It will take us backwards when it comes to tackling dangerous climate change. It should have been rejected by the Labor Party; instead, it is up to the Greens to show that we are now the real opposition in this parliament.
I would like to focus my remarks this evening on measures in this bill that relate to ARENA. But, before I move specifically to that, I want to talk more generally about the challenge of climate change briefly. It does feel ridiculous to have to be saying these things in 2016, because it is nearly 20 years since the famous hockey stick graph showed emissions rapidly escalating. It is more than 25 years since the first ICPP report, but climate change is real and we still have to assert it here in this chamber, here in this place of elected representatives. We still have to assert, unhappily, that the science of climate change is real and the consequences of climate change pose a significant threat to our way of life.
In this chamber, we have heard even more nonsense than usual recently on this question. We have heard very recently that changes in the carbon dioxide level are a result of changes in temperature, not a cause. That is simply not true, and there is no scientific evidence for that. We have heard that we do not and cannot affect the level of carbon dioxide in the air. That is simply not true and cannot be justified in relation to either the scientific data or the historical experience of industrialisation.
We have heard that warming is beneficial, and that is also not true. It is simply not true. What is true is that we have experienced record levels of warming that almost every credible climate scientist in the world thinks is a consequence of human activity. What is also true is that we face an uncertain future, a costly future and a riskier future than we need to face of changing climate, rising sea levels and all of the geopolitical and economic instability that will come with that.
There is a real need for action but, instead of action, the Liberals have gutted Australia's climate change apparatus. What they have left us with is manifestly deficient. They have left us with a target of 26 to 28 per cent reduction on 2005 levels by 2030. That target will see Australia fall well short of the commitments made by any country we might meaningfully seek to compare ourselves with: the United States, the United Kingdom, Germany, Canada, the other European nations. This is simply not good enough for a wealthy country like Australia.
What is more, we have the targets but we do not have any mechanisms to enable us to reach those targets. We do not have an effective price on carbon, no market based mechanism for generating changed in behaviour by consumers or business. It is to the enduring shame of the Australian Greens, who like to talk endlessly about their great achievements in climate change, that they voted against the CPRS, the mechanism that would have been in place for many, many years by this point in time had they actually had the conviction, stood by their convictions, and been willing to support a progressive government rather than undermining a progressive government when they had the opportunity. Direct action is not going to get us the rest of the way there. The research confirms that direct action is largely just funding projects that would have gone ahead anyway. It is essentially a form of corporate welfare. It is not asking the people who need to be contributing to make the contribution they need to make. With all of this, we need to understand that the government only met its 2020 target because of the reduction in land clearing, the consumer-driven embrace of domestic solar, the decline in manufacturing that occurred through the GFC and afterwards, and the corresponding decline in energy demand.
With this bleak landscape—and it is a bleak landscape—ARENA is the last remaining limb of a credible climate change policy. Developing clean tech is essential. It is essential if we are to reduce our emissions. It should be an important part of any policy under this government for jobs and growth, as it was under Labor because the number of jobs in the renewable energy industry tripled during a period that included the global financial crisis. During that period in 2013, the leading global business index in renewables rated Australia as the fourth most attractive destination for renewables investment in the world, behind only China, the United States and Germany. Sadly, that ranking is falling away.
ARENA has played a critical part in all of this. It plays an essential role in developing clean energy technology by investing at each stage in the R&D cycle. It provides support that commercial parties are unable or unwilling to provide. Some technology—for example, wind—is already cost competitive with other energy sources in the NEM. For this reason, ARENA does not invest in wind but instead concentrates on developing new technology. It looks at things in phase 1, the research and development phase. As an example, we can see world-leading research programs at UNSW and ANU into solar PV and thermal solar. Those things receive significant funding from ARENA and they could not have been funded with loans from the private sector. ARENA funds things in the pilot phase—the phase when we need to show that technology can work out of the lab out in the real world. Again, this is too risky for most commercial players, and public-grant funding is incredibly important here.
Of course ARENA also invests in the demonstration phase, which proves that the technology not only works but also can work at scale. It is in this phase that we help to make these technologies cost competitive. It is these investments that bring technology down the cost curve and encourage the development of viable business models and supply chains. This is where large-scale solar energy is at in Australia. The series of grants that were announced by ARENA in the last week will go a long way to making solar a permanent and cost-competitive component of Australia's clean energy landscape. This work is incredibly important and I am very, very proud to say that Labor has stepped in and saved ARENA from a cut that would have, effectively, left it an empty shell had it gone ahead.
In a 2010 speech on low-carbon energy, the Prime Minister acknowledged the role of government in supporting clean energy innovation. He said that government support for innovation and investment in clean stationary energies is important, particularly at the early stages. Well, that was not what was presented in the budget earlier this year, and that was not what was presented in the omnibus bill when the government first introduced it. The problem is that the Prime Minister is hostage to the right wing of his party room. Under these circumstances, Labor defended ARENA from the government, as we did when it was under attack from the former—and, perhaps, once again—Prime Minister Tony Abbott back in 2014. This bill before us this evening secures an additional $800 million over five years in grants. This is $800 million secured by Labor's intervention and by Labor's negotiation with the government. ARENA has stated that this money will provide it with a budget that allows it to continue a strong work program into the future.
Senator Di Natale, as he so often does, used his time this evening not to attack the government but actually to attack Labor, which of course is the modus operandi for the Greens here in the chamber and for the Greens political party out there on the ground in the election. Where are the seats where they direct their resources? Not the seats held by conservatives; they do not spend their time trying to convince conservatives that they ought to change their vote and pursue a more progressive agenda. They spend their time, resources and energy attacking Labor members and undermining Labor members, and it is getting us no closer to the progressive future that they claim they want.
I have a memo to Senator Richard Di Natale. I say to him: Labor did not win the last election. The Labor Party took a program to that election that would have dramatically reduced inequality in this country through investments in education, health, clean energy and universities, but we did not win and we are not in a position to implement that agenda. We find ourselves negotiating with the government, which is not interested in that agenda. But, nonetheless, negotiate we did. One of the things we have secured is a strong future for ARENA, a strong future for investment in clean energy and a stronger future for the researchers who undertake world-leading research in our institutions, universities and research centres.
I commend the bill to the senators present and later this evening, when the bill comes before the chamber, I hope that people recall that, in fact, securing ARENA's future has been a most important contribution made by Labor.
I rise to make a contribution to this debate on the Budget Savings (Omnibus) Bill 2016. Here, again, we have the government trying to rush through changes that will significantly impact on some of the most vulnerable members of our community. While I realise that this is a government bill, you cannot help but comment on the fact that Labor is helping the government rush through the bill. It is like: 'Nothing to see here. Let's get a move on. Let's push these changes through.' Although, yes, it is really great, as a person who has campaigned long and hard for an increase in Newstart, against cutting the energy supplement, and on issues around psychiatric confinement and the government trying to take DSP off those people who are subject to such confinement, I am really pleased to see that those measures are no longer part of this package.
I am also really pleased to see that the cuts to ARENA are not quite as bad as the government was going to make, but they are still there. They are still going to lose half a billions dollars worth of funding. I for one cannot say to Labor: 'Oh, fantastic. You've made a few cuts—great. We were there already.' But now you're helping the government make all these other cuts, a number of which are in my portfolio areas and which I will go to in a minute, where we have had submissions to the inquiry. The two old parties combined, as they frequently do, to not allow a committee hearing into this bill. Because they chose not to allow an inquiry into this bill, we have not had an opportunity to consider all of the impacts of the 24 schedules of this bill.
Honourable senators interjecting—
If the two other parties could stop arguing across the chamber.
We're not arguing; we're having a chat.
The DEPUTY PRESIDENT
If you could keep it down, that would be great.
The DEPUTY PRESIDENT
Please direct your comments to the chair.
If they could keep it down, that would be fantastic.
The DEPUTY PRESIDENT
I have asked for order. Please continue.
They combined, as I was saying, to not enable a hearing, so in fact it was up to the Greens and the crossbenches to hold our own hearing into the measures and the impacts of these measures. We gathered some valuable evidence which, although it was not official, is certainly evidence from stakeholders and people that are interested in these cuts. I will go into some of those details in a minute.
It is once again the coalition making cuts—they were trying to make more—at the expense of the most vulnerable in our community. In the years since the horrific 2014-15 budget, which of course was notorious for the cuts it was trying to make—thank goodness many of those did not get through, but that does not stop the coalition. They will keep going and going until they can get some of those cuts through. They are continuing to pursue cuts to income support and to other supports and services that are aimed at the most vulnerable in our community. They are continually trying to cut away our social safety net and, as they do so, they increase inequality, creating a less fair society.
As the Australian Council of Social Services said to us in the informal hearing that was held on Monday, 'The critical question is why the government is pursuing a cut to this payment'—they were talking about the energy supplement at the time—'and consideration being given by the opposition to support that cut.' And thank goodness they did not. I am well on the record of saying thank goodness they did not, although I will come to the bits that they are still supporting in a minute. At the same time, they are prepared to spend $4 billion over the forward estimates to deliver another tax cut to people on $80,000 or more. It will be about $6 a week of additional cash in hand of somebody who is already on about $80,000, and that will be loose change.
They went on to contrast that to the cuts in the energy supplement, which is a cut of $4.40 to Newstart, a payment that we know is well below the poverty line now. This seems to me to be grossly unfair. It captures the fundamental inequality in the coalition's approach. They are prepared to make cuts to the most vulnerable but really baulk at addressing some of the largess that is doled out to the wealthier.
One of the most significant cuts and one which we have been discussing a lot is the cutting of the clean energy supplement. One of the issues here is the impact that this would have. People think $4.40 a week is not very much, but it is if you are struggling to survive on Newstart. For many payments, this has been the only real increase in decades. Newstart has not been increased beyond CPI for a number of decades. Quite frankly, it was unbelievable that the coalition thought it was acceptable to go in for this $4.40 when there has been no increase for decades. There has been a campaign to increase Newstart by $50 a week for a significant period of time. In fact, that campaign to get the $50 increase has been going for so long that we have had to increase it to $55 a week because the cost of living has risen so much over the time of the campaign.
But, no, instead of increasing it, listening and working on that to deliver a cut, the government chose to try to cut Newstart by $4.40 and give the better off a $6-a-week increase through tax cuts. Community organisations have for years, as I said, been campaigning for a real increase in Newstart. We have had campaigns. We have had inquiries. There has been widespread evidence collected about the need to address the issue of one of the most fundamental pieces of our social safety net.
So the question is: now that there have been some changes there—which I am pleased to see—will the coalition commit not to try to go after the energy supplement again into the future? Can people on Newstart be secure in the knowledge that in fact the government will not come for them again and try to cut their payments?
Last time, the schedule dealing with psychiatric confinement and trying to take DSP off people in psychiatric confinement was a whole bill all on its own. We did previously have an inquiry into that particular piece of legislation. All the evidence showed it was so bad that the government itself was not continuing on with that piece of legislation. In fact they had effectively, as the stakeholders took it, abandoned it. But just so that I can remind people of just how bad this piece of legislation was, or is, if it ever comes back, I want to quote Alison Xamon, President of the Western Australian Association for Mental Health, who gave evidence to the informal hearing on Monday. She said:
What we do know is that people with mental illness can be appropriately treated, and often medicated, and released on conditional release orders. But the problem is that if you have withdrawn all of their supports—
that is, taking away DSP—
because these are often people that are on disability support payment—then what will often happen is that they will lose their accommodation, which is one of the key social determinants for recovery. They can't keep their rent going, they can't keep their mortgage going if they have mortgages, or keep the utilities happening, for the temporary that they are being detained within mental health facilities or prison … There are no long term savings to be made in this, but there are certainly far more expenses to be incurred by these measures.
… … …
The reason why you need to keep receiving an income, particularly for people with mental illness, is because you need to be able to maintain those supports externally, while you are being temporarily incarcerated and receiving treatment.
Patrick McGee, from the Aboriginal Disability Justice Campaign, also provided some evidence. He said:
These are people who've been found unfit to plead. They are being detained for the purposes of treatment, and that treatment is designed to return them safely to the community. The DSP is used as a cornerstone mechanism for enabling that pathway.
Earlier, when we were debating this bill, I made these points and gave a large amount of evidence about the detrimental impacts of this particular measure. It is tragic that the government, having seen that evidence, having heard that evidence, pushed ahead to try to push this schedule through. They tried to ram it through this place without proper scrutiny. The further tragedy is that, with the magnitude of the impact it would have caused, all that was saved over four years was $30 million. The government are that mean-spirited that they would subject people that rely on this payment and these circumstances to the appalling consequences of withdrawal of DSP. I am glad to see that this is off the agenda. Again, I ask: will the government now commit to the fact that this particular idea is dead and buried? We do not want it coming back a third time. Do the sector and the community have to keep fighting these appalling ideas?
Then, of course, as has been discussed in the chamber, there are the cuts to ARENA. And we are supposed to be celebrating the fact that we have managed to save part of the funding. But I cannot celebrate the fact that we have lost half a billion dollars worth of funding out of ARENA. My colleagues have been eloquently arguing the issues over that, and they are issues that signal where the government is coming from.
There are other measures that still remain in this bill. For example, the bill still contains cuts to the carer allowance. This is another mean-spirited cut that takes backdating of payments away from carers. As we know, carers are often thrown very suddenly into caring for their loved ones and their friends. Often that is the only thing on a carer's mind—they have, all of a sudden, become a carer. They do not know about—and they do not have time to apply for—carer payment. At the moment, people can claim some backdating of carer payment. As I said, they often do not have time to think about applying for carer allowance, because they are too busy coming to terms with supporting their loved ones. It helps carers quite a bit if they can get a bit of back pay. This is what Carers Australia said in their submission to the bill:
It is hard to over-dramatise the devastating effect of the combined shock of someone you love suddenly becoming disabled or incurring a debilitating illness—having to deal with their pain and suffering and the loss of life chances—accompanied by the sudden loss of income; especially at a time when extra expenses are incurred as a result of having to adjust to the tragedy.
… … …
The capacity to be reimbursed for even a comparatively modest amount of the extra cost carers have incurred can make a real difference when they have finally reached the point of understanding that they are entitled to financial assistance.
Again, you are making money off some of the most vulnerable members of our community and trying to make savings from them. These are people who are providing billions of dollars worth of care to our community. It is short-term, mean-spirited thinking.
As I touched on before, the bill contains cuts to the energy supplement. While part of those cuts are going to be opposed, as per the discussion we had earlier, the energy supplement will still be taken off families receiving FTB. They will continue to lose the supplement. This is what ACOSS said about that:
… low income families will still be hurt by the loss of the Energy Supplement from family payments. A single parent family with two teenage children will lose $284 a year, or $5.50 a week.
The loss of the energy supplement to families follows a series of cuts to these payments over the last few years. We cannot afford to further cut away at family payments.
So we are still going to see an impact on low-income families. There is still a lot that we do not know about the impact of the changes to the family tax benefit payments, and so we will be asking some questions in the Committee of the Whole about that.
The bill also makes changes to the Aged Care Funding Instrument and other aspects of aged-care legislation. I make the point that this comes at the time when the government is also trying to take $1.6 billion out of aged-care funding. That is not contained in this legislation, but the changes that are made come in addition to those particular changes the government is trying to make. There were submissions expressing some concerns around putting in place increased compliance measures, some of the amendments that were made there and what impact they will have.
The bill also applies interest charges for those on income support. The interest rate will apply to debts under a range of income support payments. It will be seven per cent higher than the market rate—that is, it will be the market rate plus seven per cent. That is quite possibly more than the government is actually paying on its own debt at the moment. This is the second cruel attack. The coalition is changing the legislation so that a debt incurred because of administrative error will now incur an interest charge. Previously, where there was a debt because of administrative error, it could not result in an overcharge. Now the coalition wants to charge people interest even if it is not their own fault. So this is charging interest on debts from mistakes that have been made in income support payments due not to the person who is receiving the payment but to administrative error. The National Welfare Rights Network said in a submission:
Our members regularly provide information and advice to current and former recipients of social security and family assistance payments about debts. Many have relatively small debts … which are nonetheless a significant burden for them due to their low incomes. Most are willing to repay their debts and do so steadily, although it may take some years for them to repay even small debts. Despite this, many of them miss repayments and repayment deadlines at times. This is for a range of reasons, such as mental health, homelessness …
Sometimes it is simply because of the challenge of managing the household budget on a very low level of income. The submission goes on:
Although in many of these cases, the person might be eligible to have their debt repayments suspended for a period (known as "write-off" …) or negotiate a lower rate of repayment, in our experience the same circumstances which lead to them missing payments often lead to them not advising DHS of their situation.
Or seeking relief. In other words, this is another cruel measure, the same as the harsher debt recovery measures that are contained in this bill, attacking once again some of the most vulnerable members of our community. For these reasons, I foreshadow that I will be moving a second reading amendment addressing the issues around this government attacking the most vulnerable members of our community. We will be opposing this bill.
I rise tonight to speak on the Budget Savings (Omnibus) Bill 2016. Those opposite have a habit, in this place, of lecturing Labor on fiscal responsibility, yet every time I hear a lecture from those opposite I wonder where they have been for the past three years. Have they been paying attention to the national accounts or are they suffering from some bizarre form of collective amnesia? They have been in control of the finances for the last three years, not us on this side. Since their 2014 budget, the deficit has tripled, debt has blown out by more than $100 billion, and those opposite have put the AAA credit rating at risk. For the last three years Mr Hockey and Mr Morrison have been running the nation's finances. They are responsible for the deficit being $2.6 billion bigger at this year's Pre-election Economic and Fiscal Outlook than it was at the Mid-Year Economic and Fiscal Outlook in December, with net debt blowing out by $7 billion in the same period. And still, after three years in government, the Treasurer and those on the other side continue to try and blame Labor for the coalition legacy of debt and deficit blowouts and run of reform failures. The hypocrisy of this government is extraordinary.
But there is a budget repair job to do and it should be done fairly, without attacking those in our society that are most vulnerable. This bill, as originally proposed, contained 24 measures with combined savings of $5,997 million, announced in previous budget statements. We propose to support 20 of the measures with no amendments. However, a number of measures originally proposed have a particular impact on vulnerable people or are not consistent with our broader election commitments. This government has an overwhelming track record of trying to hurt those that are most vulnerable in our society. Time and time again, in this place, Labor senators and members of the crossbench, have stopped harsh and unfair cuts put forward by this government. Labor is committed to budget repair that is fair. This means taking responsible savings decisions that improve the sustainability of our public finances, reduce the risk of a credit rating downgrade, protect the most vulnerable Australians and ensure we can make targeted investments that achieve inclusive growth.
Budget repair should be achieved in a way which protects the most disadvantaged and people on low incomes, while ensuring important investments—such as those in clean energy—are protected and can promote sustainable economic growth. The amendments, secured by Labor, will bring the total savings to $6.3 billion, around $300 million more than the government put forward in its original legislation. Since the election and the introduction of the government's legislation, Labor has taken the time to carefully scrutinise and consult on the measures contained in the bill, and the agreement today reflects what we believe to be a better, fairer and more fiscally responsible package.
It is not enough to just sit in this place and to oppose everything. The future of the Australian economy and the Australian people is too important to reject sensible compromise when it can be achieved. So, once again, Labor has protected pensioners, single parents, carers and people with disability, and people who have lost their job because of the Liberals' harsh cuts. We have opposed, or amended, three measures: Australian Renewable Energy Agency savings; the cessation of the energy supplement for new payment recipients; and psychiatric confinement. To offset the cost of this and ensure we deliver a similar quantum of savings, targeted changes are proposed to abolish family tax benefit part A supplement for families with income over $80,000.
One issue that I am particularly concerned about is that of child dental care. Labor is opposed to the government's axing of the Child Dental Benefits Schedule, standing up against Mr Turnbull's plan to force over five million children onto long public dental waiting lists. I am glad that the government has agreed to take that measure out of this bill, even though they will bring it to this place separately—and I will oppose it vehemently when it returns.
In government, Labor established the CDBS in response to alarming evidence about the oral health of Australian children. The CDBS provides eligible children with up to $1,000 in dental services every two years, with a strong focus on preventive care. Today, Labor has protected the Child Dental Benefits Schedule by removing it from the government's omnibus legislation. The government's own health department says the CDBS has been a success, with the only failure being the Abbott-Turnbull government's refusal to promote it.
Labor's National Partnership Agreement on Adult Public Dental Services has also helped states and territories provide public dental services to eligible adults. As the government admits, the NPA has funded treatment for an additional 400,000 patients. But now the government wants to scrap these proven programs and establish its own Child and Adult Public Dental Scheme, the CAPDS. If implemented, the CAPDS would force over five million children onto long public dental waiting lists. This will prevent families from seeing the dentist of their choice and lengthen waiting times for children and the adults who are already entitled to public dental services. As the National Oral Health Alliance has noted, CAPDS funding would allow eligible patients to be seen just once every 17 years! People in rural and remote areas would be even worse off, given a shortage of public dental clinics. This is simply not good enough. The government's CAPDS would also allow states and territories to charge co-payments for public dental care. And this is just another attempt to shift costs onto patients by the government that gave us the GP tax, and now the Medicare rebate freeze—a GP tax by stealth.
The government's plan to axe the CDBS and NPA will save $52 million over four years. Labor is prepared to work with the government to deliver the same quantum of savings while protecting patients.
The government has also stated that the Minister for Health and shadow minister for health will enter into formal discussions, with the objective of delivering at least the same quantum of savings in dental care. But Labor will not stand by while the government axes the effective CDBS and NPA and forces children, as I said, onto long dental waiting lists.
Another issue that has been of concern to me in this omnibus bill is the $1.3 billion the government wished to cut from Australians in need by abolishing the energy supplement. This legislation was the first opportunity that Labor had to scrutinise this measure in detail. Labor made it clear during the election campaign that we had not been given the opportunity to properly scrutinise the energy supplement measure or seek advice on its effects. After closer scrutiny of the government's legislation, it became clear that the abolition of the energy supplement would have seen the most vulnerable in our society suffer disproportionately as a result of the bill. This is why we have secured important amendments which protect low-income households.
As a result, Labor will support just $200 million of this savings measure so that all existing categories of recipients, including those on Newstart and pensioners, will continue to receive the energy supplement, except for family tax benefit and Commonwealth Seniors Health Card recipients.
If the government's full abolition of the energy supplement passed the parliament, Australians already living on very low incomes would be hundreds of dollars a year worse off. A single mum on Newstart would have been $4.40 or $220 a year worse off. A pensioner couple would have been around $8 a week or $550 a year worse off. A person with a disability would have been around $8 a week or $350 a year worse off, and so too would carers. This may not seem like much to Mr Turnbull. But, to people on low incomes, every dollar counts.
It was Labor that created ARENA and the Clean Energy Finance Corporation, and under Labor renewable energy boomed; jobs in the industry tripled and growth in the numbers of households with rooftop solar went from 7,400 to 1.2 million. Australia under Labor was rated one of the four most attractive destinations for renewable energy investment, along with the US, China and Germany. This ranking has plummeted under the Liberal government.
Labor has consistently resisted attempts by the Abbott and Turnbull governments to undermine the renewable energy industry, and we are doing so again with important amendments that will save ARENA. After closer scrutiny of the government's cuts to ARENA, and consultation with industry, it became clear that the government's proposal to gut ARENA and establish a new Clean Energy Innovation Fund would have seen investments in earlier stage research and development and demonstration projects suffer, as the Clean Energy Innovation Fund would only be able to finance commercially ready projects.
The government's measure would have effectively led to the abolition of ARENA, one of Australia's flagship bodies that invest in early stage renewable projects. Through Labor's strong advocacy, Labor has struck an agreement with the Turnbull government that provides ARENA with a secured budget of $800 million over five years that ARENA itself has stated will allow it to continue its important work.
This budget is additional to funding that ARENA already has in place to complete around 200 existing projects and to fund the large scale solar projects announced on 8 September. As part of this negotiation, the Minister for the Environment and Energy will meet with the shadow minister to discuss the profile of remaining ARENA funds over the forward estimates, and to develop a forward work program which safeguards Australia's reputation as a world leader in research and innovation in renewable energy, building on the work of our universities and CSIRO, and which ensures that there is support for demonstration or proof-of-concept stage development where debt and equity finance is insufficient to support projects.
The government has also agreed to discussions with the opposition about opportunities for bipartisanship around policies that accelerate the transition to a modern, clean energy system that delivers reliable, affordable energy to Australian households and businesses, and which ensure that this transition is—to use the terms of the Paris Agreement—a 'just transition' for impacted workers and communities.
Labor took a comprehensive package of climate change policies to the election, including $300 million of funding for ARENA, a commitment to 50 per cent renewable energy by 2030 and $300 million for a strategic industries fund to ensure emissions-intensive industries and their workers are able to make the transition to a clean energy economy. Labor will continue to advocate for strong climate change policies from opposition, including non-monetary policies. That is why Labor has secured the government's agreement to commence discussions with us to accelerate the transition to a modern, clean energy renewable energy system.
Another measure that we are opposed to is the one concerning psychiatric confinement. This measure would take income support payments away from people in psychiatric confinement who are charged with a serious offence and who are undergoing a course of rehabilitation. The changes the government wanted to make would significantly disadvantage people with a serious mental illness or an intellectual disability who have been charged with a serious offence, and potentially jeopardise their rehabilitation. The purpose of psychiatric confinement is to rehabilitate, not punish, people who have been charged with a serious offence. In some cases, patients may use their income support payment to contribute to other costs of their care and accommodation, and this measure may impact on their access to services or shift costs to the states. This measure would also stigmatise and disadvantage people with mental illness or intellectual disabilities for a relatively minor amount of money. This is not good policy—there has been no consultation and it has not been thought through. I am very glad the government has finally agreed to drop this measure.
To ensure the level of savings in the omnibus bill is preserved, Labor has agreed to alternative savings. In order to protect the most vulnerable, such as Newstart recipients, Labor will support changes to the family tax benefit part A, meaning that the FTB A end-of-year supplement for families with adjusted taxable income above $80,000 will be removed from this financial year. This measure will save the budget $1.69 billion over the forward estimates.
Labor has prevented the government from making much harsher cuts to family payments. For example, a single parent with teenage children would be over $3,000 a year worse off as a result of the government's full package of cuts originally before the parliament, but they are not impacted by this measure. A family with two young children on an income of $50,000 would be more than $1,200 worse off, but they are also not impacted by this measure. The changes to the family tax benefit A end-of-year supplement that we have agreed to will only impact those with incomes over $80,000. The people Labor has protected are on incomes well below this. Labor does not see the case for any further cuts to FTB supplements and will continue to oppose the government's cuts to family payments, pensions and allowances that have recently been reintroduced into the parliament.
Following negotiations with the government, Labor has also secured further fiscal improvements. The government will no longer proceed with the reintroduction of the baby bonus. This means the government will remove and drop from the budget the proposed increase to the standard rate of FTB part B by $1,000 per year for families with the youngest child under one. This will deliver a $367 million improvement to the budget bottom line. This wasteful spending was part of the backroom deal done between Mr Turnbull and the Nationals to secure his prime ministership, and Labor is pleased to have secured its removal from the budget.
Since the election and the introduction of the government's legislation, Labor has taken time to carefully scrutinise and consult on the measures contained in the bill. The bill we are discussing today reflects what we believe to be a better, fairer and more fiscally responsible package, in keeping with the fiscal commitment we took to the election. While the bill today has made some savings, the government could fund education properly if they listened to Labor on further ways to repair the budget. Labor has put forward a fiscal repair package which delivers more than $8 billion in budget improvements over the forward estimates, and more than $80 billion in budget improvements over the medium term. Mr Shorten, at the National Press Club, put forward $80 billion worth of savings that Labor has proposed—we took constructive positions on superannuation and put forward tough decisions that we were prepared to argue the case for on capital gains tax and negative gearing.
Further savings Labor has proposed include: reforming negative gearing and capital gains, to save $37 billion; restoring integrity to vocational education and training, to save $7.9 billion; increasing the tobacco excise to stop kids smoking, adding $28 billion, which the government has agreed to; and $1 billion from cracking down on private health insurance subsidies for natural therapies. We could also save $160 million dollars or more by not having a divisive plebiscite on marriage equality that government members and senators will ignore the results of.
Finally, the best thing the government could do to improve the budget bottom line is to get rid of their ridiculous $50 billion tax cuts for big business—tax cuts that will be paid for by cuts to health, cuts to education and cuts to social services. Labor supports the cuts to small business tax, but the Australian people do not want—do not want at all—to give a $7.4 billion gift to the big four banks, and especially not when it is our schools, our hospitals and our universities that could be receiving these much-needed funds instead. Mr Turnbull has backflipped on so many of his policies and on so many of his core beliefs. This is one idea that he needs to admit he got wrong, and dump, if he truly cares about budget repair.
Labor is committed to budget repair, and this deal proves that savings can be achieved without hurting the most vulnerable and without sacrificing important investments in renewable energy. I just hope that the government will agree to the sensible measures that Labor has put forward in order to improve the budget bottom line further.
( Mr Acting Deputy President, this is not my first speech. There are measures in the Budget Savings (Omnibus) Bill 2016 that the Nick Xenophon Team support and there are others that we oppose. Tonight I rise to speak on one measure that we simply cannot support—measure 24 of the bill, the single appeal pathway under the Military Rehabilitation and Compensation Act. The Military Rehabilitation and Compensation Act 2004 provides compensation and other benefits for current and former members of the ADF who suffer a service wound, injury or disease. The measure in this bill will create a review pathway for original determinations made under the MRCA, removing the option for internal reconsideration by the Military Rehabilitation and Compensation Commission and allowing only for a review by the Veterans' Review Board.
The existing pathway for review is twofold, giving claimants the flexibility to choose the review pathway that best suits their circumstances. Currently, a claimant can seek an internal reconsideration by the MRCC, initiated by the claimant under section 349 of the act, or they can opt for a review by the Veterans' Review Board under section 352. The veteran chooses only one of the two pathways with the next stage of appeal for both pathways being the Administrative Appeals Tribunal. Should a veteran opt for the internal review pathway, the veteran cannot access legal aid. However, if the determination is varied or set aside and remade by the AAT then the tribunal can make a costs order against the Commonwealth. Conversely, should a veteran choose the review pathway by the VRB, whilst they may be legally represented, the AAT cannot award that costs of the veteran be paid by the Commonwealth. Whilst this measure seeks to simplify the process for veterans, its effect will make it harder, more onerous and costly for veterans to pursue their claims.
This is not the first time the Senate has been asked to consider the measures contained in this part of the bill. These measures originally formed part of the Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015. When it became apparent that these provisions may have caused unintended consequences, the provisions of the bill relating to the single appeal pathway were referred to the Senate Foreign Affairs, Defence and Trade Committee for inquiry and report. The committee received 21 submissions, with two supplementary submissions. Many of the submissions highlighted serious concerns with the proposed legislation. Slater and Gordon lawyers highlighted the inequity created by this measure. They said:
It results in demonstrably inferior appeal rights for injured veterans compared to civilian workers, not just under Comcare, but across Australian States and Territories.
It is clear that the government has not fully understood the implications of abolishing a veteran's right to request an internal review to the MRCC provided by section 349 of the act. It means that civilian staff covered by Comcare, including staff of the Department of Veterans' Affairs, would have better protection and fairer appeal rights compared to Australian Defence Force personnel, veterans and their families. If this measure is passed, it will mean that those who placed their lives on the line for us and those who continue to do so will be relegated to second-class citizens. This is ironic, given that civilian employees of the Department of Veterans' Affairs who administer military and veterans compensation will, if they are injured at work, have greater access to justice and fairer appeal rights than veterans.
There is no group in Australia that we hold in higher regard than our Australian Defence Force personnel and veterans. Each year on Anzac Day, we commemorate their selfless contribution and the ultimate sacrifices they make. It is astonishing, then, that the government, through this measure, would seek to diminish the rights of this group of brave Australians. The Returned & Services League of Australia, on the face of it, supported the measure. However, during questioning by my colleague Senator Xenophon in a Senate Foreign Affairs, Defence and Trade Committee inquiry, the RSL were forced to reconsider their position after initially supporting the process unconditionally. The practical effect of removing the MRCC internal review appeal pathway will be to deny veterans a quicker system of review than is currently available. The MRCC internal review pathway also provides for veterans to be entitled to legal representation through the entire appeal process, with the right to payment of most, if not all, legal costs and disbursements if an adverse decision is overturned by the AAT.
This measure, however, would mean that all reviews would be directed to the VRB, where an injured veteran is not allowed to be assisted by anyone with a legal qualification during the VRB process. This denial of legal representation for veterans before the VRB sets up a David and Goliath scenario that is virtually insurmountable. The DVA has a plethora of highly qualified private sector panel lawyers and in-house lawyers with unlimited resources at their disposal to help them in defeating an unrepresented veteran's claim. In their submission to the Senate inquiry, Slater and Gordon stated that in 2013-14 the DVA spent more than $6 million on external legal services, including $586,000 on 'engaging counsel who advised on litigation' and other matters. The power of the DVA to defend claims against unrepresented veterans is palpable.
The VRB process also results in the elimination of the possibility of a veteran being awarded costs. Veterans with strong cases will not be able to appeal to the AAT because, win, lose or draw, veterans cannot be awarded their costs at the AAT, if this bill is passed. While the possibility of legal aid may be available to veterans on appeal to the AAT, a grant of legal aid is not guaranteed, as legal aid is administered by state and territory governments. Such services are already under enormous pressure due to funding cuts which are being further implemented under this government. Different eligibility requirements would apply in each state and territory, with veterans vulnerable to the behest of an administrative officer who would make a decision as to whether or not that veteran would be eligible for a grant of legal aid.
With some sensible and reasoned amendments, this measure could achieve a single appeal pathway and a level playing field for veterans in their pursuit for justice and fairness with their claims. The proud history, traditions and sacrifices made by the Australian Defence Force have played a significant role in forging our national identity. It is our responsibility to treat them with the dignity and the fairness they deserve in their hour of need. As I foreshadowed earlier, Senator Lambie and I will be moving an amendment to this bill in the committee stage to remove the measures relating to the single appeal pathway.
I rise to speak against Budget Savings (Omnibus) Bill 2016. It is, sadly, very telling that the first substantive piece of legislation that this Senate has dealt with is legislation to cut clean energy. Originally, it was planned that this legislation would cut kids dental services and cut Newstart. It is still going to cut the carer allowance and it is going to cut education and student support. The next bill, which the House has just dealt with and which is shortly coming to us in the Senate, gives a tax cut to people on over $80,000. And we know that shortly after that bill there will be one with $50 billion of tax cuts for big multinational corporations. How sad is it that we have a government that is happy to dole out largesse to those that are already very wealthy and do not need help and is now forcing cuts on the most vulnerable and on our clean energy sector! I think it is a revolting statement of the priorities and the values of the present government.
We are told that we need some budget savings, and we Greens agree. In fact, we have been putting many revenue-raising proposals to the government, to the opposition and to the public for the last few years, so we certainly do not oppose the need for budget repair. But what we do oppose is the continuation of the $15 billion that has been spent in the last few years locking up men, women and children offshore, the $21 billion of subsidies to the fossil fuel sector that will be doled out over the forward estimates in the coming few years and the continued largesse, as I said, going to tax cuts for big corporations when this government is seemingly blind to the impact of these cuts on vulnerable people and on the clean energy sector. The priorities are very clear. Perhaps it is not surprising, though, that we see massive cuts to clean energy from this government, because it is pretty clear that the backbench is in charge these days, and that is full of climate sceptics and climate change deniers, people who do not understand that we are damaging not only our very way of life but also our economic profitability and our potential for job creation and growth.
The government went to the election with the slogan of 'jobs and growth'. So it is ironic, really, that this bill now cuts money from an institution that is one of the main drivers of jobs and growth in a growing global sector that Australia could really be going to town on. Instead, we see the government hampering jobs and growth with cuts to clean energy. But perhaps that is no surprise, given we have seen this government cutting the carbon price and installing a wind farm commissioner so that people who are very worried about the impacts of wind farms could have somewhere to vent their, thankfully, baseless concerns. Never mind the health impacts of coalmines and other dirty energy! The government was not interested in looking at those. We have seen the massive handouts to polluters so that they can continue to pollute, as opposed to the revenue raising and the tax that they used to have to pay on the pollution that they created.
We have seen cuts to the Renewable Energy Target by this government. Of course, the tragedy there is those cuts were fully supported by the opposition. So perhaps we should not be surprised that we again see a bipartisan approach to cutting clean energy. The Australian Renewable Energy Agency, or ARENA as it is known, will now, as a result of the deal done between these two big parties, have half a billion dollars cut out of its budget, and those cuts have been frontended. The vast majority of them are in the first three years. They are on the books, and ARENA will feel those cuts immediately and for the coming few years.
What an absolute tragedy it is that, yes, we have a terrible government with an awful agenda! But we had the chance here to block those cuts entirely; we have the numbers on the crossbench. But, instead of doing that, the Labor opposition reached an agreement to cut half a billion dollars out of ARENA, and now they have the audacity to want praise for that. They are going around claiming that they have saved ARENA. Well, sorry, you had the chance to not pass any of those cuts. The government wanted to cut $1.3 billion. You could have stood with the Greens and the crossbench—there were enough of us; we all know that—to have stopped all of that $1.3 billion cut from clean energy.
It is an absolute tragedy that the two big parties agreed to cut half a billion dollars when Labor need not have made that agreement. There were other revenue-raising measures. They have found some already. I am pleased they have taken a stand and said they will block the cuts to kids dental and some of the cuts to Newstart and other social support. I welcome that and praise them for that. Why did they not find those same alternative revenue measures and stand up for clean energy, rather than wreaking a half a billion dollar cut on ARENA?
People who are listening might not know what ARENA does. It is a fantastic organisation that was set up to support with grant funding those very early stage renewable energy innovation projects—really exciting things like the printing of solar panels onto, say, corrugated iron roofs and things like speeding up the efficiency, availability and affordability of batteries. Instead of expensive pressure on our grid, with maintenance required for old infrastructure, we can actually look to these new storage methods to not only solve many of the problems of the grid but empower households to manage their own energy demands. It is that sort of really exciting cutting-edge technology that this institution has been investing in.
You want jobs and growth? Well, clean energy is the sector that is taking off globally. Many of the inventions in the renewable energy sector are homegrown, but some of them will not have the ability to proceed because that organisation now has half a billion dollars less. There is half a billion dollars now not going into that innovation to create jobs in clean energy to help us tackle climate change and save the reef. I think it is truly outrageous.
Of course, there is irony in cutting funding from ARENA: how on earth are we going to meet our Renewable Energy Target? How on earth are we going to meet our Paris emissions reduction targets? Many of the experts agree—and, certainly, the scientists agree—that, as it is, those Paris targets are too weak and the Renewable Energy Target is too small. We are on track to overshoot it. Sadly, these guys ganged up and cut it. How are we going to meet either of those targets when we do not have genuine investment in clean energy and innovation? And, of course, we are in a climate emergency, folks.
Of course we need to repair the budget, but let's get things in perspective. There are many ways that we could repair the budget. There are not so many ways that we can help the transition from dirty fuels to clean fuels in a way that safeguards our way of life and our planet and also creates jobs. There are no downsides with clean energy—except if you are a fossil fuel company, of course.
That brings me to the sad revelation that in the last three years there have been $3.7 million of donations made to the Labor, Liberal and National parties by the fossil fuel sector. So of course they are very powerful political influences, and that money talks. It is no wonder that they get their $21 billion of cheap fuel and accelerated depreciation over the forward estimates. Yet we are told that we need to make budget savings. Of course, they do not want to touch that $21 billion, because their donations might dry up. What a sorry situation! It is another reason why we are pushing to reform donations, end corporate donations completely—and, of course, cap donations from individuals as well—and clean up our system.
I would like to make one further point. We were very distressed this week when, after the Labor Party caved in and agreed to cut half a billion dollars out of clean energy, it was let slip in the other place that that $800 million that had been apparently saved from ARENA was going to be cut out of other clean energy sources. It was called either the Clean Energy Finance Corporation or the Clean Energy Innovation Fund—the government was very slippery about using these terms interchangeably, even though they are different pots of money. The government is implying that in fact there have not been any savings at all and that clean energy will still be short a total of $1.3 billion. Either they pulled the wool over Labor's eyes to placate their own climate sceptic backbench or Labor was happy with that arrangement. We do not know, and I will be asking questions in the committee stage to try to get to the bottom of this. We tried to do that in the House, and the minister was not very responsive—that is the nicest way of describing the responses that the member for Melbourne, Adam Bandt, got. What we need to discover tonight is: is that $1.3 billion still being cut out of clean energy, some of it from ARENA and now some of it from those other pots? Did the government make a huge stuff-up or have they been misleading the house? We will find out tonight.
What I will also be asking in the committee stage is: what projects are going to be jeopardised by the loss of that half a billion dollars? We have just seen a fantastic large-scale solar grant fund by ARENA, which has led to many projects right around the country—particularly in regional areas—huge job creation and great renewable energy input into the grid. That sort of exciting job creation is what we need, and it tackles climate change at the same time. I am worried about what ARENA will not be able to do if they are half a billion dollars poorer. I hope that we will get some answers out of the government as to what the implications of this cut will be and I hope Labor sought to ask those questions when it agreed to cut that amount of money.
I foreshadow tonight that during the second reading stage I will be moving to condemn the government and the opposition for cutting half a billion dollars out of clean energy funding at this point in history, when the climate emergency is real and when the rest of the world is already making the transition to clean energy and benefiting from that not only environmentally but economically. I will be moving to condemn the actions of both of the big parties in this place, who are so held hostage by those fossil fuel donors that they are clearly making terrible decisions when we have alternative revenue raising measures that could repair the budget without buggering up the planet.
The Budget Savings (Omnibus) Bill 2016 has been heralded as delivering $6 billion of budget savings over four years. It does not. Saving is what happens when you do not spend. This bill cuts back on spending plans by $5 billion over four years, so, at most, the government can claim to be saving $5 billion. Even this is a bit of a stretch, because over the four years in question annual government spending is still estimated to rise by $78 billion—even after accounting for the impact of this bill. Suppose someone were spending more than his income, but still planned to increase his spending in the years ahead. If the person said, 'I had planned to increase my weekly spending by $83, but now I only plan to increase my weekly spending by $78,' would you think that he was doing any saving at all? I do not think so.
This bill is said to deliver $6 billion of budget savings, but more than half a billion of this represents tax hikes, not the paring back of spending plans. I oppose these tax hikes. The tax burden is already too high and it is expected to grow even without these tax hikes. Our tax burden has grown decade after decade, even after accounting for inflation and population growth. And it is not as if the money is being so well spent that we should be paying extra!
There are four tax hikes in this bill. The bill imposes the Medicare levy surcharge on more Australians. This is a tax of between one and 1½ per cent on the incomes of Australians without private health insurance. Those without health insurance will pay more tax. The bill increases tax on Australians whose wages include fringe benefits. If they incur medical expenses, have dependants, live in remote areas, serve overseas for our defence forces or make low income superannuation contributions—and if they claim the associated tax offsets—they will find that their tax offsets will be reduced, and their tax burden will rise. The bill also reduces the research and development tax offset by 1½ percentage points and so raises the tax burden on businesses that innovate. The loss of a tax offset is a tax increase. The bill requires employers of more than 20 people to pay pay-as-you-go withholding and superannuation obligations in line with payroll cycles, rather than up to three months later. This may reduce compliance costs, but if the government were motivated by a desire to help business it would make the change optional. Alternatively, the government would compensate businesses for the loss of cash flow—but it has not. The government only has its eyes on the money, meaning it is a tax grab, plain and simple.
While I oppose each of these tax hikes, I support each of the spending cuts in this bill. Spending is out of control. Real government spending per person has never been higher, and government spending as a share of GDP has only ever been this high once before—in 2009-10, when Kevin Rudd's emergency spending plan was in full swing. The fact that we are spending at what were once considered emergency levels should be of huge concern to all parties.
The government is living beyond its means. Continual budget deficits are causing our net debt to rise faster than GDP. This is not just concerning because we are borrowing to spend rather than invest and because the billion-dollar monthly interest bill is money down the gurgler; it is concerning because net debt to GDP cannot rise indefinitely without the consequence of a Greek- or Argentinian-style economic collapse. We cannot rely on rosy predictions of budget restraint and falling net debt some years down the track. To ensure our economic security, we need to cut government spending now. So, while I support the spending cuts in this bill, I urge the government to go further.
I urge it to talk to the responsible members of Labor to support spending cuts, to put pressure on the Senate crossbench to take some responsibility rather than letting them just throw pot shots from the sidelines, to look at the more saleable areas in which to cut, such as welfare and taxpayer funded benefits for people who are not poor, and to take advantage of the parliament's convention of passing the government's budget bills by delivering as many spending cuts in these bills as it can. Because while the bill before us today improves the budget position by $6 billion dollars over four years, the deficits over those four years are still expected to add up to $84 billion. We have taken one step. We have got fourteen more to go.
I rise today to speak in opposition to this Budget Savings (Omnibus) Bill 2016. I am very concerned about what this bill is going to mean for future generations. I am extremely concerned that we even have to be debating this bill, a bill that is based on the premise of a litany of broken promises from the Labor Party. We know that all cuts are not created equal. There are definitely smart ways to raise revenue and then there are examples like those that we have before us today, cuts that only serve to hold this country back.
It seems as though the Abbott-Turnbull government has had one aim at the top of its mind since it was elected—that is, to make it harder and harder for the next generation to get ahead and to make a go of things. How else can we explain this government's obsession with slashing and burning funding for our universities? In this bill alone, there are $500 million—half billion dollars'—worth of cuts. We have come to expect that the Liberals have a burning ideological desire to hold back young people in this country, to hamper their access to decent education, decent jobs and their ability to get a foothold in the labour market. But for Labor to roll over like the pack of policy lapdogs that they have become is not only sickening but it is also too often becoming predictable. Yes, they have got some treats from the coalition overlords or perhaps a pat on the head, and every now and again they sit up properly and do as they are told. But is it really worth all of this to sell out young Australians and their access to higher education? The fact that we have Labor and the Liberals standing together proudly cutting more than half a billion dollars from our higher education system is simply disappointing. And the fact that they are crowing about it is even more disgraceful.
This bill will hit Australian higher education students in four significant ways, students who right now are studying, who are about to start or who have already started their second semester at universities across the country. It is going to cut public funding to universities by changing the indexation arrangements, meaning those organisations will get less support and will have to reduce the quality of education or increase the cost for students. This is a tricky manoeuvre designed to make it look like they are not cutting support to universities but in fact that is exactly what the government is doing.
Dropping the threshold at which young people start paying back their HELP debts means people will be slugged harder and earlier to start paying for their increasingly costly degrees. We know right at this moment university students are paying more than they have ever paid before for access to basic bachelor degrees let alone postgraduate qualifications. And here in this bill tonight, students are going to have to start paying this back earlier with lower incomes and it will make it even more difficult once they graduate to get on with their new careers and get themselves set up for the future. It will hold them back as they enter the workforce and try to get on with their careers.
Cutting support to STEM—science, technology, engineering and maths—students is a regressive step that will hamper innovation and hold our country back. Of course this is coming from a Prime Minister who says innovation is what he is all about—well, innovation for some and bad luck for others. Further removing access to student start-up scholarships means that students who are already studying extremely hard, who are already at university struggling and doing it tough are about to have the chair kicked out from under them.
Many of these measures were originally part of the Abbott government's disastrous 2014 budget. At the time Labor and the Greens along with other crossbenchers worked together to make sure that they did not get through because they were bad then in 2014 and they are still bad now. Trying to make savings out of university funding, and making students cover the costs of higher income tax breaks that the government has announced only earlier today is just not fair.
In his budget in reply speech from 2014, the Leader of the Opposition, Bill Shorten, said: 'Tonight I rise to speak on behalf of millions of Australians who feel shocked and angry. Well, tonight Bill Shorten seems to have forgotten about those shocked and angry Australians because here he is with his troops here in the Senate, lining up with the coalition to push through cuts to education.
Selling out the poor.
As my colleague Senator Lambie says 'selling out the poor'. Bill Shorten's broken promises are all to be revealed in this bill that is being rushed through and crunched through this place tonight.
The ACTING DEPUTY PRESIDENT
Senator Hanson-Young, if you could refer to the Leader of the Opposition by his correct title please.
The Leader of the Opposition is the master of broken promises as outlined in this bill tonight. Back in 2014, opposition leader Bill Shorten proudly proclaimed, 'Labor will vote against these cuts to university funding and student support.' Well, what a difference two years can make—broken promises, and Blinky Bill has folded. These students are copping half a billion dollars' worth of cuts in this bill because the Labor Party did not have the gumption to stand up for them tonight.
These cuts will hurt vulnerable young Australians and make it harder for them to access quality, affordable higher education. It is one of the reasons I will now foreshadow that I will move a second reading amendment later this evening that outline these dangerous cuts and the sickening nature of using university students in this country as scapegoats for the government's budget repair.
The other issue that I, as a senator for South Australia, want to touch on briefly is my deep concern for the half a billion dollar cuts to ARENA and to renewable energy in this country. Ripping half a billion dollars from funding for renewable energy projects will hit my home state in South Australia the hardest. We are a leader when it comes to renewable energy, and we must be because we have to do something not just to tackle climate change but to deal with our ever-soaring electricity prices. We have a system in South Australia that is rigged towards the big energy producers, ripping off South Australian households and small businesses day in, day out. In order to bring those costs down, we need more diversity in our energy production and more diversity in the market. Today, we have Labor and Liberal senators from South Australia voting to make it even more difficult for the South Australian energy market and for South Australian households to deal with our energy crisis going forward. Gutting $500 million from investment in renewable technology will be devastating for South Australia, the state with the highest percentage of renewables in its energy mix.
With innovation and proper investment South Australia can be supported in being the leader of the nation and the world in renewable energy jobs and technology. Right when our state needs more support than ever from our federal government to invest in job creation, we have the Labor and Liberal parties ganging up here to cut one of the most richest job-creating industries that we have—that is, renewable energy. The solar thermal plant project in Port Augusta, which has been planned for a long time and has huge community support not just in that regional area but across our state, desperately needs that extra $100 million to bridge the gap to make this project viable. Where is it going to come from now that half a billion dollars has been cut from the organisation and the agency that was meant to fund it?
South Australia can lead the nation when it comes to investing in renewable energy and tackling dangerous global warming, but we are being let down by the old parties here in Canberra. It is time the government stood up to the vested interests of the fossil fuel companies, whether it is in energy production, the price gouging of electricity prices in my home state, or BP trying to drill in our Great Australian Bight. Here we have today the Labor and Liberal parties doing exactly what the big, old fossil fuel companies want more than anything—that is, to stick the boot into the development and the flourishing of the renewable energy sector. It is, frankly, outrageous that there are handouts given to the mining and fossil fuel companies every year. Yet, for the industry that we know we need to be investing in into the future, and that will be jobs rich, in South Australia alone thousands of jobs are on the line tonight because of this bill. Cutting half a billion dollars out of ARENA will cost jobs in South Australia.
I want to know what the South Australian Liberal senators and the South Australian Labor senators are going to say when they get back home to Adelaide tomorrow and explain to South Australians that they just cost jobs in South Australia because they gutted the renewable energy industry. Jobs in the solar thermal plant in Port Augusta will not go ahead now. Jobs that are needed in the wind industry in South Australia will not go ahead now. What will my South Australian colleagues say to the public back home? 'Oh, well, we just decided to cut renewable energy, but don't worry, Malcolm Turnbull has just confirmed that he's still going to give big tax cuts to business and high-income earners. She'll be right.' It is time that the government stood up to these vested interests and stopped propping up a dying, backwards-thinking and regressive industry that is so outdated that it cannot stand on its own two feet.
Hear in this chamber tonight we have the Labor Party and the Liberal Party pushing through a bill that has not had proper scrutiny. We have not been able to see all of the impacts of what their dirty deal is going to deliver. But what we do know is that it relies on three main things: cuts to renewable energy; putting action on climate change on the backburner; cuts to higher education and support for students; and making it harder for the most disadvantaged in our communities. Rather than making the big end of town pay a fair share of tax, rather than ensuring that we deal with things like negative gearing, proper reforms around the tax rorts of those who have massive superannuation fund contributions and, of course, the high-income earners who are about to get a tax cut, and rather than tackling actual inequality in the system we have the government and the Labor Party ganging up to stick the boot into renewable energy, education and welfare recipients. It is shameful. And it gets rushed through late at night on a Thursday at the end of a sitting week.
We know that the government needs to do it now because the only other big thing going on for the government is that we have a Prime Minister who cannot even get through his own agenda in his own cabinet. He is totally crippled by the right-wing grumps on his front and back benches.
Not many people in Australia would have even known who George Christensen was until recent weeks when all of a sudden he has been promoted, it seems, to prime adviser to the Prime Minister—calling the shots on what laws will pass this parliament, calling the shots on what laws will be put by the government of the day. I can tell you what: those right-wing grumps on the front and back bench of the Liberal Party do not give two hoots about the sustainability or certainty of the renewable energy industry and they certainly do not give a damn about the impact of cuts to education or support to students in this country. They do not give a damn about those who are on low incomes in this country who are struggling every day. They have just signed off on giving the richest people in this country a big tax rort and have let them off the hook when it comes to superannuation.
So we are debating a bill, because we need budget reform in this place, and yet we have just seen the Prime Minister say: 'We're in such a budget crisis. We'll start giving tax cuts to the wealthiest in this country.' Seriously, grow a spine.
And to the members of Labor Party here: if you care about tackling global warming, if you care about tackling inequality in this country, don't push this bill through—pathetic penny grabbing from those who can least afford it; a bill like this that attacks the poor, attacks renewable energy, attacks students. Instead, show some spine when it comes to standing up to those tax cuts for Australia's richest people.
The wealthy in this country are about to get a lovely Christmas bonus. That is the bill we going to be dealing with when we come back after this week is over. The last few weeks of sitting are going to be dominated by giving the rich not as much reform as we need in terms of superannuation, but we are going to be giving them tax cuts, because the Labor Party cannot stand up to Malcolm Turnbull.
The people standing up to Malcolm Turnbull right now are the rabid right wing of his party, and it has made him a weak Prime Minister, backed now by a weak Leader of the Opposition.
The ACTING DEPUTY PRESIDENT
Senator Williams, a point of order.
Senator Hanson-Young should refer to those, especially in the other place, by their correct title, not just Malcolm Turnbull, Bill Shorten or whatever. She should have learnt after eight years in this place to show a bit of respect for those who deserve it.
I think what we would like to see in this place, Mr Acting Deputy President Ketter, is a bit of respect for those who every day work to pay their bills, to put a roof over their heads, to get their kids to school, to help their kids get to university. Here today what we see is the government, the Prime Minister, Malcolm Turnbull, making life harder for them. They are the people who deserve a bit more respect tonight. I do not really give two hoots about the financial circumstances and the hardship of the Prime Minister, Malcolm Turnbull.
This bill should be voted down. It is appalling to see the Labor Party just flicking it through. I will be voting against it, as will all of my Greens colleagues. It is unfair. It is short-sighted and it is based, as I said at the beginning, on a bunch of Labor's broken promises. They said in 2014 that they would not stand for this assault on the Australian community, on the renewable energy industry, on universities and education. Yet tonight we have them lining up to stick the boot in, alongside Malcolm Turnbull and the coalition.
This bill should be voted down. It should be thrown in the bin. It is sad it is not going to be, because we have seen the dirty deal done between the Labor Party and the Liberal Party here tonight. Thank you very much.
I rise to speak on the Budget Savings (Omnibus) Bill 2016. This bill will unfairly take over $6 billion of benefits and entitlements away from Australia's poor, unemployed, disabled, aged, veterans and university students in the name of budget repair. I will not support it; it is absolute rubbish. There are better ways, which I will detail shortly, to repair the Australian budget than taking money away from Tasmania's and the mainland's poorest battlers.
It appears from media reports, conversations and speeches in this and the other place that Labor members will support this government's legislation. I am terribly saddened by that news but I cannot wait to put it in my newsletter over the next few weeks and give it to every Tasmanian to tell them what the new Labor members they voted for are doing to them down there.
This legislation has the stain and deception of former Treasurer Joe Hockey's and former Prime Minister Tony Abbott's horror budget of 2013-14 all over it. Who could forget the budget emergency? That is right: the big budget emergency that wasn't actually a budget emergency; it was just an attempt at a terrible deception of the Australian people that was finally uncovered after the Liberal government handed down their 'disregard-what-we-said-last-time-everything's-okay' budget of 2014-15.
The major parties of this parliament, their supporters and political donors try to make out that budget repair is a difficult thing to do; however, repairing Australia's budget and protecting our credit rating is quite easy. The parliament just has to make the super rich, who hide their wealth in offshore tax havens, and tax-dodging multinationals, who make billions trading in Australia, pay their fair share of tax. This parliament should target those rich individuals and organisations for budget repair, not the poor, the down-and-out, the elderly, the sick, the pensioners, the unemployed or our sure-as-hell struggling uni students. This is not just what I want when it comes to tax and equity; it is what the majority of Australians want.
The Australian National University in April 2016 released , which studied what Australians wanted when it comes to the management of our public moneys. On the question, 'A range of measures exist to reduce government debt in Australia, which of the following policy responses would you prefer?' 37 per cent of respondents said, 'Make cuts to other areas of government spending,' and 23 per cent said, 'Reduce ways to minimise tax, such as negative gearing and superannuation concessions'. Only 15 per cent agreed that welfare payments should be decreased. On the key question, 'Do you agree or disagree that reducing government debt is currently the most important economic issue facing the country?' the report stated:
Australians are split fairly evenly on whether reducing government debt is the most important economic issue facing the country.
Contrasting with the budget emergency rhetoric of the Tony Abbott led federal government, 51 per cent of respondents disagree or strongly disagree that 'debt reduction is the country's most important economic problem'.
The ANU report also notes that Australians show some confusion over the relative cost of different welfare spending programs. Fewer than one in four respondents correctly answered that age pensions are the most expensive government welfare program. Almost 30 per cent incorrectly named disability pensions as the least expensive welfare program. Just to remind the chamber of the annual costs in the 2016 budget: age pensions or income support for seniors was the highest welfare cost, at $44.17 billion, followed by family tax benefit at $20.15 billion. Disability pensions or income support for people with disabilities totalled $17.05 billion, unemployment benefit or jobseeker income support was the second lowest welfare budget item payment at $11.51 billion, and the lowest government welfare payment at $4.67 billion was the single-parent pension.
If you want to know who should be made to repair the budget, look at the long list of donors to our major political parties. That will give you a good whiff! Of course we will only discover those names when the political donation list is made public and—surprise, surprise—in the past both major parties have cooperated to design a political donation system which covers up for a long time the names of people who give money to political parties. They have not got the spine to make real-time disclosure. Oh goodness me—no—that is never going to happen. I did suggest that to the current PM, but he said that until Labor meets his match he is not prepared to do that. I would have thought that if you had leadership built within you, you would make that happen. That would make common sense, and show that you have nothing to hide.
On a per capita basis, Tasmania has the most age pensioners living on or below the poverty line, the most unemployed, the most youth unemployed and struggling small businesses. So I will not be supporting this legislation. It will only make our situation in Tasmania worse and that is why it surprises me that the Tasmanian Labor representatives are supporting this. It makes me sick to the guts.
I am happy to work with the Liberals on budget repair, but it is just that when you say 'budget repair' the Liberals, Nationals and now the Labor Party want to take it away from poor people—the poorest in society. Why can't we repair the budget by taking money from super-rich people and the wealthy multinationals who do not, and have not, paid their fair share of tax?
I have presented a plan to the parliament and to the government which will raise $9.4 billion each year or $94 billion over the next decade. If the government and the opposition are serious about fair budget repair, they will seriously consider the super-rich death tax to raise $5 billion a year, a financial transactions tax to raise a minimum $1.4 billion a year and capping the capital gains tax exemption to raise $3 billion a year. These three revenue-raising provisions are practised in many modern countries. They are not new. They are independently assessed and they are globally accepted as part of a fair and balanced way of raising revenue. So why do our major political parties ignore these obvious budget repair measures? The simple, truthful and sad answer is that these taxes would mean that the big end of town would have to pay their fair share of tax. Hooray! When cash is king regarding political donations, it is always going to be the battlers who end up paying for budget repair in Australia.
There is one example of cover-up which shows how politically protected the big end of town is from paying their fair share of tax. According to ASIC—which is supposed to be Australia's corporate watchdog and which has no teeth—about 30 per cent of Australia's share market trade is controlled by half-a-dozen traders who use super computers and highly advanced computer programs. In America, high-frequency share traders and their super computers control about 70 per cent of the share market. These share traders use advanced technologies and computers to get an unfair advantage over super funds investing for ordinary mum-and-dad investors. In Australia, it is estimated by ASIC that they skim about $4 billion of profits from mum-and-dad investors. So a financial transactions tax ranging from 0.001 per cent to 0.01 per cent could raise up to $2 billion a year.
Even just finding out who those six privileged in-hiding, high-frequency share traders in Australia are is absolutely impossible. A couple of years ago during estimates, I asked the head of ASIC who these companies were. The head of Australia's corporate watchdog, under oath, could not tell me the name of the six companies which account for 30 per cent of Australia's share market. I find that absolutely absurd. How are we supposed to have confidence in our corporate watchdog who can admit to me, 'Yes, we know that they exist and that they control 30 per cent of our financial market trades but we do not know who they are'? This is either incompetence at the highest level or just a plain cover-up. I would go just plain cover-up, to be honest. So perhaps the Minister for Finance, in his summing up, can tell this Senate the names of the half-a-dozen high-frequency share traders, who use super computers and insider knowledge from computers and programs that no-one else has access to and who actually skim $4 billion to $5 billion from mum-and-dad investors? I would like to see that blown out of the water this evening. I will be asking for those six high-frequency share traders. I cannot wait to hear their names. I would like to know why we could not put a FTT on those organisations, as many other OECD countries do with their high-frequency share traders? After I am provided with the names of those six companies, I would also like to know how much money in political donations they give, whether they pay any tax and whether they have offshore accounts in tax havens. I have no doubt those three questions will hit them like a brick. These are the questions that should be answered before we tax the poor Tasmanians for budget repair.
There are a number of provisions, totalling nearly $900, wrapped in this bill that I would support: newly arrived residents' waiting periods, interest charges for outstanding debts, social security debt recovery before overseas travel and fringe benefits reform.
In relation to budget repair and the overall state of our budget, the Prime Minister has lavished praise on former PM Howard and Treasurer Costello for the state of our economy today. Oh dear! In heaping praise on former leaders, the current Liberal leadership forgot a few stunning and sobering facts regarding previous conservative government management of public finances. According to the Walkley Award-winning journalist, local government councillor and shareholder activist Stephen Mayne's Mayne Report when he addressed the matter of Howard-Costello government management of our public moneys, Mr Mayne writes: 'Yes, they inherited $96 billion of outstanding bonds and about $69 billion of unfunded staff super. They left $58 billion of bonds and about $50 billion in unfunded super largely thanks to selling the Commonwealth Bank, Telstra and various airports. That's right—selling off our airports. Don't worry about national security.'
According to the Department of Finance and Deregulation, Mr Howard's Liberal-National Party government made a grand total of $59.8 billion from public asset sales, selling off the farm gate. In summary, Mr Howard and Mr Costello sold $59.8 billion of public assets, paid back $57 billion of Labor debt and left us with $108 billion of outstanding bonds and unfunded Public Service super. I would not say that is someone that is economically bloody smart. What if we didn't sell those public assets in the first place and had enjoyed the guaranteed revenue streams from our airports, from Telstra and from the Commonwealth Bank? Imagine if that money had gone back into our health, back into our schools, back into our kids? We would not need to take money. Instead, we take money from the poor to repair our budget now. That is what we do. That is their payback. Your mistakes; they pay it back. Someone more financially qualified can answer that question, but I do know this fact: you can only sell the farm once.
I will now turn to some of the more damaging measures the bill, starting with the changes affecting our uni students. These changes create several disincentives for our young people to gain qualifications to improve themselves and to pursue the career of their choice. We know an educated nation is a progressive and prosperous nation. It follows that so-called 'budget repair' would not include changes to higher education, yet it does. So much for the Liberal government being good money managers! How can the Liberal government expect the Australian economy to excel when only people born with a silver spoon in their hand can afford to attain a bachelor degree or higher?
Australia prides itself on being a classless society and has worked hard to achieve an enviable level of equality, but these changes are just the beginning of a widening of the gap between the rich and the poor. It's an age-old story we are all familiar with, but have not until today had to personally live. Many of those who have been through parliament or are still in parliament are the beneficiaries of free university degrees; why shouldn't subsequent generations be granted the same opportunity? We should be offering our children and grandchildren their first degree for free, giving them the opportunity to pursue the career path of their choosing, not the career path their birth determined for them.
If you cannot take my word for it then perhaps you will listen to the coalition of leading Australian universities, the Group of Eight, who said in their submission on this bill, 'The largest risks outlined in the reports referenced above relates to the costs of the VET FEE-HELP loans scheme and not higher education loans.' This begs the question: why is the government choosing to punish uni students when cleaning up the well-documented rorts in the VET FEE-HELP loans scheme would achieve a greater and a fairer outcome? The Group of Eight also recommends against indexing the higher education grants to CPI, stating: 'Annual indexation is required to maintain the accuracy of the costing structure and to prevent real cuts in funding. To that end, the Higher Education Grants Index, designed to reflect the indexation of Higher Education costs, provides more policy coherence than the CPI indexation proposed in the omnibus bill.' The Group of Eight explained in their submission that the higher education grants index is closely linked to the cost of providing an education and as a result does not need to be tinkered with.
In Tasmania, the state government is working to increase the number of people entering tertiary education, because we have a skills shortage in Tasmania. Not enough Tasmanians have the skills or qualifications to fill any job openings that do come around. Tasmanian uni students do not need added barriers to further study.
The job commitment bonus is one of the measures I agree with. The job commitment bonus is inefficient and underutilised and does not address the real issue: a lack of meaningful, long-term job creation or employment. This is why I have proposed that we remove the tax on jobs and Tasmania becomes a payroll tax free state. Payroll tax exemption for Tasmanian businesses would encourage greater investment in our state and increase the opportunity for jobs. The Tasmanian government informs me that, in the 2015-16 financial year, the state government received $400 million in payroll tax. Yet in the 2016 budget, the Tasmanian government proposed a $425 million jobs package, most of which is tied up in administration and infrastructure. Which of the two is the simplest and likely to have an immediate effect? That is right: the payroll tax exemption.
Youth employment could also be increased by introducing voluntary national service. If our kids are leaving school and do not want to study or cannot find work then they need to be doing a year or so in national service, where they can learn employability skills and a trade of their choosing, giving youth the foundation they need to pursue a career after national service.
These policies will encourage greater workforce participation, encourage greater contribution to the tax base and reduce the cost of welfare.
The changes to pensioners and aged care in this bill are just another onslaught they cannot afford. Most of our pensioners are living in poverty, and our aged-care providers are not sure how to handle the sheer number of elderly entering aged-care facilities. Meanwhile, the government is accusing providers of rorting the system. According to the government, one in every eight claims is a rort. Considering the complexity of the aged care funding instrument, these rorts could be simple mistakes—which is the overwhelming response from aged-care providers. Before the government makes devastating cuts to the aged-care sector, the ACFI must be scrapped. We must start again, in consultation with all industry stakeholders. This will give the government and the sector an opportunity to streamline the process and make savings in both administration and mistakes.
The government has also proposed to impose the pension assets test on residential aged-care arrangements, which has made the Australian Council of Social Service, me and many others concerned about how pensioners are going to pay for aged care. ACOSS says that this change further restricts choice for those on low incomes in paying for residential aged care.
In relation to the single appeal pathway, the big problem we have is the veteran suicide crisis. A large reason for that is the way veterans are being treated when they lodge claims for compensation. Veterans would rather return to war than deal with the mess that the claims system is in. Even though it has been amended by Labor, what the government is proposing under the single appeal pathway still means that this bill denies veterans the right to legal representation. That is right—it denies the right of every veteran out there to legal representation when forced to go against a government body that is stacked with government lawyers. Important decisions about veterans entitlements are being made in a situation where a severely damaged veteran and an advocate walk into a room absolutely stacked with government employees holding law degrees. How is that fair? How intimidating is that to our Australian veterans? How intimidating is it for veterans to walk in and take on a government bureaucracy that is overstacked with overeducated bloody lawyers when they cannot take one in themselves! How are they supposed to defend themselves? What you are doing to these veterans is absolutely disgusting—and if you think I was heating up on Tuesday night, wait till the next lot!
This week has been a big one for me. From dawn to late at night, I have been flat out, bumper to bumper. I know most of my fellow senators know how I feel. So I want to put my response to the Budget Savings (Omnibus) Bill 2016 in this context.
In between speeches, press conferences, the highs and lows of first speeches, and meetings about agriculture, rural women, human rights and equality for same-sex and gender-diverse people, there is one meeting that I have had this week that stands out. I squeezed it in on Tuesday. It was squashed between a RRAT committee meeting and a press conference on the marriage equality plebiscite. It was with Dr Andrew Glikson, an experienced, senior, wise scientist from ANU—an earth and paleo-climate scientist. Dr Glikson has taken it upon himself to brief whichever parliamentarians will listen to him about the existential threat to our survival that we face due to global warming and the climate crisis that faces us. My colleagues have covered a broad range of the impacts of the cuts to essential services that are contained in this omnibus bill. I want to focus on the climate implications.
Dr Glikson was frustrated that people were not listening—frustrated that, here we are, facing the biggest threat to humanity ever, and people are not listening, frustrated that our political processes are seemingly incapable of tackling this problem—that we are all Nero, fiddling while our planet burns. He was angry at our impotence, upset about the denialism, astounded at the inability of politicians and the broader community to logically and rationally look at the science, come to terms with its implications and methodically and systemically take the action that is required to save ourselves. His passion, on Tuesday, released the stopper on the same emotions that I generally have jammed into my powder keg. I try to keep them under check, because, for me, releasing this reality tends to send me careering into despair. What is it going to take? Is there any chance for humanity at all? What is the point? Why don't I just give up all this political faff and retire to the country, drink red wine and grow myself some organic vegies, and watch on as the world disintegrates before our very eyes?
This is the context in which I consider this omnibus bill, in which I consider the government's original aims of destroying our Renewable Energy Agency, with the Labor Party sanctimoniously patting itself on the back for having saved some of the furniture. We are meant to be grateful that ARENA is not going to be completely gutted, only moderately so. And we are meant to ignore the fact that, in tackling our budget emergency, we are leaving completely untouched the obvious ways of bringing in billions of dollars—the subsidies to the fossil fuel companies.
Senators, legislators, anyone who will listen—it is not enough. Half measures are not enough; business as usual is not enough. It is not where we need to head. The only thing that usually enables me to keep my despair in check is that I know what we need to do to tackle the climate crisis. We are facing massive problems, but there are solutions. If we put our mind to it, our ingenuity to work, our innovation, our commitment, our passion, the world can reduce its carbon pollution to zero within the next two decades. We have the technologies, and those that we do not have we can develop. I can even feel some optimism that we can develop technologies that will enable us to soak up the carbon out of the atmosphere at the scale and the speed required to put the brakes on the runaway train that is headed for the precipice that we are currently on. But we have to do it. We have to invest in renewables. We have to plough resources into agencies like ARENA, not ask them to muddle along and get by on half the resources they had last year. Australia is so well placed to play a leading role. We are a developed country with a well-educated community and so much renewable resource. We could be playing a leadership role, not being climate denialist laggards.
Can I remind you what we face if we do not do this, if Australia does not play its role, if the world just goes on, business as usual, as we currently are? It is not pretty. You know where we currently grow wheat in Australia? Sorry, we will not be able to do that anymore. The wheat-growing areas of Australia, under four degrees of warming—where we are still headed—will have a climate that is currently experienced in the central deserts. You know those beachside suburbs that we live in? Sorry, they will be under water. You know the sewerage systems of our cities? They will be inundated. Just think of that. Miami, in the US, is already suffering from this—putrid sewage seeping up into the streets with every high tide. You know how, across the country, our agricultural industries, our farmers and our economy do not cope too well with drought? Sorry, droughts will be much more frequent, more severe, and no amount of frenzied dam building will give us water supply in a hotter, drier world. There will be more floods, more droughts, more bushfires—unstoppable, making large parts of Australia increasingly marginal to survive in.
You know how we are currently challenged by the numbers of refugees seeking asylum around the world? Think of the refugees when the agricultural lands of India, Pakistan, Vietnam and Bangladesh are flooded by sea level rise and glacial melt. Rice is a staple food in Bangladesh, and rice farming is vital to the nation's economy. Sea level rise could threaten the food security of more than three million people in the Ganges-Brahmaputra Delta by the middle of the century, by making the water and soil too salty to grow rice. I want to quote renowned Australian economist Ross Garnaut. I think he is respected by all sides of politics. He wrote in 2009:
If sea level rises and displaces from their homes a substantial proportion of the people of Bangladesh and West Bengal, and many in the great cities of Dhaka, Kolkata, Shanghai, Guangzhou, Ningbo, Bangkok, Jakarta, Manila, Ho Chi Minh City, Karachi and Mumbai, it will not be a problem for Bangladesh, India, Pakistan, China, Thailand, Indonesia, the Philippines and Vietnam alone.
If changes in monsoon patterns and the flows of the great rivers from the Tibetan plateau disrupt agriculture among the immense concentrations of people that have grown around the reliability of water flows since the beginning of civilisation, it will not just be a problem for the people of India, Bangladesh, Pakistan, Vietnam, Myanmar and China.
… … …
The problems of unmitigated climate change will be for all humanity.
That is what we are facing. We know what we have to do. We know what we can do. It is a matter of priorities. It is making decisions for our future, not pandering to the interests of those who are comfortable with the status quo and have their heads in the sand about the future we face. We should be, we could be, we must be massively increasing investments in renewable energy, and Australia could be a leader. It would be great for the economy, great for jobs. During the election campaign, the Australia Institute estimated that, if we reached the Greens' target of 90 per cent renewable energy by 2030, it would create 30,000 jobs, which I reckon would be pretty good for our economy.
Yes, we have a budget emergency—a carbon budget emergency. It overwhelms the financial budgetary problems, which can be pretty simply fixed by some of the many revenue measures that the Greens have proposed, the full impact of which would bring in over $100 billion of revenue over the forward estimates. My colleagues, in their contributions, have already outlined what those opportunities are—the various measures that could be bringing in revenue instead of these misplaced, short-sighted cuts that we are considering in this omnibus bill.
We have a carbon budget emergency because, to keep a safe climate for humanity, there is no carbon budget left—zero. We need to be drawing carbon out of the atmosphere, not brazenly, profligately, criminally continuing to pollute and destroy our one and only planet, our one and only home. If we are to have a habitable planet for us, our children and our grandchildren to live in, we need to urgently tackle our carbon budget emergency. We need to massively increase investment in renewables, not slash it and try and pretend that half of not enough will do. It will not. We in this parliament have a choice. We can choose to direct ourselves towards a future where humanity does have a future. It is with such sadness in my heart that I have to face the reality that the current direction that this government is taking us in, epitomised by the measures in this bill, is entirely the wrong direction.
I will be brief. We heard Senator Sinodinos, the Minister representing the Minister for Industry, Innovation and Science, this afternoon referring to the fact that the government was not a one-night stand, that it was there for the long haul, that it was there to be in a lasting relationship. I was quite intrigued by that, because what it is going to do to ARENA is gut it. I will apply the analogy of the one-night stand to what the government has done in recent years to ARENA. They got engaged. The government promised to get married to ARENA and said they would last forever. Ever since, from the Abbott government onwards, the government has been trying to jilt the bride, leave her at the altar and gut ARENA. It has been dressed up, with the opposition, as a way, they say, to save ARENA. They have saved some of it but, down the track, the road has been taken to gut ARENA.
That is why later in the night I will be moving a motion to amend the Budget Savings (Omnibus) Bill 2016. I support most of it, but, in this case, you have got jobs coming out of this. They keep talking about the future, about the innovative jobs that we are going to have under the Turnbull government: 'It's all going to be wonderful. Get into innovative stuff. Do all this; do all that—exciting times to be alive in Australia.' But what they could be doing, if they kept the money—all the money—in ARENA, and if they used that extra money, is to look at ways, when the automotive industry collapses and finally closes down in Australia, to divert that money towards retraining all those people in the automotive industry who need new jobs, like the subcontractors in the automotive industry who need new jobs. You could do stuff for them.
In South Australia, Senator Xenophon follows the same sort of line. But in Victoria, when they close down Fishermans Bend and Broadmeadows and Geelong—and the same in South Australia, with what happens in Elizabeth—if they could keep ARENA going and if they did not touch ARENA, some of that money could be used for the people who need new jobs. This may sound dramatic. And I am not a builder. But you could say: 'The guys who are building hubcaps and windscreen wipers and all those things for the car industry which will become obsolete could be doing jobs.' They could be switching them over and training them in small industries, new industries, and they could save thousands of jobs around Australia.
I think it is a canard—and I am sad that the Labor Party has done the same thing—that they have said, 'Wow, look what we've done! ARENA is not dead.' In recent weeks, we have had meetings with the ARENA people. We have met with people from CSIRO. All these people know what can happen. They know that, if ARENA is preserved and protected, you can find ways to keep these jobs going. It saddens me, and I think it is wrong—the way they have dressed it all up. Because this is a tangible thing. If only they had even had the decency to say, 'All right; we'll adapt ARENA. We'll leave the money but you've got to change it.' Just imagine if they do keep pushing, and the government funds its grants, and the grants become investments in sustainable jobs, and Australia takes equity in these jobs and these new inventions. And they will get some of it back, and they can make some money out of it.
So that is all I want to say tonight. I do not want to take up very much time at all. I just want to say that I will be hoping—through amendments, and through other ones put up by the Greens and, I think, by Senator Xenophon—that we will be able to save ARENA and say, 'Okay, you've got most of your stuff through in the budget from the lower house, but leave this alone because it's a worthwhile project.'
Under English law, 'the man on the Clapham omnibus' is defined as 'a hypothetical, ordinary and reasonable person used by the courts in English law', according to definitions I have read, where it is necessary to decide whether a party has acted as a reasonable person would—for example, in a civil action for negligence. The man on the Clapham omnibus is a reasonably educated and intelligent but nondescript person against whom the defendant's conduct can be measured. I guess here we have a case of, 'What would the man, or woman, on the government omnibus bill be saying about the fairness or otherwise of these measures?'
I think it is fair to say that the fact that there was no public hearing—something that both the government and the opposition combined to vote for—is wrong. For the Senate to do its job, it needs to have a process of public hearings, an inquisitorial approach, to assess the measures and the consequences, intended or otherwise, of a bill. And a bill such as this, traversing so many areas, is a bill that ought to have been looked at through a hearing. The concerns of stakeholders were not adequately assessed, and not even a half-day public hearing was set aside.
Senators had to hold a quasi committee hearing—and I congratulate Senator Rachel Siewert for the initiative. I took part in that on Monday, along with Senator Hinch and Senator Lambie, and there were other Greens senators, including Senator Di Natale, who took part in that hearing—which was actually useful. We heard from ACOSS, from Cassandra Goldie. We heard from Catholic Social Services. We heard from those involved in the dental space who were concerned about changes to dental programs, and from the Australian Dental Association. My colleague Senator Kakoschke-Moore was part of that hearing. We heard about military compensation changes—something that Senator Lambie and my colleague Senator Kakoschke-Moore are particularly concerned about. That process was useful in clarifying thinking about this bill, the Budget Savings (Omnibus) Bill 2016. And I note that the government has deferred the changes to dental funding for children, which would have a huge impact in regional communities, out in the bush, and also in the outer suburbs of our capital cities where young children still have much higher rates of dental decay, of dental disease, than children in inner metropolitan areas. We need to address that imbalance, and that is why that dental program has been so important.
What has happened, though, as a result of negotiations between the government and the opposition, is that there have been some positives. Funding has been restored, in part, to ARENA. There have been significant concessions to ensure that those on Newstart and disability payments, carers and those on the aged pension, are shielded. Bipartisanship is positive and it is what the Australian people want. I would like to think that the crossbench maybe nudged the two major parties together because we stood firm in relation to a number of measures. And I think that what shadow Treasurer Chris Bowen and Treasurer Scott Morrison did, by sitting down and trying to sort out the differences and coming to a compromise, was a good thing which is, I think, what most Australians want.
However, there are measures in this bill that the opposition rallied strongly against in the last parliament that they now seem happy to support. One of these is the cuts to the R&D incentive, and I will refer to that later in this contribution.
I note that Senator Kakoschke-Moore referred to the whole issue of military compensation changes which we, along with Senator Lambie, will be opposing, because they are wrong. They will prejudice veterans who are fighting for just compensation, because I think they will be disadvantaged as a result of those changes—something that the opposition previously stood firm on but does so no longer.
Can I just say, in relation to ARENA: I and my Senate colleagues, together with my colleague Rebekha Sharkie, the member for Mayo in the House of Representatives, welcome the fact that the $1.3 billion cut to the Australian Renewable Energy Agency will not go ahead as planned, but we are disappointed that the compromise will still see $500 million worth of funding cut from the agency. The long-term future of ARENA is less uncertain than it was just a few days ago, but I believe it can be secured in the long term if the financial arrangements for ARENA are extended to provide it with the capacity to provide investment funds as well as having equity in funded projects. So, if ARENA invests in a new form of renewable energy technology and it takes off and goes gangbusters—if it takes off in the sense that it becomes a huge commercial success—then why shouldn't that be paid back? Why shouldn't there be a discretion in the grant for that to be paid back or even to get an equity in that project on the part of ARENA so that ARENA's funds can be replenished?
I do not think it is an unreasonable commercial proposition that should be applied to ARENA, and I do not think the board of ARENA would regard it as unreasonable either if they are given the discretion. It is a discretion that they ought to have. If this approach is adopted, ARENA would be in a position to have grants repaid with interest if the project funded becomes a commercial success. ARENA having the option of taking equity in the project and reaping the benefits would be very positive for the fund in the longer term. It is all about being agile—something I would have thought the government would welcome. Under both proposals money would be ploughed back into the fund to replenish it. I now foreshadow my second reading amendment, to this effect, and I look forward to discussing this proposal with Minister Frydenberg at a later date in a constructive manner. Later I will move:
At the end of the motion, add:
", but the Senate is of the opinion that the financial arrangements for Australian Renewable Energy Agency should be extended to provide the Agency with the capacity to provide investment funds, as well as have equity in funded projects.".
Private health insurance has not got much attention in the course of this debate, but it ought to. This measure has not attracted much attention, not many people get excited about private health insurance except when there is a premium increase, but it is an issue that I have long had an interest in. Back in 2008, when the Hon. Nicola Roxon was health minister, I held out on a piece of legislation that the then Rudd government wanted to get through on the basis that there should be a thorough Productivity Commission investigation on the interaction between the public and private health systems, the first comprehensive study of its type, and I think it was a good benchmark to see where the strengths of the public system were, where the strengths of the private system were and where the two complemented each other. I commend that for anyone who is interested in long-term good public health policy in terms of how we maximise taxpayer involvement in the health system to get the best value for money for taxpayers and the best outcomes for patients.
At a recent speech I gave to the Health Insurance Restricted and Regional Membership Association of Australia, or HIRRMA, I spoke to a number of not-for-profit private health insurance providers. These providers include two great providers in South Australia, the Police Credit Union and Health Partners. They look after one million people. They are not-for-profit providers; they provide exceptional service and value for money. Not-for-profit and member-owned health funds have for the past 11 years consistently reached 97 to 98 per cent overall customer satisfaction—if only any of us politicians could get anywhere near those numbers!—and they incur far fewer complaints with the Commonwealth Ombudsman than large for-profit health insurers.
In 2012, when the Gillard government was in power, the federal parliament was debating the introduction of means testing for the private health insurance rebate and I moved an amendment to the government's legislation which I called the Roberts amendment, after a pesky ABC press gallery journalist, George Roberts, who was badgering me at the Senate doors one morning asking me, if I wanted to talk about transparency, what would I do about it. I moved an amendment that would have required the Productivity Commission to prepare an annual report to the health minister, for presentation to the parliament, relating to changes in the composition of the persons insured under private health insurance including information about the number of persons who have ceased to be insured and the number of persons who downgraded their level of insurance. It also required the Productivity Commission to make recommendations for addressing the reductions in the number of persons insured and the downgrading of their level of insurance. That is the sort of information we want in order to guide good public policy so that we do not have a situation where health funds effectively end up stalling and going into a nosedive because of the drop-off in the number of people who are in them or the sort of cover they had.
The then opposition, the coalition, was effusive about those changes. They supported the amendment, though we missed out because the Australian Greens did not support it, which I regret. In 2014 I moved virtually the identical amendment, the Roberts Amendment, and guess what? The coalition government rejected that transparency measure because they said it was not necessary—they had got advice from the department, the bureaucrats. So that was that. I can indicate that I will not be moving this amendment this evening; however, it is an issue that I will be pursuing. Transparency is the key to driving better outcomes in savings in the health system—just look at what the Swedes have been doing. They have brought down the level of expenditure in the health system through greater transparency measures and innovative policies that get better outcomes for their patients. That is something I think we need to look at.
Schedule 6 of the bill pauses income thresholds for the Medicare levy surcharge and rebate at the 2014-15 rates for three years from 2015-16. The explanatory memorandum states:
Continuation of the pause in income thresholds at 2014-15 levels could result in individuals with incomes below each threshold moving into a higher income tier as their incomes increase. As a result:
- individuals who do not have private health insurance and do not currently pay the MLS may become liable to pay the MLS, thus encouraging them to purchase private health insurance; and
- an individual's level of MLS may increase, thus encouraging the person to purchase private health insurance.
In theory this sounds like a good idea. The more people who have private health insurance, the smaller the impact on Australia's already overstretched public health system. Statistics released by APRA in February 2016 showed a record 11.3 million people have private hospital insurance. However, when you dig a little deeper, as Westfund Health Insurance did—a not-for-profit community health fund based in regional New South Wales—a worrying trend becomes evident. The number of full-cover policies is at a record low, and the proportion of policies with exclusions or restrictions has exceeded 55 per cent for the first time. This is a direct consequence of the Gillard government's approach. The coalition, when in opposition, were deeply concerned about it and they are now ambivalent towards it. They do not seem to care—it is too hard for them to tackle. If a policyholder needs treatment for an excluded procedure, such as joint replacement, they are likely to seek that treatment at a public hospital. With restricted policies, many consumers face high out-of-pocket costs and are also likely to seek treatment at a public hospital. This negates the whole idea of having private health insurance in the first place, and increases the pressure on the public hospital system.
Trying to find savings in the private health insurance space has resulted in what seems to be a furious battleground. It started in 2009, when the coalition was in opposition, over the freezing of the private health insurance rebate. I voted against the freeze then, as did the coalition. I thought back then, and still do, that it would make private health insurance less affordable and, ultimately, put more pressure on our public hospital system. Similarly, in 2011, when the Gillard government introduced means testing, it was a delayed double whammy, also opposed by the then opposition. I thought it would lead to distortionary effects, with consumers opting for the lowest, 'bare bones' health cover and dropping ancillary benefits, which in turn would cause additional blowouts in the public sector, or, worse still, Australians not getting treated for conditions early, which would actually become much bigger problems for them and for our overall health budget down the track. You have seen the ads, particularly in June, which claim that you may save on tax if take out private health insurance by 30 June. Putting aside the potentially misleading aspects of such advertisements, I believe that many Australians are taking out 'bare bones' private health insurance policies just to avoid paying tax.
This measure has the explicit purpose of encouraging people to purchase private health insurance and avoid becoming liable to pay the Medicare levy surcharge. I have great concerns that this measure will see an increase in the number of people holding exclusionary or restricted policies, which will result in people still utilising the public hospital system, despite holding a private health insurance policy. Additionally, the government does not reveal the amount of premium rebate paid for policies with restrictions or exclusions. Westfund estimates that the government is outlaying premium rebates of $1.5 billion on policies with restrictions or exclusions. I would like to find out from Minister Sussan Ley just what this cost is and the impact it is having on our public health system. It is not an easy problem to fix, but I think the government could take a step in the right direction by disqualifying policies with exclusions for common major procedures from the government premium rebate, or reducing the rebate entitlement on them.
On research and development, I last spoke about cuts to R&D tax incentives almost one year ago. What I said then is just as relevant now. The second measure contained in this bill proposes a reduction in the rates of tax offsets under the research and development tax incentive. In a country with a long and proud history of inventors, inventions and innovations, it seems the importance of encouraging research and development is critical. From the humble rotary clothes line, the Hills hoist, to the black box flight recorder, the photocopier, the bar code and, more recently, wi-fi, the depth of talent in Australian inventors cannot be underestimated. The potential of this innovation for our economy must not be lost on any government. In my home town of Adelaide, SupaShock is gaining attention around the world for its development of a shock absorber that is credited with the Ford racing team winning V8 supercar races because of what it does to a car's handling. Not so long ago, they won a Formula E race through the Virgin Atlantic team. That gives you an idea of the potential of R&D. I know that defence industries around the world are looking at this technology—technology that could drive more jobs in my home state of South Australia, as we see auto making fall of a cliff in this country, and, with it, many tens of thousands of jobs.
The coalition had two attempts at passing this measure and both attempts were met with steadfast opposition from the Australian Labor Party. There were some terrific comments on R&D, on this measure. I genuinely have enormous admiration for Senator Kim Carr and the way he has cooperated with me on issues of industry in our car-making sector. On 2 March 2015, he said:
The government is using these changes to the R&D tax incentive to gather savings, not to make the R&D tax incentive more effective. This is typical of the way in which this government has failed to understand the crucial role of innovation in an advanced industrial economy.
He went on to say:
The measures proposed in this bill, however, will only erode certainty and transparency. The effect of the bill will be to discourage R&D investment in Australia. In particular, the bill punishes small- and medium-sized enterprises.
Dr Leigh, the member for Fenner, is a renowned economist and a very smart man. On 17 June 2015, he said:
What is this apart from a cash grab by a desperate government? Why else would the government be trying to hack into the productive potential of the Australian economy, hack into that research base, at the very same time as the government—which began bereft of a science minister and continued by cutting CSIRO—has so put itself offside with the science community and so jeopardised the potential of the Australian economy to create new jobs?
Mr Acting Deputy President Ketter, there is even a quote from you, but I will not be cruel and quote it—unless you want me to. Basically, it is on the same theme—that this is a counterproductive cut in relation to R&D. It is a shame that the opposition has decided to change its position at a time when we need, more than ever, to be fostering and supporting innovation in this country, not destroying it.
I cannot support a measure which will have a retrograde effect on small and medium businesses involved in research, and I will be moving an amendment to oppose schedule 22. When it comes to R&D, we need to keep those current incentives in place so that those 200,000 jobs—which could well be lost in Victoria and South Australia by the end of 2017, when the car-making sector closes down—have a fighting chance of being replaced. In terms of student start-up scholarships, Rebekha Sharkie, the member for Mayo, made a contribution in the other place about how these changes will be retrograde and will disadvantage regional students.
I am pleased there have been some compromises. I am concerned about those matters where there has been no compromise, particularly in terms of R&D. I acknowledge that we do need to undertake budget repair, but let us undertake budget repair fairly and in a way that does not take away from the productive capacity of the Australian economy. Let us do it in a way that is fundamentally fair, so that the man or woman on the 'Clapham omnibus' would say that it was a fair deal.
So here we are: it is about 20 to nine on the last sitting day of this session, most of the press gallery have gone to sleep and most of the rest of the country have almost certainly switched off from whatever might be going on in this building. Obviously, that is exactly what the government had in mind. Tomorrow's headlines, turned into Saturday's fish and chip wrapper, will be that the government did something or other to fix the budget. Tonight the vacuous emptiness at the heart of this government is laid bare, and that is why they are so happy to see it pushed to a vote in the dead of night.
It is a government empty of purpose and direction in open civil war with itself, with a bunch of yesterday's men whose ambition is only outmatched by their mediocrity. And this week is the anniversary of the overthrow of Mr Tony Abbott. How fitting! He was already two years past his use-by date by the time his colleagues threw him under a bus. He was replaced by someone with a big grin, a confident manner and a vague promise that any day now some sense of direction would be established. But, here we are tonight, debating the Budget Savings (Omnibus) Bill 2016, which sounds as though it is designed to be boring. It is designed to make your eyes glaze over and your attention move on. But what it is, effectively, is a dismal camel of a bill.
My colleagues, from Senator Whish-Wilson earlier in the afternoon to Senator Di Natale, Senator Hanson-Young, Senator Siewert, Senator Rice and Senator Waters, have dismantled the fundamental premise of the different elements of the bill and its overall philosophy in a fair bit of detail. Change to family payments is the biggest single measure, with more than $1½ billion in unnecessary cuts to family assistance, ending family tax benefit part A for families earning over $80,000, which actually is not very much as a combined household income. A single-parent family with two teenage children will lose $284 a year, or $5.50 a week. That is not much for people in here earning $200,000 a year, but for families struggling—uncertain about continued employment or suffering intergenerational unemployment—it is a big deal. Removing the ability to backdate a carer allowance is cruel and pointless and it saves, what, $108 billion over the forward estimates.
I will speak in greater detail about ARENA and my particular concerns about what is going to happen with the half a billion dollars ripped out of ARENA and how that will impact on Western Australia.
On higher education, I have been here long enough to remember how in 2013—or it might have been 2010—the Greens were campaigning against the then Labor government's utterly counterproductive cuts to higher education. Then, right after the election, right after the change of government in 2013, the Labor Party magically reinvented itself as the natural party of higher education, and we were all just expected to imagine that the preceding period simply had not existed. Now, as Sarah Hanson-Young pointed out, new scholarships are being turned into more HELP debts. The HELP repayment threshold is being dropped and indexation rates on payments are being boosted. All of this is, in a sense, to get students and people seeking a tertiary education further into hock, further into debt that will follow them around, in some instances, for the rest of their lives. How utterly counterproductive!
Other senators, including Senator Xenophon and Senator Whish-Wilson, have already pointed out that there was no hearing into this bill. It is worth $6 billion in cuts and revenue measures. Why would the Senate not conduct an inquiry into a bill of that scope? This is not a trivial matter. It was up to Senator Siewert to book a committee room and invite witnesses from various parts of society who will be impacted by the cuts in this bill to tell their stories. The priority of the Labor Party and the Liberal Party for this 45th Parliament is, so they say, deficit repair, but it is off the backs of the most vulnerable people. It does not tackle rising inequality. It does not tackle global warming. It does not tackle any of the real challenges bearing down on this country. As it turns out, it does not tackle budget repair either, and that is the most sadly ironic aspect of what is going on here.
The Australian Renewable Energy Agency was a key component of the clean energy package that Senator Christine Milne, Senator Bob Brown and the member for Melbourne, Adam Bandt, negotiated with Prime Minister Julia Gillard, Mr Combet and the two country Independents—the coalition stayed on the sidelines but they were not actually missed—to create a carbon price package that would fund the clean energy transition. ARENA was a foundational part of that, with ARENA doing the research and development and the early commercialisation work to get projects off the ground. There are people in this country with incredible technical and engineering expertise and they want to get the job done that we so urgently need done. They want to get a job, go to work and get these power stations built. These things were negotiated by the Greens with the Labor Party and the country Independents at the time to put together a world-leading climate package. It was not perfect. It was one of the most interesting examples of compromise. Nobody got everything they wanted, but it was a lot better than the alternative that was on offer. Now ARENA is an incredibly important part, a foundational keystone, of getting these projects to commercial scale.
I want to mention just a couple of examples from the $72 million dollars worth of projects in Western Australia, mostly in regional areas. This is why the National Party have not even bother to show up for the debate and cannot make eye contact with anybody. These are jobs in the regional areas that these people claim to represent. Without ARENA funding in Meekatharra, Perenjori and Cervantes, those communities and those small businesses who form part of the supply chain would have missed out on being a part of the transition. There were announcements just last week about three of 12 new projects being funded. At Emu Downs, $5½ million will go towards a 20-megawatt solar farm. It will complement the output from the big wind farm that is already at that location. That will mean clean energy and sustainable employment in Cervantes. It is almost inconceivable to imagine that the agency that has helped get that project off the ground would be suffering the kind of cut that is on the table tonight.
About three hours north of Perth, ARENA is funding a feasibility study into the construction of a 20-megawatt solar thermal power station in Perenjori. What could be more important in this day and age—an age of cheap solar and cheap wind—than to be able to bring dispatchable clean energy projects online? When the sun goes down, they just keep generating that output and they can provide the backup to the more ephemeral wind and solar output. That is the key to getting to 100 per cent clean energy: energy efficiency—which ARENA, the CEFC and industry are already invested in—and the kind of dispatchable clean energy that backs up the wind and the solar photovoltaic output. The plant is proposed to employ molten salt technology. Senator Milne and I visited one of these plants a couple of years ago, in the south of Spain—the Gemasolar plant. It is a 20 megawatt plant, a bit bigger than just prototype scale but smaller than a commercial unit, which runs 24/7 on sunlight.
More recently, I visited the solar thermal plant at Crescent Dunes in Nevada, SolarReserve's project, designed to provide dispatchable electricity for peak-hour generation in Nevada, and for Las Vegas in particular, at about eight o'clock at night, running that brightly lit city on solar energy. These are the kinds of projects that we can bring to commercial scale if we keep these agencies in business. We should be getting a project of that scale. Earlier in the evening, Senator Hanson-Young put in a bid for Port Augusta; I am putting one in for the goldfields. Out on the edge of the Western Desert, on the edge of the interconnector leading back into the south-west grid, there is an industrial site already gazetted and there are companies that are interested. They cannot take these projects to the bank, because the finance is not quite there yet. That is ARENA's job; that is the CEFC's job.
One example that I would have thought would have been interesting to the coalition, given their passion for mining, primary industries and the bulk export of commodities, is the DeGrussa copper mine. They put in a solar battery system, not too far from Meekatharra, and created 45 jobs. A Western Australian local company put the infrastructure in. They received a $20 million grant from ARENA for a $40 million total project. It has allowed them to offset five million litres of diesel a year from July 2015, and that is diesel that does not have to be trucked out to the site and burned when the sun is not shining. Remote Western Australia is really the perfect place for starting these innovative off-grid applications, because it is so expensive to generate electricity. That was ARENA's job. That is what they were doing. They were providing the start-up funds to get these projects off the ground.
I get that the Liberal National Party is still on this grotesque bender to delay the clean energy transition for as long as it can. It means the donations keep rolling in, and after they are done they get to slide into those sweet lobbyist roles with the Minerals Council and whoever else offers to pay the bills in their political afterlife. Every now and then they send in one of their more impressionable product placements, shuffling in here wearing a fluorescent vest donated by the Australian Coal Association, just in case there is anyone left in the country who thinks there is still some residual ambiguity in the government's attitude to the world's increasingly violent weather.
The thing that I do not get—maybe Senator Conroy, Senator Bilyk or somebody up the other end of the room can help us out and make it clear to me—is why on earth the Labor Party is providing cover for this undignified hot mess. What are you doing? We have the numbers to defeat this tonight, if you come in here and do what people pay opposition parties to do. Did you tell the social media people who photoshopped this thing up this afternoon what you had actually done? For the benefit of the , there is a picture of Mr Shorten and Ms Plibersek on a rooftop surrounded by solar panels—it is a nice photograph, very well composed—and the text says 'Breaking news: Labor saves ARENA from the government's plan to destroy it. Thank you.' No, thank you, Australian Labor Party. If someone says that they are going to set fire to your house, and you just sit there with your eyes glazed over until it is half burned down, you do not get to post memes congratulating yourself for there still being some ruins standing! It is like drinking half of someone's beer while they are not watching and then expecting them to thank you for the courtesy of having some leftovers. This is bad, and you should feel bad. Go and put that on your Facebook page!
If it is revenue that you want, if it is savings that the government is after, we can help. We are a part of this debate. We took $141 billion of revenue and savings measures to the 2016 election, all of it costed by the independent Parliamentary Budget Office. Phase out the capital gains tax discount and negative gearing and you can generate $14 billion over the forward estimates. That is a start. That is more than this bill is worth. An end to fossil fuel subsidies would save nearly $24 billion over the forward estimates. Can you imagine, in an age of climate change, that we still subsidise fossil fuels? A coal export levy, so that that industry can start to at least amass some funds to pay for the harm that it is doing to communities here and overseas, would raise $2.4 billion. Putting a price back on pollution would raise $16 billion.
There are any number of ideas. Here is a good local one. What if I told you that, sight unseen, the federal government wants to blow nearly $1 billion of your taxes on a heavy freight highway through a wetland, obliterating 90 hectares of banksia woodland, wiping out an Aboriginal campground that has tens of thousands of years of occupation behind it and ruining neighbourhood amenity for all time? The federal government proposes to chip $960 million into this atrocity. It is a project that the community does not support. It is a project that has been running under cover of darkness, because even this week the government refused to hand over basic information about the financial liability that the Barnett government is signing taxpayers up to in WA. Mr Turnbull, on the underwhelming anniversary of the deposition of your predecessor, we found you twice as much money as you are ripping out of ARENA just in this one wide, pointless strip of concrete on the other side of the country. That is really how we know that this bill actually has nothing to do with budget repair. You have done nothing but kick the debt and deficit can down the road. Anything that would have required so much as homeopathic traces of political courage has been forced under the carpet.
The government will get the headlines it wants in the morning; I know it will. We all know we will get endless footage of Mr Morrison's beaming head and the only thing we will be able to do is turn the volume down until he goes away. But the numbers will not lie. The big challenges still lie ahead, whether it is bringing the budget back into balance, doing something about our dependence on fossil fuels, or creating opportunities for people whose jobs are being offshored or automated out of existence.
How do we know that this bill has nothing to do with budget repair? Senator Whish-Wilson belled the cat right at the outset of this debate, because while we were in here debating this bill, the House of Representatives was debating a $4.3 billion tax cut for the 20 per cent wealthiest Australians. This is about nothing more than that headline and the opportunity for Mr Morrison to get himself on television in an attempt to persuade people that they have some faint idea what it is they are doing but the budget papers will not lie, and the stale charade that you put us through this week will be exposed for what it is. And instead of standing up to you, the Labor Party has let you run the table. So tonight I am nominating Dr Richard Di Natale as leader of the opposition because you lot are just not up to it; I am sorry, but you are not.
Could I take this opportunity to thank and congratulate Senator Cormann for his constructive approach to resolving some of the difficult issues. Both sides were involved in a little bit of give and take but the approach taken by Senator Cormann speaks volumes for him. As it is very late, I seek leave to table the rest of my contribution so we can move on.
You should always go out on top. This week as Captain of the Parliamentary Soccer team I scored a hat trick. It must be time to say farewell.
In 1996 in my first speech in this place I said: "The Labor Party's next challenge is to confront the changing structure of Australia's work force. Technological change is forcing the pace as more people work part time and from home, A new type of poverty is beginning to emerge and its impact will need to be assessed carefully. We are seeing a growing gap between the information rich and the information poor. This has many implications for public policy. How do we ensure that every Australian child has the education including the standard of literacy they need to be able to use the new information technologies? How do we ensure that all Australians have access to the information carriers that will revolutionise the way we learn, work and enjoy ourselves? More practically, what can we do to make sure Australians have the skills and back up they need to be leaders in developing and providing these new technologies?"
There is nothing more fulfilling and no greater privilege than to be in Government and conceive, create and implement a strategy to deliver the economic and social opportunities that technology brings and reach all Australians wherever they live and whatever their backgrounds. The National Broadband Network will remain my greatest contribution.
The concept and plan for the NBN enabled me to meet some truly extraordinary people who have all been deeply involved in the internet debate. I am privileged to have met Professor Larry Smarr, a pioneer of the internet; Professor Jeff Cole whose insights into people and their online habits is world retnowned and Larry Irving who created the phrase the Digital Divide.
These three great men inspired me even at the toughest times and I'm proud to count you as my friends.
I have also been able to contribute in other portfolio areas even from opposition. I have championed corporate governance reforms to try and make Boards and Executive Management more accountable to shareholders. Significant amendments to our corporate laws have allowed shareholders to reign in some significant areas of corporate excess.
I was Labor's trade spokesman at the time of the debate of the US FTA. I take pride in the fact that without my active support it would not have passed into law. I would also like to acknowledge the support of Phil Scanlon and the greatest Prime Minister Australia never had, Kim Beazley.
In the Defence portfolio the debate over the construction of Australia's submarine fleet was an enormous challenge. The then Prime Minister had done a deal to buy Japanese submarines and abandon our manufacturing base here in Australia. I was able to lead a campaign to overturn a decision of the National Security Council of Cabinet and protect Australia's national security interests and the livelihoods of tens of thousands of Australian families.
As I say farewell I would like to take this opportunity to publically acknowledge the recent retirement of a friend and champion of the trade union movement.
Wayne Mader was the Secretary of the Victorian Branch of the Transport Workers Union (TWU) from 2009 - 2016. He was a,member of the Victorian Branch for 45 years and an elected official for 32 years. I consider it an honour to have served in the TWU with him for the four years before I entered the Senate.
Wayne Mader embodies the true spirit of the trade union movement. He is honest and trustworthy and has always put the interests of his members first.
Wayne is truly the salt of the earth, nobody could ask for a more loyal, decent and generous friend and I want to publically thank him for that. My success in politics has been in no small part due to the unwavering support he has given me over the 25 years we have known each other.
The Victorian Branch of the TWU is now in the safe hands of John Berger and I wish him well and look forward to proudly receiving my 25 year membership from him in a few years time.
No one can survive 20 years in the Federal Parliament without a genuine group of friends. It's no different in my case. I have had the privilege of serving with and being friends with a group of passionate and dedicated Labor icons. We have been called many things over the years but the name which stuck the most is the Roosters.
Wayne Swan, Jenny Macklin and Tanya Plibersek, three incredible individuals who refused to surrender their Labor values in the face of the greatest financial disaster in 70 years, the GFC. In the six years we served in Cabinet together they championed policies that protected and improved the lives of those who needed help the most. They were and continue to be committed to true Labor ideals. In my first speech I argued that Labor's mission was to civilise capitalism - that economic policy was not an end in itself. Wayne, Jenny and Tanya demonstrated that belief time and time again. They fought for that in ways that most will never be aware of, but I want to put on the record that I was witness to them fighting to improve the standards of living of working Australian families and that I know they will continue to do so.
I would also like to acknowledge the privilege it was to serve Australia's first female Prime Minister, my friend Julia Gillard.
I will miss my friends and colleagues terribly - our Saturday morning chats, our Sunday night plane trips, our Wednesday night dinners. All made the burden of being away from our families a little more bearable.
As each of the past few years slipped by other good friends have left this place and a piece of me left with them - Steve Smith, an original Rooster, ever the calming influence on Wayne and myself. What a tragedy for the people of WA that they will not get a chance to have him serve as their Premier. My skiing buddies Mark Arbib and Joe Ludwig, two friends and colleagues who always had my back no matter what.
I would also like to single out one of the most significant and long lasting influences on my political thinking. My first friend in the schoolyard when I arrived in Australia was a kid called Bill Johnston. This was in February 1974, Bill was the youngest from a large family. They were committed Labor voters and Collingwood supporters. 42 years later Bill is still one of my closest friends and it is with great pride that I will watch him be elected to the next WA State Labor Government and take his place as a Minister. His passionate advocacy for social justice burns as brightly today as it did when he was a teenager when his nickname was "Johno the Como".
Peter Barron has been another significant influence on me. He has never allowed me to lose sight of the ultimate objective of the Federal Parliamentary Labor Party - winning Government. Peter is the silent godfather of political advisors. He is one of the few people I have met who has the gut instinct to understand the 'mob' as he would say. His unerring wisdom has transcended 40 years of service to the Party and I think him for his patience with me over many years.
Peter always has the right words for the right times and on the news of the birth of our daughter Isabella, he described her as a "triumph of love and friendship". I am extremely proud that as a family we have influenced surrogacy laws around Australia.
As I look around Caucus today, I see an outstanding future Labor Cabinet to rival the best of the past. The most passionate and brightest have come pouring into the caucus in the last two elections. I'm especially proud of my fellow Victorian Colleagues and the contribution I know they will make in the Shorten Government. Tim Watts, Clare O'Neill, Richard Marles, Joanne Ryan, Rob Mitchell, Michael Danby, Peter Khalil, Anthony Byrne, Mark Dreyfus and David Feeney. A group of true believers drawn from many backgrounds and experiences who share a common set of values to improve the standing of working people and to keep them secure in an uncertain world.
And to the next Labor Prime Minister of Australia. I have known Bill Shorten since the 1986 ALP National Conference. A bundle of energy and ideas from the first meeting. Bill and I have shared the highs and lows of all that life can throw at you. We have been friends, rivals and frenemies. He should never be underestimated. Malcolm Turnbull learned that on 2 July this year. Tony Abbott learned it on 14 September last year. The Canberra Press Gallery has still not learned it but they will.
As Opposition leader Bill has shown what I have always known - he is a resilient, smart, warm man of the people and for the people. He is Australia's Prime Minister in waiting. I'm sorry I will not be alongside you in the Federal Parliament as you take your place in history.
I would like to acknowledge one final Federal colleague, Kim Carr. Much maligned, a passionate advocate for unfashionable economic policies but a Labor warrior. If there was a tough battle in the Senate and you needed a wingman, you would always want Kim Carr next to you. People have always misunderstood our relationship. It is based on two simple things, trust and mutual respect. In the 25 years I have worked with, fought with and struggled together with, Kim Carr has never broken his word to me. In any walk of life that is the measure of a man.
I would like to single out some Victorian colleagues to whom I owe much. My two amigos, the founders of the LRA, Telmo Languiller and Theo Theophanous. Words cannot express how much their friendship and support means to me. They have believed in me when others have walked away, their loyalty has given me the strength to endure when I would have given up otherwise.
To my former colleague Mehmet Tillem, politics is a cruel game and it can be fickle. No matter how hard working, intelligent and compassionate you are it can cut you off at the knees. But Mehmet is a patient man and his time will come again.
Phil Dalidakis, a passionate, loyal and dedicated Minister in the Victorian Government. He is a powerful advocate for the people of Victoria and he is positioning the state to benefit from the jobs of the future.
My friend and confidant Bob Smith, the man who taught me to play golf - my family has not forgiven him for that. Bob saved the AWU from bankruptcy after the corrupt leadership of Bruce Wilson. I remember talking with him often during this period. He was faced with a dire set of circumstances that would have defeated most others but he began the rebuilding of that famous union from the ashes. A pillar of strength for me so many times over so many years. I look forward to sharing many more games of golf in the future.
I also want to thank Tony Sheldon, the National Secretary of the TWU. A committed trade unionist, a passionate advocate for transport workers and someone who gives unflinching support to his friends no matter the cost to himself.
My many staff who have made me look and sound so informed, intelligent and thoughtful over 20 years. Your commitment to the Labor cause was above and beyond so many times. I have been humbled by your friendship and support. To my current team - Lucien, Claire, Garth, Helen, Andy, Haaki and David, thank you for always believing in me. I could not pass up this. opportunity to mention one other staff member, our dearest friend Jan Cleeland, who worked for me for many many years and was taken from us far too soon. She was devoted to me and saved me from myself so many times.
To all the dedicated staff at Parliament House, the Hansard reporters, the Clerks, the Librarians, the Security team and the Comcar Drivers both here and in Melbourne. Thank you for your professionalism.
To the person who kept me functioning first thing in the morning, Dom and all the team at Aussies. Thank you. I will miss the daily discussion of the world game, mocking you over Carlton's increasing number of wooden spoons and your warm and friendly smile day in and day out.
I could not have survived the last 20 years without the support of a loving family. Having grown up in Canberra, I have had the advantage that my parents live here. Canberra has never been the empty cold flat I return to each Sunday night as many of you have. Each week I would return to my parents home, where I grew up, to the welcoming smiles, the updates on my nephews and now my great nieces. Bantering with Dad about Newcastle's results, him mocking Chelsea's results given how much money we have spent on players and of course watching the Chelsea -Newcastle matches together. But what made the trek up to Canberra on a Sunday night was the prospect of Mum's Shepherd's Pie - at the end of the day I'm still just a kid from the North of England.
The internet has been a boon for communicating with family across the globe but it has its downsides too. After a few years I had to ask my dad to please not use his name on blogs if he was going to vigorously participate in political debates online as his comments could be taken out of context and used against me in Parliament or by journalists. His paternal instinct was strong and he was always keen to correct the many inaccurate comments about me. At one stage when I was a Minister there was a particularly vigorous online debate about a policy I was advancing. The full force of the internet trolls was raining down and my staff were monitoring the commentary which was very unflattering. They came to me proudly to show me at least one person was defending me staunchly in the face of the abuse. The looks on their faces after they handed me the printed versions and I explained that Derek Green was actually my uncle and even worse he lived in England and could not vote for me, was priceless. Even from half way around the world the Conroy/Clements clan still loyally stick together.
I have had one constant companion through this 20 year journey, my wife Paula. We met in March 1996 just as I entered the Parliament. She has been a rock for me and our now 9 year old daughter Isabella. It is almost impossible to explain to those outside the Federal Parliament the sacrifice that your family make while you are an elected representative. It's not just that you can be away almost half the year, but when you come home after an exhausting week and just want to rest and sleep and you can't immediately let go of work or what is happening in the political arena.
It is also the intangibles - coping with the coverage in the media, especially as the 24/7 media cycle has changed the nature of political discourse. Noting the glances and scowls as you walk down the street together. Explaining to my young daughter why people have shouted abuse at her Daddy in the street. Being immediately judged as you explain what your partner does or who he is based on the media image. I'm sure you would all agree that there should be a special place in hell for those who judge women based on their spouse's work. Paula has remained steadfast in her support for me while maintaining her own career but it is the incredible job she has done in raising our beautiful daughter Isabella
while I have been absent that I owe her an undying debt of gratitude. It is often commented that Isabella has me wrapped around her little finger, but who could not be when confronted by such a smart, kind, considerate, funny and loving, no longer little girl. She increasingly misses me when I can't be at soccer training or a match. She would love me to attend at least one assembly a year and be there when she gets an award.
I often reflect on when I was a kid, how my father who worked shifts at ICL would never miss a single soccer match from the Under 11s to the Under 21s. Week in, week out. You never appreciate it at the time but you realize much later how special it was. I always vowed that I would be there for Isabella like my dad was for me. At Father's Day at her school recently Bella had to write about her Dad. She wrote that she loved it when her Dad taught her new soccer tricks.
When you resent being in Canberra because you are missing your daughter's soccer training it is time to retire from the Federal Parliament.
It's time for me to hang up my boots as Captain of the Parliamentary Soccer team and spend more time teaching Isabella soccer tricks.
It has been a great privilege to serve as a Senator for Victoria, as Leader and Deputy Leader of the Labor Party in the Senate and as a Cabinet Minister in two Labor Governments. It is also a great responsibility. To my fellow Senators a final word - it is our privilege and responsibility to serve all Australians - those who were here before us, those living here today and all those who will come to join us and continue to build this great country.
I would like to thank all the senators who have contributed to this debate. Budget repair is an important challenge for the government but it is also an important challenge for the parliament because it is important for us to continue to protect our economy by preserving our triple-A credit rating, by protecting our economy and our budget, and by protecting our capacity to fund the important services of government sustainably over the medium-to-long term by making sure that we get the budget back into balance as soon as possible. Of course we should also get the budget back into balance to ensure that we do not keep living at the expense of future generations, at the expense of our children and grandchildren, putting their future opportunities at risk.
The debate tonight in this chamber demonstrates the difficulty with actually achieving budget repair because everybody agrees in theory with the need to get spending growth under control but then you need to make specific decisions about specific areas of expenditure, so obviously the whole conversation becomes much more difficult. It is in that context that I would also like to thank the Labor Party and in particular the Shadow Treasurer, Chris Bowen, for their very constructive engagement. We have worked through a very constructive process in recent weeks with the necessary give and take to ensure that we were able to secure a consensus in this chamber for $6.3 billion worth of budget savings.
The context is that in the lead up to the election, we went into the election with this series of budget savings that were unlegislated up until that point in time. Both the Labor Party and the coalition took a series of savings measures to the last election and the measures that were initially originally included in the omnibus savings bill are a reflection of those savings measures that both Labor and the coalition took to the last election. To be fair to the Labor Party, a number of them and, principally those that are subject to the amendments to this bill, Labor during the election period indicated that they, while banking the saving, reserved the right to implement it in a different way and that is why we have worked through this process.
Budget repair is not an easy affair. It is an important affair though in our national interest. It is important for us as we strive to put Australia on the strongest possible economic and fiscal foundation for the future as we strive to ensure that our children and grandchildren can continue to have greater opportunities in the years and decades ahead, to have the best possible opportunity to get ahead and be successful. It is important, as we strive to ensure that we are in the best possible position to deal with any future global economic shocks, that we do get our budget back into balance, back under control as soon as possible and this $6.3 billion contribution to budget repair tonight, if this Senate is to endorse it, is going to make a material and significant contribution. So I conclude my remarks again by thanking the Labor Party for having stepped up to the plate on budget repair, for having engaged with the government in working through some of the issues that this bill put on the table and for having reached a sensible compromise position. I commend this bill to the Senate.
The DEPUTY PRESIDENT
The question is that the amendment moved by Senator Whish-Wilson, amendment No. 7927, be agreed to.
(—) (): I move the second reading amendment:
At the end of the motion, add
", but the Senate expresses its deep distress and concern at the continued attempt by the Coalition Government to cut away Australia's social safety net, including cuts to the Clean Energy Supplement, Carers Allowance and other measures which will hurt the most vulnerable and disadvantaged."
The DEPUTY PRESIDENT
The question is that Senator Siewert's amendment be agreed to.
As foreshadowed in my second reading speech, I move:
At the end of the motion, add:
", but the Senate condemns this bill for ripping $500 million from the Australian Renewable Energy Agency's clean energy innovation grants as a dangerous and irresponsible act of sabotage, especially in a climate emergency and global transition to clean energy, and because it leaves the Coalition and Labor parties with no meaningful plan to meet Australia's Renewable Energy Target and pollution reduction target agreed at the Paris climate conference."
The DEPUTY PRESIDENT
The question is that Senator Water's amendment be agreed to.
At the end of the motion, add:
", but the Senate rejects the slashing of more than $514 million from higher education programs and support for students as inappropriate saving measures that will hurt Australian students and universities and damage Australia's international reputation as an innovative leader in education.".
The DEPUTY PRESIDENT
The question is that the amendment moved by Senator Hanson-Young be agreed to.
At the end of the motion, add:
", but the Senate is of the opinion that the financial arrangements for Australian Renewable Energy Agency should be extended to provide the Agency with the capacity to provide investment funds, as well as have equity in funded projects.".
The DEPUTY PRESIDENT
The question is that the amendment moved by Senator Xenophon be agreed to.
The DEPUTY PRESIDENT
The question is that the bill now be read a second time.
by leave—I move Derryn Hinch's Justice Party amendments (1) and (2) on sheet 7926 together:
(1) Page 2, clause 2 (table item 6), omit "Schedules 5 and 6", substitute "Schedule 6".
(2) Schedule 5, page 18 (lines 1 to 7), to be opposed.
I am moving these amendments to try to save ARENA in its entirety. I believe that what the government and the Labor Party opposition have decided to do has the potential to destroy ARENA in the future.
This afternoon, we had Senator Sinodinos boasting that the government was not a one-night stand. Well, let him and the government prove that it is not a one-night stand. Years ago they courted ARENA, they wooed ARENA, they formed ARENA, they got engaged to ARENA and now they are trying not to marry ARENA—or, if they do, to make it a very short relationship. Leave it alone. You boast about all the things you can do. You boast about research and development; you say how good it is going to be. You talk about the jobs it can save and you talk about the things that it is going to do for everybody. You have left some of the money in there, and we know the fix is in and that you are going to ignore us.
What you could do, if you were really sincere about it, is preserve jobs in the area of renewables and in research and development. You talk about those young graduate students who have great ideas about new products and the new things they can do—the way they can save the world—and now you are trying to put the handcuffs on them. All I am asking you to do is think about it. Leave ARENA alone. In areas like the automotive industry in Victoria, and especially in South Australia—I know Senator Xenophon agrees with this—in the next couple of years thousands of people are going to be out of work, including the subcontractors. If you believe in ARENA and in the things they can do, you could retrain those people. Thousands of people could have new jobs in areas we do not even know about yet. So all I am saying to you tonight—and it is getting late—is leave ARENA alone.
The government does not support these amendments. At the request of the Labor Party, and in the context of the agreement on this bill, the government has agreed to restore $800 million worth of funding for the purpose of providing direct grants to ARENA. This $800 million is funded through savings in other parts of the bill, in particular, the changes to family tax benefit A supplement arrangements.
For the benefit of the chamber and to deal with some of the issues that the Greens have also raised during the debate, separately and off budget, the Clean Energy Finance Corporation and the Clean Energy Innovation Fund receive a capital allocation of $10 billion. The overall allocation is unaffected by the agreement that has been reached on this bill, and, unlike ARENA grants, these investments need to be commercially viable. So the agreement between the opposition and the government on the omnibus savings bill has no impact on the overall capital allocation for the Clean Energy Finance Corporation and the Clean Energy Innovation Fund, which remains unchanged at $10 billion. In relation to the decision to restore $800 million in funding for ARENA, and to avoid an unintended increase in public resources available to ARENA beyond this $800 million allocation, a commensurate adjustment has been made to the Clean Energy Innovation Fund, but without impacting the overall capital allocation to both the CEFC and the CIF.
While Labor is sympathetic to the intention of Senator Hinch's amendments, we are not able to support them on this occasion. We certainly welcome both Senator Hinch's interest in safeguarding ARENA and his enthusiasm for contributing to how this parliament can achieve real progress in tackling climate change while further developing our domestic renewable sector. We look forward to working constructively with you, Senator Hinch, and all willing crossbench and government senators in the future on this vitally important issue.
Our approach to budget savings is one guided by fairness but also an acute appreciation of the important work that programs like ARENA do. This agreement, we believe, represents that balance in action. We can achieve a significant budget saving while we maintain ARENA as a pillar of our support for a growing renewable energy industry. Labor is understandably protective of ARENA. Its establishment is a proud achievement of our previous term in government, and we will always support it. We have, over the course of the Abbott-Turnbull government, fought against its abolition, and now, through this bill, contrary to the initial intentions of this government, we have managed to obtain ongoing certainty of funding and purpose.
This bill secures additional funding of $800 million for ARENA over five years. This is in addition to the more than 200 existing projects that ARENA is already auspicing and in addition to the 12 large PV solar projects that were announced by ARENA last week but are not yet contracted. ARENA has stated that this sum—$800 million over five years—will provide it with a budget that allows it to continue a strong work program into the future. This agreement places ARENA's funding on a sound footing. Importantly, it provides researchers, entrepreneurs and industry with the certainty they need to continue turning renewable energy opportunities into new technologies, new projects and new jobs.
As part of the agreement underlying this bill, the government has also agreed to sit down with the opposition to ensure that our priorities are satisfied. These priorities are, first of all, to ensure that ARENA's budget preserves Australia's world-class leading research and innovation capability, particularly seen in our universities and CSIRO, and also to ensure that there is a budget for demonstrational, proof-of-concept stage developments in the industry.
In addition to securing our research capability, the agreement between the opposition and the government will also allow ARENA to support demonstration and proof-of-concept stage developments in the industry that ensure that the findings by those universities and by CSIRO scientists are able to be shown to be commercially viable and then able to be presented to lending and equity investors and become a reality across the Australian landscape. It is important to point out that there is no change and no reduction at all to the $10 billion Clean Energy Finance Corporation fund that is overseen by the expert board at the CEFC.
The final matter I quickly want to allude to is: there was also a commitment made by the government, as part of this agreement, to sit down with the opposition and explore opportunities for bipartisan agreement around policies that would accelerate the transition for Australia to a modern clean energy system and to ensure that this transition is, to use the words of the Paris agreement, a just transition for workers and impacted communities. So, whilst the opposition will not be supporting this amendment, I thank Senator Hinch for his concern and for the contribution. We do welcome the considered contributions to this vital policy area, and I am sure we will have cause and opportunity to work together on this issue going forward.
I can indicate that I and my colleagues Senators Griff and Kakoschke-Moore will be supporting this amendment. Even though the cut is still happening—we acknowledge that there will still be a fund but cut significantly—we are still very concerned that the solar thermal plant at Port Augusta, essential for that community, in one of the sunniest places in the world, ought to still proceed. I hope against hope there will still be enough funds for that solar thermal baseload power plant to continue.
I have a question of the minister in respect of this, and it follows from the second reading amendment that I moved that was defeated recently. Can the minister advise whether there are any plans on the part of the government to allow—by regulatory amendment, for instance—ARENA to make investments or to have a grant convert, in the event that it is a highly successful project, to be either repaid or get an equity in it? Is that something that has been discussed with the board of ARENA with a view to replenishing the fund in the event that there has an investment in a technology that takes off commercially?
I thank Senator Xenophon for that question. The short answer in relation to ARENA on its own is no, but of course that is precisely why the government, within the Clean Energy Finance Corporation, set up the Clean Energy Innovation Fund, which is jointly managed by the CEFC and ARENA. That is a fund that provides debt and equity financing for projects that need to be commercially viable. The difference between ARENA and CEFC—and that is the way it was set up by the previous government, not by us—is that ARENA provides grants, whereas the CEFC is the vehicle which provides debt and equity financing. As part of this agreement between the government and the opposition, we have restored $800 million out of the initial $1.26 billion save to ARENA for the purposes of ARENA providing direct grants, consistent with their modus operandi up until this point. We also have guaranteed that the overall capital allocation to the CEFC will remain at $10 billion. The way this is funded is by other savings in the bill, as I have indicated to the chamber.
Minister, just to clarify: you have confirmed that the CEFC's budget of $10 billion will not be altered, but am I correct in that you have also confirmed that you will move $800 million out of the $1 billion Clean Energy Investment Fund back into the Clean Energy Finance Corporation and that you have somehow linked that with the so-called savings from ARENA? Can you please clarify that you are in fact cutting $800 million out of Prime Minister Turnbull's signature pre-election clean energy announcement?
I certainly have not indicated that a saving to fund the $800 million contribution to ARENA would come from what you have just described. I actually answered that in my initial contribution in response to Senator Hinch's amendments. The funding for the restoration of $800 million to ARENA for ARENA grants comes from savings in other parts of the bill, principally the changes to family tax benefit supplement arrangements. However, given the decision to restore $800 million in funding for ARENA for ARENA grants and to avoid an unintended increase in overall public resources available to ARENA beyond that $800 million restoration of grants funding for ARENA, a commensurate adjustment in the Clean Energy Innovation Fund, which is a capital fund jointly managed by CEFC and ARENA to provide debt and equity funding, is necessary. However, for the avoidance of any doubt, the agreement between the government and the opposition has no impact on the overall capital allocation for the Clean Energy Innovation Fund and the CEFC, which remains at $10 billion as before.
So, Minister, am I correct in interpreting that you are cutting money out of CEIF and putting it back in CEFC and you claim that that was not part of the Labor Party deal? Did you raise this with the Labor Party before you reached an agreement with them? Are they aware that this so-called savings of $800 million from ARENA will now sacrifice $800 million from the CEIF?
Your characterisation is wrong.
Senator Waters interjecting—
If I may answer the question, no aspect of the agreement between the government and the opposition in relation to the omnibus savings bill has got any impact whatsoever on the overall capital allocation to CEFC and CEIF. You are mixing up off-budget-balance-sheet equity and debt financing instruments with actual cash grants which hit the underlying cash balance. You are mixing these up. If we were to do what the Greens are suggesting, instead of restoring $800 million to ARENA we would actually be making available to ARENA about $1.6 billion worth of resources for the purposes of providing grants as well as debt and equity financing. But that was never the intention of the arrangement reached between the government and the opposition. The intention, and in good faith what we have agreed to do, at the request of the Labor Party, is to restore $800 million worth of funding for the purpose of ARENA grants, which was previously supposed to be saved. But, obviously, when it comes to the capital allocation of the jointly administered capital fund between the CEFC and ARENA, within the CEFC, well, yes: the capital allocation for CEFC increases does take into account adjustment to the jointly administered CEIF.
So how much will be left in the CEIF?
The overall allocation of the Clean Energy Finance Corporation and the CEIF will be—
Honourable senators interjecting—
If I may answer—
Honourable senators interjecting—
There is nothing tricky about it whatsoever—I take that interjection. The overall allocation—
Honourable senators interjecting—
If I may answer, the overall allocation remains, at $10 billion, unchanged, but obviously the funds that are available for ARENA to co-administer are now adjusted accordingly, given that there is an $800 million increase in terms of grants funding. What that means is that the capital funding for debt and equity financing for renewables remains precisely as it was. But we are not proposing to double the contribution to ARENA to $1.6 billion; that is not something that we are proposing to do.
Senator DI NATALE
Just following up on that question: it was a very straightforward question, Minister. The Clean Energy Innovation Fund, which was the centrepiece of the Prime Minister's announcement leading into the federal election, was funded to the tune of $1 billion—the Clean Energy Innovation Fund. How much will now be available within that fund?
I have answered that question. The Clean Energy Finance Corporation, which has within it the CEIF, has an overall capital allocation of $10 billion. That was the allocation before today; that will be the allocation after today, should this bill pass. On top of that, we have agreed to restore $800 million in funding to ARENA, for the purpose of ARENA being able to provide direct grants, which is funded from separate savings within the omnibus bill—namely and principally the changes to family tax benefit supplement arrangements.
Senator DI NATALE
This just requires a yes or no answer, Minister. Will the Clean Energy Innovation Fund continue to have $1 billion worth of investment available? Not the Clean Energy Finance Corporation—the Clean Energy Innovation Fund. Will it continue to have $1 billion available to it? Yes or no?
As I have indicated to the chamber, the Clean Energy Finance Corporation capital will continue to be $10 billion, and the funding for ARENA has been increased by $800 million compared to what is reflected in the budget.
Minister, I will just repeat my earlier question: was the Labor Party aware that you would take a commensurate amount out of the Clean Energy Investment Fund as part of their deal in what they think has saved ARENA?
Senator Waters, your characterisation is completely inaccurate. The capital available to the Clean Energy Finance Corporation, including the Clean Energy Innovation Fund, was $10 billion before today; it will be $10 billion after today, should this legislation pass. And, on top of that, the government has agreed, at the request of the Labor Party, as part of this agreement, to restore $800 million worth of funding, for the purposes of ARENA grants, which was previously supposed to be saved. I do not know how I can be any clearer than that. However, clearly the intention of the agreement between the government and the opposition never was to increase resources available to ARENA to $1.6 billion. It was to provide an additional $800 million, and the implication of what you are asking for is essentially to double the contribution to ARENA, once you take grants and debt and equity financing resources into account.
So, Minister, the implication of what you are saying is that there was really no point to the Clean Energy Investment Fund, if it is basically the same as the CEFC. So how then do you explain the Prime Minister's press release, in the lead-up to the election, trumpeting it as a 'strong new approach to clean and renewable energy innovation in Australia'? Which is it? Have you cut it, or was it meaningless in the first place?
Well, again, that is just political rhetoric—and I will conclude my contribution on this point. That was certainly the feedback during our conversations—without attributing feedback to specific people. The feedback that we have received was that ARENA did not feel that, for its purposes, debt and equity financing was workable—that that was more in the remit of the Clean Energy Finance Corporation, and that the focus of ARENA and its purpose were better suited to the provision of grants funding. And what we have done, through this exercise, is to restore $800 million in funding for grants, which was previously supposed to be saved, without making any adjustment to the overall capital available to the CEFC and the CEIF.
So, Minister, why were there multiple different explanatory memorandums when this bill was before the House—the first one mentioning the cut to the Clean Energy Investment Fund, the next one not mentioning it, and then a further version—before us here in the Senate? Which is the truth? Is there a link? And was this part of the deal with the Labor Party or not? Which version of the explanatory memorandum was accurate?
They are all accurate. Obviously, an explanatory memorandum that goes to the Senate after legislation is passed through the Senate is put together for the purposes of Senate consideration at that point. But, beyond that, it is all accurate and consistent with what I have just indicated to the chamber.
Minister, the difference I was referring to was in the two House versions of the explanatory memorandum. Why the change?
Minister, could you just clear up something for me. What is the overlap between with the three different organisations: ARENA, the CEFC and the renewable energy investment fund? Can you outline the quantum? You said a little bit earlier that there were joint ventures and that they worked together. Can you explain how debt financing, equity financing and cash grants worked between those three organisations? I am a little bit confused as to how they worked together. Can you just illuminate that?
It does seem that the Greens are a little bit confused, even though the explanation has been very clear for some time. As a result of the agreement that the government and the opposition have reached in relation to this bill, ARENA will end up with $800 million more in direct funding for the provision of grants than they otherwise would have had. Separate to that and off budget—and this is not something that we put in place; this is something that Labor and the Greens put in place under the period of the previous government—there is a capital allocation—
Chair, I raise a point of order on relevance. I asked how they worked historically. I did not ask about what you are planning to do now. I want you to explain to me how those three organisations have worked together and whether they have taken on joint venture projects together and how they have actually shared their financing across different projects. Perhaps you could explain to us how it worked previously, and then we can work out what quantum of differences we are looking at from these bills.
Thank you, senator. I was getting to that, of course. You know that the Clean Energy Finance Corporation, as it was set up by the parliament under the period of the previous government, was set up to provide financing for commercially viable projects, by way of either debt or equity financing. ARENA was set up for the purpose of providing grants funding for relevant renewable energy projects. Our government has established within the CEFC a jointly administered Clean Energy Innovation Fund, which was aimed at bringing ARENA and the CEFC together in the context of, in particular, as it says, clean energy innovation related projects but providing support through debt and equity financing as well. What has been put to us is: instead of doing it this way, leave all of the capital that was previously allocated within the CEFC fund—not touch that at all; not reduce that at all. We have decided to restore $800 million worth of funding for ARENA, which they will be able to deploy for their pre-existing purposes, as per usual.
Senator Cormann, after all these words and all these answers and all the ducking and shoving, will you admit that all you have done here with ARENA is rob Peter to pay Paul?
Thank you very much, Senator Hinch. No, that is not what the government has done. If you are suggesting that we have paid for the additional funding for ARENA with savings elsewhere, then that is true. We have paid for the additional $800 million funding for ARENA by proposing to pass adjustments to family tax benefit A supplement arrangements. We have not paid for this additional $800 million by savings in other parts of the renewable energy space. That is the point I was making. That is something that the Greens are inaccurately trying to assert, and it is not right.
I have one last question. If I get this right then the CEFC is debt and equity financing, depending on its risk profiles; the innovation fund that you have set up to bring these two organisations together is debt, equity and grants as well; and ARENA is now just purely grants. Is that correct?
No, the way you have put that is not correct. You should know this because you were a part of the government that set this up. ARENA has always been an organisation that provides grants and not equity and debt financing. This continues. The Clean Energy Finance Corporation has always been the body that provides debt or equity financing for commercially viable projects. Within the overall capital allocation of the CEFC, the Clean Energy Innovation Fund brought together the CEFC and ARENA within the CEFC to pursue debt and equity financing options. The overall capital available remains at $10 billion. There has been no money taken out of that overall capital allocation. It is the same as it was before. However, as a result of the agreement that the government has reached with the Labor Party, we are restoring $800 million worth of direct funding to ARENA for its usual purpose, which is to provide grants.
Minister, what impact will shuffling around the $800 million from the Clean Energy Innovation Fund—moving that to the CEFC—have on the decisions that can be made by the CEFC in relation to the risk profile of investments?
The risk framework that you are referring to is completely unchanged. There is absolutely no change whatsoever, and the Clean Energy Finance Corporation will continue to make decisions consistent with the arrangements that were put in place in legislation by this parliament under your period in government with the previous Labor government.
Minister, my understanding is that the whole point of the Prime Minister's Clean Energy Innovation Fund was to allow higher risk investments within the pool of money allocated to the CEFC. If you are now taking that ability away and taking $800 million out of that $1 billion, are you also now claiming that it will not have any impact on the risk profile of the investment decisions that can be made? Are you saying that the Prime Minister's announcement was a complete sham the whole time? Or have you got your facts wrong?
I do not know how productive this is. This is just essentially politics. As I have indicated consistently all the way through, the capital allocation to the Clean Energy Finance Corporation remains at $10 billion, consistent with the arrangements that were put in place under the previous Labor government, supported by a the Greens at the time, I believe. As far as ARENA is concerned, the government has agreed to restore $800 million in grants funding for the purposes of ARENA.