John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

APPROPRIATION BILL (No. 3) 2007-2008

It is with pleasure that I introduce Appropriation Bill (No. 3) 2007-2008.

There are two Additional Estimates Bills this year: Appropriation Bill (No. 3) and Appropriation Bill (No. 4). I shall introduce the latter Bill shortly.

The Additional Estimates Bills seek appropriation authority from Parliament for the additional expenditure of money from the Consolidated Revenue Fund, in order to meet requirements that have arisen since the last Budget. The total additional appropriation being sought through Additional Estimates Bills 3 and 4 this year is $3.3 billion, or about 4.8% of total annual appropriations.

I should add that in addition to Appropriation Bills 3 and 4, I will also be introducing another two Appropriation Bills to meet additional expenses relating to drought and equine influenza assistance measures announced by the previous Government after the last Budget. The amounts to meet these additional measures would normally be included in the Additional Estimates Bills; however, as the funding for these measures is required urgently, a second set of Bills has been prepared which can be given faster passage in the Parliament – the Appropriation (Drought and Equine Influenza Assistance) Bills.

Before I turn to the detail of the additional appropriation being sought in Appropriation Bill (No. 3), I want to speak about the Government’s savings initiatives and their effect on the Additional Estimates Appropriations. The Government has commenced the hard work of identifying savings and offsets of the previous Government’s spending so that they may be redirected to better and more effective program priorities. Today I am delivering a modest initial instalment on the Government’s election promise of savings.

During the election campaign we promised to require government departments and agencies to deliver an additional two per cent efficiency dividend in the 2008-09 financial year. The first part-year instalment on that promise will be achieved this financial year, with an estimated saving in expenses against annual departmental appropriations of around $100 million in 2007-08. These savings have served partially to offset an increase in departmental appropriations in the Additional Estimates. Efficiency dividend savings are estimated to increase to around $430 million in 2008-09.

Of course, it is not only the public sector that has been called upon to find economies. The Government has applied this requirement to itself and to members of Parliament generally by requiring a 30 per cent reduction in Ministerial and opposition staff, yielding a net saving of $15.4 million this year.

Significant administrative efficiencies will arise this year with the transition from Australian Workplace Agreements to collective enterprise agreements and statutory individual contracts. The Workplace Authority will achieve a funding reduction of $30 million in 2007-08 as a result of the simplified administration.

We are also delivering the first instalment on our promise to redirect savings in annual appropriations to superior policy outcomes including, to name but a few:

• Redirecting the savings from cancelling the previous Government’s Skills for the Future program work skill vouchers to fund our better plan for more Vocational Education and Training places as part of our Skilling Australia for the Future program. A part-year saving of $16.3 million will be achieved this year;
• Abolishing the Access Card project providing a saving this year of $250.6 million; and
• Abolishing Australian Industry Productivity Centres, saving $10.2 million this year and redirect the savings to a better targeted program.

Amongst the measures announced by the previous Government that we will not be proceeding with are contributions to the Rugby League Hall of Fame and the Australian Rugby Academy producing a cash saving to the Budget this year of $35 million, while a review of the Renewable Remote Power Generation Program has identified a saving this year of $33 million.

These savings, and many others, have served to contain the additional appropriation sought in these Bills.

Turning now to Appropriation Bill (No. 3), the total appropriation being sought this year is $2.4 billion. This proposed appropriation arises from changes in the estimates of program expenditure, due to variations in the timing of payments and forecast increases in program take-up, reclassifications and from policy decisions taken by the Government since the last Budget.

I now outline the major items provided for in the Bill.

As a first step in attacking Australia’s skills deficit the Department of Education, Employment and Workplace Relations will be provided with $242.1 million to enable the following programs to proceed:

• $100 million to establish the National Secondary Schools Computer Fund, which will provide for grants of up to $1 million for schools to assist them to provide for new or upgraded information and communications technology for secondary school students in years 9 to 12;
• $33.3 million for the Government’s Skilling Australia for the Future program which will provide a total of 450,000 additional training places over four years at a cost of $1.3 billion. Funding in 2007-08 will deliver 20,000 Vocational Education and Training places that are aimed at people currently outside the workforce. This program will commence in the beginning of April 2008;
• $92.6 million to meet additional costs associated with the previous Government’s Skills for the Future program and to extend that program until our new program commences in April; and
• $16.2 million to establish the Television Technical Operators College and the WesTrac National Skills Training Centre of Excellence.

The Department of Education, Employment and Workplace Relations will also be provided with $22.7 million to provide assistance to schools in declared Exceptional Circumstances areas to increase equitable access to high-quality education opportunities.

The Government will provide a net increase of $45.7 million in 2007-08 to establish the Workplace Authority, which will undertake pre-lodgement assessment of workplace agreements and provide a comprehensive information and education service about pay and conditions to help employers and employees better understand the workplace relations system.

$15 million will be provided to establish the Office of the Workplace Ombudsman, which will perform the workplace relations compliance role formerly undertaken by the Office of the Workplace Services. The additional resources will ensure timely investigations of the expanded number of claims.

Additional funding of $60.75 million is proposed for the Department of Education, Employment and Workplace Relations to reimburse it for the communications campaign to raise public awareness of the services provided by the Office of the Workplace Ombudsman and the Workplace Authority, which concluded in October 2007.

The Department of Infrastructure, Transport, Regional Development and Local Government has been provided with $2.5 million to establish Infrastructure Australia to ensure genuine rigor and accountability in infrastructure spending. Infrastructure investments will be subject to expert analysis. If a government chooses to invest in a project for political rather than economic reasons everyone will know about it. Infrastructure Australia will develop a national approach to tackling infrastructure bottlenecks.

The Department of Innovation, Industry, Science and Research will be provided with $15.2 million to introduce the Enterprise Connect program, replacing the previous Government’s Australian Industry Productivity Centres.

Additional funding is proposed for the Department of Health and Ageing for the following:

• $14.0m to provide a package of incentives to support the take-up of Medicare Easyclaim by patients attending participating general practices and specialist practices;
• $33.1m to provide upfront capital grants and recurrent funding for the establishment of 31 GP Super Clinics around Australia, and to provide incentive payments to GPs and allied health providers to relocate to these clinics;
• $11.7m to establish a specialist training school at Greenslopes Private Hospital at the University of Queensland; and
• $31.6 million for investing in hospitals and community health under the Better Outcomes for Hospitals and Community Health program. This includes funds for specific commitments announced during the election such as $10 million for the Flinders Medical Centre clinical teaching facilities upgrade.

The Department of the Environment, Water, Heritage and the Arts will receive the following additional amounts:

• $50.8 million additional funding for the Great Barrier Reef Marine Park Structural Adjustment Package;
• an additional $31.8 million to provide rebates to households for installing solar hot water heaters to encourage improved energy efficiency in homes;
• an additional $50.8 million for the National Solar Schools Plan to encourage improved energy and water efficiency in schools; and
• an additional $15.2 million to take early action on the National Plan for Water Security. This proposal will accelerate investment in water savings infrastructure and the purchase of water allocations by bringing forward spending from 2011-12.

The National Water Commission will receive an additional $25.0 million to assist groundwater licence holders in New South Wales to adjust to reductions in water access entitlements.

The Department of Families, Housing, Community Services and Indigenous Affairs will be provided with $189.8 million to assist people with disabilities, their families and carers. This includes annual tax-free payments of $1,000 for each child under the age of 16 with a disability for whom the carer is receiving Child Carer Allowance and $9.0 million to increase the support available to people in disability business services.

The Department of Immigration and Citizenship will be provided with:

• an additional $18.0 million to upgrade the Border Control System. This funding will enable enhanced electronic connectivity between the Department and the Australian Security Intelligence Organisation; improved analysis and security checking of travellers to Australia; and higher quality data matching systems;
• a further $81.6 million through the DIAC funding model for increases in the volume of DIAC’s transactions including visa applications (mainly student and skilled migrant) during 2007-08.

The Department of Defence’s appropriation is largely the result of a reclassification of appropriations and other estimates variations, including:

• $402 million to cover an increase in depreciation expense. This increase in funding is fully offset by a reduction in the Department’s capital funding appropriation from Appropriation Act 2, thereby making the reclassification budget neutral;
• $38.8 million for Stage 2 of the Enhanced Land Force Initiative; and
• $70.6 million for additional costs incurred for Operation Astute in East Timor in 2006-07.

The balance of the amount in Appropriation Bill (No. 3) relate to estimates variations, reclassifications and other minor measures.

The Appropriation Bills are structured according to the Administrative Arrangement Orders announced on the 3rd December 2007 and 25th January 2008. Members will notice that in the case of some functions transferred between agencies, the recipient agency has been assigned the same outcome as the agency from which the activity was transferred. This ensured that valid outcomes existed against which funds could be appropriated within the Additional Estimates timeline and in the context of the large number of Administrative Arrangement changes. Following Additional Estimates, agencies will be able to seek amendments to outcomes statements so that these can be more fully integrated into their agency outcome and program structure.

We have inserted a new provision in Appropriation Bill 3—section 12—to facilitate the achievement of whole of Government outcomes relating to indigenous employment initiatives. The new provision will provide relevant agencies with the necessary appropriation in order to spend amounts received from the Northern Territory Flexible Funding Pool Special Account. Participating agencies will be identified in an annual determination by the Finance Minister. The Flexible Funding Pool model was adopted to permit the reallocation of funds between participating agencies, where required, to more effectively meet employment objectives relating to the Northern Territory Emergency Response.

We have also taken the opportunity to make changes to the Appropriation Bills to clarify the relationship between annual appropriation Acts and certain provisions in the Financial Management and Accountability Act 1997 , which can change amounts appropriated by, and issued under, the annual appropriation Acts. The FMA Act provisions in question are sections 30, 30A, 31 and 32, which relate to re-imbursements and other amounts received by agencies, handling goods and services tax issues and changes to appropriations that flow from a change of agency functions, such as the new administrative arrangements made after the election.

The changes proposed are particularly important following commencement of the Financial Framework Legislation Amendment Act (No. 1) 2007 which altered sections 31 and 32 so that they directly change the amounts of appropriation provided in the annual appropriation Acts.

We are proposing to expand the explanatory detail provided in Note 2 to section 6 of the Bills and also expand the detail provided in the appropriation clause in each Bill. These changes are not designed to alter the substantive law, but to make clear that the appropriation Acts are subject to the relevant FMA Act provisions.

A number of other minor technical improvements have been made to the Bills to ensure consistency with the drafting of other legislation.

The previous government decided to abolish the Statement of Savings and to remove departmental savings from Appropriation Bill (No. 3). This statement merely replicated information already provided in the Mid-Year Economic and Fiscal Outlook. It was also somewhat misleading, as most of the items presented were actually reallocations of funding across programs or years and did not represent reductions in agency appropriations. Consequently, I am not tabling a Statement of Savings document with these Additional Estimates Bills. Also, the proposed Appropriation Bill (No. 3) does not show agencies which are not expected to spend all of their departmental outputs appropriation for 2007-08. The Government has decided that detail on savings measures agreed since the 2007-08 Budget will be provided in tables in the Portfolio Additional Estimates Statements.

I commend the bill to the Senate.

APPROPRIATION BILL (No. 4) 2007-2008

Appropriation Bill (No. 4) provides additional funding to agencies for:

• expenses in relation to grants to the States under section 96 of the Constitution and for payments to the Territories, and local government authorities; and
• non-operating purposes such as equity injections and loans.

The total additional appropriation being sought in Appropriation Bill (No. 4) 2007-2008 is $898.5 million.

The principal factors contributing to the additional requirement since the 2007-2008 Budget include $172 million in additional payments to the States, Territories and local government authorities, including:

• $63.7 million to the Department of Health and Ageing including:
• an amount of $40.3 million for investing in hospitals and community health under the Better Outcomes for Hospitals and Community Health program. This program includes funds for specific commitments announced during the election, such as $15 million for the Launceston Integrated Cancer Care Centre; and
• $18 million for a contribution to Grafton Hospital;
• the Department of Defence will be provided $26.8 million for payment to the Queensland Government for the relocation of Amberley State School as a result of the expansion of RAAF Amberley. This appropriation is provided through the reclassification of an existing Defence appropriation.
• a bring forward of $20 million under the AusLink program to allow the early initiation of projects by the Department of Infrastructure, Transport, Regional Development and Local Government, and
• an increase of $33.0 million for the Commonwealth State and Territories Disability Agreement, to allow the Department of Families, Housing, Community Services and Indigenous Affairs to make grants to the States for people with disabilities and their carers.

Bill 4 also proposes $723 million in additional appropriation for non-operating expenses, the more significant of which I now outline.

AusAID will be provided with $466.4 million for Australia’s contribution to the International Development Association, which is the concessional lending arm of the World Bank. The amount reflects additional funding announced at MYEFO of $211 million and a change in the accounting treatment for $255 million previously appropriated with funding for loans in Appropriation Act 1 2007-08. The original funding provided in Appropriation Act 1 under the previous accounting treatment will be returned to the Budget.

An additional $17.6 million will be provided to the Department of Innovation, Industry, Science and Research for the Innovation Investment Fund. This amount represents the profit on the Fund’s investment continuing the policy that profits generated should be returned to the Fund to create a self-sustaining program of investments.

Finally an additional equity injection of $121.4 million is proposed for the Department of Immigration and Citizenship to, among other things, reimburse the Department for meeting workload increases flowing from an increase in case volume in 2006-07 and to provide capital funding for IT system development and upgrades for the Border Control System as well as additional capital funding for the Systems for People IT program.

We have also changed Appropriation Bill 4 to clarify the relationship between annual appropriation Acts and certain provisions in the Financial Management and Accountability Act 1997 , which can change amounts appropriated by, and issued under, the annual appropriation Acts.

Consistent with the amendments proposed for Appropriation Bill 3, the changes proposed for this Bill expand the explanatory detail provided in Note 2 to section 6 of the Bill and also expand the detail provided in the appropriation clause. These changes are not designed to alter the substantive law, but to make clear that the appropriation Acts are subject to the relevant FMA Act provisions.

A number of other minor technical improvements have been made to the Bills to ensure consistency with the drafting of other legislation.

I commend the Bill to the Senate.

HIGHER EDUCATION SUPPORT AMENDMENT (VET FEE-HELP ASSISTANCE) BILL 2008

This Amendment Bill is to implement the original policy intent of the VET FEE-HELP legislation passed through the Parliament last year. That legislation extended the FEE-HELP student loan scheme to important parts of the vocational education and training (VET) sector, but it was poorly framed and now requires the corrections set out in this Bill in order to operate effectively.

Consequently it has fallen to this Parliament and to the Rudd Labor Government to fix the incompetence of the Howard/Costello Government and specifically the incompetence of the former Minister for Education who is now the Deputy Leader of the Opposition.

It is to be regretted that Parliamentary time needs to be devoted to this patch up job. But unfortunately there is no choice. If the errors in the current legislation are not corrected that will have budgetary consequences.

The objective of VET FEE-HELP is to provide an Australian Government loan to ease the upfront financial burden for full fee-paying students in high level vocational education and training courses, including Diploma and Advanced Diploma courses that have appropriate credit transfer into a higher education award.

Specifically the Amendment will ensure that:

• VET FEE-HELP is restricted to eligible full-fee paying students in Diploma, Advanced Diploma, Graduate Certificate and Graduate Diploma courses; and
• VET providers have credit transfer arrangements with a higher education provider in place for each VET accredited Diploma or Advanced Diploma qualification.

As it stands the current legislation does not achieve these aims and if left without amendment could result in an unintended extension of FEE-HELP far beyond the stated intention.

Such extension is not budgeted for in the forward estimates and could prove extremely costly. In the current inflationary climate such an unintended expenditure cannot be justified.

The current legislation fails to adequately set out the fee arrangements under which VET FEE-HELP can be offered to a student, leaving this wide open to a full range of VET courses. The proposed amendments ensure that VET FEE-HELP is to be made available only to students paying full fees, and a mechanism is put in place to ensure that the Minister has clear information from VET providers on this matter.

Further, the current legislation does not ensure that, in order to offer VET FEE-HELP to students, VET providers must have credit transfer arrangements in place. This is corrected in the proposed amendments.

Increasing Australia’s productivity is critical to our future economic prosperity and enhancing the skills and capacity of our workforce is a key to productivity. VET FEE-HELP provides a strong financial underpinning to help more Australians gain essential skills through vocational education and training.

VET FEE-HELP enhances opportunities for individuals to pursue study in the vocational education and training sector at the Diploma level and above without the disincentive of upfront payment of full fees. FEE-HELP loans are not subject to income and assets tests and repayments do not commence until an individual’s income is above a minimum repayment threshold.

VET FEE-HELP will create opportunities for Australians to pursue new careers or lift their qualification levels to Diploma, Advanced Diploma, Graduate Certificate or Graduate Diploma. It opens the way for greater movement between vocational education and higher education. Aligning student financing arrangements between the sectors reduces the funding inconsistencies which can sometimes get in the way of students seeking to move between the sectors. It also eases the administrative load for multi-sector providers of both VET and higher education.

We anticipate that over the next four years more than 6,000 students will benefit under this scheme.

Higher level VET qualifications are the way of the future for skills development – and the Rudd Labor Government has made them a centrepiece of its Skilling Australia for the Future policy.

Our Skilling Australia for the Future policy will increase and deepen the skills capacity of the Australian workforce. The Government’s plan for our future skilled workforce will close the skills gap in the Australian economy in three key ways:

Firstly, by funding an additional 450,000 training places over the next four years.

The first 20,000 of these new training places will be available from April 2008. These initial places will be directed to those outside the workforce and will help many Australians gain employment and stimulate workforce participation rates.

Secondly, we will ensure that most of the 450,000 places lead to a higher level qualification.

The new places will offer high-quality training opportunities which better suit the needs of our economy in the future. In an increasingly globalised world, we need to increase not only the number of Australians with skills and qualifications, but also the depth of skills in our workforce if we are to drive up productivity and compete internationally.

The Business Council of Australia estimates that nearly half of the qualifications needed to meet the predicted demand for skilled workers over the next decade will need to be at Certificate III level or above.

A 2007 study by the National Centre for Vocational Education Research highlighted the importance of associate professional occupations in the context of globalisation, technological change and the changing nature of work yet shows that in recent years there has been a decrease in the level of participation in Diploma and Advanced Diploma qualifications in the vocational education and training sector.

Thirdly we are placing industry demand at the heart of the skills training system through setting up Skills Australia and by strengthening Industry Skills Councils.

The Rudd Labor Government’s Skilling Australia for the Future policy will give skills training in critical high-level skills a much needed boost. VET FEE-HELP provides an important underpinning for growing participation in high-level skills training.

I commend this Bill to the Senate.

SOCIAL SECURITY AND VETERANS’ AFFAIRS LEGISLATION AMENDMENT (ENHANCED ALLOWANCES) BILL 2008

This Bill delivers on the Government’s $4 billion election commitment to help older Australians, carers and people with disability make ends meet.

It will give much needed financial support to around three million eligible Australians who are finding it increasingly difficult to make ends meet, including pensioners and self-funded retirees.

This Government understands the cost of living pressures faced by many in our community.

Increases in the cost of living and staple items like food and housing mean those on fixed incomes and those caring for the most vulnerable in our society need our support.

That’s why the Government is acting to help with these pressures.

Since being elected, we have already announced an inquiry into grocery prices, and we are delivering on our commitment for a full-time petrol commissioner.

Today we are delivering on another commitment, to increase utilities and telephone allowances for eligible seniors, carers and people with disability.

This bill will amend the social security law, the Veterans’ Entitlements Act 1986 and the Military Rehabilitation and Compensation Act 2004 to give increased, and more timely, financial support to older Australians, people with a disability, carers and veterans.

Through these measures, these Australians on fixed incomes will be able to plan more easily to meet their regular financial commitments.

First, the bill will help older Australians receiving income support payments such as age pension and veterans’ service pension by significantly increasing the utilities allowance. This measure will benefit over 1.7 million aged income support recipients, 250,000 Commonwealth seniors health card holders, 700,000 disability support pensioners and 120,000 carer payment recipients. The annual rate of utilities allowance will increase from $107.20 to $500, and will be paid in quarterly instalments of $125 for singles and eligible couples combined. This equals a total annual payment of $500 for singles and $250 for each member of a couple. We understand that these bills come in four times a year so that’s why the allowance will be paid quarterly. Paying the allowance regularly gives older Australians peace of mind and certainty that they will have the funds on hand to pay their bills.

Secondly, the bill expands the qualification criteria for utilities allowance to cover people under pension or qualifying age and receiving a carer payment, a disability support pension, an invalidity service pension, a partner service pension, an income support supplement, a bereavement allowance, a widow B pension or a wife pension. This equals a total annual payment of $500 for singles and $250 for each member of a couple in one of these new groups.

Under these first two elements, more Australians will receive more support to help with their utilities costs.

Thirdly, the bill significantly increases the rate of seniors’ concession allowance, which is paid to self-funded retirees, from $218 to a total annual payment of $500 for each eligible individual. In another change to make life easier for seniors, this higher rate will also be paid on a quarterly basis on the same days as utilities allowance.

Lastly, the bill provides a higher rate of telephone allowance for older Australians, carers and people with a disability if they receive income support and have an internet connection at home. The new rate of $132 a year for singles will be available to those who have a home internet connection, an increase from the standard rate of telephone allowance of $88 a year.

The higher rate of telephone allowance will also be available for eligible veterans and their dependants who have an internet connection at home.

The Government understands that, in today’s Australia, the internet is a critical means for families to stay in touch with their loved ones. Some Australians on income support pensions and payments can be at risk of becoming isolated from the community, and that’s why we are helping them stay in touch with friends, children and grandchildren around the country and the world, via the internet. Affordable home access to the internet has the potential to connect them with a new world of communication, information and entertainment.

The Government is proud to be delivering on these important election commitments.

TAX LAWS AMENDMENT (2008 MEASURES No. 1) BILL 2008

This Bill makes a number of improvements to Australia’s tax and superannuation laws.

Firstly, this Government is honouring an election commitment to remove tax deductibility for donations made to political parties, can