Andrew Leigh

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR COMPETITION

MEMBER FOR FRASER

MEDIA RELEASE

KEVIN ANDREWS KNOWS WHAT HE’S AGAINST, BUT NOT WHAT HE’S FOR

The Social Services Minister - determined to reject the views of the charities sector and trash the Australian Charities and Not for Profits Commission (ACNC) - has no plan for the sector.

Minister Kevin Andrews’ Bill reads like a media alert more than a serious piece of legislation.

The ACNC Repeal Bill (Part 1) offers no transitional arrangements for a sector that employs a million people. There are no details of a successor agency.

This is a purely symbolic gesture, added to by the fact that debate on the Bill won’t take place this coming week as expected.

The Explanatory Memorandum states this Bill “will not take effect until the enactment of a later Bill, which will provide the details of the arrangements replacing the Commission".

Alarmingly, the Minister gives himself the power to determine the successor agency without parliamentary approval. If the Minister won’t trust the public with his plans, why should parliament entrust him with the power to do as he wishes?

The Bill does nothing but create greater uncertainty for a pivotal sector at the heart of our communities.

The Minister appears without vision or heart for the charities that work for Australia’s vulnerable. There are nearly 60,000 charities registered with the ACNC.

Four of out five charities surveyed want to keep the ACNC. These include Save the Children, St John Ambulance Australia, the Ted Noffs Foundation, RSPCA, The Sidney Myer Fund & the Myer Foundation, Foundation for Alcohol Research and Education, Volunteering Australia, Lifeline, ACOSS, SANE Australia, Musica Viva Australia, Hillsong Church, Social Ventures Australia, Australian Conservation Foundation, the YMCA, the Wesley Mission and the Queensland Theatre Company.

The explanatory memorandum says the ACNC was established to be a single reporting point for charities and claims that this “has not eventuated”.  But in just over a year, the agency has won strong support in the sector, and its red tape reduction directorate is working on reducing unnecessary reporting by charities.

The Government claims to be reducing red tape. But abolishing the ACNC will increase the red tape burden on charities.

SUNDAY, 23 MARCH 2014

On ABC NewsRadio, I spoke about the impact of Coalition cuts on the Treasury, as highlighted by Martin Parkinson's recent speech. Here's a podcast.

I led off today in the Matter of Public Importance debate, speaking about the value of keeping the Australian Charities and Not-for-Profits Commission.

Matter of Public Importance - Australian Charities and Not-for-Profits Commission, 20 March 2014

Yesterday, in this House, the Leader of the House said as follows:

‘There will be a single national database for university reporting, so government departments will coordinate with each other rather than putting that burden of coordination on the university sector.’

A single national database to allow coordination. But remove the word 'university' and insert the word 'charity 'and you have exactly what the Australian Charities and Not-for-Profits Commission does.

It is a one-stop shop. This is a government that approves of one-stop shops when it comes to environmental approvals but when it comes to a one-stop shop for charities they are suddenly against it. When it comes to one-stop shops this government is all over the shop. The charities commission is a body that could not enjoy wider support from across the charity sector. A wide range of charities, more than 40, have signed an open letter to save the charity commission. They include: Save the Children, St John Ambulance Australia, the Ted Noffs Foundation, RSPCA, The Sidney Myer Fund & the Myer Foundation, Foundation for Alcohol Research and Education, Volunteering Australia, Lifeline, ACOSS, SANE Australia, Musica Viva Australia, Hillsong Church, Social Ventures Australia, Australian Conservation Foundation, the YMCA, the Wesley Mission and the Queensland Theatre Company. What else could bring all of these organisations together from across the political spectrum but the Abbott government?

The Abbott government said it would bring Australians together—and it has. They are united in opposition to what this government is doing. This government wants to get rid of a charities commission, about which Tim Costello said:

‘The commission is actually working for us, and it gives the public confidence. It underpins the consumer benefit to charities.’

Myles McGregor Lowndes, of the Australian Centre for Philanthropy and Nonprofit Studies said:

‘During its short history, the ACNC has played a positive role in the overall regulatory environment of charities.’

Indeed, he describes:

‘Its stellar improvement in terms of timeliness, consistency of decision making and responsiveness…’

Carolyn Kitto of Stop the Traffik said:

‘The ACNC is a dream come true for small charities…The ACNC has cut red tape dramatically. The staff are helpful and navigate complexities so we can be sure we are compliant and efficient.’

David Crosbie, CEO of the Community Council of Australia said:

‘The ACNC is more efficient than the government regulators it replaced, is doing good work and deserves a chance to achieve its three goals of reducing red tape, increasing public trust and strengthening the charity sector.’

Louise Walsh from Philanthropy Australia says:

‘Since the ACNC’s establishment as an independent charities regulator, Philanthropy Australia has consistently supported the ACNC’s important role in our community.’

We also heard strong support yesterday from Anglicare Australia, which said:

‘The repeal of the ACNC will simply recreate more bureaucracy, lessen protection for the public and add unnecessarily to the workload of community service providers. It will also create uncertainty as there is no clear replacement. Uncertainty is the biggest enemy of efficiency, as big business tells us.’

The matter of public importance before the House goes in particular to the impact on Western Australia. Professor David Gilchrist, the Director of the Not-for-profit Initiative at Western Australia's Curtin University, spoke to my office today and said:

‘A silent majority in Western Australia think the ACNC is the way forward. Regulation is only part of what it offers.

‘Its best practice governance principles have been very well accepted. It has provided the sector with a good set of financial principles that allow for differences between charities. It recognises that the WA sector is every bit as complex as any other sector.

‘Removing the ACNC without a fair trial and without leveraging the hard work of the commission in recent months would be a mistake.’

That is what David Gilchrist of the Not-for-profit Initiative at Curtin University said.

A pro bono survey in August 2013 of 1,500 charities found that 81 per cent supported the ACNC. What share supported the government's preferred solution of returning charities regulation to the ATO? Just six per cent. The National Party gets more votes than that! There is more support for the Australian Greens and the National Party than there is for this government's approach of returning charitable regulation to the Australian Taxation Office.

This is a serious sector. The not-for-profit sector employs one million Australians, turns over $100 billion and involves five million volunteers. It is at the heart of our community and many of us in this place take pride in the work of the not-for-profit sector. But if we want a strong not-for-profit sector we have to listen to what expert reviews have said. No less than five reviews, including the Productivity Commission review and the Henry tax review, have said we need a national charities commission. That is because without a charities commission there is a hodgepodge of regulation which puts donors at risk and does not allow charities their own bespoke regulator.

This government is driven not by expert advice, not by listening to five inquiries and not by listening to the four in five charities that want to keep the ACNC; instead, it is driven by blind ideology. There is no better evidence of that than the attempt by the minister in charge of abolishing the charities commission to hang onto a 400-year-old common-law definition of charities rather than a new statutory definition. John Howard back in 2000 said that this statutory definition would be a good idea. Mr Howard said:

‘Yet the common law definition of a charity, which is based on a legal concept dating back to 1601, has resulted in a number of legal definitions and often gives rise to legal disputes.’

This government is a pre-Howard era government in its approach to charities. It wants to take us back to 1601. In fact, not only it is pre-Howard but it is pre-Protestant, pre-Enlightenment, pre-electric lights and pre-steam engines. When it comes to charities, this government would take us back to the time of leeches and witch burning. That is its view of charities. Its view of charities is that they should be seen and not heard. It wants the Australian charity sector to be simply a service delivery arm of government. That is why the Minister for Social Services is taking carriage of this and not the Assistant Treasurer—that was at the time when we had an Assistant Treasurer!

Labor's view is that charities play an important role in the Australian community sector and they should be free to speak their minds. Brave charities have spoken their minds. You have to be a pretty bold charity to put your head above the parapet with this government, knowing their willingness to play favourites and to have a go at charities that are of a mind to speak in the public interest rather than simply look at where their next dollar is coming from. We have seen charities, from ACOSS to the age sector, saying that this is a bad idea and that, if this change goes through, it will be utterly retrograde. Charitable donors will be at risk. They will be placed at risk from scam artists. If you are opening your door to a charity, you want to know that there is a charities commission standing ready to take complaints against the thankfully small number of dodgy charities. If we do not have that then we are not going to have the backstop that the sector requires. This approach would be like the coalition saying to financial investors: 'Let's get rid of ASIC. We'll be okay without the Securities and Investments Commission. Let's just let the market rip.'

Mr Bowen interjecting—

Dr LEIGH:  The shadow Treasurer said perhaps I should not suggest that. You never know what this government will do. This is, after all, a government that is going further in the area of removing protections on consumers than the Financial Planning Association would want. This government should listen to donors, should listen to charities, should listen to philanthropists and should keep the ACNC.

With legislation going before the House of Representatives yesterday to repeal the charities commission, this morning I spoke to reporters in the Press Gallery to defend the important work of the ACNC.  Here's the transcript:

E&OE TRANSCRIPT
DOORSTOP INTERVIEW

PARLIAMENT HOUSE

THURSDAY, 20 MARCH 2013



SUBJECT/S: Australian Charities and Not for Profits Commission; FOFA and Arthur Sinodinos; Qantas sale.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Amidst their so-called 'Repeal Day' the Coalition brought forward the repeal of the Australian Charities and Not for Profits Commission. I say brought forward because the Coalition promised consultation: a consultation paper in February and extensive discussions with the sector. We haven't seen any of that and that's why more than 40 charities signed an open letter to the Government calling on them to rethink the scrapping of the charities commission.

The charities commission is important for donors who are vulnerable to door-to-door scams, if there isn't an agency to report them to. It's vital to the sector which appreciates the work the charities commission does. That's why organisations as diverse as Save the Children, Lifeline, Hillsong Church, the RSPCA, and the Myer Foundation are calling on the Government to trash their laws to get rid of the charities commission and to hang on an organisation that's supported by the sector.

I've heard people say the sector is split on this. It’s true. The sector is split on this. Four out of five charities support the charities commission. 94 per cent want the responsibilities to stay with the charities commission. Six per cent want them to go back to the tax office. So if the Government didn't have a tin ear for consultation and if this process wasn't being led by a Minister who's much more driven by ideology than good public policy then they wouldn't be pursuing this at all. They ought to put it aside and if they're serious about scrapping red tape, hang on to a one-stop shop that's working to reduce red tape for charities.

I'm happy to take questions.

JOURNALIST: Why shouldn't that be the responsibility of the ATO?

LEIGH: Well, it was the responsibility of the ATO for some time and then a Productivity Commission inquiry and the Henry Tax Review recommended that having a one-stop shop for charities was a smarter approach. I haven't heard anyone say a bad word about Susan Pascoe who runs the ACNC.

Many charities have spoken to me about how much they appreciate an agency that gets their sector, that understand their complexities. Let's face it, if you're in danger of being ripped off by one of the thankfully, very few scammers going door to door, posing as charities, then you want an ACNC, just as corporate investors want an organisation like ASIC looking after their interests.

JOURNALIST: Unions are in town today. They concede that if Qantas can make a guarantee about Australian jobs they might be supportive of the Qantas Sale Act. Is Labor of a similar frame of mind?

LEIGH: Labor hasn't changed our view. We don't believe the Flying Kangaroo should be sold off.

JOURNALIST: There's no wriggle room, no room for negotiations in this?

LEIGH: We're certainly open to conversations around the Government providing a debt guarantee. But our view is that the Flying Kangaroo should not be sold off to overseas interests and I think that's a view that broadly shared in the Australian community. Certainly in my street stalls and conversations in the community, I don't have many people come out to me saying the real public policy problem in Australia is that Labor won't agree to sell off Qantas to foreign interests.

JOURNALIST: Dr Leigh, is the Labor Party taking the same approach that Tony Abbott did in Opposition? Is there any evidence to the contrary?

LEIGH: Well in this case, we're saying yes to positive reforms. The charities commission is a reform which is broadly supported by the Australian community and the naysaying approach, the back-to-the-future approach is to say let's throw it to one side and go back to the hodgepodge of regulation that we had. We're taking a positive approach.

We believe that the charities commission is the right thing. On the Future of Financial Advice. We're again taking a positive approach and we're standing on the side of consumers rather than on the sides of a couple of vested interests in the planning industry who are saying they want to get rid of the best interest test.

JOURNALIST: This case of a $200,000 donation to Kevin Rudd, this seems pretty curious. What's going on there?

LEIGH: I don't know any more about that than you. I'm sure the Queensland branch of the Labor Party will do the right thing.

JOURNALIST: Would you agree that Arthur Sinodinos was seen as one of the good guys in this place?

LEIGH: Arthur Sinodinos stepping down is a matter for him. The question, that I think it now highlights is whether or not the Government ought to be rushing through financial planning legislation that is opposed not only by consumer groups but also by the Financial Planning Association. It's a pretty unique configuration, to annoy both consumers and financial planners. Given that Senator Sinodinos is no longer having carriage of that I think it would be appropriate to pull that legislation from the parliament.

JOURNALIST: Wouldn't Labor be happy that it’s claimed its first ministerial scalp from the Abbott Government?

LEIGH: Our focus is on getting good public policy. I think that as a result of Senator Sinodinos stepping down we need to now look to whether it's really appropriate for the Government to be rushing ahead with these anti-consumer changes to the financial planning legislation. Thanks everyone.

JOURNALIST: Thank you.

ENDS

On 19 March, I joined PVO on Sky to discuss the resignation of Senator Arthur Sinodinos, and its implications for the government's anti-consumer financial changes and its anti-charity ACNC changes.

The Daily Telegraph today publishes an extract from my population speech at the Lowy Institute.

Don't be scared, let's populate and prosper, Daily Telegraph, 20 March 2014

If there’s one thing that’s really big in the population size debate, it’s the size of the scare campaigns made by both sides. One side tells us that a big Australia is a ‘catastrophe’, while the other says that slow population growth will hurt share prices and drive up debt.

Australians comprise just one in 300 of the world’s population. We have the third-lowest population density of any country. Only Mongolia and Namibia have fewer people per hectare than Australia. Yet we also have one of the highest urbanisation rates. Nearly nine in ten Australians live in urban areas.

An unusual feature of the Australia’s population debate is how much it is sparked by population projections. This is especially odd given the record of past projections. In 1888, the Daily Telegraph predicted that the population in 1988 would be 60 million. The Australian Treasury recently updated its population forecast for the 2040s from 26 million to 35 million.

And while you might think that the government has two population levers: one marked ‘more babies’ and one marked ‘more migrants’, only one of them really works. Government can control migration, but its policies have little impact on whether or not people have babies. So the population debate is really a migration debate.

In the debate over a larger Australia, there are dud arguments on both sides.

Advocates of more migration argue that size will reduce the per-person cost of government, and give us much additional heft on the global stage. I don’t think there’s much evidence for either of these.

But it does seem likely it will get us better cultural goods, such as international sporting events and great entertainers. If you want to host a World Cup or attract the world’s best musicians, size helps.

Perhaps the best argument for a larger population is that it means more entrepreneurs. One channel for this is simply scale: if extraordinary people like Albert Einstein and Steve Jobs are one in a million, then it follows that they are also an argument for another million people. Innovators may also be over-represented among migrants. Some evidence suggests that bilingualism raises intelligence, and a global outlook is good for business (half of Australia’s exporters are foreign-born).

How about the claimed costs of migration?

It is often said that a larger population will mean more traffic congestion. Over the past decade, Sydney’s population has grown by 12 percent, while commuting times have grown by 4 percent. And yet while gridlock is one of the most serious problems faced by Sydneysiders today, the best way to address it is through good city planning and economically sensible policies, not population control. Even if we stopped all population growth tomorrow, cars would still become cheaper to buy and use. We should tackle congestion efficiently and directly, not via population policies that could harm Australia in other ways.

A similar argument applies to house prices, where the best approach is to focus directly on housing affordability, by removing unnecessary supply constraints, and ensuring that housing policies are as effective as possible. Even if we adopted a zero population growth strategy, rising incomes and higher marriage ages would still drive up the demand for housing, creating a good argument for getting housing policies right. Likewise for the natural environment, where market-based policies can do far more than population control to address the challenges of water supply and climate change.

Population growth has the potential to get us things we cannot obtain in other ways: better cultural goods and a more productive, more entrepreneurial culture. A larger nation has more mouths, but also more minds. Size has potential costs, but economics teaches us that these are best addressed by good policies to reduce congestion, increase housing supply and protect the environment.

Over the past decade, three in ten permanent immigrants have been family reunion, six in ten have been skilled migrants, and one in ten have been refugees. Skilled migrants are more likely to compete with high-wage workers, making the Australian immigration system quite different from the US immigration system. Some evidence suggests that the Australian skilled migration system reduces inequality.

The skilled migration system can surely be improved – for example, through harmonising occupational requirements with source countries, or better exchanging data on applicants’ labour market history. But overall, it should be a source of pride.

Skilled migration will remain the largest component of our permanent migration program, and it is vital that we don’t just focus on ‘how many?’, but also on ‘who?’. If we want to have a healthy migration debate, then ensuring that our migrant mix reflects our national values and priorities matters more than fretting about the next set of demographic projections.

Andrew Leigh is the Shadow Assistant Treasurer, and his website is www.andrewleigh.com. This is an edited extract of a speech delivered at the Lowy Institute.

In today's Australian, I have an op-ed arguing that the government should keep the charities commission.

Scrap Charities Register, and Say Goodbye to Giving, The Australian, 20 March 2014

When doorknockers with a children’s education charity Care4Kids rang the doorbell of homes across Melbourne and Sydney, they got a warm reception.

Nearly a million dollars was raised for ‘work helping children with cancer, leukaemia, other illnesses and learning disabilities whose education has been compromised’.

But there have been questions raised about exactly how the money raised by the charity actually benefited children at risk; the people it was intended to help. There is little information to show exactly where the money went.

Alas, this is not an isolated incident. Formed at the end of 2012, the independent Australian Charities and Not-for-Profits Commission (ACNC) received 202 complaints in its first year, including 48 for fraud or criminal activity.

This goes to show just how important a well regulated charitable sector is. In the same way that ASIC provides investors with the confidence they need to buy shares in companies, the ACNC provides donors with the confidence that registered charities are actually performing charitable works.

It is not only the direct victims of fraud who suffer when a charity defrauds donors, it is the charitable sector as a whole. For every story you hear about a dodgy charity, you’ll be just that little bit less likely to donate to the volunteers who rattle tins for the Salvos or Surf Life Savers.

Anything that leads Australians to give less is a tragedy. The inexcusable actions of a few dodgy organisations are being allowed to undermine the fantastic work undertaken every day by the huge majority of Australian charities.

This is one of the key reasons why the former Labor Government established the ACNC in 2012 after an extensive period of consultation. It was recommended by the Productivity Commission and the Henry Tax Review, and supported by the charity sector.

The ACNC helps charities strengthen their transparency and accountability so the public can have confidence in the sector and the good work they do.

It does this by making charities and not-for-profits visible with a national register of charities. The register is a major weapon against scammers taking advantage of your goodwill. If donors are worried about whether a charity is legitimate or not, they can simply carry out a free check of the ACNC’s register: an online database nearly 60,000 charities. The register contains information such as a charity’s tax status and where it is based. In coming months the register will contain more information about charities, including their activities and financials.

The ACNC also helps our charities with governance, legal training and advice. Many charities have told me how much they appreciate the ACNC’s friendly approach and expertise.

The ACNC will reduce the duplication that can arise in a federal system. Thanks to the ACNC, the Australian Capital Territory and South Australia have said that they will exempt nationally registered charities from also having to register in their jurisdictions. Other states would do well to follow. Our reforms make it much simpler for charities to run their organisation – so they can spend less time filling out forms, and more time in the community.

The ACNC is administering a Charity Passport underpinned by a ‘report-once, use-often’ reporting framework. Charities that work with different government departments will find it easier to do their reporting thanks to the Charity Passport. Scrap the ACNC, and you lose the Charity Passport.

Every day, we hear the Abbott Government claiming to be cutting red tape. Yet ironically, scrapping the ACNC means abolishing its red tape reduction directorate – the very people in charge of reducing regulatory burdens on the charitable sector.

The Abbott Government is heading up a very small minority of critics of the ACNC. According to a recent survey, four out of five charities support the work the ACNC is doing.

Over 40 charities, including the RSPCA, Lifeline and the Hillsong Church, have signed on to an open letter to keep the ACNC. As World Vision’s Tim Costello notes, the ACNC ‘underpins the consumer benefit to charities.’ Carolyn Kitto of anti-slavery charity Stop the Traffik calls it ‘a dream come true for small charities’, and points out that the ACNC ‘has cut the red tape dramatically’ for her organisation.

As the Community Council of Australia has warned, abolishing the ACNC would be a sign that the government is not interested in the views of the charity sector. It would harm charities, who will lose visibility and governance support. And it would be bad for the public who will be more exposed to fraud and scams.

Published in The Australian

This morning I issued a media release arguing that the axing of the the Australian Charities and Not for Profits Commission would be a mistake. The Government's repeal package is now before the parliament with a lot at stake for donors, consumers and charities. Today some of Australia’s best-known charities signed an open letter urging Tony Abbott to abandon plans to scrap the national regulator.

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR COMPETITION

MEMBER FOR FRASER



MEDIA RELEASE

CLUELESS COALITION TO CHOP CHARITIES COMMISSION

Federal Labor will continue to support the charity and not for profit sector and oppose any government attempts to repeal the Australian Charities and Not For Profit Commission (ACNC).

Today, in an open letter to the Prime Minister, 40 organisations say if the ACNC is shut down and the ATO is reinstated to determine who is and isn't a charity, "red tape will continue to grow, the size of bureaucracy will grow. Services to the public will be reduced. Services to the sector will be reduced." Signatories include Save the Children, St. John Ambulance Australia, The Ted Noffs Foundation, RSPCA, the Myer Family Company, Foundation for Alcohol Research and Education, Volunteering Australia, Lifeline and many others.

The Abbott Government will sneakily include the ACNC in its so called ''repeal day'' package.

In the week that the Government claims to be cutting red tape, it’s looking to kill an agency that does reduce red tape.

Testimony from sector players and experts speaks volumes:

“The commission is actually working for us and it gives the public confidence, it underpins the consumer benefit to charities.''

-      Tim Costello AO, World Vision Australia CEO, Fairfax Media, 1 September 2013



“During its short history, the ACNC has played a positive role in the overall regulatory environment of charities, and it is well-placed to continue that role. In the short term, it provides the infrastructure for a ‘one stop shop’ for Commonwealth regulatory requirements, and a dedicated force to work with other Commonwealth agencies to streamline their present arrangements. Its stellar improvement in terms of timeliness, consistency of decision making and responsiveness to emerging issues of previous ATO functions, surpasses the sector’s original high expectations.”

-      Professor OAM Myles McGregor-Lowndes, Australian Centre for Philanthropy and Nonprofit Studies, QUT, ACNC Guest Editorial, 25 February, 2014



“The ACNC is a dream come true for small charities. We don’t have the range of expertise needed to manage the ATO and ASIC and we don’t have the time to do compliance for many different groups nor can we easily stay on top of changes in regulations. The ACNC has cut the red tape dramatically. The staff are helpful and navigate complexities so we are sure we are compliant and efficient.”

-      Carolyn Kitto, Australia Coordinator STOP THE TRAFFIK, 6 February, 2014

“The ACNC is more efficient than the government regulators it replaced, is doing good work and deserves a chance to achieve its three goals of reducing red tape, increasing public trust and strengthening the charities sector… Axing the ACNC would be a very clear sign that government is not interested in the considered views of the charities sector.”

-      David Crosbie, chief executive of the Community Council for Australia, Opinion, Sydney Morning Herald, 18 February, 2014

“Since the ACNC’s establishment as an independent charities regulator, Philanthropy Australia has consistently supported the ACNC’s important role in our community. The ACNC has only existed for just over a year – so far the progress is promising and we want it to be given the opportunity to realise its full potential.”

-      Louise Walsh, Philanthropy Australia CEO, Pro Bono News, 6 February 2014

In August 2013, a Pro Bono survey of over 1500 members of the not-for-profit sector found that 81% supported the ACNC.  Only 6% of survey respondents in the charitable sector supported a return to the ATO as the default regulator (which is what the Abbott Government advocates).

The not-for-profit sector employs over 1 million Australians, turns over around $100 billion, involves almost 5 million volunteers, and is at the heart of all our communities.

The Productivity Commission and the Henry Tax Review recommended a national charities commission.

The Productivity Commission declared the previous regulatory framework to be complex, lacking coherence and transparency and costly to charities.

Abolishing the ACNC is an insult to taxpayers who want to see where their donations go. It’s an insult to charities who will lose visibility and governance support. It’s bad for the public who will be more vulnerable to fraud and scams.

ENDS

WEDNESDAY, 19 MARCH 2014

I'm inviting new parents and their extended families to join me for the 2014 Welcoming the Babies.

This is an event I've organised each year since the inaugural event in 2011.

It's a great opportunity to meet other parents and find out about local community services for young children.

Come along on March 29, 10.30am-12.30pm, to the St Margaret's Hall (Cnr Phillip Avenue and Antill Street, Hackett).

Enjoy a day out with the whole family. There will be face painting, balloons, a sausage sizzle, music, playground and a toy library.

In case of rain, we have a backup indoor play area.

Everyone is welcome!

If you want to register your baby or toddler for a certificate, please email Lyndell Tutty in my office - Lyndell.Tutty {AT} aph.gov.au - or phone 6247 4396.

I hope to see you on the day.

I spoke in parliament on Australia's backsliding on climate action, while other countries almost universally do more to address the challenge.

Climate Change, 17 March 2014

I rise to speak tonight on the issue of climate change. As the House knows, the historic Australian climate change legislation, passed under the previous government, has seen significant improvements in our environment. Electricity sector emissions fell by 5.5 per cent over the year to September 2013; emissions from companies covered by the carbon pricing mechanism fell by seven per cent in 2012-13. Inflation was within the Reserve Bank's target band. Growth has continued. Productivity has modestly picked up. And we have not seen any Australian cities wiped off the map. The introduction of the Australian carbon pricing scheme was done in a manner which accords with textbook economics. While putting a price on the negative externality, that of carbon pollution contributing to climate change, we reduced income taxes for low- and middle-income earners to ensure that they became no worse off.

Labor went to the last election pledging to link our carbon price with international schemes. If we compare scrapping emissions pricing with moving to a floating price, the impact on inflation in 2014-15 is less than one-quarter of a percentage point. The government in Australia is running in very much a different direction from most countries around the globe.

A recent report by the global legislators organisation GLOBE, co-authored by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, covered about nine-tenths of global emissions. That report catalogued almost 500 laws to tackle climate change—including: flagship legislation in developing countries including Bolivia, El Salvador and Mozambique; and key action in major economies such as China and Mexico. Indeed the report found that 64 out of the 66 countries had put in place or were establishing significant climate or energy legislation. Only two countries were backsliding: Japan and Australia. Japan is stepping away from some of its prior commitments as a result of the Fukushima nuclear disaster and scaling back its contribution to nuclear energy. Perhaps that is understandable given the circumstances of the Fukushima tragedy. Less understandable is Australia, which is walking away from carbon pricing for straight-out political reasons.

We had a consensus in this country for carbon pricing until one of the great tipping points in this debate: the victory by the Prime Minister Mr Abbott over the Communications Minister, Mr Turnbull, in the Liberal Party party room by one vote saw the bipartisan consensus for climate change collapse. Now the coalition are pushing for Direct Action, a scheme which Frank Jotzo and Paul Burke have noted is an attractive political phrase; the combination of two very positive-sounding words. But it is unfortunately fundamentally flawed. The reason for that is that, unlike carbon pricing, Direct Action does not allow us to pick the lowest-hanging fruit of emissions reduction opportunities. As the OECD has estimated, subsidy approaches involve an economic cost per unit of emissions reduction more than ten times higher than under carbon pricing. Because the baseline of what a firm would have emitted otherwise is impossible to verify, the result is that firms are probably delaying emissions reduction investment right now even as a result of the talk of Direct Action.

Direct action is a short-term policy with promised payments for five years worth of claimed energy reductions rather than the long-term solution of carbon pricing. While carbon pricing assists the government's bottom line, making a $3.6 billion contribution to cash receipts in the fiscal year 2012-13, direct action is funded by revenue from existing taxes. What we saw under Labor was a tax switch—and I emphasise the word 'switch' because when I spoke about this previously I was misquoted in a Liberal Party attack ad. A tax switch that sees lower taxes on work and higher taxes on pollution. The reverse system will involve higher taxes on work in order to subsidise polluters. As Professor Jotzo and Dr Burke note:

'Direct Action appears to be an ill-considered clunker, like the hastily chosen gift you bring to your aunty’s fourth wedding ...'

It is complex and bureaucratic as distinct from the simple, free-market solution of carbon pricing, which is, unsurprisingly, favoured by the World Bank, the OECD and the International Monetary Fund.

In a submission to the inquiry into the Direct Action Plan by the Senate Environment and Communications References Committee, Professor Ross Garnaut noted:

The Green Paper does not specify the objective of the Emissions Reduction Fund … The Green Paper makes no effort to meet the elementary requirements of good practice with new regulation:

As Professor Garnaut further noted:

'Rather than a Green Paper, what is before the Senate is a shooting of the breeze: the raising of a few of the questions that would need to be answered along the way to preparing a Green Paper.'

What we have at the moment is a proposal to get rid of a national cap. Without a national cap that we currently have under carbon pricing policies, the baselines and penalties need to set business facility by business facility. It is, as Professor Garnaut noted, 'a huge bureaucratic exercise'.

Professor Garnaut estimates that the lower bound for the budgetary deterioration as a result of shifting to direct action is $4 billion to $5 billion per annum and the upper bound extends several times above that. As a result of this, the emissions reduction targets, the five per cent bipartisan emissions reduction targets, are unlikely to be met, Professor Garnaut notes, unless the fund is as large a drain on budget expenditures as the sale of permits is now a contributor to public finances—that is even to get modest emissions reduction targets, but to meet the five per cent targets may well cost more than that.

The core of the problem is that the government is surrounded by climate change deniers. While the Prime Minister himself now says that he supports the science of climate change, having previously called it 'absolute crap', the renewable energy target is subject to review under a chair who is on the public record with statements that modern science is wrong in its knowledge that human activity is a major contributor to global warming. The scientific consensus around climate change is 95 per cent for anthropogenic climate change—about the level of certainty that scientists have that smoking causes cancer. The Prime Minister's No. 1 business adviser goes further still. In September of last year, Maurice Newman wrote in The Australian Financial Review claiming:

The CSIRO, for example, has 27 scientists dedicated to climate change. It and the weather bureau continue to propagate the myth of anthropological climate change and are likely to be background critics of the Coalition’s Direct Action policies.

These attacks on hardworking scientists are of a piece with the government's attacks on experts. This is a government that has never seen an expert that it did not want to attack. By contrast, under Labor we saw renewable energy grow. Under the renewable energy target, we saw more than a million households installing solar panels compared to only about 7,000 under the former Howard government, and we saw the creation of 8,000 to 16,000 jobs.

Former Treasury Secretary Ken Henry has described the Prime Minister's Direct Action scheme as 'bizarre' and when economists were polled on this at the Australian Conference of Economists a survey found that 86 per cent supported a carbon price or an emissions trading scheme with just six per cent supporting Direct Action. There is, as Matt Wade said at the time, 'near-unanimity among economists' for a market-based solution. That market-based solution is doing the job of reducing Australian emissions and Australia ought not be one of the only countries in the world that is backsliding on tackling climate change.