Andrew Leigh

I was on 'doors' today, answering questions about some of the main issues in Australian politics. Here's a transcript.

21 JUNE 2011



TRANSCRIPT
DR ANDREW LEIGH - FEDERAL MEMBER FOR FRASER
DOORSTOP INTERVIEW
PARLIAMENT HOUSE, CANBERRA

EO&E



Topics: mortgage exit fees, refugees, live exports, burqas, climate change,

Andrew Leigh: Joe Hockey has today announced that the Liberal Party is going to do its best to bring back mortgage exit fees - fees which are unfair on Australian households for two reasons.  Firstly, we should always trying to reduce bank fees wherever we can but secondly mortgage exit fee detracts from competition because they stand in the way of someone walking down the road to get a better deal. A front loaded fee, unlike a back loaded fee, allows someone to make a choice with their feet and gives us all a better banking system. But the decision on exit fees is really just symptomatic of what’s going on Australians politics today:

In the case of carbon pricing the Labor government is getting on with delivering a carbon pollution scheme which will deal with dangerous climate change and assist pensioners and households.

In the case of the mineral resource rent tax we’re putting in place arrangements that will see Australians get a fair share for the minerals that are their birth right – Tony Abbott says no.

And in the case of the National Broadband Network we’re creating infrastructure that will be the highway network of the twenty-first century – Tony Abbott says no.

At every turn Labor are standing up for families and Tony Abbott is standing in the way of serious reform.

Happy to take questions.

Journalist: Andrew on the exit fees question – isn’t it only that the opposition wants to block some exist fees, for example there is still support for mortgage exit fee bans against the big banks, credit unions and building societies but they want them to be lifted for non-lenders?

Andrew Leigh: Well one exit fee is one exit fee too many in my view. I think we should be promoting competition right across the spectrum, that’s what Labor’s reforms will do. From the first of July we will be scrapping all mortgage exit fees. For some reason that I can’t work out, frankly Joe Hockey wants a return to mortgage exit fees. Thinks Australian mortgage holders should pay higher fees. Thinks that they ought to have fees that stand in the way of competition ...

Journalist: ... but only if they’re with non-bank lenders.

Andrew Leigh: The point still stands. I don’t see a distinction here. I don’t see why any serious politician should be saying: what the Australian banking system really needs is some more mortgage exit fees. That I just don’t understand.

Journalist: Andrew, we had the 730 Report reveal last night that there had been $16 million paid out to pay the cost of mental health for refugees who had been inside the system. Doesn’t this prove, more than anything else, the shear madness of mandatory detention?

Andrew Leigh: Mandatory detention is a system, Stephen, that has been in place since the early 1990s. It’s important in order to perform health and background checks. But I’m a strong supporter of the expansion to the humanitarian intake that’s been put in place by this government.

I spoke in Parliament last night about the vast contribution that refugees have made to Australia. From Frank Lowy to Majak Daw, Australia has been enriched by its refugees.

Journalist: But on one hand Labor is increasing the intake, praising the contribution refugees have made and on the other hand you have several thousand people locked up suffering terrible mental health problems and costing the taxpayer millions of dollars.

Andrew Leigh: Well Stephen it has been a really major priority of this Government to get kids out from behind razor wire – to make sure that as few children as possible are in dentition. That’s not going to be possible in every case. If you have the instance of a 16 year old who arrives unaccompanied not speaking English it might actually take awhile to find a family who speaks the same language and is a suitable, caring home for that person. But Minister Bowen is very much committed to making sure that wherever we can, we’re getting kids out of detention. That’s an important value I think for all of us.

Journalist: Do you expect to see an announcement on the Malaysia deal this week? Have you been briefed on how discussions are going and has there been any breakthrough?

Andrew Leigh: This is important complicated policy. We’re dealing with a global challenge in refugee flows and we’re looking to find a regional solution. That regional solution has been praised by the UNHCR’s regional representative Richard Towle, whose recognised that if we can find regional solutions we’re in a much better spot than if each country simply goes it alone. I’m not going to set down timetables on that. The discussions are complicated and ongoing. But they are about trying to make sure that we boost the humanitarian intake while at the same time breaking the business model of the people smugglers.

None of us wants to see little kids put on boats with the tragedies like we saw at Christmas Island and that’s what this plan is about.

Journalist: Are we being a bit too lenient with our taking in of refugees? Figures show that we’re taking in many more than the average?

Andrew Leigh: Australia takes 1.6 percent of the world's asylum seekers. That to me seems a fair share.  A decade’s flow of asylum seekers wouldn’t fill the MCG. This seems reasonable amount that we are taking given our level of development and also given the generous spirit with which I think many Australians view refugees.

We had a scholarship ceremony yesterday in Canberra City for recipients of the Canberra Refugee Support Scholarships. And these young refugees are just extraordinary people.

I spoke about one of them, See Mu Paw, an 18 year old Dickson College student in Parliament last night.  She is an amazing young women and she’ll make a great contribution to Australia. So no, I don’t think we’re taking too many refugees.

Journalist: Yesterday in Sydney there was quite a landmark decision over the wearing of burqas. Do you think women should be allowed to wear full burquas?

Andrew Leigh: I think Australia is an open tolerant society and I don’t think we ban particular forms of dress. I don’t think we ought to be prescribing the tie that I wear out here this morning and I don’t think we ought to be banning burquas.

Journalist: One live cattle exports, is it acceptable that stunning is only optional in Indonesian abattoirs?

Andrew Leigh: I believe in the case of live animal exports we should be putting in place stunning. But this is a matter of finding a solution which can be lasting, which doesn’t affect Indonesia but also all the countries that receive Australian live exports.

The independent review is looking at live exports overall. It’s really critical for the industry that we find a lasting solution to this. I know that the exchanges I’ve had with cattle farmers, they’re as shocked as anyone by the Four Corners images and they want as much as anyone to make sure that we have a sustainable system of live cattle exports.

I frankly don’t understand why Mr Abbott would want to race back into the live export trade with the risk that we again have some of the shocking images that came on our TV screens just a couple weeks ago. I think we need to be calm, methodical about this and I think we need to get it right.

Journalist: If there is a plebiscite on the carbon tax do you think you’d win?

Andrew Leigh:  Tony Abbott’s call for a plebiscite is just an extraordinary one. He says that there ought to be a plebiscite on the carbon price and then he says that he wouldn’t stand by the result.

Frankly Tony Abbott is on this issue, as on many, the erupting volcano of Australian politics. He’s all smoke. He’s all puff. Causes a lot of disruption to Australians but isn’t actually able to produce anything constructive.

If you like next time a Liberal Party spokesperson steps to this microphone ask them for their constructive idea for the country. Ask them for their optimistic vision as to what Australia ought to be. That’s what Australians want to hear from their politicians. Australians are an optimistic people and we want to hear politicians who have ideas, solutions, to the challenges facing Australia – not just the erupting negativity that we see day after day from Mr Abbott.

Thanks very much.

(ends)

I spoke last night about the great Australian life of Jamie Mackie.

Jamie Mackie
20 June 2011

I rise to pay tribute to Professor Jamie Mackie, who passed away on 21 April, aged 86. Jamie was a key player in the deepening of Australia's engagement with South-East Asia and the campaign to dismantle the White Australia policy.

Jamie's first exposure to South-East Asia came as a 19-year-old gunner on HMAS Warramunga. He was part of General Douglas Macarthur's amphibious landings against Japanese positions. Visiting Manila, he was struck by its heritage, 'a history that almost none of us in Australia then knew anything about'. This spurred a lifelong interest in the region.

He knew interesting people. At Geelong Grammar, his history master was Manning Clark. At Oxford, Jamie got to know Rupert Murdoch, who was then secretary of the Oxford University Labour club. Jamie quipped that perhaps history might have been changed had Murdoch taken up Jamie's offer to go and see Citizen Kane together.

In the 1950s, Jamie volunteered to go to Indonesia as part of the new volunteer graduate scheme launched by Herb Feith. He worked in the State Planning Bureau in Jakarta, and lectured in economic history at Gadjah Mada University in Yogyakarta. These lectures eventually became his first book, to be followed by a spate of articles about the political economy of Indonesia and Australia's foreign policies. His group at Monash University's Centre of Southeast Asian Studies earned the title of 'a second Cornell', in recognition of its concern for human rights in Indonesia.

Jamie's engagement with Indonesia naturally brought him into an active role in campaigning against the White Australia policy. With Ken Rivett, he wrote an influential 1959 pamphlet, Immigration: Control or Colour Bar?, arguing that the policy was not just morally wrong but also against Australia's national interest. In his obituary of Jamie, David Jenkins noted that the values in this argument underpinned much of the modern multicultural Australia we value today.

But articulate pamphlets were not enough. My father, Michael Leigh, a close friend of Jamie's, says that one of the turning points for him came with the Sharpeville massacre in 1960. After the brutal killing of 69 civilians, including 10 children, the Labor opposition called on the Menzies government to pass a censure motion against the South African government. Menzies refused.

My father told me that this was the moment that people like he and Jamie decided that a street demonstration would be necessary to express horror at this brutal manifestation of the consequences of racial exclusivity and of the Prime Minister's refusal to join international condemnation. Victoria Police refused permission for their march and warned that they should not proceed outside the boundaries of Melbourne University. Yet proceed they did with police lining both sides of the road. Australia is a better country for the courage of these marchers.

I had known Jamie since I was a child, and enjoyed the way he would often drop into my ANU office unexpectedly to share an idea or an anecdote. After more than a decade as a professor in the ANU Research School of Pacific and Asian Studies, and as co-founder of the annual Indonesia Update conference, Jamie clearly delighted in strolling the halls of the labyrinthine Coombs Building. He would buttonhole me about economic policy, the treatment of refugees or Australian foreign policy. Jamie would hold forth at length until—like the junior academic I was—I would eventually explain that I had to get back and do some research. He always left me with a new idea and, looking back, I wish I had asked a few more questions and been a little less precious with my time. ANU professor Tony Reid wrote:

'Jamie Mackie epitomized the best in the reformist enthusiasm of post-war Australia to open out to its region. For him as for many of that generation, Indonesia pre-eminently represented the Australian 'other', the Asia with which Australia had to come to terms. Because he was himself very much an Australian of that era—warm, open, maverick, visionary, irreverent, unpretentious—he understood better than most how exciting and challenging, but painfully difficult, a prospect it was to get that relationship right. He played his part like no other, and it will be impossible to think of the development of that relationship without him.'

One of the great Indonesian poets is Chairil Anwar, who passed away in 1949 aged just 26. Aku, perhaps his most famous poem, ends with the line: 'Aku mau hidup seribu tahun lagi.' Which translates as: 'I want to live for another thousand years.'

Chairil Anwar did not. Jamie Mackie did not. But their influence might.

I spoke in parliament yesterday about the contribution that refugees have made to Australia.

World Refugee Day
20 June 2011

What do all these great Australians—researcher Gustav Nossal, entrepreneur Frank Lowy, scientist Karl Kruszelnicki, academic Eva Cox, commentator Les Murray, comedian Ahn Do; sportsman Majak Daw, television presenter Yalda Hakim, the late businessman Richard Pratt and Justice James Spiegelman—have in common? They were all refugees. World Refugee Day is a day to reflect on the generosity of Australia. We are a big country with a big heart This is something we should be proud of. Since 1945, over three-quarters of a million people have resettled in Australia. Those who have sought refuge in our country have made significant social, economic and cultural contributions to the nation we are today and to the nation we will be tomorrow.

Today, along with the Minister for Immigration and Citizenship, I attended the Canberra Refugee Support scholarship ceremony. For the past six years the Canberra Refugee Support scholarship program has brought together the ACT government, local businesses, community organisations and individual citizens in helping refugees overcome hardship and persecution through the benefits of education and vocational opportunities. Today 22 refugees from Burma, Iraq, Afghanistan, Sudan, Iran and Ethiopia were awarded scholarships to assist and acknowledge their determination and resilience in achieving their dreams.

One such recipient was See Mu Paw. See Mu is 18 years old and currently in her final year at Dickson College where she is studying to attain the ACT Year 12 Certificate. Gentle and caring, she is an active member of the Refugee Bridging Program. Before moving to a refugee camp in Thailand, See Mu had spent her young life in a small village in Burma. From the camp in Thailand, See Mu and her family settled in Australia in 2009. Se Mu's teachers comment on her kindness and her willingness to support others in need. She is planning to study childcare at the Canberra Institute of Technology next year. See Mu's scholarship was sponsored by Athol Morris in memory of his mother, Helen Morris. A refugee herself, Helen came to Australia before World War II, escaping the Nazi regime in 1936. The letter she wrote to Prime Minister Joseph Lyons made its way to his office via, of all places, the CSIRO. Wanting to help people in her situation, Prime Minister Lyons granted her an entry permit.

Helen's story highlights that Australia's generosity and understanding predates our commitment to the 1951 United Nations Refugee Convention and the formation of the United Nations High Commissioner for Refugees. Australia was a founding member of the 1958 UNHCR executive committee and, before that, the 1951 advisory committee. This government is committed to Australia taking more refugees and has expanded the humanitarian program to 14,750 places per year. Last year we provided $50 million in funding to the UNHCR.

In my electorate of Fraser, I am proud to work with and support the work of Canberra Refugee Support and its president, Geoff McPherson, vice president, David Cran and secretary Ben Pynt; the Canberra Multicultural Community Forum; the Dickson College Refugee Bridging Program; the senior multicultural information and learning exchange; and the Refugee Resettlement Committee with president Gabriel Blair, vice president Peter Peterson and community liaison officer Bev Purnell.

World Refugee Day celebrates the contribution of refugees to Australia and other nations. This year is the 60th anniversary of the United Nations refugee convention. Today we celebrate the diversity and richness refugees have brought to our country. But today is also a sobering day because, as far as we have come and as generous as we have been, we face the new challenges of working with our regional neighbours and the UNHCR to provide humane and respectful resettlement services while ending people smuggling.

Through the contribution of those who have chosen to call Australia home, refugees to Australia have brought employment and job opportunities to thousands. Brought an awareness of civic engagement and the importance of equality. Brought a curiosity and passion for the sciences. Brought a sense of fairness and justice. Brought laughter into our busy lives. The possibilities are limitless for what a new generation of refugees will bring to Australia.

(I hit my time limit in the chamber half way through the last paragraph.)http://www.youtube.com/v/NWe0CHjC_ck?version=3&hl=en_US

I spoke in parliament yesterday about tax reform.

Tax Laws Amendment (2011 Measures No. 5) Bill 2011
20 June 2011

The great achievement of the Labor government has been a serious ongoing commitment to tax reform. It is with taxes that we build society and a hallmark of this Labor government has been focused and consistent attention on tax reform. We, of course, commissioned the Henry review, a root and branch tax review, which has for the first time in a generation looked across the tax system at how to make it work more effectively. As the Henry review in its opening noted:

'A 21st century tax and transfer system should meet its purposes efficiently, equitably, transparently and effectively. Critically, it would support per capita income growth rates at the upper end of developed country experience by encouraging high workforce participation, a more efficient pattern of saving, and stronger investment in education and physical capital.'

The Henry review noted that revenue raising should be concentrated on four robust and efficient tax bases: personal income; business income; private consumption through broad, simple taxes; and economic rents from natural resources and land.

The Henry review has underpinned much of what the government has done on tax reform. Commentators, I think, have missed one of the big stories about the recent budget, which is that it contains substantial tax reform, not the sort of tax measures that we saw all too frequently during mining boom mark-1—recycling revenue into badly targeted measures—but measures that focus on how to make our system more efficient and more equitable, and operate on a simpler basis. It is for that reason that this government is going about putting in place a minerals resource rent tax, a tax that will ensure that Australia's big mining companies at last pay their fair share, a tax that sits very much in the tradition of the progressive side of politics of ensuring that taxes are paid by those who can best afford them and that taxes impose a minimum deadweight cost on the economy. Growth is a Labor value. Increasing the size of the Australian economy is absolutely critical and the minerals resource rent tax will see us do that. Another substantial tax reform is carbon pricing. We are recognising, through a fixed carbon price and then an emissions trading scheme, that the best way of dealing with dangerous climate change is to go to the heart of the problem, which is dangerous carbon pollution. At the moment, polluters can put as much carbon pollution into the atmosphere as they like. They do not pay for carbon pollution. Carbon pricing has been presented as an environmental reform but it is of course also an economic reform. The most effective way of getting carbon abatement in the Australian economy is to put a price on carbon, not through the coalition's grab bag of subsidies for polluters but going straight to the issue, putting a price on pollution and bringing about a smooth transition to a cleaner, greener economy, taking Australia from its current position as the most carbon intensive country in the developed world to a position where we are able to compete effectively for the green jobs of the future.

The Gillard government is also putting in place substantial reform on fossil fuels through legislation which is finally enacting reforms originally foreshadowed by then Treasurer Peter Costello in the 2003 budget. What is tragic about these fuel reforms is that the coalition, at the last moment, have walked away. For the best part of the last eight years they have been in the cart on this fundamental economic reform but at the last moment saw a populist slogan and leapt out of the cart. I am glad to see the Assistant Treasurer here in the chamber. I am sure he would be as pleased as I am at the passage of those reforms through this House in the most recent session.

When crisis has hit, Labor has also used taxation reform exactly as economists would have us do. We put in place a modest flood levy to deal with the rebuilding cost required from the natural disasters of the most recent summer. Looking back further to the economic downturn, we used a fiscal stimulus that was timely, targeted and temporary, recognising that household payments and infrastructure investments were the most efficient way of getting the economy going again. On each of the tax reforms I have listed, Labor listened to the economic mainstream. While the coalition were listening to who knows what zealots, we were there focused on the economic mainstream and on delivering real reforms.

And it is those real reforms that lie at the heart of Tax Laws Amendment (2011 Measures No. 5) Bill—reforms recognising the importance of phasing out outdated payments. One of the key reforms in this legislation is removal of the dependent spouse tax offset. The dependent spouse tax offset existed at a state level prior to the 1930s but was first introduced at a federal level in 1936. During the second reading debate, one member justified the measure saying he felt it was the duty of a husband to maintain his wife and therefore it was right and proper that a husband would receive a deduction for it. I do not think that such a sentiment would be shared by most 30-somethings in the labour force today. Most families without children would not think feel it is the duty of a husband to maintain his wife and in an era in which we are trying to boost labour force participation, in which we hear much talk of skills shortages, it is important that we remove disincentives to work.

As the dependent spouse tax offset phases out, it imposes an effective tax rate in the phase-out range. If a dependent spouse earns more than $282, under the current program the entitlement reduces by $1 for every $4 the dependent spouse's income is above the threshold. The effect of this is to put in place another 25 per cent tax rate in addition to the current marginal tax rates for the first $10,000 earned by a so-called dependent spouse.

We are steadily phasing out this measure. It will be phased out for taxpayers born after 1971, recognising that some of those who have been recipients of this payment may now be in a position where it is not straightforward for them to enter the workforce. Taxpayers who are invalids, permanently unable to work or are carers will not lose this benefit. The phase-out is applying to able-bodied taxpayers, those aged under 40 and those who—certainly from the discussions I have had with my electors—would not have the social norms that were expressed in this place when the dependent spouse tax offset was put in place. This measure modernises the Australian tax system. It brings the Australian tax system up to speed with contemporary values and it boosts labour force participation—an absolutely critical measure.

We are also making the Australian tax system simpler and fairer for business and the community. It has long been recognised that the entrepreneurs tax offset is poorly targeted for small businesses. There is little evidence it has acted to encourage the establishment of small businesses. More than 80 per cent of small businesses were eligible for the offset. Rather than allowing a small business to grow, the entrepreneurs tax offset encourages businesses to structure affairs in a particular way, despite the market opportunities that might be present.

The assistance is provided at a fairly low level to very small businesses. The maximum claim is $2,500, but the average entrepreneurs tax offset claim was less than $500, with 70 per cent of claims being below $600—a fair bit of paper work for a relatively small sum of money. The entrepreneurs tax offset is difficult to administer and adds to the complexity of our current tax system. There are better ways and more effective ways to help small businesses. The $5,000 immediate deduction, which will come into place from 2012-13, is a far more efficient and effective way of helping our small businesses grow and so boosting employment in this critical sector.

The budget also puts in place important reforms to fix the current system of fringe benefits taxation for cars. This is a system which is both inequitable and inefficient. The existing statutory formula method for determining the taxable value of car fringe benefits delivers a greater tax concession the further the car is driven. Car fringe benefits arise when an employee uses salary sacrifice for an employer provided car for private use. Under the statutory formula method, the person's car fringe benefits are determined by multiplying the relevant statutory rate by the cost of the car. The current statutory rates are designed so that a person's car fringe benefit decreases as the distance travelled by their vehicle increases. People can therefore increase their tax concession by driving their vehicle further. The Henry tax review reported evidence showing that this is exactly what people do.

Anecdotally, in my electorate one hears stories that, as the end of the tax year approaches and as a taxpayer feels that they are not necessarily going to be in the most favourable mileage bracket, they will lend the keys of their car to a teenage son to drive to the coast for the weekend. Their child might otherwise have caught a bus to the coast. These sorts of environmentally unsound practices are effectively encouraged by a poorly structured tax concession. So we are reforming the statutory formula method, replacing the current statutory tax rates with a single rate of 20 per cent that applies regardless of the distance travelled. The reform will only apply to new vehicle contracts entered into after the announcement on budget night so, of course, it will not affect people who have already entered into contracts. That shift to the single standard 20 per cent rate will be phased in over four years. Naturally, people who still use their vehicle for a significant amount of work related travel will be able to use the operating cost or log book method to ensure that their car fringe benefit excludes any business use of their vehicle. Over the forward estimates this measure will result in an increase in revenue of nearly a billion dollars, and this is additional revenue which is then available for more efficient and more equitable tax reforms.

I am very proud to be part of a Labor government which is committed to good economic management and important tax reforms, tax reforms that I hope will outlive many of us in this place, tax reforms that reflect the understanding of those of us on this side of the House that it is important to draw on the best evidence available and tax reforms that recognise that the Henry review has laid down much that we can draw on in the future. I commend the bill to the House.

I spoke last week on some useful reforms to public sector superannuation.

Governance of Australian Government Superannuation Schemes Bill 2011
15 June 2011

The bills before us concern the retirement savings of people who serve our nation. The good men and women of our military, as well as those in our public service, many of whom reside in the ACT in my electorate of Fraser or in the neighbouring electorate of my good friend and colleague the member for Canberra, will benefit from the changes in this legislation. The bills seek to consolidate the main civilian and military superannuation schemes under a single trustee. The merger will see the Commonwealth Superannuation Scheme, the Public Sector Superannuation Scheme, the Military Superannuation and Benefits Scheme, the Defence Force Retirement and Death Benefits Scheme and the Defence Force Retirement and Benefit Scheme all administered by a single trustee, the Commonwealth Superannuation Corporation, or CSC. The CSC will be a statutory agency, as will ComSuper.

The consolidation of these schemes will help modernise the governance arrangements. The outdated position of Commissioner for Superannuation will be replaced by a chief executive officer. A board of 11 directors will govern the CSC. The governance model is in keeping with a common model used right across the broader superannuation industry. The CSC board composition will reflect member interests as well as employer interests. There will be three nominees from the ACTU, two nominees from the Chief of the Defence Force. and five nominees from the Minister for Finance and Deregulation with input from the Minister for Defence. The government will also appoint the chair.

I note in passing that those opposite have raised the bogeyman of the ACTU having representation on the CSC board. It is sort of odd, is it not? They are quite happy to have their positions on health dictated by British American Tobacco and they are quite happy to have their positions on the mining tax dictated by a few mining magnates, but they are not happy to have workers representatives—representatives of millions of Australian workers—on a superannuation board.

I note that some in the community, particularly the ex-service person community, have raised concerns that amalgamated trustee arrangements might not recognise the uniqueness of military service. This concern was raised about the original 2010 bill. Submissions to the Senate Finance and Public Administration Legislation Committee raised this issue of ensuring that ADF personnel were adequately recompensed for the unique role they play in the defence of our nation. It is important to note that the bills before the House do not disturb, and the previous incarnations of these bills did not ever disturb, members' entitlements or benefits. No existing features or benefits of military schemes are disturbed. There is no change to scheme entitlements for ADF personnel and there is no change to scheme entitlements for Commonwealth public servants. The 2010 bill recognised the uniqueness of military service, something noted by the Senate committee report's citation of the joint submission by the departments of finance and defence. That submission concluded:

Overall, the Bills seek to recognise the special nature of military service (noting that this principle is relevant to all aspects of military conditions of service) without taking away from a superannuation trustee's essential function of managing the superannuation schemes for which it is responsible on behalf of all scheme members and safeguarding members' benefit until they retire.

The submission of the Defence Force Retirement and Death Benefits Scheme Authority, or the DFRDB Authority, to the Senate committee acknowledged that the uniqueness of military service was recognised by the relevant scheme rules and not by the composition of the board. The DFRDB Authority concluded:

In the context of the above, the DFRDB Authority accepts the assurances of the Australian Government that the interests of the DFRB and DFRDB members will appropriately represented by the CSC. Therefore it is the view of the DFRDB Authority that it is not necessary to retain a separate board to administer the military superannuation schemes.

The government recognises the unique nature of military service. I recognise that too. One of the great privileges of this job is having the opportunity to honour those who have sacrificed their lives for our freedoms and to acknowledge the work that many of our service people make on our behalf. It was never the intent to dispel this recognition with these administrative changes.

Recognising the concern, the government engaged with our military community on the proposed administrative changes. These consultations have led to changes to make clear the uniqueness of military service. The bills before the House require the CSC board to have regard to that uniqueness, as provided for in the schemes established by the relevant military superannuation acts, when acting under such legislation. Further, when the board is making decisions concerning matters solely related to the military schemes, at least one director appointed by the Chief of the Defence Force must be present. As I outlined previously, the CDF will appoint two representatives to the board and the appointment of the employer representatives by the finance minister will be in consultation with the defence minister. The bills also provide for the establishment of the Defence Force Case Assessment Panel within the single trustee model. The panel will undertake functions currently performed by the DFRDB. We will also review the arrangements after the first five years to ensure that the changes have been effective.

The consolidation of these government super schemes into a single trustee arrangement is not occurring in isolation. There has been a trend in our local superannuation industry towards consolidation. In 2006, the merger of the Australian Retirement Fund, the Superannuation Trust of Australia and Finsuper created AustralianSuper, one of our largest industry super funds. This was followed in 2008 by the creation of Media Super from the merger of Print Super and JustSuper. In 2009, the Stevedoring Employees Retirement Fund and the Seafarers Retirement Fund consolidated into Maritime Super. Consolidation, particularly for smaller funds, allows the benefits of economies of scale, economies which some fund managers believe necessitate funds having at least $5 billion under management to survive effectively.

The advantage of scale is backed by studies and the experience of funds not only here but also overseas. A study by the Australian Prudential Regulatory Authority, APRA, found that large funds outperform medium and smaller funds by at least half a per cent and in some cases by a full percentage point. The APRA study, based on data over a 10-year period, was consistent with studies overseas. For example, a US study of pension fund data showed larger funds outperformed smaller funds by over four percentage points.

Scale has the potential not only to deliver higher investment returns but also to reduce administration costs. A 2009 study by Deloitte Actuaries and Consultants examined the public disclosure statements of 60 industry superannuation funds. That study found that:

operational costs, which largely relate to the number of fund members, in a fund with more than 500,000 members can be reduced by about 32% when compared with a fund of between 100,000 and 500,000 members. These costs are reduced even further (about 44%) when compared with a fund of between 50,000 to 100,000 members; and

investment fees as a percentage of total fund assets, using the default investment option, were 0.57% in a fund with over $10 billion in assets, compared with the higher 0.76% in a fund with between $1 billion and $2.5 billion in assets.

In investigating the net benefit of consolidation, the Department of Finance and Deregulation's actuary, Mercer, calculated that based on the 2008 figures net investment returns had the potential to be $10 million better in 2008, $15 million better in 2018 and $19 million better in 2028.

The bulk of the potential return of $10 million in 2008 would have benefited the military schemes as $7 million of the net return is related to those schemes.

While all funds in a consolidation benefit, it is the smaller funds that achieve the greatest benefits. There is a future risk that, without this consolidation, the military schemes could become smaller relative to other funds and then have problems obtaining good investment returns.

The larger the fund the greater the ability of a trustee to pool funds and thereby lower investment costs and drive higher returns. This is because a merger sees a better spread of age profile of members amongst all the schemes. That allows a better spread of assets across age bands and risk categories. The practical implications for fund members will be an increase in the super savings of over 90 per cent of our current serving personnel. Just a 0.5 percentage point increase in the net return of a cadet who joins the RAAF and retires as a group captain will be $95,000 if that person serves a full career or $41,000 if they serve for a decade. The benefits, though smaller, will also flow through to the government's main civilian superannuation schemes.

It is easy to forget that if those opposite had their way we would not be talking about administrative changes to strengthen investment returns for those who serve our nation. Those opposite have always stood against superannuation reforms. I would like to draw the House's attention to a terrific after dinner speech delivered last night in Parliament House by the Assistant Treasurer—who I am pleased to see in this place—in which he took the audience through the history of superannuation and pointed out that when Bob Hawke took office in 1983 just 40 per cent of the workplace had super cover and that by 1991, after the Hawke Labor government's major superannuation reforms, 72 per cent of the workforce had superannuation cover.

But the Assistant Treasurer also pointed out some of the statements of those opposite when Labor under the Keating government moved to introduce a superannuation guarantee levy. The Assistant Treasurer said:

… Wilson Tuckey drew on his 'long history in the racing industry' to compare the legislation to the 'worst type of jockey … both stupid and dishonest.'

Wilson Tuckey continued:

'When the poor old employer levy gets to 12 per cent, what will it deliver? Luckily, it might deliver an overseas holiday and a few presents for the kids, but it will not deliver a retirement income at the inflated costs of those days.'

As the Assistant Treasurer pointed out, a 12 per cent super guarantee will provide a worker now aged 30 on average full-time wages with a real retirement benefit of over $553,000 at age pension age. That is certainly more than 'an overseas holiday and a few presents for the kids.'

These sorts of statements of doom and gloom at the introduction of compulsory superannuation were not restricted to members who have left this place. Then Senator Bronwyn Bishop told the Senate at the time of a conversation that she had had with a small business person. That small business person had told Senator Bishop:

But now that this compulsory superannuation payment has gone through, yesterday I had to sack a part-time employee and turn a full-time employee into a part-time employee.

The late Senator Peter Cook, for whom I had the privilege to once work, interjected very speedily and said that, given that the law had not yet come into effect, it was difficult to see how small business people would have been affected by it. But Senator Bishop was as unmoved then, as she is now, by the facts. She finished the 1992 debate as follows:

I heard Senator McMullan said, 'The difference between our systems on superannuation is that ours is compulsory and theirs is voluntary.' That is very true. That is an essential difference. Our policy is designed to make it attractive for people to provide for themselves in later life whereas this Government's is designed to penalise business, to regulate it out of existence.

Of course, that is what those opposite have often thought about compulsory superannuation—that it is an imposition.

The Leader of the Opposition once called Labor's superannuation guarantee 'a con job'. Those opposite have been fundamentally uninterested in superannuation. Perhaps the reason for that is that it is so far in the future. When you are just focused on getting your face on the evening news, why should you be thinking about things that are going to happen a couple of decades hence? No, you want to focus on the here and now, the latest poll and the latest snappy grab.

But superannuation is about much more than that. Superannuation is about ensuring that Australians enjoy dignity in retirement. Because of the lag in investment accumulation, the decisions we are making now are going to affect people like my one- and four-year-old sons, who will enter the labour market possibly around 2030 and continue in it possibly as late as 2080. My little boys are among those who will benefit from having a good superannuation scheme. It is those long-run reforms—that many of us will not be around to see—which lie at the heart of superannuation reform. It can sometimes look like a technical detail but, let me tell you, it is anything but. It is about securing dignity in retirement and ensuring that Australians are able to enjoy their retirement, comfortable in not having to worry about being able to pay the bills. I commend the bills to the House.

(Update: The bills passed both houses on 21 June.)

Transcript – Sky News AM Agenda – 6 June 2011

8:40am

E & OE 

Subjects: Carbon pricing, live exports, immigration

KIERAN GILBERT:

Welcome back to AM Agenda. With me now is Liberal frontbencher Senator Mitch Fifield and Labor MP Andrew Leigh. Gentlemen, good morning to you both. Andrew first to you. Why not give the people a say with a plebiscite as Mr Abbott is proposing?

ANDREW LEIGH:

Well Kieran we had an election last year, and it was very clear that the majority of Australians voted for Parties that wanted to put a price on carbon. We’ve seen that of course in the 2007 election as well when both major political parties went to the election saying we should put a price on carbon. Tony Abbott, of course, is running more stunts than Jim Rose. He wants to do anything he can to distract himself from serious policy. He doesn’t want to talk about the different plans that are on the table. And there are two very different plans on the table.

GILBERT:

Why is a plebiscite a stunt, necessarily? You would think that giving the people a say on the specific issue - the Government didn’t say it would bring in a carbon tax before the poll, in fact Julia Gillard explicitly rejected the idea.

LEIGH:

Well Kieran, the differences between a carbon tax and an ETS are miniscule…

MITCH FIFIELD:

Tell that to the punters!

LEIGH:

…compared to the differences between pricing carbon and not pricing carbon. I mean, the real difference here is, are you going to use a market-based mechanism - the most efficient way of dealing with climate change. Tony Abbott during the period immediately after the election was asked by the independents whether he wanted another poll, and he said no, he didn’t. But of course, when things didn’t go his way, he’s now like a spoiled kid in the school yard trying everything he can to run a nasty, negative campaign to try and distract attention from the big economic reform, which is…

FIFIELD:

What’s nasty about a plebiscite?

GILBERT:

Senator Fifield, Senator Brown said this morning effectively what Andrew has said here – that Tony Abbott didn’t get what he wanted, ie Government, and now he wants to sideline Government with taxpayer’s money. This could cost tens of millions of dollars – this plebiscite.

FIFIELD:

We’re not wanting to revisit the last election, we’re not wanting to re-prosecute that. We just want to give the Australian people a say, for the first time, on this issue. Andrew and Julia Gillard are in denial and in a parallel universe. Julia Gillard went to the election - she said, “there will be no carbon tax under a Government I lead.” She lied. She also said before the election that she would seek a community consensus before seeking to price carbon. That was the whole genesis of the “people’s assembly.” She hasn’t sought a community consensus. She’s lied to the Australian people. They deserve to have a say. We’re not saying that the Government definitely has to have an election. We think that would be the right thing to do – to seek a mandate at the polls – but if they aren’t prepared to do that, then the right thing to do is to seek the people’s view through a plebiscite.

GILBERT:

Are you trying to get this through before the Greens take the balance of the power in the Senate as of July the first?

FIFIELD:

We’re seeking to expedite this through the Senate.

GILBERT:

Through the Senate that’s going to allow it through?

FIFIELD:

Sure, the Senate changes in composition, but we don’t know whether this Senate will allow the plebiscite bill through. We hope that it will. We’ll be making the case to the independents, we’ll be making the case to the minor parties. Who knows, maybe the Greens might suddenly embrace the concept of democracy and want to seek the people’s will on this. We’ll wait and see. There’s absolutely no reason why Julia Gillard shouldn’t support a plebiscite.

GILBERT:

Is the Government confident that they’ve got the numbers in the lower house with Andrew Wilkie and Mr Windsor, Mr Oakeshott and co?

LEIGH:

Well Kieran we’re obviously working it through the multi-party committee on climate change. There’s good faith negotiations occurring there…

GILBERT:

Andrew Wilkie’s not involved in that though, so are you confident that he will back you on this vote?

LEIGH:

Greg Combet and the Prime Minister are very actively involved in talking to all the independents. And of course we would be happy to talk to any member of the Coalition who is prepared to accept that climate change is real and we need to look at the most efficient way of dealing with…

FIFIELD:

But Andrew, what about talking to the Australian people? Forget the multi-party committee, have a plebiscite.

LEIGH:

Let’s look at what we’re doing, we’re backing the scientists based on the best science, and we’re backing the economists, who almost to a person say the most efficient way of tackling dangerous climate change…

GILBERT:

It must be very tough to hold your nerve though – for the Prime Minister and the Government to hold its nerve given the polls are so bad and given the polls show almost unanimously that people don’t back a carbon tax.

LEIGH:

Not at all Kieran, and let me give you the opposite argument. The opposite is – can you imagine if the Government looked at the front of the paper, saw that some poll had given some particular number, we walked away from good policy and went straight for populism? That’s not the Labor way. That’s not our tradition.

FIFIELD:

The Labor way is to lie to the Australian people – that’s the Labor way. That’s what Julia Gillard has done.

LEIGH:

We have backed putting a price on carbon, and I can go directly to what Mitch has said with the analogy the Prime Minister herself has used. If you find yourself driving home and your way is blocked, do you sit there at the roadblock? No. You drive around and you find another way home. And that’s exactly what we’re doing here. The fixed carbon price period will last three to five years and then we’ll move into an ETS. That’s the goal we’ve always sought, and the reason we’re doing that is the reason the British conservatives, the New Zealand conservatives, a whole host of sensible governments around the world support pricing carbon.

GILBERT:

Including the New Zealand leader who’s here today to address the Parliament, who does, as Andrew said, back a similar initiative.

FIFIELD:

John Key is responsible to the Parliament and people of New Zealand. Julia Gillard is responsible to the Parliament and people of Australia. Andy was talking about the multi-party climate committee – how many people are on that? Eight or ten? They’re giving eight or ten people a say. What about giving the Australian people a say for the very first time? The Australian people have not had the chance to have a say on a carbon tax. Julia Gillard said, no, she wasn’t going to introduce one. The Government’s explanation is, ‘well, we’re driving a different way.’ That’s just garbage! You can’t fib, fudge and slide.

LEIGH:

Mitch, you’re a sensible conservative, so I’m sure it pains you to come out with lines like these.

FIFIELD:

It doesn’t pain me at all.

LEIGH:

You must know that in 2007 all major parties went to the election supporting a price on carbon. You must know that the consensus across all serious economists is that pricing carbon is more efficient. You must also know that your policy is going to extremely inefficient. Direct action is…

GILBERT:

Senator Fifield…

FIFIELD:

Just on that point, all bar two or three serving members of the Australian House of Representatives went to the election vowing not to introduce a carbon tax. We certainly weren’t going to introduce a carbon tax. We said we weren’t, the Labor Party said they weren’t. So, the majority of people in the Australian Parliament are there on the basis of not introducing a carbon tax.

GILBERT:

OK, I’ve got to move on. I want to talk about the Labor Party at the moment. Friday is the anniversary of Kevin Rudd being ousted. Andrew, the former Prime Minister has had to delay, postpone a party he was going to have with former staff because it begun a media circus apparently – that was the message from his wife. Peter Beattie has urged Kevin Rudd to bury the hatchet and in fact to leave Parliament. It’s pretty messy at the moment.

LEIGH:

Well Kieran this party really characterises some of the sideshow nature of some of the commentary on this. I mean, you see column inches being spilt on this, but frankly, that’s not what this Government is about. When I speak to caucus colleagues and Ministerial colleagues, they’re focused on the big reforms. Reforms like helping disabled kids in schools, reforms like trying to close the gaps, making sure the Australian economy has the productive capacity to compete in a new economy…

GILBERT:

Can Julia Gillard convince people to listen to her once again? When you look at the number in the Nielsen poll on Saturday, over 60% believing that Kevin Rudd should be leader, compared to 30% for Julia Gillard.

LEIGH:

Kieran, you can look back to the media sideshow that was going on under the Hawke and Keating Governments, and there’s column inches being spilled on leadership tensions and polls. But what do we look back to? We look back to the major economic reforms of that time. The transition to a more productive economy, throwing off those shackles of tarrifs, engaging with Asia. Those big, long-run reforms were what those Governments focussed on then, and that’s what our Government is focussed on now.

GILBERT:

Senator Fifield, given the state of the polls, it looks in that context unlikely that the Coalition will secure the support of the crossbenches. They’re not going to want to go to an election now, are they? They would get wiped out, they would lose their seats as well. So how can you get people across the line on this plebiscite, for example, when it just seems that all the politics and the polls suggest that it would be suicide to do it?

FIFIELD:

Well a plebiscite wouldn’t be suicide. We’re not expecting the independents are going to call an election or put pressure on the Government to call an election. But what we are hopeful is that they will see the plebiscite as a way of the Australian people expressing their view. The independents talk a lot about the true will of the Australian people being expressed, and I think that this is a very good way for that to happen.

I’ve got to say, just coming back to Kevin Rudd’s party, it does go to show just how fragile Julia Gillard’s leadership is. A Member of Parliament can’t even get a group of former staffers together for a party without it being seen as some direct challenge to the Prime Minister’s authority. This is extraordinary.

GILBERT:

Everything that he’s doing at the moment is being interpreted in that context. You’re talking about that being a sideshow, but isn’t it largely being driven by a Foreign Minister who is continually popping his head up one way or another?

LEIGH:

I’m really proud of our Foreign Minister. I think it’s terrific to have a foreign minister that sits in the Evatt/Evans tradition of being an activist, who is out there in the world’s councils. Who was, a week ago, sharing a stage with Bob Geldoff and Bill Gates at the global alliance against vaccines initiative in London, pledging that Australia would make a difference towards making the number of kids who die before their fifth birthday through preventable diseases, pledging …

GILBERT:

Is there any chance of him making a comeback to the leadership, do you think?

LEIGH:

Kevin Rudd’s doing a great job as Foreign Minister, and that’s what he’s going to continue to do. He will be there in the world’s councils, he’s actively engaged in Libya he’s actively engaged in the local…

GILBERT:

So there’s no chance of return to the top job?

LEIGH:

We’ve got a - he’s doing a terrific job as Foreign Minister, Kieran, and that is what he will continue to do. We have a mandarin speaking Foreign Minister. How good is this, for Australia in the Asian Century….

FIFIELD:

And Julia Gillard’s face lights up every time she sees Kevin on TV. I’m sure she shares your view.

GILBERT:

Senator Fifield and Andrew Leigh, gentlemen have a great day. Thanks for that.

ENDShttp://www.youtube.com/v/LA1STtRRFug?version=3&hl=en_US

If you’re after some light entertainment, try asking a member of the federal opposition what they think of climate change deniers.

If you’re talking to someone in the half of the party room who voted for Tony Abbott over Malcolm Turnbull, they’ll likely try to change the subject. They know that it’s a difficult task to argue that the CSIRO, the Bureau of Meteorology, NASA and the Academy of Sciences are engaged in a vast conspiracy. But in their heart, many Coalition politicians somehow can’t come to accept the overwhelming scientific evidence in favour of climate change.

Alternatively, you might be talking to a Malcolm Turnbull supporter. They know the science is solid, but their leader believes climate change is ‘absolute crap’. So they’ll likely tell you that the Coalition is a broad church, which tolerates a variety of views.

But rejecting the science of climate change isn’t a fashion choice. It’s a fundamental question about whether you’re serious about public policy. If you believe the cranks and shonks on a matter as big as whether humans are causing climate change, why should we trust your judgement on anything else?

On some issues, we should tolerate difference. I may not like paisley shirts and ABBA, but I respect your right to love them both.

But if you can’t accept the thousands of temperature readings that show us that 2010 is one of the three hottest years on record, then you’re off with the fairies. Yes, Cori Bernadi, I’m talking about you.

If you can’t accept that every decade since the 1940s has been hotter than the preceding decade, then I have as much respect for your views as a flat-earther. Yes, Dennis Jensen, I’m talking about you.

And if you can’t cop the mainstream evidence that CO2 emissions are causing climate change, then you’ve just joined the loony right. Yes, Nick Minchin, Barnaby Joyce, Sophie Mirabella, Eric Abetz, Guy Barnett, Bronwyn Bishop, Ron Boswell and Michaelia Cash, I’m talking about you.

Australia’s conservatives didn’t always oppose mainstream science. Stanley Bruce created CSIRO.

Robert Menzies was an original fellow of the Australian Academy of Science. Malcolm Fraser created the Australian Science, Technology and Engineering Council.

Today, every living Liberal Party leader apart from Tony Abbott accepts the science of climate change and the need to put a price on carbon. It’s time for the Opposition to recognise that if you’re not serious about climate change science, you’re not fit to govern the country.

(crossposted at the ALP blog - please comment there)

'Vertical funds' are playing an increasingly important role in foreign aid these days. One of these is the Global Alliance on Vaccines and Immunisation (GAVI), which received an extra $200 million injection from Australia at a donor meeting in London a week ago. Kevin Rudd's speech received plaudits from those who attended (Bruce Boyd told me of a colleague at the meeting who said the announcement 'took people's breath away'). Given how well GAVI has performed in assessments such as the UK multilateral aid review, this is good news indeed.

Another vertical fund that Australia contributes to is the Global Fund to Fight AIDS, Tuberculosis and Malaria. The fund will be holding its fourth Partnership Forum in Sao Paulo from 28-30 June, and I'll be attending as part of a parliamentarians' event on 27 June. You can guarantee that I won't be making any spectacular pledges of Australian aid, but I am looking forward to the conversation.

Flying from Australia to Brazil is messier than you might think (I'm getting there via South Africa), so it turns out that I won't be able to return in time for the community forum that I had advertised for Saturday 2 July in Downer Community Centre. I'll post details here once I've rescheduled that event. Apologies to inner north residents for any inconvenience.

I spoke in Parliament today about the Australian Youth Climate Coalition, as well as Canberra's first 'Carrotmob'.

Climate Change, 16 June 2011

In politics, some of the most important decisions you make are the ones that outlive you, whether it is the Menzies government's decision to expand basic research through the CSIRO, the Keating government's decision to put in place a superannuation guarantee or this government's decision to dramatically improve early childhood education. Great policy is made with the long game in mind. In the case of climate change, the decisions we make today will matter more for my sons than they will for me. It will be my little boys whose world will be most affected if sea levels continue to rise and temperatures increase. Young people in my electorate, much like their peers across Australia, want a clean energy future, a future where Australia prices carbon.

This was the message 24 enthusiastic young Canberrans brought to me last week: Claire Bailey and Laura Hyde, year 9 students from Campbell High School; Kiara Creaser from Dickson College; Fehin Coffey, Sophia Rose O'Rourke, Kirk Demant and Claire Hickstepp from Orana School; Vicki Tjandra and Andrew Lovering from the University of Canberra; and Zoe Anderson, Moira Cully, Laura Hogan, Eliza Hopkins, Lindsey Cole, Charlotte Wood, Joshua Creaser, Jonathan Rosseau, Tess Corkish, Ben Huttner-Koros, Adam Huttner-Koros, Alexandra Gill, Hayley Shone, Ben Molan and Tom Sloan from the Australian National University.

These young Canberrans presented me with a petition signed by 700 people supporting a price on carbon and investment in renewable energy. They did so under the umbrella of the Australian Youth Climate Coalition. The AYCC has been determined to see Australia act. They have been dogged in their determination and unwavering in their commitment to ensure youth throughout Australia have their voices heard. It is often said that young, progressive activists are anti-market, that they are hostile to economics. But Australia's young climate change activists show how wrong this is. The AYCC activists I met with understand there is no contradiction between economic growth and environmental preservation and that a market based mechanism is the most efficient way of tackling dangerous climate change.

Speaking of markets, I want to use this opportunity to commend the organiser of Canberra's first 'Carrotmob'. Modelled as the environmental equivalent of a flash mob, Carrotmobs attract extra shoppers in return for the store owner's commitment to spend the extra revenue on improved energy efficiency. I commend Ren Webb and the other Carrotmob organisers who helped Ainslie IGA manager Manuel Xyrakis accumulate an extra $12,000 to spend on reducing his store's carbon footprint.

Thousands of Australians, young and old, support market based mechanisms for tackling climate change. It is time for all members of parliament to get on board. We need to price carbon now.

I spoke in Parliament today about the ACT Community Living Project.

ACT Community Living Project, 16 June 2011

On Monday, 13 June, I had the pleasure of attending a barbecue to raise funds and awareness for the ACT Community Living Project. CLP is a not-for-profit community organisation seeking services for people with a disability, particularly those with a moderate to severe intellectual disability, many of whom have physical or health issues. The group also includes people with autism.

The event was held at Magnet Mart Gungahlin on a crisp Canberra winter's day. CLP had organised balloons and face painting for the kids, hot soup, coffee and sausage sandwiches. My four-year-old son, Sebastian, and I helped David and Kay behind the counter and then he sat and chuckled at me while I had my face painted with the CLP logo. I acknowledge CLP president, Esther Woodbury, and CLP coordinator, Allison McGregor, for their hard work in promoting CLP and pay tribute to CLP and the 350 Canberra families it supports for family members with an intellectual disability.

CLP recognises the need to provide people with an intellectual disability with a choice of accommodation, access to lifelong education, meaningful work or voluntary activities, quality health care and the chance to be socially included. I am pleased to support its work to raise funds for CLP and to raise awareness of the important issue of supporting people with an intellectual disability.