Friday, November 28, 2014

We Need to Do More for the Great Barrier Reef

Barack Obama was right, and Julie Bishop was wrong, about the health of the Great Barrier Reef. WWF Australia and the Australian Marine Conservation Society in a report this year to the UNESCO World Heritage Committee have stated:

"The Great Barrier Reef World Heritage Area (the Reef) is in crisis. Since its inscription on the World Heritage List in 1981 the condition of the Reef has seriously declined, with the declines accelerating in the past decade despite management measures aimed at increasing the Reef’s level of protection and reducing fishing and pollution pressures. The Australian community is looking to the World Heritage Committee to maintain a watching brief and exert influence on the Australian and Queensland governments to implement the transformational management changes required now to halt and reverse the decline in the Reef’s health and resilience.

These changes are urgent as ecosystem recovery of coral reefs can take decades; however current proposals by the Australian and Queensland governments have time-frames of up to 5 years before relatively modest changes are likely to be implemented. The proposed changes will do little to mitigate the impacts on the World Heritage property in the short to medium term from existing and currently proposed developments.

Drawing on the findings of the draft Great Barrier Reef Region Strategic Assessment prepared by the Great Barrier Reef Marine Park Authority (GBRMPA), following is an overview of the current condition and trend of the attributes contributing to the Outstanding Universal Value (OUV) of the Reef.

  • More than half of the attributes for all four OUV criteria show a deteriorating trend since inscription of the Great Barrier Reef as a World Heritage Area.
  • The overall condition of three of the four OUV criteria is declining.
  • The criterion for Integrity of the GBRWHA is declining.
  • Overall, the attributes that make up the criterion, Habitats for conservation of biodiversity are in poor condition and are declining.
  • The main pressures on OUV continue to be climate change impacts, poor water quality due to agricultural run-off and impacts associated with coastal development including ports. Impacts on values are from legacy effects, current pressures and cumulative impacts that have already, and are continuing to lower the resilience of GBRWHA ecosystems.
  • Key values of the GBRWHA that play a significant role in its OUV are in poor or very poor condition and the majority are showing a declining trend, including: inshore coral reefs and corals in the lower two thirds of the Region; seagrass meadows and seagrasses; freshwater wetlands; grass and sedgelands; woodlands; connecting water bodies; sharks and rays; marine turtles; seabirds;  shorebirds; dugongs; Indigenous sacred sites, sites of particular significance, places important for cultural tradition;  Indigenous stories, song lines, totems and languages; and Indigenous structures, technology, tools and archaeology."

The Great Barrier Reef is not just an environmental asset – it’s an economic asset as well – employing 65,000 people and contributing $6 billion to the Australian economy every year. This figure will grow as tourism is set to be one of Australia’s super-growth sectors over the next 20 years, which is why it’s important we get this right. The Great Barrier Reef attracts millions of visitors each year.

The Liberal Government has enforced wide ranging cuts to the agencies tasked with managing the Reef and the programs designed to improve the Reef’s health. Labor has offered bipartisan support to the Federal Government to ensure the Reef is not placed on the “World Heritage in Danger” List. Such an outcome would be a disastrous for Australians.

Labor recognises the urgency for taking immediate action that will protect the Reef from the impacts of issues such as coastal development, and would if re-elected impose a ban on capital dredge spoil being dumped in the Great Barrier Reef World Heritage Area. Labor will oppose any further cuts made to the Great Barrier Reef Marine Park Authority, Bureau of Meteorology, tourism, marketing, research and small business grants programs imposed by the Liberal Government.

The Great Barrier Reef is an Australian icon. It’s the world’s largest coral reef ecosystem, and is home to thousands of types of marine animals. Understanding the threats to the Great Barrier Reef is the key to developing protection measures, and Labor is committed to ensuring stringent environmental protection measures are in place.

Friday, November 14, 2014

China Free Trade Agreement

The test is, will this FTA support and create Australian jobs. Old timers like Liberal Senator Heffernan and I have seen these things before. Extravagant claims for what FTAs will accomplish at the time they’re signed, and totally different outcomes:

  • When the United States Free Trade Agreement was signed, we were told it would generate $4 billion in wealth, but the only $4 billion we’ve seen is a $4 billion increase in our trade deficit, from $11 billion to $15 billion!
  • We have rising inequality – the world’s richest 85 people now own as much as the world’s poorest 50% - 3 and a half billion people combined.
  • We have rising unemployment – 6.2% is higher than US unemployment. 26% unemployment in Broadmeadows. This would be embarrassing in Greece or Spain.
An FTA with China needs to retain labour market testing, and maintain the Australian Government’s power to regulate the movement of overseas workers. We already have over 1 million people in Australia on temporary visas which give them work rights, and unemployment of over 750,000. Enough, already!  And we don’t need any more watering down of our anti-dumping regime. We should be strengthening it.

G20 Leaders Must Act on Tax Avoidance

G20 leaders have an opportunity, indeed a responsibility this weekend to agree on a global tax regime that stamps out rampant tax avoidance by multinationals and high net worth individuals.

The summit’s timing could not be more pertinent with the revelation last week showing Luxembourg’s facilitation of industrial scale tax avoidance by multinational corporations. It found hundreds of companies, including some Australian firms, had funnelled hundreds of billions of dollars into Luxembourg, slashing their tax bills in the process. In some cases, the firms were paying effective tax rates of as little as 1 per cent.

Luxembourg, however, is but one player in the global tax avoidance game with estimates that some 10 per cent of global GDP, that is $US8 trillion, is stashed away in tax havens. Tax Justice Network research findings estimate the figure could be as high as $US32 trillion hidden by the world’s wealthiest people in the world’s tax havens. This estimate does not include the vast amount of wealth held in the form of real estate, super yachts, works of art and race horses that are owned by secretive offshore companies, trusts and foundations.

United Voice, in collaboration with the Tax Justice Network Australia released in September a ground breaking report Who Pays for our Common Wealth? Tax Practices of the ASX 200. It revealed 29% of Australia’s 200 largest listed companies pay an effective corporate tax rate of 10% or less. 14% have an effective tax rate of 0%. This translates into an estimated loss in annual revenue of $8.4 billion. In 2013, 57% of ASX 200 companies disclosed subsidiaries in tax havens. This figure could be higher, as reporting is not mandatory. As Dr Mark Zirnsak, from the Tax Justice Network Australia says:

“The frequent use of subsidiaries in secrecy jurisdictions in combination with the shifting of debt and profits is resulting in lost tax revenue in Australia and overseas where it should be paying for essential services to help lift people out of poverty. Last financial year a massive $47 billion flowed from Australia to secrecy jurisdictions.”

When the Liberal Government was elected Treasurer Hockey said that we all must do the 'heavy liftingto return the Budget to surplus. What we got instead was a Budget that disproportionally burdened the poorest members of Australia – the unemployed, students, low income pensioners and foreign aid recipients up to 2017-18, whilst failing to rein in tax concessions for high income earners.

Economists and captains of industry like to argue the world is becoming a better place courtesy of globalisation, but what I see is ever growing inequality, and tax avoidance exacerbates this. This is not about class warfare and tearing down wealth creation, but about ensuring that everyone is paying their fair share in tax. Many Australia companies do pay close to the 30% corporate tax rate.

One key to this is greater disclosure and transparency of corporate tax practices. More needs to be done to ensure Australia leads by example and Australian companies contribute their fair share. The Australian Government should:

  • Require large corporations to provide more public disclosure and transparency.
  • Increase fines for tax evasion and extend laws to effectively cover the full range of corporate tax avoidance strategies.
  • Eliminate or restrict the use of stapled securities for tax arbitrage, according to global norms.
  • Ensure that the Australian Tax Office is adequately funded and staffed.
  • Lead the G20 to adopt tough and effective global rules to combat corporate tax dodging.
Tax Justice Network Australia recommends the Australian Government:

  • Support the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS) and pressure secrecy jurisdictions to end their status through effective cooperation with other governments to combat tax evasion, tax avoidance and money laundering.
  • Support the automatic exchange of information on tax matters between tax authorities of different countries, with appropriate safeguards, and follow through on its commitment to implement automatic exchange of information on tax matters into Australian law.
  • Require greater transparency from multinational corporations, including country-by-country reporting. Consolidated annual reports should include revenues, profits, staffing levels and taxes paid in each country in which they operate or have subsidiaries.
For multinational corporations the Tax Justice Network Australia recommends:
  • Greater transparency on the purpose and function of subsidiaries in secrecy jurisdictions.
  • Voluntary reporting of revenue, profits, staff levels and taxes paid in each jurisdiction until such a measure is implemented by law.
  • Avoiding setting up subsidiaries in secrecy jurisdictions.
If Treasurer Hockey is serious about balancing the books then he must address corporate tax avoidance. The G20 Summit in Brisbane is the perfect opportunity for the Treasurer to do this, so that ordinary Australians and small businesses are not shouldering an unfair tax burden.

Thursday, November 13, 2014

Timbercorp and the ANZ

I attended the Senate Inquiry into the Timbercorp collapse yesterday morning. It was very moving to listen to the account of families now facing the loss of their family homes and the loss of their life savings as a result of this scandal.
I believe the ANZ Bank should now put a halt on debt recovery action while the Senate Inquiry does its work. The ANZ Bank recently announced a record full year profit of $7.3 billion. I don’t think ANZ shareholders would want to see their share dividends beefed up by the ANZ foreclosing on ordinary families and driving them into financial ruin and destitution. They should now suspend debt recovery action and, subject to the Senate Inquiry’s findings, they should waive debts that would not have arisen but for negligence.

Russian Navy Ships

The Department of Defence is monitoring these vessels. They are in international waters, and they’re allowed to be there. People shouldn’t get excited about this. I don’t foresee any need for any boat turnbacks.

I think Tony Abbott’s comment about ‘shirtfronting’ was foolish and childish. It is said that in the world of diplomacy you should speak softly and carry a big stick. This was the opposite – bellicose megaphone diplomacy. It has been an obstacle, rather than a help, to getting the answers Australians want about the shooting down of the MH17.

US-China Climate Agreement

This is an absolutely stunning agreement. It is the best news for international action on climate change in nearly 20 years, since the Kyoto Protocol of 1997.

Of course it leaves Australia absolutely out on our own, like a shag on a rock. Europe is acting, the US is acting, China is acting, the small Pacific nations are screaming for action.

Australia is turning into an international bludger on climate change; scrapping the carbon price, white anting the Renewable Energy Target, shooting messengers like the Climate Commission, and trying to keep climate change off the agenda of the G20 talks in Brisbane. Talk about lifters and leaners. We want everyone else to lift, just not us!

Republican Mitch McConnell says the agreement doesn’t require China to do anything for the next 15 years. That this kind of wilful ignorance passes for political debate in the US today goes a long way towards explaining why so few Americans turn out to vote in Congressional elections. Apparently Mr McConnell is the Republican Leader, so he is supposed to be the brightest of them! God knows what that says about the others!

China has agreed to ramp up its renewable energy target by 1/3rd, over 30%, compared to its previous offer. This will build a massive solar PV industry.

Second, it has agreed to level out its emissions by 2030. Given that its emissions accounted for 70% of the global increase in emissions in 2012, this is a huge turnaround. It is a world away from the sabotage they engaged in at Copenhagen, which I strongly criticised at the time.

I repeat, this is the best news on international action to tackle climate change in nearly 20 years, since the Kyoto Protocol.

Wednesday, November 12, 2014

Timbercorp Hearing

The effects of recent major financial advice scandals have been catastrophic, resulting in consumers losing $5.7 billion in funds, losing their homes, losing their financial security in retirement.

I know first-hand in my electorate of Wills a number of constituents who have been affected adversely as result of poor advice or management by their financial advisor.

People have lost their homes, hundreds of thousands of dollars, their Self-Managed Super Funds, their share portfolios and their health etc because of poor advice and management.

Clients in share portfolios and managed investments schemes including Timbercorp and other agribusinesses, were not aware of the Agribusiness loans and in particular the loan conditions were either misrepresented or not disclosed. These loans effectively resulted in some clients being geared twice over.

Where gearing was disclosed clients were assured that the margin loans would never exceed 50%. In fact, the margin loans exceeded 200%, resulting in clients losing their entire share portfolio and other assets. Investors were explicitly assured their homes were safe.

In some instances clients were asked just to sign the rear page, which were not witnessed in their presence. Asset, liability and income details were often left blank or were completed after the client had signed the application (as they were told their office needed to finalise details on their behalf). Some of the loan documents recently obtained from Timbercorp Finance show that these details were never completed, or had liability details erased, or included incorrect client information.

Timbercorp management/maintenance/insurance fees and other agribusiness fees were disguised by being rolled into refinancing of debt.

Timbercorp increased the level of commission paid to Financial Advisors to promote their geared investments as the GFC began to impact.

A number of clients were pressured to increase their level of investment in Timbercorp even when the product was failing.

Undisclosed incentives were provided in relation to the recommending of Timbercorp products (for instance, the provision of overseas trips and possibly the granting of equity in Timbercorp companies). Given that Timbercorp were required to disclose all incentives they might pay to advisers distributing their products, this was an apparent breach of the requirements of the Corporations Act.

The significant omissions and potential fraud in respect to loan documentation should be investigated and all debts frozen and recovery action ceased by the respective creditors. ANZ, CBA, Macquarie Bank and other credit providers should explain their involvement and why such significant breaches of lending practices were permitted and should waive debts that would not have arisen but for their negligence.

The ANZ recently announced a record full year profit of $7.3 billion, up 15 per cent on a year ago, while the Commonwealth Bank posted a full-year cash profit of $8.7 billion, a record for an Australian lender. There is clearly the capacity for some debt forgiveness here. I remind the ANZ of ‘forgiveness’ taxpayers extended major financial institutions during the GFC when government action guaranteed the banks survival.

The relevant regulators, APRA and ASIC should independently investigate the arrangements and when fraud and other lending anomalies are established, they should explore grounds to award compensation to clients affected.

It is important for Australian investors to come forward with their experiences and evidence to inform the Parliament on further regulatory changes that may be necessary in this sector.

For its part, Labor will take to the next election a firm commitment to proceed with the broad thrust of its Future of Financial Advice reforms – important changes that the current government has dismantled.

Tuesday, November 11, 2014

Stooging a Generation

I have often expressed concern in the last few years that my baby boomer generation has pursued policies such as rapid population growth which have damaged the chances of the next generation.

Recently I have referred to the Axis of Financial Evil confronting our children – student debt, job insecurity, and housing unaffordability.

Support for this concern comes from a report released yesterday by the Foundation for Young Australians. The report expressly says that today's young people face very different prospects from their parents: higher unemployment, large education debts and even larger housing debts, which will put home ownership out of the reach of many.

We are experiencing a new baby boom. Foundation Chief Executive Jan Owen says that over the next forty years Australia will experience a 50 per cent increase in the number of young people, who will rise from the present 4.3 million under the age of 24 to 6.3 million under the age of 24, making it the largest cohort of young people Australia has ever had.

But today's young people graduating from University will start their careers with over $24,000 more in student debt than their parents. Over 25 per cent of young people who do gain qualifications do not use those qualifications in their job. They are taking on three times as much debt as their parents did to buy their first home – houses are six times more expensive than they were in 1985. More than 38 percent of 18 to 24 year olds are overweight.

Jan Owen says we have a situation where the next generation could be worse off in many areas, and that we have a shrinking window of opportunity to ensure young people don't become the first generation of Australians to do worse than their forbears.

Monday, November 10, 2014

Labor Will Protect the Great Barrier Reef from Dredge Spoil

Congratulations to Mark Butler for Labor's commitment to ban the dumping of dredge spoil in the Great Barrier Reef World Heritage Area. This commitment will be implemented if Labor is elected in 2016. The Great Barrier Reef has been subjected to a range of environmental pressures, and the world’s greatest coral reefs are not in as good as condition as they used to be. The situation is sufficiently serious that the World Heritage Committee is presently considering whether to place the reef on the "in danger" list, and is due to decide this matter in June next year.

The dumping of dredge spoil from big construction projects in the waters of the Great Barrier Reef World Heritage Area potentially damages the reefs. The Federal Government approved a plan to dump about 3 million cubic metres of dredge spoil, caused by the expansion of the Abbot Point coal port, in the reef's marine park. But strong community opposition to the plan has caused a rethink and hopefully that spoil will now not be dumped offshore.

But there are still very large proposals being considered for dumping dredge spoil at sea - 5 million cubic metres in Cairns as part of a shipping development project, 5.7 million cubic metres as part of the Townsville port expansion, 13 million cubic metres as part of the Dudgeon Point coal facility expansion and another 12 million cubic metres at the Port of Gladstone.

Given this troubling setting Federal Labor's announcement of a clear ban on dredge spoil dumping is very welcome.

Friday, November 7, 2014

Do Private Training Colleges Deserve a Pass?

It is completely unacceptable that three out of four private training colleges have given students sub-standard training or questionable assessments.

This finding from the Australian Skills Quality Authority clearly indicates that we need to rethink the wisdom of supporting private training colleges at the expense of TAFE. First, State Governments should rethink their push to privatise vocational training.

Secondly, as suggested by TAFE Directors Australia, the Federal Government should delay extending public funding to private colleges for at least three years.

At present the Federal Government wants to extend funding to students at private colleges from 2016, but this should not happen until concerns about the regulation of the sector are resolved.

As Pat Forward, the Australian Education Union's Federal TAFE Secretary, has said:

"Allowing private providers to receive government funding to provide vocational training has led to for-profit operators getting rich from taxpayers' money, while delivering shoddy education to students... For many students, the training they receive from these private providers will be their once-only chance to receive a government subsidy for their training, so it is crucial that it meets quality standards.”
The Australian Skills Quality Authority (ASQA) audit found 75 per cent of training colleges were unable to demonstrate compliance with the core standard for quality training and assessment. Even after being granted 20 days to rectify the problems, one in five colleges still could not comply, according to Natasha Bita writing in The Australian.

Examples of sub-standard training outlined by ASQA include private training companies issuing safety white cards for the construction industry after half an hour of online training rather than the recommended six hours, and some trainers offering three-week Aged Care Certificate 3 for courses which take six months at a TAFE College.

Australia's young people need and deserve high quality training. They deserve protection from exploitation, and neither they nor their parents should be fitted up with fees for courses that won't deliver the skills they need to find secure work.

Sunday, November 2, 2014

Action Needed to Save Our Migratory Shorebirds

The migratory shorebirds are now returning to Australia to spend the summer with us. Their annual flights from Siberia and other parts of the Northern Hemisphere along the East-Asian Australasian Flyway are nothing short of astonishing.

But there are fewer of them than ever before. Many of these shorebirds have suffered massive population declines in the last 30 years. The population of the Curlew Sandpiper has declined by up to 80 per cent since the 1980s. Our largest shorebird, the magnificent Eastern Curlew, has crashed by almost 50 per cent in the same time.

All along the Flyway shorebirds are being hit by habitat destruction for ports, industry and housing. They are also suffering from recreational activities on beaches, such as off-road driving, off-leash dogs, and suffering from climate change.

The Australian Government, in response to alarm expressed by Birdlife Australia and other environmental groups, released a draft Wildlife Conservation Plan for Migratory Shorebirds in August. But the plan has some major flaws.

It does not commit Australia to no net loss of important habitat. It fails to take into account cumulative losses, that is, the collective impacts of multiple threats to our shorebirds. It does not provide for updated migratory shorebird population estimates or the identification of important sites. We need more accurate information. And most importantly, it will not increase international co-operation to protect migratory shorebird habitat. We need to do more to get China and Korea in particular to better protect the shorebirds stopover points in the Yellow Sea.

The Wildlife Conservation Plan for Migratory Shorebirds is open for public comment on the Department of the Environment website until 3 December 2014. I encourage people who care about these unique and brave little birds to comment on the Plan.