I table two supplementary explanatory memoranda relating to the government's amendments to be moved to the National Reconstruction Fund Corporation Bill 2023, and, by leave, I move amendments (1) to (8) on sheet UC140 together:
(1) Clause 5, page 4 (after line 16), after the definition of Australia, insert:
Australia's greenhouse gas emissions reduction targets means:
(i) Australia's current nationally determined contribution was communicated in accordance with Article 4 of the Paris Agreement in June 2022; and
(ii) that nationally determined contribution has not been adjusted in accordance with paragraph 11 of Article 4 of the Paris Agreement;
the greenhouse gas emissions reduction targets set out in paragraphs 10(1)(a) and (b) of the Climate Change Act 2022; or
(b) in any other case—the greenhouse gas emissions reduction targets included in:
(i) Australia's current nationally determined contribution communicated in accordance with Article 4 of the Paris Agreement; or
(ii) if that nationally determined contribution has been adjusted in accordance with paragraph 11 of Article 4 of the Paris Agreement—that nationally determined contribution, as adjusted and in force from time to time.
(2) Clause 17, page 15 (after line 16), after subclause (3), insert:
(3A) In performing its functions, the Board must have regard to:
(a) the desirability of transforming Australia's industry and economy by:
(i) growing or improving Australia's industrial capability; or
(ii) improving Australian industry's ability to pursue value-adding opportunities; or
(iii) supporting a long-term improvement in Australia's economic diversity; and
(b) the desirability of attracting private sector finance or investments into the priority areas of the Australian economy; and
(c) Australia's greenhouse gas emissions reduction targets and the desirability of supporting decarbonisation; and
(d) the desirability of creating secure jobs and a skilled and adaptable workforce; and
(e) the desirability of enhancing Australia's resilience against supply chain vulnerabilities; and
(f) the desirability of encouraging the commercialisation of Australian innovation and technology.
(3) Clause 17, page 15 (line 24), omit "Subsection (4) does not", substitute "Subsections (3A) and (4) do not".
(4) Clause 75, page 46 (after line 25), after paragraph (1)(c), insert:
(ca) in the case of the Corporation—environmental, labour, social and governance matters to be considered by the Corporation in relation to:
(i) the Corporation's investment functions; and
(ii) the Corporation's investment powers;
(5) Clause 75, page 47 (after line 5), after paragraph (1)(f), insert:
(fa) in the case of a designated subsidiary of the Corporation—environmental, labour, social and governance matters to be considered by the designated subsidiary in relation to:
(i) the Corporation's investment functions being performed through the designated subsidiary; and
(ii) the designated subsidiary's investment powers;
(6) Clause 82, page 51 (line 8), omit "and".
(7) Clause 90, page 56 (line 5), after "delegate to a", insert "senior".
(8) Clause 90, page 56 (line 10), after "function to a", insert "senior".
We thank the Senate Economics Legislation Committee, the Senate Scrutiny of Bills Committee, the Parliamentary Joint Committee on Human Rights and the many other stakeholders, including members of this place, who have provided their valuable feedback on this bill. In response to this feedback, the government is moving these amendments to the bill.
Firstly, in respect of functions of the board, while investing to diversify and transform Australian industry is the core objective of the NRF, we also recognise that there are several important considerations that the board should have regard to in performing its functions. That is why we are proposing further amendments to clause 17 of the bill to make it clear that the board must have regard to a number of other important matters that have informed our design of the NRF from the outset, transforming Australia's industry and economy, attracting private sector investment and not crowding it out, meeting Australia's greenhouse gas emissions reductions target and decarbonisation, creating secure jobs and a skilled and adaptable workforce, enhancing resilience in Australia's supply chains, and encouraging the commercialisation of Australian innovation and technology.
Our proposed amendments to clause 75 require the corporation to develop policies on how environmental, labour, social and governance matters need to be considered in relation to its investment functions and powers and also its subsidiaries. This represents modern investment best practice, and we thank those stakeholders who raised these issues. By introducing these amendments, the government reaffirms that one of the most important outcomes of the National Reconstruction Fund will be the creation of secure, well-paid jobs in these key industries that build upon our national strengths. The fund will revitalise and strengthen our local supply chains to ensure that we have our own industrial and manufacturing capabilities.
By legislating the core functions of the board to include the creation of secure jobs, we are emphasising one of the biggest benefits that our domestic manufacturing industry provides and will continue to provide: opportunities for Australians to make a meaningful, high-skilled contribution to our nation's future. Nearly 85 per cent of the jobs in manufacturing are full-time.
When we proposed the National Reconstruction fund in March 2021, Labor said we were doing this to rebuild secure work. When he announced the Inflation Reduction Act in August 2022, itself a huge investment in manufacturing capability in the US, President Joe Biden said that it would 'lift up American workers and create good paying union jobs across the country'. 'Union jobs' is universally recognised language for secure, safe, high-skilled, well-paid jobs. That is exactly what this government is doing with our National Reconstruction Fund, creating jobs that communities can build around, especially in regional, remote and outer-suburban Australia. We're investing in businesses so that they can invest in their workers, developing the skills that we need to meet any challenges that the future may have in store. But we're only going to get there by working together—government with business and their people. We all have a common goal: an Australian industry that will lead the world. This can only be achieved if everyone has a voice, which can be heard, and a stake in the success of our collective effort.
Finally, in response to comments by the scrutiny committee, we also propose a minor amendment to clause 90, to make clear that the CEO may only delegate their powers and functions to senior staff. This amendment brings the clause into line with the CEFC Act and will not significantly change the operations or the functions of the NRF. I therefore commend the bill to the Senate.
The opposition will not be supporting the amendments moved by the government. I do know that, unfortunately, this is going to be subject, the committee stage, to a guillotine that is going to kick in at 8 pm. I know that Senator Hume, Senator Scarr, Senator Brockman and, possibly, Senator Rennick—we have a number of issues that we would like to endeavour to get through in the short time, just under three hours, that we have available.
In terms of the board appointments minister, as the bill currently stands, section 19(1) states that the ministers will, by written instrument, appoint board members. There is, however, no process stated for which these appointees will be selected from. Could you take us through what process the minister would enact to ensure that merit based appointments do occur?
nator FARRELL (—) (): Thank you, Senator Cash, for your question. There will be the normal processes that would apply in the consideration of board membership. Obviously, there will be merit based board appointments. When you're dealing with something like the National Reconstruction Fund, emphasis will be on people with those skills that might best be capable of implementing this much needed and very ambitious project.
When you state that normal processes will apply, could you please outline to the Senate what those normal processes are, and, when you say that the minister will ensure people have the appropriate skill set, how is that going to occur?
The minister will select from a list of candidates prepared by the department, the skills matrix taking into account the qualifications listed, in the bill, at section 19(2).
Will the skills matrix be made public?
That skills matrix is already in the bill.
In terms of the board positions themselves, will they be publicly advertised?
On what basis will they not be publicly advertised?
The government has decided not to publicly advertise them.
On what basis did the government make the decision—given all of the comments that were made, in particular, prior to the election in relation to transparency and integrity by this Prime Minister, the Attorney-General and other members of the government—that you will not be publicly advertising these positions?
Senator Cash, you really have got a cheek, talking about transparency, when the former prime minister did not reveal to the Australian people that we're—
Come on. It's a straight question.
If you don't realise, Senator Henderson, the seriousness of what the former Prime Minister did—and, I might say, some of the comments of your current female shadow bench. The former government didn't even tell the—
Senator Farrell, please take a seat. Senator Henderson?
I have a point of order. I would ask Senator Farrell to withdraw that denigrating comment about women on our side of the chamber. Women on our side of the chamber have been subjected to some pretty horrendous treatment in recent days. I would say to Senator Farrell that it's most improper to reflect on women on this side of the chamber in that way. I would ask him to withdraw it.
My comment was a compliment.
The TEMPORARY CHAIR: I was listening carefully to the backwards and forwards. Senator Farrell, you got pretty close to some concerns that were raised, but it might help the Senate if you just explained. Finish your sentence, because you didn't quite finish it. Then, if necessary, I'll ask you to withdraw, but at this stage I won't.
I was complimenting women on your side of the bench, but if there was anything I said I unreservedly withdraw.
The TEMPORARY CHAIR: Senator Cash.
We've established that—despite statements by the now government prior to the election and, in particular, even in relation to the political commentary that the minister himself made, in answering this question, to reflect on the previous government—under this government, in relation to the National Reconstruction Fund board, the board positions themselves will not be publicly advertised. Can you, then, advise whether board positions themselves will undergo a selection process, including interviews?
My understanding is that there will be discussions with the candidates but not formal interviews.
When you say, 'discussions with candidates', have any of these candidates already been identified?
When you say, 'discussions', who will be having those discussions?
CASH (—) (): Will the minister or the minister's office be involved in any of the discussions?
My understanding is the advice will go from the department to the minister, and then the minister will ultimately make a decision.
nator CASH (—) (): Is the minister bound to accept the recommendations from the department?
Does that mean that the minister does not, in any way, need to accept the recommendations put forward by the department and, on that basis, the minister could themselves put forward their own selection?
I've already explained how the process is going to work. There's a matrix. The department will propose some names, which will come to the minister. The minister will make a decision post the receipt of those names.
It's very important to understand because, obviously, there are other processes that will be gone through when these names are announced. The minister is not bound to accept the recommendations put forward by the department. I just want to confirm that means that the minister may themselves appoint anyone they like.
Long debate text truncated.
Date and time: 6:22 PM on 2023-03-28
Senator Pocock's vote: No
Total number of "aye" votes: 27
Total number of "no" votes: 33
Total number of abstentions: 16
Related bill: National Reconstruction Fund Corporation Bill 2023
Adapted from information made available by theyvoteforyou.org.au