Addressing the Future Drought Fund Bill 2018
Posted February 20, 2019
Cathy has taken the House through some of her concerns, including a look at the process of accountability in spending the dividend from the fund and the missed opportunity to give voice to, listen to and act on the priorities for rural and regional communities.
Ms McGOWAN (Indi) (18:24): In my addressing this legislation tonight, the Future Drought Fund Bill 2018, I'd like to take the House through some of my concerns about the bill, look at the process of accountability for the minister in spending the dividend and outline areas where I will be making amendments. Secondly, I would like to talk about the missed opportunity in this bill for the government to resolve its thinking about our regional communities and the lack of opportunity to give voice to, listen to and act on the priorities for rural and regional communities.
The purpose of these Future Drought Fund bills appears to be relatively straightforward: to establish a Future Drought Fund that will support drought resilience measures into the future. It talks of an investment of $3.6 billion that will return a dividend of $100 million a year from July 2020, next year, with that dividend to be spent on drought resilience measures as the minister sees fit so long as they are consistent with the drought resilience funding plan. Colleagues, while I support the intent of the bill, I feel the bill was rushed out to meet the drought summit time line. I feel it's loosely drafted and does not represent good governance and, in its current form, I'm unable to support the bill.
Consequently, I will be moving amendments to the bill in the consideration in detail stage. In these amendments I will cover the operations of the fund, to make it more transparent, and propose that the minister becomes accountable to the parliament for spending, that we see good governance designed into the development of the plan and that proper process is followed in the expenditure of the dividends. The amendments I propose pick up the concerns raised by the Scrutiny of Bills Committee, by the Senate committee inquiry into the bill and by the proposed improvements recommended by the National Farmers Federation as part of that inquiry—no small group of people to support me in my amendments.
Let me talk about the process of accountability. As it currently stands, the bill lacks accountability to the parliament. It gives all the power to the minister, and there are no checks and balances—that minister can basically just say, 'Trust me.' The minister has the power to spend $100 million a year on loosely defined drought resilience objectives, as long as the spend is consistent with the drought resilience funding plan. The only check on this consistency is by the government's Regional Investment Corporation. The government's Regional Investment Corporation is a bank. The drought resilience funding plan guiding this investment will be developed by the government's department and it currently only involves a 20-day consultation period with the community. So $100 million a year, a complex plan, and all we get are bankers to oversee it.
The drought resilience funding plan will be reviewed every four years, but there's no mechanism in the review to check its effectiveness. In fact, there's no mechanism anywhere to account for effectiveness and delivery. The drought resilience funding plan is to be a legislative instrument, but it's not disallowable. So parliament is not able to disagree with the minister. The parliament will have no opportunity to hold the minister to account for the content of the plan. So, after this bill is passed, the only chance the parliament will have to review the effectiveness of the fund would be a review after 10 years of operation. But, even then, as the bill is drafted, the report is not required to be tabled in the parliament or published. So, after 10 years of population, it can be reviewed, but the review doesn't have to be published.
All Australians should be concerned by the lack of transparency and accountability of $100 million a year. I'm concerned, and it's not just me that's concerned—though, clearly, it's pretty important that I am, given that this is my background and my interest. In preparing for tonight's debate, we connected with that wonderful group called the National Farmers Federation—not exactly a radical socialised group supporting government expenditure. In their input to the Senate committee inquiry, the NFF raised concerns about the funding plan and expenditure. They wanted the views of drought and related issues experts incorporated—so not just bankers; let's have someone involved who gets rural and regional Australia. As member for Farrer just said, let's have someone who actually understands agriculture. The NFF recommended that the bill be amended to establish a future drought fund consultative committee and, at the very least, to get some professional agricultural rural knowledge and skill into the process. I agree, and I'll be proposing that this committee be established as part of the process.
I would also like to briefly talk about some of the recommendations from Standing Committee on the Scrutiny of Bills. What a wonderful thing this is—a standing committee on the scrutiny of bills. They talk about broad discretionary powers, and they basically say that 'the expenditure should be subject to at least some level of parliamentary scrutiny'—at least some level; I agree. The committee went on to say, 'In this regard, the committee is concerned that the bill contains no guidance on its face as to the terms or conditions that would be attached to the financial assistance granted.' So that's pretty interesting, and I would say, 'Well, what's the role for parliament here?' I will be moving some amendments along those lines. The committee also talks about merits review and says:
The committee notes that neither the bill nor the explanatory memorandum set out any particular processes (for example, an application process) to be followed by persons seeking to obtain a grant or enter into an arrangement.
So we've got no idea about what the merits are of the people who get the grant and of the minister who spends $100 million, other than a plan that's been approved by a banking organisation. So there's no link in there at all to how agricultural outcomes or drought resilience will be achieved. Further, the report of the committee stated:
The committee's consistent view is that significant matters relating to a legislative scheme, such as how grants and agreements under the relevant scheme are to be administered, should be included in primary legislation (or at least in legislative instruments subject to parliamentary disallowance and sunsetting) unless a sound justification for using non-disallowable delegated legislation is provided.
That certainly has not been provided in this legislation. The report continued:
The committee requests the minister's advice as to why it is considered necessary and appropriate to confer on the Agriculture Minister a broad power to make grants of financial assistance, in the absence of any guidance on the face of the bill as to how this power is to be exercised.
I agree. There's more in that report, but I won't spend all my time talking about it. It is well worth a read.
I would like to talk about the issues that we have. I have to say that it is not just me that thinks that there are problems here; there's a large body of people who think that we could do better and we should do better. I will be moving amendments to the bill proposing that we look at a review mechanism; that we look at checks and balances and expenditure; and that we look to the Productivity Commission to become involved to address the effectiveness of it. The review would occur, ideally, before the plan is reviewed every four years, so that review can then be considered as part of the renewal. I will also ask in my amendments that the Productivity Commission be asked to review the effectiveness of the fund having regard to economic outcomes but also social and environment outcomes. All of us know that drought affects the economy, it affects the environment, and it affects the communities. So we've got to look at how this money is actually used across those three areas.
Colleagues, I'd briefly like to talk about the amendments, but I'd also like to talk about a missed opportunity in this legislation—and not only the poor governance aspect of it. What a golden opportunity for rural and regional Australia this is—$100 million a year and the idea of a plan. If we can get a consultative committee in place, what a difference this money could make to our communities. But if it's only spent on a pipe, what a lost opportunity that would be. If it's only spent on infrastructure and we don't pay attention to the impacts on the environment or the community, what a lost opportunity it would be. So I want to talk a little bit about the opportunity for leadership in rural and regional Australia, the opportunity to work with real people in real places—exactly like the member for Farrer talked about in her speech—and the opportunity that this money gives us not only to work with resilience and build people's resilience physically, emotionally and environmentally but to position ourselves for future droughts, which will come, by working with local government and community groups to say, 'Well, it's going to happen. How do we work together to plan for the future?'
Let me talk a little bit about planning. It's so much money. It could make such a difference if we plan around the integration of government policy. One of the failings I see in this bill is that we don't actually talk about how it fits in with other government policy. The one I know so much about is our policy on rural and regional Australia. I've been part of the committee looking at the future of regional development and decentralisation. Surely, a policy that's looking at drought has to look at regional development and decentralisation. One of the recommendations in that particular report is that we come up with what we called 'regional plans'. A regional plan gets everybody in the community together to look at Commonwealth, state and local government funding. We look at what we've got, and we see where there's duplication and how we can use more of it. Imagine if we were to develop these regional plans and then, together, we were able to link to some of this drought resilience money and say, 'Here's how this money can add value to the whole.' What a difference that would make! But it requires government to work across portfolios. I really encourage the minister to give some consideration to how we can value-add this money and get much better bang for our buck by looking at a strategic approach to significant planning—not just planning for the $100 million but planning for regional Australia and our long-term prosperity.
Not only do we have a problem, then, with missed opportunity around regional planning; I also want to talk a little bit about what I want to see in my own electorate of Albury-Wodonga, which, as the member for Farrer has just said, is in the Murray-Darling Basin. We've got this drought at the moment, and we've also got a problem with the Murray-Darling Basin Plan. There is a huge opportunity to use funding like this to bring communities together across difference—an opportunity to work with the communities of the Murray-Darling Basin. I just have to take issue with the member for Farrer. While she's the member for the New South Wales side of the river, I just want to say: it's a valley, and a valley knows no political boundaries. So we've actually got to work together across the New South Wales-Victorian boundary and also across the political boundaries that we have. That means working across both sides of parliament, and that's why I think this bill is so important. We actually need to think about how that money is going to be spent to give us the greatest bang for our buck.
I'm just going to bring my comments to a close and, in speaking tonight, I want to talk a little bit about my decision-making framework. This is a really important piece of legislation. This has the potential to be absolutely fundamental to the future of our rural and regional communities and, in particular, to help our farming communities manage drought. But there are so many problems at the moment. There are problems with grants. There are problems with review. I've mentioned them. I was thinking tonight about my approach to how I was voting. Is this legislation right in its concepts? I think it is. I think $100 million and a good way of working will make a really big difference. Could this legislation be good for Indi? Absolutely. And good for Australia? Absolutely.
The third thing in my decision-making framework is: is this legislation exhibiting good governance? I don't think so. Consequently, I'll be making some amendments. Are there any unintended consequences attached to this bill? Yes, I think there are. The stakeholders include the NFF, whom I've just quoted. The NFF thinks there are problems. Landcare thinks we could do it better. And I'm sure, if we opened it up wider, there would be many, many really good stakeholders who could value-add and tell us about the unintended consequences. An unregulated grants program will always cause us problems.
In my closing comments, I would like to acknowledge the departmental staff and the advisers here. You've been an absolute delight to work with, and I look forward to working with you on the amendments and, hopefully, on making this legislation the best legislation it can be so that I can support it and have the benefits come to my community and to Australia, just as we hope will happen.