BILLS (Second Reading): Investment Funds Legislation Amendment Bill 2021

12 January 2022

I rise to speak to the Investment Funds Legislation Amendment Bill 2021 and to support the amendment moved by the member for Whitlam. This bill makes several changes to the Future Fund and the investment funds that it manages. In summary, the bill would implement a new employment framework for staff of the Future Fund Management Agency, the agency that is responsible for the administration of the Future Fund. Staff of the agency would no longer be employed under the Public Service Act but would be directly employed under the Future Fund Act. The bill will make documents with respect to the Future Fund and Future Fund Management Agency's investment activities exempt from the operation of the Freedom of Information Act. It will implement a cap of $650 million as the annual maximum distribution allowed for the Medical Research Future Fund, along with other changes to the operation of the MRFF. It will shift administrative responsibility for the Emergency Response Fund from Home Affairs to the National Recovery and Resilience Agency, which follows the change to the Administrative Arrangements Order that shifted responsibility for emergency management from Home Affairs to the Prime Minister and Cabinet portfolio.

The staff of the Future Fund Management Agency are currently employed under the Public Service Act. This means that they are subject to the general employment framework that governs the Public Service. Schedule 1 of the bill will provide for a new employment framework for employees of the Future Fund Management Agency, where they would no longer be employed under the Public Service Act but, instead, be directly employed under the Future Fund Act. Labor recognises that the Future Fund Management Agency is a different kind of Public Service entity and that it operates in quite a unique employment market, similar to other Commonwealth entities such as the RBA and ASIC, which have arrangements to directly employ specialist staff. We note that this proposal is not a new one. Former Labor finance minister Lindsay Tanner, in a speech to the National Press Club in November 2009, said that the then government would be working with the Future Fund to examine options for the alternative employment framework, recognising the unique nature of the agency. However, Labor also notes that the Morrison-Joyce government has engaged in eight years of diminishing the capability of the Australian Public Service, including through its arbitrary staffing cap policy, resource and staffing cuts and a growing and wasteful overreliance on private consulting firms, contractors and labour hire to perform core public sector work. This is privatisation of the APS by stealth.

It tells you something about the employment and bargaining framework that this government has presided over that you have to staff out of the Public Service Act in order to retain high-quality staff and provide them with requisite pay and conditions. The Australian Public Service and the wider public sector have a crucial role to play in serving our community and shaping the future of our nation. However, years of cuts and outsourcing have undermined the capacity and capability of the Public Service.

Labor is committed to building a stronger Public Service that delivers better outcomes for the community, contributes to building a fairer and more inclusive Australia and is a better place to work. Labor recognises the essential role of the APS in designing and delivering services for the public good and in developing policy solutions to the challenges the nation faces, both now and into the future.

With respect to the FOI exemption, schedule 2 of the bill will exempt documents relating to the investment activities of the Future Fund Board of Guardians and the Future Fund Management Agency from the operation of the Freedom of Information Act. It would mean it would join the list of similar exemptions for documents in respect of the commercial activities of entities such as the Attorney-General's Department, Australia Post, the CSIRO, the National Housing Finance and Investment Corporation, and NBN Co. Again, like the proposed changes to the employment framework, the proposal is not new. Former Minister Lindsay Tanner, in that very same speech in 2009, said that Future Fund board documents in respect of acquiring, realising or managing investment by the Future Fund board would be provided with the exemption under the FOI Act. Former Minister Tanner said that this was on the basis that 'the Future Fund is of the view that some of its information which if made publicly available would place at risk the return that could be earned for the funds or limit the range of investments the board can access.' The possibility of disclosure of sensitive information under the FOI Act has created some uncertainty for other entities entering into arrangements with the Future Fund.

We understand that the rationale for the change that is before us today is still the same. Labor understands the importance of ensuring particular documentation relating to commercial activities has a requisite degree of protection. However, the government's track record on transparency and freedom of information in the last eight years it has been in office is not something that should fill anyone with hope. The Morrison government has systematically abused Australia's freedom of information laws and has resorted to repeatedly breaking the law to hide from the Australian public information they have a right to know. They abuse claims for cabinet confidentiality, unlawfully claim documents in a minister's office cease to exist when they switch roles and make sweeping claims for exemptions totally at odds with the spirit and letter of FOI laws. They deliberately starve the Office of the Australian Information Commissioner of funding and resources, exacerbating delays in releasing information that they're forced to make public. A recent report found that 41 per cent of requests for non-personal information were refused outright in 2019-20, and just 26 per cent were granted in full. This is a government addicted to secrecy. Notwithstanding all this, we do recognise that a balance needs to be struck between transparency that is in the public interest and the protection of commercially sensitive information that is important to the operation of the Future Fund.

With respect to the Medical Research Future Fund, schedule 3 of the bill makes a series of changes to the administration, and the most significant change is the proposal to implement a maximum annual distribution of $650 million from the MRFF from 2022-23. This amount will be set in legislation, but it will be open for the Treasurer and Minister for Finance to set another amount by disallowable instrument, and the legislated amount will be subject to a five-yearly review. A key point to make about this amount is that it represents yet another broken promise from the government. In fact, it's one of those occasions where it's a broken promise built upon another broken promise. We all remember that on the eve of the 2013 election the opposition leader, Tony Abbott, promised a number of things, including that there would be no cuts to health. But what did we get? Cuts and cuts. And now we are seeing cuts to the Medical Research Future Fund.

Of course, the government isn't spending the whole $20 billion it has in the fund. In the five financial years from 2016-17 since money has gone out of the fund, a total of $1.2 billion to 30 June has been spent on medical research. Australians know now more than ever the benefits of medical research, and so does Labor. The government's response is not to deliver on the initial promise to the MRFF, the medical research community and all Australians. We heard at the Senate inquiry the consequences of locking in this broken promise, and Labor will not support that.

There are other changes that are proposed for the MRFF in this bill which we do support, however: allowing for the direct transfer of funding from the MRFF to states and territories; and extending the duration of the Australian Medical Research and Innovation Strategy and Australian Medical Research and Innovation Priorities, which are used to assist the health minister in deciding how financial assistance from the fund is provided. We support allowing for grants to be provided by instalments.

With respect to the Emergency Response Fund, Labor hopes that the transfer of responsibility of the ERF to the newly established National Recovery and Resilience Agency will finally see some funding get out to communities that need it. For most of its existence since it was formed, in December 2019, this $4 billion fund has been earning the government hundreds of millions of dollars in interest. It finally spent $50 million in the last financial year, however its net earnings as of 30 June this year far exceed what has gone out: $726 million in net earnings versus $50 million spent. I support the amendments made by the member for Whitlam to this bill.