BILLS - Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018, Aboriginal and Torres Strait Islander Land and Sea Future Fund (Consequential Amendments) Bill 2018 - Second Reading
Posted in Pat's Speeches | November 28, 2018
I rise to speak to the Aboriginal and Torres Strait Islander Land and Sea Future Fund (Consequential Amendments) Bill 2018 and related bill. The bills establish a financial asset fund, the Aboriginal and Torres Strait Islander Land and Sea Future Fund, to support additional payments to the ILC, the Indigenous Land Corporation. I think it'll be called the Indigenous Land and Sea Corporation now. The fund will replace the Indigenous land account. Funds currently allocated will be managed by the Future Fund's board. The fund will be credited with amounts equal to the balance of the land account's special account and the value of the investment of the land account. The fund's special account will then be debited to provide an annual payment to the Indigenous Land and Sea Corporation to be credited to and paid from the ILC funding special account.
The finance minister and Indigenous affairs minister may also determine, once in a financial year, that an additional payment is to be made to the ILC after considering the advice of the Future Fund's board about the impact of any additional payments on the sustainability of annual payments to the ILC. The Future Fund board will be responsible for deciding how to invest the Aboriginal and Torres Strait Islander Land and Sea Future Fund to enhance the Commonwealth's ability to make annual payments or any additional payments to the Indigenous Land and Sea Corporation. The Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018 requires the responsible ministers to issue an investment mandate to the Future Fund's board regarding the investment of the Future Fund.
The purpose of the investment mandate is to provide a mechanism for the government to provide strategic guidance to the Future Fund board on its expectations for the investment of the Aboriginal and Torres Strait Islander Land and Sea Future Fund. The Indigenous land account has achieved an average return over the past three years of approximately CPI plus 1.5 per cent per annum. Under the new arrangements, the government expects that the account will achieve a return of CPI plus 2.6 per cent after fees. Some would say that's quite a substantial increase. The expenses associated with the investment and administration of the fund incurred by the Future Fund will be met out of the fund itself.
Labor's position is to support the intent of this legislation, and we accept the need to improve the financial sustainability of the fund. However, after consultations with stakeholders, we took the view that there are a number of ways in which the legislation could be strengthened in order to protect the land fund for future generations, so we have requested a number of minor amendments to the bill which we believe will help achieve this.
First, we have requested of the government that they include provisions in the bill so that the minister must have regard to the sustainability of the fund prior to making any additional transfers. This will help ensure that these transfers are not used to deplete the fund over time. We also requested that the long-term sustainability be a necessary consideration when the minister sets the investment mandate. I am pleased that the government will be soon moving amendments to address both these issues.
Our second concern relates to the removal of an oversight role for the ILC in relation to the fund. At present, the ILC Board provides oversight of this account. This is not an active oversight role but, rather, a way for the ILC board to maintain a clear line of sight as to how the account is being invested. The bill before us in its original form removed this. We did not support this. At a time when there are growing calls for a greater Indigenous say over issues that impact their lives, we felt the removal of the oversight was inconsistent with the need to maintain as much Indigenous involvement as possible. However, we welcome the government's decision to require the Future Fund to brief the ILC Board on the fund's investment decisions, restoring that important oversight for the ILC. We note that this will be an active oversight role that is not designed to interfere with the functions of the Future Fund board but, rather, to ensure that the fund, which is designed to assist Indigenous Australians, is never removed entirely from Indigenous involvement.
We also welcome the amendment that requires the minister to consult with the ILC in relation to the investment mandate. This, once again, provides an opportunity for important input from Indigenous Australians into the management of the fund.
We believe these amendments strengthen the bill and we thank the minister for working with us to achieve a bipartisan position. Having reached agreements on these matters, we will support the bill.