Bills Digest 110 1995-96
Natural Heritage Trust of Australia Bill 1996
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 25 June 1996
CONTENTS
Date Introduced: 19 June 1996
House: House of Representatives
Portfolio: Environment, Sport and Territories
Commencement: Royal Assent
To establish a Natural Heritage Trust of Australia Reserve, with some
of the proceeds of the partial privatisation of Telstra, which will fund
certain environmental projects.
The environment provides social, economic, scientific, cultural, recreational
and aesthetic benefits to all humans. Environmental issues have continued
to grow in importance and prominence, with problems such as Climate Change,
Ozone Depletion, Deforestation, Salinity and loss of Biodiversity finding
their way on to the international and domestic political agenda. Environmental
problems are a concern of humankind because Earth has only one air system
and one water system and therefore, eventually, all environmental problems
affect all people.
Australia is a party to a number of international instruments that attempt
to protect aspects of the environment from further destruction. These
include:
- Convention for the Protection of the Ozone Layer
- Convention on Biological Diversity
- Convention on the International Trade in Endangered Species of Wild
Flora and Fauna (CITES)
- Convention on the Transboundary Movement of Hazardous Wastes and their
Disposal
- Convention on the Law of the Sea
- World Heritage Convention
- Framework Convention on Climate Change
- Convention to Combat Desertification
- Convention on Wetlands of International Importance especially as Waterfowl
Habitat (Ramsar)
Australia has obligations under international law (by virtue of being
a party to the above treaties) to protect and conserve the environment
and to utilise environmental resources in a sustainable manner. The international
law recognises a concept of intergenerational equity, in that future generations
have a right to inherit an environment that is at least as good as the
one that we are living in and that meets their economic, social, cultural,
recreational and aesthetic needs.
Australia's environment is unique and Australia is the only developed
megadiverse country in the world. Aspects of Australia's influence in
environmental protection have received international praise. For example,
the International Association for Impact Assessment presented the federal
Environment Protection Agency with its 1995-96 institutional award of
excellence for 'demonstrated leadership in, and commitment to, environmental
assessment'.(1)
However, Australia has not always had an exemplary environmental record.
For example, Australia failed to meet the agreed timetable for interim
measures to reduce greenhouse gas emissions (to limit emissions to 1990
levels by the year 2000) under the Climate Change Convention. This is
due in part to the fact that Australia relies heavily upon fossil fuels.
Nevertheless, Australia's greenhouse emissions record on a per capita
basis has been claimed to be the worst in the world(2).
Even though Australia was one of the countries instrumental in bringing
the Biodiversity Convention into existence, in practise Australia has
a poor record on loss of biodiversity. Of Australia's 258 known species
of mammal, already 138 species are either extinct, endangered or potentially
vulnerable(3).
In the pre-election policy document entitled 'Saving our Natural Heritage',
it was announced that:
- A Coalition government will establish a $1 billion Natural Heritage
Trust of Australia which will be devoted to protecting and rehabilitating
Australia's natural environment; and
- This Trust will integrate the joint interests of environmental protection
and sustainable development(4).
The document went on to announce funding measures in the order of:
- $318 million over five years to the National Vegetation Initiative
- $32 million over five years to the National Land and Water Resources
Audit
- $163 million over five years to the Murray Darling 2001 project
- $85 million over five years to the National Rivercare Initiative
- $100 million over four years to the Coasts and Clean Seas Initiative
- $80 million over four years to the National Reserve System to preserve
Australia's biodiversity(5)
In addition, smaller financial commitments were made to programs such
as the National Wetlands Program, the Endangered Species Program, the
World Heritage areas, the National Weed Strategy, waste management programs
and measures designed to combat air pollution. Commitments were also made,
among other things, to the implementation of the National Forest Policy
Statement and to the phasing out of export woodchips from areas other
than Regional Forest Agreement areas by the year 2000(6).
The initial funding for the Natural Heritage Trust of Australia is to
come from the proceeds of the partial privatisation of Telstra. The Telstra
(Dilution of Public Ownership) Bill 1996 was introduced into the House
of Representatives on 2 May 1996 and passed on 9 May 1996. It was introduced
into the Senate on 9 May 1996 and has been referred to the
Environment, Recreation, Communications and the Arts References Committee
for
inquiry and report by 22 August 1996.
During the election campaign preceding the 2 March 1996 election, the
then Opposition Leader Mr John Howard MP confirmed that a Coalition Government
would not provide additional funds to pay for its $1.15 billion environment
policy if the Parliament refused to approve the one-third sale of Telstra.(7)
Clause 4 of the Bill establishes the Natural Heritage Trust of
Australia Reserve.
Clause 5 declares the Natural Heritage Trust to be a component
of the Reserved Money Fund after the Financial Management and Accountability
Act 1996 commences. At the time of writing this digest, that proposed
legislation had not been introduced. If the proposed legislation does
not commence then the Reserve is established as a trust account under
the Audit Act 1901.
Clause 6 requires unused money in the Reserve to be invested
and the proceeds of any investment to be paid into the Consolidated Revenue
Fund. An amount equal to the amount paid into Consolidated Revenue is
then transferred to the Reserve. This is consistent with section 81 of
the Constitution which reads:
All revenues or moneys raised or received by the Executive Government
of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated
for the purposes of the Commonwealth in the manner and subject to the
charges and liabilities imposed by this Constitution.
Clause 8 lists the purposes of the Reserve as supporting specific
projects (for example the Murray-Darling 2001 Project) and other more
generic matters such as 'environmental protection', 'sustainable agriculture'
and 'natural resources management'. These are defined in the proposed
sections 15-17 respectively.
Clause 9 restricts the use of money in the Reserve that originated
from the partial privatisation of Telstra to five projects only: the National
Vegetation Initiative, the Murray-Darling 2001 Project, the National Land
and Water Resources Audit, the National Reserve System and the Coasts
and Clean Seas Initiative or any matter ancillary or incidental to those
projects.
This means that donations, further appropriations to the fund, if any,
and interest earned upon investments (or on the existing money) transferred
back from the Consolidated Revenue Fund may be applied to the other purposes.
Although there is nothing in the proposed legislation that obliges money
to be spent upon a particular purpose.
Clauses 10-14 inclusive specify the primary objectives of the
five major projects that the Reserve designates as its purposes to fund.
Briefly, these include:
- the National Vegetation Initiative - which aims to conserve native
vegetation and biodiversity, and by the means of revegetation, restoring
degraded land and water;
- the Murray-Darling 2001 Project - which aims to restore the Murray-Darling
Basin to achieve a sustainable resource for the natural systems and
communities surrounding it;
- the National Land and Water Resources Audit - which aims to estimate
the direct and indirect effects of land and water degradation on the
Australian economy and on the quality of the Australian environment.
Such estimates will help establish a baseline to assess the efficacy
of land and water restoration programs;
- the National Reserve System - this implements part of the Convention
on Biological Diversity by setting aside areas that protect and maintain
biological resources, ecosystems and viable populations of natural species
in their native habitat; and
- the Coasts and Clean Seas Initiative - which aims to protect marine
biodiversity and protect coastal areas from pollution and other environmental
threats. Another aim is to develop an oceans policy for Australia.
Clauses 15-17 detail the other projects that the Bill will allow
Reserve moneys (other than those moneys specifically received from the
sale of shares in Telstra) to be directed to. These include:
- environmental protection - the maintenance, conservation and preservation
of the natural environment, biodiversity and the minimisation of waste
production (including preventing or combating pollution) and research
into the Australian natural environment and biodiversity, etc; The clause
does not expressly provide for research into pollution or waste minimisation
or disposal.
- sustainable agriculture - the promotion of agricultural practices
that are economically, socially and ecologically viable. This includes
the sustainable use of Australia's biodiversity.
- natural resources management - which includes the use of soil, water
and vegetation and activities concerned with the development or conservation
of those resources. Unlike the preceding clauses, Clause 17 does not
refer to 'sustainable use' of the natural resources like water. Neither
does it make any mention of encouraging 'environmental best practice'
or like concepts.
Clause 18 sets out certain payments from the Reserve that are
authorised under paragraph 8K. These include, for example, payments under
the Rural Adjustment Act 1992 provided that they are connected
with property management planning in relation to a farm unit.
Clause 19 inserts a requirement that prior to any amount being
debited from the Reserve and given to a State, there must be a written
agreement between the Commonwealth and the State. The two Ministers given
authority to sign such an agreement on behalf of the Commonwealth are
the Minister for Environment, Sport and Territories and the Minister for
Primary Industries and Energy.
Clause 20 is similar to Clause 19 in that it requires a written
agreement between the Commonwealth and a person or other body (other than
a State), prior to the grant of financial assistance being given from
the Reserve.
Clause 21 requires the Minister deciding to spend money from
the Reserve to have regard to the principles of ecologically sustainable
development and 'such other matters as the Minister concerned considers
relevant'.
Proposed subsection 21(3) defines the principles of ecologically
sustainable development. Among them are the notion of intergenerational
equity, the need to protect biological diversity and maintain essential
ecological processes and life-support systems. In determining the application
of the principles, a number of guidelines are to be followed, including
that where there is a threat of serious or irreversible damage to the
environment, the lack of full scientific certainty can not be relied upon
to postpone or prevent action being taken to protect the environment.
This is a rule of customary international law as well.
The proposed Part 4 deals with the financial aspects of the Reserve.
Clause 22 transfers the first $1 billion dollars received from
the sale of shares in Telstra to the Reserve. Should less than $1 billion
dollars be received then obviously the Reserve will receive only the amount
accrued.
Clauses 23 and 24 allow for budget appropriations, gifts and
bequests to be added to the Reserve.
Clause 25 provides that if a grant of financial assistance had
been made from the Reserve and is repaid or partially repaid, the repayment
will be transferred back into the Reserve. Similarly, Clause 26
provides for moneys repaid under a written agreement to be transferred
back into the Reserve.
Clauses 27 to 29 inclusive are all similar again in that money
earned from Reserve money (whether by way of income or asset disposal
or other related projects) must be transferred from the Consolidated Revenue
Fund to the Reserve.
Part 5
Clause 30 establishes the Natural Heritage Board comprising the
Minister for Environment, Sport and Territories and the Minister for Primary
Industries and Energy. The proposed section requires the Ministers to
consult with each other on any decision about spending or investing the
Reserve money, in any decision to make a recommendation to the Governor-General
about regulations or otherwise under a law that relates to the Reserve.
One of the functions that the Ministers must do is to prepare estimates
in accordance with clause 31. The estimates of debits are to be
prepared for each financial year (or other period that the Ministers acting
as the Natural Heritage Board determine). The object of this process is
to manage an investment strategy for the Reserve and subclause 31(4)
provides that money can not be debited from the Reserve other than in
accordance with the estimates.
There is no mechanism for ensuring that all the listed projects will
be funded and the priority of funding is left to the Ministerial discretion
of the two Ministers named.
Proposed section 32 provides that the Reserve must have a minimum
balance (and provides a formula for calculating the minimum) for each
financial year after 1 July 2001. The base amount is 30% of the amount
provided by the sale of shares in Telstra - a maximum of 30% of $1 billion.
That amount is not indexed prior to 1 July 2001 but there is a formula
for indexing it for each subsequent year.
Proposed section 33 requires an annual report to be prepared
each year in the usual manner.
Proposed section 34 provides that financial statements must be
provided to the Auditor-General and sets out the actions the Auditor-General
must take.
Proposed section 35 provides that the Minister for Environment,
Sport and Territories may delegate to the Secretary of the Department
or to the Director of National Parks and Wildlife or to other SES officers
any of his or her powers other than the ones under proposed sections 30-31
(ie the estimates and spending decisions).
Clause 37 prevents gifts or bequests to the Reserve from being
conditionally bestowed. For example, an environmental organisation or
an individual wishing to donate to the Reserve could not specify that
they wanted their donation to be put towards the Murray-Darling Project
2001.
In order for such gifts or donations to be tax deductible, an amendment
would be necessary to the Income Tax Assessment Act 1936.
Clause 39 provides that moneys debited from the Reserve are included
within definitions used in other legislation. For example, the Rural
Adjustment Act 1992 in section 21(1) requires that payments by the
Commonwealth to a State must be done 'out of money appropriated by the
Parliament for the purpose'. However, item 39 proposes to include moneys
debited from the Reserve within this definition.
The Rural Adjustment Act 1992 is designed to promote 'a better
financial, technical and management performance from the farm sector'
among other objectives. Sustainability is referred to in the Rural
Adjustment Act 1992 but in the sense of sustained productivity and
competitiveness rather than environmental sustainability.
Clauses 40-42 provide that the Governor-General may make regulations
under the Act and establish the transitional guidelines. An example being
that all the expenses of investment of money in the Reserve are to debited
from the Reserve.
(1). Press Release of Senator the Hon Robert Hill 23 June 1996.
(2). The Impact of "Greenhouse 21C": An Assessment of the
Federal Government's Greenhouse Plan of Action (3 April 1995) The
Australia Institute.
(3). Kennedy, M. What Future for Australia's Endangered Mammals (1990)
27 Wildlife Australia 3-5.
(4). p1 Saving our Natural Heritage.
(5). Ibid p1-2.
(6). Ibid p2.
(7). AAP 25 February 1996.
Susan Downing ph 06 277 2784
25 June
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
PRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9032
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
This page was prepared by the Parliamentary
Library, Commonwealth of Australia
Last updated: 25 June 1996
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