Second Reading Speech
Julie Bishop (Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women's Issues)I move:
That this bill be now read a second time.
The Higher Education Endowment Fund (Consequential Amendments) Bill 2007 amends the Future Fund Act 2006 and the Income Tax Assessment Act 1997 to support implementation of the Higher Education Endowment Fund.
I have been assisted in the preparation of this bill by the Treasurer and the Minister for Finance and Administration, in their capacity as the responsible ministers under the Future Fund Act.
As detailed in my previous speech, the Higher Education Endowment Fund is being established to enhance the funds that are available to be invested in the higher education sector. Announced as part of the 2007-08 budget, the endowment fund will be managed by the Future Fund Board of Guardians.
In recognition of the separate purposes for which the two funds have been established, they are supported by separate legislation. This also has the benefit of limiting the number of amendments required to the Future Fund Act.
I will first discuss material changes to the Future Fund Act and Income Tax Assessment Act which support the establishment and operation of the Higher Education Endowment Fund.
I will then discuss material changes that the government is initiating to improve the operation of the Future Fund Act, changes that are mirrored in the Higher Education Endowment Fund Bill.
Future Fund Act 2006
Expansion of the functions of the Board of Guardians
Consequential amendments to the Future Fund Act make it clear that the Future Fund Board of Guardians will now have two distinct streams of work. This bill will alter the Future Fund Act to support the Future Fund Board of Guardians take on the investment management function for the Higher Education Endowment Fund.
It will also make clear that each fund will have a separate investment mandate. As noted in my previous speech, work will soon commence on developing an investment mandate for the Higher Education Endowment Fund.
The investment mandate of the Future Fund, and the general operation of the Future Fund, will remain the responsibility of the Treasurer and the Minister for Finance and Administration, as supported by the Future Fund Act.
The Minister for Finance and Administration will remain responsible for the administration of the Future Fund legislation, including the expanded functions of the Future Fund board for the investment of the HEEF.
Ministerial Directions on Investments
Responsible governance is a priority for this government. This requires that we review and update legislation. This bill supports one such change to the Future Fund Act which is mirrored in the new legislation for the endowment fund.
This bill will ensure that investments made by the Future Fund Board of Guardians are determined by the board, not by ministerial direction, within the broad guidelines of the investment mandate.
Both this bill and the Higher Education Endowment Fund Bill specify that the responsible ministers cannot direct the Future Fund Board to use the assets of the fund to invest in a particular financial asset, for example, shares in a particular company.
It also prevents the responsible ministers from issuing a ministerial direction that has the effect of requiring the board to use the assets of the fund to support a particular business entity, a particular activity or a particular business.
These amendments will ensure that the Board of Guardians deliver the best outcomes for the government and for all Australians.
Income Tax Assessment Act 1997
The Higher Education Endowment Fund Bill will allow the Future Fund Board of Guardians to accept gifts of money to be included as part of the endowment fund.
To support this function, changes to the Income Tax Assessment Act are required. This change creates a new avenue for business and the general community to make philanthropic donations to the sector.
I commend the bill to the House.
Debate (on motion by Mr Griffin) adjourned.