Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Hansard source

I rise to speak on the Excise Tariff Amendment (Fuel Indexation) Bill 2015. Recently I was speaking with some people who live in my electorate about the very issue of petrol excise. The general consensus amongst them was that if they knew that the excise was going directly into funding roadworks then they would not be opposed to it. And that is exactly what this proposal now does.

Can I say from the outset, I commend the team on Labor's side that put this package together and also the government for agreeing to it, because, effectively what we are now agreeing to is a measure that ensures that some of the money that is collected through the excise on petrol or diesel or whatever it is goes directly into funding roadworks around the country. And even more importantly, it goes into funding roadworks in a very fair and equitable way. I will come back to that in a little more detail later on.

What is also important in respect to this measure is that it also goes a long way, as many other speakers on this side of the House have said, towards reinstating some of the funding that has been cut to local government across the country by the Abbott government over the last couple of years. These are real cuts made to local government because the financial assistance grants to each and every one of the councils around Australia was frozen for a three-year period, costing local government nearly $1 billion over that three-year period. By cutting $1 billion from local government, what it means is that each council then has a choice: it can either cut funding from programs and projects within its council area or it can increase rates. But either way, it has got to make a tough decision as a result of a cut made to it by the federal government.

As we have seen across the country, particularly in outer metropolitan councils and in remote and rural councils, the impacts of these cuts have been felt even more. Then there was about $200 million cut from frontline community services across the country, many of which were jointly funded between local government, the federal government and the local organisation that was providing the service. Services such as counselling, legal advice, youth and aged care programs were all being provided or delivered by local governments around the country. I am aware of some of those services in my own electorate that are going to cease as a result of having their funding cut.

Again, because it is local government that is delivering those services, in many cases the community will hold them responsible and the local government, knowing the benefits of the services they are delivering, will not want to cut those services but will have to pick up the shortfall of the funding cuts from the federal government. And so again local government wears the bill of federal government cuts to it. Then there was also the $1.3 billion cut to pensioners across the country as a result of the government walking away from an agreement which has existed since 1993, initiated by the federal government, to pay part pensioners a whole range of concessions when they became of pension age and were eligible for a part pension. One of the critical concessions they were entitled to was on council rates. And again, councils have been under pressure to make decisions about whether they would continue to fund the concessions. But as it has turned out, my understanding is that most of the costs have been picked up by state governments.

However, when the state governments pick up that $1.3 billion, it comes at the expense of other state government priorities, which include roadworks. So again we see funding to roads and other government services either cut and the work is not done or some other level of government has to pick it up. Even if it is the state government, it still means that it comes at the expense of some other work. So this proposal effectively puts money back on the table. I have not even touched on some of the other cuts such as to health and hospitals, which were also impacted.

I want to talk briefly in the time that I have about how this proposal impacts on South Australia. The first point I want to make about the impact on South Australia is this: in the 2014 state election campaign in South Australia, one of the key issues raised by the RAA, the Royal Automobile Association, was that of trying to get a commitment from the two major parties for increased road funding. The association wanted the increased road funding because the roads across the South Australia need serious investment into them. There is no doubt at all that in many cases accidents that we see across Australia quite often are attributed to bad roads, badly maintained roads, poor designs and the like. So spending money on improving the road system saves lives of people throughout our country. But it also means that you can spend money on fixing up roads because in recent decades we have allowed a growth in homes in and around the urban areas and around the CBDs but we have not matched that growth with a growth in spending on the roads that service the people that ultimately are going to live in and around those areas.

But for South Australia there are some additional matters that are relevant. The first thing is: with respect to the level of infrastructure spending in South Australia, in the Abbott government's first budget, only four per cent of the $50 billion of national infrastructure spending was allocated to South Australia, only four per cent. Then in the same year the $18 million of supplementary local road funding was also cut. There was a longstanding supplementary allocation made to South Australia because some 20 or 30 years ago a formula was put in place which disadvantages South Australia because South Australia, with 11 per cent of the roads and over seven per cent of the population, only gets just over five per cent of local road funding. To make up for that, South Australia has for years picked up some supplementary funding.

And then we saw in this year's budget some further cuts. There was $130 million cut from rail projects, $126 million cut from the South Road project, $62 million cut from other road projects, $4 million cut from bridges and $2.5 million cut from heavy vehicle safety improvements. Again, this was all money that would have been relevant and important to make South Australians roads safer.

This proposal puts the money into the Roads to Recovery funding pool. The Roads to Recovery funding pool is distributed independently of politics under a formula that has been already worked out and is already in place and which, I believe, is very fair. In South Australia's case, under that program South Australia gets between eight and nine per cent of its share of local road funding, which is what it should be in all other respects, so it gets the right amount. So, in respect of what has been agreed on here for South Australia, it is a good outcome because it means—I have put it at roughly a figure of—an extra $100 million that will be allocated to South Australia. But, more importantly, whatever share it gets will be based on the Roads to Recovery funding share, which is an equitable distribution of road funding in this country.

The last thing I say—because I notice that the Treasurer is here and he wants to wrap this matter up—is that again, importantly, putting money into road projects around the country is one of the best ways of stimulating the economy. I do not think anybody would disagree with that. Right now, at a time when we have unemployment in South Australia above seven per cent and youth unemployment much higher than that, investing in infrastructure projects in the country is the best thing we can do that can immediately create jobs and put some of those people back into employment. And it can put them back into employment having constructed projects that are essential for the state, will improve road safety and, quite frankly, will improve business efficiency throughout the state, and that means better productivity.

As I said from the outset, I believe that consumers, the people who pay this money, will not object to it, will not resent paying it, if they know that the money that they pay as a petrol excise goes directly into funding the roads. That is what this proposal does, and that is why I support it.

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