Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

Earlier today I was talking about the border security allocation in the appropriation bills. I was noting that we are stopping the boats, with no illegal arrivals by boat since 19 December last year. That is 70 days. We have also closed four detention centres, saving over $80 million. However, there is a lot more to do, as evidenced by the allocation for border protection contained in these bills.

The fourth significant allocation in the bills before the House is for just over $540 million for the Department of Defence for overseas operations. It is to supplement foreign exchange movements and is for the reappropriation of amounts between the appropriation acts aligning with Defence's current work programs.

This allocation reminds us of the fourth policy failure of the former government. It is like the four horsemen of the apocalypse, the fourth failure being in the area of defence. This must be sheeted home to the various ministers for defence, both cabinet and junior ministers, in the previous government. That group includes former cabinet members—the member for Hunter; Senator John Faulkner; the former member for Perth, Stephen Smith; and the junior ministers from the New South Wales Right—the member for Blaxland and my old nemesis in Eden-Monaro, Mike Kelly—and their left-wing mates, Greg Combet, Senator Kim Carr and the member for Lingiari. None of them can escape blame for the more than $25 billion that was ripped out of defence in the course of the last six years.

As a former chief of staff for the Minister for Defence I have been appalled by the mismanagement over recent years. The Rudd-Gillard-Rudd government showed an utter disregard for the service of the men and women of the Australian Defence Force. This has placed Australia's national security at risk not just now but over the long term. In fact, the Labor government cut almost $30 billion out of Defence investment through broken promises, deferments, delays and cancellations. Defence spending in 2012-13 alone was cut by 10.5 per cent to help plug Labor's budget black hole. This was the largest annual reduction since the end of the Korean War in 1953. The share of GDP spent on defence in the 2013-14 budget is just 1.59 per cent, the lowest level since 1938.

The coalition will restore spending on defence. There will be no further cuts to overall defence spending under a coalition government. As the Commonwealth's budgetary position improves, we will restore the real growth in defence investment that marked the final seven years of the Howard government and whose continuation was promised in Labor's 2009 defence white paper but not delivered by the Rudd-Gillard-Rudd government. So in defence we are also repairing Labor's mess.

In conclusion, what is one of the lessons we can reasonably reach after this little exploration in recent history? It is not that it was about Kevin Rudd and Julia Gillard that they lost the last election. It was the collective failure of the Labor Party. It was the frontbenchers' collective failure on their policies overall. That is what they need to fix. And that is what we are trying to fix to strengthen— (Time expired)

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the appropriation bills and the amendment moved by the opposition. Before I go to the substance of my speech, I did enjoy the reference by the member for Eden-Monaro to his long experience in the Defence portfolio, including as a chief of staff. It would be remiss of me not to point out that this was during the period of the children overboard affair, which saw the most gross politicisation of the Defence Force in our nation's history.

I move on to the substance of my speech, which will touch on the Reserve Bank and the transfer of $8.8 billion to the Reserve Bank Reserve Fund which is contained within Appropriation Bill (No. 3) 2013-2014. While Labor supports the supplementation of the RBRF, this transfer has been done in the most nakedly political manner. The decision to inject all the funds this financial year is driven by base political motives. The Treasurer wants to pad out this year's projected budget deficit, blame it on Labor and then reap the dividends from the RBA in future years to bolster those budgets.

The Governor of the Reserve Bank appeared before the House Standing Committee on Economics late last year, on 18 December. While I will not comment too much on this because the report is yet to be tabled, the public Hansard from this hearing does provide some startling revelations. These revelations include that at the first meeting of the Reserve Bank governor and the new Treasurer, when you would expect the Reserve Bank governor to outline his priorities for the Reserve Bank and ask for support from the Treasurer, he did not go to that meeting seeking the immediate injection of the $8.8 billion. He did not go to the member for North Sydney and say, 'I need all this money urgently—I need it now.' Furthermore, the governor indicated that the RBA expects to be in a position to return dividends to the government in August 2014. So we are in a situation now where, because of a decision by the Treasurer, we will see $8.8 billion injected into the Reserve Bank as late as May this year and then, only six or eight weeks later, the Reserve Bank will turn around and provide a dividend to the government. This is a pea-and-thimble trick of the highest order.

Those on the other side have already tried to claim that the last Labor government drove down the RBRF in some irresponsible manner. This is utter rubbish. According to the last RBA annual report:

The RBRF is essentially the Reserve Bank's capital. Its primary purpose is to provide a capacity to absorb losses when it is necessary to do so. The RBRF served this purpose when it was substantially depleted in 2009/10 and 2010/11 by large accounting losses as the exchange rate appreciated.

Let me repeat that point, from that direct quote from the annual report. The RBRF served its purpose as the capital for the Reserve Bank to handle movements in our currency.

We have no argument with the need to supplement the RBRF. What we have an argument with is the naked political manner in which the Treasurer is doing this. In his testimony, Governor Stevens was very clear that there was no crisis necessitating the urgent top-up. He said:

… the bank was not insolvent and not close to insolvent. The notion of insolvency for a central bank is not one anyway.

So we have an artificial, confected crisis by the Treasurer. We have him going to a meeting where he proposed a one-off injection with the goal of having his future budgets bolstered by this nakedly political move. This is consistent with the various assumptions and changes in parameters that we witnessed in MYEFO. It is the Australian taxpayer that pays for all this because the annual interest bill on this $8.8 billion transfer is, on current long-term Commonwealth bond rates, around $400 million or just over $1 million a day.

The interest cost of this political exercise for just 10 days equates to the cut I would like to talk about next, which is also contained in these bills, and that is the sneaky and cruel cut of $11½ million to the Building Multicultural Communities Program. In November last year I raised in the Federation Chamber the situation concerning two community groups in Charlton—the Filipino-Australian Society of the Hunter Valley and Vedic Samiti Newcastle—as well as the Ethnic Communities Council of Newcastle and Hunter Region. These groups had been successful in receiving grants through the Building Multicultural Communities Program; however, they were advised by the new government that this funding was under review. I want to make this abundantly clear: these grants were not election promises by the Labor Party. These grants were from an established program and the awarding of these grants was announced by the previous government before the caretaker period began. They were awarded under a proper process and fully funded in the 2012-13 budget.

I wrote to the Minister for Social Services, Minister Andrews, in November on behalf of these organisations calling for the government to honour these commitments. The only response I received was a pathetic one-line response from the minister's parliamentary secretary that advised that the Australian government had made a decision about the BMCP funding and the outcome of this decision had been communicated to all organisations that were awaiting this advice. It was a one-line response where the parliamentary secretary did not even have the guts to repeat their decision to cut a government program that was fully funded.

I have kept in close contact with these groups, as has my colleague the member for Newcastle with affected groups in her electorate. The grant cut is very disturbing. These groups have now been officially advised by the Department of Social Services that they will not be receiving this funding. This is truly a shocking move by a callous and calculating government, which says one thing in opposition and does another when it is in government. This funding had been allocated, including $22,000 to the Filipino-Australian Society to build a new kitchen and install additional doors in their hall. I met members of the society when this grant was announced and I cannot emphasise enough how grateful and excited they were about this grant and how much they were looking forward to using this money to grow their society and improve the services they provide not just to Filipino Australians but to the broader community that enjoys the facilities around the hall. This society has done great work raising funds and goods to help victims of Supertyphoon Haiyan in the Philippines. It is an absolute disgrace that this funding has been cut by the new government.

Vedic Samiti was to receive approximately $100,000 to extend their hall, including further car park provisions and an upgrade to their audio system. This was another great example of a local community using grants smartly to improve their facilities and provide additional services to the very significant Indian community that calls the electorate of Charlton and the broader Hunter area their home. This is another ethnic group that is suffering under the new government. This is an absolute disgrace and we all keep fighting to continue.