Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

These measures will pass the House with the support of the opposition, and I envisage they will pass the House today. I thank the Treasurer and the Minister for Finance for our discussions today. It is the case that agreement has been reached. Labor sought and received an agreement that an additional $1.1 billion in Roads to Recovery funding for local government, which is the equivalent of the first two years of revenue from the fuel indexation, will be given to local government. This is very good news for rural and regional roads and local roads right across the country.

It is the case that the Abbott government has frozen the indexation of financial assistance grants which has resulted in a $925 million cut to local government over three years, but this will result in a $1.1 billion boost to local councils over the next two years, which I know is something local government will very much welcome. In fact, local has already welcomed it. The Australian Local Government Association in response to Labor's proposal to the government, before the government had announced its acceptance of Labor's proposal, said in a press release: 'The Australian Local Government Association welcomes and strongly supports the proposal today by the ALP to direct the revenue from the first two years of fuel excise indexation, estimated to be $1.1 billion, towards additional Roads to Recovery funding for local government.'

The president of the ALGA, Mayor Troy Pickard, said: 'We applaud the opposition's focus on local government and their recognition in this policy initiative of local government's important role in developing economies and creating jobs through projects funded through the Roads to Recovery program.' The president goes on to say: 'This initiative is particularly welcome at a time when local government is under financial pressure, following the decision to freeze indexation of financial assistance grants costing councils an estimated $925 million in the period to 2017-18.' So it is very clearly the case that local government recognises the initiative of the Labor Party today—the agreement which the Labor Party sought from the government—and what the government has provided is very welcome.

Of course mayors and councils right across the country have infrastructure programs that they have been hoping for and working towards. They have had them in the top drawer, ready for the day they would be able to fund them, a time when funding would be available from a higher level of government, federal or state. They can now be funded and built. And that is very important, because it is estimated that 11 per cent of the roads managed by councils across the country are in a poor or very poor condition. We talk about the need for infrastructure, and big infrastructure projects are very important. But what is also important is the infrastructure that is the responsibility of local government.

You have bridges across the country which are falling into disrepair. Trucks have to slow down on them or trucks over a certain weight are not allowed to go on them. You have country roads, which are very important—because our agricultural and regional products are moved around the country—falling into disrepair. This extra $1.1 billion, which the Labor Party insisted upon as part of our negotiations with the government, is very welcome. When the Labor Party goes into these discussions, we make sure that we have a positive dividend for the people of Australia at the end of those discussions.

That is in contrast to the Greens, who could not negotiate their way out of a paper bag. They negotiated with the government—and I use the word 'negotiated' lightly—they capitulated to the government on pensions, and in return they got six weeks extra discussion on the tax white paper, only to have the government completely rule out the thing they had asked for. That was only capped by their capitulation to the government on the debt limit—abolishing the debt limit—which they had railed against the government on. They had said, 'We want the Intergenerational report to deal with climate change'. The government agreed to that, and they got a couple of paragraphs in the Intergenerational reportone of which said, 'climate change might be good'. So: well done, Greens, for your negotiation strategy. That is not the approach taken by the Labor Party. We make sure that we have a positive benefit for the people of Australia from our discussions.

In effect, from next week, these funds will be available for local government. They will be applied to the road funding backlog to fix roads and to invest in infrastructure right across the country. The national infrastructure audit released just last month made the following point with respect to rural roads in particular:

Rural roads owned and operated by local councils are important for local economic activity, and are an important part of the nation's transport network, providing the 'first and/or last mile' of many land-based supply chains. There is evidence of a maintenance deficit across many of these roads. This is a particular issue for local governments in rural areas with large road networks and declining income bases.

But it is not just a matter for rural roads.

I note the Parliamentary Secretary to the shadow Treasurer, the member for Chifley, has joined us. Perhaps it was so that I could point out to the House that Blacktown City Council is one of the biggest beneficiaries in the country of the boost to Roads to Recovery. It is the largest council in New South Wales by population. And in fact the formula is one which particularly benefits Blacktown council. Because of population, kilometres of roads and the level of disadvantage, Blacktown council stands to be very big winner out of the announcement made by Bill Shorten, the member for Maribyrnong and the Leader of the Opposition, Anthony Albanese and myself earlier today and of the agreement reached with the government.

It is the case that the opposition will facilitate the indexation of fuel excise. That is a change of position that is readily and freely acknowledged by me and by us. Because when the circumstances change, we change our position—as was famously once said by an economist who finds favour on this side of House if not on that side of the House.

Mr Robert interjecting—

We know the member for Fadden thinks Keynes is a communist conspiracy but actually he has played a pretty positive role in the economic management of the world over the last 80 or so years.

Mr Robert interjecting—

Aggregate, demand, supply—who would want to be interested in all of that says the member for Fadden. Who would want to stimulate when there was a downturn?

Mr Robert interjecting—

Old Herbert Hoover over here. Let them eat cake he says. It is the case—

Mr Robert interjecting—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

We could have a bit of silence, thank you.

Mr Robert interjecting—

I am talking to you interjecting.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

He is just showing the Australian people what he is made of—I am all for it. His vote goes down every time he speaks. It is the case that the budget deficit has doubled in the last 12 months. Forget about my economic statement in the last government. Even compared to this Treasurer's budget, the budget deficit has doubled over the last 12 months on this Treasurer's watch. When the budget deficit doubles, it may not be anybody's fault but the Treasurer's. But everybody has an opportunity make a contribution and that is what the parliament will do today because this Treasurer has doubled the budget deficit and that means difficult decisions are necessary.

The other point to make is that the government, through their tactics, decided to implement this by a regulation, which meant that if this particular instrument, the legislation moved by the Treasurer just a moment ago, is not passed by this House and in the other place then the excise collected over the last 12 months or so would need to be refunded. That is not necessarily a bad thing but it is a matter of who it would be refunded to. Would it be refunded to every motorist who has paid it? No, that would be impossible. There are no records of who has paid this increase in excise around the country. It would be refunded to the oil companies. While some people might feel comfortable writing a cheque for $123 million or so to Australia's large oil companies, I would not. So that presents the House and the other place with a conundrum, one which we are settling tonight by voting for this legislation so the $123 million is used for the benefit of the people of Australia, not refunded to the oil companies.

The final point is: as I said before, every council and every mayor has an infrastructure program ready to go, has projects ready to roll out. What we see when those projects roll out, because of these $1.1 billion, will be a stimulus package—much to the chagrin of the anti-Keynesian at the table representing the government. The government has recognised the need for a stimulus package with the instant asset write-off, which is time-limited—unlike the Labor Party's instant asset write-off when we were in office, which was permanent.

The government has in effect brought in a stimulus package. We know that economic growth is in need of a boost around the country. We know that the figures, despite the Treasurer's rhetoric, were concerning on many levels in the last iteration of the national accounts and we know that there is a need to stimulate investment, particularly in the non-mining sector, as Australia moves through the economic transition. The Labor Party will facilitate that by providing just over $1 billion to local governments to engage in infrastructure spending.

Infrastructure spending is very labour intensive. When a council is improving a road, building a new road, fixing an intersection or upgrading a facility, it takes workers. This is labour intensive. Consider the fact that our unemployment rate is higher than during the Global Financial Crisis; it is higher than countries which we normally compare ourselves with. When we got through the Global Financial Crisis with it lower than those countries and under this government's watch it has gone higher than those countries then there is a case for investment with a view to ensuring jobs for people right across the country in local government. So therefore the Labor Party will support this and support its passage through the House this evening.

This has not been an easy decision for the opposition. We thought about it long and hard. We thought about it through our various shadow cabinet committees and we dealt with it in the caucus morning. It was not an easy decision but government is not always about easy decisions and being in parliament is not about easy decisions; it is about fair decisions. We have secured this measure in return—the Labor Party made the suggestion to the government in good faith that the $1.1 billion should be invested in Roads to Recovery—and so I welcome the fact that within a couple of hours the Treasurer, the Deputy Prime Minister and the Minister for Finance had issued a press release accepting Labor's condition, which means that we are now in a position to facilitate its passage through the House. We look very much forward to this boost to infrastructure for local government in metropolitan Australia and in rural and regional Australia because the people of Australia and the motorists of Australia know that the roads of Australia very much need the investment.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise this evening to talk about these four bills that bring to fruition the government's policy to reintroduce indexation to the fuel ask excise. As the Treasurer said in his remarks, this is just part of the government's continuing efforts to methodically implement our budget measures over the past two years. I would like to take this opportunity at the outset to congratulate the Minister for Infrastructure, Warren Truss, Treasurer, Joe Hockey, and the Minister for Finance, Mathias Cormann on successfully reaching an agreement today. I also thank those opposite and recognise the efforts of the shadow Treasurer and the member for McMahon for being part of bringing a solution to the table to reintroduce the indexation of fuel excise to CPI.

This is a significant structural reform that supports the government's vision for a stronger and more prosperous economy. Reintroducing the indexation of fuel excise to inflation will provide a stable and growing source of revenue to the government and will enable us to deliver our historic infrastructure package of over $50 billion, the biggest infrastructure spend in the history of the Commonwealth.

It is always important to recognise that this does come at a small cost to families. The average family, it is estimated, will incur a cost of some 40c to 50c a week. But, at the end of the day, that cost is worth it, given the infrastructure improvements that we are going to see that are going to allow our small business people and those who frequently use our roads increased productivity and increased business opportunities.

Following this agreement, we will see the Roads to Recovery program receive a boost of some $1.1 billion over the next two years, building on the additional $350 million provided under the program in the 2014-15 budget. This investment will directly affect all road users in a positive way. Again, we are seeing that people want value for money, and we will see that delivered through this agreement.

The Roads to Recovery funding will go straight to local councils around the nation to upgrade and repair local roads according—importantly—to their own priorities. Local councils are our grassroots government bodies. They know what local roads need to be fixed. I am sure that the councillors at Logan City Council and Gold Coast City Council will be all too pleased to receive the increase in funding to address local road issues, given the rapid development and population growth in both of those council areas. It is worth recognising that this will follow on from the double funding arrangement for the Roads to Recovery program in the 2015 budget. There is no shortage of good projects for our local councils to fund, and the Roads to Recovery funding will be a critical boost for infrastructure and for jobs.

Under the measures proposed, the fuel excise will increase twice a year, in February and August, in line with movements in the CPI. This policy is currently implemented by a 12-month tariff proposal, and the passage of this legislation will make the policy permanent.

As I said earlier, this will have a modest impact on motorists. For a typical household which consumes 50 to 60 litres of fuel per week, the estimated price impact of this fuel excise indexation will be around 40c to 50c per week. This measure will provide a predictable and growing source of revenue which will help the government boost its investment in infrastructure. I think we all recognise that it is a small price to pay for better roads, better infrastructure, more productivity and more jobs. Over the five years to the end of 2018-19, this measure is expected to raise some $3.6 billion. Implementing this important and fiscally responsible reform will contribute to our government's efforts to build a stronger and more prosperous economy and a stable, secure source of funding for road infrastructure into the future.

It is this government's focus on a long-term, responsible economic plan that will help us recover from and fix the debt and deficit fiasco that was left by those opposite. Today's agreement to reintroduce the indexation of fuel excise to inflation is just one measure in a long list of achievements of this government over the past couple of weeks. Decisions made by this government to deliver lower, simpler and fairer taxes have—predominantly through the removal of the carbon and mining taxes—reduced the overall tax burden by some $5.4 billion. We have seen the parliament endorse our fair and sustainable pension measures, and last week the parliament passed the small business tax cut and the instant asset write-off. On Wednesday last week we signed the free trade agreement with China. This has the potential to add billions of dollars and thousands of new jobs to our economy. Further, we have seen the launch of the white paper on northern development, setting out a plan for jobs, investment and infrastructure in Northern Australia over the next 20 years.

Our economic plan is working, and we are continuing to work towards reducing the projected debt and deficits that were left by the previous government. Every day we are getting on with building a stronger and more prosperous economy, and the revenue generated from this measure will assist in building local infrastructure identified by our local councils, thereby improving business productivity, growth and jobs. I know that, with the recent budgets handed down by our local councils, they will be more than happy to see that additional funding made available for these important road projects. Both the councils in my electorate do an enormous amount of work in rapidly growing areas, and it will significantly add to the ability for our councils to do the vital work to build, grow, develop and repair our local roads. I commend these bills to the House.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I rise to support this legislation—the Excise Tariff Amendment (Fuel Indexation) Bill 2015, the Customs Tariff Amendment (Fuel Indexation) Bill 2015, the Fuel Indexation (Road Funding) Special Account Bill 2015 and the Fuel Indexation (Road Funding) Bill 2015—on the basis of the proposition that was put forward by the Leader of the Opposition, the shadow Treasurer and me this morning, which was adopted by the Labor caucus and then agreed to by the government. This was a difficult decision. It was a pragmatic decision, but it is the right decision. It is a compromise under which Labor is agreeing to support the government's move to reintroduce indexation of fuel excise on the basis of the investment of the first two years of the proceeds, some $1.1 billion, into Roads to Recovery. In circumstances under which the Abbott government has doubled the deficit since its election, Labor accepts the need to undertake measures which are difficult, in order to come to a better budgetary position. However, in ensuring the boost for Roads to Recovery we have ensured that this increase can have an immediate positive effect where it is needed—primarily on jobs, on local economies and on economic productivity.

Roads to Recovery, in particular, drives jobs right around the nation by its very nature, because it is distributed to each and every local council and because the formula for the allocation is not subject to politics but on the basis of a proper analysis, including the length of road in a particular municipality in accordance with disadvantage. It will ensure that the overwhelming majority of the funds from the fuel excise increase over the next two years will go to outer suburban areas and to regional areas. These are precisely the areas where people drive more than in an electorate, such as mine, that has access to public transport.

We do need to have this additional infrastructure investment. ABS figures show that public sector infrastructure investment fell by some 17.3 per cent in the December 2014 quarter compared with the December 2013 quarter. Private investment over that one-year period fell by 12.4 per cent. At a time where what the economy needs is investment in infrastructure to help assist the fact that there is a slowdown from investment in resources sector infrastructure as it moves to the production phase, this investment will be very much welcomed by local government and will also ensure that additional people are able to secure employment.

In the 2013-14 budget, the government proposed the change that is being given effect today. Labor had concerns because of the effect it would have on consumers. In the same budget, the government froze indexation of financial assistance grants. This cost councils some $925 million over four years and represented a particular blow to the fiscal position of those councils who could least afford it—those in rural and regional areas. The local government community have been impacted by that. Indeed, mayors such as the Mayor of the City of Greater Geraldton, Ian Carpenter, said about small local government areas:

They'll become unsustainable. It's a very, very serious problem and I can't stress that enough. To take away the indexation is just crazy. It is just crazy.

He is right, and we certainly would not have taken away that indexation from the financial assistance grants. But with this measure we have managed to secure, from opposition, more money to be put back into local government than that which was taken away at that time.

We believe this is particularly important because of the nature of the Roads to Recovery program. We looked, to be frank, at what options there were for additional infrastructure investment. If you had the allocation to a large road project then it would be difficult, I think, for us to justify, as a parliament, charging every motorist in Australia while only some benefitted. What Roads to Recovery does is ensure that every community will receive something back, and that is why, in particular, we chose to put forward this proposition. We also know that, because there is a $15 billion shortfall in local government infrastructure, every council will have a list of where maintenance is ready to be done—the widening of a road, a roundabout or a safety measure. They all have a list that will be larger than the funding increase that will result from this agreement today.

It is also the case that Roads to Recovery is very labour intensive. It will maximise the employment outcome as a result of the additional investment. It is not surprising that the Australian Local Government Association welcomed Labor's initiative this morning. The president, Troy Pickard, from Western Australia, had this to say:

We applaud the Opposition's focus on local government and their recognition in this policy initiative of local government's important role in developing local economies and creating jobs through projects funded through the Roads to recovery program. This initiative is particularly welcome at a time when local government is under financial pressure following the decision to freeze the indexation of Financial Assistance Grants, costing councils an estimated $925 million in the period to 2017-18. Local Government faces a huge task in managing our local roads infrastructure, which is more than 670,000 km in length and valued at more than $165 billion. This infrastructure plays an essential role in sustaining local economies by connecting freight networks across regions. The proposal underlines the continued commitment of the ALP and, in particular, of Anthony Albanese, Shadow Minister for Infrastructure and transport, and Julie Collins, Shadow Minister for Regional Development and Local Government, to the Local Government sector.

There is also, of course, a very important road safety outcome. In May, the NRMA warned of the need for urgent action to help New South Wales councils clear a $3.2 billion backlog on road repairs. The report said that, in the six years between 2008 and 2013, 1,480 people were killed and 100,413 injured on roads managed by NSW regional councils. The NRMA called for a greater contribution from the fuel excise to help regional and local councils fund roads. It noted that last year the fuel excise raised $15 billion yet only some $6 billion of the amount collected was spent on the nation's roads. NRMA President Kyle Loades said 'upgrading dangerous roads made a huge difference to the road toll'.

After the government failed to win support last year to boost fuel excise through legislation, it made the change via regulation. But this was a short-term fix. If this decision were not put into effect by legislation in the next couple of months all the extra revenue would have had to have been paid back not to motorists but to the big fuel companies. That was a position that I think was untenable. It would simply be unacceptable that money that had been collected from motorists was paid back directly to fuel companies, which is why this proposition that has now been agreed to of putting money back into local roads is so important. I am pleased that the government has agreed to this proposal.

Australians can always rely upon Labor to invest in the nation's roads. We doubled the road budget during our period in office. We also believe it is important to invest in public transport. Infrastructure Australia's updated national infrastructure audit released last month said that, without action, traffic congestion will cost the nation some $53 billion a year by 2031. That is a huge cost. Those opposite refuse to invest a cent in urban public transport.

On taking office the government dumped billions of dollars that had been allocated to projects like the Melbourne Metro and Brisbane's cross river rail project. I was reminded how absurd that was two weeks ago when I attended the launch and on Sunday when commuters gained access to the new regional rail link in Victoria—a project that has added 54,000 new seats a day to the Victorian rail network and that employed 15,000 people in construction. This is the first new rail line built in Victoria in 80 years and it will add some $300 million a year of productivity benefit to the Victorian economy. It is a game changer of a project. It is a stark example of one of the great differences between Labor and the coalition. When Tony Abbott as the Leader of the Opposition said in Victoria prior to the last election that the federal government does not invest in public transport he was unaware that the regional rail link project even existed. If we are returned to government we will invest in public transport, not just roads. We make that commitment again. We put more money into public transport between 2007 and 2013 than all previous governments combined between Federation and 2007. I think that is evidence that we are very strong in this area.

With regard to the so-called hypothecation in general of the fuel excise in a fund, we think that is basically a bit of smoke and mirrors. You can put money into a fund and say it is going to roads but that is only legitimate if the amount that is in that fund or allocated from fuel excise is greater than the amount that is actually spent on roads. If that is not the case then it is not additional investment, because you can just say, 'We will put $2 billion here,' but $2 billion comes out the other end in terms of expenditure. That is why we put forward a specific commitment for Roads to Recovery over a specific period of time. That is a real commitment that will make a real difference, not the so-called hypothecation. We are serious about infrastructure investment, which is why we are concerned that the government has cut infrastructure investment by 11.2 per cent over the forward estimates.

This is a proposal that I believe is worthy of support on balance when you look at all of the circumstances that are there with regard to the doubling of the budget deficit and the way that the government has introduced this change by regulation. I commend the legislation to the House. We will continue to play a constructive role, unlike the former opposition. (Time expired)

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Good things come to those who wait. I must say we on this side have been waiting 18 months to hear the opposition take some responsibility for the mess that they left us—some responsibility for the $667 billion in debt that we are about to rack up and some responsibility for the $120 billion of accumulated deficits. The opposition-leader-in-waiting gave it to us a couple of minutes ago when he said that the ALP realises some tough decisions need to be taken. It has taken them 18 months, but all of a sudden we have the opposition-leader-in-waiting saying that the ALP now realise that some tough decisions need to be taken.

It is very interesting to see how we have got here. What has all of a sudden led to this change from those opposite? What is it? Has it got anything to do with what the Greens did last week? Did the Greens shame the opposition into taking some fiscal responsibility? That is how low those opposite got: they had to be shamed by the Greens. As a matter of fact, there was almost a double wedge with this bill here, which has led the opposition—the Labor Party—to show some fiscal responsibility. We had the Greens last week shaming them by taking fiscal responsibility when it came to the changes to the pension, which left the Labor Party looking isolated, irrelevant and completely out of touch with the fiscal repair job that this nation needs, and then, with this bill, we have had the clock ticking, as the member for Grayndler mentioned, because if the Labor Party had not acted then it was highly likely that the revenue that had been collected in the last 12 months would have returned to the oil companies. So it has taken the Greens last week and the oil companies getting the money that we have tried to save over the last 12 months to actually get the Labor Party to agree to show some fiscal responsibility. Any other spin that those opposite might put on this should be completely and utterly ignored. As for the idea that, as the member for Grayndler suggested, the ALP now realises some tough decisions need to be taken, the only reason they have realised that is that it took the Greens and the oil companies to get them to understand that message.

I also would point to another thing that the member for Grayndler said, about how, in their six years of government—'government' is probably a kind word for the chaos and dysfunction that we saw when those opposite were last in power, and I think we will see episode 3 of that tonight, which will once again reinforce that message; the take-home message that I think all Australians will see will be one of complete chaos and dysfunction, and it will be rammed home again—there was a doubling of the roads budget. I can say this honestly: we saw no indication of that in my electorate, and I would dare say that if we asked many of the members, especially on the government side, whether they saw any of that then there would be a shaking of the head as well. It might have been talked about by those opposite, but it never, ever eventuated.

That is the difference between the six years of chaos and dysfunction that we saw from those opposite when they were last in power and this government. I know the assistant infrastructure minister is in the House. What we do is not talk about it but actually put money into projects, get building and get delivering. I have seen it firsthand in my electorate, and I know the assistant minister has as well, because he came down so we could look at the new part of the Western Highway that was being opened. We were not there talking; we were actually looking at a road which was being opened, and we can now drive on that road. That is what government is all about. We can all talk, and we will see a lot more talking tonight, but what we want to do is act, and we are acting. We are acting across the country when it comes to road infrastructure, just as we are acting to fix the mess that we inherited when it came to debt and deficit. This bill before us will help do that, and that is why the government has put it forward.

We understand what this bill is about and what it means. It means a 50-litre-per-week consumption of fuel results in 40c of additional cost. Therefore, there will be an impact on road users, especially when it comes to those in rural and regional areas, because the public transport opportunities that we have in rural and regional areas are not similar to the ones that they have in urban areas. So there will be an impact in regional and rural areas. That is why we have been very keen to increase funding to the Roads to Recovery budget. Let us put this bill aside, because we were already doing that, and it is something which had been extremely well received by local government across Australia, because we had said to local government, 'Here is money directly to you to fix your local roads.' Can I say, as a member that represents a rural and regional electorate, that there is no issue which is more of a touchstone—no issue which is more important to local residents—than the roads that they travel on to and from work, getting their kids to and from school, and making sure that the freight that they produce can get carried to and from market. That is what this government recognised and acted on, and now we are acting even further. This increased funding for Roads to Recovery will be incredibly well received. I have to say this: we will also be making sure that the extra funding goes into fixing local roads. We are going to ensure that the dollars that are collected make sure there is more bitumen being fixed or laid down, more gravel being graded and more potholes being fixed. That is what we are determined to do.

We all understand that in 2015-16 we have a doubling of the Roads to Recovery funding, so that is $700 million which was going to be allocated to local governments across the nation for local roads. They will now get an extra $300 million, so that is $1 billion into local roads. In 2016-17, there will be an extra $805 million in addition to the $350 million currently planned.

I think it is fair to say that this will be the largest spending envelope given to local government to address and fix local roads that we have seen in this country's history. And it fits with the message of this government because we have got an infrastructure Prime Minister, a Treasurer who is focused on improving the infrastructure of this nation, a Deputy Prime Minister who is focused on fixing the infrastructure of this nation, and an assistant infrastructure minister--who is here in the House--who is also absolutely fixated on making sure that we get infrastructure spending rolling out in this country so it actually delivers the infrastructure that this nation needs.

Overall, we are looking at an increase of over three times the funding for road infrastructure for 2014 over the 2015-16 and 2016-17 period. I know that there will be residents in my electorate who will be absolutely delighted by this. I was in Skipton in my electorate—the home of a young Henry Bolte—a few months ago, and I met with some lovely ladies who were celebrating the 90th birthday of one of the local residents. There were about 14 ladies celebrating, and they asked me to sit down and join them for a quick cup of tea and a piece of homemade birthday cake—which I must say was delicious. I asked them to tell me what local issues were worrying or concerning them. Two of the ladies said to me, 'We're very worried about the local road leading up to our houses. There are some potholes that need fixing, there is some bitumen that needs repairing. If you could do one thing for us, could you write to the local council and see whether they could address the problems with these two roads?' I did that, having enjoyed the cake and coffee, and now—given this increased spending that is going to local government to see these local roads fixed—I am looking forward to seeing issues like these addressed. So next time I call in to Skipton, when hopefully the dear lady will be celebrating her 91st birthday, I will be able to get a reassuring message that the local government has been able to fix those two roads which were of concern. It really gives you a sense of how important this issue is for regional and rural areas.

We should not get away from the fact that, by delivering this, we are also delivering the long-term structural change that we need for Australia's finances. This will help deal with the deficit issue that we inherited but also the debt issue that we inherited. This government is determined to ensure that that debt and deficit problem that we inherited is fixed. We have been resolute about that, and the Labor Party have stood in the way. But on this bill—and it has taken 18 months—they have finally come to the party.

The member for Grayndler has said that the ALP realises that some tough decisions need to be taken. I hope that after the seven weeks of the winter recess we will see more of the same from the Labor Party—that they will understand that the time has come for them to not only act and support us on this measure but also look at other measures to support us on. Eighteen months is really too late, and when you are shamed by the Greens to have to act, surely just acting on one bill is not enough to make up for that. Surely there must be an understanding now on the other side that they need to do more to repair how the Australian people view the way that they deal with fiscal matters. It might be that it will be the Leader of the Opposition-in-waiting rather than the Leader of the Opposition who is finally able to direct the Labor Party down this path. Time will tell on that. In the lead-up to Christmas it will be very interesting to see where the ALP go with that issue. I know it is on their minds at the moment and I think it will be firmly back on their minds tonight.

I support the passage of this bill for two reasons. The first reason is that it helps us to address the fiscal mess that we were left with by the other side. That is an incredibly important job that we in this parliament need to do on behalf of our children and future generations. The second reason is that it will provide much-needed revenue to local government so that they can continue to deliver the roads that local communities expect to drive on: roads that are safe and well maintained so that people can travel safely to and from work and to and from school and so that the freight that we need to carry to market can be carried in an efficient way.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to be here supporting the Excise Tariff Amendment (Fuel Indexation) Bill 2015 because it really does help local government to get back on track. Mr Deputy Speaker Goodenough, you would be well aware that the cuts to the Financial Assistance Grants by the Commonwealth has cost local government in Western Australia $147 million. That is a very, very substantial figure for many of our local governments. We even have some local governments who rely on these FAG grants for more than 50 per cent of their income. We certainly have a whole host who rely on the FAG grants for in excess of 25 per cent of their grants.

We have councils such as Halls Creek, Carnarvon, Manjimup, Derby and West Kimberley that really have had the rug cut from under them by the level of these cuts. There is no doubt that there had to be some pretty severe pruning done and unemployment generated as a result of these cuts. This has particularly had a major impact throughout rural Western Australia, where we have lots of small communities for whom local government constitutes a major employer.

We had the CEO of Wagin Shire write to us saying: 'A decision like what has occurred will either increase shire rates and charges or reduce the services to communities. It will also have a long-term impact on programs that local government often undertake from these funds for their communities. Local government use many outside contractors to undertake works and services and, regrettably, these companies do not freeze their prices for three years. Councils will be expected to pay the increased costs that are required to undertake work; however, the freeze being enforced by federal government on all councils will force them to drop programs.'

This has been the theme of local authority after local authority. It has also impacted on many metropolitan shires. We know that the City of Swan, who are here with us in Parliament House today, have had their funds cut and their ability to service their vast network of roads compromised. The City of Bayswater says that these cuts have put them under great pressure as they struggle to meet the needs of a growing and ageing population. This is a blow for local communities. So we were very mindful of the impact that these cuts were having on local governments across Western Australia. That was a major motivator for us to come to a compromise agreement with the government on the indexation of fuel excise. We were not prepared just to pass another new tax, particularly after the Prime Minister had gone to the last election, promising that there would be no new taxes—an absolutely categorical promise that there would be no new taxes—but then reimposed an indexation on the fuel excise which, in our view, really amounted to a new tax.

We do understand that the reintroduction of indexation to fuel excise does have a disproportionate impact on rural communities and on outer suburban areas. Unlike Mr Hockey's projection, they are indeed required to travel more. They need to use their vehicles more and therefore disproportionately bear the burden of this increase in the fuel excise. So we thought that ensuring that we hypothecate part of this for Roads to Recovery to ensure that regional communities right across Australia and throughout Western Australia would actually receive a share of this money would be a way of ensuring that we were able to balance the disproportionate impact that these cuts have had on people from outer metropolitan and regional areas.

We saw this as a great win and a way in which we could start moving forward on this matter. I am very pleased to see that the Australian Local Government Association, as the member for Grayndler has said, has come out very clearly in support of this and come out very clearly recognising that this was an initiative of the Labor Party—an initiative to solve an impasse that was occurring and also at the same time ensure that local government, which we feel very strongly about, is supported. We strongly believe that we need to have a strong and direct relationship with local government, not a relationship that is mediated by state government. For that reason, we strongly support the constitutional recognition of local government, particularly in relation to our financial capacity to deliver to local government. I note that we allegedly had somewhat of a bipartisan position on this before the last election, although we did see many members of the then opposition—not government—systematically white ant what was a bipartisan view. But let's hope that once again we can build that bipartisanship in relation to the constitutional recognition of local government.

We have had some queries today from constituents asking why we did not lock this arrangement into public transport and why we did not put as an alternative to the investment to the investment of money on Roads to Recovery for local government; why wouldn't we do that on a public transport project?

Our response to that is that we have to deal within the art of the possible and we were well aware that it was never going to be possible to get the Abbott government to agree to investment in urban public transport. But there is absolutely no ambiguity that a Labor government will be making a substantial commitment to urban rail across Australia, ensuring that we properly balance the infrastructure spend between road and rail. We accept that we cannot deal with the congestion problems that are currently facing our cities by road expansion alone. It is predicted that seven out of the 10 corridors that are going to be the most congested are in Perth. The Assistant Minister for Infrastructure and Regional Development used his normal rantings to suggest that somehow or other this was my fault, that I was the one that did not invest in public transport and did not invest in roads. That is a truly extraordinary—

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

You built over the corridors. What about the Roe Highway?

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

Okay; I will just address this.

Mr Briggs interjecting—

You did actually ask me, and I am happy to answer. It is absolutely true that we did not believe the Roe Highway should be built. In fact, we determined that it was a massive waste of infrastructure funds and that the Fremantle container port needed to be moved to an outer harbour. Indeed, we did a comprehensive freight network review, a very public process that involved all the government agencies, industry, communities, anyone that had an interest, any stakeholder in this process. We made a determination that the planning required us to build a new container terminal down in Cockburn Sound. For the past seven years, the Barnett government has sat and done absolutely nothing about that. With this hastily-cobbled-together, secretive Perth Freight Link, we are going to do bits of this road, add capacity to this road, but, unfortunately, in the final kilometre or so there is actually going to be no additional work done. So what we are doing is creating—

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

Say that more on the record. Keep saying it.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

All right. You are assistant minister; you are now suggesting that you have got another part to this project?

Mr Briggs interjecting—

No? I think it is interesting that he is actually acknowledging that that is a bit of a problem. Either he is going to have to tunnel under the river, which of course is going to add to the cost of this project, or he is going to have to build a new bridge over the Swan River. Either way, without dealing with that issue, you are not going to be dealing with this.

The public can be absolutely assured that a Labor government will be ensuring that our infrastructure spend will be properly balanced between urban rail and road.

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

Which projects?

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

We will properly balance it. Certainly we will not be building the Perth Freight Link. I can tell you that.

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

Aha!

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

Well, I do not think there is any secret about that. We will be investing in infrastructure that goes into the port—the port infrastructure that we need into the future.

I want to make one other comment, and that is that we need to look at the future of this fuel excise as the basic funder of a lot of our road projects. Over the next five to 10 years, as we see a move to more and more hybrid and electric vehicles, the funding model that is based on the fuel excise is going to become more problematic. We have to do some long-term thinking about how we ensure that we have a proper finance base for funding the road and public transport infrastructure that we will need, as some very disruptive technology is going to emerge. We probably will not see this in any numbers for five years, but I suspect that, in five to 10 years, and certainly from 10 to 15 years, we will see a massive shift away from fuel based vehicles to electric vehicles. We all have to start thinking about how then we ensure that we have the right revenue streams in place. But I am very pleased that we have been able to help local government put themselves back on a stronger financial base by agreeing to this. We still disagree with the FAGs cuts, but at least this will go, to a very significant extent, to enabling those local communities to reinstate employment at a time when it is much needed.

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

Last week Essential polling polled Australians' perceptions of politicians. I do not know if it surprised you, Deputy Speaker, but it did not surprise me that 90 per cent of Australians do not hold us in high regard. When today this deal was announced and I was asked to speak on the Excise Tariff Amendment (Fuel Indexation) Bill 2015 and the associated bills, I thought I would come down and have a chat to the House about this legislation, because, in 18 months, this is one of the rare times that I have actually seen bipartisanship. I got here early and I have listened to speeches from the Treasurer, the shadow Treasurer, the member for Grayndler and the member for Perth. And I get why people are not thinking too highly of us at the moment. In a moment of supposed bipartisanship, we have the opposition standing up and rebadging this as a position of their own. I have written down some of the quotes, because I found them quite hard to comprehend. The member for McMahon, when responding to interjections from the Assistant Minister for Defence, said that we had doubled the budget deficit. When the assistant minister rightfully pointed out that their record was not too flash, his response was: 'Forget about that.' In other words: 'From 2007 to 2013, up until PEFO—forget about that.' The problem is we cannot. He went on to say, 'Difficult decisions are needed.' I know that the Assistant Minister for Infrastructure agrees with me on this. We have been trying to make them for 18 to 19 months. Difficult decisions are needed—and take the partisanship out of this. Look at our last four years' budgets, what was proposed and what was delivered. In 2011-12 a budget deficit of $22.6 billion was forecast. The actual was $43.4 billion: double. In 2012-13 the budget forecast was $1.5 billion. The actual was $18.8 billion: out by a factor of about 15. In 2013-14 the proposed was $18 billion; the actual was $48 billion. And in 2014-15 proposed was $17.5 billion and actual $35 billion. We have financial problems in this country. They are structural. And here is a newsflash from a bloke who does not come from a political background to the shadow Treasurer: yes, difficult decisions are needed. At the moment, in the budget-in-reply speech from the Leader of the Opposition, there is a $57 billion black hole in what was said on the night. The shadow foreign minister stood up—

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

You're being bipartisan?

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

I will get there. The shadow foreign minister wants to reinstate $16 billion worth of foreign aid spending. In the last two days in question time we have heard—and we have heard it for the last 18 or 19 months—the allegation that we have cut $80 billion out of health and education. We want to spend $80 billion less than the previous government forecast over a 10-year period at a time in politics when the traditional four-year forward estimates and budgeting process has morphed into 'anything that costs a lot of money and we could not fund we moved into years five to 10'. That does not cut the mustard, and the results all the way through—up to and including ours, Member for Perth, show you why. That is what this House needs to get fair dinkum about and address. I am pleased that there is a bipartisan approach this afternoon. We need more of it. I noted with interest the member for Port Adelaide on the doorstop this morning being questioned about the $80 billion supposed cut—which is in fact $80 billion extra the opposition want to spend. When he got the question, 'Will you pay that money?', for the first time ever the member for Port Adelaide actually balked this morning. Why? The myth of this was exposed in question time very aptly by the Prime Minister.

The member for Perth mentioned local governments. They are part of the trifecta. We have a structural budget deficit, and what we need to be considering as a parliament now is tax reform and federation reform. The two taxes that have been proposed in the last six months by those opposite add up to $23 billion—over 10 years again, not four. That is not going to change the $57 billion black hole over four years as of the budget-in-reply speech—spread out to 10 years—and the $96 billion in school education and foreign aid spending that those opposite are still attempting to bash us about on a daily basis. We need considered tax and federation reform, and they do not happen in isolation. The member for Perth is right: local government is an important arm of government. It collected $14 billion last year across Australia in rates revenue. State government is an important level of government. Between stamp duty, land tax, payroll tax and mining royalties it received $90 billion worth of revenue last year. All three are operating in the same space on a day-in, day-out basis. We need to have the discussion about who does what and who pays for what.

The problem we have in this place, and the reason why 90 per cent of Australians at present hold us in such low esteem, is that when we attempt to have this conversation, which—and the intergenerational report belled the cat—is a conversation that will affect our children and grandchildren, as the member for Wannon said, over the next 40 years, both sides of politics default to a wedge position and scare campaigns. And both are complicit in it. We need a better quality of debate. The underlying number in the intergeneration report, which scares the living daylights out of me, is that over the next 40 years the 65-plus age bracket in this country will grow at three times the speed of the zero to 64 age category. Here is a newsflash. I do not know whether members have thought it this far through. The zero to 64 age bracket are our taxpayers; the 65 and over are our tax receivers. We have structural issues. Today we are doing something in a small way about it. There needs to be more bipartisanship, serious federation reform, serious tax reform, less wedge politics and fewer scare campaigns, for the sake of our children and our grandchildren.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I am pleased that the member for Reid has gone to the question of structural budget deficits—although saddened that he is choosing this moment to leave the chamber—because the IMF recently brought down a report which looked at precisely that issue. Examining 200 years of government financial records across 55 leading economies, it identifies two periods of Australian fiscal profligacy. They were, as it turns out, when the member for Mayo was the Work Choices adviser to John Howard in 2005 to 2007, and in 2003 at the start of the mining boom. The IMF's calculus is that, when you take into account spending needed to stabilise the economy, the Rudd government's stimulus spending during the financial crisis does not rate as profligate but the Howard government's overspending in 2003 and 2005 to 2007 does.

Interestingly, it also notes that there was another period of profligate spending in 1960 under the Menzies government. What this points to is what Australians know well, which is that in the final period of the Howard government real government spending grew faster than in any other four-year period since the 1990s recession. As the Parliamentary Budget Office's estimates of structural budget deficits have noted, the Australian budget was in structural deficit for the final period of the Howard government.

Since this government has come to office it has continued an approach of blowing out deficits. In the last budget alone we have seen the doubling of the deficit. And you do not need to believe Labor's figures on that, you simply need to compare last year's budget with this year's budget and you can see that budget deficit jump from $17 billion to $35 billion. That significant increase in the budget deficit reflects the fact that the Abbott government is all talk but no action when it comes to the deficit.

That is part of what has brought us to the point where we are today. Again, the Abbott government has effectively held Australians to ransom over the increase in the fuel excise. It is not the first time. They tried to hold research funding to ransom against cuts to higher education. They are currently holding childcare funding to ransom against huge cuts to family tax benefit part B—effectively saying to Australian families, 'You can have more resources for your four-year-old so long as we can take money away from families with six-year-olds.' That is what they are saying in threatening to trade off family tax benefit part B cuts against their childcare package.

But this has been the biggest ransom of all because, effectively, what would have happened had Labor not come to the table is that the additional fuel tax that had been collected from Australian motorists over the last eight months would have been returned not to consumers but to the oil companies. I think that would be unconscionable for many in this place—to see the fuel taxes that have been collected from Australian households just sloshed back into the bottom lines of oil companies. That is the result, of course, of the fact that the Abbott government has chosen to impose this fuel excise through a sneaky regulation change.

They like to say, of course, 'We're just doing what the Rudd government did with the alcopops change.' But that is patiently untrue. In the case of alcopops it was clear when the regulatory change was made that parliament would later support the change. No such bipartisan agreement was in prospect at the time this regulatory change was made.

Labor has determined to support this change on the condition that the additional resources are spent on roads right across Australia. We have secured an additional $1.1 billion in new funding under the Roads to Recovery program. This is an important injection of funds which go to every council across Australia. It is formula-driven, so it is not plagued by the same sorts of pork-barrelling risks that impartial observers would otherwise be concerned about when it comes to infrastructure funding under this government. Importantly, Roads to Recovery is labour-intensive. That matters, because this government came to office inheriting an economy where the unemployment rate had a five in front of it. Now, it has a six in front of it. It is important, because consumer confidence is now seven per cent lower than when this omnishambles of a government came to office. So a boost to the Roads to Recovery program is able to help in supporting the domestic economy.

Interest rates have been cut now to a full percentage point below what Joe Hockey, the now Treasurer, once called 'emergency levels'. And so we have unemployment up, consumer confidence down, interest rates down and debt up. The numbers that should be going down are going up and the numbers that should be up are going down. Labor is concerned, and that is why we have called on the government, and the government has agreed, to put $1.1 billion of the additional fuel excise raised into the Roads to Recovery program.

The Regional Australia Institute's analysis of unemployment data shows that not only is the national unemployment rate high but that unemployment in rural and regional Australia is now above seven per cent. That is a full one per cent higher than the national rate. You need to go back to the early 2000s to find a time when there were so many people in rural and regional Australia struggling to find work.

Tony Abbott said that he wanted to be Australia's 'infrastructure Prime Minister', but on his watch infrastructure investment has fallen off a cliff. ABS figures show that infrastructure work is down by one-fifth the since the election of the Abbott government. In the first budget, the Prime Minister froze local government assistance grants for three years, effectively cutting $925 million from regional communities over the course of three years.

This measure will see an additional $1.1 billion returned to councils—returned to those same councils that have had $925 million stripped away from them. That is what Labor has secured today. It will ensure that there is greater investment in infrastructure. According to independent estimates, there is currently a $15 billion local government infrastructure deficit. And because the Abbott government has no clear plan to address that this additional investment in Roads to Recovery will make a difference.

It will make a difference here in my own electorate of Fraser where, for example, under a Labor government Roads to Recovery has funded a $7.6 million upgrade for Northbourne Avenue, colloquially known as Canberra's 'main street'. It has funded a $2 million injection for Sutton Road, an important transport corridor from regional New South Wales to the ACT. The member for Hume would be well aware of the number of his constituents who make use of that important transport corridor.

Making sure that we have the appropriate investment in regional roads is good job-creation policy, but it is also good productivity policy. We do not need Australians choked in traffic. We need to make sure that congestion times are down so that people can spend more time at their jobs, more time with their friends and families and more time enjoying leisure.

The Australian Local Government Association estimates that 11 per cent of roads managed by councils were in a poor or very poor condition. Overall, councils manage 670,000 kilometres of road, which, if you look at it by length, is about three-quarters of all roads across the country. So investing in local council road programs is, effectively, to invest in three-quarters of Australian roads. It ensures that these local councils are able to go ahead with those shovel-ready projects. As the national infrastructure audit noted in respect of rural roads:

Rural roads owned and operated by local councils are important for local economic activity, and are an important part of the nation’s transport network, providing the ‘first and/or last mile’ of many land-based supply chains. There is evidence of a maintenance deficit across many of these roads. This is a particular issue for local governments in rural areas with large road networks and declining income bases.

Labor believes that we need to invest in roads and we also need to invest in public transport. In this we sit at the sensible centre of Australia politics. We have on our left the Greens, who believe you should invest in public transport but not in roads, and on our right, the Liberal and National parties, who believe you should invest in roads but not in public transport. Most Australians believe that we ought to do both.

Mr Fletcher interjecting—

The parliamentary secretary at the table said that this is straw man. I am very much looking forward to his contribution and his extensive list, no doubt, of the number of public transport projects funded since the Abbott government came to office—that is, by new decisions of the Abbott government. I will look forward to him perhaps quoting from the Prime Minister's book, Battlelines, in which he dismisses public transport and says instead that in a car the consumer feels like a king. This anti-public transport attitude is adding to congestion in our cities. We need more investment in roads but we also need more investment in rail.

This decision today, over the course of the next decade, will add over $22 billion to the budget bottom line and will see a change in government revenue, which is—let's be honest—at odds with what the government said would happen before they came to office. Before coming to office, the Prime Minister, Tony Abbott, said there would be no new taxes. He said that the coalition would lower the tax burden on Australians. But, of course, we have seen anything but that. We have seen the Abbott government taxing Australians at higher levels than at any other time since the Howard government—that government, so aptly pinged as fiscally profligate by the IMF in its recent reports. So you do not need Labor to identify the fiscal mismanagement of the coalition; you can look to the experts in the International Monetary Fund, who are absolutely scathing when they look at the fiscal record of the Howard government.

If we look at the budget papers, we see that tax receipts rise each and every year over the budget forward estimates. The coalition say that they do not believe in higher taxes, but the last budget had 17 new or increased taxes. The standard adage in politics is, 'Don't listen to what they say; look at what they do'. That is particularly true of a government that have broken so many promises since they came to office: no cuts to health; no cuts to education; no cuts to pensions; no cuts to the ABC; and no cuts to SBS. Is there any part of that which remains true today? It is hard to see it. This government cannot be trusted on tax and they cannot be trusted on keeping their promises not to cut programs that Australians depend upon.

The only thing they can be trusted to do is to look after the top end of town. That is why we have seen a so-called plan on multinational taxation which raises less than one-sixtieth of Labor's carefully calibrated plan. Labor's plan of multinational tax does not get in the way of our tax treaties. It does not do anything that is not in line with what is being recommended by the boffins at the OECD. But it succeeds in adding over the course of the decade $7.2 billion to the budget bottom line. By contrast, the coalition's multinational tax plan is a series of asterisks, raising, if you only look at the amounts they have budgeted, $30 million. It is a laughable multinational tax plan, and it comes at a time when the government is cutting the wages of the cleaners who clean their offices . That is how warped the moral priorities are of this government. With inequality at a 75-year high, they think it is a higher priority to cut the wages of cleaners earning only around $20 an hour rather than to focus on fair taxation of some of the world's largest multinational firms. This government cannot be trusted on tax, and it cannot be trusted with economic management. There is barely a promise that they have made that they have not so far broken.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Occasionally this parliament works. When I have conversations around the country, ranging from schoolchildren to some of the more mature and experienced members of our community, the major complaint about our democracy is that we constantly seem to be battling with one another rather than coming together to produce and achieve the best outcomes for this country. Tonight I do not want to have any argy-bargy about who did something right or who did something wrong. I am really pleased that tonight the major parties are coming together to produce a good outcome for this country.

When the Abbott government brought down its first budget, I thought it was an appalling budget and I still believe that it was an appalling budget. First of all, it breached a number of core pre-election promises. This Prime Minister stood up on national television on the eve of the election and said that, if he was elected, there would be no cuts to pensions, no cuts to health, no cuts to education et cetera. Of course we came to the first budget of this government and all those promises had been thrown out of the window as if they had no value whatsoever. That must have been a great disappointment to the Australian community—to both those who voted for the now government and those who did not vote for the now government.

People everywhere around Australia are constantly and consistently frustrated that the political parties in this place do not seem to be able to better work together. Nothing exemplifies that point more than the debate we have been having around national security of late. I have been in this parliament for almost 19 years. For all of that time, whenever a serious national security issue has emerged the government of the day has thought about how it might provide a legislative response and then gone to the opposition of the day; walked from the blue carpet across to the opposition leader's office and said: 'Look, we have a problem. This is what we believe is the appropriate government response. Will you come with us? These are the details. We believe this is in the national interest.' And, more often than not, almost on every occasion, the opposition of the day—and I am referring there to both of the major parties—has agreed to or indeed suggested things to bring their party colleagues with them; and a consensus has been settled and we have moved forward as a country.

I lament the fact that in more recent days, with the changes to the Citizenship Act, that has not happened. I lament that very much. I lament the fact that this Prime Minister seems to be determined to use national security as a wedge and as a political opportunity. But more broadly I am also disappointed that we do not talk about the issues ahead more often. I would like to see a day when, prior to the pointy end of budget planning, a government walks across to the opposition leader's office and talks about what they have in mind for the budget. Some might think these words might come back to bite me because I might find myself in government in the not-too-distant future. But I do not care. I think Australia is ready for a more consensual approach to some of these issues.

Take the pension changes mark 1, for example. The government, against its pre-election promises, decided to change the indexations of pensions growth. Why wouldn't you walk across to the opposition leader's office and say: 'Look, we have a budget situation—as every country in the world has in the wake of the GFC and the slowing of the major economies. These are the things we believe we need to do to fix it, to turn the budget around. What does her majesty's opposition think about these proposals?' I think, if we did that more often, we could start to build a consensus model in this place. We could agree more often. We would get better outcomes. And the Australian community would give a nod of approval.

Tonight we are doing something akin to that, and I welcome that. The government put forward a proposal which was a clear breach of an election promise and one which this opposition could not support. It was a proposal, after all these years—after an initiative by the then Prime Minister John Howard to freeze the indexation of petrol—to reintroduce the indexation. We were concerned that the government had massively overstated the budget situation. But—worse—it was clear in the weeks and months after that the government was determined to make the budget situation even worse. As we all know now, the budget position has deteriorated in the two years this government has been in office.

We were concerned about the breach of election promise. We were also concerned—indeed, I was particularly concerned—about the spatial inequality of that move; because, as we all know, these measures, particularly petrol taxes, fall disproportionately adversely on those living in rural and regional Australia. As members of this place know, that is of particular interest to me. Indeed all those budget measures in the Prime Minister's first budget fell disproportionately on rural and regional Australia, and that is a very great concern to us.

But I think it has been more than appropriate, and quite innovative, of the opposition—given that the budget situation continues to deteriorate and given that the reintroduction of excise will produce so much more revenue to the bottom line over the coming years—to come back to the table and say: 'Look, you guys have a deteriorating budgetary situation, despite your protestations pre-election that all would be rosy and good if only you were elected. And the Labor Party has taken the fiscally responsible approach and decided to join with the government to help in its efforts to turn that budget situation around'—given its failure to do so on its own—'and we have come to the table with an idea.' I think that is a very welcome proposition.

Our idea—for those listening—is to say: 'We will allow the reintroduction of indexation but only if something is done to return something to the economy,' because this economy is, at best, flat-lining. We want to return to the economy something that would act as a stimulus, an initiative that all the economists say is the right thing to be doing in the economy. And I should say it is not just the economists; I think the Governor of the Reserve Bank might be saying it. They are saying we need to be injecting some cash into infrastructure projects. And I am delighted, as someone in this place who focuses so much on rural and regional Australia, that the real emphasis on that effort will be in rural and regional Australia.

So it is a win-win, I like to think. We make a very sound contribution to turning a deteriorating budget situation around. We bolster the economy by doing no less than what the Reserve Bank governor has been asking us to do—that is, pumping cash into long-term infrastructure projects that produce long-term economic gains for our economy. At the same time we deal with the growing spatial inequality we have in this country. There has been a bit of debate over the last couple of years about a report yesterday produced by ACOSS which shows that the gap between the rich and the poor in this country is growing.

I want to preface anything I say by reminding the House that one of the great achievements of the former Labor government was to ensure that equality actually narrowed throughout the course of the Global Financial Crisis, an achievement, I believe and the member for Rankin can confirm, probably not matched anywhere else in the world. Equality is always a problem. It is not as bad in this country but it is always a problem and something we need to tackle.

There was a second report yesterday by PwC which demonstrated the growing spatial inequality we have in this country—that is, the growing divide between our capital cities and some of our regional areas. The growing gap is quite alarming. We need to act as an opposition and as a government. I would like to think that this could be a starting point of joint action on some of these issues. Obviously it starts with infrastructure. There are a number of ways that governments in this country can redistribute wealth—obviously the taxation system and the transfer payment systems—but nothing is more effective than an investment in both social and economic infrastructure, and that is what we need to do in rural and regional Australia.

This becomes even more important when we consider the fact that in the government's first budget, it cut almost $1 billion out of the financial assistance grants to our local government authorities. That is a lot of money that would have been spent on infrastructure projects right around this country which will not now be spent because the government has fiddled with the indexation arrangements. In my own home town of Cessnock, the council will lose $150,000 in its first year. To those of us down here who have 'billions of dollars' rolling off our tongues all too easily, $150,000 in road resealing projects in my home town goes a long way.

Given the government appears to show no interest in revisiting that issue, the initiative the opposition has put forward will offset those losses and allow those councils through the Roads to Recovery program to revisit many of those projects in those local government areas. That is good for the roads in those areas. In my home town, historically there is no bigger issue than roads. Things are on the improve, which I welcome. It is good for the roads, it is good for the local economy and, of course, it is good for jobs at a time when unemployment is rising in our rural and regional communities.

Obviously in the Hunter the levelling off of the mining boom post the investment phase, after the more than halving of coal prices, is having a significant economic impact. In other parts of the country, in central Queensland and in north-west New South Wales a now three-year-long drought is biting very hard. We need to do things to stimulate the local economies in those areas. I believe there is no better opportunity and no better means of doing so than investing in local roads projects. More broadly, it prompts us to have the discussion.

We have got a bond rate only just sneaking over two per cent. When the cost of government borrowing is so low, notwithstanding significant debt but still the lowest debt in the world as a percentage of GDP, it is the right time to borrow and invest in long-term infrastructure projects, which, over time, deliver a very significant return to the Australian economy and therefore the Australian community.

I would urge the government to take the message out of this initiative and rethink its budget strategy and ask itself whether we could be doing more out there to stimulate jobs and growth in our local communities all around the country. These are things we can do together. Again, I welcome the fact that the government has been very quick to accept the opposition's proposition. I was a little bit surprised actually that the offer could be made so quickly and then responded to so quickly, so quickly that we find ourselves debating this issue in the chamber this evening. I think all members on both sides of the chamber will welcome the demonstration of our capacity to do just that. I know that local government councillors right around the country will be certainly welcoming that. I know that the communities they served will be welcoming that as well.

I know when I return to my electorate after the cessation of our proceedings at the end of this week, people will be talking about this. They will be talking about the benefits that will flow. They will understand it was a tough decision for the Labor Party to change its position but I know they will appreciate it because I know they will welcome us working together. I know they will also welcome the fact that their local communities are going to benefit substantially. I commend the bill to the House.

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

The Excise Tariff Amendment (Fuel Indexation) Bill 2015 is an important bill to speak on. It is important to explain to the Australian people why we are here and why we are debating this particular bill. It is one that I think Australian consumers and motorists would be looking at very closely and asking themselves how we got ourselves into this position. This bill and the agreement that the government has with the Labor opposition are a triumph of common sense over ideology and of Labor making the best out of what is a very bad situation created by the Liberal Party in government for Australian consumers and for motorists. As such, we have moved very quickly to be able to address some of the mismatch of what this government has done in fuel excise.

Labor has sought and the government has agreed to an additional $1.1 billion in Roads to Recovery funding for regional roads as part of a compromise to pass the government's reintroduction of indexation for fuel excise. So much so did the government know that this was bad policy and that they needed to be saved that they immediately accepted Labor's solution to a very bad situation. The best we could do was to face a circumstance where taxpayers had paid extra indexation and that money would not be kept by Treasury but would be passed back to oil companies, not to consumers—and that was unacceptable. That is not something that could be acceptable. It is a substantial amount of money. Instead, that money will go to benefit all Australians through the Roads to Recovery program. This is good news for the regions and for local roads.

The Abbott government's cuts to local government have had a devastating effect on economic activity in regional areas, with unemployment high and many regions currently experiencing youth employment of over 20 per cent. In fact, if the government were to have the mind or the care to look at what is happening in some of their own backyards in the regions, there are some real problems, some really big and deep problems, under their watch right now. They do not seem to be too concerned. They do not seem to be putting in place the sorts of projects and the sort of spending that you might expect when we see some of our regions in deep pain over economic activity.

This $1.1 billion boost to the Roads to Recovery program will stimulate regional economies. It will generate much-needed jobs and be a boost for vital local infrastructure. Again, what is curious about this is that it was Labor that had to do this, and we did this from opposition. It was not the government. The government is responsible for the smashing of confidence since it came to office and has undermined our economy, which is still in transition.

In the government's first budget, the Prime Minister froze local government assistance grants for three years, cutting $925 million from communities over three years. This was very, very painful and deeply felt in regional communities right across the country. If anyone cares to have a look at economic activity in some of the latest statistics and data, they will see that Australia is in pain in a range of areas—maybe not so much so in Sydney, where there is still strong economic activity; maybe not so much so in Melbourne and in the other capital cities; perhaps less so in Brisbane. But when you get out to the regions, when you get out of those economic centres in the big cities, there are some really big problems.

You would think that a Liberal and Nationals government would care enough about their own backyards and electorates to be doing a little bit more, just a little bit more, whether it is talking up the economy or perhaps doing more than just talking—perhaps actually doing something concrete. That would be something that would be welcome in this place. And—more important than this place—it would be welcome in country towns and rural and regional areas, where they are experiencing the real impact of the very vicious cuts that the Abbott government have imposed on them.

When Labor left office, unemployment was too high, with a five in front of it. It is now too high with a six in front of it. I do not think that is a good economic number or a good economic record. There is currently $15 billion worth of local government infrastructure deficit that would make an enormous difference to local communities. It is a lot of money. It would make a big, big difference. It is really important to local communities. You would think that a government that promoted itself and put itself forward as the infrastructure government—apparently, every minister is an infrastructure minister and every backbencher is an infrastructure backbencher—would do something, but we are seeing none of that happening. The Australian Local Government Association estimated that 11 per cent of roads managed by councils were in poor or very poor condition, and overall councils manage something like 670,000 kilometres of roads, which is about 75 per cent of all roads by length.

As a result of a trick to bypass the Senate on the excise indexation, the Abbott government has threatened to return the additional fuel excise that it has collected from Australian motorists over the last eight months to oil companies. It almost beggars belief; it really does. It almost beggars belief. Out of ideology and a trick, the Abbott government would see itself returning over a billion dollars of motorists and consumers' money to oil companies. This is unacceptable. It just is unacceptable, and it has left Labor with very few options. It was certainly unacceptable to the Labor Party that this would be the case.

This was a difficult decision for us to make, but the prospect of billions of dollars of consumers and motorists' funds being returned to oil companies was clearly something that Labor could not allow to happen. We much prefer that this money be spent on roads in regional and outer suburban areas rather than be handed back to multinational oil companies. The fuel excise indexation will be difficult for some people, but we are left with very little choice—in fact, I would say no choices—when it comes to this.

The Roads to Recovery program, as we all accept, is very important. We know there is a huge backlog and that local government have pulled back on works because financial assistance grants were cut last year by $925 million over four years. Experience shows that these additional funds—available, in fact, from next week—will quickly be applied to that road backlog. These are good local councils in regional areas that are ready to go. These are shovel-ready projects. These are things that will happen very, very quickly and will make an enormous difference.

In November 2014, the Australian Local Government Association estimated that 11 per cent of roads managed by councils were in poor or very poor condition. Again, a lot more work needs to be done. The Australian Infrastructure Audit, released last month, made the following points with respect to rural roads:

Rural roads owned and operated by local councils are important for local economic activity, and are an important part of the nation's transport network, providing the 'first and/or last mile' of many land-based supply chains. There is evidence of a maintenance deficit across many of these roads. This is a particular issue for local governments in rural areas with large road networks and declining income bases.

Of course, you would think that a Liberal government that promotes itself as a friend of business and regional areas would acknowledge that what it is effectively doing by not investing in infrastructure and local roads is killing small business. That is the bottom line. That is where it really hurts. It is the small businesses, not in the big capitals—not in Sydney, Melbourne, Brisbane, Adelaide and Perth—but in rural and regional areas, that feel the worst impacts of the cuts made by this Liberal government. It is those small businesses, the backbone of this country, the ones that mortgage their houses, the ones that take the risk to employ people, the ones that are 'energise enterprise', that are paying the price for this Liberal government's vicious cuts. It is them that have a downturn in activity, a downturn in confidence, which flows across the economy and in turn reduces revenues back to government. Worse than that, it means that young people who would be looking for employment cannot find it in regional communities, and the reason they cannot is that small businesses are failing because the Liberal government will not invest. They will not even invest in confidence.

One thing I remember all too well is that for six years nobody in Australia was as good as Tony Abbott or Joe Hockey at talking down the economy—nobody. In the Olympics of talking down the economy they were both gold medal recipients. The only problem is you are supposed to stop when you get to government. That is the only problem. You are supposed to start talking the economy up, but they just cannot stop. They are addicted to ruining the economy. Every day we hear more talk of Greece—not about Greece, but that Australia will become the next Greece. Joe Hockey loves to go on about how Australia will become the next Greece.

I met with some small business people today, yesterday and the day before that and they said to me, 'Can we do something about confidence?' I said, 'Yes, we can. Tell the Treasurer to stop talking it down.' Stop talking down small business, stop talking down the economy—give them a go. In a 'have a go' economy and in a 'have a go' government give small business a chance to pick itself up by its bootstraps, so that they can compete, not against international players and the market, but compete against their own government, who is determined to just attack Labor. That seems to be the most important thing this government has on its agenda—priority one, attack Labor, priority two, attack Labor and, by the time you get to priority 28 or something down the line, it is, 'Oh, yeah, and there is an economy we should perhaps worry about at some point in time or unemployment perhaps at some point in time.'

If this were just rhetoric I could be excused for making some of this stuff up, but it is not. In the last 18 months the Liberal government has doubled the deficit. What happened to the emergency and the crisis and 'The barn is on fire'—and Tony Abbott was driving the fire truck? The problem is he turned up with fire truck full of fuel and just kept dousing the fire with more fuel. What did we have after we had an emergency in 2013? What would you call it today when the deficit has doubled from $17 billion to more than $35 billion? What do we do about that deficit, or does it not matter if it is a Liberal government deficit? So a $17 billion Labor deficit is an emergency but a $35 billion Liberal deficit is okay—another gold medal, well done! Debt seemed to be the biggest thing. We were being crushed under the weight of debt, so much so that the government decided, in its wisdom, between budgets to add a further $35 billion of debt. Who is paying for that debt? Small business, I would have to guess, and probably every other Australian—the consumer. This is a government that likes to come onto the record in here and spray fuel around the place, fan the flames of fire, and all the other things it does. But where are the real policies? Where are the things that affect small business in regional and rural communities?

But it seems that even on a really bad piece of policy and legislation from the Liberal government occasionally they can be saved from themselves. That is what we are debating here tonight. Labor will pass these changes because the government have agreed that we can save them from themselves. So we will do that. We will save them from themselves, because we are saving consumers and we are saving motorists. We do not want more than a billion dollars of consumers' hard-earned money, small business' hard-earned money—in a trick from the Liberal government—to go back to the oil companies and not back to them. The only option that is available is that it goes to the Roads to Recovery program, because at least we know there will be some equity and fairness and that that money will be properly spent by local government on things that will boost the economy, help small business, help families in the regions and help the regions.

I do accept that the government has very, very quickly accepted our offer on this. I have never seen a government move so fast to save itself. Perhaps while it was fanning those flames of fire it realised it was doing a little bit too much damage to itself along the way and that some of its own small business supporters might think that there is actually something wrong with what the government is doing.

Australia faces many, many issues right now, but the largest one it faces is a Liberal government determined to continue to make life hard not just for ordinary people. For example, there is the new policy idea that they have got—mind you, which they have not yet rejected, it is still there on the books—where somehow they are going to take away federal funding for schools and hospitals and we are going to let the states do all of that and the federal government will abrogate itself from its responsibilities to all Australians. This seems to be the new mantra. This seems to be the new ideology that is coming forward. That is not acceptable either. Just like this was not acceptable, just like the doubling of deficit is not acceptable and just like continuing to not invest in roads and infrastructure and regional and rural communities is not acceptable, we do not believe that returning $1.1. billion of consumers' money to oil companies is acceptable.

I cannot see how this government could have ever thought that was acceptable. With its little game of playing politics and its trickery in trying to get around the Senate and do a whole range of things, it thought it would be really clever and that is what it would do. We are going to go out and talk to people and make sure that they understand what led to this bill tonight and what led to their money being redirected not back into their pockets but back into local government funding, which we applaud but only because the government could not get its own bills right.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

I found it very difficult to come to the conclusion that I should support this legislation, the Excise Tariff Amendment (Fuel Indexation) Bill 2015 and related bills, and I will explain why in a moment. But, having given proper consideration to all its elements, I am now in a position where I can support it. But I will be making some comments on how I think some of the money should be spent—the $1.1 billion which Labor has been able to get the government to devote to Roads to Recovery for regional roads as a result of our agreement to reintroduce the indexation of the fuel excise.

I want to make it very clear that the reason for my concern is expressly around issues to do with my electorate and other parts of remote and rural Australia—but most particularly remote Australia. As we know, under this proposal, as a result of fuel indexation, fuel potentially will rise in price twice a year in line with the consumer price index. As we know, the consumer price index is determined by the Australian Bureau of Statistics. It takes into account a range of factors, including goods and services, transport, clothing, housing, health and food. Once the CPI is arrived at there will be an effective change in indexation. If the CPI falls, what will be the impact on fuel prices? One assumes that, consistent with the approach of the government, it would come off. Nevertheless, I understand the impact of this is inevitably to increase the price of fuel twice yearly.

That will have a particular impact on communities in my electorate. There are a number of reasons for that. One of them is the dire straits that many people in rural parts of my communities feel. They live in hundreds of Aboriginal communities around the Northern Territory. Many of them are very isolated and their transport access is poor. The roads are roughly made, if at all in some cases, and require a lot of resources to maintain. They are maintained by either the Northern Territory government or local governments around the Northern Territory. There are large numbers of trunk roads that are maintained by the Northern Territory government, which will not directly benefit as a result of the decisions taken here.

We know that many people in these communities are dirt poor. The Treasurer believes that poor people do not drive cars, but for these people cars are their only method of transport between their communities and major centres. As a result, they purchase fuel from their local suppliers to travel of those distances, whether it is from Yuendumu to Alice Springs, from Numbulwar to Katherine or wherever. I do not think this is properly understood by this parliament: these people will wear a disproportionate cost as a result of this fuel indexation measure because they pay significantly more for their fuel than other Australians.

It is worth noting that currently the national average price of fuel is 143.4c a litre, the national metropolitan average is 145.4c a litre, the five major capitals average is 143.1c a litre and the total regional average is 139.6c a litre. If you live in Tennant Creek, which is up the Stuart Highway from where I live in Alice Springs, you pay $163.5 a litre but if you live in remote communities across the Northern Territory you pay significantly more. People are paying today at Docker River $2.35 per litre, at Lajamanu $2.15 a litre, at Finke $2.25 a litre and at Yuendumu $2.16 a litre. On the face of it people will say that is because of transportation and because there is a single provider and no competition. All that might be true, but the bottom line is that the poorest Australians have to pay that price for fuel in those communities to transport themselves to and from those communities.

What does this mean in the context of this fuel excise legislation? The GST applies on the final price of the fuel so, every time there is an increase in fuel costs as a result of an increase in the CPI, people who live in these communities pay additional GST on the difference in price and that has a disproportionate impact on these communities. Even though the fuel excise might be a set level, it has an impact on the final price of the fuel and as a result there will be a disproportionate impact on the GST price being paid by people in these communities. I do not think that is commonly understood. Certainly there is nothing that the government has proposed—or the opposition for that matter—that will remedy that situation, because it is very difficult to remedy.

I am looking at what might come out of this for people who live in those communities and I am looking at the $1.1 billion. I know—and I have had many years of experience watching this—that people who live in these communities are effectively forgotten when it comes to the allocation of resources across this country. We have horizontal fiscal equalisation that is supposed to provide comparative levels of services across this country as a result of local government funds and financial assistance grants. We have seen the FAGs cut by this government. The direct impact of that of course is that the people in these communities have less money to spend on the roads, which are decrepit in any event.

When we are contemplating how we address these issues—and I am pleased that this $1.1 billion has been made available—I am wanting assurances that when this money is allocated the real needs of people across this country in terms of road infrastructure are actually addressed, not just the needs of those who live in urban areas because of their political clout. Let there be no doubt about it that the people most disadvantaged and most in need of improved road infrastructure are the people who live in very remote parts of this country, whether it is in my electorate of Lingiari, the seat of Grey or the seat of Durack in Western Australia. By the way, I have not seen the members representing those electorates come and make these arguments, but they are real arguments which need to be properly understood. But there are so few seats affected by this, because of the population distribution across this country, that, when it comes to making decisions about the allocation of road funding, it escapes the minds of people. There are so few seats in contest that it escapes the minds of people to actually address the funds where they need to be addressed for those most in need.

This is a plaintive call, I suspect, but I am hoping that, when it comes to the distribution of these additional funds which will be coming out of this hypothecation—which, as the shadow Treasurer commented, is questionable—the additional funds will be made available to where they are most needed, because if they are not made available to those communities that are most in need then it will further exacerbate the difference in access to services for people who live in remote parts of this country. When we think about it, it is not just a question of these communities and the community members; it is a question of those people who run commerce on these roads.

In the local government areas of the Northern Territory, they manage 15,240 kilometres of local roads, with the Local Government Association of the Northern Territory managing 2,117 kilometres of local roads. But only five per cent, or 700 kilometres, of the roads maintained by regional local councils in the Northern Territory are sealed. Five per cent of rural local government roads are sealed and have a kerb, from a total, as I said earlier, in excess of 15,000 kilometres. This is not something which can be just looked over. It emphasises the need for capital investment in these places. If there are benefits to be derived from these people who travel on these roads, who pay the most for fuel in this country, then those benefits ought to be derived in terms of additional capital infrastructure for these roads and roads elsewhere.

I had reason to look at a comment made by the manager of a Northern Territory trucking company, Mr Mark Castagna, earlier in the week, when he was talking about the $600 million being proposed for funding the development of northern Australian roads out of the northern Australia white paper:

Mark Castagna … from Tanami Transport—

a company I know well—

said the money would not go far.

"I can't see too much bitumen coming out of it," he said.

"I think they'll have to re-look at it and get a bit more money."

Estimates of the cost of bituminising a kilometre of road vary enormously across this country, but if you assume, very generously, that $1 million can seal, say, three kilometres of dirt road, and you are looking at 1,800 kilometres of dirt roads, potentially, to be sealed across northern Australia, that ain't a lot. I have just talked about 15,000 kilometres of local government roads, and just two roads, the Outback Way and the Tanami Road, alone amount to 2,600 kilometres. It is unlikely, therefore, that we are going to see those roads have the investments that they require to be bituminised.

Mr Castagna said the road funding was a good start and admitted he was biased because he had been "carting on these mongrel roads for 35 years".

"We need to prioritise the Tanami and the Plenty Highway," he said.

"That is where most of the tourists want to go and most cattle come through those two roads."

But Mr Castagna said "a man will be grey and pushing up daisies before it happens".

He said the Northern Territory stock routes were the only place you could drive about for a week and not see a grader.

These observations are valid observations, and they highlight the dire straits and dire need of roads in the bush. So, when I came to make a decision about this piece of legislation, that is what was at the front of my mind. I am hoping, therefore, that in addressing this particular issue the funds which are made available are allocated as I have described, for those people most in need—most in economic need and most in need of infrastructure development—not those who have the most political clout. We know, as surely as night follows day, that in this place political clout determines how money is spent. Well, it should not. It should be based on a fair assessment of need and where money should be spent based on need. But that is not how it is done, and we need to change the way we do things to make sure those people who are impoverished and need access to these roads are properly resourced.

I am pleased to be able to support the legislation.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Why are we here? Why are we debating this? Why are we talking about this move? What we are faced with here is a situation where, before the last election, the coalition, when in opposition, were making all sorts of commitments about what they could do. They believed that the budget did not face a revenue problem; it faced what now Treasurer Joe Hockey calls a revenue forecasting problem. They believed that they could go into an election where they did not need to raise taxes and did not need to cut spending further than the commitments raised; that confidence in the economy would be supercharged by the election of the coalition government; and that everything would repair itself. Then, having made repeated promises that they would not introduce new taxes and would not lift the total tax take—they believed that taxes would be lower under them and kept creating the impression that this would be the case—they went back on their word in the most dramatic fashion.

The coalition's first budget in government saw a number of announcements made that went completely contrary to what was being promised at the election. An impression was being deliberately generated in the minds of the voting public as they went to the ballot box in September 2013 that this would be a government that would not raise taxes, everything would be rosy and they would be able to repair the budget in a way that would not impact on people. For instance, in August 2013 when the now Prime Minister was asked whether he would manufacture a reason to go back on his word, he repeatedly said, 'Absolutely not.' He said that those commitments were rock solid and that the state of the budget would not be used as an excuse to break promises. Yet the 2014 budget did that, and this government has had to recoil from the deep-seated, fiery reaction by the public that they had been misled. There were a number of commitments made in that first budget, including a re-introduction of indexation, and the government tried to make a virtue out of it. They tried to say they needed to make a tough decision, that this was important for budget repair and that was why they were doing it.

We have to fast-forward to the point where we are confronted with this situation. I am here with my colleague from Western Sydney, the member for Parramatta, and another Western Sydney colleague is sitting as the Deputy Speaker, the member for Hughes, and we know full well that in Sydney people-movement is a hard and challenging thing. A lot of people rely on vehicles. A lot of people are stuck in vehicles for an extended period of time, in major motorways in Western Sydney—the M5, M4, M7 and M2. They sit there for long periods of time. A lot of people, particularly the key decision makers in the Abbott government, do not appreciate this situation for one moment, because they are not stuck in the type of traffic that our constituents have to deal with every day. They chew up a lot of petrol. They chew up a lot of money using tollways in Western Sydney as well. So costs are a big issue. These are the types of voices we brought to the debate when the Abbott government decided to introduce indexation of fuel—fuel taxation. But we are now faced with a situation where continued opposition would not see that money go back to struggling motorists, because a gargantuan exercise would have been required to identify the purchases made by individual consumers since the 2014 budget, track down those motorists and provide the rebate. What would happen is: it would go to oil companies. And no-one in the general public thinks for a moment that those poor, struggling oil companies need extra revenue handed to them in a bumper cheque from the Australian government. It is ridiculous to suggest that should happen. This is a situation manufactured as a result of deceit, frankly, by the Abbott government, suggesting that they would not need to introduce new taxes, suggesting to people that they would not be hit by new levies. The reality is that that is exactly what has happened. From our point of view, the choice we are confronted with is: do we pay oil companies? Frankly, that is ridiculous. So we as an opposition, instead of having the ludicrous situation where money is handed to oil companies, have come up with this compromise. I understand that people do not want to pay more for fuel. I have already made that reflection a few moments ago. But if there is something that can be done to improve roads—particularly in regional Australia, and particularly in the big regions like one of the fastest-growing regions in the country, Western Sydney—then we should definitely look for it.

There will be motorists who will begrudgingly accept the logic that says: we will pour money—in this case over a billion dollars—into improving roads. I, along with my colleague the member for Greenway, am a representative who sits entirely within the Blacktown local government area. It is a huge council. It is the biggest council in New South Wales and, I think, the third biggest in the country. We both grew up in this area and we have seen vast tracts of rural land transformed into housing estates right before our very eyes. This council has a massive infrastructure backlog as a result of a variety of decisions, some taken at a state level, to change the way infrastructure levies are paid on new housing and the way in which infrastructure is financed. It puts pressure on councils and they rely heavily on financial assistance grants from government.

We had a double whammy with an increase in fuel indexation at the same time as financial assistance grants to local government were cut. These grants are used by government in part to build new infrastructure in areas to maintain or improve existing infrastructure, but the grants have been massively cut. In Blacktown's case, Blacktown council saw a $6.7 million cut over four years to its financial assistance grants. This was a massive hit at a time when the then Liberal-controlled Blacktown council was cutting services. For instance, in Mount Druitt the local pool was being shut down. The modest level of assistance that was being provided to pensioners who were ratepayers was being eliminated. You saw all sorts of services being squeezed and new levies being introduced by the then Liberal-controlled Blacktown council. And, on top of that, they had to contend with a federal coalition government cutting the level of assistance to them. So we have a situation now, as a result of what Labor has sought, and the government has agreed to, where we have an additional $1.1 billion in Roads to Recovery funding for regional roads being used as part of the compromise to pass the government's re-introduction of indexation. This is undeniably good news for regional and local roads. When you consider, as I reflected a few moments ago, the cuts to local government and the devastating impact on economic activity—particularly in regional areas where unemployment is high and many regions are currently experiencing youth unemployment at over 20 per cent—this boost will stimulate regional economies and help generate much-needed jobs, and it is a boost for vital infrastructure. So if we can see some sort of assistance from the freezing of local government assistance grants for over three years, which represented $925 million being cut from communities over three years, we can see potential for assistance to local government in a very meaningful way.

Local government, for example, currently has a $15 infrastructure deficit. This funding boost that has been extracted by the opposition will be critically needed in regional areas and has been welcomed. The Australian Local Government Association estimated that 11 per cent of roads managed by councils were in a 'poor or very poor condition'. It is worth bearing in mind that councils themselves manage close to 700,000 kilometres of roads, which is about 75 per cent of all roads by length. Bear in mind that the federal government will not fund many federal roads. In Sydney I cannot name any that are being funded other than roads around the second Sydney airport.

And, by the way, there is much crowing from the coalition about the roads they are building around this airport, but all these roads will do is funnel more traffic into already congested roads. They will funnel it into the M5, which the constituents of the member for Hughes use. They will funnel it into the M4 and into the M7/M2, and these roads are already choked. You can go in at peak points in the day, and these roads that are supposed to operate much more smoothly and carry a lot more traffic are not doing it. So this roads package that we keep hearing about from the coalition is nothing more than providing a funnel for higher volumes of traffic into already deluged motorways. There is no move by this government to fund new road infrastructure that is critically needed—for instance, the M9, which would run roughly parallel to the M7 in Western Sydney. None of that!

So the federal government is not funding new roads. The federal government certainly will not fund state roads. If we are already having an active debate about whether or not they will maintain support for funding schools or health care and hospitals, it is hard to believe that they will fund state roads. So the logical area where they can make an impact through this type of compromise that has been reached is through local government to ensure that some of the infrastructure backlog that is causing great concern to local government is in part addressed.

Look at the way some of this has been received—for instance, the Australian Local Government Association today putting out a statement welcoming the proposed $1.1 billion in extra funding to Roads to Recovery. They say they 'strongly support the proposal today by the ALP to direct the revenue from the first two years of the fuel excise indexation, estimated to be $1.1 billion, towards additional Roads to Recovery funding for local government.' The President of the ALGA, Mayor Troy Pickard, said, 'We applaud the opposition's focus on local government and their recognition in this policy initiative of local government's important role in developing local economies and creating jobs through projects funded through the Roads to Recovery program.'

Cynics on the other side would say, 'Of course the ALGA would welcome $1.1 billion in additional funding,' but, frankly, who could deny them the positive reaction that they would have to this type of announcement, particularly when, as Mayor Pickard said, 'This initiative is particularly welcome at a time when local government is under financial pressure following the decision to freeze the indexation of financial assistance grants, costing councils an estimated $925 million in the period to 2017-18.' So for them this is an important boost.

As I said, there will be those who, no matter what, will not support an increase in taxation. You can understand why that exists. This government that has undertaken a massive breach of promise in the 2014 budget has maintained some fairly vicious cuts to schools and hospitals in the 2015 budget. For those people who were under the belief that the Abbott government would not increase taxes—it did so 17 times in this new budget, by the way—and who feel misled: we certainly understand your anger. But, as I also indicated in my earlier comments, there will be those motorists who begrudgingly accept that, if this is going to happen, if it can improve roads and see better outcomes particularly in congested major cities like my constituency, part of one of the fastest growing regions in the country, they will potentially accept that and will understand it.

But we are trying to ensure that we do not see valuable government revenue go into the bottom line of already strong balance sheets of oil companies. Instead of providing money to oil companies, let's make a meaningful contribution to improve infrastructure in this country, particularly through local government, which has a massive infrastructure backlog. Let's see the money directed there, let's see some potential benefit to local roads and let's ensure that this is a meaningful investment for local economies, stimulating them at a time of high unemployment and making sure that we can boost economic activity in their area and provide a benefit for motorists. I certainly commend the opposition's position in this matter.

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

I am very pleased to speak on the Excise Tariff Amendment (Fuel Indexation) Bill 2015 and other fuel indexation and road funding bills. I am even more pleased that today Labor has delivered an additional $1.1 billion to the Roads to Recovery program. If not for this proposal from the Labor Party, the government would have provided all the revenue it has collected as a result of the fuel indexation changes to the big oil companies. That is the political reality we have at the moment. The regulation would have been disallowed, and they would have been paying off the big oil companies with the money from motorists. That is the brutal truth of where we are now, and I am very pleased that Labor has achieved a compromise where $1.1 billion is delivered to the Roads to Recovery program instead. The alternative of refunding this money to the petrol companies was not acceptable to Labor.

At the outset I would like to draw the attention of the House to the comments of the President of the Australian Local Government Association, Mayor Troy Pickard, who said this morning, 'The Australian Local Government Association welcomes and strongly supports the proposal today from the ALP to direct the revenue from the first two years of the fuel excise indexation towards additional Roads to Recovery funding for local government.' This is an important point. The area of government that deals with the brunt of road maintenance and building, local government, has welcomed our sensible proposal.

The Roads to Recovery program supports maintenance of Australia's local road infrastructure. This $1.1 billion boost to the program will stimulate regional economies, generating employment and boosting important local infrastructure. This is a very important point. I will go on to the infrastructure requirements in a moment, but I just want to comment on the impact of this on regional economies.

Regional economies are doing it tough at the moment. We have unemployment rates significantly above the national average, and the national average is at a 12-year high. That is very well known. We have very patchy growth in these regions as mining comes off and manufacturing struggles under this government. We have recent reports that 20 per cent of the growth in the economy comes from six locations throughout this country. So our regional economies need this additional stimulus. It is a stimulus that my region welcomes. My region has a youth unemployment rate of 18.6 per cent. Any money from projects like this will be expended almost immediately because the projects are over the next two years. They are not capital-intensive; they are more manpower intensive. This is good news for my region. It is good news for unemployed people in my region and good news for the economy as a whole. There is a $15 billion local government infrastructure deficit, so this extra funding is vitally important for regional areas.

It is shameful that, in their first budget, the Abbott government froze local government assistance grants, cutting $925 million from communities. Because of this, local councils have had to pull back on important roadworks. My electorate of Charlton takes in two local government areas—the City of Lake Macquarie and the City of Newcastle. These are two very large local government areas that, combined, have around 480,000 ratepayers. So almost half a million ratepayers reside in local government areas encompassed by my electorate. Because of the freezing of grants by the Abbott government, Lake Macquarie will have $5.7 million in funding cut and Newcastle will lose $4.6 million. Given these cuts, it is a great result for regional communities that this extra $1.1 billion will be invested in helping local councils address the significant roads backlog.

Under the current Roads to Recovery funding, Lake Macquarie will receive $7.5 million in the five years between 2014 and 2019 and Newcastle will receive $4.9 million. The current funding model for Roads to Recovery is over a five-year period. Although it is too early to say exactly what extra support these two local councils will receive, as this proposal will inject $1.1 billion into the program in only two years it is a significant win for both the Newcastle and Lake Macquarie councils. That is why I am supporting this proposal. It is a proposal that immediately injects much-needed money into my local economy. It is a proposal that significantly increases the infrastructure investment going on in my local government areas to target backlogs in my region, a region that is expanding rapidly and desperately needs this additional infrastructure funding. It is a region that has suffered due to the cuts from the Abbott government to the tune of $11 million already. This is in addition to the $1.5 million we also lost that was allocated to the Glendale transport interchange, a project that all 11 local government areas in the Hunter region declared the most important infrastructure priority in our area. It was a project that the Abbott government saw fit to cut funding to. So the Labor proposal to inject $1.1 billion to address infrastructure backlog is great news for my region.

Having identified the benefits to regional communities from this bill, I would like to draw to the attention of the House to the government's approach to this issue and what would have happened had Labor not brought forward this proposal. As I said earlier, in a bid to bypass the opposition in the Senate, principally led by the Labor Party, the Abbott government had threatened to return the extra fuel excise it had collected over the last eight months to the oil companies. This is the sort of tricky, arrogant and devious ploy that we have come to expect from this government. The people of Australia should be very clear of the different approaches to fuel indexation of the coalition and Labor. The coalition were happy for this revenue to be returned to the big oil companies. Labor could not accept this proposition. Australian motorists would have been outraged if this were to occur. That is why we have made this sensible proposal to spend the money on regional roads.

I would now like to turn to the broader issue of taxation more generally. The facts are that, before the last election, the Prime Minister solemnly promised there would be no new taxes. How much garbage did we hear from Liberal spokespeople that they would be a low-taxing government? On this issue, as on so many other issues, the Prime Minister completely misled the Australian people. He was a man so hungry and desperate to win power that he was prepared to say and do anything to be elected. Upon winning the election, he immediately started to breach the promises he made to the Australian people.

The Abbott government is taxing Australians at a higher rate than the previous Labor government did. It is a fact that both the Howard and now Abbott governments have taxed Australians at a higher rate than the previous Labor government did. At the same time, the government have doubled the budget deficit. So they are taxing us more and they have doubled the deficit at the same time. This puts lie to the claim that the coalition are the party of lower taxes. This is clearly false, and this is confirmed by their own budget papers. The most recent budget saw tax receipts rise each year over the forward estimates. The coalition cannot be trusted on taxation. The most recent budget includes at least $3.9 billion in new taxes, tax rises and charges. The people of Australia should be very aware that the coalition's rhetoric on taxes are not matched by their actions in government.

In summary, today Labor has secured significant extra funding for the Roads to Recovery program that will be of great benefit to regional communities such as my own of Charlton. It will stimulate our economy. It will get people into work. Just as importantly, it will tackle the significant infrastructure backlog we have in our region, a backlog exacerbated by the government's heartless and short-sighted cuts to financial assistance grants to councils all throughout Australia, including Lake Macquarie City Council and the Newcastle council. On the basis of this important proposal winning acceptance from the government, I am very happy to support Labor's compromise and I commend it to the House.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

We are here today because of a classic move by this government—a classic move that, as the previous speaker said, many in the community have come to expect. When the petrol tax, the increase in the fuel excise, first came into this House in the last budget, I was one of the most vocal opponents of it. In fact today I am still vocally against increasing the fuel excise. But in the situation we are now in, I support this bill. That is because, rather than respecting this parliament, rather than allowing the Senate to vote on this bill, the government directed the petrol companies to start collecting their increased petrol tax. They have been collecting it for a good eight months. We are now in a situation where we have to decide what we are going to do—whether we increase the petrol tax in legislation or whether the government hands the money back. Quite frankly, it is not fair to the many people in regional areas, people in my own electorate, who have already been paying the increased petrol tax, if they do not see some benefit from the extra revenue they have been paying this government. What Labor put forward—it is great to see the government has come on board to support it—is that over the next two years this $1.1 billion go into the Roads to Recovery program.

My electorate, which is part of regional Central Victoria, covers the Macedon Ranges Shire Council, the Mount Alexander Shire Council and the City of Greater Bendigo Shire Council, along with part of the Loddon shire. It is a large electorate with hundreds of kilometres of roads, most of which are local government roads and some of which are state government roads. Quite a bit of work will be done to the state government roads through increases in the VicRoads budget. A few of the roads are funded by the federal government, the Calder being the main arterial from the top to the bottom of the electorate, as well as the Calder Alternate. But the majority of motorists in my electorate use local roads. The funding from this bill will be welcomed to help local governments ensure that our roads are safer. They will be able to go further down their priority lists to fix some of the trouble spots, some of the safety spots in Central Victoria.

I have been out quite a lot talking to people in my local area through regular listening posts. Maiden Gully has seen significant growth in recent years, with a number of new housing estates, but the infrastructure has not kept up. Edwards Road has become a major safety concern for a number of people living in that area. Many motorists have to turn on or off Edwards Road to get to the local primary school. The Calder Alternate cuts straight through Maiden Gully, so Edwards Road is a major concern. Another local road in that area that is a major concern is Rathbones Lane. Many years ago it was just a fire access road that was used by the CFA in case of a bushfire or a farm fire. But today it is a local road and one of the only access roads that people living in a particular housing estate have. So the money that will be allocated through this bill will be welcomed by our local communities. It will ensure that our local councils, in discussions with state government, will be able to go further down their priority list.

My part of the world, Bendigo, is seeing significant growth, with a number of new housing estates. Old road infrastructure and public transport infrastructure needs to be improved. We also still have significant farming areas. I spoke to the Macedon Ranges Shire Council this afternoon to explain what was happening. They said that they could see a lot of this funding going towards long-distance roads, trying to link together the small towns in many of the farming areas in the Macedon Ranges.

When I first met with the Macedon Ranges Shire Council, I asked them, 'If I am successful and I go on to be your local federal member, what matters to you?' It is a question you get to ask when you are out there talking to people: 'What is it you would like to see us do?' Since that conversation many years ago, one comment has stuck with me. A councillor said that they could not match the funding they receive in one year from the Roads to Recovery budget with 10 years of rate based funding. I used to be a resident of the Macedon Ranges. It is a large geographical area with a small rate base, which means that their roads budget is small. What is allocated to them through Roads to Recovery is more than they can allocate to their roads and maintenance over 10 years. To me, that spoke to the importance of the federal government continuing to allocate funding to this program. It is very popular with our local mayors and our local council areas. It is also very popular and important to areas like Loddon shire, which is one of the largest geographical council areas in state of Victoria. Only part of it is in my electorate. Again they have the issue of a small rate base; they simply do not have enough ratepayers to keep up with the maintenance of their roads. One local councillor said: 'We just can't possibly do it. If we spent every dollar in our budget on maintaining roads, we would still be short.' We know that our local government areas are struggling to keep up with the maintenance of their roads. One figure we have heard to date is that 11 per cent of roads managed by council are in poor or very poor condition. They are trying to do their best with what they have in their rate base. So it is important that the federal government partner with the state government and help to fund road maintenance.

Also, due to the government's attacks on and cuts to the financial assistance grants, it is important that this funding go specifically to our regional councils this year. This is another issue that local council areas have raised with me. Funding to local councils has been cut, because the government has frozen the Financial Assistance Grants, meaning that our local governments will struggle to maintain community assets—to maintain sporting facilities—and ensure that they have enough in their budget to pay increases in staff wages. Our local governments in regional Australia are large employers, and in some of our council areas they are the largest employer. In Mount Alexander they are the largest employer—they employ the most people. These funding cuts do put real pressure on that council—can they afford to keep the staff that they have; will they have to look at redundancies? These are the pressures that this government is putting on local councils because it has frozen indexation.

Local government has also been whacked since this government got elected because the government completely scrapped round 5A of the Regional Development Australia Fund. That funding was not an election commitment like this government likes to rant about—just after the budget and before the election local governments were told that they would be allocated funding, based upon the size of their council, to spend on a project or projects in their council area. They had to put forward those projects, they had to go to the department, and then the department ticked off on those projects to make sure that they were in accordance with the rules and the guidelines of RDAF. In my area, Bendigo, they decided to prioritise the gardens—it was one of their major projects—and $1.2 million was to be allocated. Bendigo is a larger council area than Macedon Ranges, who are allocating their 5A funding to improving the Gisborne town centre. In Mount Alexander, they went to the community priority list and decided to divide the funding up between three projects that were sitting there waiting to be done—they simply did not have the dollars in the budget to do them. They did everything right—they met with the minister, they understood the brief, they received the information after the budget, they did their work at a local council level, they did the planning, they submitted the paperwork to the government of the day, the government of the day ticked off on it and issued the letters to say yes, but before the contracts could be signed we had an election and this government, on coming to office, scrapped the funding for those projects. You can understand why local government is very pessimistic about this federal government—their first act when they got into government was to scrap round 5A of RDAF. Since then we have seen attack after attack after the attack on our local governments.

The problem when you attack local government is that you are attacking local regional communities—you are attacking major employers in those regions and you are attacking local communities, making things harder for those communities. This fuel excise funding going into the roads in regional areas will improve productivity and will improve safety. It will create jobs and it will ensure that people working for local government in the roads division will have ongoing and continuous employment. It will ensure that there continue to be good blue-collar working jobs in our local government areas. That is a good thing.

As I said, is it is disappointing that we have got to this point. After the chaos, the madness and the disappointment that tax has already started to be collected—but the government is collecting that tax without the approval of this parliament. We can turn that into a good news story for our regional communities. I know this is my first term here and being here in parliament is all a new experience, but I never thought I would be standing here saying that we have to work out what to do with money the government have collected but that they never had approval to collect. It is ridiculous. I have been talking to local media tonight and I have been talking to the local mayors, saying, 'Look, this is going to sound crazy because it is—the government started to collect an increase in the fuel excise before it had the authority of the parliament to do so, and now we have to try and fix it.' Labor's solution is to take the money that the government took off road users and give it back to road users through local government, through better roads.

I mention the member for Lingiari, because I heard his contribution, and it is true that people in regional areas pay more, as a proportion, in petrol tax simply because they drive further. They use more petrol and therefore they pay more, as a proportion, in fuel excise. And in regional areas fuel prices are higher—they just are. That all impacts on household budgets. I do a lot of driving myself, and I meet a lot of small business people who do lots of business around the Bendigo electorate and they, like me, spend a lot of time on the road. They do complain about petrol prices, and they are right—they are higher in the regions. They also complain about roads. At least when I go back to the electorate over these holidays I can say, 'It has been unfair that you have been paying an increase in the petrol price, it is unfair that the government did imposed that without having the authority of the parliament, but at least we have now linked that extra money that you have paid into improving the roads in our area.' This means we can get on with fixing Edwards Road; it means we can get on with fixing the Heathcote-Redesdale Road. That is going to help three local government areas—we might be able to bring the three local government areas together to help fix that local road. These are the issues before us. It is unfortunate we have got to a situation where we have had to bring the two together, but we are here because the government has pulled another dodgy on the Australian people by collecting a tax they did not have the authority to collect. At least today Labor has been able to clean up their mess and see that money go back to motorists through improving their roads. I support the bills.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It is always a great pleasure to follow the member for Bendigo, but it is somewhat daunting because she is such a good advocate for Labor and for her community. Tonight we are talking on these bills because the government has presented us with a difficult choice; they have presented the community with a difficult choice. The choice is either that we hand millions and millions of dollars back to multinational companies—not to consumers—or that we try to find some more productive way of dealing with that money. In this instance, Labor has decided that the best approach would be to hand that money back to local communities and local councils. As the member for Bendigo said, that is because this was a tax that was collected without parliamentary approval. Given the rhetoric of those opposite and given the philosophical underpinnings of those opposite, you would think that they would not instigate or collect a tax for which this parliament had not given approval to, but that is what they did—just as they implemented a GP tax by stealth, by regulation.

We are left with a difficult choice—Hobson's choice. We can either hand money to multinationals for their own bottom line or for some other purpose—I suppose they might refund it to consumers, but they would find it very difficult to do so—or give it to regional councils. We know that councils need these funds because there has been a $925 million cut from local assistance grants for the next three years. That is nearly a billion dollars coming out of local communities. Those important grants help councils with their everyday operations; those grants have been an important part of council funding since the Whitlam government. They are particularly important for regional communities with very large areas, very high costs and very low populations.

There are many councils north of Gawler in my electorate—councils like the Clare and Gilbert Valley or the Light Regional Council, of which I am a ratepayer, or the Barossa Council—have a very heavy burden, because they have vast road networks. Often these are graded dirt roads, like the roads I travelled in my youth for one reason or another. I have vivid memories of riding out from Kapunda to Allendale North on my bike; it was a pretty tough ride; later on I had a few old cars that I used to bash around in. These are important roads for the local community; I know that because I have travelled them. Since becoming an MP I have had cause to drive them to visit one community or another. These roads make an impact and, as a local member, you know there is no greater thing you can do for country residents than to prevail on the council to get a road graded so that it can be navigated in wet weather. It is often a difficult task. It does not matter whether you are talking about Mallala, Owen, Tarlee, Balaclava or Kapunda—these farming communities all have vast road networks and they need good roads.

Every time this government hacks into the funding of local councils, that hurts city councils but it has a disproportionate impact on country councils and rural and remote locations. We know that in Australia there is a $15 billion local government infrastructure deficit across the country, where infrastructure needs fixing but it cannot be fixed. We know that councils manage 670,000 kilometres of roads—75 per cent of all the roads by length—and so we know that 11 per cent of those roads are poorly maintained. That is not because the council wants to let the local community down—they are closest to the community—but they have to work out in their works budget which roads get fixed and which roads do not. It is always a difficult trade-off. Every time this Commonwealth government cuts their funding, the choice becomes even harder.

We have difficult choices in this national parliament, which cause difficulties in local communities. In South Australia we have a particular difficulty: historically, since the late 1990s we have had eight per cent of the country's population receive roughly six per cent of the road funding. That has been a difficult issue because we had a decade of Commonwealth underfunding of roads during the Howard era and up until 2004, when the rivers of gold started to flow from the mining boom mark 1. If you have a decade of underfunding and you do not maintain the top of the road every few years, then you end up wrecking the base of the road and then it is ten times more expensive and more difficult to fix. We had a very big infrastructure backlog for South Australian roads. When I got elected, I remember going down the Kapunda to Tarlee road, and it had not changed since I left year 12—15 years later it had not changed a jot. It was patched up all over the place and still taking very large trucks. I was proud when the South Australian government under Mike Rann finally got it fixed to something approximating a decent road.

We know the Howard government fixed the problem by putting in an additional top-up to South Australian roads in 2004 and that funding remained all the way through the Rudd and Gillard governments. And it helped. It made a difference. It helped clean up that backlog. The councils were very, very attached to that funding, but this government cut that funding, on top of all of its other cuts. To rub salt in the wound, it was a South Australian minister, the member for Mayo as the infrastructure minister, who cut this $18 million a year that made all the difference and that recognised South Australia's population demands.

You have to remember that, in South Australia, most of its very large population—eight per cent—is in Adelaide. So we have a far-flung population in this state. This state is important to this nation's mining revenues. There has been an explosion in mining in South Australia over the last few years because of the pay scheme and because of our very good state mineral resources minister, Tom Koutsantonis, among others. But we have a small population across that. So, we have very large road network that need to be maintained by councils with very low rate bases, as the member for Bendigo said. That is exactly the situation. That has a big effect on South Australia.

So, it is disappointing that the government, on top of all the other cuts that they have made, have hacked South Australia again. It was not good enough for the government to just wave goodbye to the car industry or to lie openly about submarines—flat-out lie to the public of South Australia about submarines. It also had to hack a road funding measure put in place by the Howard government in recognition of our situation.

David O'Loughlin is the Local Government Association president—and, yes, I know him well because he was a Labor candidate for Adelaide, a very fine one. But, with his Local Government Association hat on, he said:

If this funding is not extended in the May federal budget, state council road programs will be trashed …

As it only affects South Australia, it would mean the federal government is making a conscious decision to strip funds from our state while every other state retains the status quo.

That is just unfair to South Australia.

With this bill, we have Hobson's choice, a difficult choice, between handing this money that has been collected without parliamentary approval—in this sort of sly, double-dutch deal where you get the petrol companies to collect your tax and then present this parliament with an unfortunate, unpleasant choice—back to the petrol companies for them to do with as they please or, alternatively, finding some productive use for it. Now, the productive use that Labor have achieved for it, through negotiation, is making sure that that money goes back to local roads and local councils. That is an important thing for my electorate. It is an important deal to make.

Bismarck, I think, said about legislatures: 'Laws are like sausages. It's better not to see them being made.' That would be true of this bill. Nobody would look at this bill and say it is a high point of parliamentary decision making or as an exercise. No-one would hold the government up as having done the right thing in these circumstances. That is why we opposed it—because we assumed that this government would do the right thing. After all the government's rhetoric, after all their commitments, after the elevation of trust to some sacrosanct place by the Prime Minister in the last election, we assumed that they would bring this tax to the parliament. Remember, 'no taxation without representation' was the cry of the miners at Eureka; here, all these years later, what would they say about this fix? This is indeed taxation without representation.

You would expect better of the conservative parties, who like to philosophically elevate taxation to some sort of barometer of a nation's health—if not of the Prime Minister then surely of their very animated backbench. There is nothing that gets that side more motivated than a good discussion about taxation. So, to find them in here—or not in here, as the case may be—supporting taxation without representation, particularly on the bowser, every time people have to go to the petrol station, is absolutely galling.

What Labor decided to do was make a silk purse out of a sow's ear. We decided to make sure that the $1.1 billion boost to the Roads to Recovery program occurs and stimulates local jobs, local communities and local demand, and gives real confidence to bush areas which have been hit hard and will always be hit hard by people who want to mess with federation, with basic services and with the ordinary operations of government, as this government does—and it does not matter whether it is in this bill; in the federation white paper; or in health and education funding, with $60 billion worth of cuts that the government will not own up to. There is nothing worse than someone who will not own up to their own work, who is not proud of their own work, and that is this government: shamefaced, sneaky and, often, operating in violation of its own philosophical precepts.

We support this bill, but it is not perfect. We wish that the government had behaved in a different manner, where we would have had different choices.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to follow my Labor colleagues the member for Wakefield and the members for Bendigo and Charlton before him, who have all spoken of making the best of a very difficult situation—Labor coming to the table in support of this Excise Tariff Amendment (Fuel Indexation) Bill. We have agreed to this because, in the end, it means an additional $1.1 billion in funding for Roads to Recovery, and that is a really significant investment in regional economies and regional areas like Newcastle and the Hunter region.

That is part of the compromise that we have agreed to with the government in order to pass this reintroduced bill regarding the indexation of fuel excise. As speakers before have made abundantly clear, it would be unconscionable for those funds to be returned to the big multinational companies and deliver absolutely no benefits to the consumers who have paid this fuel excise. It needs to result in some kind of net benefit for the people that we represent here in the Australian parliament. This is a compromise that does not come lightly, but it is good news for regional and local roads, including those in my electorate of Newcastle. It is a difficult decision for Labor to come by, but the prospects of billions of dollars being returned to oil companies was clearly an unacceptable position for Labor and, I would suggest, a pretty unacceptable position for the Australian people. We would prefer this money to be spent on roads in regional and outer-suburban areas, rather than being handed back to those multinationals who, quite frankly, really do not need this money at all.

Regions like Newcastle have suffered under the Abbott Liberal government. Indeed, local governments, in particular, have really felt the shift in focus, having been very much a focus of the Rudd-Gillard Labor governments, where we saw a massive injection of funds delivered to local government. It was an unprecedented partnership that was so well crafted by the member for Grayndler, the then minister for local government, who really forged a very new kind of relationship between federal and local governments. Having been a councillor on Newcastle City Council prior to my coming to this parliament, I can assure this parliament that those funds that were delivered directly into councils were indeed very welcomed by councils like Newcastle City Council, which was at the time managing an infrastructure backlog of some $130 million following the report from Percy Allan which the former New South Wales Treasury secretary delivered. The commitment that the then minister for local government made in terms of providing some much-needed direct funding into programs like Roads to Recovery, black spot road funding and the direct regional infrastructure grants assisted during that really difficult time during the global financial crisis not only was invaluable but also saved so many local governments who were simply not able to meet the demands of those times.

This federal government's cuts to local government and the freezing of the financial assistance grants, in particular, have been a really savage blow to local councils right across Australia. It has had a devastating impact on economic activity in regional areas like Newcastle, where we have high unemployment, along with many other regions in Australia now experiencing youth unemployment of over 20 per cent. That is unacceptable for any community that I know of. In Newcastle, recent unemployment rates have peaked at levels not seen since the current Prime Minister was in fact the employment minister. Indeed, they are unemployment levels not seen even during the entire global financial crisis. That is the situation in Newcastle at the moment. Unemployment has touched double digits in Newcastle and this year has sat on an average of more than eight per cent, well above the national average, which is around six per cent—which in itself is too high, I should add.

This $1.1 billion that Labor has secured from the government to invest in Roads to Recovery funding will stimulate regional economies. It will generate much needed jobs and will be a boost for vital local infrastructure. Indeed, the Hunter Research Foundation's analysis, post budget, of the Newcastle and Hunter regional economies makes it really clear just how necessary an investment in infrastructure really is. This is not the Labor Party speaking here; this is the independent Hunter Research Foundation, who make very clear that the Hunter region is currently experiencing the worst economic conditions that it has faced in a generation—and that includes, as I said, really unacceptably high levels of unemployment. Shipbuilding and manufacturing in my home town of Newcastle tonight released news that another 160 jobs are to be lost from the Forgacs shipyard. That is a completely unacceptable position, but I will talk at length about that on another occasion.

It is this lack of investment into Australian jobs and Australian industries, the lack of a plan around that, that is making life so difficult for regions across Australia as well as, of course, near record low levels of business confidence. That is the situation that many regional economies like Newcastle and the Hunter region in particular are faced with. That is why it was so vital for Labor to be able to secure that the moneys generated from the fuel tax excise be spent in a profitable way that has some long-term social and economic benefits for those communities.

The regional economies are really doing it tough, and this money will go some way to helping address some of those difficulties. This government has really smashed confidence since coming into office and has undermined the transition that was going on in our economy in Newcastle. In Newcastle, the coal industry workforce is shrinking and local manufacturing is reeling from the stalling of federal government investment. I gave the example earlier tonight of another 160 job losses from Forgacs shipyards. The government has done nothing but stall on its investment in Australian jobs and Australian industries. It is costing thousands and thousands of jobs and the possible loss of an entire shipbuilding capacity in this nation, not just in Newcastle.

In the government's first budget, the Prime Minister froze local government assistance grants for three years, and that cut $925 million out of communities right across Australia—$925 million zapped out of those economies. My electorate touches four local government areas: Newcastle, Lake Macquarie, Maitland and Port Stephens. In total, the cuts from this government's freezing of the financial assistance grants left those four councils in my region $15 million worse off. These cuts were not flagged. No-one had any indication that this was on the government's radar, so they came as a very rude shock and were not at all welcome or appreciated, I can assure you, by the people of Newcastle.

Newcastle City Council alone has lost more than $4½ million and Lake Macquarie City Council more than $5½ million. These are two councils that are currently battling with the consequences of the savage storms that tore through our region last April and did massive damage to infrastructure. Yes, there will be some funds made available, as is right and proper, through national disaster payments, but there is always a shortfall. These councils already have infrastructure backlogs and are faced with extraordinary circumstances of cleaning up after massive storms and wind damage. There will be a shortfall; make no mistake. Having access to at least some assistance through these Roads to Recovery grants will mean a lot to the communities in my region.

I recall very well standing with the Lord Mayor of Newcastle, Nuatali Nelmes, late last year on the steps of Newcastle City Council, where she outlined to the media the detrimental impact that freezing the indexation of the financial assistance grants would have in our community of Newcastle—what it meant to local swimming pools, pathways and maintenance projects that had to get pushed back in the time frames and job lists of Newcastle City Council. In an act of extraordinary duplicity earlier this year, despite these cuts, we saw the Deputy Prime Minister featured in local Newcastle media spouting that the government had handed out these fantastic 'no strings attached' grants to communities, failing to mention that these were not new dollars. This was not some new scheme or new project here. All the government was doing was handing out what remained in the financial assistance grants bucket, minus the additional dollars that should have been there for the indexation rise that, had this government not frozen it, my community would have had access to. There are currently some $15 billion worth of local government infrastructure deficits around the nation. This is a very welcome funding boost that Labor has managed to extract from the government. It is vital to the needs of regional communities, including Newcastle.

In government, Labor invested $4.2 million in Roads to Recovery programs in Newcastle City Council alone. It was a massive investment, at times a tripling of funding that had not been seen from previous non-Labor governments. It was extremely welcome. We were able to look at a large number of roads that had been sitting on a list for a very long time. But of course there are new problems with local roads in the region now. I held a community office just last week, where the residents of Woodberry brought to my attention problems with roads in their area at the moment. Whilst these are issues that I will take up with the Maitland City Council and the state government, they talked about the need for really significant upgrades of roads because of massive potholes—more than just storm damage but ongoing problems with these roads. Communities like those in Woodberry, Beresfield and Tarro—where people have talked to me about the Anderson Road problems and the Thornton Road problems—will really welcome the fact that their local government areas are going to be able to have access to this $1.1 billion of funding that Labor has extracted to boost the Roads to Recovery program. Money that can be spent directly on the ground, through local governments, is money very well spent. We know that from our time in government. I am very pleased to see this government taking up Labor's suggestion of investing in infrastructure again.

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

This is a good day. It is a day when the government and the opposition have reached agreement on a difficult area of public policy: fuel excise. Fuel excise was indexed to the consumer price index nearly 30 years ago. It was indexed in order to remove the annual budget round of increasing excise on a range of commodities from tobacco and alcohol through to petrol. The classic front-page story that ran on the morning of the second Wednesday of August every year—budget day at that time—would announce 'Fags, beer and petrol go up'. The decision to index it to CPI said to people that these excises should proceed only in a fashion that equals the rate of inflation.

In the early 2000s the then Prime Minister faced difficult political circumstances at a time when the Australian dollar was plunging towards US50c and the domestic price of petrol was rapidly increasing—it went beyond, unbelievably in those days, $1.10. At 110c a litre the political pressure on the government was great. The government had lost a key by-election in Ryan, had lost its kindred spirits in the Western Australian parliament—the loss of the Court government—and found itself under extreme political pressure as a consequence of the cost-of-living impact occasioned by a collapsing dollar. The immediate response of the government brought little or no short-term pain—it was to remove the indexation on fuel excise. That seemed at the time to be a prudent measure, because in the context of one budget how could it do much damage? But over the course of the ensuing nearly 15 years that decision has cost the budget in excess of $10 billion. So it is good to see the government and the opposition reaching a compromise to restore the indexation on fuel excise.

This comes at a cost to consumers. We should all know that. A consumer with an average fuel tank of 60 litres, such as my wife's vehicle has, will pay about $1 a fortnight in additional petrol costs—not much, but we should know and understand that it will cost an additional amount of money. We should also know and understand that it will generate substantial revenues over the forward estimates of the order of $3.6 billion, and over the course of the next decade of the order of $23 billion, to support the activities of the Commonwealth government. Those activities will include road funding and a whole range of other essential functions of government.

It is really pleasing to see a good piece of public policy, hard fought over and hard won on both sides—tough negotiation—producing an outcome that is genuinely in the national interest. One of the reasons we know it is in the national interest is the positive reaction that we have seen in the last few hours from our community. The Australian Local Government Association has welcomed this decision, because it also delivers to Australia's local governments road funding in excess of $1.1 billion. That will go into the Roads to Recovery road funding that is administered by our local government authorities. Our local government authorities are not just excellent authorities but also the authorities with the capability to properly administer these funds. They are the authorities with the right prioritising of local community demands and needs. They are properly democratically elected, held accountable and able to ensure appropriate and proper spending of these funds. So it should be no surprise to any of us that the Australian Local Government Association says of the Labor Party that this:

… underlines their capacity, even in Opposition, to put Local Government at the centre of policy initiatives aimed at enabling councils to deliver essential infrastructure for their communities, create jobs and contribute to productivity improvements across the nation. Councils across Australia will be appreciative and thankful to the Shadow Ministers for this great initiative.

We should also be greatly appreciative of the government for accepting the offer that was made.

I am really pleased to be speaking here today on this bill, because I think all of us in this place see the sound public policy and public administration reasons and the good taxation policy that underpin indexation of these excises. In the context of petrol I think it was an important measure long overdue. Therefore I congratulate the government on having the strength to stay in the ring and to wrangle on this, and the shadow minister for infrastructure and the shadow Treasurer for bringing it home in a way that keeps the Australian taxpayer whole. We know that if this compromise had not been reached the Australian government would have had a terrible job to conclude what to do with the revenue that it has collected, quite properly, over the course of the last year while the excise has been in place. It reasonably had concluded that it might need to give that money back to the petrol companies which originally collected this revenue. So this is a good decision—a good decision for Australia's roads, for Australia's road users, for our community and for local government. It is rare that in this place we can come together, both side of politics, and conclude an arrangement that is so manifestly in our national interest and at the same time do it in a hard-won and legitimate way.

Labor has proudly sought, and the government has agreed to, an additional $1.1 billion in Roads to Recovery funding for regional roads. That decision will, we hope, go some way towards repairing the funding and activity gap left at local government level as a consequence of the cuts in financial assistance grants to our local government authorities. Throughout the country, from north to south and from east to west, from Adelaide to Darwin and from Cairns to Broome, we have had cuts in the Financial Assistance Grants to local governments. And those cuts have a profound impact on the capability of our local government authorities to act in the interests of our communities. I will read some of the funding that has been foregone as a consequence of the freeze to indexation in Financial Assistance Grants.

In Albany on the south coast of Western Australia, cuts over the forward estimates will total in excess of $2 million. In Bayswater, a metropolitan, suburban local government authority in Perth, the cuts will total in excess of $1.1 million. At Chittering in the hills outside Perth we see that the cuts through this non-indexation will total in excess of $630,000. These cuts are very substantial, but they get even bigger and even worse when we get to the regional locations of Western Australia, where we see that as a consequence of these measures Dalwallinu will forego funding that totals nearly $1.4 million over the forward estimates. These are very small local government shires with small populations, lots of roads and lots of infrastructure. They have very, very small rates bases.

Consider Derby-West Kimberley: this is the area of Western Australia that covers from the central part of the Kimberley, from the township of Derby, through to the Kimberley west coast and the township of Broome. That local government authority will lose, under this decision, nearly $3 million. The Shire of Donnybrook-Balingup, where I will be on the weekend at the Truffle Kerfuffle, will lose nearly $1.4 million under these measures.

Local government is literally the first tier of government in our country. It is the tier of government that is closest to the people and it is the tier of government that keeps our communities working and functioning well. It is extremely important. In my own electorate of Brand, due to these freezes in Financial Assistance Grants the City of Kwinana will lose almost $800,000. The City of Mandurah will lose over $1.6 million and Rockingham will lose almost $2.4 million. There is in excess of $4 million in lost funding for key metropolitan local government authorities as a consequence of those Financial Assistance Grant freezes.

Now, the decision which the government has made that unblocks in excess of $1.1 billion will restore a substantial funding stream that will materialise as Roads to Recovery funding. The reason that is important is because all of our local government authorities have priority roads, roads that are about serving the interests of our communities, and construction tasks that are often about safety, always about amenity and always about providing local contractors and local workers with good, local jobs. And that is really important, because those good local jobs are jobs on the tools. They are jobs that are building our roads, streets and pavements which create safer communities—better places to live and better amenity. It is amenity that better accords with the aspirations of our community.

The government's decision to allow this additional funding stream to go to Roads to Recovery should be applauded, and I know it will be applauded by the over 550 mayors and local government authorities around our country. The reason they will applaud is because they have the people, the machinery and the capability to start work right away on Roads to Recovery programs that will deliver immediate benefits to our communities. They will deliver immediate work and immediate benefits in the course of the coming two financial years that will benefit our communities for 10, 15 or 20 years to come. There cannot be a better way to spend a dollar than by having that dollar dedicated towards enduring public assets to support our communities—to make our communities safer places and to make our communities even better places.

Many of our regions are currently experiencing high youth unemployment. Just last Friday I was in Cairns with the Prime Minister and Warren Entsch, launching the North Australia white paper, the government's terrific response to the Joint Standing Committee on Northern Australia. In Cairns, the unemployment rate for young people, as we stand here this evening in Canberra in Parliament House, is in excess of 22 per cent. So we know that the Roads to Recovery program will not just fill an important capital works gap in our local government portfolio works but it will, most importantly, improve amenity in our communities. It will create jobs in our regional communities and it will do all of that on budget and on time in projects that will be well administered and well and transparently managed in the interests of all of our local government authorities. And it will be done on the priority ordering of capital works that our local government authorities have published, that they are prepared to stand behind, that they are prepared to fund and that they are prepared to make sure happen in a safe way to support our communities.

It is a rare day when both sides of parliament can come together to agree on a revenue measure that will stay in place now in perpetuity, that will generate funds from the sale of gasoline and petroleum for generations to come and that will index this excise to inflation. It is a wise decision, it is a good decision, it is a decision that serves our community well and it is a decision of which we should we should all be proud. I commend the bill to the House.

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

) ( ): It is a pleasure tonight to make a contribution on the fuel indexation and excise tariff amendment bills. They give effect to a very important decision that Labor has made today, and I want to take some time this evening in the House to explain the rationale behind what has occurred and what these pieces of legislation give effect to.

Today, Labor has agreed to compromise on a tax proposal that was put forward by the Abbott government, one that has been baked into the various budgetary documents that they have produced since announcing that decision about a year ago. We have done this with some critical conditions. The most important one is that we have said that the revenues that have been collected under this tax need to go into local government and be put to local roads funding, and I will talk a little bit about the importance of this priority. The critical thing at the outset to understand is that we believe that we have been able to turn what was a bit of an attack on motorists, to be frank, into something that is going to be in part beneficial for motorists and at the same time for local governments. We have seen really good support today from the Australian Local Government Association, who has come out strongly backing Labor's decision.

I want to start with a central principle in this discussion that has guided a lot of Labor's decisions about how to manage what have been fairly consistent proposals to increase tax or to increase the burden on ordinary Australians. Labor does not believe that the fiscal issues in this country should be borne, in general, by ordinary Australians. What we need to remember is that when the Abbott government were elected the first two major things they did as a government were to give a tax break to the biggest polluters in this country and a tax break to big mining companies. Then we saw the Abbott government go on a tirade around the nation preaching debt and deficit disaster and going on and on about all the problems that have been caused, supposedly by us, when the first two big policy initiatives of the government were to give tax breaks to the biggest companies operating in Australia.

What we have seen since is a more or less constant attempt to push that burden onto ordinary Australians. We saw in the last budget, very disappointingly, about 17 new or increased taxes. That was despite a promise made at the last election that there would be no new taxes. It sounds a little bit unbelievable given the rhetoric and everything the government says, but this government is actually the highest-taxing Australian government since John Howard was Prime Minister of Australia. That is probably not what you would think because this is not what we hear from those in the government, but the facts show us that very clearly and it is important that Australians understand this.

Given the principle I have laid out here about where the burden of this issue should lie, you could imagine that when we initially heard about the proposal to increase taxes on fuel we were very opposed to this initiative, and it is an opposition that we have kept up for some time. But, coming to this point in the budgetary cycle, Labor has really faced what has been a Hobson's choice. The government has essentially said that, were Labor not to agree for this legislation to go through the House, the taxes that had been collected under regulation would be returned to fuel companies—essentially the fuel companies that Australians buy petrol from. Clearly, this would be completely unacceptable to motorists around Australia and clearly it would be unacceptable to Labor. One of the things that all of us in politics understand is that you get pretty good at making lemons into lemonade. That is why Labor has agreed to the proposal before us, but with these critical conditions that will ensure that we meet some other important objectives that Labor believes in while we go ahead with this excise increase.

I spoke a bit earlier about one of the conditions of the agreement that we have made with the coalition government. The critical point here is that this proposal has been agreed to on the understanding that this $1.1 billion flows directly back into local government and, in particular, supports them in the difficult task they face in maintaining local roads around Australia. Beyond the rationale I spoke about of the tax burden, I think this does show quite a deep commitment that we on this side of the House have to local government. I am a former local mayor and a former local councillor. I was on council at the City of Greater Dandenong for three years. Having had that experience, I am critically aware of the role that local government plays.

I also know that money for local governments is tight. They do not have the same revenue options that state and federal governments have. We also know that, when you add it up, local governments in Australia are responsible for an incredibly large array of activities. It is roads and it is footpaths and all of the things that we know about, but it is also things like local community groups and neighbourhood houses that dot all of our neighbourhoods, and the different services they provide like local arts, writing, theatre, community groups and all those sorts of things.

I have been on a metropolitan council, but I know that the task faced by regional and rural councils is of a completely different order of magnitude. That is because they have a much narrower tax base. A local government that looks after a hundred small towns has to deal with a hundred community halls and a hundred local swimming pools and a hundred of all of the other things that we might have three or four of in a big metropolitan council with a much wider and a larger range of people who can pay rates. I remember attending lots of local government seminars when I was a councillor. You would often hear really incredible stories about local government CEOs who had to play very different roles in their local council because they just did not have the staff that they needed to fulfil all of the activities. One that sticks in my mind is a local government CEO who, on his way home, had to go and shut some critical gates in the community that shut off community facilities at the end of each night. Despite the very hardworking CEOs we had at the City of Greater Dandenong, you would not see a task like that on their lists.

We know that these councils are managing regional facilities on a shoestring. In addition, these rural councils are often servicing areas of really significant need. In rural and regional Australia there is a higher incidence of poverty than we see in many of our big cities and the average age of the population outside of the cities is higher than in the cities. So we see these small councils with lots of different facilities and also communities that need quite a lot of care.

This issue facing local government—the funding gap between the funding they are able to raise themselves and the various responsibilities they have—is particularly stark when we look at the issue of roads. There are 670,000 kilometres of roads that are run and monitored by local governments around Australia. That is about 760 times the difference between Melbourne and Sydney, if that brings it to a more tangible magnitude. We know that 75 per cent, by length, of all the roads in Australia are monitored and managed by local government. One of the recent reports on the state of roads in rural and regional Australia found that 11 per cent of all roads are in poor or very poor condition. That is from an Australian Local Government Association survey. So again we can see that local government has this really significant responsibility, and it is just not able to keep up with the infrastructure backlog.

We are all playing the bipartisanship game today, but it is important to note that local governments have not been assisted by various decisions made by the government since they came to power. As with other areas, they talk a very big game about local government but when we look at the numbers there have been massive reductions to funding for local governments, in the form of cuts to financial assistance grants. And those cuts have affected councils all over the country. Thinking about my electorate of Hotham, the city of Glenaire was promised financial assistance grants for the council, but that promise was ripped away when this government was elected. We see that reflected right across the country.

In just the first year of office, the Prime Minister cut $925 million away from communities through cuts to local government. Considering all the things I have discussed in terms of the big responsibilities of local government, those cuts were really the last thing they needed. Again, we hear big talk about roads and the importance of infrastructure investment in this country—cutting $1 billion from local governments was not going to get us any closer to managing the infrastructure backlog faced by our local councils.

I want to speak a little bit about Labor's approach to infrastructure, which has very much guided the compromise we have reached with the coalition to ensure that additional funding goes into local government. All of us on this side of the House speak pretty frequently about our commitment to public transport. It is a very real and very serious commitment. The Rudd and Gillard governments spent more on public transport investment than every other Australian government—put together—since Federation. This is really important, because the money that is being put forward here in this legislation is not going to go to public transport, and I just want to make it clear that we understand that. It is certainly not reflective of stepping away from a commitment to public transport. We are fiercely in favour of that, and I say that particularly as a Victorian.

We saw in the last state election a bit of a referendum—as the Prime Minister called in—on the East West Link. We saw the people of Victoria being very clear that, instead of a big road that very few people in the community actually wanted, they wanted investment in public transport infrastructure. And Labor is very keen to help them achieve that.

We saw some other important reforms to infrastructure under the former government, which I want to highlight while I have the floor this evening. One of the really important things Labor did was put infrastructure right at the top of the national priority list. Because of the incredible work of the member for Grayndler when he was infrastructure minister, Australia moved from being one of the lowest-spending countries in the OECD to being the highest-spending country on infrastructure in all of the OECD.

When you go around Australia—as we all get to do as members of parliament—particularly in local communities, there is rarely a person who does not know Albo and his fierce commitment to funding good public transport that cities want and to funding roads of national importance.

One of the critical things that the member for Grayndler was able to do as infrastructure minister was make some really important moves towards taking the politics out of infrastructure funding decisions. Infrastructure is of course probably the most famous example of pork barrelling—you hear about 'bridges to nowhere' and those sorts of things—that is just making light of a very serious point, which is that these projects can be so politicised and they are worth really significant dollars. One of the important things that the last government did was put a really good framework around infrastructure decisions through the establishment of Infrastructure Australia.

In the Leader of the Opposition's budget reply speech, we heard about some really important initiatives that Labor wants to put forward, if we form government again, to continue that important process of depoliticising infrastructure decisions. These decisions are too important—too important to our national economy—to be just the play-thing of whoever is the Prime Minister of the day. Some of the things that the Leader of the Opposition talked about were, for example, trying to bring some semblance of bipartisanship into the approach, and to provide more independence to Infrastructure Australia. I would contrast that with the approach we have seen on the other side of the House, where, for many months—I think, more than a year—Infrastructure Australia was actually without a chair. That really tells us everything we need to know about the seriousness with which they take the independence of these infrastructure decisions.

There is so much more that we could talk about in this important reform. We have not talked about the employment implications of the decision that Labor has made. And that is key, because this is about $1.1 billion flowing right into local communities and building construction projects that are of local need. Let me just say that Labor has made what was a really significant impost on Australian motorists into something that we see will benefit them and local communities, and benefit local governments. I am very pleased today to support the legislation before the House.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to 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.

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Makin for his thoughtful contribution and recognise that, yes, a substantial part of this proposal will go to the people of South Australia and to the improvement of roads in South Australia. I would just say to him, in relation to the rest of the infrastructure, that I have repeatedly asked the South Australian government to bring forward major proposals, including through the asset-recycling scheme, and as it stands today they have not given us any proposals that meet the criteria—that is, the infrastructure proposal needs to have a reasonable cost-benefit analysis.

Having said that—and the Prime Minister has indicated this—we are prepared to work in good faith with Jay Weatherill and the South Australian government to find the projects and to help fund the projects that are necessary to build the South Australian economy. I genuinely want to build a stronger South Australian economy. I genuinely do. I love South Australia.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Some of my best friends come from South Australia!

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Well, my daughter is named Adelaide, actually, so it has a very special place in my heart. But South Australia is a great state. In particular, when I was the Minister for Small Business and Tourism, I was doing everything I could to try to put South Australia on the global tourism map because I think its product is in many ways second to none in other parts of Australia. Having said that, we will work closely with the South Australian government should they put up proposals.

I want to thank every member who has contributed to this debate. It is certainly a significant moment. It is a significant moment because this is a significant structural reform that will deliver $23 billion to the budget over the next 10 years. I know it is hard for many people to see petrol prices increase with inflation and, in this case, the excise increasing with inflation, but we need to pay for new roads. We need to invest in the infrastructure that is going to make us a stronger and more prosperous economy. If we can have better roads that reduce the congestion and that help to improve our productivity, that is good for Australia. Every single dollar of excise that comes from this bill, associated with the inflationary impact on excise—every single dollar—will go towards road funding. That is hugely important.

In addition to the proposal put forward by the Labor Party to increase the Roads to Recovery program—and, as I said in my second reading speech, the base funding for Roads to Recovery has been $350 million a year—we had increased it next year, in 2015-16, to $700 million at any rate. So, when the shadow Treasurer contacted us and endeavoured to negotiate an agreement, we were prepared to appropriately consider the offset of an extra $1.15 billion over two years, which is the increase in the excise equivalent over the next two years, and put it into the Roads to Recovery program.

I want to emphasise that I did not want to be in a position where we were putting an extraordinary amount into 2015-16, so we are putting an extra $300 million into 2015-16 and around $850 million on top of the $350 million in 2016-17, so we have a reasonably flat line, albeit an increase. And then bear in mind that it drops down to $350 million after that, which was the base funding.

Why do we do so? It is because this is timely from an economic perspective. It is timely from an economic perspective to get out there and build the roads as we go through the transition from mining construction to mining production. There are large number of potential workers who have been involved in the mining industry who are coming back to other parts of the country. This is an opportunity for them to get work in road building and potentially even bridge building—because I am advised that they do qualify under the Roads to Recovery program, which is very important in country areas.

But I might say that it is timely from an economic perspective. It is advantageous because it is deliverable from an economic perspective. Importantly, local government is a well-respected deliverer of these sorts of programs, so it is not as if you are trying to build an entirely new industry to roll out the roads. There is a proven track record in relation to the delivery of the money in this area and the delivery of outcomes in this area. It is outcome oriented, which is hugely important. Finally, as the member for Makin mentioned and I am sure many others have mentioned, it does cover every part of Australia, and I think that is hugely important. No part of Australia is left out of this program. It is not specific. There is a formula that is laid down by the Local Government Grants Commission and their formula will apply to this extra funding.

Improving and repairing the budget should not be this hard, but it is. Despite quite a journey from the opposition, we welcome their support. I am not going to labour on the politics of the decision, nor am I going to labour on the politics of the debate. I am focused on outcomes. I have always, always been focused on outcomes. This is the right outcome for the people of Australia and it is the right outcome for the budget. Why? Because, if we have a stronger budget, we have done everything we can to prepare for the challenges of the future—and we are absolutely determined to repair the budget.

This was announced in the 2014 budget. It was subject to considerable criticism, but it is the right thing to do. Like a number of other initiatives in that budget it is hugely important for Australia that, at the appropriate time, in the view of the parliament, and it is absolutely right that we pass more and more measures from that budget. That is the only way we are going to be able to properly prepare Australia for the future. In the last two weeks, we have seen a number of measures pass through the parliament that help to strengthen the Australian economy and strengthen the Commonwealth budget, and they were decisions that were made in the 2014 budget.

I commend this bill to the House. I thank everyone that has contributed to this debate. In good faith, I thank the opposition for being prepared to be reasonable about this. I do not gloat about this. What I do care about is that we strengthen the budget and strengthen the Australian economy so that we leave a better Australia for our children, and that is exactly what this does. This legislation is hugely structural. It is very significant. As I said in my second reading speech, I was there when indexation was taken away. There were many factors at play at that time. The lost revenue for Australia since that time has been extraordinary. And, rather than introducing a whole raft of new taxes, it is far better to make the existing taxes work and work to the benefit of the Australian people. In this case, because every dollar of excise increase is going into roads, there is a real benefit to the Australian people. I commend the bill to the House.

Question agreed to.

Bill read a second time.