Monday, 28 May 2007
Appropriation Bill (No. 1) 2007-2008
I will not get into the conversation about football teams on the day after my beloved Newcastle Knights, unfortunately, took the biggest pounding in the history of the club, but I can guarantee the House that when they overcome their injury woes they will be back.
It is a pleasure to speak to the Appropriation Bill (No. 1) 2007-2008 and cognate bills. This is the Treasurer’s 12th budget and my 12th budget. I have been here just over 11½ years, having been elected in March 1996. A strong global economic environment, record terms of trade and an unprecedented resources boom continue to make the work of the Treasurer easier than it has been in the history of Federation. It is a dream come true to be in government and to be Treasurer in these buoyant economic times. This coming financial year the Howard government will officially collect some $247 billion. We throw the term ‘billions of dollars’ around in this place with gay abandon, but in anyone’s language it is a huge amount of money.
In addition, the Treasurer will collect about another $37 billion in GST. He does not like to count that on his books, even though the accounting standards the government is expected to adhere to demand that he does. The government’s orphan tax is the GST. It is a big tax take that demands enormous responsibility. Unlike the days before the former Hawke-Keating Labor government’s restructure that opened up the Australian economy, the biggest challenge for Peter Costello on budget night was to determine how best he could spend this richness of money without making his political intentions too obvious in this important election year, and how best he could spend the riches without putting too much pressure on the Australian economy—in other words, without stimulating the Australian economy too much.
Of course, the question for the rest of us was: has it been spent wisely? I should begin answering that question by touching on some of the good things in the budget first, some things that we welcomed. We do of course welcome the tax cuts. They are an appropriate dividend paid out to those who live and work in this country in these good economic times in this resource-rich nation. And they are also welcome on the basis that, for a change, they are largely targeted at lower and middle-income earners, unlike recent budgets, where most of the proceeds of tax cuts have gone to those on higher incomes. So we welcome that point. We also welcome the $22 billion or so for road and rail infrastructure announced under AusLink 2, although I note the government’s refusal so far to announce where that money will be spent—no doubt that information is being held back until closer to the election, and on that basis it is very difficult for us to determine whether that money will or is likely to be spent fairly and efficiently.
One aspect of the budget which exposes it as the most poll-driven document I have seen in my 11 years in this place is the range of one-off expenditures. For example, there is $500 for pensioners as a one-off payment. There is $1,000 for carers, those people who do such a magnificent job in our community, as a one-off payment. It really does pose the question: if these people are deserving of additional payments, why is it only a one-off payment in an election year? If the member for Dobell is able to answer that question, I would welcome it. This must be breeding increasing cynicism and scepticism in the electorate about this government’s intention when it is handing out cash grants to pensioners and carers as a one-off payment only in an election year.
Nothing causes the 2007-08 budget to stand out as a political document more than the bringing forward of some $250 million under the strategic regional roads program, money that should have been spent after the election but will now conveniently be spent prior to the election. This is a quarter of a billion dollars which can be flushed straight into the system by virtue of the fact that the money will go to applications that were denied in the last funding round. So, no documentation is required, there are no cumbersome and time-consuming processes. Bang; $250 million is spent on regional roads, no doubt mainly in key marginal electorates. But there will be exceptions to that rule because, with many of the projects, like those in my electorate that were denied funding the first time around, the government will be forced to fund them because they were in the round and it is going to be impossible for the government to spend money in areas where applications had not been lodged previously.
So there is some good news for my electorate, as just over $2 million will be spent on roads in or around the vineyard districts in my local area. That is very welcome news. I have to say, though, that just over $2 million is a very small amount of money. Cessnock council, for example, has indicated that at least $10 million is required to bring the road network within the Hunter Valley wine country up to anywhere near an acceptable standard. Why shouldn’t the federal government be more heavily involving itself in this road network? As you would know, Mr Deputy Speaker, in the Hunter Valley we make the world’s finest wines, we are the state’s largest tourism destination outside Sydney, we are a real draw card for the state and we are a key economic driver for the state’s economy—and therefore for the national economy—so why wouldn’t the Commonwealth government be investing in that all-important road network? It has been ignoring it for too long and it is about time it started to invest; $2 million is a good start but we need much, much more.
On the question of spending wisely, the big test in this budget was for the government to demonstrate that in these good economic times it was prepared to astutely invest in our future. We are still involved in a very long economic growth cycle and we are very fortunate to be locked into that process. But the good times will not last forever. No qualified economist would argue otherwise, and we really do need to be taking the proceeds of the good times and investing in the future to insulate ourselves from tougher times. There is little evidence of that in this budget.
As I mentioned, we have seen a significant injection into AusLink 2 and a promise of funding in the future, but again we have not seen the detail. We still live with a lack of funding in preschool education, in skill education and, of course, in higher education. I know I will hear from government members saying, ‘You can’t talk about higher education. We put $5 billion into a Higher Education Endowment Fund.’ This is no more than a promise to pay some surplus into university infrastructure in the future. There is no real commitment from the government. We have seen a theoretical hypothecation—which is unusual for any government—of future tax revenue into a higher education fund. Whether it is banked with the Reserve Bank, banked in the Future Fund or delineated out into a higher education endowment fund means nothing at all. It is nothing more than a stunt.
The reality is that we live with crumbling university infrastructure, right now, as a result of underfunding in years gone by. Our public schools are struggling. Of course, the Prime Minister has shown a bent away from public schools in funding terms. Working parents still cannot get child care. In the budget there was a 10 per cent increase in the childcare rebate, but what is the point in doing something on the demand side if you are not working on the supply side? You potentially make the situation more difficult, and it is a huge issue in my electorate.
All these problems contribute to undermining Australia’s future economic prosperity. We have to be investing heavily in education for our children to make sure they are the leaders of tomorrow. We have to provide them with quality teachers, quality infrastructure and a whole range of opportunities all the way from TAFE to university to make sure that they maintain the living standards that we have enjoyed over the last decade or so.