Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak on the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 and cognate bills. There is no doubt that there are those who will receive the benefits of this bill and will appreciate receiving it, and I support those in my electorate who will be part of that. But I notice that the announcement of the $4.8 billion in this bill for pensioners, carers, senior health card holders and veterans makes no mention of Newstart recipients. There are those in receipt of Newstart in my electorate who will miss out, and I hear about this on a daily basis from them. Equally, there is no doubt that the government’s stubborn refusal to make adjustments to the bank deposit guarantee has had a profound impact on the Australian economy. This artificial leverage to authorised deposit-taking institutions has led to the disastrous freezing of funds in superannuation accounts and other financial institutions not covered by the guarantee. The guarantee has also had serious implications for the projected budget surplus. In fact, the government’s handling—or mishandling—of the deposit guarantee was described in the Financial Review on 6 November by Laura Tingle as creating ‘a remote and unquantifiable liability’ for the federal budget.

The unlimited deposit guarantee and its subsequent impacts were clearly badly planned and a knee-jerk reaction, and the cause, effect and damage are now obvious. The government has chosen not to remedy the problem it has created. And, as we heard from the Leader of the Opposition, to his knowledge this is the only government that has made the global financial crisis worse. In a practical sense, as reports of superannuation lockouts were aired and rumours turned to worries, which in turn turned to outright fear and a total loss of confidence, the government stood by this blanket guarantee—as it still does today—and talked loud and long about its immense success in handling the economic crisis. Try telling that to those who have had their funds frozen and those who have had to take out loans to manage their lives or their business. The effect of the loss of confidence and the confusion created by the government were such that one of my constituents actually complained to me that she could not buy a safe for love nor money. You call that confidence!

The imbalance in the financial sector is continuing to prevent many retirees from accessing their incomes. Sadly for these retirees, the government moved swiftly and confidently to ensure the funds remain frozen. These funds went to the same cupboard that confidence has been stored in since November 2007. This tale of mismanagement has more twists than the Walpole to Windy Harbour road in my electorate. After guaranteeing authorised deposit-taking institution funds to an unlimited amount, after creating the stampede towards these institutions and away from non-guaranteed institutions and after distorting the markets to such a significant extent in favour of the banks, the government whipped out its trump card. ‘PS,’ they said sometime later, ‘There is a compulsory fee for deposits over $1 million.’

Mr Rudd stood by the open doors of the big bank telling the public, ‘Quick, my friends, in here; I’ll look after you.’ But, after waiting until everyone was inside, he asked those with over $1 million to please stand up and proceeded to charge them for his services. Tragically, retirees, the middle-aged, young families, students—people from all walks of life—have been affected by this financial crisis. Unemployed, low-income earners, high-income earners, students, stay-at-home parents—people in every occupation—have felt the shocks of the global situation and the government’s mishandling of the deposit situation in Australia. I understand the intent of this package and its proposed stimulus. I realise that, by giving the funds to those with the most propensity to consume, one would assume that the money has the greatest possible effect on the economy. However, there are some people who fit this category but who unfortunately miss out on this bonus. As I said, the Newstart recipients have been excluded—or are they included? According to the print sheet that I have on the package, it is for pensioners, carers, senior health card holders and veterans. But Newstart recipients have to eat and they have to pay the rent. I have been contacted by numerous constituents from my electorate who either are on Newstart or know someone who is. They regularly remind me that they believe they have been left out of this package.

And what about those who have been affected by the fallout from the deposit guarantee? They have also let me know just what has happened to them. For instance, one couple have worked very hard to build up their retirement funds. The husband is retired and the wife was considering retiring next year, but those plans have been shelved. They have lost all the gains they have made in the past three years by diligently managing their own self-funded superannuation. They spread their portfolio, but, once the Rudd government guarantee deposits for banking institutions occurred, they were simply not quick enough to transfer their money into a bank before the managed investment funds froze capital withdrawals. My constituents have worked very hard over those years. They have not been a burden on the taxpayer’s purse and they do not want to be. I would like to know whether the government has factored in those same previously self-funded independent retirees and the many others across Australia who may be forced onto the pension as a result. What impact will this have on the budget surplus and forward estimates? My constituents are obviously not the only ones affected by the rush to withdraw from investment funds. I have also been in contact with the Busselton branch of the Association for Independent Retirees. This association is very active in my electorate, with other branches in Bunbury and Margaret River. I have been advised that more of their members have now had to speak to Centrelink, as their funds have been frozen or their income stream has been drastically reduced.

Western Australian business confidence was served another blow yesterday as Alcoa announced it had shelved its $2.2 billion expansion plans for its Wagerup alumina refinery. They cite the global financial crisis, falling demand and energy availability issues, and I well know just what this means to my electorate and to the broader economy. This news delivered a further shock to the south-west economy, particularly in my electorate of Forrest, where many businesses are still trying to recover from the disproportionate impact of the gas crisis following the explosion on Varanus Island in June this year. Many businesses were forced to source or install alternative forms of energy at considerable cost and capital expense. There is now a crucial need to source and access secure energy supplies for the future, and Alcoa has confirmed this need. A further concern for Alcoa to consider was the Rudd government’s proposed emissions trading scheme, to be introduced as early as 2010, and what effect it would have in the future on its investment and production in the south-west. Alcoa is not alone in its concerns of how its operations will be impacted under the Rudd government’s emissions trading scheme. The proposed ETS and the government’s process and timing is forcing many mining and resource companies to seriously consider and reconsider the additional cost of productions that such a scheme will make. In turn, this only provides more uncertainty for any future investment in the region, as industry tightens capital expenditure, reconsiders the timing of capital projects or shelves its investments entirely.

Small business confidence has fallen as well and is at its lowest in many years, and small business in my electorate is already suffering. I have car dealerships, the service sector, dry cleaners, hairdressers, lawnmowing and landscaping services and tourism operators knocking on my door. Current figures for overseas visitors have fallen for a second consecutive month by 7.6 per cent. Where now is the government’s five-point plan—the part of the plan that was, to quote Mr Swan, ‘to enhance labour force participation’? Those currently losing their jobs would dispute the effectiveness of this five-point plan. An economist from JP Morgan was quoted in the West Australian newspaper on October 23 as saying that one million people will be out of work by 2010. And where now is that magic inflation genie that was out of the bottle at three per cent some months ago, according to the Treasurer? It was the No. 1 priority of the government, we were led to believe. Inflation is now at a 13-year high of five per cent, and the Treasurer is curiously silent on the absence of the genie and its bottle. In fact, when delivering the government’s Mid-Year Economic and Fiscal Outlook, Treasurer Swan did not even know the latest inflation forecast. The West Australian newspaper reported:

The Treasurer, the man who with the Reserve Bank governor is supposed to be driving the economy, was like a schoolchild trying to find his homework as he sorted through briefing notes, dot points and then a 260-page document for the key numbers.

This is the same Treasurer who said that we have had 17 years of growth but this is threatened by an inflation problem that must be brought under control. But, in delivering the mid-year data, he had no idea just what the figure was on this apparent No. 1 problem for Australia. Treasury has admitted that prospects for commodity prices have weakened. In Western Australia, widespread job cuts and expenditure cuts are occurring in the mining sector. Rio Tinto, Fortescue, Minara Resources, Consolidated Minerals and Mount Gibson Iron are reported to be cutting hundreds of jobs. Contractors Worley Parsons have also cut jobs, and Treasury has also forecast slowing growth and rising unemployment.

After some confusion between the Treasurer, the Minister for Finance and Deregulation and the Prime Minister as to when pensioners would receive an increase in the pension, the Rudd government finally announced and introduced legislation today to provide a $4.8 billion one-off payment to the nation’s four million pensioners, carers and seniors, to be paid in December. With cost-of-living pressures having risen considerably over the last 12 months and the underlying rate of inflation now at a 17-year high, this package is a welcome albeit overdue response from the government. Finally pensioners are being given some assistance after being denied by the government. However, the one-off pension bonus in Labor’s $10.4 billion package does not include an increase in the base rate. So, while pensioners will undoubtedly welcome the money, it does not come with a commitment from the government to raise the base rate. Pensioners cannot be sure under the Rudd government that they will receive an increase in the base rate of their pension in the future.

On one hand the government is providing funding and on the other it is taking it away. A recent unsuspecting victim is the Australian National Academy of Music, which will lose $2.5 million. The Minister for the Environment, Heritage and the Arts has hit a real discord with the Australian music industry, axing the academy’s entire funding from 1 January 2009. It faces closure at the end of the year, with less than two months notice. I would dearly like to know where the 54 students enrolled for next year, who had their places confirmed three months ago, will go in 2009, given that applications and auditions for other institutes are underway and many are already closed. One would consider that complete stripping of funds would first be negotiated with the academy. Instead, we see Mr Garrett taking his money and going home. I would like to know who is the real patron of the arts, because the only patron at work here is the patron for cut and run.

Mr Garrett recently stated that the academy is not the most effective or efficient model to support elite musicians. Mr Garrett has not only questioned the reputation of the Australian National Academy of Music, which has been working hard to develop since its inception over 10 years ago, but not even put funds into effective and efficient use, to use his own words. Our best and brightest musicians should not be forced overseas. Can you imagine the outcry if our elite athletes had to go overseas to further their skills? I put our best musicians in a similar category to those athletes. Whether they are future stars on the field or on the stage, both deserve to have the opportunity to attend Australian institutes where they can reach their full potential.

In my electorate of Forrest, we have a flourishing music scene, with original bands climbing over each other to get gigs. We also have the annual Western Australian Performing Arts Eisteddfod in the City of Bunbury, the biggest in Australia, hosting a record 2,200 participants this year in its 50th anniversary, and strong representation from the south-west region in professional settings across Australia. I am most concerned that the government is taking a decisive step backwards in this field, and I deplore such contempt for our Australian musicians. Cutting funding from an academy that was hastening to implement reforms with just over two months notice is not only abandoning the 54 applicants for 2009 but a massive step backwards for Australian music in general. When $10.4 billion can be found to support the Australian economy, surely $2.5 million can be found to support Australia’s best classical musicians. I call on the government to reveal its plans for the future of the ANAM.

The coalition supports changes to the first home owners grant. There was confusion, to start with, surrounding the eligibility criteria. It took a question in Senate estimates to clear the significant confusion in the industry and in my electorate of Forrest to define ‘newly constructed homes never before being occupied’. The coalition introduced the first home owners grant in July 2000, including a differential higher payment for new dwellings of $14,000. The initiative is part of the stimulus package that has been taken on trust by the coalition. We support the increase in a grant for new dwellings due to the need to provide a stimulus to the residential construction industry. I am concerned that questioning in estimates revealed that no modelling or advice was provided on the likely impact of the stimulus on house prices or rents. There is potential for the increase for existing dwellings to have an adverse impact on rents and artificially inflate house prices and hence home affordability.

Proposed changes do not address longer term issues in the Australian private housing market, and Australia faces a chronic housing undersupply, estimated to reach a shortfall of 200,000 dwellings by 2010, with annual undersupply growing to more than 50,000 in the same year. Undersupply is the key housing affordability challenge and the roadblock to Australians seeking to be self-supporting in the private housing market, whether renting or buying. The major cause of undersupply is the failure of state planning, infrastructure and land release polices, which have constrained supply—driving up rents and home prices.

Recent government initiatives also fail to address the real issues in the private housing market. The National Rental Affordability Scheme addresses the social housing sector but not the dynamics of the private housing market. The Housing Affordability Fund rewards, rather than seeks to reform, the failure of state governments by providing direct subsidies for taxes and charges. First home saver accounts are overly complex and are not being taken seriously by the banking sector and depositors. A comprehensive economic reform plan is needed to address undersupply in the Australian housing market.

To keep Australians in their homes, however, the Prime Minister must keep Australians in their jobs. Delinquency in home loans was significantly greater for Australian banks in the late eighties and early nineties, and is a third less than in 1996, before the coalition came to office, when unemployment was at 8.4 per cent. Strong growth in employment of more than two million jobs and in real incomes of more than 20 per cent under the Howard government assisted families to be self-supporting in the private housing market. According to the RBA, despite strong growth in real house prices over the last 25 years, growth in real disposable incomes of younger Australians in the home-buying cohort after paying for accommodation was higher in 2007 than at any other point. The new government forecasts show that unemployment will hit five per cent, putting an additional 200,000 out of work, up from the 134,000 forecast in the May budget. The biggest threat to the Australia housing market is rising unemployment.

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