Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

I want to thank the people of Wills for putting their trust and confidence in me for a sixth time to represent them in this place. Indeed, Labor in Wills improved its two-party preferred vote and we stand on the electoral pendulum at 72.6 per cent as the second-strongest Labor seat in Australia. It is a source of considerable pride. I thank my campaign team and my family for the steadfast support that they have provided to me in good times and in bad. They give me the strength to go on and I am very much in their debt.

In August last year I raised in the parliament the issue of population, advancing two propositions: first, that the world has a population problem and, second, that Australia has a population problem. I was therefore really pleased to hear the Prime Minister say, in her first significant statement after she became Prime Minister in June, that she did not believe in a ‘big Australia’. Big Australia had become the shorthand expression for the 36 million population that Treasury has said Australia will reach by 2050 if we run a net overseas migration program of 180,000 per annum between now and 2050.

Prime Minister Gillard pursued this conviction into the federal election campaign, telling her own constituents:

I do not support the idea of a ‘big Australia’ with arbitrary targets of 40 million people. We need to stop and take a breath.

She said that she did not want us hurtling towards a big Australia and that we should not sacrifice our wonderful environment or our unique quality of community life.

Ultimately, I do not think population was a major vote changer in the recent election. The Liberal opposition neutralised our foray into this area by advocating a cut in net overseas migration to 170,000 per annum. We were able to counter this thrust in turn by pointing out that net overseas migration is already trending back to this number. The fact is that the 170,000 figure will still give us a population of 35 million by 2050—not much to excite the voters there.

There is no doubt in my mind that, if Prime Minister Gillard had put her opposition to a big Australia into tangible form, by setting a lower net migration target, or if the Leader of the Opposition had picked a lower status quo altering number, there were votes there for the taking. Given the closeness of the election result, it is something worth thinking about. Nevertheless, the Prime Minister’s clear opposition to a big Australia has created a strong expectation around Australia that we will see a change in direction from the rapid population growth path of recent times, once the panels she has appointed to investigate the issues have done their work and reported early next year.

Of course this will be an ongoing battle. The big business and property developer forces, who are both the cheer squad for and beneficiaries of rapid population growth, have no intention of submitting quietly. They will continue to press for high migration at every available opportunity. They claim that high migration improves our standard of living. Given this incessant claim, it is very interesting to examine the issue of living standards. There is no doubt that many people today are experiencing real cost-of-living pressures. There is no doubt in my mind that the rising cost of living and the difficulty ordinary Australians are having in making ends meet have been behind the fall in Labor’s electoral standing this year. Indeed, I heard the opposition take this issue up in a matter of public importance during the first sitting week of the parliament after the election. They had plenty to say on what they assured us was the government’s failure to act to help ordinary Australians with cost-of-living pressures. They also waxed lyrical with concerns about the impact of action to tackle climate change on the cost of living. What they did not produce was anything at all which might assist people who are presently battling to make ends meet. Given the opposition has produced no plan of any kind to deal with cost-of-living pressures, I have come to the conclusion, unfortunate but unavoidable, that the opposition is not fair dinkum about tackling cost-of-living pressures and is simply seeking to make political capital from them.

But they are at least right about the existence of cost-of-living pressures. These pressures arise from a number of sources, but the key cause, the most important cause, is population growth. Population growth leads to greater demand for products, and that greater demand puts upward pressure on prices. This is particularly evident in our basic resources of land, water and energy. These resources have limits, and population pressures are forcing us to turn to more expensive methods of meeting demand, such as desalination plants for water and deep-water drilling for petrol.

The cost-of-living pressures are most clearly evident in electricity and gas prices and local council rates. Over the past 10 years, electricity prices have almost doubled across Australia’s eight capital cities. The most populated cities, Melbourne and Sydney, have seen the highest price rises, and prices have more than doubled in the past 10 years. In real terms, across Australia, electricity prices have increased by over 40 per cent over the 10 years. Melbourne prices have risen by over 50 per cent in real terms—52 per cent. So have Sydney’s—51 per cent. In Brisbane, real electricity prices have gone up by over 38 per cent, and in Adelaide real electricity prices have gone up by over 26 per cent.

You might think that more people—a growing population—would lead to economies of scale and lead to lower electricity prices, but you would be wrong. Rising electricity prices do not just show up on the household bills I have referred to; they also show up in the rising cost of electricity per kilowatt hour. Instead of rising population causing lower prices, it leads to a need for extra infrastructure and therefore higher prices. The more crowded a city becomes, the higher the cost of doing business. Congestion costs kick in and just maintaining electricity infrastructure becomes more expensive. In Victoria, electricity and water bills are up 25 to 60 per cent from 2005 and gas is 20 per cent higher. Prices in Sydney since 2005 have jumped over 60 per cent, and in Brisbane by over 50 per cent.

It is untrue—and mischievously untrue—to assert that rising electricity prices are a consequence of carbon trading or measures to reduce carbon emissions. It is, or should be, well known that Australia has no emissions trading scheme or carbon tax. As for other measures, as the Clean Energy Council has pointed out, the cost of supporting residential solar power is a ‘drop in the ocean’ compared to ‘billions of dollars in network costs’. It points out:

The Australian Energy Regulator estimates the cost of improving the electricity network in NSW at more than $14 billion over five years. Based on the 50 MW installed under the NSW Solar Bonus Scheme, the cost of solar electricity from the current scheme is less than 4 per cent of this.

Rising electricity prices hit pensioners and the poor particularly hard. Melbourne has had a very cold winter—and the weather during the federal election campaign was no exception. One of my campaign workers visited a woman pensioner who had asked for our assistance with a postal vote. The inside of the house was as chilly as the outside. When my campaign worker inquired about this, the woman said that she could not afford to heat her house. This woman was enduring a harsh winter without any artificial heating. It is far from satisfactory. For many pensioners, rising electricity bills have made it very hard to make ends meet.

The situation with water bills and gas bills is not much better. Again, a rising population is putting upward pressure on water and gas prices. We have already got at the easy water and the easy gas. Augmenting our supplies involves things like desalination plants and pipelines, which come at greater expense than our present supplies.

It is a similar unhappy story with local council rates. I always expected that more people in my municipality would lead to lower rate bills due to economies of scale and more people sharing the rate load. The opposite has been the case. In nominal terms, council rates in Melbourne have increased by over 100 per cent—more than doubled—from 2000 to 2010. In real terms, rates have increased by over 48 per cent. Across the eight capital cities, rates have increased by 60 per cent in the last 10 years and, in real terms, rates have increased by over 23 per cent. Sydney council rates, which are subject to capping by the state government, have increased by less but have still risen over the last 10 years by 41 per cent and over 10 per cent in real terms. Regrettably, this pattern of  increasing rates is set to continue. Victorians will pay an average of $79 more in their rates in 2010-11—up by over six per cent from last year based on the draft council budgets. This is of course above the CPI and again underscores the impact of rising population on local government finances.

These costs of population growth—rising electricity prices, rising water prices, rising gas prices, rising council rates—are being borne most of all by those who can least afford them; fixed-income earners and pensioners in particular. It is all very well for the opposition to cry crocodile tears over cost-of-living pressures on ordinary Australians, but if you are genuine about this problem you will come up with an alternative proposal to the present arrangements. The opposition has not done so.

I believe there are things we can do. We are not powerless about electricity prices. At present electricity prices are overseen by regulatory authorities. For example, in New South Wales it is the Independent Pricing and Regulatory Tribunal, and in Queensland it is the Queensland Competition Authority. It is said that price-cap regulation is only a transitional measure during the development of retail markets and that governments are moving towards the eventual removal of price caps. Looking at the evidence of the past decade or two of electricity privatisation and price deregulation, I am concerned about what this trend will mean for household electricity consumers, particularly pensioners and others on fixed incomes.

I do not agree with the moves towards electricity price deregulation. Indeed, I think it is high time pensioners and other household electricity consumers got some relief from ever-rising electricity prices. I think regulatory authorities should limit electricity price rises for household consumers to the percentage amount by which pensions rise. This would give pensioners and fixed-income earners some badly needed respite.

I urge electricity pricing regulatory authorities to consider the hardship which the rises over the past decade have caused and to think about pensioners who are struggling to make ends meet when they consider applications for price rises. I know there will be objections to this. Some people will say the market should set prices, but electricity is an essential item and electricity consumers have not been able to prevent prices rising way above CPI by shopping around. Consumers need government to be involved in the price of such an essential item.

Some people will ask: how will electricity companies invest in new infrastructure if they cannot charge higher prices? My response is: at present the costs of rapid population growth are being borne by ordinary household consumers in general and pensioners and those on fixed incomes in particular. These costs should be borne by the beneficiaries of growth—the property industry. Electricity companies should not be prevented from recovering the costs of new infrastructure from the new developments which necessitate it. Household consumers should not be asked to subsidise infrastructure development over which they have no control. I also know there will be objections from some people who say that we need electricity prices to rise as a pathway to cutting our carbon footprint. They believe rising prices will encourage people to reduce their electricity use and/or turn to renewable cleaner sources of energy generation.

The first problem with this view is that it is too vulnerable to political scare campaigns. We hear it from the opposition all the time and it is going on right around the world. The second problem with this view is that it does not do justice to the real hardship experienced by low-income earners when electricity prices rise. I know that there were provisions in Labor’s carbon pollution reduction scheme to compensate low income earners for the impact of higher electricity prices on them. I also acknowledge the work of organisations like the Brotherhood of St Laurence which have engaged in the climate debate in a constructive way, seeking to tackle the carbon problem while at the same time protecting the interests of the poorest people in our society. But it remains the fact that low-income people are doing it tough now and they are entitled to get some relief from ever-rising electricity prices.

The third problem with this view is that it may have been acting as a climate change panacea, distracting attention from many other good and worthy options for reducing carbon emissions. I think there are many different ways of skinning the climate cat, and some of the more important ones lie in the areas of agriculture, soil carbon and re-establishing natural landscapes.

I want to deal with the claim that Australia needs more migrants because we are short of workers. It is just not so. Our unemployment rate is over five per cent. We have over 422,000 Australians looking for work. Many of them are young Australians aged between 15 and 24 who really need to get off to the right start in life. In October it was reported that Broadmeadows has an unemployment rate of 15.9 per cent. Broadmeadows is just beyond the northern boundary of my electorate and I know it very well. According to the 2006 census, of the people in Broadmeadows aged 25 and over, over 50 per cent were born in non-English-speaking countries. For men aged 25 to 44, over 47 per cent of the non-English-speaking country born reported income of less than $399 per week. This is entrenched unemployment, poverty and disadvantage.

If we continue running a high migration program, they might go and work in iron ore mines in the Pilbara but the evidence is not promising. It suggests that significant numbers will simply get caught up in a cycle of unemployment , poverty and disadvantage, as has happened in Broadmeadows. So I suggest that, before we succumb to the wailing of employers crying skill shortages, we put our talents to finding work for those 15.9 per cent unemployed in Broadmeadows, who are entitled to our attention. I do not care whether we find them work in Broadmeadows or in the Pilbara, but let us not talk about skill shortages again until we have got them into the workplace.

While high migration is being used as a battering ram to keep down the pay of ordinary workers, CEO salaries are skyrocketing. The ACTU has released a survey today showing that the typical CEO is taking home almost a hundred times the pay of the average worker. Executive pay at Australia’s 50 largest companies rose by nearly a million dollars, over 17 per cent, last year while the average pay of a full-time worker rose just $3,200, or five per cent. One of the great things about Australia has been its egalitarian nature, where Jack was as good as his master. But if the boss is being paid 100 times as much as an average worker, is Australia really still the land of the fair go? I believe the ACTU’s proposals to limit the tax deductibility of salaries to a million dollars or to cap executive salaries to a multiple of the earnings of ordinary workers have merit and should be seriously considered by this parliament.

Returning to the impact of council rates, there is one state which retains the power to cap rates—New South Wales, where the minister for local government annually determines the amount by which councils can increase their general revenue. Given the lack of state government powers, rising council rates are not easily addressed but it is a serious problem. I was recently advised that the former Kodak site in East Coburg recently sold for $79 million to the Perth based Satterley Property Group, almost double what Urbex is believed to have paid for it in 2006. The reason that Urbex was able to double its money in just four years is of course that the land value has risen. Who underwrites this spectacular land value rise and the spectacular profit for Urbex that accompanies it? That would be the long-suffering ratepayers of Moreland whose rates pay for the community infrastructure which surrounds the Kodak site and makes the land as valuable as it is. They also underwrite the rising value of the land by tolerating the downside of the increased population: traffic congestion, more competition for community facilities and open space, loss of privacy and sunlight which comes with high-rise et cetera. My view is that local councils should not acquiesce in or, even worse, encourage high rise monstrosities which put pressure on local infrastructure and reduce the quality of life for local residents.

One community in America which is campaigning for a stable population has come up with a campaign slogan which goes, ‘Don’t build it and they won’t come.’ The property lobby will complain that this would make housing less affordable but the fact is that it is their high migration policies which have damaged housing affordability. Unless and until we reduce high migration and net overseas migration to the levels of the early 1990s we will continue to see housing affordability decline. A home of your own, the great Australian dream, will disappear as surely as it has done in other countries which have gone down the high migration, high population road, and our young people will have been let down. It is time we cut the rapid migration program, stabilised our population and got on with providing the infrastructure and services that people need. Unless and until we do this, both federal and state governments from whichever political party will be dogs chasing their tails, forever in catch-up mode, unable to really help ordinary people with cost of living pressures or other pressures of daily life and wondering why it is that the voters do not seem to like us.

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