Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Hansard source

During the budget week, the Australian public gained an important insight into Australia's main political parties, their values and the qualities of the leaders that will take our country to the next election. It was a week when the curtain was pulled back on the Gillard government. Behind the smoke and the mirrors and the spin there was nothing apart from broken promises, bad policies and record debt and deficits. Whereas the Howard government used the budget before the

2007 election to establish a platform for Australia's long-term future, including the establishment of the Higher Education Endowment Fund to create world-class institutes of learning, the Gillard government has chosen to play political games and lay traps in the event of a change of government.

This government is so obsessed by its own survival and on attacking the Leader of the Opposition that it has lost sight of the national interest, if it ever understood that concept. Whereas John Howard and Peter Costello paid off Labor's debt, the Prime Minister and the Treasurer are happy to pass the burden to future generations. The Howard government paid off $96 billion in net debt, saving the country over $8 billion a year in interest payments. In 2007, the incoming Labor government was left with zero net debt, a $20 billion budget surplus and money in the bank. Yet in 2014-15, the Rudd-Gillard government's net debt will peak at $192 billion. Eight point four billion dollars will be spent servicing the interest on Labor's debt—money which could otherwise be spent on education, health or defence.

On 165 separate occasions, the Prime Minister confirmed that the government would deliver a surplus this year. 'No ifs, no buts; failure is not an option,' the Prime Minister trumpeted. Despite announcing seven successive budget deficits, the government expects us to believe that it is not its fault. This government does not have a revenue problem; it has a spending problem. Let us be clear. If re-elected, this Labor government will not deliver a surplus, not in 2016 or 2017 or any time thereafter. The Treasurer is like the traveller lost in the desert, stumbling off in different directions, chasing the mirage of a surplus that suddenly disappears just when it seems to be in reach.

The Australian people want a mature government that will make their lives easier, not harder. They want a government that will provide a stable economic environment so that they can raise their families, grow their businesses and live their lives without an incompetent government needlessly interfering. As the Leader of the Opposition made clear in his budget in-reply speech, should the coalition win the election there will be no nasty surprises and there will be no lame excuses. We will ensure that government is not at the forefront of everybody's everyday concerns. The Australian people do not want sleepless nights worrying about the next policy disaster from this incompetent government that increases taxes, constantly meddles with superannuation and savings and breaks promise after promise. We will restore the bonds of trust between the Australian people and the parliament that have been so treacherously broken by this wretched Gillard government, and we will make sure that the Australian government once again lives within its means.

After five years of wasteful spending and miscalculations, misjudgements and gross mismanagement, the grim reality of this government's recklessness is becoming clear. The government has been forced to slash spending, and this budget emergency is of its own making. As usual, its priorities are skewed. For example, the government's decision to cut funding to the Department of Foreign Affairs and Trade comes at a time of growing uncertainty within the region as increasing levels of prosperity have enabled the expansion and modernisation of Asia's militaries. The recent displays of nationalist sentiment in our region, driven in large part by unresolved territorial disputes, have added a dangerous and unpredictable element to Asia's strategic make-up.

In a rapidly evolving strategic environment, a prudent government will always hope for the best while planning for the worst. On every measure of national security the Prime Minister has failed. From failing to attend meetings of the National Security Committee of cabinet and sending her bodyguard instead to slashing the country's defence budget, the Prime Minister's priorities do not reflect the national interest. This year, defence spending will fall to historic lows not seen since 1937. Ensuring that Australia has the capabilities it will need in an increasingly complex strategic environment cannot be achieved overnight. It requires long foresight, planning and commitment.

Having significantly weakened the Australian Defence Force, the Prime Minister is now set on reducing the other arm of Australia's national security, our diplomatic corps. This budget will see further cuts to DFAT of one per cent in real terms. Its share of total government expenditure is expected to decline to 0.31 per cent by 2016-17, representing a one-third reduction in funding when compared to the final year of the Howard government.

Whereas funding for diplomacy and defence is on the decline, spending on foreign aid continues to grow, reaching 1.4 per cent of total expenditure in 2014. If Australia's national interests are to be advanced, we must ensure that all three arms of Australian foreign policy apparatus are properly aligned: defence, diplomacy and development.

In her speech to the National Security College at the Australian National University, the Prime Minister stated that this:

… will be an era in which diplomacy will be critical as we and our friends and partners in the region strive to master the complexities and new dynamics of a multipolar world.

She said the government would:

… increase our diplomatic footprint abroad, and increase the expertise of our professionals working in the Asian region.

If diplomacy is as critical to Australia's fortunes as the Prime Minister states, why is she cutting funding to record lows? Once again, spin has triumphed over substance for this government.

The hollowness of the Prime Minister's words is matched only by the false promises and motherhood statements of her Australia in the Asian century white paper. The government indicated that it would open an Australian embassy in Mongolia as well as additional consulates in China, Thailand and eastern Indonesia. Without funding or even a time frame, such an aspiration is more akin to fantasy.

The government's record gives little reason to hope that such an expansion of Australia's diplomatic network will ever be achieved. Only 12 months ago, the government promised to establish a new mission in Senegal. At the time, Foreign Minister Carr stated:

Expanding our diplomatic footprint in Africa sends a clear signal of the Government's commitment to building a long-term and credible Australian partnership with the countries of Africa.

One year later, this new embassy has been added to the Prime Minister's pile of scrapped policies and broken promises. Long-term planning is a concept this government is yet to understand, let alone implement. Given its disastrous handling of the budget, the government is struggling to keep the lights on at Australia's existing missions, let alone open new ones.

In the lead-up to the budget, the government announced that it would close Australia's embassy in Hungary as part of its need to find further savings. Its failure to advise the Hungarian government of its decision before leaking the fact to the press shows it has learned nothing since its incompetent mishandling of the live cattle issue with Indonesia. The government's decision to close the Australian embassy in Hungary follows years of public concern about the level of Australia's overseas representation.

The Joint Standing Committee for Foreign Affairs, Defence and Trade's inquiry into Australia's overseas diplomatic representation found that there are strong reasons for on-the-ground Australian diplomatic representation. Such representation facilitates a deeper understanding of a country, allowing quicker and more informed responses to changing circumstances. It provides the ability to develop long-lasting networks which in turn enhance Australian influence and the ability to effectively promote an understanding of Australia's position on international issues. Such relationships enhance Australia's trade and other interests and allow for the provision of effective support for Australians travelling overseas.

The report quoted then secretary of the Department of Foreign Affairs and Trade, Dennis Richardson, as saying:

Closing a mission saves very little, the reason being once you have got a mission up and running your running costs are quite low. It might cost you $25 million over three or four years to open a post, but if, 10 years later, you were to close that post you would probably only save about $2 million a year.

Is this what it has come to for this government? The hole in this country's finances is now so large that it is scrounging for loose change.

The committee also drew attention to the risks inherent in closing overseas posts. The Lowy Institute too suggested that careful strategic consideration should be given to closing embassies, because turning posts on and off is really damaging to us as it causes enormous resentment. I would have thought that the last thing this government needed was more resentment at home and abroad. The coalition has announced that, should we be elected, we will undertake a complete review of the Department of Foreign Affairs and Trade to ensure that Australia's overseas diplomatic network reflects our country's wide range of national interests in the 21st century.

Having made a habit of breaking its solemn promises to the Australian people with its litany of spin and deceit, the Gillard government is now making a similar name for itself overseas. As part of its campaign for a seat on the United Nations Security Council, the government promised to increase the Australian aid budget to 0.5 per cent of gross national income by 2015-16. It was a promise made to developing countries in particular, in order to win support for the government's UN Security Council bid. At the last budget, in 2012, this commitment was pushed back to 2016-17. In this year's budget, the time frame has been pushed back again, to 2017-18. With the vote undertaken and the seat secured, the government has felt free to break the very promise that was central to its campaign. At the bottom of the government's Security Council campaign brochure, it read:

Australia, we do what we say.

At least Australia did until the Gillard government came to office.

The decision in the budget to defer the target date to 2017-18 follows the stripping of $375 million from the aid program to help cover the blow-out in the government's border protection costs. In doing so, the Gillard government makes itself the third-largest recipient of Australian aid.

The Prime Minister's failures unfortunately extend well beyond diplomacy. According to the budget papers, funding for Austrade, Australia's export promotion agency, will be cut by $1.9 million. Australian businesses who are reliant on exports have a right to feel aggrieved. Between Foreign Minister Carr, the country's dilettante-in-chief, and Minister Emerson, who mistakes media appearances for actual achievement, there has been a complete indifference to the interests of Australian exporters.

Rather than hide behind excuses, the government should go out and finalise the free trade negotiations started by the Howard government. Since the launch of free trade agreement negotiations with China in 2005, 18 rounds of discussions have been held without result. This government's lack of action stands in stark contrast to the action of New Zealand, which concluded a free trade agreement with China in 2008 after just three years of negotiations. Since then New Zealand's good exports to China have trebled, with more than 90 per cent of its goods now entering China duty free.

The government's disregard for bilateral free trade agreements and the benefits they provide to Australian exporters and investors is exemplified by the statement of the Minister for Trade and Competitiveness, Craig Emerson, that a free trade agreement with China is 'overrated'. This is despite a joint feasibility study finding that a free trade agreement could have boosted Australia's real gross domestic product by approximately $24 billion had it been concluded for the period 2006 to 2015.

The government's failure to conclude a free trade agreement with South Korea has likewise resulted in the loss of real export income. The failure to conclude this agreement at a time when the United States has concluded a free trade agreement with South Korea means, for example, that the United States is now capturing a large part of the beef market into South Korea, at the expense of Australian beef producers. I recently met with representatives from a mineral sands company in South Australia that had been supplying the South Korean market with its value-added processed product for use in high-end manufacturing in technology. The signing of the South Korea and United States free trade agreement has resulted in this Western Australian company losing its competitive edge. Its product is now being sourced from the United States, which is undertaking the processing of the raw product and then delivering it into South Korea. So we are losing an advantage that we had over the United States.

Until the Australian government concludes this agreement, more local companies will lose their market share. When the competitiveness of our exports is lost, so too are Australian jobs. Compared with Canada, for example, which has signed free trade agreements with nine countries and has entered into 19 sets of free trade agreement negotiations, covering 74 countries, since 2006, the Gillard government has been missing in action. Rather than assisting Australian exporters, the Gillard government has made it worse by imposing an economy-wide carbon tax, a tax that our competitors are not imposing on their economies.

This budget is more proof of the government's focus on headlines rather than outcomes. The widening chasm that exists between its foreign policy rhetoric and reality was recently picked up by Richard Woolcott, a former Secretary of the Department of Foreign Affairs and Trade. In a speech to the University of Melbourne law school, Richard Woolcott drew a comparison between the Gillard government and the former Soviet Union:

The fact is that we are not doing as well with our Asian engagement as the regular rhetoric and diet of spin emerging from ministerial offices would have the public believe …

This budget shows the government rhetoric for what it is: nothing but hollow spin from a government bereft of new ideas. It has proven what we all know, and it starts at the top—the Prime Minister herself admitted she does not have an interest in foreign affairs. Foreign and trade policy under a coalition government will be designed to protect and project Australia's reputation as a prosperous economy and a virtuous nation. (Time expired)

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