Ed Husic (Chifley, Australian Labor Party, Shadow Minister for the Digital Economy) Share this | Hansard source

At is heart, this budget, Appropriation Bill (No. 1) and related bills, continues what the coalition has been doing from day one, since their election in 2013, which is to continually widen the gap between the haves and the need-mores. The reason I use the term 'need-mores' is that, particularly in the electorate that I represent, people are pretty proud that they can make what they can of what they have, but they clearly need more support. That's the case across Western Sydney. For example, look at the investments that governments should rightly be making—but this coalition has continually neglected—in things like schools, in things like TAFEs, in terms of the infrastructure for the growing area of Western Sydney, one of the fastest growing regions in the country. We still don't see the level of investment that should be there. They should especially be investing in things like hospitals and health care in our area. This budget delivered zip—nothing—particularly for Western Sydney, in a range of those different areas.

This government has committed itself to giving $80 billion to the biggest businesses in this country, it's committed to giving $17 billion to the big banks, and it's already delivered tax cuts of $16,000 to millionaires, but it still can cut to people who need more. It will cut preschool funding, particularly in Chifley, where it still has not been guaranteed to be renewed next year, which might affect just over 2,300 young kids in the Chifley electorate. Schools in Chifley still look set to lose $20 million over 2018 and 2019, because of this government, with its smoke and mirrors, and the defunding that has been occurring through Gonski 2.0. That will affect our area. They cut $3 billion from TAFEs and promised an additional $300 million in cuts this year. They've cut billions from universities, and I've got a big concern about what that does in terms of the University of Western Sydney.

With infrastructure in Western Sydney—as I said, one of the fastest growing regions in the country—the government makes a big deal about the north-south rail it's putting in, yet all it can do is $50 million for a study, when what we really need is a comprehensive approach to people movement in Western Sydney, where our region will rival the other side of the city, the east, in terms of growth. It is likely that 150,000 people will move in, just within the Chifley electorate and to the north of it, through the north-west growth centres—very little there. That's before we even get to talking about the NBN and its failure to keep pace with the local area.

But one of the most disgraceful things the government is doing is that in this budget they will deliver a $5.6 million cut that will affect Mount Druitt Hospital. Basically, it is roughly the same as if you were to cut 13,800 patient appointments—and we are going to see that cut. When you look at this budget, particularly for Chifley, you have cuts to school funding, you have future threats to preschool funding, you have no genuine funding of infrastructure, and you have continued cuts to TAFE—$3 billion, with $300 million extra, which will no doubt affect TAFEs like those in Mount Druitt. And, importantly, you'll see a $5.6 million cut that will affect Mount Druitt Hospital. That's before we even get to the point that there is an MRI in that hospital that has not received a Medicare licence, which would ensure that people aren't paying huge out-of-pocket expenses just to get an MRI scan at their own public hospital. It is an absolute disgrace: a $5.6 million cut, plus no licence for the MRI, sets back people in our area hugely.

In other parts of the budget, what you're seeing now from the coalition concerning job programs is effectively a continuation of the slow march away from the things they wanted to do when they first came into office and a crab walk towards the things Labor said should have happened when we left office and the types of things we've been talking about on the ground with employment service providers as we've moved across the country trying to find out how to make these failing job programs of the government work better. Bear this in mind: when the coalition came in, they were all beating their chests about how they would revamp Work for the Dole. They basically scaled up the number of places to 150,000 per year. They were told that this was way too big a jump, would be counterproductive, and it was questionable whether or not it would happen—and what happened? They started scaling it back. They realised that they'd made a mistake, that they hadn't listened. They put people onto the Work for the Dole at the six-month mark of unemployment, when people were telling them that was way too early. They then moved that from six to 12 months, back to where it should have been. In the last budget they then cut the coordinators that existed to help improve the way the program was going. Has anything been done to improve job outcomes? No. What we've seen as a result is still roughly 10 to 20 per cent of people getting jobs three months after going through the Work for the Dole program. We've seen very little evidence of that.

There's hardly any mention of young people and unemployment in this budget. If anything, the focus on older people and particularly digital skills uplift is what the Labor opposition has been saying publicly, through our discussion with job providers on the ground about getting people ready for the future of work and the impact of technology, should have been happening ages ago. Again, if we suggest an idea and they take it up, we welcome that, but it shows a lack of leadership or ability to think through the problems confronting people.

What a change there has been about innovation! A few years ago we were all agile and nimble—it was an exciting time to be alive—then all the talk faded away and is gone. They have pressed the innovation mute button, and they hardly talk about it. Our side has regularly been pressing the case for this, because you need innovation to drive the growth in new firms and jobs, but the government is trapped in the belief that, if they put out another report or announce another review, that equals innovation. It's garbage. In April 2016 Bill Ferris brought down his report to review the way R&D works in this country, and they only just got around to releasing their response to it—and what did they do? They flagged big cuts to R&D spending. From a government that styled itself as innovative, agile, creative and pro future, we're now seeing massive cuts to the R&D arrangements.

They had some other big announcements—for example, saying that we needed to start thinking more about the application of AI and setting ethical boundaries. They also announced that the DTA would get $700,000 in funding for blockchain. I welcome the ideas, because Labor had been championing them months before. We said last year that Australia should take leadership on the issue of artificial intelligence, and we saw very little out of the government on it, and also that the Digital Transformation Agency should be the central point for applying blockchain within government. We're glad the government have announced these things in their budget, because it's exactly what we've been pushing for.

The real tragedy is that this government rarely thinks ahead. If they're not thinking ahead, they're not planning ahead, and they have pushed acting into the never-never. One group that always has to think ahead is our local venture capital community. They have to have a sense of what's coming in the economy, and they need to be able to test those firms who have ideas that will have the greatest possible benefit to the economy down the track. For years the lack of capital availability to back good ideas in the Australian context has been a big issue. It has become less so recently. For example, in the 2017 year, we've seen capital raisings of about $1.2 billion. It has been fantastic, but we should certainly do more.

For some time, I've been absolutely staggered that our nation's pre-eminent fund, the Future Fund, refused to back local venture capital. It's not like they don't like venture capital; it's just they didn't like Australian venture capital. We have been pressing them since last year to explain this: out of the $2 billion that they put into venture capital, why is it they only invest one to two per cent here? Why is it that taxpayers' dollars can be used to support the growth and evolution of new firms and new jobs offshore, yet we see none of that happening here? In October, when the Future Fund was before estimates, they said that they didn't invest locally because they had doubts about the strength of the local VC community. In fact, the quote from the head of the Future Fund was:

I think one of the things that has held the Australian venture capital industry back is that, frankly, performance hasn't been very good …

Some in the VC community would probably agree with that, but things have changed.

What I found remarkable was that in October, before estimates, the head of the Future Fund said that there are doubts about VC, but his own chief investment officer, just a month before, speaking at the Australian Financial Review's innovation summit, basically castigated everyone else for not backing local VC. In fact, he said it was time for a 'paradigm change'. That's always a good way to get attention. It happens the minute you use that combination of words. Dr Raphael Arndt said at the summit:

To put all your retirement savings on a bet that robust economic growth and lower rates will continue is risky.

He then urged super funds to do more.

Well, in actual fact, Hostplus, AustralianSuper, HESTA, First State Super and all the pesky industry funds that the government likes to target, single out, chastise and harangue—and put in all these new legislative arrangements around and talk down to—have probably put more into local venture capital to back local firms and local jobs than what our own Future Fund has. We had the Future Fund hectoring super funds on one hand and then a month later their own CEO was before estimates saying there are big doubts about local VC performance. That was in October. Suddenly in April, we opened up the Sydney Morning Herald and John McDuling had scored himself an exclusive. Blackbird Ventures—which is a great firm with a great investment portfolio and which is backed by a lot of great Australian tech entrepreneurs—had suddenly scored some money out of the Future Fund. I absolutely congratulate the Future Fund for this. As has been revealed in estimates, Blackbird Ventures have scored anywhere between $20 million to $30 million to back locals. That is good.

Some things that came out of estimates were interesting. There were two things in particular. The Future Fund has outsourced decisions about which of the local VCs they'll back to Greenspring Associates. I don't have a problem with capable outfits making those decisions. They have to because of the quantum involved. But the thing I know, moving in this environment for a number of years now, is that VC tends to have a view—I've seen it, even when I have travelled in the United States—that they will only take a greater interest based on geographic proximity—that is, the closer your firm with the proposition wanting the money is to the location of the VC. They generally tend to back it that way. I don't know how many times Greenspring Associates will be out to Australia and if they've set themselves up here to do the local scoping work of the local venture capital market, but I have to say this is something we will keep an eye on. Labor has been pressing the Future Fund to do more in this space. If Greenspring Associates only does an occasional visit to Australia that might occasionally lead to one article appearing in the Sydney Morning Herald about one VC that managed to score $20 million to $30 million out of the Future Fund, then there will be more questions asked by us.

The second thing that it's not very clear from the head of the Future Fund, who appeared before estimates, where they're going to go. For a group that is so fixed on stats, numbers and the concrete, they have not been forthcoming about how they will move from the one per cent to two per cent mark of current local investment from a $2 billion venture capital pool to something better. You would expect better. Don't get me wrong, I think what they're doing is good. We're not advocating a mandate and forcing them to do that. We certainly recognise you have to be very prudent about applying funds in this space, because it is a high-risk class. But the point is this: if the Future Fund has accepted the asset class and if the Future Fund has accepted investing $2 billion in venture capital, then clearly the appetite is there. If they get similar return rates here to what they're getting overseas, it is absolutely incumbent on our nation's Future Fund to back local venture capital.

This is me as a Labor MP arguing this, but a lot of our crew know that you need to back new firms with new ideas to put new drive into an economy that hasn't behaved the same since the GFC. We do need to be clear that Labor will push for this because we see a longer term economic benefit. If we see Greenspring turn up only once a year to scope out local VC and we see only one or two announcements made just to stop the hounding of the Future Fund, that not only is wrong in the short term but is denying us longer term economic prosperity. We will be fixed on this issue longer term.

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