Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I suggest that the order agreed to by the Committee for the consideration of proposed expenditures be varied by the Committee, next considering the proposed expenditure for the trade segment of the Foreign Affairs and Trade Portfolio, and then the Resources, Energy and Tourism Portfolio.

Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

Is it the wish of the Main Committee to consider the items of proposed expenditure in the order suggested by the minister? There being no objection, it is so ordered.

Foreign Affairs and Trade

Proposed expenditure, $4,524,405,000

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I welcome this opportunity to ask the Minister for Trade a number of questions. Firstly, I ask the Minister for Trade what Austrade functions will cease or be changed as a result of the imposition of the efficiency dividend on the Department of Foreign Affairs and Trade.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I am happy to answer that question but if the member would like to outline the full list of his questions we might be able to deal with them.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

Being new to this process, I was going to vary my questions depending on what answers I got, but I will take guidance from the chair as to the normal procedure.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Let us see how it goes. He is new to it; we had to sit on the other side, so we know how this goes—but I prefer to be over here. As far as Austrade’s functions are concerned, the extent to which they have been changed is that we have incorporated into the trade portfolio the functions of Invest Australia and the Global Opportunities program. There has been no diminution in the functions of Austrade; there has in fact been an expansion of them and a greater integrated approach.

We believe it is important to bring the investment functions within the Trade portfolio, because what we as a government understand is what the previous government never properly comprehended, which is that the nature of trade has changed. Trade is no longer simply about exporting commodities or producing here and shipping. Increasingly, there has been a very strong trend to direct investment out of this country so that businesses can take advantage of global supply chains or take equity or ownership in markets positioned overseas. If you look at the figures, direct investment out of Australia now almost equals direct investment into Australia. This is a significant change. What we say, though, is that we need a more integrated approach as to how that change, that refocus, has occurred. It is not just the decision that we took in the budget to incorporate the Invest Australia functions, which was part of an election commitment that we made; we have also referred this question of investment and investment flows very much to the Mortimer review.

The Mortimer review has been criticised by the opposition for being yet another review. They, of course, were a government that never had it, because the problem with the previous government was that, in a coalition context, so long as the Trade portfolio always defaulted to the National Party they never thought of trade much beyond commodities—agriculture, specifically, and broadacre agriculture at that. Of course, trade is much more than that.

I congratulate the former government for seeing the light now that they are in opposition, because the portfolio has at least gone to a Liberal. I would have thought that he would have understood much better, because he knew the neglect that the former government demonstrated in the trade portfolio by having this focus on agriculture. He set about building something of an empire in the industry portfolio. That is how Invest Australia came about. That is how the Global Opportunities program came about. But we say that dissipation of resources into another portfolio was costly and wasteful.

By integrating these initiatives into the Trade portfolio, we are obviously looking for considerable savings. The department has, as I understand it from Senate estimates, identified the numbers of people and the costing arrangements by which these programs will be absorbed. So, quite contrary to the member’s question about what the functions are and how they have changed, with the implication being that they have been reduced, they have in fact been expanded.

I also make the point that given the focus on investment, trade negotiations also, as a result, have, from our perspective, to take much more notice of the behind-the-border issues. The previous government, in terms of the extent to which they did have a focus beyond agriculture, were very much tariff barrier orientated. We understand the importance of looking at the services side of the equation and the capital flows—and by definition that means that increasingly the negotiating focus and the thrust of the negotiations, whether they are multilateral, regional or bilateral as in free trade agreements, are increasingly going to have to be on the behind-the-border issues.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I thank the minister for his policy speech but draw him back to what the question actually was. The question was: what Austrade functions will cease or change as a result of an efficiency dividend being imposed on DFAT? I hope you will not take five minutes to answer this question, Minister, because I have a few others.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I do not know where the shadow minister has been sitting, but no Austrade functions have ceased.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

No, ‘will cease’ was the question.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

And, indeed, no Austrade functions will cease.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

Or change?

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Of course they have changed. Haven’t you been listening? I have told you what the functions are that are changing. We are changing them to make sure that there is a focus on investment. We are changing them to make sure that there is more of a focus on services. We are changing them to make sure that they integrate and are more effective in terms of understanding a dynamic approach to trade policy that you never had the wit or the wisdom to comprehend. And the fact is that you would never stand up to the National Party and argue for them, even though you understood them far better than anyone else.

I remember the shadow minister at the table, the member for Groom, being quoted in a newspaper—I do not have the exact quote in front of me; I did not think he was going to go down this line—as saying that he and the former Minister for Trade argued in cabinet for increases in the Export Market Development Grants Scheme but they could never get them. They could not win. Not only couldn’t he win against the National Party; the two of them together could not win in cabinet. As a consequence, we had the ridiculous circumstances in which, despite the fact that he knew the trade facilitation role that Austrade exercises—the Export Market Development Grants Scheme—needed additional resources, he could not win the argument. This was in the context of a government that were spending like drunken sailors—and that is the reason that we have had to impose the sorts of fiscal disciplines we have, including the efficiency dividend, because inflation was out of control under them. That is why there were eight interest rate rises on their watch. This minister could not win the argument in the drunken sailor carve-out. He could not win it, even though he knew that the trade facilitation role of Austrade required it.

Worse than that, what they did was to change the guidelines to make it more attractive to access the Export Market Development Grants Scheme. They changed the guidelines but gave it no money. I heard the member for Groom in the parliament the other day—it was in response to a ministerial statement I made about New Zealand, but he went off about the EMDG—saying that we had no money in the forward estimates for this year, $50 million for next year and nothing for the year after. Whilst that is true, what did their government have in the forward estimates for increased expenditure in the EMDG over the next four years? Zero, zero, zero, zero. What we did when we saw that stupidity, despite the fact of them acknowledging that they had to get the EMDG Scheme up to scratch, was to say, from opposition, ‘This scheme needs additional resources.’ We also said that additional changes to the scheme needed to be made to make it more attractive.

I am pleased to see the member for Leichhardt in the room, because one of the issues that he campaigned on—which was partly responsible for his magnificent win in that seat, I might say—was that not-for-profit bodies that in a group sense want to promote exports should have access to this scheme. That was a meritorious suggestion. We picked it up and ran with it. It is one of the changes that we have now legislated which are in the Senate awaiting approval. I am pleased to acknowledge that the opposition is supporting the scheme. But not only did we make changes; we funded them. As for the question of the resources beyond the $50 million that we have already put in, of course that is going to be subject to the outcome of the review that we get from Mr David Mortimer. This government has a commitment to expanding our trade performance, is prepared to put money on the table and is prepared to put constructive proposals forward when they come forward from interested bodies.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

The service sector did not expand very much under the last government and probably went backwards. I do not know the figures. I would like the Minister for Trade to tell the House about the potential in that area and where he thinks the services sector could go as an exporter.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I thank the member for Lyons for his question. I think it is true to say that there was serious neglect by the previous government of the services sector as an export opportunity for this country. The services sector of this economy is responsible for 80 per cent of the domestic economy but is only worth about, I think, 30 per cent of our export performance. We have got to do better on the services front. That is why, to start with the multilateral area, we have led the way in suggesting that, as part of the conclusion to the Doha Round, services have to be included. We have also advocated the calling of what is referred to as a signalling conference, a getting together of those economies for which services exports are a particular focus of attention.

Bear in mind that the WTO now has 152 members—a new member acceded just recently. For a lot of developing countries in that context, the services sector is not as important as agriculture in particular and, to some extent, industrial goods. So the signalling conference is a mechanism whereby, despite the requirement for a singular undertaking under Doha, nothing is concluded until everything is decided. At least we have a mechanism to carve it out. That is on the multilateral front.

The director-general may convene the meeting of ministers over the next few weeks to hammer out the settlement between agriculture and industrial goods. He has also undertaken to convene, at the ministerial level, a meeting of the services group, and we will be pushing for ambition. We have made the point that, as much as we have to get ambition in agriculture and NAMA, the non-agricultural market access area, or industrial goods, if you like, we will not be signing off on the Doha Round as a country, as Australia—this is not the Cairns Group position—unless we have an outcome on services.

So far as the regional architecture is concerned, we have also pushed very strongly for the inclusion of the services sector in the regional negotiations, as we have in the FTAs. We have resisted pressure on the part of the ASEAN group to exclude services in the context of the ASEAN free trade agreement that we are negotiating together with New Zealand. We have had a considerable and significant outcome in services—the most comprehensive outcome in any FTA we have had—with the recent one we signed up to with Chile. I know the shadow minister at the table likes to suggest that all this work was done by them, but it was not. I am prepared to acknowledge the great work that was done in terms of negotiations, but I tell you what: we came along and really drove this agenda and spoke at the political level and said, ‘We want an outcome and a comprehensive one.’ Both Chile and Australia have a vested interest in showing the way in terms of a model FTA to enhance the multilateral system and to reinforce the fact that you can drive this agenda at the bilateral level too. That is why we drove so hard to get the Chile agreement up as our first FTA since being back in government. It has a considerable outcome in the services and investment sectors.

In terms of the FTA with China, bear in mind that the negotiating strategy of the previous government was to concede market economy status to that country without getting anything in return, and that is why the negotiations on that free trade agreement stalled for three years. We have reactivated them. We got involved; the Prime Minister got involved—this was a particular focus of his activity in re-engagement. I went to China the week after the Prime Minister’s visit, and we have made clear that we want the FTA to proceed, but it has to be a comprehensive one. As difficult as the argument is going to be about agriculture and, for that matter, industrial goods, we have said that services and investment have to be in the equation.

I say to the member for Lyons: I think there is huge potential to improve our export performance in this nation, in particular through the services sector. A lot of the activity there is going to be involved in the border issues, but at the multilateral front, the regional front and the bilateral front we are putting a major new focus on services as a way forward to securing and sustaining our export base and the future of this economy.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

Can I go back to the minister’s statements about the EMDG Scheme and ask a couple of questions in relation to that. Firstly, how did he arrive at the figure of $50 million? Secondly, how did he arrive at the decision to put that not in the coming financial year but in the financial year after that and then have no more money available after that? If it is, as he suggests, on the basis of wanting to review through Mortimer—and I have never criticised the fact that you are conducting the review; I have simply stated that you are holding up policy formulation and certainty while you do that review—and the Mortimer review comes back and says that the EMDG is underfunded in the out years 3 and 4, do I take it from the minister’s earlier statements that he will make sure that there is money in those years 3 and 4?

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

The shadow minister asks how we came to the $50 million figure. That was the figure that I was prepared to fight for and win in opposition. This was an effective advocacy that I was able to make that you were incapable of making. That is my first point. From opposition—where we did not have the resources of Treasury, we did not have knowledge of the extent to which you had blown the budget and spent like drunken sailors and we did not have an appreciation of the extent to which you were going to drive inflationary pressures as high as you did—we had to try and create an environment in which we were not only signalling a commitment to enhancing a scheme that you had run down but signalling an important down payment.

As for the question of the application of the scheme, our changes will apply from 1 July and exporters can plan next year with confidence. Exporters know that the funds have been provided in the budget for 2009-10 to cover eligible expenditure incurred in the next financial year. So what we are doing is covering expenditure from now on.

Let me make this point: you pay a price when you elect a government and get a dud one, and that is what the people who made application under the EMDG Scheme found to their disadvantage when the former government changed the guidelines in 2006 but put no money in to cover it. With their having made the first tranche of payments, there was no money left in the kitty for the second tranche of payments, except 15c in the dollar—and now they have the gall to try to suggest that that is our fault. What we are dealing with is the second tranche and the availability of money under their watch, because they did not provide money from 2006 onwards when they changed the guidelines, and they provided no money in the forward estimates. We inherited a scheme that was fundamentally being undermined because the previous government was not prepared to put money in. So, when the shadow minister asks me why we have underpayment in the EMDG this year, I say: blame the previous Liberal government; it all happened on their watch. I must say I have had great pleasure—not pleasure; that is the wrong term, although I am having pleasure here making the point in terms of our political opponents—

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Infrastructure, Roads and Transport) Share this | Link to this | Hansard source

Your figures are wrong as well.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I have had a number of letters written to me by members from the other side of the House asking why the EMDG payment is so poor in terms of the second tranche. I say the reason is simple: the previous Liberal government paid lip-service to the importance of the scheme and even went about changing the guidelines but was not prepared to commit any resources to it. So, when you ask why there is no money, blame the former Liberal government. It is as simple as that: blame the former Liberal and National Party government. They had a minister that knew it was important to put extra money in. He was in the newspaper as saying that he was trying to argue for that extra funding but he could not win it.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. Can I call the Minister for Trade back to the question. The question related to expenditure in the years 2009-10, 2010-11 and 2011-12. The question was not about current expenditure.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

The shadow minister asked how we came to the figure. I have explained how we came to the figure, but the question I am posing in response is: why, if the shadow minister, when he was the minister, knew that the scheme needed more money, was he not able to win that extra money in cabinet? You cannot tell me the money was not there, because the previous government spent like drunken sailors. That is why we have got an inflation problem. But why couldn’t he manage to get the money that was needed to fund better a scheme that he said he supported, that he saw the need to change but never found any money for?

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Infrastructure, Roads and Transport) Share this | Link to this | Hansard source

Time’s up.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Time is not up—I am sorry, it is. Perhaps you can ask me another question.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I ask the minister—based on his earlier answers, this is going to be the last question of this session—when he talks so boldly about others being rolled in ERC and cabinet, how he got rolled in ERC and cabinet in relation to the negotiating budget for the Australia free trade agreement to the tune of $1.1 million and, in relation to the Australia-China free trade agreement, to the tune of nearly $10 million.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

The fact is we were not rolled. That is the simple fact of it. The shadow minister asked me the question. He does not ask about what he has been out in the newspapers arguing for some time, and that is that our negotiating team has been reduced in China. It has not, nor has it been reduced for the Japan FTA or any other FTAs. We have the same number of negotiators, despite the efficiency dividend that we had to introduce to meet the inflationary profligacy that was occasioned by your mad spending. We have the same numbers in the negotiating teams for all of those FTAs. We have not cut any of the staff in Geneva. We take the view that we require the best of our resources, not just an adequacy of them, at all of those levels of negotiation. We have been active not just in Geneva on the WTO, and it has not just been the department that has been particularly active; we as a government have been active. In particular, I have been active but so has our Prime Minister and so have our industry minister, our resources minister and our infrastructure minister—because we understand the importance of political engagement to try and get an outcome here.

It is one thing to put the resources into negotiations but, if you negotiate a dud deal, there is not much advantage for the country. The previous government was in office almost 12 years and was never able to influence in a proactive way an outcome in the WTO. The last WTO agreement that was concluded was under a Labor government, and I hope that we are able to bring home a new agreement, a bookend to the arrangement, bookends framing those 12 years of wasted opportunity of the former government. This was a government that in its 12 years in office had a circumstance in which net exports contributed to economic growth in only two of those 12 years. When Labor were last in office, we had net exports contribute to growth in 10 of the 13 years. Why? Because we had an activist approach to trade policy. We understood the importance of integrating it with industry policy but, most importantly, we understood the importance of investing in infrastructure and in skills. It is through trade that job opportunities and the sustainability of the economy beyond the resources boom will happen.

We were able to do that because we the current government have a whole-of-government approach. The previous government had absolutely no idea—and the shadow minister comes in here and lectures us about what our intentions are! Our intentions are clear. You had the opportunity; you wasted it. We are now going to take that opportunity. We are going to commit the resources. We do not just have a review. We have made a down payment in the review, the $50 million in terms of the EMDG, the reallocation and recalibration of the trade negotiations and bringing back Invest Australia and Global Opportunities under the umbrella of the trade portfolio.

Consideration of proposed expenditure adjourned.

Resources, Energy and Tourism Portfolio

Proposed expenditure, $640,806,000

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and Minister for Tourism. As the minister knows, we have had some significant cuts in Qantas flights between Japan and Cairns.

Joanna Gash (Gilmore, Liberal Party, Shadow Parliamentary Secretary for Tourism) Share this | Link to this | Hansard source

Madam Deputy Speaker, I seek your clarification: my understanding is that the minister has to make a statement before the adjournment starts.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

No. The member for Leichhardt has the call.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker; I see my time expiring quickly. I have a question for the minister. Cairns has suffered recently from the loss of flights between Japan and Cairns. We have lost 62 per cent of the seat capacity, effectively 182,468 seats per year, because of the cuts in Qantas flights from western Japan and Narita. That equates to 3,500 or so seats per week—a significant loss of opportunities for Japanese to come to Cairns. In the year to the end of March we had 198,000 visitors to Cairns. That represents a significant number of Japanese who came to visit tropical North Queensland and there has been some economic analysis that shows that the potential financial loss to Cairns equates to about $100 million. Those are significant losses.

I sat down with the minister on the day that the cuts happened and had a good opportunity to talk to him about it. I also met the next day with Tourism Tropical North Queensland. They had developed a four-point plan that involved reviewing the Japanese market and other options and looking to accelerate an emerging market strategy and to attract carriers and tourists from new markets. I note that the Chinese market has grown by 71 per cent in the year to March, to 58,000 visitors. An important part of their plan was to look at getting additional funding, and my question to the minister relates to that in particular. They also talked about business support, which was the fourth point. We have just heard from the Minister for Trade about the impacts of the previous government’s cuts to EMDG, which also hurt tourism in tropical North Queensland. Part of their response was to see what this government is going to do to EMDG, because they know they were hurt by the Howard government. I know the minister has done a lot of work and I have enjoyed working with him and the Prime Minister to come up with a response to support tourism in tropical North Queensland. So I would appreciate it if the minister would outline the federal government’s response to this really significant impact on the tourism industry in tropical North Queensland.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I welcome the question from one of Labor’s strong regional representatives. When I look along the table this evening I can see which party represents regional Australia today: the member for Lyons, a long-serving and outstanding member; the new member for Flynn—the seat could not have a better advocate; and welcome back to the member for Braddon, a very strong advocate for regional Australia.

Madam Deputy Speaker, as you and I appreciate, the member for Leichhardt is a voice of reason in representing that very important northern seat of Queensland. He also well appreciates that it is a seat that, whilst it has a lot of diversity in terms of employment, is highly dependent on the tourism industry—an industry that Australia-wide represents over 480,000 people directly employed, an industry that represents  $22 billion in terms of export earnings. But it is also especially important to the state of Queensland, where more than 100,000 people are directly employed in the industry and it accounts for 5.6 per cent of all persons employed. It is also interesting to note that it contributes $8.1 billion to the Queensland economy and it accounts for 5.6 per cent of Queensland’s gross state product.

It is for that reason that last Wednesday I attended a meeting in Queensland to sit down in a constructive way with the state Minister for Tourism, Regional Development and Industry and member for Cairns, Desley Boyle, and representatives of Queensland Tourism, in association with Tourism Australia, to have a hard think about where we go in a very tough market from a tourism perspective. The tourism industry in Australia at the moment is doing it very tough. As the member for Groom appreciates, we have to struggle against what in this industry is a tough issue—the strength of the dollar. That means in markets historically important to Australia, such as Japan, we are actually seeing declining numbers, because not only is it more expensive for the Japanese to come to Australia but we are also competing with short-haul, cheaper overseas holidays for people from Japan.

Added to that recent problem—which is in addition to all the problems of skilled labour due to the neglect of the previous government, who actually failed to invest in training—we now have what is a global oil crisis. In the last 12 months the cost of jet fuel has doubled. That has effectively meant—and, whilst we do not like the decisions, it is the nature of commercial reality—Qantas and Virgin in recent weeks have made tough decisions with respect to the reduction of regional airline capacity. The latest announcement today was made by QantasLink regarding changes in airline capacity in Mildura, Newcastle and Wollongong. For that reason, because northern Queensland was exceptionally hard hit, we sat down with the Queensland government. We contributed $4 million, in association with a contribution from the Queensland government of another $4 million, to try to put proper money on the table.

We also undertook for Tourism Australia to work with Queensland Tourism to think through a strategy which is not only about trying to, I suppose, stop the erosion of the Japanese market but about turning it around and about getting North Queensland to actually look at new markets, such as the growth potential of places such as China and India. I simply want to say that the Australian government, working in partnership with business, will do everything possible to assist in turning it around, because we understand the importance of the sector to Northern Queensland.

I say to the member for Leichhardt: thanks for your assistance. I think the people of Cairns are very fortunate to have you as their voice of reason. You understand the tourism industry and have the willingness to work to get through this period. Tourism has been through similar periods in the past. I think back to events since I have been in parliament: September 11, the collapse of Ansett soon after, the threat of SARS and terrorism and all those associated issues. It is a robust industry and, because of the absolute commitment and contribution of a lot of small and medium sized businesses, we will get through this challenge yet again.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I ask the minister for resources, tourism and the other thing, which I have forgotten—energy, sorry.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

How can you forget that?

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I will ask an energy question on the basis of that. What progress is being made on zero-emission coal technology, in particular in relation to the legislative program to enable geosequestration—it is a long question; it is not as long as Scooter’s but it has a couple more lines in it—in terms of the government’s investment in that technology through, I assume, its coal fund; and when does it expect to make any announcement in regard to further progress in the area of zero-emission electricity generation from coal?

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Before I call the minister I would like to get another question so I can get through a few more.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Minister, I am going to ask you a question about a tourism development in relation to Table Cape Lighthouse. Before I do that, I would like to point out to all those here—because everything has a context in life; everything has a season—that you have been a great friend to the north-west coast of Tasmania and particularly my electorate of Braddon, and I am particularly interested in your tourism portfolio.

I thought you might like to know, Minister, before I ask you the question, that Table Cape, where the lighthouse is located—and I hope you come and visit sometime and enlighten yourself—was named by explorers George Bass and Matthew Flinders in 1798. This is the background to your announcement. It was named after Table Mountain which overlooks Cape Town in South Africa. I have had the great privilege of seeing that and I could see the parallel between the two places. It was fantastic.

You might not know, Minister, but it is very important in terms of the tourist potential of this area that Table Cape is a volcanic plug, unlike Table Mountain, and is some 130 million years old. Once it was very much forested, and now deforestation and weathering have made it one of the most beautiful areas. I know that the member for Groom has been to the north-west coast, to Table Cape, many times and knows that it is a patchwork quilt of fertility. I think it was the member for Groom who once said to me, ‘You know, your soil is so rich at Table Cape, Sid, if you throw a toenail in the ground it will grow a foot.’ That is the fertility of Table Cape.

Minister, could you please enlighten my electorate and particularly the Wynyard-Waratah Municipality, which of course has guardianship of the magnificent Table Cape, with the tulips and that, what we are going to do to boost tourism, particularly in relation to the lighthouse there? Could you also outline to us the process whereby the funding will flow through so that the municipality will have the benefit of the tourism development which this government, apart from all other governments, has committed to? I look forward to that, Minister. When is it going to happen?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I will firstly deal with the very serious issues raised by the member for Groom, because it is fair to say that the nature of the legislation that he is referring to with respect to geosequestration was work in progress by the previous government. As shadow minister for transport from December 2004 to December 2006, I can say that it was legislation we expected to come forward, but unfortunately it did not see the light of day during the previous parliament.

Having said that, it is very serious business for the current government. In my opinion the department has done a good job over an extended period in seeking to consult with industry to make sure that we get this legislative framework right. There are very serious issues of liability, and we are also trying to work out the proper balance between those who are seeking to sequester carbon and those who have existing rights to extract oil and gas.

The bill has been referred to the House of Representatives Standing Committee on Primary Industries and Resources following proper consultations in trying to work out the views of industry. It will now proceed on the basis of a proper reference. The committee’s chair is the member for Lyons, Dick Adams, and the deputy chair is the member for Hume, Alby Schultz, who absolutely welcomed this opportunity. It is also a statement by the current government that House committees are regarded as being capable of doing serious legislative considerations rather than, as the history of this place has indicated until now, the practice of just referring legislation to the Senate. If we get it right, this is a world first.

All being well, it is intended that the legislation be introduced in the very near future. It will then sit on the table to allow the committee consideration to proceed in the break with a view to finalising the legislation in the spring session. It is to be hoped that, given consideration of this offshore legislation, it also creates a road map to finalise onshore state and territory legislation, because it is important that wherever possible we get the best common approach across offshore and onshore with respect to all these issues.

I also welcome the member’s interest in the question of clean coal technology. There is a clean coal fund of $500 million, part of which was previously allocated. Over and above that, can I also assure the former minister, the member for Groom, that there is an absolute government commitment to maintain our participation in the Asia Pacific partnership. I think that is a very important issue because it goes to global endeavours to try and get clean coal technology right, because carbon capture and storage, so far as I am concerned, are central to Australia’s economic future. Eighty-two per cent of our electricity comes from coal-fired power stations and, whilst renewables will grow, just like the demand for energy will grow, unless we as a nation and a global community get carbon capture and storage right, our economic future is seriously at risk.

As part of that, I will also—following proper consultation—soon announce a clean coal council, which will obviously involve representatives of the mining industry and also state and territory governments, because it is not just government money on the table at a federal level; it is also state money from the states of Queensland, New South Wales and Victoria. We have to make sure that we get absolute cooperation, including from the scientific community such as the universities and CSIRO. There will also be a task force on the issue of sequestration, to have a look at the issues of pipelines and mapping and all those associated issues. If everything were to go right, then we would be able to put acreage out in 2008. We are not talking about fly-by-nighters who will be interested in sequestration; we are talking about an investment of $50 million to $100 million to consider whether or not sequestration can be commercialised, from the private sector’s point of view.

On the question of Table Cape Lighthouse, I must say, Sid, that I have been to a lot of places in your electorate. I have not been fortunate enough to experience it in more recent times, but I well appreciate the nature of the commitment by the government of $185,000 to upgrade Table Cape Lighthouse, a commitment which was delivered in the budget under the Australian Tourism Development Fund. As you and I appreciate, Waratah-Wynyard Council has been working on this important community project with your support over a very long period, and I was pleased to see the commitment, which was an election commitment, fully delivered in the budget, because that enables this very popular local tourism destination and the project associated with it to go forward now. It is important regionally. (Time expired)

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

I have questions for the Minister for Tourism. Would the minister please outline the economic impact and the modelling that he has undertaken with respect to the nearly $1 billion of new tourism taxes that the minister and his government have imposed on the tourism industry? Further, would the minister please outline the impact that he expects this nearly $1 billion of new tourism taxes will have on certain segments of the area with regard to, for example, the way in which the passenger movement charge is expected to impact on the tourism industry? Further, would the minister outline the way in which the additional revenue that will flow from the passenger movement charge will be spent and the benefits that that may have or may not have for the tourism industry?

I would also appreciate the minister outlining the impact that the luxury car tax will have on the tourism industry—how much revenue is anticipated to be raised through the introduction of the luxury car tax and what is the expected impact on those operators in the tourism industry that are operating vehicles and that rely on vehicles that will now be captured under the luxury car tax? Further, I would appreciate the Minister for Tourism outlining the way in which Tourism Australia is expected to be resourced in the future, given that it has been announced that 20 positions have been cut from Tourism Australia, and the impact that the loss of those 20 positions is likely to have on Tourism Australia’s ability to market Australia abroad. Further, can the tourism minister enlighten this side of the House as to which positions are likely to be removed from Tourism Australia following this reduction of 20 places from the industry?

I would also be interested in the tourism minister’s thoughts on the way in which that $4 million that has been allocated to the industry is going to be used to assist Queensland. In particular, I am interested to know why that $4 million was such a miserly amount, given the $1 billion of new tourism taxes that the Rudd Labor government has imposed on the industry. Further, I am interested to know whether that $4 million is quarantined specifically for Queensland or can be used more broadly across Australia and also whether any orders were specifically given by the tourism minister in respect of Tourism Australia directing them to spend that money in Queensland only or to use that money across the board.

Further, I would be interested to know the tourism minister’s response to the announced capacity cuts by Qantas airlines and what initiatives, if any, the tourism minister is taking in trying to entice airlines such as Japan based airlines or other airlines from Australia to retake routes from which Qantas and Jetstar have cut capacity service to the Japan-Cairns market. I would also be interested to know, following Qantas’s announcement today that they will be discontinuing their Dash 8 100 service, whether or not the minister will be providing additional funding to New South Wales and to Victoria, given that Mildura will lose its maintenance base following the cuts. Will there also be additional money flowing to assist the Newcastle region? If the minister could address those questions, I would be most grateful.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

My question also relates to investment for tourism development. As the Minister for Tourism would be aware, being quite familiar with the area of Parramatta, we earn less than one per cent of our GDP from tourism, which is well below the Sydney-wide average, yet we have within our borders an extraordinary range of tourism assets. In fact, we have more heritage buildings in Parramatta than we have in The Rocks, and most of those are within walking distance from the river which connects Parramatta to Circular Quay. We are also about 20 minutes from the Olympic site of Homebush and on the way between the Sydney CBD and the quite popular Blue Mountains. So there is extraordinary opportunity to grow local tourism business in Parramatta. Could the minister inform the House and the people of Parramatta how the budget enhances the capacity of the Parramatta region to develop as a tourism portal for Western Sydney?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Can I first say that in respect of the passenger movement charge I find it interesting that the opposition would question appropriate consideration of budget measures by government which go to the fight against terrorism. That is what we are talking about in terms of the allocation of some of these financial resources, and people should appreciate that one of the reasons why people actually want to come to Australia is because we are a safe place to have a holiday. Just as the previous government sought to make sure that we had adequate budget resources to put in place proper security measures and also quarantine measures, especially given the recent equine problems, it is more than appropriate that the Treasurer give proper consideration to these issues.

Yes, the passenger movement charge has been increased and so have visa fees, just like they have been in the past. I assume the modelling by Treasury was akin to the modelling conducted by the previous government with all these measures. It is interesting to note, because these are Treasury issues, as the member for Moncrieff appreciates, that the same consideration would have been given by the current government to such budgetary matters as was given by the previous government. I note that, yes, there is an increase in the passenger movement charge of $9. The passenger movement charge has not increased since 1 July 2001. I also note that in a period of 18 months, from 1 January 1999 to 1 July 2001, under the previous government the passenger movement charge increased on two occasions—not one occasion; two occasions—from $27 to $30 on 1 January 1999 and by another $8 on 1 July 2001. This was an amount of $11 over a period of 18 months.

Despite the fact it has not been increased since 1 July 2001, it was increased by an amount of $9, all related to issues going to the cost of processing international passengers at international airports and maritime ports and all the associated issues with visas and visa charges et cetera. So, yes, no-one likes increases in charges. They occur under this government just like they have occurred under previous governments.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Mr Ciobo interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Moncrieff has asked his question.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

The $4 million allocated at my meeting in Queensland last Wednesday is allocated to Queensland. There was a serious problem confronting the Queensland tourism industry and that is why there was a very constructive meeting, held in the offices of Tourism Queensland, which involved not only me but also my counterpart, the Queensland Minister for Tourism, Regional Development and Industry, and also Tourism Australia. It is not just a question of the $4 million put on the table for Queensland by the Australian government, part of which could go to actually getting people to sit down and think about a new strategy for Northern Queensland. It is also my intention that some of that go to Tourism Australia for the purposes of facilitating further marketing, especially marketing principally concentrated on Queensland, which goes hand in glove with the endeavours of the Queensland government to think about whether or not they can get other international carriers to come into Cairns—not just Japanese carriers but also other carriers such as Garuda. The money can therefore be allocated for the purposes of trying to piggyback additional marketing capacities for those airlines who might be interested in Cairns to actually get a better bang for the dollar in those markets. As the member for Moncrieff understands, that is how Tourism Australia operates. Do not just look at the advertising budget of Tourism Australia, which was not reduced in the recent budget; also look at the strategic relationships that develop with other players in the market, such as Qantas and all those other international carriers, for the purposes of trying to promote Australia in overseas markets.

I must say that I was pleased to see the new strategic marketing relationship developed with Film Australia and the 20th Century Fox operation in terms of trying to piggyback that operation to assist not only Cairns but the tourism industry generally—which goes to the question of Parramatta.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Given that the minister has not answered a large number of my—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Moncrieff will resume his seat. I am not allowing interventions during this debate; there is not enough time. I have made a decision on that. Has the minister concluded? He has four seconds, if he is quick.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Yes.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Prior to coming to this place, I actually spent a lot of time representing people in the renewable and sustainable energy industries. I know how hard it has been for people in those industries to commercialise their technology. I know how hard it is to attract investment dollars into research and development. People work very hard in those industries and they do rely on government encouragement to be able to develop their technologies for the common good. It is in respect of that that I note the government’s position in relation to the 60 per cent reduction in greenhouse gas emissions based on 2000 levels by the year 2050. That will, as it is achieved, result in substantial energy efficiency in developing cleaner energy technologies in association with the development of an energy trading mechanism. My question to the minister is: what support has the government given the renewable energy sector in the 2008-09 budget, in particular as to funding arrangements for various technologies including geothermal and solar based technologies?

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Before I call the minister: because we do not have a lot of time, will the members for Kalgoorlie or Moncrieff be seeking the call?

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Infrastructure, Roads and Transport) Share this | Link to this | Hansard source

I will be seeking the call.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Can you seek the call then, please?

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Infrastructure, Roads and Transport) Share this | Link to this | Hansard source

I do appreciate the opportunity. I thank you, Madam Deputy Speaker, and I do hope you do not live to regret the invitation!

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I might not, but the minister may!

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Infrastructure, Roads and Transport) Share this | Link to this | Hansard source

Minister, I have a great concern as a Western Australian and as a member that represents one-third of the Australian landmass. I have an affinity with Western Australia, my electorate and the North West Shelf in particular, and I am very concerned about shareholders of Woodside Petroleum right now because, in the last budget that you handed down, you dudded Woodside shareholders. Of course, you know what is going to ensue from this point. The budget handed down demanded that Woodside pay excise on condensate. Many in this place will not understand because they are not concerned, but I am. The Western Australian shareholders in Woodside want to know why this government would, in the dark of night, rob Woodside shareholders of $2.5 billion. Further, Minister, will you please answer whether you were involved, as the minister, in the negotiations that saw Woodside shareholders dudded to the tune of $2.5 billion, or was it something that was dropped on you as a surprise, just as it was dropped on Woodside shareholders?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

There are a range of issues that have been raised with me as we conclude this session. Firstly, can I say to the member for Parramatta that I am pleased to see that the election commitment of $500,000 to develop a new, innovative approach to promoting tourism in Parramatta was delivered in the budget. That is exceptionally important. I also grew up in the Parramatta district, and I was pleased to see Parramatta give the Wests Tigers an absolute belting last Sunday afternoon. More seriously, I understand that Parramatta is the cradle city of the nation. It is full of history, and this amount of money allows the city of Parramatta to actually get more serious about the issue of tourism.

In terms of renewable energy, can I simply say that there is a fund of $500 million, of which $50 million is allocated for geothermal. Following consultation with the industry, I will be announcing guidelines, which the industry has been involved in, for the development of the industry in the foreseeable future. About $21½ million of that money will be available in 2008-09, which is most welcome. Fifteen million dollars of that money is also available for the purpose of development of second generation biofuels, which will be of interest to the member for Gilmore, given her interest in that industry over an extended period. There is an innovation fund of $150 million for renewables, of which $100 million will be principally related to research and development activities for solar-thermal and solar PV as part of the government’s commitment to renewables. But remember this: the renewable energy industry will get a leg-up through the development of the emissions trading system, which puts a price on carbon, and also through the introduction of the renewable energy target of 20 per cent by 2020. I simply say to the industry: it is not just a question of grants; it is also the nature of the system that will significantly advantage the renewable energy industry.

With regard to the issues raised by the member of Kalgoorlie, for the life of me I think it is about time some people understood that a point is reached in life where you draw the line. The North West Shelf project is, firstly, a mature project. Secondly, it is a highly profitable project. I would have thought that our responsibility, having only brought on two LNG export opportunities in 20 years, is to actually devote our attention to the development of a modern, 21st century program of incentives to encourage investment in new projects, rather than just continuing to substantially financially assist existing mature and highly profitable projects. I draw your attention to the fact that condensate excise exclusion was first introduced 24 years ago. It has represented a return to the companies of $1.5 billion over the last five years alone, when oil prices were half the current levels. I might also say that this is over and above an unintended windfall gain as a result of a concession introduced in 2001 to reduce the top rate of the crude oil excise. By my calculations, that has delivered to these participating companies another benefit of $1 billion since 2001. It would be interesting to go back and read the second reading speech of the then member for Leichhardt, who had the responsibility for introducing this change in 2001. I point out that this change in the top rate of the crude oil excise is far more generous than was originally intended by the previous government or expected by the companies.

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Infrastructure, Roads and Transport) Share this | Link to this | Hansard source

They were exempt. You cannot talk about the compensation. They were exempt. He has got it wrong.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Kalgoorlie has asked his question.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

So far as I am concerned, we are about making sure that, in the national interest, the Australian community receives a fair share of benefits associated with Australia’s resource development. And, can I say, the North West Shelf partners have received good taxpayer support for 24 years. I am actually turning my attention to new gas projects such as Gorgon, Browse and Sunrise. I might also say that the face of industry is now changing. It is no longer just a Western Australian focus; there is a new section of the industry emerging through coal seam methane gas on the east coast. I would have thought that the Australian government also has to pay significant attention to what is going to develop in seats such as Flynn, with a focus on Gladstone, where there are five companies— (Time expired)

Proposed expenditure agreed to.